The Senate has passed the heavily debated flood insurance bill by a vote of 72 to 22.
The bill is in response to the 2012 law that aimed to shore up the flood insurance program by putting premiums in line with risk.
As a result, rates skyrocketed, so the bill was drafted in an attempt to roll those premium hikes back.
The bill would cap annual rate hikes at 18 percent, and would preserve subsidies for homes built to code but then re-mapped into higher-risk flood zones.
Those subsidies would remain even if the home is sold.
The bill is also retroactive, meaning that homeowners who start to see their rates go up would get their money back.
To make up for the lost revenue, policyholders would be charged an annual surcharge.
"Homeowners throughout New York can breathe a sigh of relief this evening," said Sen. Charles Schumer. "Homeowners in Staten Island and in the Rockaways, homeowners in Brooklyn and on Long Island, homeowners up in the Hudson Valley, they can all let out one big sigh of relief."
Critics of the legislation say that by limiting the increases and preserving those subsidies, the government is continuing to provide an incentive for people to live in flood-prone areas, and they will not shore up the financially troubled program.
The legislation now heads to President Barack Obama's desk for his signature.