The House leadership is hoping that, because the bill has strong bipartisan support, it could be passed by the full House before Congress leaves for its Memorial Day recess May 27.

Industry and House leadership want the bill out the door promptly in order to give the Senate as much time as possible to deal with the issue before the current extension of the program runs out Sept. 30.

The program has been extended 10 times on a short-term basis since the original reauthorization ran out Sept. 30, 2008. The program lapsed for a total of 53 days last year because Congress was unable to pass short-term extensions on time.

Following a lengthy debate Thursday, the full committee decided to add business interruption insurance to the program. A subcommittee had passed a provision adding the coverage earlier, and the full committee rejected an amendment sponsored by Rep. Jeb Hensarling, R-Texas, that would have removed that provision.

The vote on the amendment was 9-38.

Among the technical or special interest amendments voted on the panel, the committee rejected a proposed provision that would have mandated that 829,000 NFIP customers serviced by State Farm agents be pushed back into the private sector within 27 months.

Currently, these NFIP customers are underwritten directly through NFIP-direct, the result of a decision last June by State Farm to exit the program because of the many lapses in the program through congressional inaction since 2002.

State Farm is gradually transferring control of the policies it underwrote to NFIP-direct through a process that will be completed Sept. 30.

But when the transition is completed, State Farm agents will still service the policies, according to Phil Supple, a State Farm spokesman.

The amendment that would have taken those policies away from the State Farm agents was rewritten, and now it simply calls for a study of the issue, with the Federal Emergency Management Agency, which administers the program, reporting back to Congress a year of enactment of the legislation.

The bill also mandates that FEMA send out a letter every year to all NFIP-direct customers saying NFIP-direct customers have the option of getting their NFIP policies through other agents.

Regarding privatization efforts, FEMA is explicitly authorized under the measure to "carry out initiatives to determine the capacity of private insurers, reinsurers, and financial markets to assume a portion the flood risk exposure in the United States."

The bill "clarifies" the power of the FEMA administrator to utilize private market reinsurance capacity to minimize the likelihood that the program would need to borrow additional funds from the Treasury.

The legislation also directs FEMA to assess the capacity of the private reinsurance market by seeking proposals to assume a portion of the program's risk, and to submit a report on such assessment within six months of enactment.

The bill also gives FEMA the power to tear down and rebuild flood-damaged properties with the caveat that such action "must be cost-effective."

The bill was first passed April 11 by the House Subcommittee on Insurance, Housing and Community Opportunity.

Credit Union Times reports that the committee also approved an amendment supported by lenders that would clarify existing law allowing lenders to collect premiums for force-placed flood insurance during the 45-day notification period in the instance when a borrower allows his or her policy to lapse. The amendment passed on a voice vote.