[Congressional Record Volume 152, Number 85 (Tuesday, June 27, 2006)]
[House]
[Pages H4589-H4604]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2006

  The SPEAKER pro tempore. Pursuant to House Resolution 891 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the consideration of the bill, H.R. 4973.

                              {time}  1340


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 4973) to restore the financial solvency of the national flood 
insurance program, and for other purposes, with Mr. Miller of Florida 
in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Ohio (Mr. Oxley) and the gentleman from 
Massachusetts (Mr. Frank) each will control 30 minutes.
  The Chair recognizes the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
  I rise today in support of H.R. 4973, the Flood Insurance Reform and 
Modernization Act of 2006, or the FIRM Act. This legislation will 
significantly reform the National Flood Insurance Program and ensure 
its continued viability. After all the rain we have seen in our 
Nation's capital these past few days, now is an especially good time to 
take a close look at this program that millions of Americans count on 
to protect the investment they have made in their homes from flood 
damages.
  The Financial Services Committee has a history of reforming the NFIP 
and with conducting oversight over the program. Spearheaded by the 
efforts of our former colleague, Representative Doug Bereuter of 
Nebraska, this committee took significant steps toward reform with 
passage of the Bunning-Bereuter-Blumenauer Act in 2004. That bill 
helped ensure that those people whose homes flooded on a frequent basis 
will not continue to soak the American taxpayers by filing flood loss 
claims time and time again.
  Under the leadership of my friend Bob Ney, chairman of the 
Subcommittee on Housing and Community Opportunity, the committee 
continued to oversee the NFIP last year with a field hearing in his 
district and with hearings on the status of flood map modernization and 
the program in general. These hearings exposed a number of deficiencies 
in the NFIP, including the fact that FEMA was not moving quickly enough 
to reform the program and that the Nation's flood maps are often 
outdated and inaccurate.
  Then came Hurricanes Katrina, Wilma and Rita. These storms placed an 
unprecedented strain on the NFIP that continues to this day. We had to 
raise the borrowing authority of the flood program first to $3.5 
billion, then to $18.5 billion, then to $20.8 billion. FEMA tells us 
that it is still not enough to cover all the claims from last year. 
When all is said and done, the NFIP will need $25 billion to pay all of 
those claims, and that does not take into account any storms we have 
before hurricane season ends this year.
  We have an obligation to these estimated 225,000 policyholders who 
have already filed a claim resulting from the events of 2005. These 
homeowners who have a binding contract with the NFIP to cover flood 
events could initiate legal action against FEMA and the U.S. Government 
if the flood insurance program does not make good on this contract.
  At the same time, we also have an obligation to reform and modernize 
the NFIP so that homeowners will continue to have access to flood 
insurance. According to recent estimates, more than half the U.S. 
population lives within 50 miles of the sea. While senseless coastal 
development should not be subsidized or encouraged, these homeowners 
who play by the rules and live in homes that take proper flood 
mitigation steps should also not be penalized.
  The FIRM Act is a bipartisan bill. Chairman Baker and I have worked 
closely with Ranking Member Frank to put together numerous reforms that 
will serve to increase FEMA's accountability and address the weaknesses 
exposed by last year's flooding.
  In an effort to make the NFIP more actuarially sound, the FIRM Act 
phases out the subsidized rates currently enjoyed by the owners of 
hundreds of thousands of vacation homes and second homes. If you can 
afford one of those homes, you can afford to pay your freight. In 
addition, the bill introduces new lines of coverage at actuarial prices 
and increases the program's coverage limits to reflect inflation. These 
are common-sense reforms that, again, will be actuarially priced.
  The FIRM Act requires FEMA to administer the program more 
responsibly. Flood maps will be improved and updated, and FEMA will 
have to certify to Congress that they have done so. The NFIP's 
borrowing authority will be temporarily increased to ensure that all 
outstanding claims will be paid.
  The FIRM Act increases the amount that FEMA can raise policy rates in 
any given year from 10 percent to 15 percent; and for those lending 
institutions that drop the ball on enforcing mandatory flood insurance 
purchase requirements, fines will be tripled from where they are now.
  I remain committed to the reform of the National Flood Insurance 
Program that we in the Financial Services Committee started with 
passage of the Bunning-Bereuter-Blumenauer Act in 2004. H.R. 4973 is 
the logical next step on the road to fiscal soundness for NFIP.
  I commend Mr. Baker for his work and strongly urge a vote for final 
passage.
  Mr. Chairman, I retain the balance of my time.

                              {time}  1345

  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  I fully agree with the statement of the chairman, and I am very proud 
to say that this is part of an ongoing, bipartisan effort that this 
committee has undertaken.
  A few years ago, we found a flood insurance program which was both 
important but flawed in a number of ways, and we began, at the urging 
of our former colleague from Nebraska, Mr. Bereuter, and our continuing 
colleague from Oregon (Mr. Blumenauer), to make improvements. We have 
not been able to get everything we wanted, but we have improved it.
  This bill takes substantial steps forward, and I think it is 
important for Members to know this is a bill which makes improvements 
at the same time from both the environmental and the fiscal 
standpoints. We make it a better program, we make it a more responsible 
program fiscally, and we make it a more responsible program 
environmentally.
  There will be various amendments, many of which I think are very 
important, including, and I want to particularly call attention to the 
amendment offered by our colleague from Mississippi (Mr. Taylor), who 
as much as anybody in this House encountered personally the problems of 
the flood insurance program, and he has a very important amendment that 
would go to the aid of individuals who have not been fairly treated, 
and I strongly will be supporting that amendment. We won't have a lot 
of time to debate it, and I wanted to say that now.
  I also want to make one general point that should not go unnoticed. 
We are dealing here with a public program. This is a case of the 
Federal Government stepping in to meet a very important social need 
that cannot be met by

[[Page H4590]]

the private market. The private market is a wonderful thing and does 
great things, and in the area of insurance we rely heavily in this 
country on the private market. But there are examples of market 
failure, not in a pejorative sense, but in a more technical sense. 
Flood insurance is one of them. If it were not for the role of the 
Federal Government here, there would be many, many Americans in great 
distress and unable to get the kind of insurance that they need.
  So for those who believe that the public sector is always the 
problem, that the private sector is not only a valuable part of our 
life but provides all good, and that you always ought to be denigrating 
the public sector, they probably don't want to vote for this bill. 
Because this is a bill which significantly improves a public sector 
response to a problem which, left without this, the private sector 
couldn't handle.
  Mr. Chairman, I reserve the balance of my time.
  Mr. OXLEY. Mr. Chairman, I recognize the gentleman from Ohio (Mr. 
Ney) and yield him 2 minutes.
  Mr. NEY. Mr. Chairman, I thank Chairman Oxley of the committee, and I 
rise today to support H.R. 4973, the Flood Insurance Reform and 
Modernization Act of 2006, also known as the FIRM Act.
  This important measure, approved by the House Financial Services 
Committee on March 16, will significantly reform the National Flood 
Insurance Program and ensure its continued viability by increasing 
accountability, eliminating unnecessary Federal subsidies, and updating 
the flood insurance program to meet the needs of the 21st century.
  Last year, in the immediate aftermath of Hurricane Katrina, I 
introduced H.R. 3669, the National Flood Insurance Program Enhanced 
Borrowing Authority Act of 2005. That piece of legislation increased 
FEMA's borrowing authority for flood insurance by $2 billion, which 
went a long way in helping the Department's flood insurance response.
  Since that time, FEMA estimates that it will need a total of $25 
billion in borrowing authority to cover claims. These claims from homes 
and businesses that have been damaged or destroyed by Hurricanes 
Katrina, Rita, and Wilma are not a new obligation. They are the result 
of a legal promise that we made to those homeowners and business owners 
when the Congress passed the National Flood Insurance Act of 1968 and 
subsequent revisions.
  Every single one of these claims represents someone who has taken the 
responsible course of action by purchasing flood insurance and paying 
premiums to the government. We not only have a legal obligation to 
honor our commitments, but we have a moral obligation, Mr. Chairman, to 
provide the coverage we promised to provide to those citizens.
  Small business owners will be eligible to purchase business 
interruption coverage at actuarial rates to better prepare them to meet 
payroll and other obligations during the next big storm. And for the 
first time since 1944, the bill updates maximum insurance coverage 
limits for residential and nonresidential properties.
  Our subcommittee in the Financial Services Committee, under the 
leadership of Chairman Mike Oxley, Mr. Baker, Mr. Frank, Congresswoman 
Maxine Waters and others, has spent considerable time on flood 
insurance reform in the past several years. In 2004, the Bunning, 
Bereuter, Blumenauer Flood Insurance Reform Act addressed and 
strengthened the operations.
  I urge my colleagues to support this important piece of legislation.
  Mr. FRANK of Massachusetts. Mr. Chairman, I now yield 3 minutes to 
one of our colleagues who has been dealing very directly with the 
negative consequences of the hurricanes and the damage that has been 
done, the gentleman from Florida (Mr. Davis).
  Mr. DAVIS of Florida. I thank the gentleman for yielding.
  The National Flood Insurance Program is critical to our country, 
particularly those of us that live in the coastal States. It is even 
more critical now because, as we have learned in Florida and in 
Mississippi and many States, we have entered a cycle of historic 
proportions in terms of hurricane and hurricane damage.
  The reason I rise is to speak in support of the Taylor amendment, 
which will be offered by Congressman Taylor of Mississippi, that calls 
for a study by the Inspector General of the Department of Homeland 
Security into what I think is a growing crisis not just in Mississippi 
but now in Florida.
  In Florida, the insurance industry recently succeeded in a session of 
the legislature in passing a law that repeals a 100-year-old law called 
the ``value policy law.'' This loophole that has been created in 
Florida is resulting in hundreds, and I fear soon thousands, of 
Floridians sitting back and waiting to get paid by their insurance 
company and watching the flood insurer blame the wind insurer, and the 
wind insurer blame the flood insurer.
  It is even worse in Mississippi, where one of our colleagues, 
Congressman Taylor, who is offering this amendment, is being forced, 
while serving as a Member of Congress, to sue his own insurance 
company. The same is true down at the other end of the Capitol, with 
Senator Trent Lott and at least one Federal judge.
  This law in Mississippi, now the law in Florida, could become a law 
throughout the country; and we need to study this because I think the 
impact on the consumer will be devastating.
  If you fly over Florida, which you and many of your constituents will 
do, now that it is summer vacation, you will still see thousands of 
blue tarps from a year ago from the last hurricanes. Every time you see 
one of those tarps, it represents a Floridian, a family who either 
cannot live in their home or is suffering water damage every time it 
rains. And it rains in Florida in the summertime.
  This is not a Federal issue, at least yet; but it is a very important 
State issue to our constituents. The least we can do as a Congress is 
to support Congressman Taylor's very simple amendment to have this 
study done about the impact to the consumer of this loophole that has 
been created in Mississippi and now in Florida and perhaps other 
States. We need to be there to protect our constituents in a time of 
storm.
  Mr. OXLEY. Mr. Chairman, I yield 3 minutes to the gentleman from 
Louisiana (Mr. Baker).
  Mr. BAKER. I thank the chairman for yielding time and for his 
continuing diligence and hard work on this important matter to all the 
people of this country, but particularly those of us in Louisiana.
  I certainly want to express my appreciation to Mr. Frank and to 
colleagues on his side who have also worked hand in hand with us to try 
to come to accommodation on this difficult issue.
  The flood insurance program is one that has been roundly criticized, 
and appropriately so in some instances. The repetitive loss problem 
that was addressed several years ago by this Congress was one of 
embarrassment for those who are responsible and felt that the program 
had been abused. But those chapters are now closed.
  The problem that faces us today is one of a different nature, and 
that is people entered into contractual obligations to protect their 
property, and storms beyond anyone's comprehension have now caused 
individuals to make claim on those policies, leaving the program today 
at a $20 billion borrowing level, a record high, and as previously 
noted, a requirement to go to $25 billion if the agency is to meet all 
of its contractual obligations.
  But I believe one point needs to be made clear in the hearing record 
on this matter, and the flood insurance program is unique. It is a 
program that collects premiums and from premiums collected makes 
payments to claimants. It is the only disaster response program in the 
United States which has a stream of income from which people who suffer 
loss may be reimbursed.
  Through 2004, the fund balance on hand after paying out $15 billion 
in claims within the flood insurance program was a positive balance of 
$1.8 billion. This is the only mechanism I know of when FEMA writes a 
check as the result of a declaration of a Presidential disaster where 
the taxpayers see their money come back. So I find it problematic when 
this program is criticized, because in all other cases where there is a 
disaster response, taxpayer

[[Page H4591]]

money is spent without any recourse of recovery.
  In this case, we need to address the problems before us. The bill 
increases the borrowing authority to $25 billion, and also, from a 
financially soundness perspective, increases the amount of money to 
flow back into the program with increases in premium.
  The most important sector where these increases occur is in the 
nonprimary residence structures, meaning businesses and vacation homes. 
Premiums will increase, or may increase, up to a maximum of 30 percent 
per year. This is estimated to get the program in sound financial 
condition over the next 3 to 4 years, of course barring what we hope 
will not happen, and that is another cataclysmic Katrina-Rita 
combination.
  I do believe this program serves an essential service in the function 
of our economy. Pointing to the area still decimated by Katrina, we 
need to get people back into their homes. They need to have the 
knowledge they have flood insurance coverage, because there are 
important economic activities that must occur in that region of the 
State in order to provide the United States with a free flow of energy 
and to have access to our ports through which agricultural products are 
exported.
  I certainly hope the House will adopt a great bipartisan product.
  Mr. FRANK of Massachusetts. Mr. Chairman, I am now pleased to yield 6 
minutes to one of the Members who has really taken the lead in 
improving this program, the gentleman from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Chairman, I appreciate the gentleman's courtesy 
in permitting me to speak on this, and for his leadership, along with 
the chairman, Mr. Oxley, and my friend, Mr. Baker. This is truly 
important bipartisan legislation to address the flood insurance 
program's challenges both in the short term and the long term.
  I strongly support this legislation and appreciate the willingness of 
the committee staff to work with people outside the committee to be a 
part of the process. Those of us here on the floor have known for a 
long time that the flood insurance program, while an invaluable asset 
to communities in the floodplain, is not functioning as originally 
designed. Hurricane Katrina taught us we cannot just let the status quo 
continue, or the flood insurance program will cease to function. It 
will be in bankruptcy or people will lose their tolerance for Federal 
bailouts.
  This bill is an excellent start, but you can be guaranteed that it is 
not the last time we will be talking about these changes on the floor. 
There are differing views about what needs to be done. Some have 
recommended making the program actuarially sound, and I agree with 
those measures. But one thing we have learned from Mr. Baker and from 
Mr. Taylor is that we have to be sensitive to the people who live in 
flood-prone areas. They are not just statistics of repetitive flooding, 
and they are rarely homeowners who are gaming the system. These are 
people caught up in the cycle of flooding and rebuilding who want to 
take steps to reduce their vulnerability.
  In 2004, we did pass a bill to provide mitigation assistance to 
severe repetitive-loss property owners. We found that these 
repetitively flooded properties, which constitute just 1 percent of all 
the properties in the program, accounted for 25 percent of the flood 
loss dollars. Addressing these properties, we wanted to help move 
people out of harm's way, either literally, by buying them out, or 
helping them take mitigation actions, such as elevation.
  Unfortunately, the repetitive-loss pilot project in the 2004 bill had 
not been fully implemented and we were not able to see the positive 
impacts before Hurricane Katrina. That is why I am glad the bill before 
us extends the pilot program so that it will have a chance to work. It 
also goes further to strengthen the flood insurance program and make it 
more fiscally sound over the next 50 years.
  Some have argued that all properties owners who enjoy artificially 
low flood insurance rates should be required to pay actuarial rates. 
This would increase the premium enough to make the program more 
actuarially sound, saving $1.3 billion. But while I agree the program 
should move closer to risk-based rates, the response of policyholders 
to the loss of the subsidy is unclear.
  The CBO estimates that some would reduce their amount of coverage or 
drop flood insurance all together. Many of these subsidized properties 
are second homes or vacation homes, and the legislation addresses these 
and I think is a good compromise. Phasing in risk-based rates for 
second homes will also ensure that families in New Orleans and 
Mississippi and other flood-prone areas that rely on flood insurance 
won't be forced to pay artificially high rates to subsidize somebody's 
second home or vacation home.

                              {time}  1400

  The bill also helps encourage participation in the program. Many 
people living in the floodplains do not have flood insurance now. Less 
than 40 percent of the property owners who are required to buy 
insurance actually do so.
  In parts of Mississippi and Alabama, hit hardest by Katrina, the 
coverage rate was only 15 percent. That means that people did not have 
access to insurance payouts to make them whole, and they are relying on 
grants and loans from the disaster relief programs that are paid by the 
taxpayer.
  The challenge is figuring out how to make sure that more people who 
are supposed to have flood insurance do so, and this bill helps the 
situation by increasing the penalties levied for nonenforcement of 
Federal mandatory purchase requirements.
  It also includes an important study on how to better enforce 
mandatory flood insurance.
  The bill also addresses the inaccuracy and inadequacy of flood 
insurance maps. We are going to talk a little about this later in the 
day.
  Current flood insurance is required only where there is a 1 percent 
chance of a flood on an annual basis and not in other low-lying areas 
where surges are likely to follow major storms. Many of the people who 
flooded in Katrina did not technically live in the floodplain. They 
were out of this 100-year cycle, or they lived behind levees and did 
not realize they should have flood insurance.
  These updated maps are important, because FEMA uses them to issue 
flood elevation requirements. Communities want to have the confidence 
that their residents are paying the right amount for flood insurance, 
and we should be loathe to tinker with that.
  In addition to directing FEMA to develop more sophisticated maps, 
this legislation authorizes FEMA to study the implications of requiring 
flood insurance behind the levees. This is a very important part of the 
bill. I don't think it has been given the proper attention by more of 
us in Congress. I hope that we will move towards requiring flood 
insurance for those situations.
  The saying goes, there are only two kinds of levees, those that fail 
and those that will fail. But this study moves us in the right 
direction.
  While this bill, I think, sets the stage, for moving us in the right 
direction, simple, common-sense steps strengthen the program and bring 
together a vast, diverse range of people, from environmentalists to 
fiscal conservatives, people in real estate, and most important, most 
important, people whose lives we saw torn apart living in flood-prone 
areas.
  I deeply appreciate the work of this committee and our colleagues in 
making important steps that are going to make a difference for people 
for generations to come.
  Mr. OXLEY. Mr. Chairman, I yield 3\1/2\ minutes to the gentlewoman 
from Pennsylvania (Ms. Hart).
  Ms. HART. Mr. Chairman, I especially want to thank Chairman Oxley, 
Ranking Member Frank, subcommittee Chairman Bob Ney and Ranking Member 
Ms. Waters for addressing this issue. It is one that I know many of our 
colleagues have dealt with with their constituents due to flash 
flooding, which occurs all over the United States, not just in coastal 
areas.
  I rise in support of this bill because it will help many of those 
people who, unfortunately, on top of the suffering that they faced as a 
result of the flooding, also faced more suffering because they didn't 
get what they needed as a result of, I think, poor administration of 
the National Flood Insurance Program.
  The story is all too common across the country. Young couple saves 
money, buys their dream home, finds that it is in a flood-prone zone, 
so they

[[Page H4592]]

buy Federal flood insurance, thinking things will be okay. In fact, 
even their paperwork makes it look like they will be completely 
covered.
  But in September, 2004, in my district, remnants of the Hurricanes 
Frances and Ivan came through my district in Pennsylvania; and I worked 
with many families throughout my region who had lost their homes.
  My staff and I spent a significant amount of time with them and 
learned of all of the deficiencies involved in the National Flood 
Insurance Program. We learned that these incidents were as a result of 
poor administration of some rules that needed to be carried out that 
had been put in place in 2004. We raised these concerns with Chairman 
Oxley and Chairman Ney, and they offered graciously to hold a hearing 
on this issue.
  One of my constituents, Beth Beam, was given the opportunity, along 
with other victims of flooding throughout the eastern seaboard, in 
fact, to highlight the problems they had experienced with the NFIP. It 
became clear from this hearing that we needed serious reform.
  Many of my constituents learned too late that they were listed in the 
wrong flood zones or the maps were outdated and they really were not 
listed as being eligible or that they had problems receiving adequate 
compensation for their actual losses.
  Most frustrating was the lack of support and information that they 
received when they raised their concerns. The lack of true appeals 
process within the NFIP meant that many individuals had no recourse 
when they believed the system was not meeting their needs and the 
agreement that they had made on their policies.
  This bill is a great solution to ensure these types of problems don't 
happen again.
  First, it directs FEMA to develop more sophisticated and updated maps 
so that we will update the standards and people will know if they are 
actually in a flood zone.
  Second, the bill reinforces the need for FEMA under the legislation 
that Congress passed a couple of years ago to create this appeals 
process that will help people have the opportunity to have their 
concerns addressed.
  It will also require adequate training for the insurance agents who 
sell this federally subsidized flood insurance. That issue is so 
important as people will need help getting through the process when 
they have lost so much.
  Finally, the bill provides optional coverage for living expenses, 
business interruption insurance, basement repair costs and replacement 
of contents, things that obviously people who face these losses need so 
much.
  Following the floods in my district, people were surprised to learn 
how much of their property was not covered. People were very surprised 
and disappointed to learn how much of their property was not covered, 
although their policy showed that it might be.
  This legislation will ensure that they are able to receive 
compensation for the damages they actually experience, which is in line 
with what they have bought insurance to cover.
  Again, I want to thank the chairman and the committee for listening 
to these concerns. The NFIP is supposed to fill the gaps for those who 
lose their homes and properties. Unfortunately, the inadequacies have 
caused so much harm in the past and made people's lives even worse. 
Programs like NFIP are supposed to be a safety net, and I believe this 
bill will help us fix it and make it the safety net that people expect.
  The NFIP has been directed to make these changes. I urge Congress and 
my colleagues to support this legislation so that we can carefully 
oversee this process and ensure our constituents will not face these 
problems again.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 2 minutes to the 
gentlewoman from California (Ms. Waters), who is the ranking member of 
the subcommittee and who has been compiling a very productive record in 
the work of that subcommittee.
  Ms. WATERS. Mr. Chairman and Members, I would like to thank both the 
chairman and Mr. Frank, to make sure that we would work together to 
increase the coverage and raise the limit for flood insurance. It has 
not been increased for over 20 years.
  I had the opportunity to be in the gulf coast region with my 
colleagues and to hear the stories of the people who had been 
devastated by Katrina. Not only did we find that there were residents 
who had been given mortgages and the banks and financial institutions 
had not required flood insurance but then this bickering with the 
insurance companies who were disputing damage. They said, no, it was 
not flood damage, it was wind damage, and vice versa.
  I think this bill will go a long way toward dealing with some of the 
issues that we learned about.
  Certainly, we want to make sure that the insurance companies are 
doing what they are supposed to do. My colleague from Mississippi, who 
will have an amendment, Mr. Taylor, on this floor today, I certainly 
support. I was there with him, and I saw the devastation and the 
destruction. We heard the complaints about the insurance companies.
  Let me just say, in addition to raising the limit, this will go a 
little bit further, and it will deal with business interruption. It 
will help to meet the needs of those who are confronted and faced with 
this kind of devastation for the future.
  Again, I would like to thank not only Mr. Baker and Mr. Frank but Mr. 
Oxley and Mr. Taylor for the work that he is doing.
  Mr. OXLEY. Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, at this time, I would yield 
3 minutes to the gentlewoman from Texas (Ms. Jackson-Lee), another 
representative who has great concerns, because of the area that she 
represents, with the fair worth of the program.
  But, before we do, I would note that this bill is being supported by 
the National Taxpayers Union, Citizens Against Government Waste and 
Taxpayers for Common Sense. As I said, this is an unusual case, I 
think, where both environmental groups and groups primarily concerned 
with reducing government spending have come together in support of a 
piece of legislation.
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the gentleman for his 
distinguished leadership on this issue, along with Mr. Oxley, as well 
as the ranking subcommittee member, Mrs. Waters, and the leadership of 
Mr. Ney.
  Let me also acknowledge the leadership of Mr. Baker, who I assume has 
walked the walk in our region, in our gulf coast region.
  I, too, have walked those streets and seen the impact that the 
devastation of Katrina has caused, and likewise in the City of Houston, 
not only the, if you will, Katrina survivors but also those who 
experienced the flooding of Rita.
  In addition, I walked along the pathways and saw the devastation in 
Mr. Taylor's district, and again thank him for his leadership, along 
with many, many Members who have addressed this question.
  Mr. Frank, I hold in my hand a book that says, From Poverty to 
Opportunity: A Covenant for a New America, which talks about overcoming 
poverty. I say that, and I support certainly this document, but I raise 
that with respect to H.R. 4973, because it helps those who have done 
everything right in America. They pay their taxes, and they have worked 
and invested in the American dream, and that is their home, to be able 
to find relief.
  This bill provides an extra $25 billion to cover the Katrina-related 
claims, but it is also an overhaul, an important overhaul of the flood 
insurance program, because it allows the National Flood Insurance 
Program to offer actuarially priced business interruption. How many of 
those who came through these recent storms lost their homes and their 
businesses?
  In fact, I was just with the FEMA director in Houston on Friday. In 
the room were two elderly persons who stood up and said, we have flood 
insurance, but nobody did anything. We didn't get anything. We lost 
everything. So there is a fracture in the system.
  I hope that this will be able to, one, provide, if you will, an 
embellishment of this program but also be able to give people help for 
the losses that they experience.

[[Page H4593]]

  I want to say very much thanks for the phase-out subsidy of vacation 
homes. That is the right way to do it. We know that sounds bad to some 
individuals. We thank them for having vacation homes, second homes, but 
we certainly don't want to strike it out immediately. Give them an 
opportunity to get coverage; and we recognize they, too, need coverage. 
But we understand the economies of scale. This is a reasonable and 
respectable approach to take.
  Let me also say that we are also delighted that you are dealing with 
flood maps. Mr. Etheridge and myself on the Science Committee did work 
on inland flooding. Hurricane Allison, what we call Storm Allison in 
Houston was what we call inland flooding. We lost billions of dollars 
in the medical center because it wasn't called a hurricane, but the 
flooding destroyed so much.
  We appreciate the fact that this will update flood maps, maintain an 
inventory of levees in the United States and move more quickly to 
update flood elevation standards and flood maps in the areas affected 
by last year's hurricane. Most importantly, this is a model of what we 
can do to ensure that homeowners and taxpayers and hard-working 
Americans certainly are not thrown into poverty. Certainly we hope that 
we will move others out of poverty.
  I would ask my colleagues to support this legislation.
  Mr. OXLEY. Mr. Chairman, I yield 2 minutes to the gentleman from 
Florida (Mr. Shaw).
  Mr. SHAW. Mr. Chairman, I, along with my colleague Ms. Ginny Brown-
Waite, have introduced the Homeowners Insurance Protection Act. The 
bill provides financial protection to all Americans that live in 
natural catastrophe-prone areas through a three-layered approach. Our 
goal is to keep homeowners' insurance premiums at affordable rates. 
This program would assure that when a big one hits, the responsibility 
for insured losses is with insurance companies and not with the 
bailouts from the Federal Government, such as FEMA.
  First, this bill would create the Federal Catastrophe Fund, to be 
known as the Hurricane and Earthquake Loss Protection Fund, or the HELP 
Fund.
  Second, each State that chooses to participate in this voluntary 
program must establish a State Catastrophe Fund, which we call the CAT 
Fund, similar to that which we have in Florida.
  Third, the State CAT fund then purchases reinsurance from the Federal 
HELP fund. The HELP fund is thus financed directly by insurance 
premiums and not by taxpayer dollars.
  We live in a diverse nation facing diverse natural catastrophes. This 
bill encourages States to take responsibility for their residents and 
gives the States the discretion of insuring for their own catastrophic 
needs.
  I yield to the chairman.
  Mr. OXLEY. I thank the gentleman for yielding.
  I understand that this is an issue in many States around the country 
but especially in those States hit by hurricanes in the last 2 years. I 
would welcome the opportunity to explore this issue further with the 
gentleman and my good friend from Florida, as well as the gentlewoman 
from Florida.
  Mr. SHAW. I thank the chairman for his comments.
  I would just add, in closing, that we are facing a tremendous 
catastrophe in Florida, the economy. The gentleman from Pensacola can 
verify this.

                              {time}  1415

  Insurance is almost unaffordable. We need a secondary insurance that 
would back this up, that would spread the risk further than just 
throughout one State. This isn't just Florida. This is all the gulf 
coast. The gentleman from Louisiana seated behind me will certainly 
verify that.
  So it is a good bill. It prepares for the future and it does it in a 
very conservative and practical way.
  Mr. FRANK of Massachusetts. Mr. Chairman, I now yield to one of the 
Members who has really been in the forefront of trying to improve our 
national response to this crisis because of his own firsthand 
experience and the leadership he has had to show in the region that he 
represents and trying to deal with the otherwise inadequate Federal 
Government response to Katrina.
  I yield as much time as he may consume to the gentleman from 
Mississippi (Mr. Taylor).
  Mr. TAYLOR of Mississippi. Mr. Chairman, I want to thank the 
gentleman from Massachusetts, the gentleman from Ohio.
  Mr. Chairman, not everything our Nation does is wrong. And one of the 
things our Nation does that the private sector wouldn't do or chose not 
to do was insure people against flooding. And that is a very good 
program.
  When you consider that the predictions are that within the next 50 
years 80 percent of all Americans will live within 50 miles of a coast 
line, then protection from flood insurance, protection from hurricanes 
is very important.
  In southern Mississippi I have had very, very few complaints about 
the Federal flood insurance program. I have had tens of thousands of 
complaints about how people were treated by the wind coverage. So I 
want to commend the gentleman from Massachusetts and the gentleman from 
Ohio for raising the amounts that people can buy coverage for.
  Most of southern Mississippi had older homes. People had lived in 
them for decades. And now they, and I, are going through simultaneous 
sticker shock. Houses that you may have bought 20, 30 years ago for 
$50,000, you have now got to replace for a heck of a lot more than 
that. So by raising the amount that people can cover themselves from 
$250,000 to $335,000 is a huge improvement. Also, raising the contents 
up to $135,000 again is a huge improvement. I think as people put a pad 
to their contents after they woke up the next morning and discovered 
that they were gone, I think everyone was surprised that they owned 
more than they thought they did and they lost more than they thought 
they did. So again this is a move in the right direction.
  I want to commend the committee for putting in the money for the new 
flood maps. Water in Bay St. Louis got to be 26 feet above sea level in 
some places. That was unprecedented since the Europeans landed over 300 
years ago. And the Navy Oceanographic Lab tells us we are in for 10 
years of this. So, again, since this is a public entity funded with 
taxpayer dollars, I think it is very important, whether it is 
Pensacola, Florida, or Gulf Shores, Alabama. Anywhere in coastal 
America I think it is important that we know the propensity to flood, 
take adequate steps to minimize losses in future hurricanes.
  I would also like to commend the committee for working with me on 
trying to address the Katrina fraud. Citizens of this country are 
noticeably upset that some of the generous money given to them, either 
as taxpayers or through groups like the Red Cross, was abused, that 
people milked the system, in some instances, to do things like a sex-
change operation.
  I happen to think the biggest fraud of all, though, Mr. Chairman, 
came from the insurance industry. And I will walk you through this. 
Under the National Flood Insurance Plan, we count on the private sector 
not only to sell the insurance policy; we count on the private sector 
to adjudicate the claim.
  Now, wind damage is paid for by a private company. Flood damage is 
paid for by the Nation through the National Flood Insurance Plan.
  So imagine yourself, a 25-year-old insurance adjuster. You have 
visions of being a company man or getting that next promotion. You may 
even own stock in your company. You are sent out to adjudicate a claim 
on a house that is no longer there, knowing that if you said the wind 
did it, it is coming out of your company's pocketbook. If you say the 
water did it, it is coming out of the taxpayers' pocketbook.
  The FBI says that fraud is a crime of opportunity. And I think under 
this system, we have given the insurance industry the opportunity to 
stick the bill to the taxpayers every time there was any question. And 
I think they did.
  Is it a coincidence that the insurance industry reported $44 billion 
in profits last year, in the same year that the National Flood 
Insurance Program lost $25 billion? Are they that much better at what 
they do? I don't think so.
  I think they took claims that legitimately should have been paid by 
the wind policies and stuck it to the taxpayer to the tune of millions, 
if not billions, of dollars. And I am going to

[[Page H4594]]

offer an amendment in a little while to ask for an Inspector General's 
report to see if that is true. And if it is true, then we need to come 
back and change the system so that we don't just count on an insurance 
adjuster blindly sending the bill to the government and the government 
paying it every time.
  Think about it. If the Members in this room want to be reimbursed for 
their trip to the airport, they have got to turn in a taxi receipt for 
15 or 20 bucks. But in the case of the National Flood Insurance 
Program, Allstate, State Farm, Nationwide, fill in the blank, can bill 
the government for hundreds of billions of dollars, and we pay that 
claim without even bothering to look into this. That is wrong. It is a 
system ripe for abuse. And I am convinced it has been abused.
  Last, and several other speakers have touched on this, we need to 
rethink the whole flood insurance program. Whether you are from 
Florida, Georgia, Alabama, Mississippi, any coastal State, we don't 
need people who have invested their life savings in their houses 
getting abused by their insurance company. And let me tell you, it is 
happening every day.
  Senator Trent Lott, one of the most powerful men in the Senate, feels 
like the only way he is going to get justice out of his insurer is to 
sue them.
  Federal Judge Lou Guirola had to drop hearing cases, like Senator 
Lott, so that he could sue his insurance company.
  Now, when U.S. Senators and Federal judges feel like the only way 
they are going to get justice is to go to court themselves, what is it 
like for the grandmas and grandpas out there? What kind of fair shake 
are they going to get? And the answer is they are not getting one.
  So if the private sector is not going to do it fairly, if they are 
not going to do it right, then maybe we need to expand the National 
Flood Insurance Program and call it the National Hurricane Insurance 
Program. Because let me tell you what I think is going to happen. We 
spend a lot of money to send the hurricane hunters out there for the 
Air Force, a lot of money to tell us where these storms are going to 
hit and when. We have satellites up in space to tell us about these 
storms. Why do we do that? So that people will get the heck out of 
there before a storm hits.
  Based on what has happened, based on the tens of thousands of 
southern Mississippians who have been denied legitimate claims for 
their wind coverage, I am convinced in the next hurricane people are 
going to die needlessly because they stay behind in their home with a 
camcorder so they can prove to the insurance adjuster whether it is 
wind or water. That is wrong. It is completely contrary to why we fund 
the hurricane hunters; it is completely contrary to why we put those 
satellites in space. A person should not have to die on his property to 
get justice from his insurance company. And although there is no 
Federal regulation of the insurance industry, maybe the abuses that 
took place after Katrina will cause some of my colleagues to rethink 
this.
  So, again, the bill takes some very important steps on allowing 
people to purchase more flood insurance, to purchase more contents 
insurance. It is taking the right step on getting the flood maps much 
more accurate, not so much for the guys who have lived there for 20 or 
30 years, but for all the new folks who are moving to the coast who 
need to know if their property has a propensity to flood.
  So I am grateful for what has been done. I have offered some 
observations of what needs to be done.
  Mr. OXLEY. Mr. Chairman, I yield 4 minutes to the gentleman from 
California (Mr. Gary G. Miller).
  Mr. GARY G. MILLER of California. Mr. Chairman, I rise to support 
H.R. 4973, the Flood Insurance Reform and Modernization Act, before us 
today.
  The National Flood Insurance Program is a valuable tool in addressing 
the losses incurred throughout this country due to floods. It assures 
that businesses and families have access to affordable flood insurance 
that would not be available on the open market.
  Prior to the passage of the National Flood Insurance Act in 1968, 
insurance companies generally did not offer coverage for flood disaster 
because of the high risk involved. Today more than 20,000 communities 
participate in the National Flood Insurance Program. More than 90 
insurance companies sell and service flood service insurance. There are 
more than four million policies covering the total of $800 billion.
  The National Flood Insurance Program provides Federal flood insurance 
for properties located in flood-prone areas where the community has 
voluntarily agreed to institute floodplain management and land use 
control measures that minimize the risk of flooding and mitigate 
potential flood damage. The program is intended to provide a more cost-
efficient alternative to costly Federal disaster assistance by 
encouraging communities to take preventive measures to reduce flood 
losses and providing affordable flood insurance that would not 
otherwise be commercially available.
  Last year's hurricane season resulted in significant strains on the 
NFIP. The claims resulting from the losses from these catastrophic 
hurricanes is unprecedented in the history of the program.
  Since the NFIP's inception in 1968, the program paid out $15 billion 
in claims. In contrast, claims for Hurricanes Katrina and Rita alone 
are expected to exceed $25 billion. This far surpasses claims paid by 
the entire history of the NFIP.
  In the past, when losses exceeded premiums, the NFIP had been allowed 
to borrow from the U.S. Treasury to repay claims. Such loans have 
traditionally been paid back rather quickly with interest.
  The bill before us today increases the amount that FEMA may borrow 
from the U.S. Treasury to $25 billion to cover the expenses incurred by 
the National Flood Insurance Program, NFIP, during the last year's 
hurricane season.
  As CBO has stated, the funds borrowed from Treasury so far exceed the 
program's income from premiums and fees they will likely never be 
repaid. As such, this bill proposes a number of reforms to the program 
to ensure that it is actuarially sound in the future.
  When we debated this in committee, some individuals made proposals; 
and for the best of reasons, they said we should look at a 100-year 
traditional floodplain, and anybody within a 100-year traditional 
floodplain should be required to pay for insurance.
  The problem that many of us have who represent districts who have 
mitigated 100-year floodplains is that all of our people who are not at 
risk would be required to basically boost the program by increased 
premiums by them participating in it also.
  And when Federal dollars, State, and local have been spent to 
mitigate 100-year floodplains, many of us thought that that was 
unreasonable. In fact, the 100-year floodplain would have impacted a 
large portion of L.A. County that I represent. Anything near the L.A. 
River would have been included, and most of Orange County would also 
because the Prado Dam mitigates that.
  There was another proposal made with the best of heart and the best 
of concern for the people of this country. That said, let's look at a 
historical 500-year floodplain. The problem we had with that is there 
is no evidence available and then there is no information available 
either that we can dictate and determine how much a 500-year floodplain 
might be.
  If we had taken a 500-year historical floodplain, it would have 
included all of L.A., most of L.A. County, and most of Orange County 
and any other city in this country that is next to a river or near the 
coast.
  I offered an amendment and it was supported by the committee that 
said let's do a GAO study to determine if we need to expand the 
program, how it should be done, how it should be implemented. I think 
it is a reasonable approach, rather than us just making a knee-jerk 
reaction to a severe problem. And it is a problem we have to address. I 
am not saying we don't. But to tax people who are not impacted or not 
at risk of flood to boost the program, I think, is unreasonable. It 
would have impacted many of our districts that don't live in areas of 
high risk. And I do understand the need that we need to protect those 
who are within the program. We need to make the program actuarially 
sound. And I am pleased with the language in this bill that is included 
here, and it expands the coverage of the program. And I urge my 
colleagues to reject any amendment

[[Page H4595]]

that would further expand it without GAO studies.
  Mrs. McCARTHY. Mr. Chairman, H.R. 4973 is necessary but not 
sufficient.
  It is necessary because the hurricanes and flooding in 2004 and 2005 
have shown that the present flood insurance programs must be reformed.
  It is not sufficient because those same hurricanes, especially 
Hurricane Katrina, convinced me that flood insurance alone will not 
protect the millions of Americans who now live in harm's way along our 
Nation's coasts and rivers.
  I had the privilege of visiting the Gulf Coast earlier this year. I 
saw the devastating impact of wind and water on homes, on businesses, 
and on lives. I also heard the horror stories from people who were told 
that the damage to their lives was caused by water and not wind. In 
these cases, neither flood insurance nor homeowner's insurance 
protected them. Others indicated that officials told them they didn't 
need flood insurance because they were not in a danger zone.
  It is time for Congress to go beyond the traditional approach of 
distinguishing between flood and wind damage. We have to develop a 
comprehensive natural disaster program that will protect homes from 
hurricanes, earthquakes, volcanoes, and other natural disasters that 
one day will affect 49 of our 50 states.
  Insurance companies know that a disaster can occur. Some companies 
already are refusing to insure homes on Long Island and in other 
communities where a ``big one'' is overdue. The hurricane of 1938--the 
so-called Long Island Express--killed 600 to 700 people, destroyed 
75,000 buildings and caused $300 million in damage. At that time, Long 
Island was the home to 600,000 people. Today, 2.8 million live there. A 
category 4 hurricane could cause $100 billion in insured damage alone.
  Earlier this year, the gentleman from New York (Mr. Israel) and I 
asked the Financial Services Committee to conduct hearings as soon as 
possible on the disaster insurance bills before the Committee. Our 
letter stated that ``We believe that Congress needs to pass a strong 
reinsurance program. Natural disasters can occur in any region at any 
time. Since the insurance industry appears unable or unwilling to 
provide protection for our constituents, then it is time for Congress 
to act swiftly and positively.''
  The initial response indicated that we should wait until after the 
GAO completes its study of natural disaster insurance needs later this 
year. Fortunately, the real facts of Katrina, a number of extensive 
newspaper investigations, and the airing of several ``what if' programs 
on cable TV are opening eyes even here. The Housing Subcommittee is 
holding its second hearing tomorrow (June 28) on natural disaster 
insurance needs. This one will focus on ``The Housing Market and 
Natural Catastrophes.''
  I am convinced that this country needs an insurance program that will 
cover all natural disaster risks. If properly crafted, this program, 
will reduce the amount of emergency funds that Congress will have to 
provide after the next emergency, whether it occurs in the Northeast, 
Midwest, West Coast, Southeast, or Gulf Coast regions.
  I want to encourage the administration, all financial services 
companies, state and local officials, and this body to work together 
and to develop a comprehensive and responsible natural disaster 
insurance program. The policy should be priced according to the risks 
of that state; it should cover all major natural disasters. It must be 
mandatory and cover both homes and businesses. States need to update 
and enforce building codes and to require mitigation both before and 
after a natural disaster. Finally, the federal program would be a 
backup for private reinsurance. These are the goals that I will pursue.
  The House should pass HR 4973 today. Then, we must turn our attention 
to the larger disaster insurance issue. The American people cannot 
afford to add another $20 billion or $50 billion or $100 billion 
natural disaster relief program to the deficit, not when a fiscally 
sound alternative may be within reach. Tomorrow may be too late.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield back the balance of 
my time.
  Mr. OXLEY. Mr. Chairman, we have no further speakers. I yield back 
the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the bill is considered read for amendment under 
the 5-minute rule.
  The text of the bill is as follows:

                               H.R. 4973

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Flood 
     Insurance Reform and Modernization Act of 2006''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Study regarding status of pre-FIRM properties and mandatory 
              purchase requirement for natural 100-year floodplain and 
              non-Federally related loans.
Sec. 4. Phase-in of actuarial rates for nonresidential properties and 
              non-primary residences.
Sec. 5. Reduction of waiting period for effective date of policies.
Sec. 6. Enforcement.
Sec. 7. Maximum coverage limits.
Sec. 8. Coverage for additional living expenses, basement improvements, 
              business interruption, and replacement cost of contents.
Sec. 9. Increase in annual limitation on premium increases.
Sec. 10. Increase in borrowing authority.
Sec. 11. FEMA participation in State disaster claims mediation 
              programs.
Sec. 12. FEMA reports on financial status of insurance program.
Sec. 13. Extension of pilot program for mitigation of severe repetitive 
              loss properties.
Sec. 14. Notice of availability of flood insurance and escrow in RESPA 
              good faith estimate.
Sec. 15. Reiteration of FEMA responsibilities under 2004 Reform Act.
Sec. 16. Updating of flood maps and elevation standards.
Sec. 17. National levee inventory.
Sec. 18. Clarification of replacement cost provisions, forms, and 
              policy language.
Sec. 19. Authorization of additional FEMA staff.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) flooding has been shown to occur in all 50 States;
       (2) the aggregate amount of the flood insurance claims 
     resulting from Hurricane Katrina, Hurricane Rita, and other 
     recent events has exceeded the aggregate amount of all claims 
     previously paid in the history of the national flood 
     insurance program, requiring a significant increase in the 
     program's borrowing authority;
       (3) flood insurance policyholders have a legitimate 
     expectation that they will receive fair and timely 
     compensation for losses covered under their policies;
       (4) substantial flooding has occurred, and will likely 
     occur again, outside the areas designated by the Federal 
     Emergency Management Agency as flood hazard areas;
       (5) properties located in low- to moderate-risk areas are 
     eligible to purchase flood insurance policies with premiums 
     as low as $112 a year;
       (6) about 450,000 vacation homes, second homes, and 
     commercial properties are subsidized and are not paying 
     actuarially sound rates for flood insurance;
       (7) phasing out subsidies currently extended to vacation 
     homes, second homes, and commercial properties would result 
     in estimated average savings to the taxpayers of the United 
     States and the national flood insurance program of 
     $335,000,000 each year;
       (8) the maximum coverage limits for flood insurance 
     policies should be increased to reflect inflation and the 
     increased cost of housing;
       (9) significant reforms to the national flood insurance 
     program required in the Bunning-Bereuter-Blumenauer Flood 
     Insurance Reform Act of 2004 have yet to be implemented; and
       (10) in addition to reforms required in the Bunning-
     Bereuter-Blumenauer Flood Insurance Reform Act of 2004, the 
     national flood insurance program requires a modernized and 
     updated administrative model to ensure that the program is 
     solvent and the people of the United States have continued 
     access to flood insurance.
       (b) Purposes.--The purposes of this Act are--
       (1) to protect the integrity of the national flood 
     insurance program by fully funding existing legal obligations 
     expected by existing policyholders who have paid policy 
     premiums in return for flood insurance coverage;
       (2) to increase incentives for homeowners and communities 
     to participate in the national flood insurance program and to 
     improve oversight to ensure full participation in the program 
     for owners of properties for which such participation is 
     mandatory; and
       (3) to increase awareness of homeowners of flood risks and 
     improve the quality of information regarding such risks 
     provided to homeowners.

     SEC. 3. STUDY REGARDING STATUS OF PRE-FIRM PROPERTIES AND 
                   MANDATORY PURCHASE REQUIREMENT FOR NATURAL 100-
                   YEAR FLOODPLAIN AND NON-FEDERALLY RELATED 
                   LOANS.

       (a) In General.--The Comptroller General shall conduct a 
     study as follows:
       (1) Pre-firm properties.--The study shall determine the 
     status of the the national flood insurance program, as of the 
     date of the enactment of this Act, with respect to the 
     provision of flood insurance coverage for pre-FIRM properties 
     (as such term is defined in section 578(b) of the National 
     Flood Insurance Reform Act of 1994 (42 U.S.C. 4014 note)), 
     which shall include determinations of--

[[Page H4596]]

       (A) the number of pre-FIRM properties for which coverage is 
     provided and the extent of such coverage;
       (B) the cost of providing coverage for such pre-FIRM 
     properties to the national flood insurance program;
       (C) the anticipated rate at which such pre-FIRM properties 
     will cease to be covered under the program; and
       (D) the effects that implementation of the Bunning-
     Bereuter-Blumenauer Flood Insurance Reform Act of 2004 will 
     have on the national flood insurance program generally and on 
     coverage of pre-FIRM properties under the program.
       (2) Mandatory purchase requirement for natural 100-year 
     floodplain.--The study shall assess the impact, 
     effectiveness, and feasibility of amending the provisions of 
     the Flood Disaster Protection Act of 1973 regarding the 
     properties that are subject to the mandatory flood insurance 
     coverage purchase requirements under such Act to extend such 
     requirements to properties located in any area that would be 
     designated as an area having special flood hazards but for 
     the existence of a structural flood protection system, and 
     shall determine--
       (A) the regulatory, financial and economic impacts of 
     extending such mandatory purchase requirements on the costs 
     of homeownership, the actuarial soundness of the national 
     flood insurance program, the Federal Emergency Management 
     Agency, local communities, insurance companies, and local 
     land use;
       (B) the effectiveness of extending such mandatory purchase 
     requirements in protecting homeowners from financial loss and 
     in protecting the financial soundness of the national flood 
     insurance program; and
       (C) any impact on lenders of complying with or enforcing 
     such extended mandatory requirements.
       (3) Mandatory purchase requirement for non-federally 
     related loans.--The study shall assess the impact, 
     effectiveness, and feasibility of, and basis under the 
     Constitution of the United States for, amending the 
     provisions of the Flood Disaster Protection Act of 1973 
     regarding the properties that are subject to the mandatory 
     flood insurance coverage purchase requirements under such Act 
     to extend such requirements to any property that is located 
     in any area having special flood hazards and which secures 
     the repayment of a loan that is not described in paragraph 
     (1), (2), or (3) of section 102(b) of such Act, and shall 
     determine how best to administer and enforce such a 
     requirement, taking into consideration other insurance 
     purchase requirements under Federal and State law.
       (b) Report.--The Comptroller General shall submit a report 
     to the Congress regarding the results and conclusions of the 
     study under this subsection not later than the expiration of 
     the 6-month period beginning on the date of the enactment of 
     this Act.

     SEC. 4. PHASE-IN OF ACTUARIAL RATES FOR NONRESIDENTIAL 
                   PROPERTIES AND NON-PRIMARY RESIDENCES.

       (a) In General.--Section 1308(c) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4015(c)) is amended--
       (1) by redesignating paragraph (2) as paragraph (4); and
       (2) by inserting after paragraph (1) the following new 
     paragraphs:
       ``(2) Nonresidential properties.--Any nonresidential 
     property.
       ``(3) Non-primary residences.--Any residential property 
     that is not the primary residence of an individual.''.
       (b) Technical Amendments.--Section 1308 of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4015) is amended--
       (1) in subsection (c)--
       (A) in the matter preceding paragraph (1), by striking 
     ``Subject only to the limitations provided under paragraphs 
     (1) and (2), the'' and inserting ``The''; and
       (B) in paragraph (1), by striking ``, except'' and all that 
     follows through ``subsection (e)''; and
       (2) in subsection (e), by striking ``paragraph (2) or (3)'' 
     and inserting ``paragraph (4)''.
       (c) Effective Date and Transition.--
       (1) Effective date.--The amendments made by subsections (a) 
     and (b) shall apply beginning on the publication by the 
     Director of the Federal Emergency Management Agency of the 
     certification under section 16(b)(2), except as provided in 
     paragraph (2) of this subsection.
       (2) Transition.--In the case of any property described in 
     paragraph (2) or (3) of section 1308(c) of the National Flood 
     Insurance Act of 1968, as amended by subsection (a) of this 
     section, that, on the date of the enactment of this Act, is 
     covered under a policy for flood insurance made available 
     under the national flood insurance program for which the 
     chargeable premium rates are less than the applicable 
     estimated risk premium rate under section 1307(a)(1) for the 
     area in which the property is located, the Director of the 
     Federal Emergency Management Agency shall increase the 
     chargeable premium rates for such property over time to such 
     applicable estimated risk premium rate under section 
     1307(a)(1). Such increase shall be made by increasing the 
     chargeable premium rates for the property (after application 
     of any increase in the premium rates otherwise applicable to 
     such property) by 15 percent (or such lesser amount as may be 
     necessary so that the chargeable rate does not exceed such 
     applicable estimated risk premium rate) once during the 12-
     month period that begins upon the date of the enactment of 
     this Act and once every 12 months thereafter until such 
     increase is accomplished. The provisions of paragraphs (2) 
     and (3) of such section 1308(c) shall apply to such a 
     property upon the accomplishment of such increase and 
     thereafter.

     SEC. 5. REDUCTION OF WAITING PERIOD FOR EFFECTIVE DATE OF 
                   POLICIES.

       Section 1306(c)(1) is amended by striking ``30-day'' and 
     inserting ``15-day''.

     SEC. 6. ENFORCEMENT.

        Section 102(f) of the Flood Disaster Protection Act of 
     1973 (42 U.S.C. 4012a(f)) is amended--
       (1) in paragraph (5)--
       (A) in the first sentence, by striking ``$350'' and 
     inserting ``$2,000''; and
       (B) in the last sentence, by striking ``$100,000'' and 
     inserting ``$1,000,000''; and
       (2) in paragraph (6), by adding after the period at the end 
     the following: ``No penalty may be imposed under this 
     subsection on a regulated lending institution or enterprise 
     that has made a good faith effort to comply with the 
     requirements of the provisions referred to in paragraph (2) 
     or for any non-material violation of such requirements.''.

     SEC. 7. MAXIMUM COVERAGE LIMITS.

       Subsection (b) of section 1306 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended--
       (1) in paragraph (2), by striking ``$250,000'' and 
     inserting ``$335,000'';
       (2) in paragraph (3), by striking ``$100,000'' and 
     inserting ``$135,000''; and
       (3) in paragraph (4), by striking ``$500,000'' each place 
     such term appears and inserting ``$670,000''.

     SEC. 8. COVERAGE FOR ADDITIONAL LIVING EXPENSES, BASEMENT 
                   IMPROVEMENTS, BUSINESS INTERRUPTION, AND 
                   REPLACEMENT COST OF CONTENTS.

       Subsection (b) of section 1306 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013) is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5)--
       (A) by inserting ``pursuant to paragraph (2), (3), or (4)'' 
     after ``any flood insurance coverage''; and
       (B) by striking the period at the end and inserting a 
     semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(6) in the case of any residential property, each renewal 
     or new contract for flood insurance coverage shall provide 
     not less than $1,000 aggregate liability per dwelling unit 
     for any necessary increases in living expenses incurred by 
     the insured when losses from a flood make the residence unfit 
     to live in, which coverage shall be available only at 
     chargeable rates that are not less than the estimated premium 
     rates for such coverage determined in accordance with section 
     1307(a)(1);
       ``(7) in the case of any residential property, optional 
     coverage for additional living expenses described in 
     paragraph (6) shall be made available to every insured upon 
     renewal and every applicant in excess of the limits provided 
     in paragraph (6) in such amounts and at such rates as the 
     Director shall establish, except that such chargeable rates 
     shall not be less than the estimated premium rates for such 
     coverage determined in accordance with section 1307(a)(1);
       ``(8) in the case of any residential property, optional 
     coverage for losses, resulting from floods, to improvements 
     and personal property located in basements, crawl spaces, and 
     other enclosed areas under buildings that are not covered by 
     primary flood insurance coverage under this title, shall be 
     made available to every insured upon renewal and every 
     applicant, except that such coverage shall be made available 
     only at chargeable rates that are not less than the estimated 
     premium rates for such coverage determined in accordance with 
     section 1307(a)(1);
       ``(9) in the case of any commercial property, optional 
     coverage for losses resulting from any partial or total 
     interruption of the insured's business caused by damage to, 
     or loss of, such property from a flood shall be made 
     available to every insured upon renewal and every applicant, 
     except that--
       ``(A) for purposes of such coverage, losses shall be 
     determined based on the profits the covered business would 
     have earned, based on previous financial records, had the 
     flood not occurred; and
       ``(B) such coverage shall be made available only at 
     chargeable rates that are not less than the estimated premium 
     rates for such coverage determined in accordance with section 
     1307(a)(1); and
       ``(10) in the case of any residential property and any 
     commercial property, optional coverage for the full 
     replacement costs of any contents related to the structure 
     that exceed the limits of coverage otherwise provided in this 
     subsection shall be made available to every insured upon 
     renewal and every applicant, except that such coverage shall 
     be made available only at chargeable rates that are not less 
     than the estimated premium rates for such coverage determined 
     in accordance with section 1307(a)(1).''.

     SEC. 9. INCREASE IN ANNUAL LIMITATION ON PREMIUM INCREASES.

       Section 1308(e) of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4015(e)) is amended by striking ``10 percent'' and 
     inserting ``15 percent''.

[[Page H4597]]

     SEC. 10. INCREASE IN BORROWING AUTHORITY.

       (a) Borrowing Authority.--The first sentence of subsection 
     (a) of section 1309 of the National Flood Insurance Act of 
     1968 (42 U.S.C. 4016(a)), as amended by the National Flood 
     Insurance Program Further Enhanced Borrowing Authority Act of 
     2005 (Public Law 109-106; 119 Stat. 2288), is amended by 
     striking ``$18,500,000,000'' and inserting 
     ``$25,000,000,000''.
       (b) FEMA Report.--Not later than the expiration of the 6-
     month period beginning on the date of the enactment of this 
     Act, the Director of the Federal Emergency Management Agency 
     shall submit a report to the Congress setting forth a plan 
     for repaying any amounts borrowed pursuant to increase in 
     borrowing authority authorized under the amendments made by 
     subsection (a).

     SEC. 11. FEMA PARTICIPATION IN STATE DISASTER CLAIMS 
                   MEDIATION PROGRAMS.

       The National Flood Insurance Act of 1968 is amended by 
     inserting after section 1313 (42 U.S.C. 4020) the following 
     new section:

     ``SEC. 1314. FEMA PARTICIPATION IN STATE DISASTER CLAIMS 
                   MEDIATION PROGRAMS.

       ``(a) Requirement to Participate.--In the case of the 
     occurrence of a natural catastrophe that may result in flood 
     damage claims under the national flood insurance program, 
     upon a request made by the insurance commissioner of a State 
     (or such other official responsible for regulating the 
     business of insurance in the State) for the participation of 
     representatives of the Director in a program sponsored by 
     such State for nonbinding mediation of insurance claims 
     resulting from a natural catastrophe, the Director shall 
     cause appropriate representatives of national flood insurance 
     program to participate in such State program to expedite 
     settlement of any flood damage claims under the national 
     flood insurance program resulting from such catastrophe.
       ``(b) Extent of Participation.--Participation by 
     representatives of the Director required under subsection (a) 
     with respect to flood damage claims resulting from a natural 
     catastrophe shall include--
       ``(1) providing adjusters certified for purposes of the 
     national flood insurance program who are authorized to settle 
     claims against such program resulting from such catastrophe 
     in amounts up to the limits of policies under such program;
       ``(2) requiring such adjusters to attend State-sponsored 
     mediation meetings regarding flood insurance claims resulting 
     from such catastrophe at times and places as may be arranged 
     by the State;
       ``(3) participating in good-faith negotiations toward the 
     settlement of such claims with policyholders of coverage made 
     available under the national flood insurance program; and
       ``(4) finalizing the settlement of such claims on behalf of 
     the national flood insurance program with such policyholders.
       ``(c) Coordination.--Adjusters representing the national 
     flood insurance program who participate pursuant to 
     subsection (b)(1) in a State-sponsored mediation program with 
     respect to a natural catastrophe shall at all times 
     coordinate their activities with insurance officials of the 
     State and representatives of insurers for the purpose of 
     consolidating and expediting the settlement of claims under 
     the national flood insurance program resulting from such 
     catastrophe at the earliest possible time.''.

     SEC. 12. FEMA REPORTS ON FINANCIAL STATUS OF INSURANCE 
                   PROGRAM.

       Section 1320 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4027) is amended--
       (1) in the section heading, by striking ``REPORT TO THE 
     PRESIDENT'' and inserting ``REPORTS'';
       (2) in subsection (a), by striking ``In General'' and 
     inserting ``Biennial Report to President''; and
       (3) by adding at the end the following new subsection:
       ``(c) Semiannual Reports to Congress on Financial Status.--
     Not later than June 30 and December 31 of each year, the 
     Director shall submit a report to the Congress regarding the 
     financial status of the national flood insurance program 
     under this title. Each such report shall describe the 
     financial status of the National Flood Insurance Fund and 
     current and projected levels of claims, premium receipts, 
     expenses, and borrowing under the program.''.

     SEC. 13. EXTENSION OF PILOT PROGRAM FOR MITIGATION OF SEVERE 
                   REPETITIVE LOSS PROPERTIES.

       Section 1361A of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4102a) is amended as follows:
       (1) Funding.--In subsection (k)(1), by striking ``and 
     2009'' and inserting ``2009, 2010, and 2011''.
       (2) Termination.--In subsection (l), by striking 
     ``September 30, 2009'' and inserting ``September 30, 2011''.

     SEC. 14. NOTICE OF AVAILABILITY OF FLOOD INSURANCE AND ESCROW 
                   IN RESPA GOOD FAITH ESTIMATE.

       Subsection (c) of section 5 of the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2604(c)) is amended by 
     adding at the end the following new sentence: ``Each such 
     good faith estimate shall include the following conspicuous 
     statements: (1) that flood insurance coverage for residential 
     real estate is generally available under the National Flood 
     Insurance Program whether or not the real estate is located 
     in an area having special flood hazards and that, to obtain 
     such coverage, a home owner or purchaser should contact a 
     property insurance agent, broker, or company; and (2) that 
     the escrowing of flood insurance payments is required for 
     many loans under section 102(d) of the Flood Disaster 
     Protection Act of 1973, and may be a convenient and available 
     option with respect to other loans.''.

     SEC. 15. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 
                   REFORM ACT.

       (a) Appeals Process.--As directed in section 205 of the 
     Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 
     2004 (42 U.S.C. 4011 note), the Director of the Federal 
     Emergency Management Agency is again directed to, not later 
     than 90 days after the date of the enactment of this Act, 
     establish an appeals process through which holders of a flood 
     insurance policy may appeal the decisions, with respect to 
     claims, proofs of loss, and loss estimates relating to such 
     flood insurance policy as required by such section.
       (b) Minimum Training and Education Requirements.--The 
     Director of the Federal Emergency Management Agency is 
     directed 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 that 
     were established by the Director under the notice published 
     September 1, 2005 (70 Fed. Reg. 52117) pursuant to section 
     207 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform 
     Act of 2004 (42 U.S.C. 4011 note).
       (c) Report.--Not later than the expiration of the 6-month 
     period beginning on the date of the enactment of this Act, 
     the Director of the Federal Emergency Management Agency shall 
     submit a report to the Congress describing the implementation 
     of each provision of the Bunning-Bereuter-Blumenauer Flood 
     Insurance Reform Act of 2004 (Public Law 108-264) and 
     identifying each regulation, order, notice, and other 
     material issued by the Director in implementing each such 
     provision.

     SEC. 16. UPDATING OF FLOOD MAPS AND ELEVATION STANDARDS.

       (a) Flood Mapping Program.--Section 1360 of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4101) is amended by 
     adding at the end the following new subsection:
       ``(k) Program to Review, Update, and Maintain Flood 
     Insurance Program Maps.--
       ``(1) In general.--The Director, in coordination with the 
     Technical Mapping Advisory Council established pursuant to 
     section 576 of the National Flood Insurance Reform Act of 
     1994 (42 U.S.C. 4101 note) and section 16(c) of the Flood 
     Insurance Reform and Modernization Act of 2006, shall 
     establish a program under which the Director shall review, 
     update, and maintain national flood insurance program rate 
     maps in accordance with this subsection.
       ``(2) Inclusions.--
       ``(A) Covered areas.--Each map updated under this 
     subsection shall include a depiction of--
       ``(i) the 500-year floodplain;
       ``(ii) areas that could be inundated as a result of the 
     failure of a levee, as determined by the Director; and
       ``(iii) areas that could be inundated as a result of the 
     failure of a dam, as identified under the National Dam Safety 
     Program Act (33 U.S.C. 467 et seq.).
       ``(B) Other inclusions.--In updating maps under this 
     subsection, the Director may include--
       ``(i) any relevant information on coastal inundation from--

       ``(I) an applicable inundation map of the Corps of 
     Engineers; and
       ``(II) data of the National Oceanic and Atmospheric 
     Administration relating to storm surge modeling;

       ``(ii) any relevant information of the Geographical Service 
     on stream flows, watershed characteristics, and topography 
     that is useful in the identification of flood hazard areas, 
     as determined by the Director; and
       ``(iii) a description of any hazard that might impact 
     flooding, including, as determined by the Director--

       ``(I) land subsidence and coastal erosion areas;
       ``(II) sediment flow areas;
       ``(III) mud flow areas;
       ``(IV) ice jam areas; and
       ``(V) areas on coasts and inland that are subject to the 
     failure of structural protective works, such as levees, dams, 
     and floodwalls.

       ``(3) Standards.--In updating and maintaining maps under 
     this subsection, the Director shall establish standards to--
       ``(A) ensure that maps are adequate for--
       ``(i) flood risk determinations; and
       ``(ii) use by State and local governments in managing 
     development to reduce the risk of flooding; and
       ``(B) facilitate the Director, in conjunction with State 
     and local governments, to identify and use consistent methods 
     of data collection and analysis in developing maps for 
     communities with similar flood risks, as determined by the 
     Director.
       ``(4) Hurricanes katrina and rita mapping priority.--In 
     updating and maintaining maps under this subsection, the 
     Director shall--
       ``(A) give priority to the updating and maintenance of maps 
     of coastal areas affected by Hurricane Katrina or Hurricane 
     Rita to provide guidance with respect to hurricane recovery 
     efforts; and
       ``(B) use the process of updating and maintaining maps 
     under subparagraph (A) as a model for updating and 
     maintaining other maps.

[[Page H4598]]

       ``(5) Annual report.--Not later than June 30 of each year, 
     the Director shall submit a report to the Congress 
     describing, for the preceding 12-month period, the activities 
     of the Director under the program under this section and the 
     reviews and updates of flood insurance program rate maps 
     conducted under the program. Each such annual report shall 
     contain the most recent report of the Technical Mapping 
     Advisory Council pursuant to section 576(c)(3) of the 
     National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
     note).
       ``(6) Authorization of appropriations.--There is authorized 
     to be appropriated to the Director to carry out this 
     subsection $300,000,000 for each of fiscal years 2007 through 
     2012.''.
       (b) Review and Updating of All Flood Zones and Annual Map 
     Modernization Reports.--
       (1) Required revision.--In carrying out the program under 
     subsection (k) of section 1360 of the National Flood 
     Insurance Act of 1968 (as added by subsection (a) of this 
     section), the Director of the Federal Emergency Management 
     Agency shall, as soon as possible after the date of the 
     enactment of this Act, conduct a review of all floodplain 
     areas and flood-risk zones identified, delineated, or 
     established pursuant to such section 1360 and shall revise 
     and update all such areas and zones.
       (2) Certification of completion.--Upon completing the 
     review, revision, and updating required under paragraph (1), 
     the Director shall submit to the Congress a report certifying 
     such completion.
       (3) Annual reports.--During the period that ends upon 
     certification under paragraph (2) of this subsection by the 
     Director, the Director shall include in the annual report 
     required under section 1360(k)(5) of the National Flood 
     Insurance Act of 1968 (as added by subsection (a) of this 
     section) a description of the extent to which the review and 
     updating required under paragraph (1) of this subsection has 
     been completed.
       (c) Reestablishment of Technical Mapping Advisory 
     Council.--
       (1) Reestablishment.--There is reestablished the Technical 
     Mapping Advisory Council, in accordance with this subsection 
     and section 576 of the National Flood Insurance Reform Act of 
     1994 (42 U.S.C. 4101 note).
       (2) Membership.--Paragraph (1) of section 576(b) of the 
     National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
     note) is amended--
       (A) by redesignating subparagraphs (E), (F), (G), (H), (I), 
     and (J) as subparagraphs (F), (G), (H), (K), (M), and (N), 
     respectively;
       (B) by inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) a representative of the Corps of Engineers of the 
     United States Army;'';
       (C) by inserting after subparagraph (H) (as so redesignated 
     by subparagraph (A) of this paragraph) the following new 
     subparagraphs:
       ``(I) a representative of local or regional flood and 
     stormwater agencies;
       ``(J) a representative of State geographic information 
     coordinators;''; and
       (D) by inserting after subparagraph (K) (as so redesignated 
     by subparagraph (A) of this paragraph) the following new 
     subparagraph:
       ``(L) a representative of flood insurance servicing 
     companies;''.
       (3) Appointment.--The Director of the Federal Emergency 
     Management Agency, or the Director's designee, shall take 
     action as soon as possible after the date of the enactment of 
     this Act to appoint the members of the Technical Mapping 
     Advisory Council pursuant to section 576(b)(1) of the 
     National Flood Insurance Reform Act of 1994, as amended by 
     paragraph (2) of this subsection.
       (4) Duties.--Subsection (c) of section 576 of the National 
     Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is 
     amended to read as follows:
       ``(c) Duties.--The Council shall--
       ``(1) make recommendations to the Director for improvements 
     to the flood map modernization program under section 1360(k) 
     of the National Flood Insurance Act of 1968 (42 U.S.C. 
     41010(k));
       ``(2) make recommendations to the Director for maintaining 
     a modernized inventory of flood hazard maps and information; 
     and
       ``(3) submit an annual report to the Director that contains 
     a description of the activities and recommendations of the 
     Council.''.
       (5) Termination.--Subsection (k) of section 576 of the 
     National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
     note) is amended by striking ``under subsection (b)(1)'' and 
     inserting ``pursuant to subsection (b)(1) of this section and 
     section 16(c)(3) of the Flood Insurance Reform and 
     Modernization Act of 2006''.
       (d) Post-Disaster Flood Elevation Determinations.--Section 
     1363 of the National Flood Insurance Act of 1968 (42 U.S.C. 
     4104) is amended by adding at the end the following new 
     subsection:
       ``(h) Expedited Community Adoption of Post-Disaster 
     Advisory Flood Elevations.--If the Director determines that 
     it is appropriate to examine flood elevation determinations 
     after flood-related disasters, to incorporate data gathered 
     since the publication of an effective flood insurance rate 
     map or other flood hazard map and to issue advisory flood 
     elevations, the Director shall expedite the notification and 
     publication procedures in this section. The Director shall 
     require community adoption of the advisory flood elevation 
     information under such expedited procedures for the purposes 
     of local land use and control measures and for the purposes 
     of facilitating flood-resistant reconstruction when Federal 
     funds are made available. Expediting the notification and 
     publication procedures shall be accomplished to preserve all 
     rights to submit information and to appeal the Director's 
     findings.''.

     SEC. 17. NATIONAL LEVEE INVENTORY.

       To identify levees for the national flood insurance 
     program, the Director of the Federal Emergency Management 
     Agency shall maintain and periodically publish an inventory 
     of levees in the United States, and shall consult with the 
     Secretary of the Army as necessary to maintain such 
     inventory.

     SEC. 18. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, 
                   AND POLICY LANGUAGE.

       Not later than the expiration of the 3-month period 
     beginning on the date of the enactment of this Act, the 
     Director of the Federal Emergency Management Agency shall--
       (1) issue regulations, and revise any materials made 
     available by such Agency, to clarify the applicability of 
     replacement cost coverage under the national flood insurance 
     program;
       (2) revise any regulations, forms, notices, guidance, and 
     publications relating to the full cost of repair or 
     replacement under the replacement cost coverage to more 
     clearly describe such coverage to flood insurance 
     policyholders and information to be provided by such 
     policyholders relating to such coverage, and to avoid 
     providing misleading information to such policyholders; and
       (3) revise the language in standard flood insurance 
     policies under such program regarding rating and coverage 
     descriptions in a manner that is consistent with language 
     used widely in other homeowners and property and casualty 
     insurance policies, including such language regarding 
     classification of buildings, basements, crawl spaces, 
     detached garages, enclosures below elevated buildings, and 
     replacement costs.

     SEC. 19. AUTHORIZATION OF ADDITIONAL FEMA STAFF.

       Notwithstanding any other provision of law, the Director of 
     the Federal Emergency Management Agency may employ such 
     additional staff of such Agency as may be necessary to carry 
     out all of the responsibilities of the Director pursuant to 
     this Act and the amendments made by this Act. There are 
     authorized to be appropriated to Director such sums as may be 
     necessary for costs of employing such additional staff.

  The CHAIRMAN. No amendment to the bill shall be in order except those 
printed in House Report 109-530. Each amendment may be offered only in 
the order printed in the report, by a Member designated in the report, 
shall be considered 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.


                  Amendment No. 1 Offered by Mr. Oxley

  The CHAIRMAN. It is now in order to consider amendment No. 1 printed 
in House Report 109-530.
  Mr. OXLEY. Mr. Chairman, I have an amendment at the desk made in 
order under the rule.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Oxley:
       Page 9, strike lines 9 and 10 and insert ``the submission 
     to the Congress, by the Director of the Federal Emergency 
     Management Agency, of the report required under''.
       Page 9, line 17, strike ``date of the enactment of this 
     Act'' and insert ``effective date under paragraph (1) of this 
     subsection''.
       Page 10, line 10, strike ``date of the enactment of this 
     Act'' and insert ``effective date under paragraph (1) of this 
     subsection''.
       Page 10, line 18, after ``Section 1306(c)(1)'' insert ``of 
     the National Flood Insurance Act of 1968 (42 U.S.C. 
     4013(c)(1))''.
       Page 11, line 2, after ``$1,000,000'' (and before the close 
     quotation marks) insert the following: ``; except that such 
     limitation shall not apply to a regulated lending institution 
     or enterprise for a calendar year if, in any three (or more) 
     of the five calendar years immediately preceding such 
     calendar year, the total amount of penalties assessed under 
     this subsection against such lending institution or 
     enterprise was $1,000,000''.
       Strike line 20 on page 15 and all that follows through line 
     8 on page 16 and insert the following:
       ``(a) Requirement to Participate.--In the case of the 
     occurrence of a natural catastrophe that may have resulted in 
     flood damage covered by insurance made available under the 
     National Flood Insurance Program and a loss covered by 
     personal lines residential property insurance policy, upon 
     request made by the insurance commissioner of a State (or 
     such other official responsible for regulating the business 
     of insurance in the State) for the participation of 
     representatives of the Director in a program sponsored by 
     such State for nonbinding mediation of insurance claims 
     resulting from a natural catastrophe, the Director shall 
     cause such representatives to participate in such State 
     program, when claims under the national flood insurance 
     program are involved, to expedite settlement of flood damage 
     claims resulting from such catastrophe.''.

[[Page H4599]]

       Page 17 lines 4 through 6, strike ``Adjusters representing 
     the national flood insurance program who participate pursuant 
     to subsection (b)(1)'' and insert ``Representatives of the 
     Director who participate pursuant to this section''.
       Page 17, line 12, strike the quotation marks and the last 
     period.
       Page 17, after line 12 insert the following:
       ``(d) Mediation Proceedings and Privileged Documents.--As a 
     condition of the participation of Representatives of the 
     Director pursuant to this section in State-sponsored 
     mediation, all statements made and documents produced 
     pursuant to such mediation involving representatives of the 
     Director shall be deemed privileged and confidential 
     settlement negotiations made in anticipation of litigation.
       ``(e) Effect of Participation on Liability, Right, and 
     Obligations.--Participation of Representatives of the 
     Director pursuant to this section in State-sponsored 
     mediation shall not affect or expand the liability of any 
     party in contract or in tort, nor shall it affect the rights 
     or obligations of the parties as provided in the Standard 
     Flood Insurance Policy under the national flood insurance 
     program, regulations of the Federal Emergency Management 
     Agency, this Act, or Federal common law.
       ``(f) Exclusive Federal Jurisdiction.--Participation of 
     Representatives of the Director pursuant to this section in 
     State-sponsored mediation shall not alter, change or modify 
     the original exclusive jurisdiction of United States courts 
     as provided in this Act.
       ``(g) Cost Limitation.--Nothing in this section shall be 
     construed to require the Director or representatives of the 
     Director to pay additional mediation fees relating to flood 
     claims associated with a State-sponsored mediation program in 
     which representatives of the Director participate.
       ``(h) Exception.--In the case of the occurrence of a 
     natural catastrophe that results in flood damage claims under 
     the national flood insurance program and does not result in 
     any loss covered by a personal lines residential property 
     insurance policy--
       ``(1) this section shall not apply; and
       ``(2) the provisions of the Standard Flood Insurance Policy 
     under the national flood insurance program and the appeals 
     process established pursuant to section 205 of the Bunning-
     Bereueter-Blumenauer Flood Insurance Reform Act of 2004 
     (Public Law 108-264; 118 Stat. 726) and regulations issued 
     pursuant to such section shall apply exclusively.
       ``(i) Representatives of Director.--For purposes of this 
     section, the term `representatives of the Director' means 
     representatives of the national flood insurance program who 
     participate in the appeals process established pursuant to 
     section 205 of the Bunning-Bereueter-Blumenauer Flood 
     Insurance Reform Act of 2004 (Public Law 108-264; 118 Stat. 
     726) and regulations issued pursuant to such section.''.
       Page 15, line 5, strike ``$18,500,000,000'' and insert 
     ``$20,775,000,000''.
       Page 24, line 22, before ``Review'' insert ``One-Time''.
       Strike line 24 on page 24 and all that follows through line 
     2 on page 25 and insert the following:
       (2) Required revision.--The Director of the
       Page 25, line 8, after the period insert the following: 
     ``The revisions and updating under this paragraph shall not 
     be subject to the requirements of section 1360(k) of the 
     National Flood Insurance Act of 1968 (as added by subsection 
     (a) of this section).''.
       Strike line 8 on page 28 and all that follows through line 
     2 on page 29 and insert the following:
       (d) Post-Disaster Flood Elevation Determinations.--Section 
     1361 of the National Flood Insurance Act of 1968 (42 U.S.C. 
     4101), as amended by the preceding provisions of this Act, is 
     further amended by adding at the end the following new 
     subsection:
       ``(l) Interim Post-Disaster Flood Elevations.--
       ``(1) Authority.--Notwithstanding any other provision of 
     this section or section 1363, the Director may, after any 
     flood-related disaster, establish by order interim flood 
     elevation requirements for purposes of the national flood 
     insurance program for any areas affected by such flood-
     related disaster.
       ``(2) Effectiveness.--Such interim elevation requirements 
     for such an area shall take effect immediately upon issuance 
     and may remain in effect until the Director establishes new 
     flood elevations for such area in accordance with section 
     1363 or the Director provides otherwise.''.

  The CHAIRMAN. Pursuant to House Resolution 891, the gentleman from 
Ohio (Mr. Oxley) and a Member opposed each will control 5 minutes.
  Mr. FRANK of Massachusetts. Mr. Chairman, in the absence of any 
opposition, I ask unanimous consent to be recognized for the other 5 
minutes.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Massachusetts?
  There was no objection.
  The CHAIRMAN. The Chair recognizes the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise in support of the manager's amendment to H.R. 
4973. In addition to making technical changes necessary for the bill, 
the manager's amendment will clarify the drafter's intent in a handful 
of areas.

                              {time}  1430

  This amendment establishes that the phasing in of actuarial rates for 
second homes and nonresidential properties will begin once FEMA has 
certified completion of their map modernization efforts. This is 
necessary to ensure that subsidies are eliminated fairly and without 
inaccurate information about which homeowners should be purchasing 
flood insurance in the first place.
  In addition, the amendment provides that the $1 million cap on 
penalties for nonenforcement of NFIP requirements not apply to 
regulated entities that have been assessed a penalty of $1 million in 
any 3 of the past 5 calendar years. This will help ensure that bad 
actors not get away with ignoring the need for adequate enforcement or 
mandatory flood insurance purchase requirements.
  This amendment more clearly defines FEMA participation in State 
disaster claims mediation programs and ensures the confidentiality of 
documents and conversations during the mediation process.
  In addition, it clarifies that mediation participation does not 
interfere with the exclusive Federal jurisdiction enjoyed by the 
Federal courts over the NFIP and provides that FEMA will not incur any 
additional fees as a result of mediation participation.
  The manager's amendment also more clearly sets out the timeline for 
FEMA's inclusion of certain features on updated floodplain maps and 
clarifies the FEMA Director's authority regarding the ability to issue 
interim postdisaster flood elevation building requirements.
  This amendment is a bipartisan effort that makes this bill better and 
more technically sound. I urge my colleagues to support it.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I concur fully with the 
gentleman from Ohio.
  Mr. Chairman, I yield back the balance of my time.
  Mr. OXLEY. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Ohio (Mr. Oxley).
  The amendment was agreed to.


            Amendment No. 2 Offered by Mr. Burton of Indiana

  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in House Report 109-530.
  Mr. BURTON of Indiana. Mr. Chairman, I rise to discuss my amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Burton of Indiana:
       Page 29, after line 2, insert the following new section:

     SEC. 17. NOTIFICATION AND APPEAL OF MAP CHANGES; NOTIFICATION 
                   OF ESTABLISHMENT OF FLOOD ELEVATIONS.

       Section 1363 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4104) is amended by striking the section 
     designation and all that follows through the end of 
     subsection (a) and inserting the following:
       ``Sec. 1363. (a) In establishing projected flood elevations 
     for land use purposes with respect to any community pursuant 
     to section 1361, the Director shall first propose such 
     determinations--
       ``(1) by providing the chief executive officer of each 
     community affected by the proposed elevations, by certified 
     mail, with a return receipt requested, notice of the 
     elevations, including a copy of the maps for the elevations 
     for such community and a statement explaining the process 
     under this section to appeal for changes in such elevations;
       ``(2) by causing notice of such elevations to be published 
     in the Federal Register, which notice shall include 
     information sufficient to identify the elevation 
     determinations and the communities affected, information 
     explaining how to obtain copies of the elevations, and a 
     statement explaining the process under this section to appeal 
     for changes in the elevations;
       ``(3) by publishing the elevations in a prominent local 
     newspaper; and
       ``(4) by providing written notification, by first class 
     mail, to each owner of real property affected by the proposed 
     elevations of--
       ``(A) the status of such property, both prior to and after 
     the effective date of the proposed determination, with 
     respect to flood zone and flood insurance requirements under 
     this Act and the Flood Disaster Protection Act of 1973;
       ``(B) the process under this section to appeal a flood 
     elevation determination; and

[[Page H4600]]

       ``(C) the mailing address and phone number of a person the 
     owner may contact for more information or to initiate an 
     appeal.''.

  The CHAIRMAN. Pursuant to House Resolution 891, the gentleman from 
Indiana (Mr. Burton) and a Member opposed each will control 5 minutes.
  Mr. BLUMENAUER. Mr. Chairman, I seek time in opposition to the 
amendment.
  The CHAIRMAN. The gentleman will control 5 minutes.
  The Chair recognizes the gentleman from Indiana.
  Mr. BURTON of Indiana. Congressman Stark and I both realized a 
problem that exists in the redrawing of the floodplain maps across this 
country. FEMA is in the process of reshooting the maps in several parts 
of the country, and the only way people who are in the affected areas 
know about it is, in the classified section of the newspaper, there is 
some very fine print that says that there is going to be a meeting 
discussing the elevations of the new floodplains. We had about 3 or 400 
people in my district that didn't know anything about this until after 
the fact.
  Now, the problem is, once FEMA has redrawn these maps and they have 
been approved, the only way a person in a projected floodplain knows 
about it is if the insurance company contacts him and says you have 45 
days to buy insurance or else we will add it to your mortgage payment. 
We had about 300 people in moderate income areas that were going to be 
hit with an extra thousand or $2,000 a year for flood insurance when 
there hadn't been a flood there for 100 or 150 years. In fact, nobody 
ever heard of having a flood in this area. Yet these people have been 
adversely affected.
  Once these maps have been drawn and approved, the only way a person 
in a newly affected area can have restitution is to go and spend maybe 
a thousand or $2,000 hiring a lawyer and then fighting the governmental 
process, the agency, to prove that they are not in a floodplain.
  What my bill does and Mr. Stark's bill does is simply say that FEMA 
has to send a first-class letter to everybody in the affected area so 
they know there is going to be a meeting talking about them being in a 
newly designated floodplain. It will cost maybe 35 to 40 cents a 
letter, maybe even less than that if they would use bulk mail.
  In this particular case, the 300 families in the affected area, it 
would have cost $120 to notify them that there was a change in their 
status. There had not been a flood there in anybody's recollection, at 
least not in 100 or 150 years.
  I think this is a very important amendment. It helps people all 
across the country. I really appreciate the chairman of the committee 
and the ranking member saying they would approve this amendment. So I 
thank you very much, Mr. Chairman and Mr. Ranking Member.
  I yield to my colleague, Mr. Stark.
  Mr. STARK. I thank the distinguished gentleman from Indiana for 
yielding. I would like to associate myself with his remarks.
  In my community, this came to my attention several years back when 3 
or 4,000 households in two different cities received notification just 
45 days before the insurance bill was due from their mortgage companies 
and were told that within 45 days they would have to pay between $1,000 
and $2,000 in insurance. In both communities, half of the households 
were excluded, but each household had to go individually, perhaps at a 
cost of $1,000 to $2,000 a household. That was a million to $2 million 
without even hiring lawyers or surveyors in my district to relieve 
themselves from this onerous, unneeded insurance premium. We can send a 
million letters for less than $400,000 if that became necessary.
  It is a question of timely notification. I think it is only fair for 
us to notify the individual property owners, to give them time to be 
able to get the surveys and get the information they needed before they 
have to pay up the first thousand or $2,000 in premium and then later 
try and escape from under this, if their property is excludable, from 
the floodplain. I urge the adoption of the amendment.
  Mr. Chairman, I want to thank the gentleman from Indiana for yielding 
and for his work on this issue.
  This first came to my attention back in 2000 when flood maps were 
updated in Alameda County in the 13th Congressional District. Thousands 
of residents in San Leandro and Fremont found out that they were added 
to a floodplain by getting a letter from their lender. They had 45 days 
to select a policy and pay the annual premium or the lender would 
choose for them and add it to their monthly payment.
  There was no explanation of what had suddenly determined them to be 
in a floodplain and the community appeal window was already closed. 
Needless to say, the National Flood Insurance Program ranks somewhere 
just above the IRS in popularity in my district.
  Considering the ongoing nationwide map modernization program and the 
new FEMA requirement to assume houses behind levees require flood 
insurance unless the levees are certified, this problem will affect 
almost every congressional district in the country, if it hasn't 
already.
  The logic of the Burton/Stark amendment is simple. Translating flood 
maps into on-the-ground information about households is already 
happening, but often only in time to send the first bill for flood 
insurance.
  Our amendment merely changes the timeline to guarantee that property 
owners will find out earlier in the process when there is still time to 
get involved and appeal as a community.
  In my district, more than half of the households added to the 
floodplain were later taken out. If they could have done so as a group 
rather than individually appealing and hiring their own surveyors, it 
would have saved both time and money, not to mention the reputation of 
the flood insurance program.
  I urge my colleagues to support the Burton/Stark amendment. All our 
constituents deserve to be kept informed about federal requirements 
that directly impact their pocketbooks. 
  I thank the gentleman for yielding.
  Mr. BURTON of Indiana. Once again, I want to thank my colleague for 
being a cosponsor; and I want to thank the chairman for accepting.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. BURTON of Indiana. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. I just want to be clear that I support 
this amendment.
  Mr. BURTON of Indiana. Thank you, Mr. Frank. Thank you, Mr. Chairman.
  Mr. FRANK of Massachusetts. If the gentleman would yield further, I 
would just say that anytime the gentleman from Indiana and the 
gentleman from California support an amendment, I will be there.
  Mr. BURTON of Indiana. Thank you, Barney. 
  Mr. BLUMENAUER. Let me say, I appreciate the intent that is offered 
by the sponsors of this amendment. I was prepared, however, to argue 
rather strongly in opposition in terms of the reimbursement mechanism 
that was involved, but I understand that that has been stripped out and 
it is now just purely a notification. While I am hopeful that, as this 
works its way through the process, we can deal with making sure that 
the notification process doesn't get in the way of trying to move this 
in an orderly fashion, I am not prepared to demand a rollcall or be 
cranky about it, because I do think you have adjusted your amendment so 
that it loses its onerous nature in the way that it was originally 
filed.
  I appreciate the direction you are going and would look forward to 
working with the gentlemen to make sure that this furthers the public 
notification but does not bog down the process unnecessarily. As I say, 
I appreciate the direction that you are going.
  Mr. STARK. Mr. Chairman, will the gentleman yield?
  Mr. BLUMENAUER. I yield to the gentleman from California.
  Mr. STARK. I appreciate his usual tenacity in watch-dogging the 
Federal dollar.
  I would apologize. On our side of the aisle, the whip notice had it 
incorrect as it came out this morning. The gentleman is correct. It has 
been corrected. The distinguished gentleman from Indiana has seen that 
the amendment is limited to the notification, and I think it will 
assuage concerns.
  I thank the gentleman for yielding.
  Mr. BLUMENAUER. I personally feel more comfortable about that. I 
didn't know it when I claimed time in opposition because I had some 
outdated information. I didn't realize how fast this legislative train 
was rolling, but I feel better now.
  Mr. Chairman, I yield back the balance of my time.
  Mr. BURTON of Indiana. Mr. Chairman, I yield back the balance of my 
time.

[[Page H4601]]

  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Indiana (Mr. Burton).
  The amendment was agreed to.


          Amendment No. 3 Offered by Mr. Garrett of New Jersey

  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in House Report 109-530.
  Mr. GARRETT of New Jersey. Mr. Chairman, I have an amendment at the 
desk.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Garrett of New Jersey:
       Page 8, line 4, after ``PROPERTIES'' insert ``, CERTAIN 
     PRE-FIRM PROPERTIES,''.
       Page 8, line 17, strike the quotation marks and the second 
     period.
       Page 8, after line 17, insert the following new paragraph:
       ``(4) Recently purchased pre-firm properties.--Any property 
     that--
       ``(A) has been constructed or substantially improved and 
     for which such construction or improvement was started, as 
     determined by the Director, before December 31, 1974, or 
     before the effective date of the initial rate map published 
     by the Director under paragraph (2) of section 1360 for the 
     area in which such property is located, whichever is later; 
     and
       ``(B) is purchased after the date of the enactment of the 
     Flood Insurance Reform and Modernization Act of 2006.''.
       Page 9, line 14, strike ``or (3)'' and insert ``, (3), or 
     (4)''.
       Page 10, line 12, strike ``and (3)'' and insert ``, (3), 
     and (4)''.

  The CHAIRMAN. Pursuant to House Resolution 891, the gentleman from 
New Jersey (Mr. Garrett) and a Member opposed each will control 5 
minutes.
  Mr. BLUMENAUER. Mr. Chairman, I would claim the time in opposition.
  The CHAIRMAN. The gentleman will control 5 minutes.
  The Chair recognizes the gentleman from New Jersey.
  Mr. GARRETT of New Jersey. Mr. Chairman, back in 1968, Congress 
created the National Flood Insurance Program, the NFIP, with the intent 
of providing homeowners that live in floodplains the opportunity to 
purchase flood insurance from the Federal Government. At the time, 
there were little to no opportunities to purchase flood insurance from 
the private insurance market.
  Over the years, some problems have developed in that program, and so 
I come to the floor of this House today to thank Chairman Oxley, 
Chairman Baker and Ranking Member Frank for all their hard work in 
putting together the important piece of legislation that is before this 
House today to try to address some of those problems that have been 
experienced in the past and to make sure that we have a national flood 
program worthy of the constituents at home and the problems that they 
face.
  There were several different solutions to address one of the issues 
that came up, and that is dealing with homeowners who were in existing 
pre-FIRM homes and the insurance that they could afford to buy and 
coming forward with those homes maybe right across the street from them 
that did not qualify.
  In an effort to reach a compromise between the two sides, I am 
offering today an amendment that is a compromise, a commonsense one, I 
think, a middle ground, if you will, that would provide additional 
resources to the flood insurance program in a fair way and not subject 
current homeowners of pre-FIRM houses to an unanticipated or unplanned 
increase in their flood insurance premiums.
  My amendment would simply require any purchaser of a pre-FIRM 
residential home to pay a phased-in actuarially correct flood insurance 
price using the same phase-in structure that nonresidential and 
nonprimary homes are currently subject to in this system.
  In essence, it comes down to this. If someone has a pre-FIRM home and 
had that home for a period of time and someone across the street came 
in and purchased that home, that current purchaser would look across 
the street and say that they are subsidizing the gentleman across the 
street. We are saying that should not occur indefinitely. That when 
that pre-FIRM homeowner eventually, whenever that date occurs, sells 
that home, that property then would phase into the current system, 
there would no more subsidization of those homes any further, and 
everyone would be on the same level playing field.
  Again, I thank the members of the committee, I thank the chairman as 
well, for working with us on this program as we brought it up in the 
committee at that time.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BLUMENAUER. Mr. Chairman, I would yield myself 3 minutes.
  Let me say, I appreciate the gentleman's deep interest in making sure 
that we are moving forward with reform in the flood insurance program 
and that we are dealing with some of the idiosyncratic ways that there 
are some folks that never get out of being an exception. With all due 
respect, that the approach that has been adopted by the committee is 
one that over the long run is going to be the most advantageous.
  I share your concern, but as I have been working with the floodplain 
managers from the various States around the country, the people on the 
ground are concerned about the impact that the rapid movement towards 
dealing with these other subsidized residential properties would have. 
There is a very real problem because a lot of these properties do 
change hands frequently, in knowing what the impact is, and that many 
people would end up not seeking subsidized property, that communities 
may opt out, all this could end up being counterproductive. 
Particularly as it relates to the area, and again I referenced in my 
opening comments being sensitized by Mr. Taylor and by Mr. Baker, about 
some of the practical realities, particularly for low-income 
communities. While it seems that this would be a way to phase it in 
only when the property changes hands, this would have the practical 
effect of discounting the value overnight to the people who own these 
properties, many of whom may be low income. So it would depress the 
price of the homes that they own because the seller would be subjected 
to the higher premium.
  You and I know that in the long run that is a more rational policy 
for the taxpayer and for the people who hold those policies, but there 
is a psychology that is at work with some communities and with some 
owners and it may well be counterproductive.
  So, with all due respect, I would suggest that what we ought to be 
doing is looking for ways to phase it in over time with these 
communities, that we deal with emphasizing mitigation like we had in 
the 2004 legislation, because I fear there may be a double whammy, 
where communities are less interested in participating and that you may 
be penalizing some of the very low-income property owners in a way that 
I don't think any of us want.

                              {time}  1445

  So while I sympathize with the approach, while I applaud the 
committee for advancing the boundaries, this is one area where I would 
suggest that this, what looks like a simple phase-in, actually may not 
be a simple phase-in and may have unintended consequences.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield 2 minutes to the 
gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. Mr. Chairman, I thank the gentleman for yielding, and 
I thank him for his leadership on this issue. I also want to thank 
Chairman Oxley and Chairman Baker for all of their good work in 
bringing this bill to the floor, because it addresses a very, very 
serious challenge that we have.
  We all know that Hurricanes Katrina and Rita represented a great 
physical catastrophe for this generation. I think it is incumbent upon 
us to make sure that it does not turn into a great fiscal tragedy for 
the next.
  I remember speaking to a factory worker at the Pepsi plant in my 
district in Mesquite, Texas. He said, Congressman, I want to do 
everything I can to help those people on the gulf coast, but tell me 
you are going to do a few things differently so I don't have to do it 
again.
  We know that the National Flood Insurance Program is not actuarially 
sound. It is not fiscally solvent. Congress is having to bail it out. 
Yet if you look at the legislative history, since 1981 it was supposed 
to be fiscally solvent. So the underlying bill takes a

[[Page H4602]]

number of steps to start taking us in that direction.
  But if we are going to have a National Flood Insurance Program, we 
should not be subsidizing people and incenting them to live in places 
that, frankly, put them in harm's way, especially at the taxpayers' 
expense. If they are going to put themselves in harm's way, that is the 
decision they need to make, but we should not be a party to incenting 
them to do it.
  So I think that the gentleman from New Jersey, his amendment takes a 
very, very reasonable small step towards helping make this program a 
little bit more fiscally solvent, and I think it is fair.
  It is one thing to say on the pre-FIRM properties when we were trying 
to incent people to get into the program, okay, to some extent you are 
grandfathered. But new people who are coming in, if we are going to 
save this program for new future generations, I believe we need to take 
more steps toward fiscal responsibility, and the gentleman from New 
Jersey, his amendment is a very reasoned amendment that takes us in 
that direction, and I believe the House should support it.
  Mr. BLUMENAUER. Mr. Chairman, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Chairman, I thank the gentleman.
  We sometimes get into confusing phrases here. We are talking about 
pre-FIRM. I know a lot of us are worrying about that stage in life when 
you are post-FIRM. But here we are talking about an important issue.
  I am torn on this. I have been ambivalent. I opposed this amendment 
in committee. I thought some more about it. Both my friends, both the 
gentleman from Oregon and the gentleman from New Jersey, make some good 
points, and I would say this: I expect this amendment will probably get 
adopted. But I hope we can do this. In general, I think it is a 
reasonable thing to do, but there are low-income buyers, owners, who, 
through no fault of their own, they weren't warned, find themselves in 
this position, and there is the danger that the one small asset they 
have can get devalued.
  Our colleague from Texas, Mr. Green, had an amendment that tried to 
provide some relief on premiums for people in the very low end. I would 
hope if this amendment were adopted, I would address this to the 
chairman, the gentleman from Louisiana and others, we might then as a 
committee take up the question of whether some relief might be 
appropriate for people who are at the lowest end of the spectrum, 
people who do own a home, but that is about all they have.
  I think this is a case where the general principle is a good one, but 
a negative impact may be excessive on some people at the lower end. So 
that would be my hope, we would then, because this is an ongoing 
process, be able to look at that.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, I will just conclude by saying to the ranking member 
the same thing the ranking member said to me in the committee, and that 
is when we first proposed it, I will be glad to work with you to try to 
make this amendment an even better amendment.
  I appreciate your consideration that there were two ends of the 
spectrum, one that said we should eliminate this subsidy, if you will, 
today, and other people have said we should never eliminate it, it 
should just continue on; and we were just trying to find that 
proverbial middle ground. Hopefully, we have gotten one step closer to 
that with this amendment.
  Mr. Chairman, I yield back the balance of my time.
  Mr. BLUMENAUER. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I appreciate what the gentleman is saying. I have spent 
the last 6 years trying to inject some fiscal responsibility into the 
program. I have supported the work that the committee has done. But 
along the way, I have been sensitized to some of the impacts that we 
don't want to have that are unintended in terms of discouraging 
participation.
  So as you are working with the committee in terms of refining this, I 
would hope that there would be some sensitivity, if this amendment 
passes, to the impact on low income.
  For instance, one of the unintended consequences may be driving 
people who are in this circumstance to be seeking financing from sub 
prime lenders there by avoiding flood insurance, by very expensive 
financing mechanisms. It ought to go hand in hand with what we do in 
terms of having more mandatory coverage so there aren't people that are 
sort of drifting along, and that it doesn't have unintended 
consequences for having people and communities opt out, or for low-
income people, being unduly disadvantaged. I sympathize with what you 
are saying, and I would be happy to work with you as well.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from New Jersey (Mr. Garrett).
  The amendment was agreed to.


          Amendment No. 4 Offered by Mr. Taylor of Mississippi

  The CHAIRMAN. It is now in order to consider amendment No. 4 printed 
in House Report 109-530.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Taylor of Mississippi:
       At the end of the bill, add the following new section:

     SEC. 20. INVESTIGATION OF WRITE-YOUR-OWN INSURERS' ADJUSTMENT 
                   OF CLAIMS RELATING TO HURRICANE KATRINA.

       (a) Investigation.--The Inspector General of the Department 
     of Homeland Security shall carry out an investigation of 
     insurers making flood insurance coverage available under the 
     Write-Your-Own program pursuant to section 1345 of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4081) and 
     subpart C of part 62 of title 44, Code of Federal Regulations 
     to determine--
       (1) whether any such insurers, in adjusting and settling 
     claims resulting from Hurricane Katrina, improperly 
     attributed damages from such hurricane to flooding covered 
     under coverage provided under the national flood insurance 
     program rather than to windstorms covered by other coverage 
     provided by such insurers or by windstorm insurance pools in 
     which such insurers participated; and
       (2) the extent to which such improper attribution of 
     damages occurred.
       (b) Report.--Not later than the expiration of the 6-month 
     period that begins upon the date of the enactment of this 
     Act, the Inspector General of the Department of Homeland 
     Security shall submit to the Congress a report setting forth 
     the conclusions of the investigation pursuant to subsection 
     (a).

  The CHAIRMAN. Pursuant to House Resolution 891, the gentleman from 
Mississippi (Mr. Taylor) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Mississippi.
  Mr. TAYLOR of Mississippi. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, when the National Flood Insurance Program was put 
together, a couple of steps were taken to minimize the administrative 
costs of that program. One, under the National Write Your Own Program, 
allowed the private sector, companies like Allstate, State Farm and 
Nationwide, to sell this policy, get a fee for selling this policy, but 
the cost of actually paying the claims would be borne by the Federal 
Government. There is really nothing wrong with that. The problem came 
in when at the same time they allowed the same companies to adjudicate 
the claim in the aftermath of the storm.
  The example I used earlier is that you have got a young claims 
adjuster. He is a company man. He works for State Farm; he works for 
Allstate or Nationwide. He has visions of being promoted to a manager. 
He has stock in that company. He wants to go far.
  He is sent out to what is now a slab that just a few days ago was 
someone's home. There is nothing there. And he has to determine whether 
that house was destroyed by wind or by water.
  In the case of south Mississippi, the Navy Oceanographic Lab tells us 
we had 6 to 8 hours of maximum hurricane winds before the water ever 
got there. In the case of the little town of Bay St. Louis, that meant 
you had winds for 6 to 8 hours from 100 miles an hour up to 150 miles 
an hour before the tidal surge came in and destroyed the evidence of 
what the wind did.
  So this claims adjuster, who wants to go far with the company, can 
decide whether his company is going to pay

[[Page H4603]]

that claim through the wind pool, or whether the taxpayers are going to 
pay through the flood insurance program.
  The FBI says that fraud is a crime of opportunity. No matter how 
well-intended Congress was when they wrote this, they created the 
opportunity for a heck of a lot of fraud. In fact, I think the biggest 
fraud that occurred after Hurricane Katrina wasn't people getting an 
extra FEMA check or two or three extra checks from the Red Cross, 
although that is deplorable. The biggest fraud occurred at the 
corporate level where the insurance industry made a corporate decision 
to, whenever possible, blame flooding every time and stick the 
taxpayers with bills that they should have paid.
  Mr. Chairman, last year the insurance industry reported a $44 billion 
profit after everything. Last year Federal flood insurance lost $25 
billion. That is the reason this bill is on the floor today. I don't 
think it is a coincidence, because I think what happened was whenever 
given the opportunity, the insurance industry stuck the taxpayer with 
bills that they should have paid.
  So what I am asking for is for the Inspector General to look into 
this and hopefully use the Fraudulent Claims Act, which requires treble 
damages for anyone who submits a false claim to our Nation, in addition 
to a $5,000 or $10,000 fine every time a false claim is submitted. 
Because I am convinced that is precisely what happened.
  Mr. Chairman, after we are told that that is what happened, I hope 
this Congress will come back and find a way to where we as a Nation 
won't just blindly accept the claims of an insurance industry when we 
pay that bill.
  I used the analogy before. If Mr. Oxley, if Mr. Pickering, any Member 
of this body wants to be reimbursed for their trip to the airport, they 
have got to submit a claims ticket from that taxi driver for the 15 
bucks, or they don't get paid.
  But in the instance of national flood insurance, these insurance 
companies submitted claims for $100,000, $200,000, $250,000, and the 
taxpayer paid it every time without anyone second guessing. That is the 
opportunity for fraud, and I believe that fraud took place.
  So, Mr. Chairman, I don't know of anyone who in their right mind 
could oppose this, I don't know of anyone who wants to see our tax 
dollars used unwisely, and I don't know of anyone who wants to see the 
National Flood Insurance Program defrauded or the subject of fraud.
  So, again, it is my understanding that Mr. Oxley will accept this 
amendment. I very much appreciate that. I hope that when the Inspector 
General report comes back 6 months from now that the next Congress will 
take steps to take away this opportunity for fraud.
  Mr. OXLEY. Mr. Chairman, will the gentleman yield?
  Mr. TAYLOR of Mississippi. I yield to the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, I appreciate the gentleman yielding and also 
say to my friend from Mississippi, congratulations on a well-thought-
out amendment. I know the gentleman has had personal issues with this, 
as well as our good friend, former House Member Senator Lott; and we 
have had a number of discussions about the frustration that you and 
many of your constituents feel.
  We think that it is appropriate that the IG conduct that 
investigation and report back within 6 months, and therefore we are 
prepared to accept the amendment.
  Mr. TAYLOR of Mississippi. Again, Mr. Chairman, I very much thank the 
gentleman from Ohio, and I thank the gentleman from Massachusetts.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Mississippi (Mr. Taylor).
  The amendment was agreed to.
  The CHAIRMAN. It is now in order to consider amendment No. 5 printed 
in House Report 109-530.


                Amendment No. 6 Offered by Mr. Pickering

  The CHAIRMAN. It is now in order to consider amendment No. 6 printed 
in House Report 109-530.
  Mr. PICKERING. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mr. Pickering:
       Page 10, line 16, strike ``REDUCTION OF''.
       Page 10, line 18, before ``Section'' insert ``(a) 
     Reduction.--''.
       Page 10, after line 18, insert the following new 
     subsection:
       (b) Exception.--Section 1306(c)(2)(A) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013(c)(2)(A)) is amended by 
     inserting before the semicolon the following: ``or is in 
     connection with the purchase or other transfer of the 
     property for which the coverage is provided (regardless of 
     whether a loan is involved in the purchase or transfer 
     transaction)''.

  The CHAIRMAN. Pursuant to House Resolution 891, the gentleman from 
Mississippi (Mr. Pickering) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Mississippi.
  Mr. PICKERING. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, my amendment will simply allow the flood insurance 
coverage to become effective immediately upon the purchase or transfer 
of real property for which coverage is provided without regard to the 
financial mechanism used to purchase such property.
  In sum, whether you buy using a loan as a mechanism of purchase or if 
you make a cash purchase of the property, what we discovered after 
Katrina is that some individuals had purchased a home using full 
payment, cash, and not using a loan, thinking that they would have the 
coverage of the flood insurance. They came to discover that unless it 
was through a loan mechanism, they would not be eligible for that 
coverage.
  So this simply closes the loophole that has been discovered in the 
aftermath of Katrina, without undoing the congressional intent of 
protecting against the fraud or the actions of people who just go out 
to buy coverage when a hurricane or a flood warning comes. It is only 
with the purchase and the transfer of property that they are able to 
purchase the flood insurance. But it makes the policy clear, whether 
you are buying with cash or by loan, you will be able to have the 
protection that you believe you have a right to and are entitled to and 
assume that you would have in the event of a disaster.
  I want to thank the committee for working with me and my staff as we 
close this loophole and would ask for their support as we go forward in 
this amendment. Again, I thank them for their cooperation as we went 
through the policy.
  Mr. OXLEY. Mr. Chairman, will the gentleman yield?
  Mr. PICKERING. I yield to the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, we are pleased to accept the amendment. I 
congratulate the gentleman on his foresight. We are prepared to vote in 
favor of the amendment.
  Mr. PICKERING. Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN (Mr. Bonilla). The question is on the amendment 
offered by the gentleman from Mississippi (Mr. Pickering).
  The amendment was agreed to.

                              {time}  1500


                 Amendment No. 7 Offered by Ms. Matsui

  The Acting CHAIRMAN. It is now in order to consider amendment No. 7 
printed in House Report 109-530.
  Ms. MATSUI. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Ms. Matsui:
       Page 23, line 13, strike ``and''.
       Page 23, line 19, strike the final period and insert ``; 
     and''.
       Page 23, after line 19 insert the following:
       ``(C) ensure that emerging weather forecasting technology 
     is used, where practicable, in flood map evaluations and the 
     identification of potential risk areas.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 891, the 
gentlewoman from California (Ms. Matsui) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. MATSUI. Mr. Chairman, I yield myself such time as I may consume.
  My amendment, Mr. Chairman, simply asks that FEMA utilize emerging 
weather forecasting technology as they update our national flood maps. 
Applying such technologies gives us new

[[Page H4604]]

ways to solve old problems and address rising challenges. FEMA needs to 
be prepared to utilize this technology as it becomes more available to 
us.
  This amendment makes sense. It will ensure that FEMA has the highest 
quality information when it works to determine the level of risk for 
vulnerable geographies. This language would not impose any additional 
financial burdens on FEMA.
  As a member of the Science Committee, I made it one of my priorities 
to find ways to integrate emerging technologies into complex policy 
initiatives.
  Mr. Chairman, I ask my colleagues to support my amendment.
  Mr. OXLEY. Mr. Chairman, will the gentlewoman yield?
  Ms. MATSUI. I yield to the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, the Chair is prepared to accept the 
amendment. I want to thank the gentlewoman for her foresight and also 
for merging this new technology with the ability of FEMA to make better 
and more accurate mapping.
  Ms. MATSUI. Mr. Chairman, reclaiming my time, I thank the gentleman 
very much for supporting my amendment.
  Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from California (Ms. Matsui).
  The amendment was agreed to.


     Amendment No. 8 Offered by Ms. Eddie Bernice Johnson of Texas

  The Acting CHAIRMAN. It is now in order to consider amendment No. 8 
printed in House Report 109-530.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chairman, I offer an 
amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 8 offered by Ms. Eddie Bernice Johnson of 
     Texas:
       Page 24, after line 6 insert the following new paragraph:
       ``(5) Education program.--The Director shall, after each 
     update to a flood insurance program rate map, in consultation 
     with the chief executive officer of each community affected 
     by the update, conduct a program to educate each such 
     community about the update to the flood insurance program 
     rate map and the effects of the update.''.
       Page 24, line 7, redesignate paragraph (5) as paragraph 
     (6).
       Page 24, line 18, redesignate paragraph (6) as paragraph 
     (7).

  The Acting CHAIRMAN. Pursuant to House Resolution 891, the 
gentlewoman from Texas (Ms. Eddie Bernice Johnson) and a Member opposed 
each will control 5 minutes.
  The Chair recognizes the gentlewoman from Texas.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chairman, last year, our 
Nation was devastated with a series of natural disasters that 
negatively impacted our economic and social structures. The South 
especially incurred severe flood damage to their infrastructure and 
local communities. The floods varied from severe, slow and fast rising 
but were consistent in destroying people's homes and businesses.
  This past hurricane season brought forth a series of catastrophes 
that devastated southern communities, injuring people's livelihoods and 
souls. The wave of destruction was insurmountable to none ever 
experienced.
  The amendment that I have, Mr. Chairman, is to amend the Act simply 
to indicate the responsibility we feel that FEMA has to reach out and 
educate our communities.
  FEMA uses the information produced by the flood insurance studies to 
prepare a flood insurance rate map that depicts the spatial extent of 
special flood hazard areas and our thematic features related to flood 
risk assessment.
  The rate map is the basis for floodplain management, mitigation and 
insurance activities of the insurance program. As a result, flood risks 
have been assessed at approximately 20,400 communities nationwide.
  As it stands, FEMA currently has a regulatory function that calls for 
communities to implement local outreach. However, no such function 
exists to mitigate any outreach responsibility on FEMA. Neither the 
code nor the regulations require FEMA to proactively implement outreach 
programs to educate local landowners.
  In response to this oversight, I offer this amendment that requires 
FEMA to conduct educational programs to better inform local communities 
of changes made in the flood insurance map.
  Currently, H.R. 4973, the Flood Insurance Reform and Modernization 
Act of 2006, lacks a mandate that calls for FEMA to implement the 
initiatives necessary to reach out to local communities and educate 
property owners who are affected by the map update. Many homeowners do 
not know about changes in the map. The only thing they know is that, 
after they have suffered a severe flood, they are not covered.
  I think this amendment is a necessary step to ensure that FEMA is 
made responsible to make the vital information available to everyone 
who might be a flood victim. I believe that this is a necessary step to 
protect the lives of innocent people who have no choice but to rely on 
this congressional body to implement necessary safeguards that protects 
their well-being.
  I urge adoption of this amendment.
  Mr. OXLEY. Mr. Chairman, will the gentlewoman yield?
  Ms. EDDIE BERNICE JOHNSON of Texas. I yield to the gentleman from 
Ohio.
  Mr. OXLEY. Mr. Chairman, we have reviewed the amendment and are 
prepared to accept it.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chairman, I thank the 
gentleman very much.
  Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Eddie Bernice Johnson).
  The amendment was agreed to.
  Mr. OXLEY. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mrs. 
Miller of Michigan) having assumed the chair, Mr. Bonilla, Acting 
Chairman of the Committee of the Whole House on the State of the Union, 
reported that that Committee, having had under consideration the bill 
(H.R. 4973) to restore the financial solvency of the national flood 
insurance program, and for other purposes, had come to no resolution 
thereon.

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