The state Senate voted today to help businesses obtain hard-to-find supplemental flood insurance and prevent job losses.

Sens. Karen Keiser, Tracey Eide, Claudia Kauffman called the passage of SB 6240 a victory for businesses and workers in the Green River Valley who have been experiencing anxiety and uncertainty because of the potential for flooding and the lack of surplus flood coverage.

The legislation gives the state insurance commissioner authority to create a joint underwriting association (JUA) if certain conditions are met. The insurance commissioner must begin by forming a market assistance plan (MAP) to help affected businesses. Underwriting operations can’t begin until the commissioner finds that:

• A MAP is inadequate because fewer than four admitted or surplus line insurers are offering excess flood insurance, exclusive of personal insurance.

• Persons, businesses, or service providers cannot buy excess flood insurance through the voluntary market.

• So few insurers sell excess flood insurance that a competitive market does not exist.

Other provisions include:

• Coverage of any one policy may not exceed $5 million and the total amount of all coverage offered by the association may never exceed $250 million.

• A seven-member governing board will be created to oversee the JUA.

• The association must dissolve after a period of five years unless the Legislature authorizes an extension.

While basic flood insurance is available to homeowners and businesses from the federal government’s national flood insurance program, coverage is only offered up to $500,000 for a structure and $500,000 for contents.

“The federal program just isn’t enough for the businesses this bill is directed at,” Keiser said. “Some of these businesses have pieces of equipment which alone are worth more than a million dollars. This JUA will do what the market is not ─ offering surplus lines of coverage.”

“This would not unfairly manipulate the insurance market, as some have charged,” Eide said. “Similar associations have successfully provided insurance products where no private market exists, such as with midwifery and child care centers.”

In January 2009, the Army Corps of Engineers reclassified the Howard Hanson Dam as unsafe after engineers discovered that water is seeping through an abutment in the right hillside of the dam. While there is no danger of the dam failing, water levels will be kept below the maximum pool level until the repairs have been made. If the region is hit with heavy rains, water might have to be released into the Green River. That increased flow could top levees like Horseshoe Bend.

“We’re talking about the potential loss of thousands of jobs and billions of dollars if catastrophic flooding occurs,” Kauffman said. “We can’t take that chance.”

“The Green River Valley is home to the second largest wholesale distribution center on the West Coast,” Keiser said. “This bill is about preserving tens of thousands of good jobs, billions of dollars in assets and protecting our state’s economy from a huge economic blow,” Keiser said.

The bill passed by a 30-18 vote and now goes to the House for consideration. Similar legislation is pending in the House.

There are more than 113,000 employees in the industrial center. A one-day shutdown of commercial activity in the county's flood plains could mean an economic loss of $46 million.

In addition to SB 6240, the Senate also passed two other bills related to flood protections on identical 48-0 votes.

SB 6286, sponsored by Sen. Adam Kline, would give flood control zone districts and cities the same immunity from tort claims that counties possess, to make sure these governments can address emergency needs without being impaired by fears of liability.

SB 5704, which passed with bipartisan support, expands the allowable size of flood plain districts to three or more counties. This allows the creation of a district large enough to span the Green River basin, which is 90 miles long and stretches through 11 counties.

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