Wednesday, April 23, 2014

Vermont Bill H.676 Was Signed into Law on 4/17/2014

Ok... So what is bill H.676? Why are we posting information about this change here?  For those of you who are not following the Vermont legislative session as closely as March Madness brackets or the latest episode of Game of Thrones, it is a pretty short but effective bill at helping to clean up inconsistencies in Vermont statute with regards to floodplain protections.  The final bill that was passed by the House and Senate (which can be found here) makes two amendments to existing statute.  At this time, I do not know if it has a final "Act" number.

The first change was to Act 138 from the 2012 Legislative session that established authority for ANR to create a State Floodplain Rule.  This State Floodplain Rule would apply for uses and development exempt from local municipal regulation (aka 24 VSA 4413 statute).  This state rule would really only apply to a few limited categories of uses: State owned and operated facilities, Accepted Agricultural Practices, Accepted Silvicultural Practices, and public utility power-generating and transmission facilities subject to regulation by the Public Service Board.  Act 138 was not clear on whether or not the ANR would have the ability to include the regulation of river corridor areas in addition to FEMA's mapped Special Flood Hazard Areas (SFHAs) in the State Floodplain Rule.  The first part of H.676 helps to clarify that there is authority for regulating development in both the SFHA and the river corridor for these limited categories of projects.  Therefore, it will be an ANR State Floodplain & River Corridor Rule which will include river corridor protections for that limited list of municipally exempt development.

The second change was made to 24 VSA statute 4413 to clarify municipal jurisdiction around limited uses and the National Flood Insurance Program (NFIP).  For most of the traditional uses and development that a community has limited authority to regulate, the community now has the authority to regulate those uses for compliance with both the community's NFIP standards and any river corridor standards.  This development would include:

  • Community-owned and operated institutions and facilities;
  • Public and private schools and other educational institutions;
  • Churches and other places of worship;
  • Public and private hospitals;
  • Regional solid waste management facilities;
  • Construction of hazardous waste management facilities
H. 676 makes it clear that our ANR State Floodplain & River Corridor Rule would not apply to these types of development, but would otherwise be reviewed by the community against its own flood hazard area requirements.

Monday, April 14, 2014

Update on the Homeowners Flood Insurance Affordability Act (HFIAA)

Last week we had provided news about the US Congress passing the Homeowners Flood Insurance Affordability Act (HFIAA) at the end of March.  Since then, FEMA has published an overview of the the bill found on their website and in the FEMA Resource Library.  This overview document can also be found on our Flood Hazard Management webpage.

We have also started to get some information on how HFIAA will impact people in Vermont specifically, as well as the impacts to flood insurance nationally.  Here is a short summary:

  • It will take some time to start to implement provisions of the new law:
    • In the short term, there may still be individuals that get hit with full actuarial rates due to a new policy on a preFIRM residence (home built before the first Flood Insurance Rate Maps were created).  This new policy could be due to a lapsed flood insurance policy or a new policy being written due to a transfer of the property and/or a requirement by a lender for flood insurance;
    • There will also be a lag for people who will be expecting refunds due to the change in their flood insurance premium as a result of the HFIAA.
  • If you are a property owner living in Bennington County or in the Town/Village of Richmond here in Vermont:  FEMA will be releasing new preliminary or effective DFIRMs in the coming year.  Richmond's new DFIRMs are scheduled to become effective on 8/2/2014.  Bennington County's new DFIRMs are anticipated to become effective about one year from now (March 2015).  If the new preliminary DFIRMs show your house to be located in the mapped flood hazard area where you had not been shown to be located in the flood hazard area on previous FIRMs, you may be eligible for a grandfathered flood insurance rating.  Anyone who may be eligible for receiving grandfathered flood insurance rates is encouraged to get flood insurance BEFORE the new DFIRMs become effective for your community.  For more information regarding FEMA's grandfathering policy, please see an earlier post that was written for the Washington County map update process.  Please note that the estimated flood insurance premiums discussed may be different due to the effects of either Biggert Waters Flood Insurance Reform Act of 2012 (BW12) or HFIAA.  
UPDATE **For Properties newly mapped into the FEMA Special Flood Hazard Area: your first year would be rated as a Preferred Risk Policy (PRP) rate - i.e. as if you are not located in the flood hazard area.  Policy ratings in subsequent years would be based on the same phase-in method used to eliminate pre-FIRM suubsidies.

  • Flood Insurance premiums are going up for everyone.  While the HFIAA is allowing a phase-in of higher rates for primary homeowners, the law is still enabling a push for all policies to eventually reach full actuarial rates.  Property owners should seriously consider mitigating their home or structure(s) to reduce their flood risk and reduce the cost of flood insurance.  Additional information about mitigating your home or structure can be found on the VT Flood Resilience Sharepoint site found under either "Step 5: Insure" or "Step 3: Reduce".  

If you are a local official or someone else that may be helping individuals affected by the changes from the HFIAA, the Association of State Floodplain Managers (ASFPM) will be offering two upcoming webinars in May and June focused on the changes to Biggert Waters 2012 from HFIAA (see dates below).  From the ASFPM announcement, the first webinar in early April filled up and these two follow up webinars are also expected fill up quickly.  
Homeowners Flood Insurance Affordability Act (HFIAA) of 2014 (AKA Grimm-Waters 2014) meets Biggert-Waters 2012: Impacts and Implications
Learn how the Homeowner Flood Insurance Affordability Act modifies and expands on BW-12 implications
1 core CEC for CFMs
$30 for ASFPM Individual Members*
$45 ASFPM Chapters/Agencies/Corporate Partners*
$60 Non-members
*Members must enter the event promo code at registration to receive the preferred rate.  ASFPM members should register through the ASFPM Membership Login page.  

More information about the webinars can found by clicking on the webinar flyer links below:

Tuesday, April 1, 2014

Homeowner Flood Insurance Affordability Act of 2014 - What's Changed from BW12?

After many of the new provisions of Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) started going into effect, we had written about discussions and a US Senate bill that was working its way through Congress to roll back many of the BW12 provisions.  While there were many issues that seemed to need some working out, chief among them affordability provisions for the new rates and increasing funding for mitigation projects, a final bill was sent from the House of Representatives to the Senate and was voted on on 3/13/2014.  The President signed the new Homeowners Flood Insurance Affordability Act (HFIAA) into law on 3/21/ 2014.

The new HFIAA certainly does not repeal all of BW12.  You can see a comprehensive list of all of the changes included in the HFIAA that was compiled by the Association of State Floodplain Managers (ASFPM) - Analysis of HFIAA, but here are some of the more prominent provisions and changes resulting from the passage of the bill:

  • Repeals provision that triggered full-risk insurance rates for pre-FIRM properties;
  • All policyholders will receive an annual surcharge on their flood insurance bill: $25 for primary residences, $250 for all other properties;
  • Changes the annual flood insurance policy rate increase cap from a maximum of 20% to a maximum of 15%;
  • Establishes a maximum cap of 18% per year in premiums increases on any individual properties (exceptions are noted in the ASFPM Analysis of HFIAA);
  • The Act establishes a new, slower path to full-risk rates for some properties (increasing premiums by at least 5% per year) where grandfathering is not possible;
  • Provides for some exceptions and options to escrow flood insurance premiums during a real estate closing;
  • Increases the residential deductible limits to $10,000 from $5,000
For more information about the background on the passage of BW12 and HFIAA, there is a good article that was published in Slate Magazine.