[Congressional Record Volume 147, Number 54 (Thursday, April 26, 2001)]
[Extensions of Remarks]
[Page E649]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      INTRODUCING THE REPETITIVE FLOOD LOSS REDUCTION ACT OF 2001

                                 ______
                                 

                            HON. KEN BENTSEN

                                of texas

                    in the house of representatives

                        Thursday, April 26, 2001

  Mr. BENTSEN. Mr. Speaker, I rise to introduce legislation, the 
Repetitive Flood Loss Reduction Act of 2001, to reform the National 
Flood Insurance Program (NFIP) at a very critical time. The Bush 
administration has proposed the most severe NFIP reduction policy seen 
in years. According to the FY 2002 budget, ``flood insurance will no 
longer be available for several thousand `repetitive loss' 
properties,'' but does not provide a definition. My proposal reforms 
the program by improving pre-disaster mitigation and facilitating 
voluntary buyouts of repetitively flooded properties and defines such 
properties as those with cumulative losses exceeding fair market value. 
I am confident that an effective pre-disaster mitigation and buyout 
program will both reduce costs to taxpayers, protect residents in 
flood-prone areas, and avoid writing off thousands of families' most 
valuable asset--their home.
  I have long championed removing repetitive loss properties from the 
NFIP, and I drafted my legislation in consultation with the Federal 
Emergency Management Agency and the Harris County, Texas, Flood Control 
District, one of the nation's most experienced and most innovative 
flood control districts. I consider this legislation to be a superior 
alternative to the Administration's proposal, and I look forward to 
working with the Administration, my colleagues, constituents, and other 
interested parties so that fair NFIP reform can be reached.
  The need for this legislation was underscored by the 1999 Higher 
Ground report by the National Wildlife Federation (NWF) that the NFIP 
has made flood insurance payments exceeding the value of the properties 
involved to thousands of repetitively flooded properties around the 
nation. This report, found that from 1978 to 1995, 5,629 repetitively 
flooded homes had received $416.4 million in payments, far in excess of 
their market value of $307.5 million. My state of Texas led the nation 
in the volume of such payments, with more than $144 million, or $44 
million more than the market value, paid to 1,305 repetitively flooded 
homes. The Houston/Harris County area, which I represent, had 132 of 
the 200 properties that generated the largest flood insurance payments 
beyond their actual value. These include one property in South Houston 
that received a total of $929,680 in flood insurance payments from 17 
flooding incidents, and another property near the San Jacinto River 
that received $806,591 for 16 flooding incidents, about seven times the 
actual value of the home.
  Other areas of the country with large numbers of such properties 
include New Orleans and Orleans Parish, LA; St. Charles County, MO; 
Jefferson Parish, LA; East Baton Rouge Parish, LA; and Puerto Rico. 
Altogether, according to the NWF report, although repetitive loss 
properties represent only two percent of all properties insured by the 
National Flood Insurance Program, they claimed 40 percent of all NFIP 
payments during the period studied.
  Since its creation in 1968, the NFIP has filled an essential need in 
offering low-cost flood insurance to homeowners who live inside 100-
year flood plains, and the program has helped to limit the exposure of 
taxpayers to disaster costs associated with flooding. Insurance 
minimizes risk and liability; it goes hand in hand with economic 
growth. However, the NWF report clearly points out the need to improve 
the NFIP to address the problem of repetitive loss properties.
  Furthermore, continued losses to the NFIP has increased the call by 
some of my colleagues, and now the Bush Administration, to increase 
premiums and reduce the federal subsidy for all homeowners in the flood 
plain, not just those that suffer from repetitive flooding, in order to 
reduce federal budget outlays, or to drop homeowners who have filed 
limited claims against the NFIP. The latest Administration NFIP 
proposal drops undefined ``repetitive loss properties'' out of NFIP 
after the next claim. Under the Bush proposal, a homeowner who filed a 
single claim, regardless of the size, would be dropped from the 
program. Without long-term comprehensive reform of the NFIP, I am 
concerned that in the future Congress may follow through with the 
Administration's proposal or other proposals to double or triple flood 
insurance premiums for all flood-prone homeowners, as was proposed in 
1995 and 1996.
  While the Administration is pushing people out of the NFIP, it also 
proposes to reduce the federal share of hazard mitigation grants from 
75% to 50%, reducing funds available for flood prevention by $83 
million. The administration also proposes to eliminate FEMA's Project 
Impact, which helps communities protect themselves from the devastating 
effects of natural disasters. In addition, the 2002 budget cuts the 
Army Corps of Engineers by $600 million. Of that cut, $451 million 
comes from Construction General funds, which fund flood control and 
navigation projects. A policy of reducing flood prevention efforts 
while reducing insurance will compound the safety risk and financial 
pain for homeowners in the floodplain.
  Instead of stripping away homeowners' flood insurance, my legislation 
takes a three-pronged approach to addressing this issue: a 
comprehensive pre-disaster mitigation program; an enhanced repetitive 
substantial loss property buyout program with consistent criteria and 
procedures; and improved coordination between FEMA and local 
goveniments:
  Pre-disaster mitigation: The legislation directs the FEMA director to 
carry out a program to mitigate repetitive flood losses by providing 
financial assistance in the form of grants to the States, local 
governments, and local flood management agencies for planning and 
carrying out activities designed to reduce expenditures from the NFIP. 
Eligible mitigation activities include elevation, relocation, 
demolition, floodproofing, and acquisition by States and communities of 
properties and structures located in flood-risk areas. Grants would be 
provided
  Repetitive Loss Property Buyout Program: The legislation authorizes 
the FEMA director, upon determining that an insured property is a 
repetitive substantial loss property, to offer to purchase the property 
at fair market value (including structures) at the time of the offer. 
This offer would remain open as long as the property is covered by the 
NFEP. The State or local flood management agency may coordinate and 
carry out the purchase at FEMA's direction. Any property so acquired 
would have to be used in a way compatible with open space, 
recreational, or wetlands management practices, providing both 
environmental and flood management benefits. The legislation 
establishes a firm damage standard of repetitive flood losses in excess 
of 125 percent of the value of the property (or structures) to become 
subject to and receive priority for buyout offers. It also provides 
incentives for acceptance of buyout offers by establishing increased 
NFIP premiums and deductibles for owners of substantial repetitive loss 
properties who decline buyout offers.
  Intergovernmental Coordination: The legislation directs the FEMA 
director, in consultation with regional flood plain administrators, to 
develop and periodically update a list of repetitive flood lost 
properties, which will provide a consistent data base for all levels of 
government. This consistent approach to assessing, ranking, and 
reporting of repetitive loss properties will result in better targeting 
of assistance to areas of greatest need.
  This legislation authorizes the appropriation of $100 million for 
fiscal year 2000 to carry out the pre-disaster mitigation and 
repetitive flood loss property buyout program. I believe this is a 
cost-effective investment that will reduce the financial exposure of 
the American taxpayer by better protecting or removing the highest risk 
properties from the National Flood Insurance Program.

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