Filed Under:Markets, E&S/Specialty

Florida, FEMA Working on Deal to Prevent NFIP Suspension in State

NU Online News Service, April 13, 12:10 p.m. EDT

A tenuous truce has been forged between federal and Florida emergency-management officials over a bill passed by the Florida legislature that could potentially leave 2.06 million property owners in the state without flood insurance just as the hurricane season nears its peak in July.

The agreement calls for Florida officials to clarify that the legislation, if signed by the governor, won’t allow new construction to proceed in flood plains without prior approval, as mandated under the National Flood Insurance Program.

The confrontation was created by a provision in H.B. 503, passed unanimously by the Florida legislature recently, that bars counties and municipalities from requiring state or federal permits as a precondition for processing development permits.

This provision would put Florida at odds with FEMA requirements.

In a letter to Florida Gov. Rick Scott sent March 30, FEMA regional administrator Major May noted that, “To participate in the NFIP, FEMA requires local communities to meet floodplain-management standards that include reviewing proposed development to assure necessary permits have been received from all relevant governmental agencies.”

The letter warned that the conflicting provisions “might impede the state’s ability to enforce required components of the NFIP’s flood-plain-management regulations and may jeopardize the state’s voluntary participation in the NFIP.”

The Florida director of the Heartland Institute, Christian Cámara, who brought the matter to NU Online’s attention, says, “This is a clear example of how the lack of a private market for flood insurance has real consequences for the entire state.”

He adds, “I wouldn’t blame Gov. [Rick] Scott for what looks like an almost certain veto. The sudden and unexpected suspension of NFIP coverage would have disastrous consequences for a state like Florida.”

However, a FEMA spokesperson said today in a statement to NU Online News, “The Florida Division of Emergency Management has indicated that they are prepared to address the concerns related to compliance with the minimum National Flood Insurance Program floodplain-management regulations.”

The statement adds, “As long as this course of action can be effectively enforced, it will resolve the potential conflict created by House Bill 503.” 

The Florida-regulatory comment to FEMA was that, in its view, while the proposed law bars counties and municipalities from requiring any state or federal permits as a precondition for processing a development permit, there is separate language in the bill that allows local governments to require all other applicable permits be secured before construction actually starts.

The state emergency management has also promised FEMA it will send out a memo to counties and municipalities clarifying this language.

But, R.J. Lehmann, deputy director of the Center on Finance, Insurance, and Real Estate at the Heartland Institute in Washington, cautioned, “It remains to be seen whether FEMA will accept that response as sufficient to resolve the conflict in the law.”

The bill is awaiting the signature of Gov. Rick Scott, R. His staff said the legislation has not been sent to him for action, and he will determine whether he should sign it or veto within the period required by state law.

If signed by the governor, the law would go into effect July 1.

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