[Congressional Record Volume 152, Number 85 (Tuesday, June 27, 2006)]
[House]
[Pages H4565-H4568]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONSIDERATION OF H.R. 4973, FLOOD INSURANCE REFORM AND
MODERNIZATION ACT OF 2006
Mr. SESSIONS. Madam Speaker, by direction of the Committee on Rules,
I call up House Resolution 891 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 891
Resolved, That at any time after the adoption of this
resolution the Speaker may, pursuant to clause 2(b) of rule
XVIII, declare the House resolved into the Committee of the
Whole House on the state of the Union for consideration of
the bill (H.R. 4973) to restore the financial solvency of the
national flood insurance program, and for other purposes. The
first reading of the bill shall be dispensed with. All points
of order against consideration of the bill are waived.
General debate shall be confined to the bill and shall not
exceed one hour equally divided and controlled by the
chairman and ranking minority member of the Committee on
Financial Services. After general debate the bill shall be
considered for amendment under the five-minute rule. The bill
shall be considered as read. Notwithstanding clause 11 of
rule XVIII, no amendment to the bill shall be in order except
those printed in the Committee on Rules accompanying this
resolution. Each such amendment may be offered only in the
order printed in the report, may be offered only by a Member
designated in the report, shall be considered as read, shall
be debatable for the time specified in the report equally
divided and controlled by the proponent and an opponent,
shall not be subject to amendment, and shall not be subject
to a demand for division of the question in the House or in
the Committee of the Whole. All points of order against such
amendments are waived. At the conclusion of consideration of
the bill for amendment the Committee shall rise and report
the bill to the House with such amendments as may have been
adopted. The previous question shall be considered as ordered
on the bill and amendments thereto to final passage without
intervening motion except one motion to recommit with or
without instructions.
The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is
recognized for 1 hour.
Mr. SESSIONS. Madam Speaker, for purposes of debate only, I yield the
customary 30 minutes to the gentlewoman from California, my friend,
Congresswoman Matsui, pending which I yield myself such time as I may
consume. During consideration of this resolution, all time yielded is
for purposes of debate only.
This structured rule provides 1 hour of general debate, equally
divided and controlled by the chairman and ranking minority member of
the Committee on Financial Services. It waives all points of order
against consideration of the bill and makes in order only those
amendments printed in the Rules Committee report accompanying the
resolution.
It provides that the amendments printed in the report may be offered
only in the order printed in the report and offered only by a Member
designated in the report. They shall be considered as read, shall be
debatable for the time specified in the report, equally divided and
controlled by the proponent and an opponent. These amendments shall not
be subject to amendment and shall not be subject to a demand for
division of the question in the House or in the Committee of the Whole.
Finally, the rule waives all points of order against the amendments
printed in the report, and, as always, it provides the minority with
one motion to recommit with or without instructions.
Madam Speaker, I rise today in support of this rule and the
underlying legislation brought to the floor from the Financial Services
Committee under the leadership of Coach Mike Oxley and Chairman Richard
Baker.
Yesterday evening, despite inclement weather, the Rules Committee met
and took testimony from Members regarding their thoughts on how to
improve this legislation. The committee determined that many of these
amendments should be considered and made two-thirds of those amendments
submitted to the committee in order, including seven Democrat and
bipartisan amendments.
This legislation follows upon sensible reforms of the Flood Insurance
Reform Act of 2004, which also sought to update and modernize the
National Flood Insurance Program. Although this previous effort at
reforming the program was well intended, a number of provisions
included in the 2004 act have yet to be implemented.
Also, this earlier effort is currently incomplete because it was
passed by Congress before Hurricanes Katrina and Rita devastated the
gulf coast and, therefore, did not incorporate the lessons learned from
these storms and how best to administer the NFIP.
The Flood Insurance Reform and Modernization Act makes a number of
commonsense changes to current law. Among other things, it does the
following: it requires the Comptroller General of the United States to
study the effects of extending the mandatory flood insurance purchase
requirements to all properties located in flood hazard areas and report
back to Congress within 6 months on the findings.
{time} 1030
It increases the fine levied against federally regulated lending
institutions
[[Page H4566]]
for each failure to require mandatory flood insurance purchase
requirements to $2,000 and increases the total cap on fines for
institutions to $1 million.
It reiterates FEMA's responsibilities to implement provisions of the
Flood Insurance Reform Act of 2004 and directs FEMA to continue to work
with the insurance industry, State insurance regulators and other
interested parties to implement the minimum training and education
standards for all insurance agents who sell flood insurance policies,
and mandates that FEMA submit a report to Congress on implementation of
these provisions.
It directs FEMA to maintain and periodically publish an inventory of
levees located in the United States so that these levees can be
identified for National Flood Insurance Programs.
In addition to improving and reforming this program, this legislation
also ensures that taxpayers are protected, including provisions to
establish that nonresidential properties and nonprimary residences will
be charged actuarial instead of subsidized rates.
It increases the NFIP's borrowing authority to $25 billion, but also
a requirement that FEMA submit a report to Congress on how it intends
to repay funds borrowed under this increased authority.
It requires a semiannual report by FEMA to Congress on the financial
status of the National Flood Insurance Program.
It extends the current pilot program for mitigation of severe
repetitive loss properties, which is set to expire September 30, 2009,
to 2011.
Madam Speaker, I would like to commend Chairman Oxley and Chairman
Baker for their hard work on this legislation. Listening to people,
learning from the mistakes of the past and also from the impact of
these devastating hurricanes has meant that we will continue our
efforts to protect homeowners, taxpayers, while ensuring that a viable
market for flood insurance continues to operate effectively and
efficiently in the United States.
I urge my colleagues to support this rule and the underlying
legislation.
Madam Speaker, I reserve the balance of my time.
Ms. MATSUI. Madam Speaker, I thank the gentleman from Texas for
yielding me this time.
Madam Speaker, I yield myself such time as I may consume.
(Ms. MATSUI asked and was given permission to revise and extend her
remarks.)
Ms. MATSUI. Madam Speaker, as the representative of a district in a
floodplain, I understand the need for a healthy flood insurance
program. My hometown of Sacramento is the most at-risk river city in
the Nation. Whenever I talk about our efforts to improve Sacramento's
level of flood protection, I also mention the importance of flood
insurance. If you live behind a levee, you should have flood insurance.
I also recognize that to accomplish this we need a healthy and robust
National Flood Insurance Program. That is why the legislation we debate
today, the Flood Insurance Reform and Modernization Act, is so
significant.
Through this legislation, we will meet our responsibilities. We will
ensure coverage is available to those at risk, and we will educate
those same individuals as to the benefits of flood insurance. This bill
takes us in that positive direction.
In the aftermath of Hurricane Katrina, the deficiencies in the
program were laid bare. What remained was a program $25 billion in debt
with a questionable future. It is imperative that we rebuild the flood
insurance program.
For many Americans, owning insurance that protects against a flood is
more valuable than in case of a fire. That is because homes in a
federally designated special flood hazard area are three times as
likely to be destroyed by flood as a fire. This is the case for almost
three-fourths of all homes in Sacramento. This is an important program
that must be reformed to ensure its long-term stability and solvency.
The bill we are considering today makes reasonable reforms. It will
lay the foundation for a stronger and improved flood insurance program.
For that, I would like to thank Chairman Oxley, subcommittee Chairman
Richard Baker and Ranking Member Barney Frank for their work on this
bill, as well as the minority staff of the Financial Services
Committee, particularly Jeff Riley, for all their tireless work.
This bill takes important steps to modernize the flood insurance
program. It raises maximum coverage limits to keep up with inflation.
It provides new coverage for living expenses if you have to vacate your
home, and it also provides optional coverage for basements and business
interruption coverage for commercial properties.
These are all positive steps that will allow the program to continue
to provide peace of mind to those impacted when a flood event occurs.
Moving forward, Congress is also making the flood insurance program
sustainable in the long run. It tightens enforcement of purchase
requirements and ends subsidies on vacation homes, second homes and
businesses. These steps may not be popular, but the program needs this
kind of tough medicine.
Additionally, it directs FEMA to provide Congress with information
that will allow us to evaluate whether we should modify the program's
mandatory purchase requirements. This is an issue that demands serious
consideration, and I know that we will hear further debate on it once
this bill reaches conference.
As I conclude, I would like to express my disappointment that an
important amendment I offered was not adopted. It would have created an
educational outreach grant program to ensure homeowners in high-risk
flood areas retain their flood insurance. This grant program works.
Last year, the Sacramento Area Flood Control Agency, with a FEMA
grant, conducted just such a campaign, SAFCA, and reached out to more
than 45,000 NFIP policyholders in the American River floodplain with
impressive results.
Of this group, 43 percent now carry preferred risk flood insurance.
Preferred risk policies provide policy owners who are protected by a
levee or other flood mitigation method with full flood insurance at a
reduced price. Because of the lower price, the preferred risk policies
have a higher level of policy retention.
To put the success in perspective, FEMA more than recouped its
investment. SAFCA exceeded its target for policies, retained more than
20 times over, adding millions to the flood insurance program's bottom
line.
Extending these grants to other flood plains will only strengthen the
National Flood Insurance Program. I will continue to move this program
idea forward; and I look forward to working with Chairman Oxley,
Chairman Baker and Ranking Member Frank on this grant program.
Ensuring the long-term stability and solvency of this nearly 40-year-
old program is critical. The Flood Insurance Reform and Modernization
Act is an excellent step in the right direction. As my grant program
demonstrates, there is still more to do.
Having said that, this is a good bill and a much-needed start. I urge
my colleagues to support the rule so that we can enact this important
legislation.
Madam Speaker, I reserve the balance of my time.
Mr. SESSIONS. Madam Speaker, at this time, I yield such time as she
chooses to consume to the gentlewoman from Florida (Ms. Ginny Brown-
Waite).
Ms. GINNY BROWN-WAITE of Florida. Madam Speaker, I rise in support of
the rule; and I want to thank Mr. Sessions, as well as Chairman Oxley
and Mr. Baker and the ranking member of the Financial Services
Committee, Barney Frank, for working hard to bring this updating
measure to us today.
Madam Speaker, when the Financial Services Committee debated this
bill, an issue came to my attention that needed a remedy.
Many States like Florida that have far too many experiences with
flooding have established a mediation process for residents who have
flood claims. This process gives residents the opportunity to settle a
claim dispute with FEMA without having to go to court. Florida has a 90
percent success rate with this process, which other States have
actually begun emulating. This process brings quick results to
homeowners, saves millions of dollars in court costs and is something
that should be encouraged.
[[Page H4567]]
However, oftentimes representatives from FEMA refuse to show up, even
though the mediation program is nonbinding. This is a travesty to
residents who have already lost so much.
Accordingly, my colleague and I from Florida, Congresswoman Debbie
Wasserman Schultz, introduced an amendment that requires FEMA to
participate in State mediation claims. Again, this process is
nonbinding. If a resident is unhappy with the results of the
proceedings, they may choose to file suit. But the language will ensure
that residents have a choice, instead of FEMA making that choice for
them by simply avoiding the process.
I urge all Members to give homeowners the opportunity to settle their
claims quickly without a team of lawyers and mountains of legal fees. I
urge your support for the rule and also the underlying bill so that
homeowners living in flood-prone areas will have some certainty.
Ms. MATSUI. Madam Speaker, I yield 4 minutes to the gentleman from
Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. Madam Speaker, I rise in support of this
rule and in the hopes that this rule will be a model that my colleagues
will follow. It actually puts in order just about every amendment that
ought to be put in order, and I hope that is a precedent.
The bill also represents, I think, the legislative process at its
best. We began this a couple of years ago. The gentleman from Oregon
(Mr. Blumenauer), who is still a Member, and the former Member from
Nebraska (Mr. Bereuter) formed a very effective bipartisan coalition to
take the floodplain program and to preserve its essence to provide
assistance to Americans who could not get it from the private market
without this government program.
Let me stress that this is a case where we are putting forward a
Federal government program to meet a problem that will not be met by
the private market. And for my friends who subscribe to the maxim of
the former majority leader from Texas (Mr. Armey) that markets are
smart and government is dumb, I guess he would think what we are doing
today is dumb, but he is probably the only one in the country who does.
Because we are now dealing with a market failure in the economic sense
by having a government program, but it should be a sensible government
program. It was not as sensible as it should be.
We began a process when the gentleman from Oregon and the gentleman
from Nebraska came to us, and this was a collaborative effort between
myself as the ranking member and the chairman of the committee, the
gentleman from Ohio (Mr. Oxley). We found one of those cases where you
could improve a program from both the environmental and fiscal
standpoints, and we have legislation today that takes an important
program that meets a very pressing social need, the ability of people
who live in flood plain areas to continue to live and to get insurance
at a reasonable cost, and we make it better environmentally, less
likely that there will be building in environmentally unwise areas and
in unwise circumstances, and we make it less of a fiscal problem with
the Federal Government.
Now, clearly, people recognize the problem. In the case of Katrina,
we spent a great deal of money and got too little in return. There were
some problems there from the standpoint of levee construction and a
number of other things. We can't, in a bill like this, obviously,
prevent disasters. What we can do is increase our ability to work with
them.
So I am very proud of this bill. There is one amendment in
particular, and a number of the amendments will get bipartisan support.
Our colleague from Mississippi (Mr. Taylor), who lived through some of
the worst of this personally, has a very important amendment. I
strongly advocate for it. I wish he had gotten more than 10 minutes to
discuss it. So I am going to talk a little bit about it now. We will
talk some more about it in the general debate.
It deals with the problem that homeowners face when they are told
that they will not get any compensation for damage if it was caused by
water, when they are told that it was caused by water, when they have
very good reason to think it was caused by wind.
There is this split. Wind damage is covered by private homeowner
policies, water damage by flood damage, by the flood insurance program.
There is very good reason to believe that people have not been treated
fairly in this situation.
The gentleman from Mississippi, who has been one of the most tireless
and energetic defenders of the rights of citizens in this program, has
an amendment that would bring to bear the administrative resources to
look into this issue. We cannot regulate State insurance, but we can,
at the intersection of the Federal fund insurance program, the State
insurance, bring to bear our investigative and other resources.
The gentleman from Mississippi's amendment is an essential piece of
trying to treat people fairly in the past but, even more, preventing
abuses in the future. So I strongly urge people to vote for it.
In general, we have a good bill. There are amendments from both
parties that will improve it. There are some amendments that I will
oppose on the whole. It is a legislative effort that will make an
important program environmentally better and fiscally better and meet,
as I said, a defect the private market on its own cannot meet.
Mr. SESSIONS. Madam Speaker, at this time, I would like to notify my
colleague, Ms. Matsui, that I do not have any additional speakers. I
would welcome the opportunity to have her go through those speakers,
have her close, then I will do the same after she is through.
Madam Speaker, I reserve the balance of my time.
{time} 1045
Ms. MATSUI. Madam Speaker, I yield 5 minutes to the gentleman from
Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. Madam Speaker, I appreciate the gentlewoman's
courtesy in permitting me to speak on the rule, and I appreciate her
interest in dealing with these sensitive issues, given the district
that she represents. It was my privilege to have worked with her
husband on some of these in the past, and I appreciate her following
through, because it is critical to people in the greater Sacramento
area.
As we have seen outside our window here in Washington, DC, it is
critical to people around the country because flooding is not just
something that occurs in storm-racked coastal areas or immediately
adjacent to rivers. What we are finding is that there can be flash
floods in deserts. We are seeing throughout a four-state region now the
havoc that can be wreaked given torrential rain, having the ground
soaked, having development that has taken away the natural absorptive
capacity as wetlands disappear. This is an issue that everybody needs
to be concerned about.
I appreciate the words of the gentleman from Massachusetts, the
ranking member of the Financial Services Committee, who has been
focusing in a laser-like fashion, on these issues, along with the
Chair, Mr. Oxley. We are seeing more progress that has been made in
this area in the last 3 years, frankly, than we saw with the late Hale
and Lindy Boggs, when the program was first set up. And it is
important.
We are talking about areas now in the aftermath of Katrina where
people understand, for the first time, the issues. The rule that has
been offered up, one where we are going to have a number of amendments
in order, which is going to permit an opportunity for us to deal with
some serious legislation to try and teach one another about this issue,
and to make it better over the long term.
One of the fundamental issues that is going to come up throughout the
rules that are before us is who is going to be subsidized under this
program. There are those who feel that, well, frankly, we shouldn't
rigorously impose the flood insurance program. We shouldn't try to
expand the net for people that are involved. We shouldn't make sure
that people have flood insurance.
Well, frankly, I think history has shown in the last year that we do
people no favors by not having an effective flood insurance program, by
not helping people prepare; indeed, to the contrary. What we are doing
is we are encouraging more people to be in harm's way. We are allowing
some people to
[[Page H4568]]
avoid flood insurance, and we are shifting the burden on those who are
responsible flood insurance policy-holders.
If we are able to avoid a single 10% unnecessary rate increase, this
ripples across to save $150 to $200 million for 4 million policy-
holders. It is a savings that is compounded over time. So it is $150 to
$200 million each and every year.
Now, part of the problem of having people who should have flood
insurance avoid that responsibility, and we are finding that there are
almost a half million properties, vacation homes, second homes,
commercial properties, that don't have flood insurance. What that does
is that transfers the burden to those that do. It artificially inflates
the rate that others pay inequitably.
In addition, it poses a problem because those people that don't have
flood insurance that should, well, frankly, it tugs at our heart
strings, and we come forward with aid to try and help people after the
fact. We are spending billions of dollars that could have been avoided
if we had been dealing with an effective flood insurance program, and
if we would have implemented some of the initiatives that we brought
forward for mitigation to prevent flood damage in the first place.
So, Madam Speaker, I appreciate the opportunity to be involved with
the debate today. I join my colleague, Mr. Frank, in thanking the Rules
Committee for allowing a full and vigorous debate. I hope we see more.
This shouldn't be the exception. I hope it becomes a pattern.
This is one of those issues that is not partisan. It is not
geographical. It is not philosophical. It is one of the things that
simply good government, hard legislating, will benefit from a full and
vigorous debate on the floor of the House, and I look forward to being
a part of it.
Ms. MATSUI. Madam Speaker, I have no additional speakers, and I will
proceed to close.
Mr. SESSIONS. Madam Speaker, I have no further speakers. I reserve
the balance of my time.
Ms. MATSUI. Madam Speaker, I yield myself the balance of my time.
Madam Speaker, this bill represents an incredible amount of
collaboration between Chairman Baker and Ranking Member Frank.
This is a very important bill. It makes reasonable changes to the
flood insurance program. It will lay the foundation for a stronger,
improved flood insurance program. I urge my colleagues to support the
rule so that we can enact this important legislation.
Madam Speaker, I yield back the balance of my time.
Mr. SESSIONS. Madam Speaker, as you have heard today on the floor,
this rule is fair; it is balanced. It is not an exception; it is a
rule. And I appreciate the kind comments that have been made by my
colleagues on both sides of the aisle about underlying legislation
which will help improve the national flood insurance program.
I want to thank Chairman Richard Baker from Louisiana and Chairman
Mike Oxley from Ohio for their strong leadership on behalf of this
great bill.
Madam Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The resolution was agreed to.
A motion to reconsider was laid on the table.
The SPEAKER pro tempore. Without objection, the Clerk will effect a
technical correction in the engrossment of the resolution by inserting
``the report of'' after ``printed in'' on page 2, line 9.
There was no objection.
____________________