[Senate Hearing 117-858]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-858


REAUTHORIZATION OF THE NATIONAL FLOOD INSURANCE PROGRAM: ADMINISTRATION 
                              PERSPECTIVES

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                                   ON

 EXAMINING THE REAUTHORIZATION OF THE NATIONAL FLOOD INSURANCE PROGRAM
                               __________

                             JUNE 23, 2022
                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs
                                

                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                


                Available at: https://www.govinfo.gov/
                
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
55-795 PDF                WASHINGTON : 2024   

            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL G. WARNOCK, Georgia          KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                 Dan Sullivan, Republican Chief Counsel

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                        Pat Lally, Hearing Clerk

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        THURSDAY, JUNE 23, 2022

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    23

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    24

                                WITNESS

David I. Maurstad, Associate Administrator for Resilience 
  (Acting), Federal Emergency Management Agency..................     5
    Prepared statement...........................................    25
    Responses to written questions of:
        Senator Menendez.........................................    30
        Senator Warren...........................................    39
        Senator Smith............................................    42
        Senator Sinema...........................................    44
        Senator Kennedy..........................................    45

              Additional Material Supplied for the Record

Letter submitted by the National Association of Federally-Insured 
  Credit Unions..................................................    79
Letter submitted by the Credit Union National Association........    80
Statement submitted by the American Property Casualty Insurance
  Association....................................................    82
Letter submitted by American Academy of Actuaries................    89
Letter submitted by SmarterSafer.org.............................    92

                                 (iii)

 
REAUTHORIZATION OF THE NATIONAL FLOOD INSURANCE PROGRAM: ADMINISTRATION 
                              PERSPECTIVES

                              ----------                              


                        THURSDAY, JUNE 23, 2022

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10 a.m., via Webex and in room 538, 
Dirksen Senate Office Building, Hon. Sherrod Brown, Chairman of 
the Committee, presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Senate Committee on Banking, Housing, 
and Urban Affairs will come to order. We are in the hybrid 
format again today. This hearing is a continuation of our 
efforts to enact a long-term reauthorization of the National 
Flood Insurance Program this Congress.
    Welcome, Mr. Maurstad, who has joined us before, and thank 
you for your years of public service and elective office in 
Nebraska and the work you do with flood insurance and other 
things.
    Flooding is the most common and most costly natural 
disaster facing families, businesses, and communities across 
the country. And climate change is only making it worse. Last 
week, as Senator Tester pointed out, and we see, particularly 
those of us who had the good fortune to take children to 
Yellowstone, and have almost a personal feeling for 
Yellowstone, Senator Tester talked about the historic flooding 
at Yellowstone and in Montana, and I assume at the southern 
entrance in Wyoming also, causing closures that hurt the 
economies of nearby towns during the tourist season.
    Just this year, we have seen flash flooding in West 
Virginia and Alabama, we have seen ice jam flooding in Alaska, 
we have seen heavy rainfall flooding in Oklahoma and Arkansas: 
and we have seen heavy rain, snowmelt, and ice jam flooding in 
North Dakota and Minnesota. And that is before hurricane season 
has even begun.
    FEMA personnel are already preparing for the 2022 hurricane 
season, expected by The National Oceanic and Atmospheric 
Administration to be above normal for activity. This flooding 
is devastating to families, homes, businesses, and communities.
    And these disasters often fall hardest on low-income 
families and communities who have fewer resources to prepare 
for them and respond to them. We need to help our families and 
communities to adapt and become more resilient to the flooding 
we face now and in the coming decades, and whenever possible, 
avoid damages altogether.
    The NFIP is critical to that effort. It provides over $1.3 
trillion in coverage to nearly 5 million homes and businesses 
in over 22,000 communities. Unlike a private insurance company, 
the NFIP does not just provide insurance. Its job is not just 
to help with recovery, but to prevent and minimize the damage 
in the first place.
    NFIP combats the overall threat of flooding through four 
related components: flood insurance, floodplain management, 
floodplain mapping, and mitigation.
    The Bipartisan Infrastructure Bill offers a downpayment on 
new opportunities for communities to help homeowners stay out 
of harm's way.
    But we need to do more. Infrastructure investment, of 
course, was a good start, supported by most people on this 
Committee. But because of climate deniers in the Senate--and 
there were many of them--and because of our collective failure 
to fight climate change, that investment in the infrastructure 
bill will not be enough.
    And as we fail to fight climate change, the costs keep 
rising. Look what is happening in Montana. We must reauthorize 
and strengthen NFIP, and we must invest in flood mitigation 
before disaster happens.
    Last week, we heard from practitioners working with 
communities and families. We learned about barriers to 
underserved communities and families participating in 
mitigation programs, we learned about the benefits of expanding 
the Community Rating System to help communities reduce local 
flood risk, we learned about the importance of providing better 
risk information to communities and property owners, both 
through improving mapping and risk communication products, and 
through disclosure of flood hazards to prospective owners and 
tenants, and we learned the importance of building State and 
local capacity to carry out our floodplain management and 
mitigation programs, especially for small and rural 
communities.
    Today we will hear from FEMA to discuss the status of the 
program, including their ideas for long-term reauthorization, 
and the implementation of FEMA's new Risk Rating 2.0 
initiative.
    FEMA has submitted a package of legislative proposals for 
our consideration. I know that Mr. Maurstad will talk about 
those. There will be a robust discussion of those issues today. 
I am interested in the recommendations that you offer for ways 
we can help strengthen the NFIP so that it can ensure long-term 
program stability while providing reliable access to insurance 
for property owners and renters, so it can address 
affordability concerns, particularly in light of Risk Rating 
2.0, so it can ensure that more people are aware of their flood 
risk and insured against losses, and so that it can help 
communities reduce our overall level of flood risk, through 
investments and improvements in mapping, floodplain management, 
and mitigation.
    As we discussed last week, it is no secret that NFIP 
reauthorization has proven to be a challenge. I think we have 
done extensions maybe 20, 21 times, something like that. It is 
a complex program--Mr. Maurstad knows that better than anyone--
with multiple goals, with implications for many of the things 
we care about.
    I believe it is possible for us to come together--the 
Ranking Member and I have had some discussions; we will have 
more--come together to reauthorize and improve this program.
    I look forward to continuing to work with Senator Toomey 
and the Members of the Committee. Many Members of the Committee 
on both sides, this is less a partisan issue than a geographic 
one, but the whole country suffers as Louisiana or Montana or 
Rhode Island or Pennsylvania does. So all of that is important.
    Senator Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you, Mr. Chairman. Acting Associate 
Administrator Maurstad, welcome to the Committee.
    The National Flood Insurance Program was last reauthorized 
on a long-term basis in 2012. That reauthorization expired in 
2017. And Mr. Chairman, you are right. The short-term 
extensions have occurred 21 times, and that is no way to run a 
railroad.
    So I am pleased that the Chairman is interested in working 
in a bipartisan fashion to see if we can get a long-term 
reauthorization done with the reforms that this program needs.
    Let me take a moment to remind everyone the scope of the 
challenges the NFIP faces. Since 2000, NFIP has borrowed from 
the Treasury in 11 out of 22 years. That means that half the 
time, this ``insurance'' program requires additional Federal 
taxpayer funds in order to subsidize policyholders.
    Today, NFIP's current debt to the Treasury stands at $20.5 
billion. Interest payments alone are between $300 and $400 
million a year. And the $20.5 billion in debt excludes the $16 
billion that was arbitrarily forgiven in 2017.
    Some of my colleagues have argued that NFIP policyholders 
could not possibly repay this debt so even the rest should be 
forgiven. But before considering such drastic action we should 
ask ourselves, how did we end up in this scenario in the first 
place?
    Well, the answer is simple. This is a broken program, and 
the subsidies, by their nature are badly designed, and the 
program systemically underprices flood insurance. It is mostly 
the fault of Congress, not FEMA, that are the root causes here.
    FEMA has, fortunately, worked to improve NFIP by 
implementing a new price rating for flood insurance premiums. 
It is known as Risk Rating 2.0, and it better aligns 
policyholders' premiums with their actual flood risk. Risk 
Rating 2.0 is producing rates that are more equitable by 
phasing out most NFIP subsidies.
    Twenty-three percent of policyholders, over a million 
families, were actually overpaying for flood insurance, and 
these families will now see a decrease in their monthly 
premiums. Congress should work toward strengthening Risk Rating 
2.0 and eliminate any subsidies that do not align price with 
risk.
    During last week's hearing on NFIP, I discussed several of 
my priorities for reauthorization. First, we should encourage 
more private capital in the form of private policies and 
private reinsurance. My top priority for reauthorization is to 
eliminate any barriers that exist to obtaining private flood 
insurance.
    Second, we should ``do no harm.'' We should be protecting 
the transition to actuarially sound premiums, which is 
underway. Any effort to slow or interrupt that progress should 
be rejected.
    Third, if subsidies are going to persist, they must be 
better targeted. FEMA is proposing a new Means-Tested 
Assistance Program for current and future low- and moderate-
income households. I am open to finding ways to help current 
low-income homeowners afford flood insurance. However, any 
means-tested subsidy should replace existing cross-subsidies 
within NFIP. Adding another subsidy on top of existing cross-
subsidies moves us further away from actuarially sound 
premiums.
    And fourth, we should improve communication so that 
homeowners and homebuyers know and understand the flood risk of 
properties that they are considering.
    FEMA recently submitted to Congress NFIP reauthorization 
proposals, including several encouraging ones. One proposal 
would prohibit coverage for a new category of excessive loss 
properties, which are properties that have flooded multiple 
times. This is a good policy and it is worthy of very serious 
consideration.
    As a general principle, we should not provide flood 
insurance subsidies that encourage people to live in flood-
prone areas. That might seem like common sense, but it is what 
we do now. While excessive loss properties are not the majority 
of homes in NFIP, they do constitute a highly disproportionate 
share of losses. And it is unfair and senseless to force 
taxpayers to continuously foot the bill to bail out properties 
in these risky areas.
    Another promising FEMA proposal would prohibit coverage for 
commercial properties and new construction in high-risk areas. 
This would help to mitigate risk in NFIP by eliminating 
coverage in heavy flood-prone areas, and it also encourages 
competition in the private market for nonresidential policies.
    One important NFIP reform not included in FEMA's 
reauthorization proposals is mid-year cancellation. A barrier 
to more people choosing private flood insurance is the fact 
that FEMA offers a very short window each year to switch over 
from NFIP to a private provider.
    Previously, FEMA had allowed policyholders to leave NFIP 
for private flood insurance and receive a pro rata refund. 
However, FEMA changed this policy in 2019. Now a pro rata 
refund is available only in very limited circumstances. This 
effectively locks in all but the most diligent policyholders 
into their NFIP policy.
    While there are improvements that can be made to FEMA's 
reauthorization proposals, I am pleased to see that it has 
given serious thought to reforming NFIP. It is actually pretty 
rare to see a Federal agency request, as FEMA has done, that 
Congress reduce the agency's borrowing authority. I commend 
FEMA for recognizing that NFIP must be financially stable to be 
a sustainable program.
    A long-term reauthorization must continue to move NFIP in a 
positive direction to protect taxpayers who currently bail it 
out year after year. I recognize that we cannot fix all that is 
wrong with NFIP overnight, but we should use reauthorization as 
an opportunity to move it in the right direction.
    I stand ready to work with the Chairman and my colleagues 
to achieve that goal, and I look forward to discussing FEMA's 
reauthorization proposals.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey.
    Today we are joined by David I. Maurstad, from FEMA, from 
the Federal Emergency Management Agency, to share his ideas, 
FEMA's ideas, about ways to improve NFIP and better protect our 
communities from flooding. He is the Acting Associate 
Administrator for Resilience at FEMA. Prior to his appointment 
as Acting Associate Administrator he served as Deputy Associate 
Administrator for the Federal Insurance and Mitigation 
Administration and a senior executive of the National Flood 
Insurance Program since 2018. He has previously served FEMA as 
a Regional Administrator and has over 25 years of experience in 
the insurance industry. His public service includes serving as 
a mayor, a State legislator, and lieutenant Governor in his 
home State of Nebraska.
    Mr. Maurstad, you are recognized for 5 minutes.
    Welcome. Thank you for joining us.

  STATEMENT OF DAVID I. MAURSTAD, ASSOCIATE ADMINISTRATOR FOR 
    RESILIENCE (ACTING), FEDERAL EMERGENCY MANAGEMENT AGENCY

    Mr. Maurstad. Thank you. Good morning, Chairman Brown, 
Ranking Member Toomey, and Members of the Committee. Thank you 
for the opportunity to testify today in support of a package of 
17 legislative proposals that would reform the FEMA's National 
Flood Insurance Program. For more than 50 years, the NFIP has 
been critical to the Nation's resilience policy. Today, as our 
changing climate poses a serious threat to our Nation, and as 
the number and severity of disasters continues to grow, the 
NFIP requires structural change.
    Since the last multireauthorization in 2017, the NFIP has 
experienced 21 short-term extensions and 3 brief lapses. The 
short-term extensions are disruptive and cause existing and 
potential policyholders to lose confidence in the NFIP. We 
believe that a 10-year reauthorization, with comprehensive 
program reforms, is an imperative.
    The 17 reform proposals put forth are guided by four key 
principles. First, ensuring that more Americans are covered by 
flood insurance, by making insurance more affordable to low- 
and moderate-income policyholders. Flood insurance can be 
unaffordable for some policyholders. Under current law, FEMA 
does not have the authority to establish and charge premiums 
based on a policyholder's ability to pay. Although the NFIP 
offers mandatory discounts and cross-subsidies, those discounts 
and subsidies do not take into consideration the policyholder's 
financial need and, in fact, can make risk communication 
difficult because many people equate lower cost with lower 
risk. Reforms that address affordability, such as the use of a 
targeted assistance program, can offer low- and moderate-income 
current and prospective NFIP policyholders a graduated risk 
premium discount while providing them knowledge of the full-
risk price to communicate a property's true flood risk.
    Second, communicating risk in real time and providing 
Americans with tools to manage flood risk. Reforms that 
increase the scale and frequency of flood mapping and 
incorporate emerging priorities and technologies into the flood 
hazard and flood risk identification process will expand the 
ways in which the NFIP communicates risk. Raising awareness of 
true flood risk enables people to make informed decisions about 
their family and property. Home buyers and renters may lack 
awareness about flood risk when they complete real estate 
transactions. Reforms that would require States to establish 
minimum flood risk reporting requirements for sellers and 
lessors before residential transactions close would address 
this challenge.
    Additionally, we need to reform how we measure and 
communicate flood risk. The Nation's evolving risks require 
flood hazard information that is more robust than the special 
flood hazard area and 1 percent annual chance flood elevation.
    Third, reducing risk by addressing extreme repetitive loss 
properties. Previous losses are a significant indicator of 
risk, meaning that if a property flooded before, there is a 
high likelihood that it will flood again. Since 1978, nearly 
100,000 structures have had two or more paid losses; nearly 
1,000 have suffered 10 or more losses. The NFIP must have 
better tools to address insured structures that have expirenced 
multiple flooding claims.
    About 2.5 percent of insured properties are considered 
unmitigated repetitive loss properties. Reforming the NFIP to 
institute an objective threshold to deny coverage to the most 
flood-prone structures would discourage unmitigated rebuilding 
in areas with a history of flooding and reduce financial risk 
to the NFIP, while ensuring that coverage is still widely 
available to individuals, families, and businesses who might 
not be eligible for private market coverage.
    Fourth, instituting a sound and transparent financial 
framework that allows the NFIP to balance affordability and 
fiscal soundness. Without this in place, the longevity and 
sustainability of the program is at risk.
    The NFIP currently carries $20.5 billion in debt to the 
Treasury and pays approximately $400 million in interest 
expenses annually. As currently structured, the program is 
unable to pay this debt back in full. Canceling the NFIP's debt 
provides the program with a solid foundation that can support 
financial reforms around borrowing authorities, future 
interest, enhanced liquidity, and an ``upper limit'' for the 
size of an NFIP event. These reforms address fundamental 
structural challenges and are essential to building a viable 
NFIP.
    It is critical that Congress provide urgently needed 
multiyear reauthorization and concurrently reform the NFIP. 
FEMA looks forward to working with Congress to develop a long-
term solution that addresses the needs of the NFIP, its 
policyholders, and the Nation.
    I would be pleased to answer any questions.
    Chairman Brown. Thank you, Mr. Maurstad.
    Several mitigation-related questions if you would answer 
briefly, because I have a number of questions I want to get to.
    Last week we heard testimony that lower-income homeowners, 
those in lower-valued properties often face barriers to 
participating in the Flood Mitigation Assistance Program, 
particularly not being able to afford matching requirements or 
receiving far too little assistance to be able to move 
elsewhere.
    Would you commit to work with us to address these barriers?
    Mr. Maurstad. Yeah, absolutely, sir.
    Chairman Brown. Thank you. We have also heard that small 
and rural communities often lack capacity to fully implement 
and take advantage of mitigation and floodplain management 
opportunities like CRS or even to meet basic requirements.
    Would you commit to providing additional technical 
assistance and capacity-building resources to help improve our 
resilience?
    Mr. Maurstad. Yes.
    Chairman Brown. OK. Thank you.
    The infrastructure bill provided a downpayment toward 
addressing our mitigation needs, but we still need to do more. 
Could you estimate what it would cost to mitigate just the 
properties currently considered repetitive loss or severe 
repetitive loss?
    Mr. Maurstad. So this one will take a little bit more than 
a yes or no.
    Chairman Brown. Of course.
    Mr. Maurstad. Of course, it is going to fluctuate. 
Inflation will impact the average value of a home. The number 
of homes fluctuate. With additional funds that you supported 
and pushed forward for flood mitigation assistance, we are 
hopeful to be able to keep pace with the increasing number of 
repetitive loss homes.
    But roughly you could do between $18 and $20 billion to 
take care of the current repetitive loss issue.
    Chairman Brown. Thank you for that, for that precise 
answer.
    Premium affordability has been a major concern of 
homeowners and Members of this Committee, certainly from 
Louisiana and Rhode Island and other States exposed to the Gulf 
or to the Atlantic. FEMA has called for nearly $5 billion to 
carry out a new Means-Tested Affordability Program over the 
next 10 years. Talk about the benefits, if you would, Mr. 
Maurstad, of this affordability program in helping more people 
obtain or maintain the insurance they need to protect 
themselves.
    Mr. Maurstad. Sure. FEMA delivered an affordability 
framework to Congress in 2018 that highlighted the number of 
property owners in the special flood hazard area, the high-risk 
area, that are low- to moderate-income in their particular 
area, and it was roughly about 30 percent of our current 
policyholders. And there is only about 35 percent of properties 
in the high-risk area that have coverage. So it is very easy to 
see that many low- to moderate-income policyholders in the 
high-risk area do not have the protection that they need.
    We need to close the insurance gap. We need to have more 
insured survivors after events. And the Means-Tested Assistance 
Program that we put forward very much targets the policyholders 
that need it the most, based on their means to pay instead of 
the type of property they have or where their property is 
located.
    Chairman Brown. Thank you. This is probably my last 
question. I want to revisit a topic we touched on last year. 
That is NFIP debt. Debt cancellation is often maybe always 
controversial. Since Katrina, NFIP has paid over $5 billion in 
interest to the U.S. Treasury on the program's debt, over $400 
million per year.
    Can you talk about the effect of that debt and interest 
payments on the program, and explicitly answer why you have 
included a proposal to cancel the debt in your package?
    Mr. Maurstad. Sure. Thank you. It is the third-largest 
expense in the program, and quite frankly, it is unconscionable 
that we are taking current policyholder premium dollars to pay 
interest on a debt that was accumulated because of past 
catastrophic events.
    The reason that we are proposing to have the debt canceled 
is so that we can start out with a clean slate and implement 
our sound financial framework proposals, which means currently, 
if nothing is done, there is a less than 5 percent chance that 
at the end of the 10-year period there will be a positive 
number in the National Flood Insurance fund. If we institute 
the recommendations of FEMA from career staff, we would be 
looking at a 75 percent chance of having a positive balance in 
the National Flood Insurance fund at the end of 10 years.
    So it is basis for being able to start out, implement the 
reforms, be able to manage the program appropriately, indicate 
that we would have the responsibility to run the program, to 
take care of a 1-in-20-year loss exceedance level, and then 
allow for the annual appropriation for the difference between 
the dollars that we should collect and the dollars that we can 
collect because of congressional restrictions.
    So it is fundamental that the debt be canceled so that we 
can put the program on solid fiscal and financial ground so 
that we can sustain the program for decades to come.
    Chairman Brown. I think you were clear. I want to make 
sure. We could not do a reasonably good 10-year reauthorization 
without debt cancellation.
    Mr. Maurstad. No. Not in my view.
    Chairman Brown. OK. Thank you. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. I think it would 
be wildly irresponsible to do a debt cancellation without 
fundamentally changing the dynamics that put us in debt in the 
first place. Otherwise, we are simply inviting the next wave of 
debt, and then the next cancellation, and so on.
    I have several questions for you. I would like to talk a 
little bit about this means-tested subsidy. And, you know, I 
think we should acknowledge that any kind of means-tested 
program or subsidy, for anything--and this is true of Medicaid, 
food stamps, housing, you name it--it has the unintended but 
unavoidable consequence of creating a very high marginal cost 
for someone to elevate their skills and earn more money, 
because if in so doing you become disqualified for one of these 
programs it is equivalent to a very high marginal tax rate on 
your increased earnings.
    In the case of the flood program, it also introduces the 
moral hazard of increasing the likelihood that someone might 
choose to live in a flood-prone area, at least somewhat more 
likely than if they had to pay the full price, and that is 
problematic as well.
    But my understanding is the design of your proposal permits 
this assistance to be provided to primary residents in which 
the residing family can earn up to 120 percent of the median 
income for that region. So that means in these regions the 
arithmetic is that a majority of people would qualify. That is 
mathematically the consequence.
    So could you help me understand why we come to the 
conclusion that we want to design a subsidy that applies to not 
a subset of the lowest-income people but actually a majority of 
people in most areas?
    Mr. Maurstad. Yes, sir. First of all, there are a lot of 
working-class families that are currently living in high-risk 
areas because that is where they are able to have employment, 
or they have lived there for generations. So the premise is to 
close the insurance gap.
    As you certainly are aware, after every major flooding 
event there are not enough insured survivors. Generally 
speaking, it is 1 out of 3, at best, of the homes that are 
damaged have the necessary insurance coverage they need to 
recover. So they have to look to other ways to be able to get 
on that road to recovery, while folks that have the insurance 
do have a path to begin the recovery process.
    So we think it is good public policy to assist low- to 
moderate-income policyholders have the necessary protection 
they need to protect their families and the lives they have 
built.
    Senator Toomey. But you are talking about subsidizing a 
majority of policies, and that is very counterintuitive to me, 
and I think it would be to a lot of folks.
    Let me ask you another question. My understanding is FEMA's 
proposal for this means-tested assistance would permit 
policyholders to simply self-certify that they are eligible. 
Self-certification obviously creates a risk of significant 
fraud. That is why the GAO has sensibly called for Federal 
agencies to have a mechanism to validate self-certification, 
and we have seen this recently. The pandemic-related relief--
there was massive fraud. The SBA probably issued over $1 
billion of COVID-related loans to businesses that were not 
eligible. We are still going to find out massive numbers of 
people with invalid unemployment claims.
    So my question is, what kind of processes do you envision 
to ensure that people who self-certify that they are eligible 
are, in fact, eligible?
    Mr. Maurstad. Yeah. So first of all, self-certification is 
one of the possible ways for which somebody could be able to be 
eligible for the program. We would need to design the 
affordability program, if given the authority to do so. So the 
request is to have latitude in how we were to design the 
program, to make sure that it is both available to 
policyholders and property owners but also so that we can have 
the right level and means of accountability.
    So the actual design will come after we get the authority. 
That is just one of, I think, four possible ways that the 
property owner could attest they are low- to moderate-income.
    Senator Toomey. So you do not reflexively oppose having a 
mechanism to verify eligibility?
    Mr. Maurstad. I think that is an important part of any 
program.
    Senator Toomey. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Toomey.
    Senator Reed, from Rhode Island, is recognized.
    Senator Reed. Thank you, Mr. Chairman. Thank you, Mr. 
Maurstad, for your public service and being here today.
    One of the principles that we have to fix is the flood 
mapping process. We have been waiting for decades to see that 
all floodplains have been properly mapped. Can you give us a 
comment on how we are doing in terms of FEMA's responsibilities 
to map everything?
    Mr. Maurstad. Currently we have met our OMB requirement of 
having 80 percent of the NFIP maps at new, validated 
engineering, meeting those requirements as set forth by the 
Technical Mapping Advisory Commission. We have also made great 
strides in the mapping of coastal areas. But we do need to move 
beyond just providing a regulatory product that outlines the 1 
percent annual chance, high-risk area.
    We are in the midst of developing what we have called the 
Future of Flood Risk Data that will allow us to build products 
with local communities that look at future conditions because 
of climate change, that other folks can use to build the tools 
they need at the local level.
    So we are absolutely committed to improving, continuing to 
modernize the flood mapping, flood risk identification. I can 
see, in years down the road, that we potentially do not even 
call it mapping anymore, because of the technological changes 
that we have. But we definitely need to do more in the risk 
communication area.
    Senator Reed. In terms of future conditions, there was just 
a story in my home State, a coastal community in Warwick, Rhode 
Island. The local TV station suggested they would be 8 feet 
underwater if we had a serious hurricane. That would cover a 
lot of territory, including homes that are insured and not 
insured.
    Will you incorporate these future conditions and also will 
that affect the rates that you are charging?
    Mr. Maurstad. So certainly we have to look farther down the 
road than we have been looking, and we have generally used 
historical data in the current circumstances, in developing the 
regulatory requirements that we have right now. And so 
certainly subsidence, certainly large, catastrophic flood 
events are going to be in our future, and we have to help 
communities and States prepare for them, and part of that is 
sound risk identification and sound risk communication.
    Senator Reed. The Flood Mitigation Assistance Program, 
under the bipartisan infrastructure law received $3.5 billion. 
There are many cases in which we have made money available that 
does not show up in every State in the same proportion, 
particularly smaller States. Can you comment on your proposal 
to spend those funds?
    Mr. Maurstad. Sure. The Flood Mitigation Assistance Program 
is looked at across the country. We have a commitment to making 
sure that our mitigation programs are equitable. And so that 
means not only high-population areas but those areas that are 
not as populated but still have flood risk, disadvantaged 
communities, socially vulnerable communities.
    And so we are using that as a factor as we evaluate the 
applications and sub-applications that come in from local and 
State government to make sure that we are delivering our 
mitigation programs in an equitable fashion.
    Senator Reed. Thank you very much. With that I will yield 
back my time.
    Chairman Brown. Thank you, Senator Reed.
    Senator Kennedy, from Louisiana, is recognized.
    Senator Kennedy. Mr. Administrator, I do not know you very 
well. I have watched you in some of the testimony. You seem 
like a very nice person. I do not want you to take what I am 
about to say personally.
    I understand I may be wasting my time today. I believe that 
FEMA and the Biden administration have made their decision with 
respect to flood insurance. I regret that but I believe that is 
a fact. And most of my people in Louisiana understand at this 
juncture that the only place they are going to find lower food 
prices, cheaper gas, a cleaner, safer environment, and 
affordable insurance is in the voting booth, because my people, 
most of them, and I think most Americans, have concluded that 
the Republicans are not perfect, but the other side is crazy.
    Now, about 500,000 people in my State have flood insurance, 
and despite what some people say, these are not 
multimillionaires, in multimillionaire homes on the beach. 
These are working people. And there are people in the
    U.S. Congress who claim to be for the little guy, but they 
do not really like him or her very much.
    A lot has been made about repetitive loss properties, and 
no fair-minded person would not want to address that issue. I 
want to address that issue. But this issue also has been 
demagogued. Of the 500,000 people in my State who have had 
repetitive losses--that is two or more losses of over $1,000 
over a 10-year period--it is 11,000 people. That is about 2 
percent. Of those who have had severe repetitive losses--that 
is four or more payments on claims of over $5,000--over that 
period, that is 594 out of 500,000. That is one-tenth of 1 
percent.
    Now I understand politics. OK. You are trying to make some 
changes. You are going to accentuate the points that you think 
will be the most persuasive. But I think we ought to be 
factual.
    Why will FEMA not share its algorithm with the American 
people?
    Mr. Maurstad. Thank you, sir, and, you know, we look 
forward to continuing to work with you. We have shared the 
algorithm. We have put forward on our website the methodology.
    Senator Kennedy. No, you have not. No, you have not, Mr. 
Administrator. I apologize for interrupting, but no, you have 
not.
    Let me just ask you directly. Well, first, who owns the 
algorithm? Did FEMA put together the algorithm in-house?
    Mr. Maurstad. Yes, sir.
    Senator Kennedy. OK. So you did it with current FEMA staff, 
no outside help?
    Mr. Maurstad. No. As we do across the National Flood 
Insurance Program, we rely heavily on the private sector and 
contractors----
    Senator Kennedy. You relied on Milliman? I am interrupting 
you, and I am sorry, but Chairman Brown is going to cut me off. 
You relied on Milliman.
    Mr. Maurstad. Milliman was one of the contractors.
    Senator Kennedy. Does Milliman own the algorithm?
    Mr. Maurstad. No.
    Senator Kennedy. OK. And this algorithm, you say you can 
zero in on an individual home and predict whether it is going 
to flood over the next 30 or 100 years, and that is how you set 
your rates, OK.
    Mr. Maurstad. We set the rates based on the individual 
characteristics of the property.
    Senator Kennedy. Right. You say the individual property, 
not a floodplain.
    Mr. Maurstad. That is----
    Senator Kennedy. Well, if I sent you a public information 
doctrine request, and I said, look, I want the algorithm so I 
can hire somebody to review this algorithm to see what 
clairvoyant people are telling us about climate change and what 
is going to happen in America over the next 150 years, would 
you give me that algorithm?
    Mr. Maurstad. As I said, we already have and we responded 
to----
    Senator Kennedy. No, you have not.
    Mr. Maurstad. ----a letter----
    Senator Kennedy. No, you have not. No, you have not. I want 
the algorithm so I can hire some experts to look at it and 
either say this thing is water-tight or it is grossly 
political, or somewhere in between.
    Mr. Maurstad. We have put on the Web exactly what an expert 
would need to determine and get to the answer that you----
    Senator Kennedy. You put on the Web the bullet points.
    Mr. Maurstad. No. We put on the Web----
    Senator Kennedy. You put on the Web the bullet points, just 
like we have got bullet points on our gun control bill, and 
then we got the bill.
    Mr. Maurstad. No. We put forth a document----
    Senator Kennedy. I am going to send you a public records 
doctrine. I am sorry to interrupt, but they give us 5 minutes.
    Mr. Maurstad. I understand.
    Senator Kennedy. I am sorry. It is probably like a council 
meeting until you----
    Mr. Maurstad. I--can I make one last comment?
    Senator Kennedy. Sure, but I am going to send you a records 
doctrine request, and I would like the algorithm so I can hire 
somebody. I am not saying I do not trust you, but, you know, I 
play poker every now and then with friends. They are all 
friends, but I cut the cards every single time. And I want 
somebody who can really look at this.
    Mr. Maurstad. Sure. Well, what we have posted on the Web is 
similar in fashion to what a private insurance company would 
have to provide a State insurance commissioner to change rates 
in the State. But more importantly, GAO has started a study of 
Risk Rating 2.0, that we are cooperating 100 percent with, that 
I am sure will get to also a lot of the answers that you are 
looking for.
    Senator Kennedy. The Government is going to study its own 
proposal. What could possibly go wrong?
    Chairman Brown. Mr. Maurstad, Senator Kennedy and others 
will be sending you written questions, as you know, and you 
will have 45 days to respond to them.
    Senator Menendez, of New Jersey.
    Senator Menendez. Thank you, Mr. Chairman, for holding this 
hearing. Before I get to my questions I want to note that I 
find it highly unusual that FEMA sent to Congress an 
unsolicited, 17-section NFIP reauthorization bill that, in my 
view, will do significant harm both to the program and 
homeowners alike.
    Many of the ideas reflected in this proposal were part of a 
2017 House Republican bill that was rejected by the Democratic 
majority. In fact, just week, E&E News noted the similarities 
between this proposal and a proposal written by then-OMB 
Director Mick Mulvaney during the Trump administration. FEMA's 
proposal will lead to more people being uninsured and 
unprotected against more frequent storms, higher costs for 
families, and higher barriers to owning a home and a small 
business.
    And so I would just say to the Chair and the Ranking 
Member, there is already a bipartisan comprehensive NFIP 
reauthorization bill, introduced in the Senate. The legislation 
that I have co-sponsored with Senator Kennedy and Van Hollen on 
this Committee, along with six other Senators, is supported by 
the National Association of Counties, the Flood Mitigation 
Industry Association, the International Association of 
Structural Movers, and others. And so I look forward to working 
with the Chair and the Ranking Member on this.
    According to a report by Redfin, 84 percent of majority 
Hispanic communities will face increases under Risk Rating 2.0, 
the highest share of increases compared to other racial and 
ethnic groups. Historically, Hispanic families have been 
underrepresented in home ownership, and I believe that Risk 
Rating 2.0 will only undermine recent gains.
    The average annual premium in majority Hispanic 
neighborhoods is $495. However, CBO has found that FEMA's new 
premium methodology may increase premiums by 4 to 7 times more. 
That could go from $495 to nearly $3,500.
    So in creating Risk Rating 2.0: Equity in Action, did FEMA 
consider whether the policy would disproportionately burden 
majority Hispanic communities?
    Mr. Maurstad. So----
    Senator Menendez. That is a simple yes or no.
    Mr. Maurstad. No, it did not.
    Senator Menendez. OK. Why not? Why would FEMA not look at 
the impact across all communities and attempt to control for 
disproportionate burdens in any community?
    Mr. Maurstad. So insurance rates are based on actuarial 
science, and the manner in which rates are calculated are based 
on the property characteristics, not the owner of the property.
    Senator Menendez. Oh, so you mean we should make public 
policy here in such a broad-based area that we do not care what 
happens to Black or African American or minority communities. 
Is that what you are telling me?
    Mr. Maurstad. That is not what I said.
    Senator Menendez. Well, that is what you did, though.
    Mr. Maurstad. That is not what I said at all.
    Senator Menendez. I know, but that is what you did.
    Mr. Maurstad. No.
    Senator Menendez. I appreciate that FEMA supposedly 
supports an affordability program to help policyholders get 
covered. But in order to have an informed discussion around the 
issue of affordability, FEMA has to fully explain Risk Rating 
2.0.
    Let me be clear. No one, except for FEMA, knows what the 
full risk premium rates are under Risk Rating 2.0. FEMA has 
only released limited information on what the first-year 
premiums are with statutory caps applied.
    So, Mr. Maurstad, will you provide to Congress the full 
risk rates of what you plan on charging my constituents?
    Mr. Maurstad. Sure. So we provided the information that we 
can provide based on what we know today. You cannot predict 
what the rates are going to be 10 years from now. We know what 
the full risk rates are now, and they will be shown on the 
insurance policies that people purchase, especially those that 
are on the glide path to their full risk rate.
    Senator Menendez. Look, you are calling on Congress to 
authorize a new voucher program as part of your plan, but it is 
difficult to know how to tailor such a program if we do not 
know the premiums you are charging. And listen, you are talking 
10 years. You are telling me you are not going to know what the 
premiums are the year after? I do not believe that.
    Our legislation, that was signed into law, requires FEMA to 
report to this Committee when premiums exceed a certain 
threshold, and it has not done so this year or in recent years. 
If FEMA cannot be more transparent with Congress then it will 
be extremely challenging for us to address affordability. You 
have failed to address what the statutory obligations are.
    Now one of the provisions FEMA proposes is the idea of 
continuous coverage, which would allow policyholders--oh, and 
before I get to that let me just say that from independent 
sources we will see a compounding raising of premiums that will 
ultimately range in the double-digit range, annually. Annually.
    Now one of the provisions FEMA--and I will close on this, 
Mr. Chairman--proposes is the idea of continuous coverage, 
which would allow policyholders to keep their NFIP discount if 
they leave the program to go to private flood insurance and 
want to later return to the NFIP. Do you know of any property 
and casualty company that offers continuous coverage?
    Mr. Maurstad. Not that I am aware of.
    Senator Menendez. Yeah, and there is a reason for that.
    Mr. Maurstad. As was pointed out, you know, this is a 
multipurpose Government program, and that has been indicated to 
us that that will allow for greater private sector development, 
which has the potential to assist FEMA in closing the insurance 
gap.
    Senator Menendez. I do not know who is the private entity 
that told you that, but I have never heard of any insurance 
company offering continuous coverage if policyholders want to 
leave their insurance policies for competitors. If we offer 
continuous coverage, what we are setting up is the program to 
be cherry-picked, and we will lose policies that help balance 
out the program. Insurance is about pulling risk over the 
widest group of policyholders, and I am deeply concerned that 
what you are proposing, both in the rate shock that will take 
place for policyholders, which means that people will forego if 
they do not have a mortgage obligation, to have flood 
insurance, they will forego--your own entity says that 20 
percent of the policyholders will drop coverage. Well, that 
reduces the universe by 20 percent. The smaller the universe, 
the higher the rates. That is going to create another cascading 
effect at the end of the day.
    But then to say continuous coverage so that people who are 
less likely to face the consequences of a claim will go to 
private insurance, but then you will leave all of the 
properties that have a challenge in the National Flood 
Insurance Program, and that will only create a compounding 
consequence.
    So I have real serious concerns, and I would just say to 
the Chairman and Ranking Member, the last time we went through 
something similar there was such rate shock that both Democrats 
and Republicans responded to it, and I hope we do not have to 
wait for the rate shock, Mr. Chairman, to try to solve the 
problem.
    Chairman Brown. Thank you, Senator Menendez.
    Senator Warner is recognized from his office, from 
Virginia.
    Senator Warner. Thank you, Mr. Chairman, and let me just 
add one comment to my friend, Senator Menendez. I think he has 
raised some really important issues and I do not bring the 
expertise on this issue that he has, but I want to affiliate 
myself with some of his comments, particularly on issues around 
continuous coverage.
    Mr. Maurstad, in Virginia we obviously have a sizable 
percentage of our population that are around coastline, rivers. 
It is really important in terms of tourism issues, commercial 
assets in Virginia. One of the things that I hear, and I say 
this as former Governor, now Senator, is constantly from 
residents and businesses trying to decide how do you make that 
risk calculation to mitigate against the challenge around flood 
risk.
    I know you have got this new system under Risk Rating 2.0, 
but I have heard from a lot of communities and actual 
individual homeowners that this new system actually makes it 
harder for the individual homeowner to be able to calculate 
what the risk might be and make that harder to them make the 
decision whether they ought to make the kind of flood 
prevention investments.
    I understand that FEMA, just released some online tools 
that were supposed to make this individual calculation a little 
bit easier, but I would ask you to kind of talk with some 
detail about whether this will provide the granularity to 
individual homeowners so they can actually make this assessment 
in a rational way without having to go get some outside 
expertise. And are you hearing about this? I am sure this is 
not just a Virginia phenomenon, but this ability to get much 
more granular, are you finding that in other communities as 
well?
    Mr. Maurstad. Thank you, sir. Certainly mitigation 
continues to be just as important today as what it has ever 
been, and in fact, now mitigation credits can apply throughout 
the community instead of just in the special flood hazard area.
    But most importantly, we continue to encourage homeowners, 
renters, small business owners, to work with their insurance 
agents, to understand the impacts of different mitigation 
measures and what that would do and what kind of impact that 
would have on their flood insurance premium.
    Of course, the real reason why we want to encourage people 
to mitigate their property is for safety for their property and 
their family.
    Senator Warner. Mr. Maurstad, respectfully, that is not my 
question. My question is with this new Risk Rating 2.0, my 
understanding is that there is a bit more complexity there, so 
a homeowner trying to sit down and make that individual 
calculation, not based on a neighborhood but based on his 
actual home, factoring in those component parts, it is tougher 
under this new system.
    Now I understand you put some new online tools in place, 
but, you know, can we provide the homeowner with that granular 
knowledge to easily make that calculation for his home and his 
neighborhood?
    Mr. Maurstad. Talking with agents and companies and 
policyholders, the new system is less complex than before. With 
the new rating engine that is in place, it is very easy for 
agents working with their customers, policyholders, your 
constituents to determine what a particular mitigation action, 
if they take it, what that will do their premium. In fact, we 
have had nearly 90 million quotes on our rating engine. So it 
is being widely used clear across the country, and people are 
getting the differences in policy coverages, changes that they 
might make. And so we just encourage them to continue to work 
with their insurance agent or insurance company representative 
who provides that level of expertise to their customers and to 
your constituents.
    Senator Warner. Well, I just have to tell you, I hope that 
is the case, and I know you have got some of these new online 
tools. I am hearing from a lot of folks that the new system may 
actually add more complexity on getting that level of 
granularity, and I do think I will go back and maybe follow up 
with you in writing on some questions to see if there are ways 
that we can actually improve that flow of information.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Warner.
    Senator Cortez Masto, from Nevada, is recognized.
    Senator Cortez Masto. Thank you. Mr. Maurstad, how is FEMA 
working to serve our tribal communities? I am curious. Do you 
conduct outreach specifically to tribal communities regarding 
insurance policies under the NFIP?
    Mr. Maurstad. Senator, the first step, of course, is to 
work with the tribal communities to have them be a part of the 
National Flood Insurance Program as a participating community. 
And so we work with our regional offices and tribal liaisons to 
see what we can do to provide them the technical assistance to 
become a participating community, so then the folks that they 
serve are able to access the National Flood Insurance Program.
    So yes, and we are going to continue to do more going 
forward, based on the equity charge that we have received from 
the Administrator and how we can provide more technical 
assistance to socially vulnerable communities, tribes, and 
other disadvantaged communities.
    Senator Cortez Masto. Thank you. I want to talk a little 
bit about flooding after fires. In Nevada, unfortunately, when 
a fire hits us the rangeland fires--and they are devastating--
we have also seen the challenge after a fire, because as we 
know, fire wipes out the vegetation that might otherwise absorb 
the excessive rainfall. And because of this, if we do not have 
timely preventative mitigation actions for replanting and 
stabilizing our burned areas we have, unfortunately, massive 
flooding, which is devastating to the environment.
    So what resources does FEMA have for replanting and 
stabilizing burned areas to prevent not only fires but to 
address the restoration afterwards to ensure there is no 
catastrophic flooding that could occur as well.
    Mr. Maurstad. Certainly our Hazard Mitigation Assistance 
Programs provide different opportunities for communities to 
bring forth projects that can reduce the loss of life and 
damage to property in the future. And so we just continue to 
encourage communities and States to look at our grant programs 
and see how we can help address some of the concerns that you 
have brought forward.
    Senator Cortez Masto. So what I would like to talk to you 
about a little bit more--maybe we will do a follow-up--I want 
to see those programs, because in Nevada, what I have seen is 
most of the land, obviously, is owned by the Federal Government 
and managed by the BLM, but we need help. We need support in 
that restoration process after a fire, a devastating fire, so 
that we are mitigating any damage that could be caused from a 
rainfall and flooding.
    Do you have specific programs in FEMA that address the 
vegetation, that address the replanting, the restoration of the 
land, in particular?
    Mr. Maurstad. No. Our programs would not----
    Senator Cortez Masto. So what do they do? How would they 
work within the State of Nevada or the BLM and our local 
owners?
    Mr. Maurstad. Well, we can get back to you on specifics of 
other Federal programs that might be available. But certainly 
we do not provide mitigation grants to Federal lands.
    Senator Cortez Masto. OK. Let me ask you this. In Nevada--
listen, we are in the middle of the desert but we have frequent 
flooding, and there are challenges over the years, as we have 
seen from the flooding. Some estimates indicate that as many as 
87,000 Nevada properties have a 1-in-4 chance of being severely 
affected by flooding over the next 30 years. Yet only about 
10,000 of our homes are enrolled in the National Flood 
Insurance Program, as you well know.
    Do you think more Nevada property owners are enrolled in 
private insurance instead of the NFIP, or do you think too many 
Nevadans are underinsured for the risk of flood? I am curious.
    Mr. Maurstad. Yeah. I mean, the insurance gap is real 
across the country and it is certainly as real in Nevada as you 
have just pointed out. One of our objectives is to continue to 
work with communities that participate in the program so that 
there are more insured survivors after the flooding events. And 
so we need to work together, shared responsibility, to make 
sure that those that need the coverage have the coverage. And 
quite frankly, where it can rain it can flood, and certainly 
after fire that risk is even greater than before.
    Senator Cortez Masto. Thank you. I appreciate you being 
here.
    Chairman Brown. Thanks, Senator Cortez Masto.
    Senator Smith, from Minnesota, is recognized, I believe, 
from her office.
    Senator Smith. Thank you very much, Chair Brown, and to Mr. 
Maurstad for joining us today. I want to just start out by 
saying that I am grateful to the Biden administration and to 
FEMA for putting together a thoughtful package of legislative 
proposals that are going to strengthen our National Flood 
Insurance Program. It seems to me that this is a timely 
reminder to Congress that we need to not just keep keeping this 
can down the road but we need to really take care of this. We 
have done the short-term extensions of the Flood Insurance 
Program I think 21 times, with 3 lapses since the last reform, 
so I think this is a very timely conversation, Mr. Chair, and I 
am glad to have a chance to be supportive of this effort.
    Mr. Maurstad, I wanted to ask you a little bit about issues 
of bias in the way that FEMA is working. I mean, thinking about 
my home State of Minnesota where we have lots of issues with 
flooding, especially in the northwestern part of the State, and 
the whole northern part of our State right now is struggling 
with flooding.
    But we know that we have this problem with requirements 
that end up disadvantaging low-income property owners and also 
communities of color. For example, money to fund mitigation 
upgrades like elevating buildings tend to be restricted to 
people who own their own home and can pay the cost share. 
Sometimes that might be tens of thousands of dollars.
    So my question is this. We have known that this has been a 
challenge. Could you just tell us a little bit about how well 
the increased cost share infrastructure funds are working, and 
could the increased Federal cost share for disadvantage 
communities be incorporated into programs as we look forward?
    Mr. Maurstad. Thank you, and yes, for the Flood Mitigation 
Assistance Program the cost share is 90 percent for socially 
disadvantaged communities. We currently have an equity 
assessment that is going on across our hazard mitigation 
assistance programs to see how we can better provide technical 
assistance and how we can make sure that there is equity in the 
manner in which our programs are implemented.
    So again, it is a shared responsibility, the mitigation 
programs, with communities and States, and so we are going to 
be doing outreach and we are going to continue to solve for how 
we can better distribute our mitigation grant dollars.
    Senator Smith. I know we all know that Federal law requires 
that Stafford Act aid be spent equitably. And there is a recent 
reporting, however, that shows that FEMA mitigation spending to 
elevate homes and recover after disasters have overwhelmingly 
benefited wealthy and predominantly White communities. A 
comparison by E&E News of which communities received funding, 
and U.S. Census data from those communities, indicated that in 
12 of the 18 States most impacted, more than half of FEMA funds 
went to wealthy and White communities.
    So Mr. Maurstad, can you just address this? There has been 
some reporting that also seems to link that we do not have good 
data on this and so we do not know what is happening, yet it 
seems to me that we can actually see what is happening here. I 
just wondered if you could address that.
    Mr. Maurstad. Sure. As I mentioned before, we are in the 
midst of both an equity assessment but also two of our grant 
programs, the BRIC Program and the Flood Mitigation Assistance 
Program, are both a part of Justice40. And so those funds that 
are going to be distributed through those programs will meet 
the requirements of 40 percent of the dollars going to social 
disadvantaged communities per the Executive order by President 
Biden.
    We know we have work to do in this area, and we are 
committed to working with you to find out how we can best solve 
for the challenges that have surfaced in the past.
    Senator Smith. OK. Thank you. I look forward to working 
with you on this. I think it is very important and I appreciate 
that.
    What I am going to do is submit this question for the 
record. I want to just note, as I said at the beginning of my 
questioning, that we have had significant flooding across 
northern Minnesota this spring, in the Rainy Lake river basin 
and all across the northern tier, that is really caused by a 
ton of rain with nowhere to go, the so-called pluvial flooding 
that has not typically been covered in the way that risk rating 
is done in the past.
    So I just would like to say, I know I am out of time, Mr. 
Chair, that I would like to continue to work with FEMA on this. 
I am interested in how the Risk Rating 2.0 has so far been 
making it work for policyholders in different regions to be 
insured for the true risk of flooding. And I think that this is 
very important for us to continue to keep an eye on.
    Thank you, Mr. Chair.
    Chairman Brown. Thank you, Senator Smith.
    Senator Tester is on his way, and he in the SCIF now so it 
may take a little while. Senator Toomey and I will each ask 
another question or two. We are not exactly stalling but we 
kind of are, but these are questions I wanted to ask and ran 
out of time, Mr. Maurstad.
    Following up on the program's finances, you have proposed a 
new way to structure a national response to catastrophic events 
at NFIP. You have stated that it was not set up to handle a 
Katrina or a Harvey, necessarily, even after factoring in 
reinsurance and other risk transfer programs that NFIP is 
using.
    Discuss your proposal to limit its borrowing authority and 
rely upon appropriations for future catastrophic events of that 
magnitude or larger as climate gets worse and worse.
    Mr. Maurstad. So the basis for the accountability is the 
program be responsible for manage to 1-in-20-year loss 
exceedance level. It is currently about $10.5 billion. And so 
we would work the program, manage the program to be able to 
handle events up to that point.
    If an event that exceeded the 1-in-20-year loss exceedance 
level, the proposal indicates that the Administrator would be 
required to come to Congress and ask for supplemental 
appropriation for the difference between the $10.5 billion, you 
know, if it were today, and a $13 billion event.
    Part of what makes the ability of the program to manage so 
that at the end of the 10-year period of time we would have 75 
percent probability of having dollars in the fund is also what 
we are calling an equalization payment, which is the difference 
between the amount of premiums we should be collecting, 
according to the actuaries, and the amount that we are actually 
able to collect because of, for example, the statutory 
limitations on how much a premium can increase in any given 
year.
    As you are aware, about 23 percent of our policyholders in 
the first year of Risk Rating 2.0 will actually see a reduction 
in their premiums, but it also means that their policy is that 
full risk rate. About another 50 percent will reach their full 
risk rate by Year 5, 90 percent by Year 10. Which means it is 
going to be a number of years until FEMA has the ability to 
collect the premium that we should be collecting that reflects 
the full risk rate of our policies. So we are proposing that 
the difference between what we are collecting and what we 
should be collecting, that there be an annual appropriation for 
that amount.
    To work with the dollars that go into the reserve fund, we 
are proposing a change to the reserve fund, that instead of the 
reserve fund being collected by the type of policy you have, it 
would be based on risk, like the rest of the program. And by 
doing that we would have a more stable ability to raise the 
funds for the reserve fund that goes along with all the pieces 
to be able to manage to a 1-in-20-year loss exceedance level.
    So all of those parts coming together is what would enable 
the program to be more fiscally sound, be able to be managed 
better on a year-by-year basis, but yet be able to take care of 
the catastrophic events that are surely going to happen, and 
that the program is challenged by because of our concentration 
of risk, which, you know, violates most insurance principles.
    Chairman Brown. Thank you. We will submit a question about 
your proposal to cease to insure excessive loss properties. We 
will do that in writing. Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. Mr. Maurstad, I 
have in my hands here a copy of the package. I think this is 
the legislative proposal that your colleague sent to all of the 
leaders. This particular one went to Senator McConnell. And I 
am looking at this write-up, page 64 of the package there is a 
sentence that jumps out, partly because it is in red, but 
partly because it is a staggering fact that is reported here. 
It is toward the top half of the page, if you are looking for 
it in the document.
    And it is just one short sentence, and I will quote it. It 
says, ``As of December 2021, FEMA has paid $35.1 billion in 
claims to properties with two or more losses, compared to the 
total of $73.4 billion paid on all claims.''
    That is your information. I did not make this up. That is 
almost 50 percent. So I do not think some of us are just 
conjuring up a problem that does not exist. If 50 percent of 
the claims paid are going to multiple-loss properties, I think 
that tells us there is a problem with multiple-loss properties, 
because they do not make up 50 percent of the covered homes. 
They make up a small fraction of the covered homes, right?
    Mr. Maurstad. Yes, sir, and repetitive-loss properties have 
been an issue for the program for a number of years. In fact, 
the 2002 reauthorization of the program, that was a bipartisan, 
bicameral reauthorization of the program, Bunning-Bereuter-
Blumenauer, had a multi-loss provision in it. Unfortunately, 
the way that it was set up it was not able to be implemented, 
and so it has gone by the wayside.
    We are proposing that, again, that we tackle this problem. 
And it is not as much necessarily certainly a concern about the 
impact to the fund, but more importantly, these properties 
should be mitigated. They should be either elevated or other 
measures taken so that they do not provide that disaster 
suffering that the families are going through every time these 
losses occur.
    And so I think someone mentioned it is common sense that we 
should not continue, after a reasonable period of time, to 
provide insurance for unmitigated properties.
    Senator Toomey. And when you talk about mitigation, is it 
not true that mitigation can occur at a community level also? 
So for instance, I am thinking about towns in Pennsylvania that 
have dedicated a lot of resources, and much of which has been 
matched by the Federal Government, to build levees and dams and 
systems that protect the entire community. I mean, that is a 
really important mitigation mechanism, totally separate and 
apart from elevating a house, right?
    Mr. Maurstad. Absolutely, and also our Community Rating 
System provides discounts for policyholders in communities that 
participate in the Community Rating System, discounts from 5 to 
45 percent, based on the mitigation activities and the flood 
protection activities that communities adopt to make their 
communities more resilient.
    Senator Toomey. Thank you, Mr. Chairman.
    Chairman Brown. Let me follow on that, and then if Senator 
Tester arrives, and if not we will adjourn.
    I want to expand a little on Senator Toomey's question, and 
I said I was going to do this in writing but let us just have 
you comment now on your interest in ceasing to insure excessive 
loss properties. Talk about addressing this category in more 
detail and if you have a way to estimate the mitigation needs 
in those properties.
    Mr. Maurstad. So this is prospective, going forward, and so 
we are saying there would need to be four losses in excess of 
$10,000 after the act would be put in place before a property 
would become an excessive loss property.
    Chairman Brown. And you will cease to insure it then.
    Mr. Maurstad. Yeah. And so, again, it is hard to estimate 
what that----
    Chairman Brown. The $10,000 number is arrived at how?
    Mr. Maurstad. Uh, $10,000 was arrived at a reasonable level 
of loss that would be considered beyond the normal, smaller 
loss. I mean, it was a calculation made based on a threshold, 
and it could be a lot of different numbers. We are proposing 
$10,000 as a reasonable level.
    Chairman Brown. Go ahead.
    Mr. Maurstad. Mr. Chairman, if I could I would like to 
clarify an earlier answer that I provided to Senator Menendez, 
if I can clarify.
    Chairman Brown. Sure. Of course.
    Mr. Maurstad. He asked about the impacts of Risk Rating 2.0 
in the rates on Hispanic and African American policyholders. 
Equity is a top priority for FEMA, and we care deeply about 
ensuring that any underserved community, that they are insured. 
And that is why we have proposed the affordability mechanism.
    And so I do not want my response to be mischaracterized, 
and I appreciate you giving me that opportunity.
    Chairman Brown. Sure. Senator Toomey wanted to insert 
something about the question on excessive loss properties.
    Senator Toomey. Yeah, and that is, am I correct in 
understanding that FEMA's--I think you just said it, actually--
that FEMA's proposal is to look only prospectively a repetitive 
loss----
    Mr. Maurstad. Correct.
    Senator Toomey. ----which means you would be suggesting 
that we simply disregard properties that may have had literally 
dozens of paid losses in the past. We will wait for four more 
before we will do anything.
    Mr. Maurstad. That is correct.
    Senator Toomey. I think we have to consider whether there 
should be some other approach, whether there is some threshold 
above which historical losses have to be taken into account.
    Chairman Brown. And that is something I think we should 
consider also.
    Any other comments on that, on excessive loss?
    Mr. Maurstad. The legislative proposals that we have put 
forward have been developed over a 10-year period, and quite 
frankly, over the last three administrations, by career staff 
who are experts in the four fields that you mentioned in your 
opening comments. Certainly we want to continue to work with 
the Committee, as we have in the past, in coming up with the 
best solutions to the challenges that we have identified.
    And so if there are various aspects of our proposal that we 
need to provide additional either information on or technical 
assistance, technical drafting assistance on, we want to do 
everything we can to assist the Committee in making sure that 
we can have a long-term reauthorization of the program with 
meaningful reform by September 30th of this year.
    Chairman Brown. Thank you, Mr. Maurstad. Thanks for joining 
us today and providing your testimony.
    Senators wishing to submit questions for the record are due 
1 week from today, Thursday, June 30. To the witness, Mr. 
Maurstad, you have 45 days to respond to any questions.
    Thank you for your public service. The hearing is 
adjourned.
    [Whereupon, at 11:18 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    Flooding is the most common and most costly natural disaster facing 
families, businesses, and communities across the country.
    And climate change is only making it worse.
    Last week we saw historic flooding in Montana and Yellowstone 
National Park--causing closures that are hurting the economies of 
nearby towns during the tourist season.
    Just this year, we've seen:

    Flash flooding in West Virginia and Alabama;

    Ice jam flooding in Alaska;

    Heavy rainfall flooding in Arkansas and Oklahoma; and

    Heavy rain, snowmelt and ice jam flooding in North Dakota 
        and Minnesota.

    And that's before hurricane season has even begun.
    FEMA personnel are already preparing for the 2022 Hurricane Season, 
expected by The National Oceanic and Atmospheric Administration to be 
above-normal for activity.
    All of this flooding is devastating to families, homes, businesses, 
and communities.
    And these disasters often fall hardest on low-income families and 
communities who have fewer resources to prepare for them--and respond 
to them.
    We need to help our families and communities to adapt and become 
more resilient to the flooding we face now and in the coming decades--
and whenever possible, avoid damages altogether.
    The NFIP is critical to that effort.
    It provides over $1.3 trillion in coverage to nearly 5 million 
homes and businesses in over 22,000 communities.
    Unlike a private insurance company, the NFIP does not just provide 
insurance.
    Its job isn't just to help with recovery, but to prevent and 
minimize the damage in the first place.
    The NFIP combats the overall threat of flooding through four 
related components:

    Flood insurance;

    Floodplain management;

    Floodplain mapping; and

    Mitigation.

    The Bipartisan Infrastructure Bill offers a downpayment on new 
opportunities for communities to help homeowners stay out of harm's 
way.
    But we need to do more. Infrastructure investment was a good start. 
But because of climate deniers in the Senate and our collective failure 
to fight climate change, that investment in the infrastructure bill 
will not be enough.
    And as we fail to fight climate change, the costs keep rising. Look 
what's happening in Montana.
    We must reauthorize and strengthen NFIP, and invest in flood 
mitigation before disaster happens.
    Last week, we heard from practitioners working with communities and 
families. We learned about:

    Barriers to underserved communities and families 
        participating in flood mitigation programs,

    The benefits of expanding the Community Rating System to 
        help communities reduce local flood risk,

    The importance of providing better risk information to 
        communities and property owners--both through improving mapping 
        and risk communication products, and through disclosure of 
        flood hazards to prospective owners and tenants, and

    The importance of building State and local capacity to 
        carry out our floodplain management and mitigation programs, 
        especially for small and rural communities.

    Today, we will hear from the Federal Emergency Management Agency to 
discuss the status of the program, including their ideas for long-term 
reauthorization, and the implementation of FEMA's new Risk Rating 2.0 
initiative.
    FEMA has submitted a package of legislative proposals for our 
consideration. I look forward to a robust discussion of these ideas 
today.
    I am interested in their recommendations for ways we can help 
strengthen the NFIP so that it can:

    Ensure long-term program stability while providing reliable 
        access to insurance for property owners and renters,

    Address affordability concerns, particularly in light of 
        Risk Rating 2.0,

    Ensure that more people are aware of their flood risk and 
        insured against losses, and

    Help communities reduce our overall level of flood risk, 
        through investments and improvements in mapping, floodplain 
        management, and mitigation.

    As we discussed last week, it is no secret that NFIP 
reauthorization has proven to be a challenge.
    It's a complex program, with multiple goals, with implications for 
many of the things people care about most--their homes and their 
communities.
    However, I believe it is possible for us to come together to 
reauthorize and improve this program.
    I look forward to continuing to work with Ranking Member Toomey and 
the Members of the Committee to strengthen the NFIP and the country's 
comprehensive approach to mitigating flood risk through a long-term 
reauthorization bill this Congress.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Mr. Chairman, thank you. Acting Associate Administrator Maurstad, 
welcome.
    The National Flood Insurance Program--or NFIP--was last 
reauthorized on a long-term basis in 2012. That reauthorization expired 
in 2017.
    Congress has repeatedly reauthorized the program on a short-term 
basis--21 times to be exact--that's no way to run a railroad. So, I'm 
ready to work with my colleagues on a long-term NFIP reauthorization 
that reforms this program.
    Let me take a moment to remind everyone the scope of NFIP's 
challenges. Since 2000, NFIP has borrowed from the Treasury in 11 out 
of 22 years. That means that half the time, this unsustainable 
``insurance'' program requires additional Federal taxpayer funds to 
subsidize policyholders.
    Today, NFIP's current debt to the Treasury stands at $20.5 billion. 
The interest payments alone are between $300 and $400 million a year. 
And the $20.5 billion in debt excludes the $16 billion that was 
arbitrarily forgiven in 2017.
    Some of my colleagues have argued that NFIP policyholders are 
incapable of repaying this debt, so even the rest should be forgiven. 
Before considering such drastic action, we should ask ourselves, how 
did we end up in this scenario in the first place?
    Well, the answer is simple: this broken, subsidization program 
systemically underprices flood insurance. And it is the policies of 
Congress--not FEMA--that are the root causes of NFIP challenges.
    FEMA has worked to improve NFIP by implementing a new price rating 
for flood insurance premiums--known as Risk Rating 2.0--that better 
aligns policyholders' premiums with their actual flood risk. Risk 
Rating 2.0 is producing rates that are more equitable by phasing out 
most NFIP subsidies.
    Twenty-three percent of policyholders, over a million families, 
were overpaying for flood insurance. These families will now see a 
decrease in their monthly premiums. Congress should work towards 
strengthening Risk Rating 2.0 and eliminate any subsidies that do not 
align price with risk.
    During last week's hearing on NFIP, I discussed several of my 
priorities for reauthorization. First, we should encourage more private 
capital in the form of private policies and private reinsurance. My top 
priority for reauthorization is to eliminate any barriers that exist to 
obtaining private flood insurance.
    Second, ``do no harm.'' We should be protecting the transition to 
actuarially sound premiums. Any effort to slow or interrupt that 
progress must be rejected.
    Third, if subsidies persist, they must be better targeted. FEMA is 
proposing a new Means-Tested Assistance Program for current and future 
low- and moderate-income households. I'm open to finding ways to help 
current low-income homeowners afford flood insurance.
    However, any means-tested subsidy should replace existing cross-
subsidies within NFIP. Adding another subsidy on top of existing cross-
subsidies moves us further away from actuarially sound premiums.
    And fourth, we should improve communication with homeowners and 
homebuyers so that they understand the flood risk of properties. FEMA 
recently submitted to Congress NFIP reauthorization proposals, 
including several encouraging ones.
    One proposal would prohibit coverage for a new category of 
excessive loss properties, which are properties that have flooded 
multiple times. This is an inherently good policy that is worthy of 
consideration.
    As a general principle, we should not provide flood insurance 
subsidies that encourage people to live in flood prone areas. While 
excessive loss properties are not the majority of homes in NFIP, they 
do constitute a highly disproportionate share of losses. And it's 
unfair and senseless to force taxpayers to continuously foot the bill 
to bailout properties in these risky areas.
    Another promising FEMA proposal would prohibit coverage for 
commercial properties and new construction in high-risk areas. This 
helps to mitigate risk in NFIP by eliminating coverage in heavy flood-
prone areas, and it also encourages competition in the private market 
for nonresidential policies.
    One important NFIP reform not included in FEMA's reauthorization 
proposals is midyear cancellation. A barrier to more people choosing 
private flood insurance is the fact that FEMA offers a very short 
window each year to switch over from NFIP to a private provider.
    Previously, FEMA had allowed policyholders to leave NFIP for 
private flood insurance and receive a pro rata refund. However, FEMA 
changed this policy in 2019.
    Now a pro rata refund is available only in very limited 
circumstances. This effectively locks in all but the most diligent 
policyholders into their NFIP policy.
    While there are improvements that can be made to FEMA's 
reauthorization proposals, I'm pleased to see that it has given serious 
thought to reforming NFIP. It's rare to see a Federal agency request, 
as FEMA has, that Congress reduce the agency's borrowing authority. I 
commend FEMA for recognizing that NFIP must be financially stable to be 
a sustainable program.
    A long-term reauthorization must continue to move NFIP in a 
positive direction to protect taxpayers who currently bail it out year 
after year. I recognize that we can't fix NFIP overnight, but we should 
use reauthorization as an opportunity to move it in the right 
direction.
    I stand ready to work with the Chairman and my colleagues to 
achieve that goal. And I look forward to discussing FEMA's 
reauthorization proposals.
                                 ______
                                 
                PREPARED STATEMENT OF DAVID I. MAURSTAD
  Associate Administrator for Resilience (Acting), Federal Emergency 
                           Management Agency
                             June 23, 2022
    Good morning, Chairman Brown, Ranking Member Toomey, and other 
Members of the Committee. My named is David Maurstad, and I am Deputy 
Associate Administrator for the Federal Insurance and Mitigation 
Administration and Senior Executive of the National Flood Insurance 
Program (NFIP). Thank you for the opportunity to testify today in 
support of a package of 17 legislative proposals that would reform the 
Federal Emergency Management Agency's (FEMA) National Flood Insurance 
Program (NFIP). Flooding is the most common and costly natural hazard 
we experience. Every year, thousands of families across the country 
must recover from these incidents, and flood insurance is an essential 
part of that recovery. I respectfully request that Congress 
expeditiously take up and enact these proposals.
    Congress established the NFIP to encourage communities to make wise 
land use decisions, and in return for the community enacting floodplain 
management ordinances consistent with Federal standards, the NFIP makes 
available flood insurance that allows people to protect homes in flood-
prone areas.
    For more than 50 years, the NFIP has been critical to the Nation's 
resilience policy, however, much of the NFIP continues to operate on a 
construct developed over 50 years ago. Today, as our changing climate 
poses a serious threat to our Nation and as the number and severity of 
disasters continue to grow, the NFIP requires structural changes.
    On September 30, 2022, the NFIP's statutory authority to sell and 
renew flood insurance policies will expire. Since the NFIP's last 
multiyear reauthorization expired on September 30, 2017, the NFIP has 
experienced 21 short-term extensions and three brief lapses. The short-
term extensions are disruptive and cause existing and potential 
policyholders to lose confidence in the NFIP.
    To maintain this vital program and to rebuild and retain the trust 
of millions of Americans who rely on the NFIP, the Administration 
believes that a 10-year reauthorization, with comprehensive program 
reforms, is an imperative.
    The 17 reform proposals put forth as part of FEMA's legislative 
proposal package are guided by four key principles: ensure more 
Americans are covered by flood insurance, build the Nation's climate 
resilience, reduce disaster suffering, and establish a sound and 
transparent financial framework for the NFIP. The four principles, 
which I will speak to today, are outlined below and reflect the 
Administration's priorities for multiyear NFIP reauthorization:
    First, ensuring that more Americans are covered by flood insurance 
by making insurance more affordable to low- and moderate-income 
policyholders. Flood insurance can be unaffordable for some low- and 
moderate-income policyholders. Under the current law, FEMA does not 
have the authority to establish and charge premiums based on a 
policyholder's ability to pay. Although the NFIP offers mandatory 
discounts and cross-subsidies based on factors unrelated to risk, those 
discounts and subsidies do not take into consideration the 
policyholder's financial need and, in fact, can make risk communication 
difficult because people may equate lower cost with lower risk. Reforms 
that address affordability, such as the use of a targeted assistance 
program, can offer low- and moderate-income current and prospective 
NFIP policyholders a graduated risk premium discount while providing 
them with knowledge of the full-risk price to communicate a property's 
true flood risk.
    Second, communicating risk in real time and providing Americans 
with tools to manage flood risk. Reforms that increase the scale and 
frequency of flood mapping and incorporate emerging priorities and 
technologies into the flood hazard and flood risk identification 
process will expand the ways in which the NFIP communicates risk. Where 
it can rain it can flood and raising awareness of true flood risk 
enables people to make informed decisions about their family and 
property. Home buyers and renters may lack awareness about flood risk 
when they complete real estate transactions. Reforms that would require 
States to establish minimum flood-risk reporting requirements for 
sellers and lessors before residential transactions close would address 
this challenge. As climate change continues to make disasters more 
frequent and intense, it is vital that we provide people with the tools 
they need to protect themselves financially as well as physically.
    Additionally, we need to reform how we measure and communicate 
flood risk. The Nation's evolving risks require flood hazard 
information that is more robust than the special flood hazard area 
(SFHA) and 1-percent annual chance flood elevation.
    Third, reducing risk by addressing extreme repetitive loss 
properties. Previous losses are a significant indicator of risk, 
meaning that if a property flooded before, there is a high likelihood 
that it will flood again. Since 1978, nearly 100,000 structures have 
had two or more paid losses; nearly 1,000 have suffered 10 or more 
losses. The NFIP must have better tools to address insured structures 
that have experienced multiple flood claims. These repetitive loss and 
severe repetitive loss properties are responsible for a 
disproportionate share of overall losses and have a high risk of future 
flooding. About 2.5 percent of insured properties are considered 
unmitigated repetitive loss properties. Continuing to cover these types 
of structures without question contributes to the NFIP's financial 
challenges and can increase the risk that families living in those 
structures will face threats to their lives, health, and safety. 
Reforming the NFIP to institute an objective threshold to deny coverage 
to the most egregiously flood-prone structures would discourage 
unmitigated rebuilding in areas with a history of flooding and reduce 
financial risk to the NFIP, while ensuring that coverage is still 
widely available to individuals, families, and businesses who might not 
be eligible for private market coverage.
    Fourth, instituting a sound and transparent financial framework 
that allows the NFIP to balance affordability and fiscal soundness. 
Without this in place, the longevity and sustainability of the program 
is at risk. Congress authorized FEMA to borrow from the U.S. Treasury 
up to $30 billion to pay claims. The NFIP currently carries $20.5 
billion in debt to the U.S. Treasury and pays approximately $400 
million in interest expenses annually--this means we are using the 
current premiums to pay for past claims. As currently structured, the 
program is unable to pay this debt back in full. Canceling the NFIP's 
debt provides the program with a solid foundation that can support 
financial reforms around borrowing authorities, future interest, 
enhanced liquidity, and an ``upper limit'' for the size of an NFIP 
event. These reforms address fundamental structural challenges and are 
essential to building a viable NFIP.
    It is critical that Congress provide urgently needed multiyear 
reauthorization and concurrently reform the NFIP. Comprehensive and 
transformative reform is necessary to transition the NFIP to a 
sustainable program that balances affordability and fiscal soundness, 
builds climate resilience, and reduces risk, loss, and disaster 
suffering.
    I am enclosing with my written testimony the detailed legislative 
proposals for your consideration, as well as an appendix summarizing 
each of the 17 reform proposals.
    On behalf of the Administration, FEMA looks forward to working with 
Congress to develop a long-term solution that addresses the needs of 
the NFIP, its policyholders, and the Nation.
    Thank you again for the opportunity to discuss this important 
issue, and I would be pleased to answer any questions that you may 
have.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

              Additional Material Supplied for the Record
   LETTER SUBMITTED BY THE NATIONAL ASSOCIATION OF FEDERALLY-INSURED 
                             CREDIT UNIONS
                             
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


       LETTER SUBMITTED BY THE CREDIT UNION NATIONAL ASSOCIATION

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    STATEMENT SUBMITTED BY THE AMERICAN PROPERTY CASUALTY INSURANCE 
                              ASSOCIATION

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


           LETTER SUBMITTED BY AMERICAN ACADEMY OF ACTUARIES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                  LETTER SUBMITTED BY SMARTERSAFER.ORG

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]