This new law extended the authorization for the National Flood Insurance Program (NFIP) for five years, through September 30, 2017, while requiring significant program reforms affecting flood insurance, flood hazard mapping, and floodplains management. 113-76 ) that President Barack Obama signed into law on January 17, 2014. Flood insurance premium rates were initially set "based on consideration of the risk involved and accepted actuarial principles." The key issues of contention have been 
what to do about the nation's increasing exposure to flood risks, the cost and consequences of flooding, premium rate structure changes designed to strengthen the financial solvency of the NFIP, and the affordability of flood insurance coverage in the aftermath of the phase-out of premium subsidies on pre-FIRM properties and policies "grandfathered" into the program. The Biggert-Waters Act

On July 6, 2012, Congress passed and the President signed into law P.L. 112-141 , the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act) that reauthorized the NFIP for five years while requiring significant program changes designed to make the program more financially sustainable and to ensure that flood insurance rates more accurately reflect the real risk of flooding. The key to understanding the underlying affordability issues of contention surrounding the reforms made to the NFIP's premium rate structure is to recognize that, in the context of the phase-out of pre-FIRM premium subsidies and grandfathered policy discounts authorized under Section 100205 and Section 100207 of Biggert-Waters, FEMA now considers the expected flood damage or DELV factor (elevation relative to lowest floor of the house) when setting rates for pre-FIRM subsidized and grandfathered properties. On January 17, 2014, President Barack Obama signed into law the Consolidated Appropriations Act, 2014, that prohibits FEMA from implementing Section 100207 (the "grandfather" provision) of the Biggert-Waters Act, codified at Section 1308(h) of the 1968 Act. The Omnibus requires FEMA to cease any current planning and development for Section 100207. However, according to FEMA, because Section 100207 does not relate to changes to flood insurance rates that have already taken place, and the Omnibus does not roll back any rate increases that have already occurred, the effect of Section 572 of the Omnibus is that FEMA would not implement Section 100207 until 12 to 18 months after the start of FY2015. FEMA indicated that the agency will continue to map flood risk as authorized by current law. Section 100236 requires FEMA to conduct a study and issue a report to Congress assessing "methods for establishing an affordability framework for [NFIP], including methods to aid individuals to afford risk-based premiums under [NFIP] through targeted assistance rather than generally subsidized rates, including means-tested vouchers." Responses to Affordability Issues and Concerns

In the aftermath of Biggert-Waters reforms and FEMA's adoption of "elevation rating" of pre-FIRM structures, owners of certain properties that, heretofore, did not have to consider the elevation of the structure in the insurance pricing process, now face relatively large rate increases. Opposition to the Removal of Premium Subsidies

Opponents of eliminating subsidized rates argue that the Biggert-Waters law does not explicitly address affordability concerns of existing policyholders facing mandatory coverage requirements and living in older, riskier homes in high-risk flood zones. Further, supporters of delaying rate increases maintain that, although FEMA does not have data on policyholders' ability to pay, the agency has begun implementing sharply higher flood insurance rates for some policyholders. Supporters of the Removal of Premium Subsidies

Proponents of eliminating subsidized rates, and charging all policyholders full-risk rates, point to the NFIP's burden on taxpayers. Congress, they argue, found that ensuring the long-term financial stability of the NFIP is in the public interest, and the Biggert-Waters law seeks to further this goal by transitioning subsidized rates to actual risk-based rates. From this perspective, the removal of premium subsidies would reduce taxpayer costs associated with a fiscally unsound government insurance program and have the additional benefit of reducing hidden financial incentives that encourage building in flood-prone and environmental sensitive coastal areas. 3370 (Grimm)

H.R. In addition, H.R. S. 1926 (Menendez)

On January 31, 2014, the Senate passed S. 1926 , the Homeowners Flood Insurance Affordability Act of 2014, to delay the increase in rates for six months after the later of the date on which FEMA proposes the draft affordability framework or the date on which FEMA certifies that the agency has implemented a flood mapping approach that employs sound scientific and engineering methodologies to determine varying levels of flood risk in all areas participating in the NFIP. FEMA is prohibited from implementing section 1308(h) of the National Flood Insurance Act of 1968, pertaining to grandfathered properties. Analysis of Bills

H.R. The potential impact of eliminating the pre-FIRM premium subsidy will likely be greatest in communities with a relatively large number of older, negatively-elevated rates and grandfathered policies with significant flood risk. As with S. 1926 , H.R.
On July 6, 2012, President Barack Obama signed into law the Biggert-Waters Flood Insurance Reform Act of 2012 (Division F, Title II, P.L. 112-141; 126 Stat. 918) to reauthorize the National Flood Insurance Program (NFIP) through September 30, 2017, and make significant program changes designed to make the program more financially stable. To achieve long-term financial sustainability and ensure that flood insurance rates more accurately reflect the actuarial risk of flooding, the new law gradually phases out subsidized premiums and grandfathered policies for approximately 19% (or about 1.1 million policyholders) of the program's total number of policyholders.
Under the Biggert-Waters Act, the Federal Emergency Management Agency (FEMA) began imposing premium rates based on the property's "elevation rate," which, in turn, is based on the property's lowest floor elevation relative to the Base Flood Elevation (BFE) for existing homes and businesses built prior to the community's initial Flood Insurance Rate Map (FIRM). Since 1973, these so-called pre-FIRM structures had been shielded from higher premium rates. The National Flood Insurance Act of 1968 (P.L. 90-448; 82 Stat. 572) included a provision for subsidizing pre-FIRM structures by charging less than full risk-based premiums for flood insurance because their construction took place before the application of the NFIP construction standards. These structures are also exempt from the NFIP's mitigation requirements unless they become substantially damaged or substantially improved.
Thus, with the elevation of the property now being a factor in the rating process, owners of certain properties—that is, those property owners with federally insured mortgages residing in government-designated, flood-prone areas—now face relatively larger flood insurance premium rate increases. Importantly, this transition toward full-risk premium rates for generally older and more risky properties has occurred before FEMA's completion of a congressionally mandated affordability study
The impact of moving to full-risk premiums by eliminating the pre-FIRM premium subsidies, as required by the Biggert-Waters Act, is being felt in virtually all 21,000 NFIP communities across the nation. The impact of elimination of the subsidies on non-principle residential properties (i.e., second homes), business properties, and new or lapsed policies has been particularly felt in communities with a relatively high proportion of high-risk flood-prone pre-FIRM properties. In addition to its impact on property owners, the elimination of the subsidy affects local community economic development as well as debates concerning how to equitably distribute the burden of recovering from flood events.
Opponents of eliminating subsidized rates argue that the Biggert-Waters Act does not explicitly address the affordability concerns of existing policyholders in high-risk flood zones and FEMA does not have sufficient data on policyholders' ability to pay; however, the agency has begun implementing sharply higher flood insurance rates for some policyholders.
Proponents of eliminating subsidized rates maintain that Congress explicitly found that ensuring the long-term financial stability of the NFIP is in the public interest and the Biggert-Waters law seeks to further this goal by transitioning subsidized rates to actual risk-based rates. Removal of premium subsidies and grandfathered policies would reduce taxpayer costs associated with a fiscally unsound government insurance program while reducing the arguably hidden financial incentives that encourage building in flood-prone and environmental sensitive coastal areas.
The key policy questions facing Congress with respect to the post-reform NFIP issues include
addressing the affordability issue; deciding whether, how, and when to privatize flood risk; exploring options for improving flood risk analysis and maps; and finding innovative new approaches to financing the nation's increasing exposure to hurricane-induced catastrophic floods and coastal hazards.
On January 17, 2014, President Barack Obama signed into law the Consolidated Appropriations Act, 2014 (Division F, Title V, Section 572 of P.L. 113-76), that prohibits FEMA from implementing Section 100207 (the "grandfather" provision) of the Biggert-Waters Act, codified at Section 1308(h) of the 1968 Act, during FY2014. The Omnibus requires FEMA to cease any current planning and development for Section 100207. However, according to FEMA, because Section 100207 does not relate to changes to flood insurance rates that have already taken place, and the Omnibus does not roll back any rate increases that have already occurred, the effect of Section 572 of the Omnibus is that FEMA would not implement Section 100207 until 12 to 18 months after the start of FY2015. FEMA indicated that the agency will continue to map flood risk as authorized by current law.
On January 31, 2014, the Senate passed S. 1926, the Homeowners Flood Insurance Affordability Act of 2014, to delay the increase in rates for six months after the later of the date on which FEMA proposes the draft affordability framework or the date on which FEMA certifies that the agency has implemented a flood mapping approach that employs sound scientific and engineering methodologies to determine varying levels of flood risk in all areas participating in the NFIP. The report to Congress would assess "methods for establishing an affordability framework for [NFIP], including methods to aid individuals to afford risk-based premiums under [NFIP] through targeted assistance rather than generally subsidized rates, including means-tested vouchers."
Several other bills—H.Amdt. 121 (Cassidy) of H.R. 2217 (Carter), H.R. 2199 (Richmond), H.R. 3370 (Grimm), H.R. 3511 (Capuano), and S. 996 (Landrieu) have been introduced to delay implementation of the rate structure reform provisions of the new law and provide additional funding for the completion of the affordability study.