[Congressional Record Volume 153, Number 145 (Thursday, September 27, 2007)]
[House]
[Pages H10956-H10994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2007
The SPEAKER pro tempore. Pursuant to House Resolution 683 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. 3121.
{time} 1253
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. 3121) to restore the financial solvency of the national flood
insurance program and to provide for such program to make available
multiperil coverage for damage resulting from windstorms and floods,
and for other purposes, with Mr. Costa 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 Massachusetts (Mr. Frank) and the gentlewoman from
West Virginia (Mrs. Capito) each will control 30 minutes.
The Chair recognizes the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. Mr. Chairman, preliminarily, I recognize
myself for 1 minute just to say that I want to be very clear that I
regret the decision not to allow a number of amendments offered by
members of the minority to this bill. And I will give them my word that
as this legislative process goes forward, I intend to seek out
opportunities to give them fair consideration.
I must say, Mr. Chairman, I'm never happy when I see my colleagues on
the Republican side being a little obstreperous, but when they're being
obstreperous with good reason, I really find that hard to tolerate. So
I did want to make clear my view and my hope that we can deal with
that.
Mr. Chairman, I yield such time as she may consume to the Chair of
the Subcommittee on Housing, from which this bill came forward, who has
done a great job all year on this legislation, the gentlewoman from
California.
Ms. WATERS. Mr. Chairman and Members, I rise in strong support of
H.R. 3121, the Flood Insurance Reform and Modernization Act of 2007.
And I would like to thank my colleague from Mississippi, Mr. Gene
Taylor, for all of the work that he has put into this issue and the way
that he helped to focus my committee and the overall Financial Services
Committee on this very issue.
He will be speaking today. And I don't think there is anybody who can
describe what happened as a result of Hurricanes Katrina and Rita and
[[Page H10957]]
Wilma and what happened in the gulf coast, in particular, his district,
any better than Mr. Taylor will do. And by the time he finishes his
presentation here today, I think all of the Members will very well
understand why it is so necessary that we move with a real reform bill
to deal with these kinds of catastrophes.
As you know, I introduced a bill on July 19, 2007, following
substantial consideration by the Financial Services Committee on flood
insurance and related issues. Specifically, the committee held two
hearings on June 12, one examining the issues of the national flood
insurance program raised by the gulf coast hurricanes, and a second
hearing on the predecessor to this bill, H.R. 1682, introduced by
Chairman Frank. Thereafter, on July 17, the committee held a hearing on
related legislation, H.R. 920, the Multiple Peril Insurance Act of
2007, that was introduced by Mr. Taylor.
H.R. 3121 reflects this extensive committee analysis on the NFIP,
wind insurance and related issues. Accordingly, on July 26, 2007, the
Financial Services Committee reported out H.R. 3121 with a favorable
recommendation. I hope that we're able to pass H.R. 3121 today because
it makes critical improvements to the NFIP in light of the devastating
lessons of the 2005 hurricane season.
In the aftermath of Hurricanes Katrina, Rita and Wilma, NFIP faced
unprecedented financial and regulatory strains as it confronted
approximately $21.9 billion in NFIP-insured losses. The program had to
borrow in excess of $17.5 billion from the United States Treasury in
order to pay claims and interest resulting from Hurricane Katrina
alone.
Those of us concerned about NFIP in the wake of the 2005 storms saw
the urgent need to put the program on sounder financial footing by
addressing the issues stakeholders had raised around the substantial
premium discounts and cross-subsidies among classes of its
policyholders, outdated flood insurance rate maps, allegations of
uneven compliance with mandatory purchase requirements, and questions
as to the performance and efficiency of private insurers operating
under the NFIP's Write Your Own program.
Additionally, the committee hearing on H.R. 920, the Multiple Peril
Insurance Act of 2007, made it clear the need to address perverse
incentives created by dual government and private insurance regimes
when damage can be a result of wind and flood. I'm proud to say that
H.R. 3121 prudently addresses these concerns.
Specifically, the bill would increase NFIP's borrowing authority to
$21.5 billion from $20.8 billion, but require that it satisfy
traditional criteria for actuarial soundness by phasing out discounted
premiums; allow the Federal Emergency Management Agency, that is, FEMA,
to increase flood policy rates by 15 percent a year, up from 10
percent; raise civil penalties on federally regulated lenders who fail
to enforce mandatory purchase of flood insurance for mortgage holders;
increase program participation incentives; encourage the revisions to
flood maps; and starting in mid-2008, allow for the purchase of
optional insurance for wind as well as water damage.
These reforms are desperately needed because, as we have seen, storms
will become stronger and more intense. We need a program that can
contend with the worst that Mother Nature can throw at us. Simply put,
we cannot wait and let another hurricane season pass without putting
the National Flood Insurance Program on solid footing.
I would urge my colleagues to support H.R. 3121, the Flood Insurance
Reform and Modernization Act of 2007.
And I thank you so very much, Mr. Chairman, for all of the time that
you have put in trying to make us very credible as we relate to these
reforms by not only giving us the leadership, but allowing us to hold
the hearings that are so necessary to get the information that is so
desperately needed to do this.
Mrs. CAPITO. Mr. Chairman, I yield myself as much time as I may
consume.
Mr. Chairman, floods are amongst the most frequent and costly
national disasters in terms of human hardship and economic loss. In
fact, 75 percent of Federal disaster declarations are related to
flooding.
Before I discuss the merits of the legislation, I would like to talk
briefly about the process that is being considered. We are debating a
huge expansion of an already struggling existing Federal program, and
yet we have not been able to have our amendments out on the floor to
have an open and frank discussion about this.
I would like to accept the chairman's offer to continue to work on
the amendments that were not allowed to be offered, and I hope that we
can see democracy being served by letting everybody's voice be heard.
{time} 1300
In 1968, Congress established the National Flood Insurance Program,
NFIP. The program is a partnership between the Federal Government and
participating communities. If a community adopts and enforces a
floodplain management ordinance to reduce future flood risk to new
construction, the Federal Government will make flood insurance
available to that community. Today, NFIP is the largest single-line
property insurer in the Nation, serving nearly 20,000 communities and
providing flood insurance coverage for 5.4 million consumers.
Mr. Chairman, recent events have underscored the need to reform and
modernize certain aspects of the program. While the NFIP is designed to
be actuarially sound, it does not collect sufficient premiums to build
up reserves for unexpected disasters. Due to the claims resulting from
Hurricanes Katrina and Rita, the NFIP was forced to borrow $7.6 billion
from the Treasury, an amount it estimates it will never be able to
repay. Consequently, NFIP sits on the GAO's High-Risk Programs list,
which recommends increased congressional oversight. Additionally, the
2005 storms shed light on the problem of outdated flood maps, resulting
in many homeowners in the gulf region being unaware that their homes
were located in floodplains.
To address these and other concerns in 2006, the House overwhelmingly
passed flood insurance reform legislation. Earlier this year, Chairman
Frank and Representative Judy Biggert introduced legislation identical
to that bipartisan bill. That bill includes many reforms, including the
phasing in of actuarial rates, but unfortunately, the flood insurance
bill that the majority chose to move out of the Financial Services
Committee was amended to incorporate legislation offered by the
gentleman from Mississippi (Mr. Taylor) which expands the NFIP to
include coverage for wind events.
Mr. Chairman, no Member of this House was more personally affected by
the 2005 hurricanes than Congressman Taylor. I do not, and no one
questions his sincerity or his commitment to assisting those who have
lost everything they owned in these storms. While I share his concern
over the rising costs and outright unavailability of homeowners' wind
coverage in some areas, I have three principal objections to linking
wind insurance to the reform of the National Flood Insurance Program.
First, expanding the program increases liabilities for taxpayers
while decreasing options for customers or consumers. Properties located
along the eastern seaboard and gulf coast represent $19 trillion of
insured value. Shifting the risk on even a portion of these properties
to the troubled NFIP could expose taxpayers to massive losses. The fact
is that insurance will choose not to engage a competitor that does not
pay taxes, has subsidized borrowing costs, and is not required to build
a reserve surplus and is protected from most lawsuits, State regulation
and enforcement.
Second, adding wind coverage to the NFIP will exacerbate the
program's well-documented administrative problems. Both the Department
of Homeland Security and GAO have criticized the NFIP for being
understaffed, not having adequate flood maps and not collecting
sufficient information on wind payments when claims were submitted for
flood damage. Expanding the portfolio further before much-needed
reforms are in place is premature.
Third, no consensus yet exists about the necessity or desirability of
creating a Federal wind insurance program. In testimony before our
committee, representatives of flood management groups, the insurance
industry, environmental organizations, Treasury and
[[Page H10958]]
FEMA all expressed agreement that a comprehensive study of the proposed
wind insurance mandate should first be commissioned to provide Congress
with a better understanding of the possible implications this expansion
could have for consumers, NFIP and the market.
Mr. Chairman, we must not let the desire to meet every perceived
problem with a new Government program drive us towards premature
actions that yield unwanted consequences. The NFIP's mission should not
be expanded, exposing taxpayers to massive new risks, until reforms are
in place and adequate study has been conducted.
In addition to the above reservations, I have serious concerns with
the effect the addition of wind coverage will have on communities that
are now relying on NFIP. This program is already financially unstable,
yet we are about to add $19 trillion of risk. Despite this fiscal
instability, States like West Virginia, that I represent, will still
rely on the program to provide assistance in the case of serious
flooding. There have not been major problems this year, thankfully, but
as recently as 2001, FEMA has declared counties in my State national
disasters due to flooding and provided $17 million in assistance. These
are serious needs across the Nation for the flood insurance program. We
should be modernizing NFIP so it can become financially stable.
Mr. Chairman, I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as
I may consume.
Mr. Chairman, I agree that we should have had an amendment that would
have allowed us to debate whether or not to strike the wind addition. I
would have vigorously defended it as I will do now.
The problem is that we now give the insured and the people who
administer insurance an impossible task. It is to evacuate a home on
the notice of a hurricane and to return to that home some period of
time later after there has been devastation from a hurricane and decide
with some degree of certainty what damage was caused by water and what
by wind, because the Federal Flood Insurance Program protects against
water damage. Wind damage is under the auspices of private companies.
In some cases, of course, the same company would be involved, and some
of the adjusters would have an interest in whether or not it was water
versus wind. The more it was water, the less they would have to pay.
But even aside from that conflict of interest, it is inherently
difficult, in fact impossible, to decide, if you go back and there is
all this devastation, was it the wind that blew the roof off? Was it
the flood that did it? Was the window broken by a wind-driven
projectile? It is impossible to tell. We give people this impossible
decision.
Now, the way the wind program works under the bill, in the first
place, it is not a complete expansion. You only would be eligible to
buy wind insurance if you already have flood insurance. It will lead to
no new insureds. That has to be very clear. No one who is not now
taking out insurance, not just eligible, but taking out insurance, will
be allowed to take this out, because it can only be an adjunct to your
water policy. It is aimed at trying to avoid having this impossible
arbitration between wind and water damage.
Secondly, and CBO scores it this way, it is subject to PAYGO. The
mandate in the legislation is that it has to be actuarially sound. And
people have said, well, the previous flood insurance program wasn't
actuarially sound. True. It wasn't subjected to that statutory mandate.
It wasn't subject to PAYGO.
We have in here language that mandates that the wind coverage be
actuarially sound. CBO has certified, and as Members know, we don't
always get from CBO what we think is the right answer, but in this
case, CBO has certified that this meets PAYGO and that wind will be
there.
So what we are saying is that if you already have water and you are
in an area where you are likely to have a combination of wind and
water, we will allow you to buy wind as an adjunct so that, and you
will have to pay the going rate for it, the actuarially sound rate, but
then you will avoid this terrible, intractable problem of arbitrating
wind versus water.
Mr. Chairman, I reserve the balance of my time.
Mrs. CAPITO. I yield 4 minutes to one of the original authors of the
bill that was presented initially to this Congress, the gentlewoman
from Illinois, Representative Judy Biggert.
Mrs. BIGGERT. Mr. Chairman, I would like to express congratulations
to the ranking member on her taking over as the ranking member of the
Housing Subcommittee.
Mr. Chairman, I have always known Chairman Frank to never shy away
from a debate. I appreciate his acknowledgement that he would have
liked to have had the opportunity to debate the amendments that were
not made in order. I know how concerned he was about that and it shows
by his vote on the floor. So I really appreciate that. He has always
been ready, willing and able to know what the opposition is and their
concerns and to debate that.
Mr. Chairman, Chairman Frank and I did introduce H.R. 1682 earlier.
That was the Flood Insurance Reform and Modernization Act of 2007. That
was to address the much-needed reforms to NFIP, the Nation's largest
single-line property insurance provider. Unfortunately, the legislation
before us today, I think, jeopardizes our commitment to enact these
reforms because it does couple H.R. 1682 with H.R. 920, which is
Representative Taylor's bill. We all know how sincere he is about this
much-needed reform. But it does add wind to the National Flood
Insurance Program. I really am concerned about this.
We had several hearings. Witness after witness testified that adding
wind to the flood insurance program was not a good idea. At one of the
hearings, adding wind to NFIP, the National Association of Insurance
Commissioners, the insurance experts, environmental groups, floodplain
management groups, the Treasury and FEMA all were opposed to such an
expansion.
In previous Congresses, flood modernization bills virtually identical
to H.R. 1682, the Frank-Biggert bill, enjoyed broad, bipartisan
support. During the last Congress, the Financial Services Committee
considered H.R. 4973, the Act of 2006, which the House passed by a vote
of 416-4 on June 27, 2006.
But instead of embracing this approach and the recent track record of
bipartisanship on NFIP, the other side of the aisle has chosen to
introduce this new bill and include language that I think really
threatens the passage of necessary reforms to the program. I am
disappointed by this action. NFIP needs reform now, not a controversy
and costly program expansion.
For the majority of its 39-year history, NFIP has been a self-funding
program. However, flood insurance claims from the 2005 hurricane season
have grown to almost $18 billion, a total greater than all the claims
from all the other years combined. Unless the NFIP program is reformed
soon, the program will face insolvency. In January, the GAO placed the
flood insurance program on its High-Risk Series list, which recommends
increased congressional oversight for troubled programs.
So, Mr. Chairman, it is clear that NFIP reform is needed now.
Therefore, before expanding the NFIP program to include wind, we should
keep our commitment to reform NFIP and move H.R. 1682 instead of the
bill before us today. The administration has said that if the wind
provision is included in this bill, the President will veto it. So
adding wind, really, to me, is a poison pill to the flood insurance
reform bill and is compromising our efforts to enact much-needed
bipartisan reform of the National Flood Insurance Program.
Mr. FRANK of Massachusetts. I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the representative
from Illinois (Mr. Roskam), a member of the Financial Services
Committee.
Mr. ROSKAM. I thank the gentlewoman for yielding.
Mr. Chairman, have you ever walked by a construction site? When they
are putting up big buildings, it is really a sight to behold. And you
look down at the foundation upon which they are building. If they are
building the house right, they are putting it on a foundation of
absolute bedrock. As you are watching them put it together, they are
bringing in large pieces of concrete and steel. They are putting it
down
[[Page H10959]]
ever so slowly, ever so slowly, because when they finally put it down
on the foundation, it is not going to move again. That is why they are
very, very careful.
I think today we are missing an opportunity to build on a solid
foundation. We have an opportunity to fix a failed and struggling
program, and that is the National Flood Insurance Program. That is not
bedrock. It is peat moss. It is very, very soft stuff. It has an $18
billion liability right now.
Unfortunately, rather than dealing with the flood component, what is
happening is that an additional liability is being placed on a program
that doesn't have a solid foundation. We are giving additional
responsibility in this bill to FEMA without any substantive reforms of
FEMA. I know that over the past years, FEMA has been subject to and
receives a great deal of criticism with the way in which it conducted
itself following Hurricanes Katrina and Rita.
{time} 1315
I think that the lost opportunity here is a sad thing. The vast
majority, not the overwhelming majority, but the vast majority of
claims have been settled in the previous conflict, and now here we have
got the chance to fix the flood program. My district wants a flood
program that is dynamic and vibrant and solvent and based on a good
foundation.
As was previously mentioned, the GAO has put the NFIP on a watch
list, and yet we are entrusting the NFIP with the new responsibility.
That we ought not do.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield such time as he may
consume to the gentleman from Mississippi (Mr. Taylor).
Mr. TAYLOR. I want to thank Chairman Frank, Chairwoman Waters,
Chairman Mel Watt, the Democratic members of the Financial Services
Committee for bringing this incredibly important bill to the floor.
Mr. Chairman, a little over 2 years ago, the Nation's worst disaster
hit a number of places, including the district I have the privilege of
representing. An unprecedented number of homes were destroyed,
including my own. As the crow flies between my house and Senator Lott's
house is 40 miles. As inconceivable as it may be, in that 40 miles
between our houses, only a handful of houses within several blocks of
the Gulf of Mexico remained.
A number of things occurred after that storm, most of them good.
People in south Mississippi pulled together. They did what they could
to take care of themselves. People from all over America came to our
assistance. Congressman Gilchrest's district raised something in the
neighborhood of $40,000 to $50,000 for the people of my district, as
well as the people of St. Mary's County. There are so many of these
things, that I can't enumerate them all. The people of St. Mary's
County sent down three truckloads of Christmas presents to kids who
lost everything.
To this day, there are still young volunteers and not-so-young
volunteers from all over the country who come down there trying to help
people rebuild their lives. About the only group that didn't try to
help the people of south Mississippi is the insurance industry. You
see, within days of the storm, the insurance industry issued a memo to
their employees that said whenever wind and water occur concurrently,
blame it all on the water.
Mr. Chairman, the United States Navy has modeled what happened that
day in Mississippi, and the United States Navy tells us that for 4 to 5
hours in south Mississippi we had hurricane force winds before the
water ever got there.
Under the National Write Your Own program, we count on the private
sector for two things: we count on them to sell the policy, and that
way our Nation does not have the administrative expense of having a
sales force. But we also count on them to adjudicate the claim fairly.
Those things that are wind, say the wind did it, and they have to pay.
Those things that are attributed to water, you can blame it on the
flood insurance, and the Nation pays.
Within days of the storm, State Farm and other companies had issued
the following e-mails to their employees: Where wind acts concurrently
with flooding to cause damage to the insured property, coverage for the
loss exists only under flood coverage.
So, on one hand, they have a contract with the Nation that says we
are going to pay if it's wind damage, the Nation is going to pay if
it's flood damage. They get to adjust the claim. We don't have a
Federal employee following them around. The total discretion to make
this claim is with the private sector.
Put yourself in the position of that 25-year-old claims adjuster.
You're looking for your Christmas bonus; you're hoping for a promotion.
You can walk on that property and say what is fair, that, yeah, there
was wind and there was water, or you can be a company man and you can
follow the memo from company headquarters and blame it all on the water
and stick the taxpayer with the bill. That is not fair to the taxpayer
right off the bat, and it's not fair to the citizens.
Let me further clarify this, and I have kind of become an expert at
it the hard way. Every homeowner's policy has something in it called
``Cost of Living Expenses,'' and that is if your home burns down
tonight, and you have got a homeowners policy, they will pay to put you
up until they fix your house. But if they deny the claim, they don't
put you up.
The President came down shortly after the storm and said, you know
what, if you have lost your house, or if your house is substantially
damaged, we are going to get you a trailer to live in. They assigned,
just in south Mississippi, 42,000 trailers; one for every family of
five, $16,000 per trailer.
Then they gave another contract to an outfit called Bechtel to haul
those trailers the last 70 miles, from a place called Purvis,
Mississippi, down to the site where a home was, hook it up to a garden
hose, plug it in, hook it up to the sewer tap. It worked out where that
company got another $16,000 just for doing the very simple thing that
grandmoms and grandpops and moms and dads do every weekend, which is
called hooking up a travel trailer.
We are now up to $32,000 per trailer, times 42,000 times, because
they decided they weren't going to pay on their homeowners claims, that
the Nation would pay. Now, you can come to this floor and defend that,
but I don't think you can.
So the individual who had a homeowners policy, because if you live in
hurricane country, and this has happened three times in my lifetime,
it's the only time I lost my house, but three times in my lifetime I
have seen terrible storms. You don't know if it's going to be more wind
than water or more water than wind. So you buy both policies, with the
idea if I get flooded, I've got a flood policy. If it's wind tearing my
roof off, I've got a wind policy. You have both.
As the chairman pointed out, our Nation spends a fortune to have
hurricane hunters fly into these storms. Our Nation spends a fortune to
put satellites that track storms into space. Why do they do that? To
give people warning so that they don't die in the storm. Our sheriffs
departments and police chiefs did a wonderful job: get the heck out of
here, this is going to be a bad storm. So the logical people and the
people who weren't hard-headed got the heck out of there. We lost a
rocket scientist. I am certainly not going to say that man was dumb,
but he built what he thought was a hurricane-proof house. He died in
that hurricane-proof house.
The point is that the few folks who stayed behind almost all died,
but the few folks who stayed behind had their claims paid because they
could sign an affidavit and say I saw my roof fly off before the water
got there, I saw my windows fly in. And, by the way, I was 10
miles inland that day and the windows in my brother's house flew in.
The insurance companies paid wind claims in all 82 counties of
Mississippi, all the way to Memphis, Tennessee; but they are somehow
trying to convince this Congress that the wind somehow miraculously
leap-frogged over the coast and they shouldn't have had to pay where it
hit first.
Mr. Chairman, what we are trying to do with this is tell the people
of America, the 52 percent of the people that live in coastal America,
that if you build the house the way you should, if you pay your
premiums, if you buy this additional coverage, if your house is
destroyed in the course of a hurricane
[[Page H10960]]
or substantially damaged in the course of a hurricane, you don't have
to be there with a video camera to record whether it's wind or whether
it's water. You paid your premium, you built it right, you are going to
get paid.
One of the gentlemen mentioned that the insurance companies have
settled 90-something percent of the claims. Let me address that.
I was pretty busy, as you might guess, after the storm. I put off
meeting with my adjuster for 2 weeks. By the time I met with my
adjuster, I had heard dozens, if not hundreds, of my constituents as I
am going around passing out MREs, told me, ``They already told me they
are not going to pay me. I had a homeowners policy. They are not going
to pay me.''
So by the time they came to my house, I asked my agent, Please don't
say a word. Each one of my steps is about 3 feet. Let's just count the
steps until we find my roof. We paced off about 150 of them, 450 feet.
I showed them my roof and pointed out it was tin. I reminded them that
tin doesn't float. I showed them the holes where it had been ripped
through the bolts.
I said, This is my roof. I am the only guy in this neighborhood that
has this style roof. This is my roof, and it is 450 feet from where my
house used to be. Now let's walk back to where my house used to be.
Miss, what do you have to say? This to the claims adjuster.
The first words out of her mouth, I see no evidence of wind damage.
We are, however, prepared to pay your flood claim. To which I reminded
her that was very sweet of State Farm. That is not their money; that is
the Nation's money. What about the claim for that roof that flew over
there?
What we are trying to do with this is prevent the need for my
constituents, your constituents, anyone who lives in coastal America,
to have to stay behind with a video camera to record the destruction
and possibly die with these claims. If you build it right, if you pay
your premiums, then you get paid. Pretty simple. Under the PAYGO rules
of this House, it will pay for itself. It has to. It is written in the
law.
Lastly, we quit putting the insurance companies in a position where
they can bilk the taxpayers for billions of dollars. What some of you
may not know, something I will be entirely grateful for, is because so
many homeowners claims weren't paid in south Mississippi of people who
lived outside the floodplain, who had homeowners insurance but didn't
get paid, in one of the appropriations bills after Katrina, $4 billion
in taxpayer dollars was included to pay those people's insurance
claims. The taxpayers paid for what State Farm, Nationwide, and
Allstate should have paid.
So when people say this is some sort of raid on the Treasury, I see
it as just the opposite. This is creating a program where the Nation
won't have to ride to the rescue next time because people will have
bought insurance ahead of time, in a program that pays for itself, in a
program that says if you built it right, if you pay your premiums, an
act of God destroys your house, you are going to get paid.
I can't think of anything that is more fiscally responsible. I can't
think of anything that is more right for the citizens. And I would
remind my colleagues that the National Association of Homebuilders, the
National Association of Realtors, and the National Association of
Bankers, when given the opportunity to look at this bill in its
totality, have endorsed this bill as it is written, including the wind
versus water language to allow people to buy all-perils insurance.
I thank the chairman for his leadership on this. No one can say they
have been blindsided on this issue. The hearings on this issue began in
January. The debate on this issue started the week after the storm.
There has been ample opportunity for people to weigh in on this issue.
I very much thank again the chairman, Ms. Waters, Mr. Mel Watt, for
the opportunity to bring this to the floor and the opportunity to right
an egregious wrong against the American people.
Lastly, I would like to remind people that even with Katrina, the
insurance industry made $42 billion in profits the year of Katrina. So
while they are simultaneously telling their employees, don't pay the
individual, while they are sticking the bill to the citizen, if you
have any doubt in your mind why flood insurance lost so much money, it
is because they made so much money that year. We are trying to correct
that. I hope you will help us.
Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from
South Carolina (Mr. Barrett).
Mr. BARRETT of South Carolina. I thank the gentlewoman for yielding.
Mr. Chairman, I appreciate that many homeowners around the country
require affordable insurance against natural disasters. However, I also
know that the Federal Government cannot afford spending at the
excessive levels we are spending at. By expanding the National Flood
Insurance Program, the NFIP, H.R. 3121 would put the Federal Government
on the hook for even more billions of dollars.
Coming from a State prone to hurricanes, I am sensitive to those
needs and to those who live in high-risk areas for natural disasters.
But it would be irresponsible for the Federal Government to expand its
program without fully understanding the repercussions. Unfortunately,
many Americans will likely once again find themselves affected by
devastating natural catastrophes such as hurricanes. The NFIP already
owes the Department of Treasury around $18 billion, and it is unlikely
that they will ever be able to repay this amount; $18 billion.
So should we now increase the NFIP's exposure, thus increasing the
Federal Government's liability, by expanding this program to include
wind insurance? To do so would be unfair to the taxpayers who would be
stuck with this bill, Mr. Chairman.
{time} 1330
Expanding this already distressed program will increase the Federal
Government's liability, and will almost definitely increase government
spending on a huge scale while crowding out private insurance markets.
Therefore, I urge my colleagues to join me in voting against H.R.
3121, the Flood Insurance Reform and Modernization Act.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield 4 minutes to the
gentleman from Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. Mr. Chairman, I thank the gentleman for yielding me
this time and permitting me to speak, and for the hard work he and his
committee have invested in this.
Mr. Chairman, the area of flood insurance is one that I have been
focusing on over the last half dozen years. I was pleased to work with
our former colleague, Doug Bereuter, with Chairman Frank and with then-
Chairman Oxley on some serious flood insurance reform that predated the
most recent disaster with Katrina. During that time, I had a chance to
learn a lot about opportunities that the Federal Government has to
alter its programs and policies to reduce this long-term exposure, and
to think about the redesign of the partnership between the private
sector, the State and local governments.
While I appreciate my friend from Mississippi's tenacity in zeroing
in on an area of very serious problem dealing with wind damage, and he
has documented in great detail the almost impossible situation that
many of his constituents and others in the Hurricane Katrina area have
faced, I am trying to keep an open mind in terms of how far we go along
the lines in terms of expanding it to add wind damage.
I don't think that we have seen the end of this process. I am looking
forward to working with my colleague on the legislative process as it
moves along. I am deeply concerned that we haven't come to grips with
the financing of our flood insurance program. We are looking at upwards
of $20 billion, and we are slowly having some actuarial balance added
to these programs; but, it still lags. Not only is there a problem of
not having actuarial balance to be able to provide the sums that are
necessary to maintain this as a self-supporting program, because as it
stands now, that is going to be a stretch. It is going to take a long
time without serious incident for us to get there.
I am also concerned that we need to do a better job of making sure
that the Federal Government and State and local governments aren't
putting more people in harm's way. In too many areas we have seen that
there has been,
[[Page H10961]]
shall we say, reluctance on the part of local authorities and State
authorities to be rigorous in making sure that we are not pouring large
sums of public investment in areas where it is encouraging people to
locate in places where we know there is going to be damage over time.
Last but not least, later in this debate we will be talking about
working with FEMA to make some adjustments to take into account global
warming, climate change and rising sea levels, because this is an area
that is going to compound lax local land use controls and unsteady
development processes that is going to end up creating a disaster out
of our disaster relief.
I can't say enough about how much I appreciate the committee's
willingness to be involved in an area that some think is esoteric, that
is sort of mundane, that is sort of too detailed and unexciting. But it
is precisely that sort of attention that is going to make us have a
stronger program that is going to meet the needs of people and is going
to do so in a way that actually helps keep people out of harm's way,
which ought to be our ultimate objective.
We ought to make sure that all of these forces save money, save lives
and protects the environment. I think this legislation moves in that
direction. I look forward to working with the committee as this
legislation works its way through the legislative process to better
achieve that goal.
Mrs. CAPITO. Mr. Chairman, it is my pleasure to yield 3 minutes to
the gentlewoman from Florida (Mrs. Ginny Brown-Waite).
Mr. FRANK of Massachusetts. Mr. Chairman, I yield an additional
minute to the gentlewoman from Florida.
Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, I thank the
gentlewoman for yielding me this time.
I rise to engage my good friend Chairman Frank in a colloquy
concerning the bill.
Mr. Frank, as you recall during the committee process before we
actually marked up H.R. 3121, my Florida colleagues and I raised some
serious questions and concerns over expanding the flood program to
cover wind. We are concerned that while this expansion may help some in
areas of the United States, we were uncertain whether it would hinder
some States like Florida that tend to be excluded from the national
insurance market.
You will remember Representatives Feeney, Putnam and I introduced an
amendment that struck the provisions expanding NFIP to cover wind
losses. The amendment put a GAO study in its place to give members in
the department time to vet this issue further. Unfortunately, the
amendment did not pass the committee, but you and I asked for a GAO
study very similar to the one included in the amendment.
You and I have worked closely on issues in the past, and I know that
you are a man of your word and you have always given those of us with
differing thoughts an opportunity for ample discussion and
consideration.
I am hoping today to get your word that when the GAO study is
released in April, that the committee and the regulators will take into
serious consideration their findings. For example, some of the
questions we asked were whether consumers would be able to purchase
wind and flood policies at sound, actuarial rates; whether FEMA had
staff available and was prepared to administer such an expansion; and
how much an expansion of this nature would expose taxpayers to future
losses. Those and other questions that were posed, they are tough
questions that GAO will be responding to.
But I hope I have your commitment that the Committee on Financial
Services members who support an expansion and the regulators listen and
respect the findings, regardless of the outcome. I would ask for that
commitment, Mr. Chairman.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentlewoman yield?
Ms. GINNY BROWN-WAITE of Florida. I yield to the gentleman from
Massachusetts.
Mr. FRANK of Massachusetts. I must say, Mr. Chairman, the gentlewoman
asks for my word, and I am tempted to assume a cultural pose which I
haven't always had and simply say, ``Word.'' But I am not sure that is
still in vogue. I'm sometimes behind in my fashionableness.
I will say this to the gentlewoman; she has been very constructive
and we have been able to work together on this and other matters,
including on the most recent legislation involving floods. Certainly I
will do everything I can to see that this is given very serious
consideration.
Now I should add, the recommendations may mean a curtailment of the
program or an adjustment of the program. If the argument is that FEMA
is not well structured, the response might be to try to improve the
structure of FEMA. But I take this report very seriously. So she has my
word that we will take this very, very seriously. In fact, I would say
when we get the report, the first thing we will do will be to have a
hearing on it and then go from there.
Ms. GINNY BROWN-WAITE of Florida. I look forward to continuing this
ongoing work relating to the NFIP program.
Mr. FRANK of Massachusetts. Mr. Chairman, I have no further requests
for time, and so I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to Mr. Gilchrest from
Maryland.
Mr. GILCHREST. Mr. Chairman, I thank the gentlewoman for yielding,
and thank Members on both sides and staff for working on this vital
issue.
I want to take a minute or two to tell the Members that there will be
an amendment coming up during the amendment process offered by Mr.
Blumenauer and myself to deal more effectively with how the Federal
Government determines taking into consideration future effects of
climate change on the American taxpayer and homeowners. I would urge
all of my colleagues to vote for the amendment.
The amendment does basically two things: Are we, as a Federal
Government, providing incentives to put more people in harm's way in
coastal areas and are we adding cost to the Federal taxpayers as a
result of that; and are we incentivizing ecological degradation?
I say that because there are maps on coastal areas and there are maps
on flooding and there are maps on predicting storms that are all based
on history. Nothing is projected into the future with an understanding
of what global warming is going to do.
Let me tell you how it has impacted my district in the Chesapeake
Bay. Poplar Island for decades was a popular place for many people in
Maryland, including Presidents of the United States. It was 1,500
acres. It is now 5 acres as a result of sea level rise. We are now
restoring that island with dredged material.
Holland Island, 350 people lived on Holland Island. It was 5 miles
long and a mile and a half wide. It is down to 100 acres today, and
nobody lives on Holland Island.
Barren Island was 582 acres. It is down to 120 acres now.
Areas in my district, Blackwater Refuge, for example, in Dorchester
County, loses 120 acres a year due to sea level rise and exacerbated
erosion problems.
It is not taken into consideration by the Federal Government, by
FEMA, or anybody else, to project those natural causes that are
occurring right now. In the Chesapeake Bay, sea level used to rise 3
feet every 1,000 years. In the last 100 years, it has risen a foot and
a half. It is important for us to take these things into consideration.
I urge Members' vote on Mr. Blumenauer's amendment when we come to
that point in the debate.
Mrs. CAPITO. Mr. Chairman, I yield 3 minutes to the gentleman from
Texas (Mr. Hensarling), a member of the Financial Services Committee.
Mr. HENSARLING. Mr. Chairman, I thank the gentlewoman for yielding me
this time.
I listened very carefully to the gentleman from Mississippi, and he
may recall that I went to his hometown and I saw what was left of his
home. I saw that devastation and I spoke to those people firsthand.
Although my family didn't feel quite that devastation, my in-laws
lived in New Orleans and their home was severely damaged in Hurricane
Katrina. My father-in-law was in the New Orleans Convention Center when
all of the violence broke out. That is something that my family knows
about, so I know there has been a lot of pain in that community. And I
have no doubt that
[[Page H10962]]
the Federal Government, which has already rendered over $100 billion of
taxpayer aid, can do more good; but I fear, I fear this is not the
solution.
Now I look at the legislation and I understand it is designed to be
actuarially sound. I understand that the taxpayers aren't supposed to
have to pay more. I understand that factory worker in Mesquite, Texas,
in my district, who generously gave to help fellow Americans in their
time of need, he has come to me and said, ``Congressman, I want to be
helpful, but tell me we don't have to do this again.''
Congress can't outlaw hurricanes, but what do we do to make sure that
he doesn't have to pay again.
So now we have a program that is not actuarially sound. It was
designed to be, but it is not. So on the coverages that we have, and I
will admit under the chairman's leadership there have been a number of
reforms put into the program that I support, but we are increasing
coverages. We are upping coverages. We are adding wind on top of a
program that already owes the taxpayer $20 billion that they have no
way to pay for whatsoever.
I would note, we had other insurance programs that were supposed to
be financially sound: Social Security, which now is a long-term deficit
of $8.9 trillion; Federal Pension Benefit Guaranty Corporation is
supposed to be fiscally sound, running a deficit of $18 billion, off-
balance sheet liability of $73 billion. We have already talked about
the National Flood Insurance Program, Federal crop insurance, Medicaid.
I could go on and on.
Mr. Chairman, I have no doubt again that the people on the gulf coast
continue to be in need. But we were told a little earlier this week, I
believe by our Speaker, this is supposed to the Congress of the child.
Well, let's look at the future of our children. When you look at the
spending of the Federal Government already, we know that Chairman
Bernanke has said, ``Without early and meaningful action, the U.S.
economy will be seriously weakened, with future generations bearing
much of the cost.''
{time} 1345
That's just with the government we have today. The GAO has said we're
on the verge of being the first generation in America's history to
leave the next generation with the lowest standard of living due to all
of this spending. This program makes it worse. It must be rejected.
The CHAIRMAN. The gentleman from Massachusetts has 3\1/2\ minutes
remaining. The gentlewoman from West Virginia has 8 minutes remaining.
Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from
North Carolina (Mr. McHenry).
Mr. McHENRY. Mr. Chairman, I thank my colleague from West Virginia
for yielding. The ranking member is very generous with yielding.
I want to thank the committee chairman, my colleague from
Massachusetts, for having an open and fair process in the committee. We
had a number of amendments through that whole process that were
vigorously debated, and there was a lot of discussion about continuing
that vigorous debate on the House floor to work out some compromises,
and the committee Chair honors his word in committee. I want to thank
him for that.
Unfortunately, the Rules Committee did not allow these amendments to
come forward to the House floor, and that is a great shame. I think the
work product coming off this House floor will be less than it could
have been had we had an open and fair process here on the House floor.
It is obvious and true that the National Flood Insurance Program is
already in deep trouble. It's $18 billion in the hole. Since 1981, over
the last 26 years, it's borrowed from the Treasury 14 times, $18
billion in the hole. Certainly it needs reform.
I think the underlying reforms for flood insurance in this bill are
appropriate and good, and I appreciate the chairman of the committee,
and I appreciate my colleague from Massachusetts accepting my amendment
in the committee that says that new and renewing multi-peril policies
shouldn't be extended in a time when the National Flood Insurance
Program is borrowing from the Treasury. I think that's proper, and I
appreciate him accepting that in this bill.
But overall, this addition of wind will actually step into the
private sector and private market that is largely working and has
largely worked for the last 100 years in this country. There have been
a number of failures, and that is on occasion what happens; but with
the private sector, it can be done on an actuarially sound basis.
What we're doing under this bill by adding a wind proposal is
exposing the taxpayers to tens of billions of dollars' worth of
additional unfunded liabilities, and that's why I'm going to have to
sadly vote against this bill.
I urge my colleagues to vote ``no.''
Mrs. CAPITO. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman
from Georgia (Mr. Kingston).
Mr. KINGSTON. Mr. Chairman, I thank the gentlewoman for yielding the
time, and I want to talk a little bit about my own background.
I was in the insurance business for 13 years, worked strictly on
commission. I was a broker, which meant I worked for the buyer, helping
them find the best quality insurance in the insurance marketplace. I
also represent the entire coast of the State of Georgia. I've been
involved in flood insurance and wind storm insurance and fire insurance
a great deal of my adult life. So I'm very familiar with this. In fact,
I'm the only CPCU in Congress, which means Charter Property and
Casualty Underwriter. That's a professional designation. I know this
stuff is my point.
Now, what you have with the insurance business is you have two types
of profits, one they make from underwriting. They don't want to insure
a building if they know it's going to burn down because they won't make
an underwrite profit. Fair game. They do everything they can to make
sure the building does not burn down.
They also make a second kind of profit called investment profit. When
they get the cash flow from premiums from underwriting, they invest it
and they make a lot of money in that. But generally speaking, insurance
companies are risk averse. They don't want to insure wind if you're on
the coast. They don't want to insure flood if you're in a flood zone.
It makes sense from a business standpoint.
But as they will gladly cede this to the Federal Government, then
what happens is exactly what Mr. McHenry said: you have the private
sector pulls out of it. They don't put in their ingenuity to it.
Now my friend Mr. Taylor, and I know having represented coastal
areas, it is possible that there are a lot of buildings and homes that
have been constructed that probably shouldn't be there or probably
shouldn't use the construction standards that they should, I know as I
go over the entire district of Georgia on the coast that people in
Idaho and Iowa and Maine are subsidizing the flood policies for my
homeowners out there.
It's hard to say this is politically unpopular, but it is the truth.
I just want to say that the insurance companies need to own up to their
social responsibility. They don't need to take a walk on this.
The Federal Government is already supplying health care, retirement
benefits, transportation benefits, food, drugs, even school uniforms
and babysitting. Yes, there are programs for that. I don't believe the
Federal Government needs to get into the wind storm pool in a major
way. We need to let the private sector continue to provide this
service, and we need to look ourselves in the eye and say maybe not all
these buildings should be built.
I urge a ``no'' vote on this.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 2 minutes to
take up the suggestion of the gentleman from Georgia. He said that the
insurance companies should be required, I guess, to live up to their
social responsibility. I agree.
The committee of which I'm the Chair has the jurisdiction on that;
and if he has any recommendations about what we can do, I'd be glad to
do it, but not in that way right now.
Mr. KINGSTON. Mr. Chairman, will the gentleman yield?
Mr. FRANK of Massachusetts. I yield to the gentleman from Georgia.
Mr. KINGSTON. If they want to make a profit from it, then we should
not let them take a walk from it. They will figure out a way to do it.
Mr. FRANK of Massachusetts. It is not in our power to tell them not
to take a walk. They are a private sector
[[Page H10963]]
entity. So unless there was to be some legislative change, there's
simply no power, particularly at the Federal level, because insurance
has historically been a State issue; but when the gentleman says we
shouldn't let them walk away, I might be inclined to agree with that.
There's nothing in the Federal Government now that would allow us to
stop them from walking away, and our committee is available if anybody
has any proposals to increase the role of the Federal Government, and I
yield to the gentleman.
Mr. KINGSTON. Keep in mind, we did not even have a flood program
until recent times. The underwriter will take care of it.
Mr. FRANK of Massachusetts. I'll take back my time to say that's
irrelevant. We weren't talking about the history of the flood program.
The gentleman said we shouldn't let the private companies walk away
from their social responsibility. I wish he would tell me how he thinks
we can do that. I will be glad to yield to the gentleman if he wants to
get back to the subject, but not when I'm still posing the question,
because he apparently didn't understand it.
He said if they're not living up to their social responsibility, we
should make them do it. I don't know how we can do that. If he wants to
suggest to me new powers it would seem to me for us to take to do that,
I'll listen.
I yield to the gentleman.
Mr. KINGSTON. Let me say this, we were not in the Federal flood
insurance program until recent times.
Case in point, I used to sell flood insurance; but when the Federal
Government grew into it, the private sector withdrew from the market.
Mr. FRANK of Massachusetts. I will take back my time, Mr. Chairman,
to say that simply isn't accurate today. Others know it better than I,
but we've had insurance companies withdrawing from offering policies
that are not covered by Federal flood insurance. The Federal Government
covers only flood insurance.
So I would repeat to him, his history is interesting; but he says we
shouldn't allow them to walk away, and I don't know any way we can
prevent them.
Mr. Chairman, I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I yield 30 seconds to the gentleman from
Georgia.
Mr. KINGSTON. Let me say this, I would love to continue this dialogue
and that's why we wanted some amendments so that we could try to work
out some of these differences.
But in your great State, in Massachusetts, in Boston or in Savannah,
Georgia, historically very old communities, there weren't Federal
programs that did the underwriting. These were all built by the private
sector.
What I'm saying is if you just step back and let the market do its
place, the market will continue to work wonders as it did for hundreds
of years in the United States of America until the Federal Government
let them start taking a walk by providing products that competed with
the private sector.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 1 minute to
say that simply isn't true. That's not the causality.
The notion that it was the Federal Government trotting them out is
simply not accurate, and again, the phraseology of the gentleman is not
that we should allow them to do it, we shouldn't let them walk away. I
don't know any way to not let them walk away.
Mr. Chairman, I yield the balance of my time to the gentleman from
Mississippi (Mr. Taylor).
Mr. TAYLOR. Mr. Chairman, I'd like to remind the gentleman from
Georgia that what this is all about is getting the companies to live by
their contract.
Thousands of my constituents, including one of the most powerful
Members of the United States Senate and a Federal judge, had to hire
lawyers and engineers to get fairness from their insurance companies.
If they're going to do that to a powerful Senator or if they're going
to do that to a Federal judge, what kind of chance does a
schoolteacher, a chief petty officer, a high school football coach
have?
The fact of the matter is they have not lived up to their
responsibilities. That's what brings this bill to the floor today.
Mr. KINGSTON. Mr. Chairman, will the gentleman yield?
Mr. TAYLOR. I yield to the gentleman from Georgia.
Mr. KINGSTON. Because as I understand it, Trent Lott lost a family
home that was like 100 years old or something in Mississippi. There was
no Federal insurance program of any nature when that house was built,
which is my point for Boston and for Savannah, Georgia. All of those
old buildings never had any Federal insurance programs: fire, flood or
windstorm or anything else.
And what I'm saying is I agree with you. They are not pleasant to
work with, and I understand and I want to commend the gentleman for his
great work on this. But the reality is, if the Federal Government steps
in, the private sector will move out.
The CHAIRMAN. The gentleman from Massachusetts' time has expired. The
gentlewoman from West Virginia has 3 minutes to close.
Mrs. CAPITO. Mr. Chairman, I yield the remaining time to close to
someone who has lived and breathed this issue for many, many years, an
expert in the area, the gentleman from Louisiana (Mr. Baker).
Mr. BAKER. Mr. Chairman, I thank the gentlewoman for yielding and
wish to quickly say as a Louisianan, obviously I am a defender of the
flood insurance program.
I want to commend Chairman Frank for his willingness to work with us
and all affected parties in crafting a flood insurance program reform
which I thought was a very good product. It was only with the addition
of the wind exposure element to the underlying bill that I began to
have any concerns about the legislative direction of the chairman's
recommendation.
Currently, the notional value of flood insurance in effect, just
flood, not to confuse with wind, today is $1,092,932,778,000 as of a
June 30 FEMA report. That's the potential exposure of the flood
insurance program to claims pursuant to contract.
We know that the current flood program with the actuarial system in
place cannot repay the debt it currently has. To put into scale what
the additional risk brought onto the U.S. Government books will look
like, the industry estimate from New England to the gulf coast only is
an additional $19 trillion of risk exposure.
The limits in the bill that have been described is it's only
available where you can buy flood insurance. We sell flood insurance in
New Mexico. We sell it in Boulder, Colorado, and we sell flood
insurance in Guam, and the entry to the wind program is to buy the
flood policy, so that we will, in fact, nationalize wind insurance
coverage via the flood program, opening the U.S. taxpayer to a risk and
a payment for which there is not an adequate stream.
Some say, well, the bill requires actuarial rating. The flood
insurance program has actuarial rating, but it's not industry
actuarial. It only looks to historical claims data. There's no risk
modeling to look forward.
Those who have laid claim to the fact that weather cycles are more
severe, damages are likely to escalate, that is not data which is
incorporated into the flood insurance premium structure. So there will
be problems with the implementation of the program as currently
drafted.
Am I suggesting we do nothing? Absolutely not. Do I think that the
current system is adequately taking care of the risk of those who live
along coastal areas? Of course it isn't.
I have legislation which I am planning to introduce and hoped to have
had introduced before consideration of this bill on the floor which
will enable the issuance of a privately issued policy, multi-peril; but
it would be exempt from State price controls.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
Mr. BAKER. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. His point about the flood insurance not
being actuarially sound is right; but in this bill, because it is
subject to PAYGO, we have a more stringent standard. So it is not
totally valid to say, oh, look, it was supposed to be actuarially done.
The wind program here is written to a much stricter standard.
Mr. BAKER. If I may reclaim, I would only make the observation that
both flood and wind have access to a
[[Page H10964]]
line of credit. The line of credit is not conditioned for flood only.
Therefore, the taxpayer does have exposure to the limit authorized by
statute, which is $20.8 billion.
Mr. FRANK of Massachusetts. But not according to CBO, I would say to
the gentleman.
Mr. BAKER. Well, we have a dispute.
Mr. FRANK of Massachusetts. Mr. Chairman, I submit the following
exchange of letters regarding H.R. 3121.
National Association of Realtors',
Washington, DC, September 26, 2007.
House of Representatives,
Washington, DC.
Dear Representatives: On behalf of the more than 1.3
million members of the National Association of
REALTORS' (NAR), I ask for your vote in favor of
H.R. 3121, the Flood Insurance Reform and Modernization Act
of 2007, when it is considered by the House of
Representatives on Thursday, September 27.
The National Flood Insurance Program (NFIP) offers
essential flood loss protection to homeowners and commercial
property owners in more than 20,000 communities nationwide.
The bill, as written, will help protect homeowners, renters
and commercial property owners from losses sustained from
flooding. NAR strongly supports the following changes to the
NFIP contained in the bill including:
Extending the NFIP for five years;
Ensuring that the 100-year flood maps are updated as
expeditiously as possible;
Increasing coverage limits to $335,000 for residential and
$670,000 for commercial properties;
Supporting education of tenants about the availability of
flood insurance while providing flexibility to property
owners and mangers in the manner of providing such notice;
Adding coverage for living expenses, business interruption,
and basement improvements;
Extending the pilot program for mitigation of severe
repetitive loss properties; and
Studying the impacts of eliminating subsidies on
homeowners, renters and local economies.
It is critical that flood insurance remain accessible for
all individuals who own or rent property in a floodplain. I
urge you to vote in favor of H.R. 3121, the Flood Insurance
Reform and Modernization Act of 2007, on Thursday.
Sincerely,
Pat V. Combs, ABR, CRS, GRI, PMN,
2007 President, National
Association of Realtors'
____
National Association of
Home Builders,
Washington, DC, September 26, 2007.
House of Representatives,
Washington, DC.
Dear Representatives: On behalf of the 235,000 members of
the National Association of Home Builders (NAHB), I am
writing to express our support for H.R. 3121. the Flood
Insurance Reform and Modernization Act of 2007 as amended by
the Manager's Amendment. which includes much-needed technical
improvements to the underlying bill.
As you know, Hurricanes Katrina, Rita and Wilma radically
disrupted the lives of those living on the Gulf Coast. After
the storms' passing, many homeowners found themselves in
dispute with their property insurance companies over whether
water or wind was the primary cause of damage to their homes.
After much debate, one proposed solution which has emerged to
address this conflict is to expand the authority of the
National Flood Insurance Program (NFIP) to include wind
coverage.
NAHB is pleased that the bill incorporates new language to
provide wind insurance coverage for home owners. H.R. 3121,
as amended by the Manager's Amendment, would provide a needed
addition in expanding the availability and affordability of
property insurance in high hazard areas. Additionally, it
references the mitigation requirements of consensus-based
building codes as a measure to lessen the potential damage
caused by a natural disaster and thus further ensure the
financial stability of the NFIP.
NAHB remains concerned about the overall solvency of the
NFIP, but we also view this program as not simply about flood
insurance premiums and payouts. The NFIP is a comprehensive
tool to guide the development of growing communities while
simultaneously balancing the need for reasonable protection
of life and property. The specific method Congress uses to
achieve this balance could potentially impact housing
affordability as well as the control local communities have
over their growth and development. NAHB believes that H.R.
3121 strikes the proper balance in protecting the NFIP' s
long-term financial stability while ensuring that federally-
backed flood insurance remains available and affordable.
As this new NFIP expansion moves forward, NAHB encourages
Congress to limit the amount of the program's fiscal exposure
to ensure its financial sustainability and to require
premiums for the new multi-peril coverage to be risk-based
and actuarially sound. NAHB commends the work of the House
Financial Services Committee in crafting legislation to
preserve and enhance this important federal program, and we
urge your support for H.R. 3121, as amended by the Manager's
Amendment, when it comes to the House floor this week.
Thank you for your attention to our views.
Sincerely,
Joseph M. Stanton
____
Re: Support for H.R. 3121, the Flood Insurance Reform and
Modernization Act of 2007.
Washington, DC, September 26, 2007
Members of the House of Representatives,
I am writing on behalf of the members of the American
Bankers Association (ABA) to express our support for H.R.
3121, the Flood Insurance Reform and Modernization Act of
2007, scheduled to be considered by the full House later this
week.
Since 1968, nearly 20,000 communities across the United
States and its territories have participated in the National
Flood Insurance Program (NFIP) by adopting and enforcing
floodplain management ordinances to reduce future flood
damage. In exchange, the NFIP makes federally backed flood
insurance available to homeowners, renters, and business
owners in these communities.
Losses from three large hurricanes (Katrina, Rita, and
Wilma) in 2005 have left the NFIP more than $23 billion in
debt to the Treasury. There is no way that the NFIP can
reasonably repay this debt and provide payment for future
losses under the current rate structure. The likelihood of
additional flood events and resulting claims against the
program make reforms vital.
This legislation would require the Federal Emergency
Management Agency (FEMA) to update the flood maps, and it
would provide a phase-in of actuarial rates for commercial
properties and non-primary residences. ABA supports these
efforts as being necessary to sustain the program over the
long term.
H.R. 3121 also would increase the penalties for non-
compliance in placing flood insurance, from $350 per
violation to $2000 per violation. We are pleased that the
legislation would provide a ``safe harbor'' for an
institution which is in non-compliance due to circumstances
beyond its control (such as outdated mapping by FEMA). We
also are pleased that the legislation would provide
institutions with an opportunity to correct non-compliance
before a penalty is assessed and place a reasonable limit for
total penalties per institution/per year.
We urge you to support this important legislation.
Floyd Stoner,
Executive Director,
Congressional Relations &
Public Policy, ABA.
Mr. PAUL. Mr. Chairman, Madam Speaker, I am pleased to lend my
support to two amendments to H.R. 3121, the Flood Insurance Reform and
Modernization Act, that will help those Americans, including many in my
congressional district, at risk of increased flood insurance premiums
because of actions of the Federal Emergency Management Association
(FEMA). FEMA is demanding that many towns and communities spend
thousands of dollars in taxpayer money to certify levies and other
mitigation devices. If the levies are not certified to FEMA's
satisfaction, the residents of those communities will face higher flood
insurance premiums. Many local governments are struggling to raise the
funds to complete the certification in time to meet the FEMA-imposed
certification deadlines.
Several communities in my own district have been impacted by these
requirements. My office is working with these jurisdictions and FEMA to
establish a more reasonable schedule for completing the certifications.
My office is also doing every thing it can to help these local
jurisdictions fund these projects. Unfortunately, even though there is
never a shortage of available funds for overseas programs, there are no
funds available to help countries comply with this new federal demand.
While FEMA has thus far been willing to cooperate with my office and
the local officials in providing extensions of deadlines for
certification, there remains a serious possibility that many Americans
will see their flood insurance premiums skyrocket because their local
governments where unable to comply with these unreasonable federal
demands. In some cases, people may even loose their flood insurance
completely.
The amendments offered by Mr. Cardoza of California will help
alleviate this problem by providing a five-year grace period for
homeowners whose flood insurance coverage is affected by
decertification of a levy. During this five-year, these homeowners
would receive a 50 percent reduction in flood insurance premiums.
Another amendment, offered by Mr. Green provides a five-year phasing in
of any changes for flood insurance premiums for low-income homeowners
impacted by the updating of the flood maps. These amendments will
benefit my constituents, and all Americans, whose flood insurance is
endangered by FEMA's certifying requirements, and I hope my colleagues
will support them. I also hope my colleagues will continue to work to
help those communities impacted by the new mitigation requirements.
Mr. BILIRAKIS. Mr. Chairman, I rise today in support of H.R. 3121.
This bill, the Flood Insurance Reform and Modernization Act, takes
important steps towards bolstering the protection provided to
homeowners in disaster-prone
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areas who face a constant threat of flood and windstorm damage.
Nearly all of my constituents and my fellow Floridians fall into this
category. In Florida, especially, H.R. 3121 will help to ease the
homeowners' insurance crisis that grows worse everyday.
Expanding the federal flood-insurance program to include wind damage
simply makes sense. Those who have their homes flooded are often in the
path of destructive storms that wield powerful winds.
Common sense would dictate that if we are seeking to help protect
homeowners from the liability that comes from destructive natural
disasters like hurricanes, we would consider all of the forces of
nature associated with these storms.
Instead of arguing today why we should include wind damage into this
program, the discussion should rather be about why we have gone for so
long without it.
While I understand the costs associated with this bill are an issue
with some of my colleagues, the cost of doing nothing is much greater.
Many of the homeowners in my District, in the State of Florida, and
in disaster-prone areas throughout the United States spend each day
staring down the barrel of a gun--waiting for the storm to hit that
will put them and their families on a path to financial ruin.
We have a chance to do something about this today.
It is this body's responsibility to act in the interest and welfare
of the American people. Vote YES on H.R. 3121, and vote yes to protect
millions of homeowners and their families.
Mrs. CAPPS. Mr. Chairman, I rise in strong support of the Cardoza-
Ross-Reyes Amendment to H.R. 3121, the Flood Insurance Reform and
Modernization Act of 2007.
This amendment will provide a 5 year grace period for homeowners who
are required to purchase flood insurance as a result of new flood maps
that decertify previously certified levees. During this period,
homeowners would be entitled to a 50 percent reduction in their flood
insurance premium while the levees are being recertified.
Recently, while updating flood maps in my congressional district,
FEMA asked the Army Corps of Engineers to certify that the Santa Maria
Valley levees would protect the City of Santa Maria for the next 100
years. Without the Corps' certification, much of the community will be
placed in a flood zone and many of my constituents will be required to
purchase expensive Federal flood insurance, something that many of them
cannot afford.
The Cardoza-Ross-Reyes Amendment addresses this problem.
Since the Army Corps of Engineers completed the 26-mile Santa Maria
Valley levees in 1963, the City has prospered, becoming the largest in
Santa Barbara County. However, I over the years, natural deterioration
of the levees has undermined their strength, leaving the community
vulnerable to potentially devastating flooding by the Santa Maria
River.
I am working with the City of Santa Maria, Santa Barbara County, and
the area's other elected officials to restore the levees so they can be
certified by the Army Corps of Engineers and, more importantly, so our
community can avoid a catastrophic flooding event.
Mr. Chairman, this amendment is extremely important to my
constituents. It will provide them with much needed relief in a
potentially expensive time.
I urge all of my colleagues to support the Cardoza-Ross-Reyes
Amendment.
Mr. HOLT. Mr. Chairman, I rise today in support of H.R. 3121, the
Flood Insurance Reform and Modernization Act of 2007.
In April of this year, severe rainstorms in New Jersey caused the
Delaware River to overflow for the fourth time in the past 2 years.
Each of these floods caused substantial damage to the homes and
businesses of my constituents in Mercer and Hunterdon counties. After
each incident I toured the affected areas and met with local officials,
residents, and business owners. Two primary concerns were raised by my
constituents in each of these meetings. Residents wanted to know what
efforts are being made to prevent future flooding and they wanted to be
assured access to the financial resources available to them.
The legislation before us today provides needed comprehensive flood
insurance reform. It will address concerns of the residents in my
Central New Jersey district by expanding, improving and reauthorizing
the National Flood Insurance Program, NFIP, through 2013. The NFIP is
federally backed flood insurance available for purchase to homeowners,
renters and business owners in 20,000 communities across the nation. In
order to be eligible, these communities are required to adopt
floodplain management ordinances to reduce future flood damage.
H.R. 3121 will improve the NFIP by increasing and expanding access to
flood insurance policies. For the first time since 1994, the bill
updates maximum insurance coverage limits for residential and
nonresidential properties. It will create business interruption
coverage policies for business owners to better prepare them to meet
payroll and other obligations after a flood occurs. Additionally, this
bill makes optional coverage at actuarial rates for basement
improvements and for the replacement of items damaged by flooding. It
also encourages participation in the NFIP through community outreach
programs.
This legislation will help protect consumers and ensure that
homeowners who should have flood insurance have it. H.R. 3121 increases
the fines on lenders who do not enforce the mandatory flood insurance
policy purchase requirement for those who live in a floodplain and hold
a federally-backed mortgage. It will also clarify the disclosure
requirements for flood insurance availability and require plain
language information on flood insurance policies. It removes the
current $500,000 per apartment building insurance cap and will allow
each unit in the building to be insured for its total value. It
requires landlords to notify their tenants of contents coverage
availability. Further, the bill makes flood insurance effective
immediately upon purchase of a home.
Not only does this bill work to ensure that insurance coverage is
available to those who need it, it will help us to find better ways to
prevent flooding in the future by requiring the Federal Emergency
Management Administration, FEMA, to map the 500-year floodplain. It
also makes the updating and modernization of flood maps an ongoing
process, and increases funding for mapping. According to the Delaware
River Basin Commission which works on issues relating to the Delaware
River, updated floodplain maps will allow us to better predict areas
that are vulnerable to flooding and identify ways to prevent floods
from happening.
I urge my colleagues to support H.R. 3121.
Mr. BACA. Mr. Chairman, I ask unanimous consent to revise and extend
my remarks. I rise to support of H.R. 3121 a bill that will modernize
and reform FEMA's flood insurance program and thank Chairman Frank and
Maxine Waters for their leadership on this legislation.
This bill will provide long overdue and much-needed reforms to the
National Flood Insurance Program, NFIP, and update the program to meet
the needs of the 21st century.
Hurricane Katrina caused property damage from both wind and flooding
in parts of five parishes of Louisiana, three counties of Mississippi,
and two counties of Alabama.
Yet insurance companies in those areas have refused to count claims
where property damage was a result of both wind and water. Instead, for
2 years they engaged in the practice of denying and delaying claims and
took advantage of the desperation of disaster victims who lost
everything.
This bill provides fair and equitable protection of combined wind and
flood losses by allowing property owners to purchase wind and flood
coverage in a single policy. It will help us right that wrong for many
victims.
As we saw during Hurricane Katrina, FEMA's maps are significantly
outdated, often understating flood risk and leaving homeowners without
enough information to protect themselves.
I am pleased that this bill includes provisions to address this
problem by requiring FEMA to conduct a thorough review of the nation's
flood maps, making the updating and modernization of flood maps an
ongoing process, and increasing funding for mapping.
H.R. 3121 addresses a number of weaknesses in the Flood Insurance
Program that were exposed by the unprecedented 2005 hurricane season.
It is a strong bill that will ensure the program's continued viability,
encourage broader participation, and increase financial accountability.
I urge my colleagues to support this important legislation.
Mr. WELDON of Florida. Mr. Chairman, I am very concerned about the
need to enhance access to affordable storm damage insurance,
particularly for those living in communities like the one I represent
in Florida. Indeed I have cosponsored and authored legislation that
would do just this and compliment the steps that have already been
taken by the State of Florida to address this issue.
Asking American taxpayers to assume $19 trillion in potential
liabilities under a program that the Government Accountability Office,
GAO, has already deemed insolvent just does not make good common sense.
If an insolvent private company came before the regulators asking the
regulator to further expand their liabilities, as is being done in H.R.
3121, the regulators would reject the application outright.
Increasing the potential liabilities of the National Flood Insurance
Program, NFIP, as is done in H.R. 3121--without first paying off the
NFIP's $19 billion debt--is unwise. Furthermore, the GAO and the
Congressional Budget Office, CBO, admit that the $2 billion in annual
premiums that NFIP takes in each year makes it virtually impossible for
the NFIP to pay off this debt. No rational person would buy insurance
from a private company who was $18
[[Page H10966]]
billion in debt or has borrowed from the U.S. Treasury (taxpayers) 14
times just to keep from going bankrupt.
Forcing H.R. 3121 to the floor while blocking amendments from
Republican Members of Congress, especially from Members from Florida
and other States who deal with hurricanes on a regular basis, does not
speak highly of the integrity of this program.
As a father, I worry greatly about the burden we are passing onto our
children. With reckless abandon, this Congress is rushing headlong into
the future without any thought of what the ramifications of our
decisions will have on our children and grandchildren. With every
indication that Social Security will be bankrupt by 2042, with the
Medicare program $17 trillion short already, the House passed another
massive spending program with unfunded liabilities estimated at $180
billion this week in the State Children's Health Insurance Program,
SCHIP. In the college student loan bill that we passed earlier this
year, this Congress added tens of billions of dollars in potential
liabilities. Today this House is going to ram through another massive
spending program where, as stated in a study by actuaries Towers
Perrin, payouts to insurers for wind damage in a given storm could be
$100 to $200 billion.
The GAO estimates that the current unfunded liability that our
children face is over $46 trillion, amounting to nearly $375,000 per
full time working American. Adding the additional potential liability
of $19 trillion in this bill would raise that to more than $500,000 per
full-time working American. We need to face reality and begin to think
about our children and the America that we are going to leave them.
As we think about the type of America we are creating for our
children, I am reminded of a warning given years ago:
A democracy cannot exist as a permanent form of government. It can
only exist until the voters discover that they can vote themselves
largess from the public treasury. From that moment on, the majority
always votes for the candidates promising the most benefits from the
public treasury with the result that a democracy always collapses over
loose fiscal policy . . .
That is what this bill before us today does. It votes largess today,
for political gain, while saddling our children with the debt. In good
conscience I cannot do that. We owe it to future generations of
Americans to turn the corner here and put their interests above our
own.
As the Comptroller of the GAO stated in his testimony before the
Senate Homeland Security Committee in 2005, the United States is on an
unsustainable fiscal path and our future standard of living will be
gradually eroded--if not suddenly damaged--if we continue on this path.
Reforming the NFIP is necessary, and this bill includes some
important reforms, such as a phase-in of actuarially determined rates
for some currently subsidized property owners. However, this bill does
nothing to address the concerns raised by the GAO in the 2006 report
that outlines the management and accountability problems after
hurricanes Katrina and Rita.
The easy thing to do would be to simply vote for this bill and put
the burden of paying for it on our children and grandchildren, much
like Washington has done already with dozens of other insolvent federal
programs. But that would not be the right thing to do, and it is for
that reason that I cannot vote to further burden our children with
costs that we are not willing to pay for ourselves today.
The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the amendment in the nature of a substitute
printed in the bill, modified by the amendment printed in part A of
House Report 110-351, is adopted. The bill, as amended, shall be
considered as an original bill for the purpose of further amendment
under the 5-minute rule and shall be considered read.
The text of the bill, as amended, is as follows:
H.R. 3121
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 2007''.
(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. Exception to waiting period for effective date of policies.
Sec. 6. Enforcement.
Sec. 7. Multiperil coverage for flood and windstorm.
Sec. 8. Maximum coverage limits.
Sec. 9. Coverage for additional living expenses, basement improvements,
business interruption, and replacement cost of contents.
Sec. 10. Notification to tenants of availability of contents insurance.
Sec. 11. Increase in annual limitation on premium increases.
Sec. 12. Report regarding borrowing authority.
Sec. 13. FEMA participation in State disaster claims mediation
programs.
Sec. 14. FEMA annual report on insurance program.
Sec. 15. Flood insurance outreach.
Sec. 16. Grants for direct funding of mitigation activities for
individual repetitive claims properties.
Sec. 17. Extension of pilot program for mitigation of severe repetitive
loss properties.
Sec. 18. Flood mitigation assistance program.
Sec. 19. GAO study of methods to increase flood insurance program
participation by low-income families.
Sec. 20. Notice of availability of flood insurance and escrow in RESPA
good faith estimate.
Sec. 21. Reiteration of FEMA responsibilities under 2004 Reform Act.
Sec. 22. Ongoing modernization of flood maps and elevation standards.
Sec. 23. Notification and appeal of map changes; notification of
establishment of flood elevations.
Sec. 24. Clarification of replacement cost provisions, forms, and
policy language.
Sec. 25. Authorization of additional FEMA staff.
Sec. 26. Extension of deadline for filing proof of loss.
Sec. 27. 5-year extension of program.
Sec. 28. Report on inclusion of building codes in floodplain management
criteria.
Sec. 29. Study of economic effects of charging actuarially-based
premium rates for pre-firm structures.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) flooding has been shown to occur in all 50 States, the
District of Columbia, and in all territories and possessions
of the United States;
(2) the national flood insurance program (NFIP) is the only
affordable and reliable source of insurance to protect
against flood losses;
(3) the aggregate amount of the flood insurance claims
resulting from Hurricane Katrina, Hurricane Rita, and other
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;
(4) flood insurance policyholders have a legitimate
expectation that they will receive fair and timely
compensation for losses covered under their policies;
(5) substantial flooding has occurred, and will likely
occur again, outside the areas designated by the Federal
Emergency Management Agency (FEMA) as high-risk flood hazard
areas;
(6) properties located in low- to moderate-risk areas are
eligible to purchase flood insurance policies with premiums
as low as $112 a year;
(7) about 450,000 vacation homes, second homes, and
commercial properties are subsidized and are not paying
actuarially sound rates for flood insurance;
(8) phasing out subsidies currently extended to vacation
homes, second homes, and commercial properties would result
in estimated average annual savings to the taxpayers of the
United States and the national flood insurance program of
$335,000,000;
(9) the maximum coverage limits for flood insurance
policies should be increased to reflect inflation and the
increased cost of housing;
(10) 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
(11) 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 and to pay
debt service on funds borrowed by the NFIP;
(2) to increase incentives for homeowners and communities
to participate in the national flood insurance program and to
improve oversight to ensure better accountability of the NFIP
and FEMA;
(3) to increase awareness of homeowners of flood risks and
improve the quality of information regarding such risks
provided to homeowners; and
(4) to provide for the national flood insurance program to
make available optional multiperil insurance coverage against
loss resulting from physical damage to or loss of real or
personal property arising from any flood or windstorm.
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 national flood insurance program, as of the
date of the enactment of
[[Page H10967]]
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--
(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, which term shall not include any multifamily rental
property that consists of four or more dwelling units.
``(3) Non-primary residences.--Any residential property
that is not the primary residence of any individual,
including the owner of the property or any other individual
who resides in the property as a tenant.''.
(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
``the limitations provided under paragraphs (1) and (2)'' and
inserting ``subsection (e)''; 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 January 1, 2011, except as
provided in paragraph (2) of this subsection.
(2) Transition for properties covered by flood insurance
upon effective date.--
(A) Increase of rates over time.--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, as of the effective
date under paragraph (1) of this subsection, 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).
(B) Annual increase.--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), once during the 12-
month period that begins upon the effective date under
paragraph (1) of this subsection and once every 12 months
thereafter until such increase is accomplished, 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 or to comply with subparagraph (C)). Any
increase in chargeable premium rates for a property pursuant
to this paragraph shall not be considered for purposes of the
limitation under section 1308(e) of such Act.
(C) Properties subject to phase-in and annual increases.--
In the case of any pre-FIRM property (as such term is defined
in section 578(b) of the National Flood Insurance Reform Act
of 1974), the aggregate increase, during any 12-month period,
in the chargeable premium rate for the property that is
attributable to this paragraph or to an increase described in
section 1308(e) of the National Flood Insurance Act of 1968
may not exceed the following percentage:
(i) Nonresidential properties.--In the case of any property
described in such section 1308(c)(2), 20 percent.
(ii) Non-primary residences.--In the case of any property
described in such section 1308(c)(3), 25 percent.
(D) Full actuarial rates.--The provisions of paragraphs (2)
and (3) of such section 1308(c) shall apply to such a
property upon the accomplishment of the increase under this
paragraph and thereafter.
SEC. 5. EXCEPTION TO WAITING PERIOD FOR EFFECTIVE DATE OF
POLICIES.
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), but only
when such initial purchase of coverage is made not later 30
days after such making, increasing, extension, or renewal of
the loan or not later than 30 days after such purchase or
other transfer of the property, as applicable''.
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; 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''; 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. MULTIPERIL COVERAGE FOR FLOOD AND WINDSTORM.
(a) In General.--Section 1304 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4011) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following new
subsection:
``(c) Multiperil Coverage for Damage From Flood or
Windstorm.--
``(1) In general.--Subject to paragraph (8), the national
flood insurance program established pursuant to subsection
(a) shall enable the purchase of optional insurance against
loss resulting from physical damage to or loss of real
property or personal property related thereto located in the
United States arising from any flood or windstorm, subject to
the limitations in this subsection and section 1306(b).
``(2) Community participation requirement.--Multiperil
coverage pursuant to this subsection may not be provided in
any area (or subdivision thereof) unless an appropriate
public body shall have adopted adequate land use and control
measures (with effective enforcement provisions) which the
Director finds are consistent with the comprehensive criteria
for land management and use relating to windstorms establish
pursuant to section 1361(d)(2).
``(3) Prohibition against duplicative coverage.--Multiperil
coverage pursuant to this subsection may not be provided with
respect to any structure (or the personal property related
thereto) for any period during which such structure is
covered, at any time, by flood insurance coverage made
available under this title.
``(4) Nature of coverage.--Multiperil coverage pursuant to
this subsection shall--
``(A) cover losses only from physical damage resulting from
flooding or windstorm; and
``(B) provide for approval and payment of claims under such
coverage upon proof that such loss must have resulted from
either windstorm or flooding, but shall not require for
approval and payment of a claim that the specific cause of
the loss, whether windstorm or flooding, be distinguished or
identified.
``(5) Actuarial rates.--Multiperil coverage pursuant to
this subsection shall be made available for purchase for a
property only at chargeable risk premium rates that, based on
consideration of the risks involved and accepted actuarial
principles, and including operating costs and allowance and
administrative expenses, are required in order to make such
coverage available on an actuarial basis for the type and
class of properties covered.
[[Page H10968]]
``(6) Terms of coverage.--The Director shall, after
consultation with persons and entities referred to in section
1306(a), provide by regulation for the general terms and
conditions of insurability which shall be applicable to
properties eligible for multiperil coverage under this
subsection, subject to the provisions of this subsection,
including--
``(A) the types, classes, and locations of any such
properties which shall be eligible for such coverage, which
shall include residential and nonresidential properties;
``(B) subject to paragraph (7), the nature and limits of
loss or damage in any areas (or subdivisions thereof) which
may be covered by such coverage;
``(C) the classification, limitation, and rejection of any
risks which may be advisable;
``(D) appropriate minimum premiums;
``(E) appropriate loss deductibles; and
``(F) any other terms and conditions relating to insurance
coverage or exclusion that may be necessary to carry out this
subsection.
``(7) Limitations on amount of coverage.--The regulations
issued pursuant to paragraph (6) shall provide that the
aggregate liability under multiperil coverage made available
under this subsection shall not exceed the lesser of the
replacement cost for covered losses or the following amounts,
as applicable:
``(A) Residential structures.--In the case of residential
properties--
``(i) for any single-family dwelling, $500,000;
``(ii) for any structure containing more than one dwelling
unit, $500,000 for each separate dwelling unit in the
structure; and
``(iii) $150,000 per dwelling unit for--
``(I) any contents related to such unit; and
``(II) any necessary increases in living expenses incurred
by the insured when losses from flooding or windstorm make
the residence unfit to live in.
``(B) Nonresidential properties.--In the case of
nonresidential properties (including church properties)--
``(i) $1,000,000 for any single structure; and
``(ii) $750,000 for--
``(I) any contents related to such structure;
``(II) in the case of any nonresidential property that is a
business property, any losses resulting from any partial or
total interruption of the insured's business caused by damage
to, or loss of, such property from flooding or windstorm,
except that 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 or windstorm not occurred.
``(8) Requirement to cease offering coverage if borrowing
to pay claims.--If at any time the Director utilizes the
borrowing authority under section 1309(a) for the purpose of
obtaining amounts to pay claims under multiperil coverage
made available under this subsection, the Director may not,
during the period beginning upon the initial such use of such
borrowing authority and ending upon repayment to the
Secretary of the Treasury of the full amount of all
outstanding notes and obligations issued by the Director for
such purpose, together with all interest owed on such notes
and obligations, enter into any new policy, or renew any
existing policy, for coverage made available under this
subsection.
``(9) Effective date.--This subsection shall take effect
on, and shall apply beginning on, June 30, 2008.''.
(b) Prohibition Against Duplicative Coverage.--The National
Flood Insurance Act of 1968 is amended by inserting after
section 1313 (42 U.S.C. 4020) the following new section:
``PROHIBITION AGAINST DUPLICATIVE COVERAGE
``Sec. 1314. Flood insurance under this title may not be
provided with respect to any structure (or the personal
property related thereto) for any period during which such
structure is covered, at any time, by multiperil insurance
coverage made available pursuant to section 1304(c).''.
(c) Compliance With State and Local Law.--Section 1316 of
the National Flood Insurance Act of 1968 (42 U.S.C. 4023) is
amended--
(1) by inserting ``(a) Flood Protection Measures.--''
before ``No new''; and
(2) by adding at the end the following new subsection:
``(b) Windstorm Protection Measures.--No new multiperil
coverage shall be provided under section 1304(c) for any
property that the Director finds has been declared by a duly
constituted State or local zoning authority, or other
authorized public body to be in violation of State or local
laws, regulations, or ordinances, which are intended to
reduce damage caused by windstorms.''.
(d) Criteria for Land Management and Use.--Section 1361 of
the National Flood Insurance Act of 1968 (42 U.S.C. 4102) is
amended by adding at the end the following new subsection:
``(d) Windstorms.--
``(1) Studies and investigations.--The Director shall carry
out studies and investigations under this section to
determine appropriate measures in windstorm-prone areas as to
land management and use, windstorm zoning, and windstorm
damage prevention, and may enter into contracts, agreements,
and other appropriate arrangements to carry out such
activities. Such studies and investigations shall include
laws, regulations, and ordinance relating to the orderly
development and use of areas subject to damage from windstorm
risks, and zoning building codes, building permits, and
subdivision and other building restrictions for such areas.
``(2) Criteria.--On the basis of the studies and
investigations pursuant to paragraph (1) and such other
information as may be appropriate, the Direct shall establish
comprehensive criteria designed to encourage, where
necessary, the adoption of adequate State and local measures
which, to the maximum extent feasible, will assist in
reducing damage caused by windstorms.
``(3) Coordination with state and local governments.--The
Director shall work closely with and provide any necessary
technical assistance to State, interstate, and local
governmental agencies, to encourage the application of
criteria established under paragraph (2) and the adoption and
enforcement of measures referred to in such paragraph.''.
(e) Definitions.--Section 1370 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4121) is amended--
(1) in paragraph (14), by striking ``and'' at the end;
(2) in paragraph (15) by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(16) the term `windstorm' means any hurricane, tornado,
cyclone, typhoon, or other wind event.''.
SEC. 8. 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. 9. 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 or other
residential property, including multifamily rental 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. 10. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS
INSURANCE.
The National Flood Insurance Act of 1968 is amended by
inserting after section 1308 (42 U.S.C. 4015) the following
new section:
``SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF
CONTENTS INSURANCE.
``(a) In General.--The Director shall, upon entering into a
contract for flood insurance coverage under this title for
any property located in an area having special flood
hazards--
``(1) provide to the insured sufficient copies of the
notice developed pursuant to subsection (b); and
``(2) strongly encourage the insured to provide a copy of
the notice, or otherwise provide notification of the
information under subsection (b) in the manner that the
manager or landlord
[[Page H10969]]
deems most appropriate, to each such tenant and to each new
tenant upon commencement of such a tenancy.
``(b) Notice.--Notice to a tenant of a property in
accordance with this subsection is written notice that
clearly informs a tenant--
``(1) that the property is located in an area having
special flood hazards;
``(2) that flood insurance coverage is available under the
national flood insurance program under this title for
contents of the unit or structure leased by the tenant;
``(3) of the maximum amount of such coverage for contents
available under this title at that time; and
``(4) of where to obtain information regarding how to
obtain such coverage, including a telephone number, mailing
address, and location on the World Wide Web of the Director
where such information is available.''.
SEC. 11. 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''.
SEC. 12. REPORT REGARDING BORROWING AUTHORITY.
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 within 10 years all amounts, that, as of the
expiration of such period, have been borrowed under the
authority of section 1309(a) of the National Flood Insurance
Act of 1968 (42 U.S.C. 4016(a)) and not yet repaid as of such
date.
SEC. 13. FEMA PARTICIPATION IN STATE DISASTER CLAIMS
MEDIATION PROGRAMS.
Chapter I of the National Flood Insurance Act of 1968 (42
U.S.C. 4011 et seq.) is amended by adding at the end the
following new section:
``SEC. 1325. FEMA PARTICIPATION IN STATE DISASTER CLAIMS
MEDIATION PROGRAMS.
``(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.
``(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.--Representatives of the Director who
participate pursuant to this section 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.
``(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.''.
SEC. 14. FEMA ANNUAL REPORT ON 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 ``annual report to congress'';
(2) in subsection (a)--
(A) by striking ``biennially'';
(B) by striking ``the President for submission to''; and
(C) by inserting ``not later than June 30 of each year''
before the period at the end;
(3) in subsection (b), by striking ``biennial'' and
inserting ``annual''; and
(4) by adding at the end the following new subsection:
``(c) Financial Status of Program.--The report under this
section for each year shall include information regarding the
financial status of the national flood insurance program
under this title, including a description of 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. 15. FLOOD INSURANCE OUTREACH.
(a) Grants.--Chapter I of the National Flood Insurance Act
of 1968 (42 U.S.C. 4011 et seq.), as amended by the preceding
provisions of this Act, is further amended by adding at the
end the following new section:
``SEC. 1326. GRANTS FOR OUTREACH TO PROPERTY OWNERS AND
RENTERS.
``(a) In General.--The Director may, to the extent amounts
are made available pursuant to subsection (h), make grants to
local governmental agencies responsible for floodplain
management activities (including such agencies of Indians
tribes, as such term is defined in section 4 of the Native
American Housing Assistance and Self-Determination Act of
1996 (25 U.S.C. 4103)) in communities that participate in the
national flood insurance program under this title, for use by
such agencies to carry out outreach activities to encourage
and facilitate the purchase of flood insurance protection
under this Act by owners and renters of properties in such
communities and to promote educational activities that
increase awareness of flood risk reduction.
``(b) Outreach Activities.--Amounts from a grant under this
section shall be used only for activities designed to--
``(1) identify owners and renters of properties in
communities that participate in the national flood insurance
program, including owners of residential and commercial
properties;
``(2) notify such owners and renters when their properties
become included in, or when they are excluded from, an area
having special flood hazards and the effect of such inclusion
or exclusion on the applicability of the mandatory flood
insurance purchase requirement under section 102 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a) to such
properties;
``(3) educate such owners and renters regarding the flood
risk and reduction of this risk in their community, including
the continued flood risks to areas that are no longer subject
to the flood insurance mandatory purchase requirement;
``(4) educate such owners and renters regarding the
benefits and costs of maintaining or acquiring flood
insurance, including, where applicable, lower-cost preferred
risk policies under this title for such properties and the
contents of such properties; and
``(5) encouraging such owners and renters to maintain or
acquire such coverage.
``(c) Cost Sharing Requirement.--
``(1) In general.--In any fiscal year, the Director may not
provide a grant under this section to a local governmental
agency in an amount exceeding 3 times the amount that the
agency certifies, as the Director shall require, that the
agency will contribute from non-Federal funds to be used with
grant amounts only for carrying out activities described in
subsection (b).
``(2) Non-federal funds.--For purposes of this subsection,
the term `non-Federal funds' includes State or local
government agency amounts, in-kind contributions, any salary
paid to staff to carry out the eligible activities of the
grant recipient, the value of the time and services
contributed by volunteers to carry out such services (at a
rate determined by the Director), and the value of any
donated material or building and the value of any lease on a
building.
``(d) Administrative Cost Limitation.--Notwithstanding
subsection (b), the Director may use not more than 5 percent
of amounts made available under subsection (g) to cover
salaries, expenses, and other administrative costs incurred
by the Director in making grants and provide assistance under
this section.
[[Page H10970]]
``(e) Application and Selection.--
``(1) In general.--The Director shall provide for local
governmental agencies described in subsection (a) to submit
applications for grants under this section and for
competitive selection, based on criteria established by the
Director, of agencies submitting such applications to receive
such grants.
``(2) Selection considerations.--In selecting applications
of local government agencies to receive grants under
paragraph (1), the Director shall consider--
``(A) the existence of a cooperative technical partner
agreement between the local governmental agency and the
Federal Emergency Management Agency;
``(B) the history of flood losses in the relevant area that
have occurred to properties, both inside and outside the
special flood hazards zones, which are not covered by flood
insurance coverage;
``(C) the estimated percentage of high-risk properties
located in the relevant area that are not covered by flood
insurance;
``(D) demonstrated success of the local governmental agency
in generating voluntary purchase of flood insurance; and
``(E) demonstrated technical capacity of the local
governmental agency for outreach to individual property
owners.
``(f) Direct Outreach by FEMA.--In each fiscal year that
amounts for grants are made available pursuant to subsection
(h), the Director may use not more than 50 percent of such
amounts to carry out, and to enter into contracts with other
entities to carry out, activities described in subsection (b)
in areas that the Director determines have the most immediate
need for such activities.
``(g) Reporting.--Each local government agency that
receives a grant under this section, and each entity that
receives amounts pursuant to subsection (f), shall submit a
report to the Director, not later than 12 months after such
amounts are first received, which shall include such
information as the Director considers appropriate to describe
the activities conducted using such amounts and the effect of
such activities on the retention or acquisition of flood
insurance coverage.
``(h) Authorization of Appropriations.--There is authorized
to be appropriated for grants under this section $50,000,000
for each of fiscal years 2008 through 2012.''.
(b) Report on Current Efforts.--Not later than the
expiration of the 60-day 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
identifying and describing the marketing and outreach efforts
then currently being undertaken to educate consumers
regarding the benefits of obtaining coverage under the
national flood insurance program.
SEC. 16. GRANTS FOR DIRECT FUNDING OF MITIGATION ACTIVITIES
FOR INDIVIDUAL REPETITIVE CLAIMS PROPERTIES.
(a) Direct Grants to Owners.--Section 1323 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4030) is amended--
(1) in the section heading, by inserting ``DIRECT'' before
``GRANTS''; and
(2) in the matter in subsection (a) that precedes paragraph
(1)--
(A) by inserting ``, to owners of such properties,'' before
``for mitigation actions''; and
(B) by striking ``1'' and inserting ``two''.
(b) Availability of Funds.--Paragraph (9) of section
1310(a) of the National Flood Insurance Act of 1968 (42
U.S.C. 4017(a)) is amended by inserting ``which shall remain
available until expended,'' after ``any fiscal year,''.
SEC. 17. 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--
(1) in subsection (k)(1), by striking ``2005, 2006, 2007,
2008, and 2009'' and inserting ``2008, 2009, 2010, 2011, and
2012''; and
(2) by striking subsection (l).
SEC. 18. FLOOD MITIGATION ASSISTANCE PROGRAM.
(a) Eligibility of Property Demolition and Rebuilding.--
Section 1366(e)(5)(B) of the National Flood Insurance Act of
1968 (42 U.S.C. 4104c(e)(5)(B)) is amended by striking ``or
floodproofing'' and inserting ``floodproofing, or demolition
and rebuilding''.
(b) Elimination of Limitations on Aggregate Amount of
Assistance.--Section 1366 of the National Flood Insurance Act
of 1968 is amended by striking subsection (f).
(c) Source of Funds.--Subsection (a) of section 1367 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4104d(a)) is
amended by adding at the end the following new sentence:
``Notwithstanding any other provision of this title, amounts
made available pursuant to this subsection shall not be
subject to offsetting collections through premium rates for
flood insurance coverage under this title.''.
(d) Technical Amendments.--Section 1366 of the National
Flood Insurance Act of 1968 is amended--
(1) by striking ``subsection (g)'' each place such term
appears in subsections (h) and (i)(2) and inserting
``subsection (f)'';
(2) by redesignating subsections (g) through (k) as
subsections (f) through (j), respectively; and
(3) by redesignating subsection (m) as subsection (k).
SEC. 19. GAO STUDY OF METHODS TO INCREASE FLOOD INSURANCE
PROGRAM PARTICIPATION BY LOW-INCOME FAMILIES.
(a) In General.--The Comptroller General of the United
States shall conduct a study to identify and analyze
potential methods, practices, and incentives that would
increase the extent to which low-income families (as such
term is defined in section 3(b) of the United States Housing
Act of 1937 (42 U.S.C. 1437a(b))) that own residential
properties located within areas having special flood hazards
purchase flood insurance coverage for such properties under
the national flood insurance program. In conducting the
study, the Comptroller General shall analyze the
effectiveness and costs of the various methods, practices,
and incentives identified, including their effects on the
national flood insurance program.
(b) Report.--The Comptroller General shall submit to the
Congress a report setting forth the conclusions of the study
under this section not later than 12 months after the date of
the enactment of this Act.
SEC. 20. 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 and information: (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 the national flood insurance program; (2) a
telephone number and a location on the World Wide Web by
which a home owner or purchaser can contact the national
flood insurance program; and (3) 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. 21. 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. 22. ONGOING MODERNIZATION OF FLOOD MAPS AND ELEVATION
STANDARDS.
(a) Ongoing 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) Ongoing 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 22(b) of the Flood
Insurance Reform and Modernization Act of 2007, shall
establish an ongoing 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
[[Page H10971]]
``(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;
``(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; and
``(C) ensure that emerging weather forecasting technology
is used, where practicable, in flood map evaluations and the
identification of potential risk areas.
``(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.
``(5) Preventing delay of 100-year maps.--In carrying out
this section and this subsection, the Director shall take
such actions as may be necessary to ensure that updating and
publication of national flood insurance program rate maps to
include a depiction of the 500-year floodplain does not in
any manner delay the completion or publication of the program
rate maps for the 100-year floodplain.
``(6) 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.
``(7) 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).
``(8) Authorization of appropriations.--There is authorized
to be appropriated to the Director to carry out this
subsection $400,000,000 for each of fiscal years 2008 through
2013.''.
(b) Reestablishment of Technical Mapping Advisory Council
for Ongoing Mapping Program.--
(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) in the matter preceding subparagraph (A), by striking
``10'' and inserting ``14'';
(B) by redesignating subparagraphs (E), (F), (G), (H), (I),
and (J) as subparagraphs (F), (G), (H), (K), (N), and (O),
respectively;
(C) by inserting after subparagraph (D) the following new
subparagraph:
``(E) a representative of the Corps of Engineers of the
United States Army;'';
(D) by inserting after subparagraph (H) (as so redesignated
by subparagraph (B) 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
(E) by inserting after subparagraph (K) (as so redesignated
by subparagraph (B) of this paragraph) the following new
subparagraphs:
``(L) a representative of flood insurance servicing
companies;
``(M) a real estate professional;''.
(3) Terms of members and appointment.--Section 576(b) of
the National Flood Insurance Reform Act of 1994 (42 U.S.C.
4101 note) is amended by adding at the end the following new
paragraph:
``(3) Terms of members.--
``(A) In general.--Each member of the Council pursuant to
any of subparagraphs (B) through (N) of paragraph (1) shall
be appointed for a term of 5 years, except as provided in
subparagraphs (B) and (C).
``(B) Terms of initial appointees.--As designated by the
Director (or the designee of the Director) at the time of
appointment, of the members of the Council first appointed
pursuant to subparagraph (D)--
``(i) 4 shall be appointed for a term of 1 year;
``(ii) 4 shall be appointed for a term of 3 years; and
``(iii) 5 shall be appointed for a term of 5 years.
``(C) Vacancies.--Any member of the Council appointed to
fill a vacancy occurring before the expiration of the term
for which the member's predecessor was appointed shall be
appointed only for the remainder of that term. A member may
serve after the expiration of that member's term until a
successor has taken office. A vacancy in the Council shall be
filled in the manner in which the original appointment was
made.
``(D) Initial appointment.--The Director, or the Director's
designee, shall take action as soon as possible after the
date of the enactment of the Flood Insurance Reform and
Modernization Act of 2007 to appoint the members of the
Council pursuant to 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) Elimination of termination.--Section 576 of the
National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101
note) is amended by striking subsection (k) and inserting the
following new subsection:
``(k) Continued Existence.--Section 14(a)(2)(B) of the
Federal Advisory Committee Act (5 U.S.C. App.; relating to
termination of advisory committees) shall not apply to the
Council.''.
(c) Post-Disaster Flood Elevation Determinations.--Section
1360 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.''.
(d) Updating Upon Request of Community.--Paragraph (2) of
section 1360(f) of the National Flood Insurance Act of 1968
(42 U.S.C. 4101(f)(2)) is amended by inserting before the
period at the end the following: ``, except that such a
revision or update shall be made at no cost to the unit of
government making the request if the request is being made to
reflect repairs and upgrades to dams, levees, or other flood
control projects under the jurisdiction and responsibility of
the Federal Government''.
SEC. 23. 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; and
``(3) by publishing in a prominent local newspaper the
elevations, a description of the appeals process for flood
determinations, and the mailing address and telephone number
of a person the owner may contact for more information or to
initiate an appeal.''.
SEC. 24. 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) in plain language using easy to understand terms and
concepts, 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) in plain language using easy to understand terms and
concepts, 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;
(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; and
(4) require the use, in connection with flood insurance
policies, of the supplemental forms developed pursuant to
section 202 of the Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act of 2004 (Public Law 108-264; 118 Stat.
725).
[[Page H10972]]
SEC. 25. AUTHORIZATION OF ADDITIONAL FEMA STAFF.
Notwithstanding any other provision of law, the Director of
the Federal Emergency Management Agency may employ such
additional staff 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.
SEC. 26. EXTENSION OF DEADLINE FOR FILING PROOF OF LOSS.
(a) In General.--Section 1312 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4019) is amended--
(1) by inserting ``(a) Payment.--'' before ``The
Director''; and
(2) by adding at the end the following new subsection:
``(b) Filing Deadline for Proof of Loss.--
``(1) In general.--In establishing any requirements
regarding notification, proof, or approval of claims for
damage to or loss of property which is covered by flood
insurance made available under this title, the Director may
not require an insured to notify the Director of such damage
or loss, submit a claim for such damage or loss, or certify
to or submit proof of such damage or loss, before the
expiration of the 180-day period that begins on the date that
such damage or loss occurred.
``(2) Exceptions.--Notwithstanding any deadline established
in accordance with paragraph (1), the Director may not deny a
claim for damage or loss described in such paragraph solely
for failure to meet such deadline if the insured demonstrates
any good cause for such failure.''.
(b) Applicability.--Subsection (b) of section 1312 of the
National Flood Insurance Act of 1968, as added by subsection
(a)(2) of this section, shall apply with respect to any claim
under which the damage to or loss of property occurred on or
after the date of the enactment of this Act.
SEC. 27. 5-YEAR EXTENSION OF PROGRAM.
Section 1319 of the National Flood Insurance Act of 1968
(42 U.S.C. 4026) is amended by striking ``September 30,
2008'' and inserting ``September 30, 2013''.
SEC. 28. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN
MANAGEMENT CRITERIA.
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
conduct a study and submit a report to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing and Urban Affairs of the Senate
regarding the impact, effectiveness, and feasibility of
amending section 1361 of the National Flood Insurance Act of
1968 (42 U.S.C. 4102) to include widely used and nationally
recognized building codes as part of the floodplain
management criteria developed under such section, and shall
determine--
(1) the regulatory, financial, and economic impacts of such
a building code requirement on homeowners, States and local
communities, local land use policies, and the Federal
Emergency Management Agency;
(2) the resources required of State and local communities
to administer and enforce such a building code requirement;
(3) the effectiveness of such a building code requirement
in reducing flood-related damage to buildings and contents;
(4) the impact of such a building code requirement on the
actuarial soundness of the National Flood Insurance Program;
(5) the effectiveness of nationally recognized codes in
allowing innovative materials and systems for flood-resistant
construction; and
(6) the feasibility and effectiveness of providing an
incentive in lower premium rates for flood insurance coverage
under such Act for structures meeting whichever of such
widely used and nationally recognized building code or any
applicable local building code provides greater protection
from flood damage.
SEC. 29. STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY-
BASED PREMIUM RATES FOR PRE-FIRM STRUCTURES.
(a) Study.--The Director of the Federal Emergency
Management Agency (in this section referred to as the
``Director'') shall conduct a study of the economic effects
that would result from increasing premium rates for flood
insurance coverage made available under the national flood
insurance program for non-primary residences and non-
residential pre-FIRM structures (as such term is defined in
section 578(b) of the National Flood Insurance Reform Act of
1994 (42 U.S.C. 4014 note) to the full actuarial risk based
premium rate determined under section 1307(a)(1) of the
National Flood Insurance Act of 1968 for the area in which
the property is located. In conducting the study, the
Director shall--
(1) determine each area that would be subject to such
increased premium rates; and
(2) for each such area, determine--
(A) the amount by which premium rates would be increased;
(B) the number and types of properties affected and the
number and types of properties covered by flood insurance
under this title likely to cancel such insurance if the rate
increases were made;
(C) the effects that the increased premium rates would have
on land values and property taxes; and
(D) any other effects that the increased premium rates
would have on the economy, homeowners, and renters of non-
primary residences.
(b) Report.--The Director shall submit a report to the
Congress describing and explaining the findings of the study
conducted under this section. The report shall be submitted
not later than 12 months after the date of the enactment of
this Act.
The CHAIRMAN. No further amendment to the bill, as amended, is in
order except those printed in part B of the report. Each further
amendment may be offered only in the order printed in the report, by a
Member designated in the report, shall be read 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. Frank of Massachusetts
The CHAIRMAN. It is now in order to consider amendment No. 1 printed
in part B of House Report 110-351.
Mr. FRANK of Massachusetts. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 1 offered by Mr. Frank of Massachusetts:
In the matter proposed to be inserted by section 7(a)(2) of
the bill, amend paragraph (2) of subsection (c) to read as
follows:
``(2) Community participation requirement.--Multiperil
coverage pursuant to this subsection may not be provided in
any area (or subdivision thereof) unless an appropriate
public body shall have adopted adequate mitigation measures
(with effective enforcement provisions) which the Director
finds are consistent with the criteria for construction
described in the International Code Council building codes
relating to wind mitigation.''.
In the matter proposed to be inserted by section 7(d) of
the bill, in paragraph (1) of subsection (d) strike
``windstorm-prone areas as to land management and use,
windstorm zoning, and windstorm damage prevention'' and
inserting ``wind events as to wind hazard prevention''.
In the matter proposed to be inserted by the amendment made
by section 22(a) of the bill, in subsection (k), redesignate
paragraphs (4) through (8) as paragraphs (5) through (9),
respectively.
In the matter proposed to be inserted by the amendment made
by section 22(a) of the bill, after subsection (k)(3) insert
the following new paragraph:
``(4) Mapping elements.--Each map updated under this
section shall meet the following requirements:
``(A) Ground elevation data.--The maps shall assess the
accuracy of current ground elevation data used for hydrologic
and hydraulic modeling of flooding sources and mapping of the
flood hazard and wherever necessary acquire new ground
elevation data utilizing the most up-to-date geospatial
technologies in accordance with the existing guidelines and
specifications of the Federal Emergency Management Agency.
``(B) Data on a watershed basis.--The maps shall develop
national flood insurance program flood data on a watershed
basis--
``(i) to provide the most technically effective and
efficient studies and hydrologic and hydraulic modeling; and
``(ii) to eliminate, to the maximum extent possible,
discrepancies in base flood elevations between adjacent
political subdivisions.
``(C) Other data.--The maps shall include any other
relevant information as may be recommended by the Technical
Mapping Advisory Council reestablished by section 22(b) of
the Flood Insurance Reform and Modernization Act of 2007.''.
In section 22(b)(2)(A), strike ``14'' and insert ``15''.
In section 22(b)(2)(B), strike ``(N), and (O)'' and insert
``(O), and (P)''.
In the matter proposed to be inserted by the amendment made
by section 22(b)(2)(E) of the bill, after subparagraph (M)
insert the following new subparagraph:
``(N) a member of a professional mapping association or
organization;''.
At the end of the bill add the following new sections:
SEC. 30. PROHIBITION ON ENFORCEMENT OF PENALTY ASSESSED ON
CONDOMINIUM ASSOCIATIONS.
Notwithstanding any other provision of law, the Director of
the Federal Emergency Management Agency shall not apply or
enforce any penalty relating to the national flood insurance
program assessed, during 2005 or thereafter, on condominium
associations that are underinsured under such program.
SEC. 31. REPORT OF ADMINISTRATIVE EXPENSES OF WRITE-YOUR-OWN
INSURERS; INDEPENDENT AUDITS.
Section 1348 of the National Flood Insurance Act of 1968
(42 U.S.C. 4084) is amended by adding at the end the
following new subsections:
``(c) Any insurance company or other private organization
executing any contract, agreement, or other appropriate
arrangement with the Director under this part shall--
``(1) annually submit to the Director a record of all
administrative and operating costs of the program undertaken;
and
``(2) biennially submit to the Director an independent
audit of the program undertaken that is conducted by a
certified public accountant to ensure that payments made are
proper and in accordance with this Act.
``(d) The Director shall review the records and audits
submitted under paragraphs (1)
[[Page H10973]]
and (2) of subsection (c) to determine if such payments are
reasonable and if the system by which the Director makes
payments to an insurance company or other private
organization under this part should be revised.
``SEC. 32. PLAN TO VERIFY MAINTENANCE OF FLOOD INSURANCE ON
MISSISSIPPI AND LOUISIANA PROPERTIES RECEIVING
EMERGENCY SUPPLEMENTAL FUNDS.
``The Director of the Federal Emergency Management Agency
shall develop and implement a plan to verify that persons
receiving funds under the Homeowner Grant Assistance Program
of the State of Mississippi or the Road Home Program of the
State of Louisiana from amounts allocated to the State of
Mississippi or the State of Louisiana, respectively, from the
Community development fund under the Emergency Supplemental
Appropriations Act to Address Hurricanes in the Gulf of
Mexico and Pandemic Influenza, 2006 (Public Law 109-148) are
maintaining flood insurance on the property for which such
persons receive such funds as required by each such
Program.''.
The CHAIRMAN. Pursuant to House Resolution 683, the gentleman from
Massachusetts (Mr. Frank) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Massachusetts.
{time} 1400
Mr. FRANK of Massachusetts. Mr. Chairman, this is an amendment
unanimously supported, I believe, certainly strongly supported by both
majority and minority committee leadership and staffs. It incorporates
a number of other amendments, and I am pleased to be able to say that
at least here we were able to get some bipartisanship, because one of
the amendments of the gentleman from Ohio (Mr. LaTourette), it improves
the program in terms of mapping and other technical ways, and I believe
that there is general agreement that this improves it.
I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I rise to claim time in opposition,
although I am not opposed to the amendment.
The CHAIRMAN. Without objection, the gentlewoman from West Virginia
is recognized for 5 minutes.
There was no objection.
Mrs. CAPITO. Mr. Chairman, I would like to thank the chairman for
working with the manager's amendment with Members of our side. I
appreciate his efforts as always.
I yield 2 minutes in particular to
the gentleman from Ohio (Mr. LaTourette).
Mr. LaTOURETTE. Mr. Chairman, I thank the gentlelady for yielding,
and I rise today to support the manager's amendment and to offer my
thanks to the chairman of the full committee, Chairman Frank.
About a year ago in Ohio we had a 500-year event, and a lot of places
that had never flooded, flooded. And what we found was that the current
structure of the National Flood Insurance Program indicates that if the
primary insurance, if there is a finding that it is underinsured, there
is a penalty that attaches to it. It further goes on to say that if the
penalty attaches and you don't pay out the limits on the first policy,
you can't reach the secondary insurance.
We had people in our hometown that basically did what they were
supposed to do; they bought the secondary insurance, they were fully
insured. The condominium owners association, however, was underinsured,
and therefore we didn't reach the policies.
The chairman joined with me in August in writing to FEMA to see if we
could administratively reach some resolution. Sadly, we were unable to
do that, and my thanks to Chairman Frank for including in his manager's
amendment today something that not only reaches my constituents,
because apparently that would be some kind of illegal earmark, but it
reaches all people in the country that find themselves so afflicted. So
my thanks to the chairman.
Mr. FRANK of Massachusetts. Mr. Chairman, the gentleman is welcome. I
reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from
Texas (Mr. Culberson).
Mr. CULBERSON. Mr. Chairman, of all the irresponsible, bad ideas
cooked up by the liberal leadership of the House, this has to be the
blue ribbon boondoggle champion of bad ideas. This exposes the U.S.
Treasury and the American taxpayers to a potential liability of up to
$19 trillion of property from Maine to the Gulf Coast States. The flood
insurance program is already, as we have heard, about, I believe, $20
billion in debt already, the flood insurance is already underfunded,
and yet we are going through this legislation, if it passes, expose the
American taxpayers to untold billion dollars worth of liability every
year. And this is a public-private partnership. As my friend Randy
Neugebauer of Texas pointed out, the insurance companies on the private
sector's part are going to collect the premiums and the American
taxpayers are going to pay the bill.
This is, I believe, one of the most dangerous and fiscally
irresponsible pieces of legislation ever brought to the floor of the
House probably in history, and certainly sets a blue ribbon record for
the liberal leadership of this House.
We need to all remember as guardians of the Treasury that the
American taxpayers are already facing individually, according to the
Government Accountability Office, every living American would have to
buy $170,000 worth of Treasury bills today just to pay off the existing
liabilities of the Federal Government, both direct and indirect. And it
is unconscionable, it is absolutely intolerable that this Congress,
this liberal leadership of this House would attempt to pass on to my
daughter and our kids a potential liability reaching $19 trillion. It
is unacceptable, it is outrageous, and I hope this House will soundly
defeat this utterly irresponsible piece of legislation.
Mr. FRANK of Massachusetts. Mr. Chairman, it might be superfluous,
but I would want to point out that the speech we just heard has no
bearing whatsoever to the amendment that is pending.
Mr. CULBERSON. It is on the bill.
Mr. FRANK of Massachusetts. The gentleman, I hope, would wait to be
recognized. But in case anybody is trying to follow the debate and the
rules, I would want to point out that we are debating a manager's
amendment. And while the gentleman didn't know, what he was so
expansively saying is, of course, unrelated to this particular
amendment.
Mrs. CAPITO. I yield my remaining time to the gentleman from Georgia
(Mr. Kingston).
Mr. KINGSTON. I thank the gentlewoman for yielding and I thank my
friend from Massachusetts for generously yielding time, and I want to
speak about the manager's amendment. Now that I have done that, I want
to talk about Public Law 15.
Public Law 15, or the McCarran-Ferguson Act, says that the States
will be in charge of insurance, not the Federal Government.
Therefore, when a company comes into a State or tries to leave a
State, the State insurance commissioner actually has the opportunity to
twist an arm and say, if you are going to come into my State, you have
to write a certain amount of coastal property, a certain mix of teenage
drivers, a certain mix of elderly people for health care or whatever.
State insurance commissioners by Public Law 15, the McCarran-Ferguson
Act, are very powerful in the insurance business.
So I want to say that is where my philosophy comes from is that I do
strongly believe that the States can twist arms and get a lot more
done.
But I just want to say that Federal flood fund insurance companies
did not start until 1968; yet, we have historic properties all over the
coast of America because the private sector was there. And, again,
having sold flood insurance through a private insurance company, I know
that it is possible. And I don't know if the gentleman needs some time.
I will be happy to yield, because it is your amendment.
Mr. FRANK of Massachusetts. First of all, I agree. I thought he was
talking about the Federal Government when he said ``we.'' And he is
right, States have some power; the Federal Government does not. But
even there, I believe he overstates the States' powers. And in fact,
particularly in the Graham-Leach-Bliley bill, we gave some insurance
companies the power to leave States, which we shouldn't have done. But
States can be required, if they are going to do something, to do other
things. But they can leave altogether, and the State insurance
commissioners generally don't have the power to do that.
Mr. KINGSTON. Reclaiming the time. I do believe that you have set a
great message, and Mr. Taylor is a tireless advocate for coastal
property. But at the same time, I do think that the McCarran-Ferguson
Act gives the State insurance commissioners a pretty big hammer here
which they ought to be using on the head of certain insurance company
executives.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield back the balance of
my time.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Massachusetts (Mr. Frank).
The amendment was agreed to.
Amendment No. 2 Offered by Mr. Cardoza
The CHAIRMAN. It is now in order to consider amendment No. 2 printed
in part B of House Report 110-351.
[[Page H10974]]
Mr. CARDOZA. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 2 offered by Mr. Cardoza:
At the end of section 22 of the bill, add the following new
subsection:
(e) 5-Year Discount of Flood Insurance Rates for Formerly
Protected Areas.--Section 1308 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4015), as amended by the
preceding provisions of this Act, is further amended--
(1) in subsection (c), by inserting ``and subsection (g)''
before the first comma; and
(2) by adding at the end the following new subsection:
``(g) 5-Year Discount of Flood Insurance Rates for Formerly
Protected Areas.--Notwithstanding any other provision of law
relating to chargeable risk premium rates for flood insurance
coverage under this title, in the case of any area that
previously was not designated as an area having special flood
hazards because the area was protected by a flood protection
system and that, pursuant to remapping under section 1360(k),
becomes designated as such an area as a result of the
decertification of such flood protection system, during the
5-year period that begins upon the initial such designation
of the area, the chargeable premium rate for flood insurance
under this title with respect to any property that is located
within such area shall be equal to 50 percent of the
chargeable risk premium rate otherwise applicable under this
title to the property.''.
The CHAIRMAN. Pursuant to House Resolution 683, the gentleman from
California (Mr. Cardoza) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from California.
Mr. CARDOZA. Mr. Chairman, I yield myself 3\1/2\ minutes.
I rise today in strong support of this amendment to H.R. 3121, the
Flood Insurance Reform and Modernization Act of 2007. I thank the
chairman of the committee, Mr. Frank, for his leadership on this issue.
I would also be remiss if I did not mention that Congressman Hinojosa
was very instrumental in helping me bring this amendment to the floor
today, and his name was left off the list of coauthors although he was
certainly instrumental, as well as Mrs. Lois Capps, our colleague from
California who has a problem in the Santa Maria area and is also a
supporter of this bill.
I fully understand, Mr. Chairman, and appreciate the need to reform
and modernize the National Flood Insurance Program. As we all know, the
recent devastating hurricanes, Katrina, Rita and Wilma, not only ruined
thousands of people's lives, but displaced tens of thousands of people
and laid waste to millions of homes, causing billions of dollars in
property damage, and they were exposed to the fragility of the National
Flood Insurance Program. Mr. Taylor will speak later to that problem.
At the same time, FEMA began a remapping of flood plains across the
country. And while I agree that people should know whether they live in
a protected area or not, FEMA's process has been terribly flawed from
the beginning, and my constituents stand to suffer as a result.
As we make the necessary reforms to the system, we must be cognizant
of the impact this legislation could have on unsuspecting residents.
FEMA's current plans to update the floodplain maps will force many
people in my district and across the country to have to purchase flood
insurance who are currently not required to purchase it. To add insult
to injury, many of these people are low-income earners, and have no
idea that this expense is looming.
I commend the bill for recognizing this problem and taking some steps
to address it; however, we must do more to help low-income people who
will be affected. Our amendment addresses these concerns and blunts the
impact the remapping process will have on low-income residents.
This amendment says that people forced to purchase flood insurance as
a result of a new map who live in an area that was previously certified
and now have been decertified under the new FEMA process will have a
grace period of 5 years in which they will be entitled to a 50 percent
reduction in their flood insurance premium. The goal is that, during
those 5 years, necessary upgrades will be made to the levees to bring
them into compliance, thereby eliminating the mandatory requirement to
purchase flood insurance.
This amendment will have a huge impact on my district and many other
parts of the country as well. It is simply unfair to, while requiring
communities to upgrade their levees, also require them to purchase
flood insurance at the same time. Many of these people are still paying
on the levees that had initially protected them in the first place.
By giving those who most need assistance a grace period, we are
acknowledging the plight of these communities and taking action. This
is the right thing to do. Moreover, given the volatile housing markets,
we need to do everything possible to ensure people on the precipice
remain in their homes. In my district, we have nearly 20,000 people who
are currently facing foreclosure due to the subprime loan problem.
Saddling these same people with more expenses when they can least
afford it is counterproductive and contrary to the shared goal of
promoting ownership. Let's help these people bring some balance to the
flood insurance program and FEMA's remapping process. I urge my
colleagues to support this amendment.
I reserve the balance of my time.
Ms. CAPITO. Mr. Chairman, I rise to claim time in opposition,
although I am not opposed to the amendment.
The CHAIRMAN. Without objection, the gentlewoman from West Virginia
is recognized for 5 minutes.
There was no objection.
Ms. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from
Texas (Mr. Culberson).
Mr. CULBERSON. Mr. Chairman, I wanted to ask the author of the
amendment and the author of the legislation, if they are here, if they
could identify, please, for the Record, other than Social Security and
Medicare, can you all identify any piece of legislation that has ever
exposed the American taxpayer to greater potential liability than this
bill before the House today? Can you all identify a bigger boondoggle
than this one? And you can have some of my time. I will yield. Can
anyone on that side identify a bigger boondoggle than this that will
expose the taxpayers to greater liability?
Mr. CARDOZA. I would say there are several Republican boondoggles
that we have seen in the last few years.
Mr. CULBERSON. Please name one.
Mr. CARDOZA. The drug program. The unheard of tax cuts that were not
paid for. There have been several things that have exposed the American
Treasury to boondoggles, and they have been authored by the gentleman's
party.
Mr. CULBERSON. Tax cuts pay for themselves by growth in the economy.
Mr. CARDOZA. That is not what the Congressional Budget Office says.
Mr. CULBERSON. Reclaiming my time. When people have more of their own
money to spend, the economy grows because they invest and we are
rewarding people for hard work and productive behavior.
Other than Social Security and Medicare, which are noble, good
programs that have helped this Nation, other than those two, has there
ever been a piece of legislation exposing the American taxpayer to
greater potential liability than this boondoggle that you are putting
before the House today? And I gladly yield some of my time, Mr. Taylor.
Can you identify a bigger boondoggle than this one?
Mr. TAYLOR. Sure. No more than I challenge the question as to whether
or not this is a boondoggle. We have recognized a problem; we are
addressing it in a means that pays for itself.
On the other hand, when the Republican majority controlled this
House, they brought a prescription drug benefit to the floor.
Mr. CULBERSON. Which I voted against.
Mr. TAYLOR. Which increased the liability of the taxpayers for over
$1 trillion and had no funding mechanism. And then they held the vote
open for 3 hours to twist arms to pass it. So, sir, that is it.
Mr. CULBERSON. Reclaiming my time. The Republican leadership might
have bent the rules to give American seniors a drug benefit; but we
didn't break the rules and steal a vote, as you all did, to give
illegal aliens access to Federal benefits. And that shows the
difference in priorities, I would point out.
{time} 1415
Mr. CARDOZA. Mr. Chairman, I recognize my colleague from Texas (Mr.
Reyes) for 1 minute.
[[Page H10975]]
Mr. REYES. Thank you, Congressman Cardoza and Congressman Ross, for
your valuable assistance in crafting this important amendment.
I also want to thank our friend, as Congressman Cardoza mentioned,
Ruben Hinojosa, who could not join us here this afternoon.
Our amendment stands both for fairness and the integrity of the
National Flood Insurance Program.
In El Paso, which is my district, FEMA is currently in the process of
issuing new floodplain maps. Initially, the community didn't think much
of this exercise because, simply, many didn't know that they had ever
lived in a floodplain and didn't expect any problems with this issue.
However, when FEMA asked the Federal agency in charge of flood
control, the International Boundary and Water Commission, about the
condition of our levees, the answer came back that they were
unsatisfactory. The levees were missing a few feet of free board, which
is supplemental height and therefore could not be certified, which
meant that now members of our community in El Paso were now subject to
flood insurance.
That is why this amendment is necessary. That's why we're trying to
correct an issue and a problem that everyday people need to wrestle
with.
Mrs. CAPITO. Mr. Chairman, I would like to yield my remaining time to
the gentleman from Georgia (Mr. Kingston).
Mr. KINGSTON. Mr. Chairman, maybe somebody in the majority party
could clarify something for me. Does this apply to the wind coverage?
Does the gentleman, author of the legislation, know? Does this apply to
the wind storm coverage? Does this amendment apply to wind storm?
Mr. CARDOZA. This amendment applies to levees.
Mr. KINGSTON. Does it apply to the wind storm policy? And here's why
I'm asking: as I understand it, we're talking about a multi-peril
policy that would have flood and wind. And a mortgagee, or a bank, the
lender is going to require you to carry flood insurance. Therefore, you
go out in the market, well, it won't be the market. You go to Uncle
Sugar, I mean Uncle Sam, and you say, I want to get this policy and
you're going to get the flood care, but they're also going to sell you
the wind storm as part of it.
So is it your intent for people who are in this floodplain area to
also get a discount on their wind storm coverage?
Mr. CARDOZA. This amendment's intent is to cover folks who are in
flood areas now that are currently covered by levees that, through no
fault of their own, FEMA's come in and decertified. They had
regulations 2 years ago that said they were fine. They've changed
regulations on these folks.
So it's not my intent to affect in any way the wind portion of the
policy.
Mr. KINGSTON. Well, if the gentleman will let me ask, and I'll yield
back to you, but where in your policy does it say they won't get the
discount on the wind coverage? Because I understand what you're doing
on the flood. But it appears that wind is going to be in this package.
I don't see how we divide it out.
Mr. CARDOZA. My amendment is silent to the wind coverage, sir. It
doesn't speak to that.
Mr. KINGSTON. But am I correct that when my lender requires me to
carry the flood insurance, then I'm also going to FEMA for the wind
storm insurance?
Mr. FRANK of Massachusetts. If the gentleman would yield.
Mr. CARDOZA. I would yield.
Mr. FRANK of Massachusetts. I just double-checked with the staff, and
there is no discount available for wind. It's in the bill.
Mr. KINGSTON. Would they have to be in the amendment?
Mr. FRANK of Massachusetts. The language is, in the case of any area
that previously was not designated as an area having special flood
hazards because the area was protected, it becomes designated as such
an area, and it's all about flood. Here it is: the chargeable premium
rate for flood insurance under this title shall be, et cetera. So if
the gentleman would look at the bottom of the amendment, I'm trying to
answer the question.
Mr. KINGSTON. Mr. Cardoza said it was silent on it, which it sounds
like. From what you just read, that's correct. Wouldn't it have to
proactively exclude the discount for wind? I'm just asking.
Mr. FRANK of Massachusetts. If the gentleman would yield to me one
second, lines 18 and 19, the chargeable premium rate for flood
insurance under this title shall be 50 percent.
The CHAIRMAN. The gentleman from Georgia's time has expired. The
gentleman from California has 30 seconds remaining on his side.
Mr. KINGSTON. Maybe if Mr. Frank could finish that sentence.
Mr. CARDOZA. I yield my remaining time to the chairman of the
committee, Mr. Frank.
Mr. FRANK of Massachusetts. The law is the law. The amendment would
change things. In that sense the gentleman is right: it is silent. It's
silent on the wind part, which means it doesn't change it. It
explicitly changes the flood part only. And look at lines 18, 19 and
pages 1, 2 and 3, and it specifically restricted the flood.
Mr. KINGSTON. But in a multi-peril policy, you're only getting one
premium.
Mr. FRANK of Massachusetts. Oh, no. The gentleman is wrong. The
gentleman should yield to the gentleman from Mississippi.
Mr. TAYLOR. Since you were in the business, you know that if you have
a federally backed mortgage and you live in a floodplain, you have to
buy flood insurance. The wind policy will be totally voluntary. It is
an option to those people who wish to purchase. There is nothing in the
law to require people to buy the wind policy.
The CHAIRMAN. The gentleman from California's time has expired.
The question is on the amendment offered by the gentleman from
California (Mr. Cardoza).
The amendment was agreed to.
Amendment No. 3 Offered by Ms. Castor
The CHAIRMAN. It is now in order to consider amendment No. 3 printed
in part B of House Report 110-351.
Ms. CASTOR. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 3 offered by Ms. Castor:
At the end of the bill add the following new section:
SEC. __. GAO STUDY OF FACTORS AFFECTING ENROLLMENT IN
MULTIPERIL INSURANCE PROGRAM.
(a) In General.--The Comptroller General of the United
States shall conduct a study to identify and analyze factors
affecting enrollment in the multiperil insurance program.
Such study shall include a study of the effects of the
multiperil insurance program on enrollment and pricing of
State residual property and casualty markets or plans and
State catastrophe plans.
(b) Report.--Not later than 270 days after the date of the
enactment of this Act, the Comptroller General shall submit
to Congress a report containing the conclusions of the study
conducted under subsection (a).
The CHAIRMAN. Pursuant to House Resolution 683, the gentlewoman from
Florida (Ms. Castor) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentlewoman from Florida.
Ms. CASTOR. Mr. Chairman, I yield myself as much time as I might
consume.
This amendment commissions a GAO study to examine the effect of the
new multi-peril coverage option which is established as an option in
this bill on State insurers and catastrophe funds like those in my
State of Florida. This amendment works very well with the initiative of
Chairman Frank and my colleague from Florida, Ms. Brown-Waite, and
their very thoughtful initiatives. But it builds upon it.
And the particular problem in my State of Florida is that the State
insurance company, Citizens, now holds 1.3 million policies. Citizens
is supposed to be an insurer of last resort; but because private
insurance companies have left the State, they've withdrawn from the
market, Citizens has ballooned to over 40 percent of the property wind
insurance market. Citizens, however, does not have the reserves, the
sufficient financial reserves, we believe, to pay the level of claims
that would result from a catastrophic hurricane. In the event of a
serious storm, Citizens may be forced to turn to public funds again.
The new multi-peril option, I know it's in dispute now, but however
you feel about it, we need to get to the bottom of the effect it will
have on our
[[Page H10976]]
State insurers and catastrophic funds. It could offer new fiscally
sound choices for those in high-risk areas. It has the potential to
help address wind insurance availability so that the public is not on
the hook for claims when the next storm hits.
If the new option is successful in making insurance available to
areas where private insurers refuse to go, multi-peril and this wind
storm option could relieve the pressure on State insurers like Citizens
in Florida. But serious questions remain to be answered about how these
State and Federal programs will interact.
Will State insurers leave room in the market for an actuarially based
Federal program to achieve high enough enrollment to make a difference?
Will State policies change to help their citizens take advantage of
the Federal multi-peril program?
How will enrollment rates of State plans change to reflect the new
Federal entrant into the market?
These are important questions for both Congress and States to ask.
There will also undoubtedly be interaction between State and Federal
programs that will affect enrollment in ways that we cannot anticipate.
So, Mr. Chairman, the study commissioned in this bill will provide
vital information to help officials at all levels of government work
together to better understand and administer the new multi-peril and
wind storm option.
Mr. Chairman, I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I rise to claim the time in opposition,
although I am not opposed to the amendment.
The Acting CHAIRMAN (Mr. Ross). Without objection, the gentlewoman
from West Virginia is recognized for 5 minutes.
There was no objection.
Mrs. CAPITO. Mr. Chairman, I would like to yield 2 minutes to the
gentleman from Illinois (Mr. Roskam).
Mr. ROSKAM. Mr. Chairman, I find it ironic, actually, that this
amendment, which has its merits, is being advanced, but that other
amendments that are sort of similarly situated weren't placed in order.
For example, this amendment says that in 9 months the GAO is going to
be charged with the responsibility, essentially, of looking back for
the past 9 months and looking at the impact on State insurance
programs. Great. Really no argument there.
But if looking back is a good idea, isn't looking forward a good idea
too? Isn't a prospective look forward at the possibility something that
we ought to be doing?
I just find it concerning that we're willing to put a potential
program, put the brakes on a potential program and be reflective, when
we, at this very moment in time, as we sit here today, as we stand here
today, we have the opportunity to accomplish this task by asking the
GAO to look forward and look at the impact of this. This is part of the
amendments that were, unfortunately, ruled out of order and were not
allowed to be brought to the House and we're going to be denied an
opportunity to have an up or down vote on the wind program, as Mr.
Hensarling had suggested in his amendment. And yet we're being told,
well, you know what, take a glance back after 9 months and let's sort
of see how we're doing. And, oh, by the way, we tend to ignore what the
GAO says anyway since they've put the National Flood Insurance Program
on a high-risk watch list, essentially; and without any managerial
changes we're entrusting that group that is on a watch with this great
responsibility.
And I think this amendment really brings that real concern to mind,
that those of us on this side of the aisle were not being given the
opportunity to really debate this in totality.
Ms. CASTOR. Mr. Chairman, I appreciate the comments of my colleague
from Illinois, and there certainly is a prospective, forward-looking
request of the GAO, and it builds upon the very thoughtful initiative
by my colleague from Florida, Ms. Brown-Waite, and the chairman of the
committee, Mr. Frank.
I yield 1 minute to the gentleman from Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. Mr. Chairman, at a meeting of the
committee, I thought the gentleman was present, the gentlewoman from
Florida (Ms. Ginny Brown-Waite) asked if I would join in a letter to
the GAO asking very many of the questions he asked. I have the letter,
dated August 9, 2007. And earlier in the general debate, Ms. Brown-
Waite asked me to engage in a colloquy and commit to taking seriously
the recommendations. So we have already asked the GAO for a study, and
I believe that study will be going forward.
And if it hasn't already been done, at the appropriate time I will
place the letter that the gentlewoman from Florida (Ms. Ginny Brown-
Waite) and I sent to the GAO into the Record.
House of Representatives,
Committee on Financial Services,
Washington, DC, August 9, 2007.
Hon. David M. Walker,
Comptroller General of the United States, Government
Accountability Office, Washington, DC.
Dear Mr. Walker: We request that the Government
Accountability Office (GAO) initiate a review into a variety
of questions regarding the expansion of the National Flood
Insurance Program (NFIP) to include an optional wind
insurance program. The results of your review will assist
congressional understanding of how such a program could be
implemented and to what extent it would affect the private
market.
As background, Section 7 of H.R. 3121, the Flood Insurance
Reform and Modernization Act of 2007 creates a new program at
the NFIP designed to enable NFIP participants to purchase
both wind and flood coverage in a single policy, A key
provision of Section 7 requires that rates charged for this
new, optional, wind coverage be risk-based and actuarially
sound, so that the program collects premiums sufficient to
pay all reasonably anticipated claims. In so stating, H.R.
3121 specificaI1y departs from the method of determining
actuarial rates currently used by the NFIP.
Under H.R. 3121 the NFIP would provide optional wind
coverage in communities that already participate in the NFIP
and that agree to adopt and enforce building codes and
standards designed to minimize wind damage. In order for you
to better understand the details of the new wind insurance
program we have enclosed a copy of H.R. 3121, Section 7 with
this request.
In addition to any issues you deem appropriate, we would
like the GAO to initiate a comprehensive analysis and
determination of the following:
1. The ability of the Federal Emergency Management Agency
(FEMA) and the NFIP to implement an actuarially-sound (i.e.,
with rates priced according to risk, or as defined by
standards and methods generally accepted by the actuary
industry, incorporating up-to-date modeling technology, and
taking into consideration administrative expenses) wind
insurance program, including: whether FEMA's current staff
and resources enable it to efficiently and effectively expand
the NFIP to offer optional wind coverage; how actuarial rates
for such coverage could be determined; the likelihood that
consumers would purchase coverage at these rates; how this
new coverage would be underwritten and sold; how claims
arising from this new coverage would be adjusted and paid;
whether FEMA's staff and resources are sufficient to be
prepared to implement this new wind insurance program on or
before June 30, 2008; what additional staff and
administrative costs are necessary in order for FEMA to
effectively implement and administer this new wind insurance
program; and how the availability of optional wind insurance
through the NFIP could affect the enforcement of the NFIP's
mandatory purchase requirement for flood insurance.
2. The effects, if any, this program could have on existing
State wind pools, including capitalization of, and
participation in, the wind pools.
3. Whether expanding the NFIP to provide optional wind
coverage could: affect the availability and affordability,
over the long-term, of wind coverage nationwide; influence
the development in private sector markets, including the
surplus and non-admitted markets, for multiple peril
insurance, or alternatives; result in adverse selection,
whereby the wind insurance program could be under diversified
and particularly vulnerable to large events; and lead to the
development of lower, yet actuarially sound rates for wind
coverage similar to wind coverage offered by the private
sector, in the same geographic area.
4. To what extent, if any, the new wind insurance program
could expose U.S. taxpayers to loss, including but not
limited to the case of program deficit.
5. Are alternative methods available to provide NFIP
participants with better wind coverage options.
6. To what extent, if any, gaps in coverage may still
exist, between the coverage included under most homeowners
policies, and the flood and wind coverage provided by the
NFIP.
As referenced above, H.R. 3121 requires the NFIP to
implement the new wind insurance program by June 30, 2008.
For this reason, it is our strong hope that you complete your
study provide us with your findings no later than April 1,
2008.
Thank you very much for your assistance as we attempt to
further our understanding of these important issues related
to the NFIP. If you have any questions regarding
[[Page H10977]]
this request, please contact Tom Glassic or Arnie Woeber.
Sincerely,
Barney Frank.
Ginny Brown-Waite.
Mrs. CAPITO. Mr. Chairman, I yield myself such time as I may consume.
In listening to the debate over this amendment, my question becomes,
if we move forward and make wind part of one of the insurable events
under this program, and then we study, through the gentlelady's
amendment, the effect this has on State insurance, and we find out,
after it's already been put into effect, that it's too costly or it's
damaging the insurability at the State level and other issues, what are
we going to do then?
This is where it goes to my argument in the beginning that we're
really entering into this prematurely, because we have so many
unanswered questions.
Mr. Chairman, I reserve the balance of my time.
Ms. CASTOR. Mr. Chairman, I will reserve the balance of my time until
it is time to close.
Mrs. CAPITO. Mr. Chairman, I yield 1 minute to the gentleman from
Texas (Mr. Culberson).
Mr. CULBERSON. Mr. Chairman, I'd like to ask the author of the
amendment if she'd be willing to accept an amendment that we also ask
the GAO to examine the effects on the taxpayers of the United States of
all the perils created by this legislation and the financial risk this
exposes the taxpayers too, because, again I think it's vitally
important for this House to recognize that the potential liability this
legislation exposes the taxpayer to, as Mr. Baker said earlier, there's
about $19 trillion worth of insurable property around the coast of the
United States. The flood insurance program's already $20 billion in
debt, and the United States, according to the GAO, already faces
potential liabilities, direct and indirect, not potential, direct and
indirect liabilities of $50 trillion.
{time} 1430
That works out to $170,000 per person. Every household in the United
States would have to buy $440,000 worth of T bills today just to pay
for the explicit and implicit liabilities of the United States.
And, finally, I would just remind the majority of something that my
hero Thomas Jefferson said in his first inaugural address because of
repeated attempts, this majority has shut out all amendments by the
minority. Thomas Jefferson said that although the rule of the majority
is in all cases to prevail, that rule to be rightful must be reasonable
and must always protect the rights of the minority, which this majority
has not done.
Ms. CASTOR. Mr. Chairman, I yield 30 seconds to the chairman of the
committee.
Mr. FRANK of Massachusetts. First, Mr. Chairman, I hope the gentleman
from Texas will remember this problem about spending when we again
debate the proposal to spend hundreds of billions of dollars sending a
manned spaceship to Mars, which I have been opposed to, and I hope he
will join me in that unnecessary expenditure and oppose it.
Secondly, CBO says he is wrong. The wind part is written, unlike the
flood part, to require actuarially sound policy premiums to break even,
and CBO certified that it's there. So the notion that this is adding
trillions or even billions to our debt is simply wrong, according to
CBO.
Mrs. CAPITO. Mr. Chairman, I have no further requests for time, and I
yield back the balance of my time.
Ms. CASTOR. Mr. Chairman, just to close, rather than any attention
placed on Mars, I am glad that here in the Congress we are able to
place some attention on our coastal areas in this country that are at
risk from catastrophic loss.
I urge approval of 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 Florida (Ms. Castor).
The amendment was agreed to.
Amendment No. 4 Offered by Ms. Castor
The Acting CHAIRMAN. It is now in order to consider amendment No. 4
printed in part B of House Report 110-351.
Ms. CASTOR. 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. 4 offered by Ms. Castor:
In the matter proposed to be inserted by section 7(d) of
the bill, in paragraph (2) of subsection (d) strike
``windstorms'' and insert ``windstorms, discourage density
and intensity or range of use increases in locations subject
to windstorm damage, and enforce restrictions on the
alteration of wetlands coastal dunes and vegetation and other
natural features that are known to prevent or reduce such
damage''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the
gentlewoman from Florida (Ms. Castor) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentlewoman from Florida.
Ms. CASTOR. Mr. Chairman, I yield myself such time as I may consume.
This amendment will help protect homeowners in coastal areas from
windstorms by ensuring that natural wind barriers remain intact. It
instructs the Director of FEMA to consider natural protective sand
dunes and wetlands when developing criteria for the multi-peril
insurance. No matter how you feel about the multi-peril option in this
bill, I think everyone will agree that it is in our country's best
interest to discourage any investment of public dollars in those areas.
One of the most sensible features of the National Flood Insurance
Program is the requirement that in order to remain eligible,
communities must enact strong growth management laws, flood mitigation
strategies that will help prevent catastrophic losses rather than just
responding to them when they occur. The bill we are considering today
expands the national flood insurance with an optional wind component.
Just like flood policies, wind policies will be contingent on
prevention and mitigation activities developed by FEMA.
While it's absolutely imperative that homeowners themselves take the
initiative to prepare their properties for windstorms, some of the best
mitigation and prevention measures naturally exist along the coast. So
no matter what your opinion is of the multi-peril option, if government
is going to offer a multi-peril option for windstorm damage, our
interest should be in doing all we can do to reduce the risk side of
the equation. In the event of a hurricane, wetlands and coastal dunes
act as shock absorbers, and these natural environmental features bear
the brunt of the monumental pounding of wind so that homes, businesses,
and schools don't have to.
I am also going to recognize another colleague, but at this time I
urge approval of the amendment.
Mr. Chairman, I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I would like to claim time in opposition,
although I am not opposed to the gentlewoman's amendment.
The Acting CHAIRMAN. Without objection, the gentlewoman from West
Virginia is recognized for 5 minutes.
There was no objection.
Mrs. CAPITO. I would like to yield 2 minutes to the gentleman from
Georgia (Mr. Kingston).
Mr. KINGSTON. Mr. Chairman, I just want to say I'm confused here.
This is opening up the floodgates for coastal development. Whom are we
fooling here? As a matter of fact, I just understood that U.S. PIRG and
a lot of pro-environmental groups are opposing this. It puts me on an
odd side of things. But whom are we kidding? This is all about coastal
development. And don't say, when you're knocking over the marshland,
don't touch that sand dune. If you're serious about sand dunes, if
you're serious about the wetlands, if you're serious about the
environment, the fragile coastal environment, you will oppose this
bill. This is the best thing in the world for developers. In fact, I'm
a little bit surprised that developers aren't knocking down the doors
and saying to fiscal conservatives who are opposing the bill for that,
what are you doing? This is the best thing.
The great State of Florida, where I have vacationed and so many other
people do, we all love the State of Florida and its natural
environment. But, goodness gracious, Carl Hiaasen wrote the book
``Strip Tease.'' I mean, there's book after book about overdevelopment
in Florida.
[[Page H10978]]
That is all this whole bill does is allow continued overdevelopment
in the coastal area of Florida and other environmental areas. So to
have a fig leaf here to say, well, don't worry, FEMA is going to worry
about that sand dune and those sea oats in the coastal area, that's a
very mixed signal.
Let me yield to my friend from Massachusetts, who I am sure has some
great wisdom for this confused guy.
Mr. FRANK of Massachusetts. As the gentleman knows, I was opposed to
the Rules Committee's decision to keep out several Republican
amendments. I now regret that even more because if the gentleman had a
real amendment to argue for, he wouldn't be making these badly strained
irrelevant arguments on this particular poor little amendment. It
really doesn't deserve all the rhetoric it's getting.
Mr. KINGSTON. Mr. Chairman, I reclaim my time.
I want to say to Mr. Frank, do you not agree with me that this is the
greatest development bill there is?
The Acting CHAIRMAN. The time of the gentleman from Georgia has
expired.
Ms. CASTOR. Mr. Chairman, I yield 30 seconds to the chairman.
Mr. FRANK of Massachusetts. Mr. Chairman, to answer the direct
question by the gentleman, no, I would not say this is the greatest
development bill. But I would also say he says he was puzzled. Not as
puzzled as I am in trying to figure out what in the world this had to
do with the amendment we are dealing with. Maybe it is considered, I
don't know, stuffy to deal with the amendment under consideration. I
always prefer it as a method of debate.
Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from
Georgia (Mr. Kingston).
Mr. KINGSTON. Let me restate. Right now it is a fact homeowners and
lenders are having trouble getting flood insurance and windstorm
insurance in the areas where there are lots of floods and lots of
windstorms, coastal areas. This allows them to get it at an economic
price that is a lot lower than the private sector because it's a
government subsidy. Therefore, America, being great entrepreneurs, this
is a very pro-growth, pro-development amendment. I cannot understand
how you would not agree with that.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
Mr. KINGSTON. I yield to the gentleman.
Mr. FRANK of Massachusetts. In the first place, the flood part
environmentalists strongly support because it restricts where people
can go and raises the fee. As to the wind part, it's not a subsidy.
Mr. KINGSTON. Let me reclaim my time just to bite on that piece of
the apple.
Mr. FRANK of Massachusetts. If you don't like the answer, don't ask
the question.
Mr. KINGSTON. Reclaiming my time, Mr. Chairman, let me say this. We
just passed an amendment for people who have to buy insurance. They
don't have to buy insurance. They can move. If they are living in areas
that are susceptible to flood, this is still a free America. They can
move on. So we are encouraging them to move into flood areas and
windstorm areas that are critical environmental areas.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
Mr. KINGSTON. Yes.
Mr. FRANK of Massachusetts. The amendment that you are talking about
specifically did not encourage anybody to move. It dealt with people
who are already there, having moved there previously, found
subsequently they were in a flood area. But the general thrust of the
bill on flood, strongly supported by environmentalists, is to increase
the amount that's charged in many cases and to restrict the building.
As to wind, there is no subsidy. It is required to be actuarially
soundly financed. So, yes, it's a government program, but one without
any subsidy to the homeowner on the wind part.
Mr. KINGSTON. Reclaiming my time, Mr. Chairman, just to emphasize
this point. This creates a stable predictability in the insurance
premium by the homeowner and developer. Therefore, it makes it easier
to develop in a coastal area.
Listen, I understand what you are doing, but I just think this fig
leaf of an amendment saying let's protect the environment is a little
bit silly because the entire point of the bill disregards the
environment.
Ms. CASTOR. Mr. Chairman, I yield 1 minute to my colleague from
Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. Mr. Chairman, I am actually encouraged by some of the
common expression that is here. I share some of my friend from
Georgia's reservations about where we are getting into with wind
coverage. The chairman is right when he noted the focus on restrictions
for flood insurance to reduce the problems you are talking about is in
the underlying bill. What my good friend from Florida is offering is if
you are going to be in this area dealing with wind peril that there is
a requirement to discourage elements in the land uses that will not
make it worse.
So you are both on the same side. You may want to go further with the
wind peril. I am open to that. We are not done with this legislation
yet. There are unanswered questions. I agree with you. But in the
meantime, acknowledging what the committee has done to narrow the scope
with flood insurance peril, which is, I think, extraordinarily
positive, and the gentlewoman is speaking out for solid land use,
having the natural barriers protected, that will save all of us money.
I am optimistic. If we can talk this through, there are enough
elements here that will be good for the environment, good for the
taxpayer, and under the leadership of Chairman Frank, I am convinced we
can get there before we're done.
Mrs. CAPITO. Mr. Chairman, I have no further requests for time, and I
yield back the balance of my time.
Ms. CASTOR. Mr. Chairman, the Federal multi-peril option must not be
an invitation to develop on our sensitive natural coasts, and we must
protect the natural windbreaks like the coastal dune areas. That is why
it is important to instruct FEMA, as they develop the eligibility
criteria for the multi-peril program, that they must take into account
the natural protective features.
Mr. Chairman, I urge my colleagues to adopt this amendment and
protect the natural wind barriers that will make damage mitigation
efforts more manageable.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentlewoman from Florida (Ms. Castor).
The amendment was agreed to.
Amendment No. 5 Offered by Mr. Blumenauer
The Acting CHAIRMAN. It is now in order to consider amendment No. 5
printed in part B of House Report 110-351.
Mr. BLUMENAUER. 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. 5 offered by Mr. Blumenauer:
Subsection (k)(2) of section 1360 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4101), as added by section
22(a) of the bill, is amended by adding at the end the
following new subparagraph:
``(C) Effects of global warming.--In updating and
maintaining maps under this section, the Director shall--
``(i) take into consideration and account for the impacts
of global climate change on flood, storm, and drought risks
in the United States;
``(ii) take into consideration and account for the
potential future impact of global climate change-related
weather events, such as increased hurricane activity,
intensity, storm surge, sea level rise, and associated
flooding; and
``(iii) use the best available climate science in assessing
flood and storm risks to determine flood risks and develop
such maps.''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Oregon (Mr. Blumenauer) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Oregon.
Mr. BLUMENAUER. Mr. Chairman, I am, in fact, encouraged with some of
the discussion that is here today. If we sort of cut through some of
the areas where people are cranky, as I understand it, I think we are
looking at some broad areas of agreement that, at the end of the day,
we are going to have a stronger flood insurance program that will be
able to answer some
[[Page H10979]]
of these questions. I have an amendment that I think will further
strengthen this because, as we learned during Katrina, there is more
work to be done to make sure that the flood insurance program is able
to fulfill its mission of providing flood insurance and helping
communities reduce that flood risk.
Now, I am pleased that the underlying legislation makes some very
important reforms to the program that I have been involved with for the
last 6 years.
{time} 1445
What I propose in this amendment is an adjustment to the legislation
to help ensure that FEMA is better prepared for current and future
risks and that people have the information that they need to reduce
their own risk. The amendment simply requires FEMA to take into
consideration the impacts of global warming, current and future, when
updating and maintaining flood insurance program rate maps.
The flood insurance maps are significantly outdated; over 75 percent
of them are at least 10 years old. Not only are they outdated, but they
estimate risk by extrapolating solely from historic loss, as my friend
from Louisiana (Mr. Baker) pointed out earlier.
Unfortunately, it looks like the future will bring new weather
patterns. A recent report from the Intergovernmental Commission on
Climate Change, the leading group of climate scientists from around the
world, indicated that, with climate change, future hurricanes will
become more intense, with larger peak wind speeds and heavier
precipitation. Changes in snow pack and sea level rise will also have a
significant impact on flood risk. These impacts are not currently
considered in the floodplain map modernization effort.
My amendment will improve upon this mapping program by ensuring that
FEMA is prepared to improve the mapping accuracy. It will require the
Director to take into consideration the impacts of global warming on
flood, storm and drought risk; and take into consideration the
potential future impacts of local climate change, weather-related
events; and use the best available climate science in assessing flood
risks and updating FEMA maps.
Mr. Chairman, I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIRMAN. The gentlewoman from West Virginia is recognized
for 5 minutes.
Mrs. CAPITO. I would like to ask the author of this amendment a
couple of questions just for my own clarification, if I could.
First of all, when you're directing FEMA to use the most up-to-date
science on global climate change and weather-related issues, does FEMA
currently have this technology available? Where does this technology
exist for FEMA? And with what type of accuracy can you predict that
FEMA will be able to predict? I know FEMA is in the business of
declaring where floodplains are; it has a lot of science connected with
this. Where is this technology coming from? What sophistication of the
equipment exists, and how do you think these will be arrived at?
I yield to the gentleman from Oregon.
Mr. BLUMENAUER. Excellent question. Around the world, scientists are
a part of this consensus, and we are refining tools. One of the
problems with this administration is they've been trying to stifle, as
you know, scientists within the administration speaking out on this,
and we have undercut investment in these resources.
The fact is that there is better information now for climate change.
I have no problem whatsoever of our being able to invest to increase it
further, but there is a global scientific consensus, there is
investment in NASA, there are already resources within the Federal
Government. They are not currently used now by FEMA, the stuff that
we've got now, let alone what we're going to have in the future.
Mrs. CAPITO. Well, my question would be, if that's available to FEMA
now to be able to more accurately predict the ebb and flow of water
across the United States and the coastal regions, why isn't that being
used by FEMA right now, if that's available? Is it statutorial?
Mr. BLUMENAUER. As my friend, Mr. Baker, pointed out when he was
arguing a few moments ago, they use a different pattern, a different
model right now. What we're doing with this legislation is we are
requiring them to change the model, use the information that's
available right now by the Federal Government, hopefully the Bush
administration won't try and stifle it, and use that for forecasting
current and prospective. Right now they don't do it in their modeling,
and there's no reason why they can't. This legislation would require
it.
Mrs. CAPITO. Then going further from what you're saying, is what
you're really saying changing the entire FEMA modeling perspective, or
putting this on top of what is already existing at FEMA?
Mr. BLUMENAUER. What we're saying now is that we are in a world that
everybody else acknowledges is rapidly changing. It looks like climate
change, global warming is a reality, and just using straight-line
extrapolation for FEMA to determine 100-year flood
plains or 500-year floodplains doesn't work because it is changing much
more rapidly than past patterns would expect.
So we ought to use the best available science here and around the
world to look at what's likely to happen in the future. FEMA doesn't
currently do that. They look at flat-line projections of past activity,
not looking at using the best available science for what's going to
happen in the future.
Mrs. CAPITO. Thank you. I have a lot of questions about the answer to
the question I just asked; but at this point, I will yield 1 minute to
the gentleman from Georgia (Mr. Kingston).
Mr. KINGSTON. I want to say to my friend, I actually think that
you're feeling around the right part of the woods on this stuff. This
is actually an important amendment; but I, like the gentlewoman from
West Virginia, really doubt FEMA's expertise in solving this problem.
And I hope that during the legislative process of this you can maybe
shore up the language to say that they ought to have somebody with a
lot better scientific and organizational mind than they would be in
this. I mean, I keep thinking FEMA-Katrina, not a good idea to let them
study anything. In fact, there are a whole slew of amendments here that
probably won't be speaking of, but it gives FEMA instructions and
directions to do this and that. I don't have the faith in FEMA which
your side apparently does. I think this is like asking the post office
to do an efficiency study; it's just not a good idea.
But I do believe that you should put in there something about rising
tides because you don't have anything about tidal levels. In the State
of Georgia, we have a 7-foot tide, Florida has about a 1- or 2-foot
tide. That stuff all makes a difference.
Mr. BLUMENAUER. Mr. Chairman, may I inquire as to the time remaining.
The Acting CHAIRMAN. The gentleman from Oregon has 2\1/2\ minutes
remaining; the gentlewoman from West Virginia has 1 minute remaining.
Mr. BLUMENAUER. Let me just take 30 seconds here.
This is something that isn't unknown. GAO found that 11 out of 11
insurance companies that they surveyed already incorporate this into
their risk models. FEMA can do this using the private sector, and it
can use government data that the Bush administration has been
suppressing now in other areas, open it up, let these climate
scientists that work in other parts of the government advise FEMA, or
contract with the private sector. It's not hard to find the
information.
Mrs. CAPITO. I yield 30 seconds to the gentleman from Georgia.
Mr. KINGSTON. I want to say to my friend, again, I support what
you're after; I think this is a serious amendment. But when you say
this information is out there, FEMA can get it, it was also well known
that people were in the Superdome, but FEMA had trouble figuring that
out and what to do about it. So just keep in mind who you're giving
this authority to. But I do want to say to the gentleman, I understand
what you're after, and I think it's important.
Mrs. CAPITO. I think the gentleman's amendment has great merit, but I
question the fact that he's already
[[Page H10980]]
mentioned that the data that we're using in the future, the data that
we're using to come about insurance rates in this flood bill, how can
we then add on wind as another peril when we're not sure that the data
that we're using to predict future weather forces is accurate at all?
Mr. Chairman, I yield back the balance of my time.
Mr. BLUMENAUER. In conclusion, Mr. Chairman, I understand the
reticence that my good friend from Georgia would have giving the
current administration of FEMA more tools. I'm sorry he's beating up on
the administration, but I understand it. They haven't shown that
they're very adept. But think of this as longer-term legislation. There
will be a new administration; there will be professionals who are
there. The point is that, whoever is there, they need to use the most
up-to-date, modern information to think about what's going on in the
future.
The science is already available in parts of the Federal Government
right now that could be used. The information is available that the
private sector is already using. All this amendment says,
notwithstanding that I share your concern about who's running it now,
but that will change, I guarantee you, that when it changes, and even
until it changes, we can give them a mandate to look at the bigger
picture and factor climate change in. And I am open to working with the
gentleman in terms of whether it's contracted, or it's Federal
information, or it's from other international sources. The point is
they currently do not do it; we haven't instructed them to do it. This
is one thing we can't blame on the inept FEMA administration; it's
something that Congress needs to change. And with your help, we can
approve this amendment, we'll change their marching orders, we will
have the big picture, and it's one of these things we can agree on,
work on together, and we will all be better off.
I urge approval of the amendment.
Mr. WELCH of Vermont. Mr. Chairman, first, I want to thank the
gentleman from Massachusetts, Mr. Frank and the gentlewoman from
California, Ms. Waters, for their hard work in preparing H.R. 3121, the
Flood Insurance Reform and Modernization Act of 2007. I have received
positive feedback from the Regional Planning Commissioners and
emergency managers in support of this bill. The Planning Commissioners
and emergency managers serve on the front-line of declared disasters
and work with both towns and FEMA. In fact, Vermont has recently dealt
with several significant flooding events and this legislation will go a
long I way to improving our response in the aftermath. This bill also
provides much needed reform of the National Flood Insurance Program,
NFIP.
I also want to thank the gentleman from Oregon, Mr. Blumenauer, for
his thoughtful amendment and working with me and Representative
Gilchrest as co-sponsors. This bi-partisan amendment requires FEMA to
consider modern climate science when mapping floodplains. Current flood
maps do not take into account critical information beyond past flooding
history. Accurate floodplain maps incorporating scientific global
warming impact predictions will ensure that citizens are aware of the
future flood risks in their communities and help prevent the loss of
human life, property, and important wildlife habitat. Communities will
be able to use these maps in considering their own land use planning
and development projects.
I believe that the focus on global warming adaptation planning is
critical while Congress also moves forward to aggressively address
climate change through legislation. Adaptation includes addressing the
occurrence and likelihood of more frequent, intense, and severe storms
bringing our rivers and streams beyond flood stage; sea-level rise
flooding coastal and tidal communities that may even be hundreds of
miles inland; reduced snow-pack that is changing annual runoff and
water collection; and of course the impact of hurricanes; all of which
are resulting in significantly greater flooding across the nation.
Vermont communities like Barre or, our capitol of Montpelier are
finding that surrounding rivers and streams are more unpredictable--
large rain events have resulted in dramatic river and stream bank
erosion that promotes flooding in nearby towns. Rivers and streams are
overflowing in areas that were not typically flooded. We are finding
flooding events both in and out of current flood plains where people
have lost property due to sudden and unexpected river and stream rise.
Many of these families are low-income and their homeowners insurance,
if they have it, does not cover their claims. And of course, they don't
qualify for SBA disaster assistance loans.
We believe that changing weather patterns require the tools for smart
land use and development decision-making. Updated climate science flood
mapping will help all citizens make informed decisions on flood risks
and the need to purchase flood insurance. Updated flood maps will also
aid communities in smart growth planning to minimize the risk of
flooding to their cities and towns.
This amendment has received strong support by the National Wildlife
Federation, U.S. Public Interest Group, Sierra Club, League of
Conservation Voters, Natural Resource Defense Council, Friends of the
Earth, Audubon, Earthjustice, American Rivers, Republicans for
Environmental Protection, and the Union of Concerned Scientists.
I strongly urge my colleagues to support this amendment.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Oregon (Mr. Blumenauer).
The amendment was agreed to.
Amendment No. 6 offered by Mr. Patrick J. Murphy of Pennsylvania
The Acting CHAIRMAN. It is now in order to consider amendment No. 6
printed in part B of House Report 110-351.
Mr. PATRICK J. MURPHY of Pennsylvania. 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. 6 offered by Mr. Patrick J. Murphy of
Pennsylvania:
At the end of the bill, add the following new section:
SEC. 30. NATIONAL FLOOD INSURANCE ADVOCATE; REPORTS.
Chapter II of the National Flood Insurance Act of 1968 is
amended by inserting after section 1330 (42 U.S.C. 4041) the
following new section:
``SEC. 1330A. NATIONAL FLOOD INSURANCE ADVOCATE.
``(a) Establishment of Position.--
``(1) In general.--There shall be in the Federal Emergency
Management Agency a National Flood Insurance Advocate. The
National Flood Insurance Advocate shall report directly to
the Director and shall, to the extent amounts are provided
pursuant to subsection (c), be compensated at the same rate
as the highest rate of basic pay established for the Senior
Executive Service under section 5382 of title 5, United
States Code, or, if the Director so determines, at a rate
fixed under section 9503 of such title.
``(2) Appointment.--The National Flood Insurance Advocate
shall be appointed by the Director and the flood insurance
advisory committee established pursuant to section 1318 (42
U.S.C. 4025) and without regard to the provisions of title 5,
United States Code, relating to appointments in the
competitive service or the Senior Executive Service.
``(3) Qualifications.--An individual appointed under
paragraph (2) shall have--
``(A) a background in customer service as well as
insurance; and
``(B) experience in representing individual insureds.
``(4) Restriction on employment.--An individual may be
appointed as the National Flood Insurance Advocate only if
such individual was not an officer or employee of the Federal
Emergency Management Agency with duties relating to the
national flood insurance program during the 2-year period
ending with such appointment and such individual agrees not
to accept any employment with the Federal Emergency
Management Agency for at least 5 years after ceasing to be
the National Flood Insurance Advocate. Service as an employee
of the National Flood Insurance Advocate shall not be taken
into account in applying this paragraph.
``(5) Staff.--To the extent amounts are provided pursuant
to subsection (c), the National Flood Insurance Advocate may
employ such personnel as may be necessary to carry out the
duties of the Advocate.
``(b) Duties.--The duties of the National Flood Insurance
Advocate shall be to conduct studies with respect to, and
submit, the following reports:
``(1) Report on problems of insureds under national flood
insurance program.--Not later than the expiration of the 12-
month period beginning on the date of the enactment of the
Flood Insurance Reform and Modernization Act of 2007, the
National Flood Insurance Advocate shall submit a report to
the Congress regarding the national flood insurance program,
which shall--
``(A) identify areas in which insureds under such program
have problems in dealings with the Federal Emergency
Management Agency relating to such program, and shall contain
a summary of at least 20 of the most serious problems
encountered by such insureds, including a description of the
nature of such problems;
``(B) identify areas of the law relating to the flood
insurance that impose significant compliance burdens on such
insureds or the Federal Emergency Management Agency,
including specific recommendations for remedying such
problems;
``(C) identify the 10 most litigated issues for each
category of such insureds, including recommendations for
mitigating such disputes;
[[Page H10981]]
``(D) identify the initiatives of the Agency to improve
services for insureds under the national flood insurance
program and actions taken by the Agency with respect to such
program;
``(E) contain recommendations for such administrative and
legislative action as may be appropriate to mitigate or
resolve problems encountered by such insureds; and
``(F) include such other information as the National Flood
Insurance Advocate considers appropriate.
``(2) Report on establishment of an office of the flood
insurance advocate.--Not later than the expiration of the 6-
month period beginning on the date of the initial appointment
of a National Flood Insurance Advocate under this section,
the Advocate shall submit a report to the Congress regarding
the feasibility and effectiveness of establishing an Office
of the Flood Insurance Advocate, headed by the National Flood
Insurance Advocate, to assist insureds under the national
flood insurance program in resolving problems with the
Federal Emergency Management Agency relating to such program.
Such report shall examine and analyze, and include
recommendations regarding--
``(A) an appropriate structure in which to establish such
an Office, and appropriate levels of personnel for such
Office;
``(B) other appropriate functions for such an Office, which
may include--
``(i) identifying areas in which such insureds have
problems in dealing with the Agency relating to such program;
``(ii) proposing changes in the administrative practices of
the Agency to resolve or mitigate problems encountered by
such insureds; and
``(iii) identifying potential legislative changes which may
be appropriate to resolve or mitigate such problems;
``(C) appropriate procedures for formal response by the
Director to recommendations submitted to the Director by the
National Flood Insurance Advocate;
``(D) the feasibility and effectiveness of authorizing the
National Flood Insurance Advocate to issue flood insurance
assistance orders in cases in which the Advocate determines
that a qualified insured is suffering or about to suffer a
significant hardship as a result of the manner in which the
flood insurance laws are being administered or meets such
other requirements may be appropriate, including examining
and analyzing--
``(i) appropriate limitations on the scope and effect of
such orders;
``(ii) an appropriate standard for determining such a
significant hardship;
``(iii) appropriate terms of flood insurance assistance
orders; and
``(iv) appropriate procedures for modifying or rescinding
such orders;
``(E) the feasibility and effectiveness of establishing
offices of flood insurance advocates who report to the
National Flood Insurance Advocate, including examining and
analyzing--
``(i) the appropriate coverage and geographic allocation of
such offices;
``(ii) appropriate procedures and criteria for referral of
inquiries by insureds under such program to such offices;
``(iii) allowing such advocates to consult with appropriate
supervisory personnel of the Agency regarding the daily
operation of the offices; and
``(iv) providing authority for such advocates not disclose
to the Director contact with, or information provided by,
such an insured;
``(F) appropriate methods for developing career paths for
flood insurance advocates referred to in subparagraph (E) who
may choose to make a career in the Office of the Flood
Insurance Advocate; and
``(G) such other issues regarding the establishment of an
Office of the Flood Insurance Advocate as the National Flood
Insurance Advocate considers appropriate.
``(3) Direct submission of reports.--Each report required
under paragraph (2) shall be provided directly to the
Congress by the National Flood Insurance Advocate without any
prior review or comment from the Director, the Secretary of
Homeland Security, or any other officer or employee of the
Federal Emergency Management Agency or the Department of
Homeland Security, or the Office of Management and Budget.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated for fiscal year 2008 and each
fiscal year thereafter such sums as may be necessary to carry
out this section.''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Pennsylvania (Mr. Patrick J. Murphy) and a Member opposed each
will control 5 minutes.
The Chair recognizes the gentleman from Pennsylvania.
Mr. PATRICK J. MURPHY of Pennsylvania. Mr. Chairman, I yield myself 2
minutes.
I come before you today, Mr. Chairman, on behalf of Anne Beck of
Erwinna, Pennsylvania; Tony Plescha of Yardley, Pennsylvania; Nancy
Rees of Yardley, Pennsylvania; and thousands of families across my
district of Bucks County who have been hit by three floods in 3 years.
Mr. Chairman, I ask my colleagues to picture a family distraught, a
home in tatters, and rain that just won't stop. If that family asked
for help, either from their insurance company or from FEMA, they would
face a maze of bureaucracy instead of relief. As of right now, there is
no one who will fight for families or business owners who seek
assistance in rebuilding after a catastrophic storm.
We are trying to change that here today. With this amendment, we are
looking to create the Office of the Flood Insurance Advocate, someone
to fight for all of us when we need help the most.
Modeled after the successful Taxpayer Advocate Service at the IRS,
this office would fight the battles for weary, rain-soaked families and
businesses looking to rebuild.
In creating the Flood Insurance Advocate, our measure would help cut
through the red tape. The National Flood Insurance Advocate would do
two major things: the first, report to Congress about problems facing
the flood insurance program; and, second, determine the most effective
way to create the Office of the Flood Insurance Advocate nationwide.
Mr. Chairman, families and businesses back home need our help.
I now yield 3 minutes to the distinguished gentleman from New York, a
colleague in the Blue Dog Coalition, Mr. Mike Arcuri.
Mr. ARCURI. Mr. Chairman, I rise to join my good friend from
Pennsylvania (Mr. Patrick J. Murphy) in strong support of this
amendment and the underlying legislation.
I would like to thank the distinguished chairman of the Financial
Services Committee for producing a bill that updates the National
Federal Insurance Program to meet the needs of the 21st century. It
improves flood mapping; increases financial accountability; and is
comprehensive, responsible public policy that will benefit thousands of
Americans in the highest risk areas.
Mr. Chairman, across my district in upstate New York, the increasing
frequency and destructive power of rainstorms and snow melts in recent
years has caused flooding disasters which have seriously damaged homes
and businesses in a number of communities.
Some of these communities in the Susquehanna River Basin, like the
city of Oneonta, suffered a fate last year similar to the areas in
Pennsylvania situated in the Delaware River Basin. The city of Oneonta
experienced very damaging flooding in June of 2006 caused by severe
rainstorms. However, it is now September of 2007, and there are local
homeowners and businesses still wrestling with FEMA's burdensome claims
process waiting on settlements they were assured as National Flood
Insurance Program policyholders.
Mr. Chairman, the same is true for the local city government in
Oneonta. It took almost 1 whole year after the disaster for FEMA to
fully reimburse the city for repairs to public infrastructure severely
damaged during the floods. Even after many months of persistence at the
regional FEMA office, the city was left with no recourse and had to
seek the assistance of my office for intervention.
Finally, after encountering hurdle after hurdle for a year, the city
received their reimbursement from FEMA. We should ask ourselves, should
we not strive to create more efficiency in an agency that is still
learning lessons in the aftermath of Katrina and Rita?
{time} 1500
Mr. Chairman, the amendment Mr. Murphy and I are offering today will
study the feasibility of creating an independent office within FEMA.
Its primary task will be to help local homeowners and business owners
in Upstate New York and across the U.S. to navigate the often tedious
and complicated Federal flood insurance claims system within the
National Flood Insurance Program.
The amendment establishes a National Flood Insurance Advocate, which
would be tasked with providing insurance policyholders across the U.S.
with a type of ombudsman to represent the public interest by
investigating and addressing complaints. The amendment also requires
that the National Flood Insurance Advocate report to Congress with
analysis of the major
[[Page H10982]]
problems facing the National Flood Insurance Program. This National
Flood Insurance Advocate is based on the successful model of the
Taxpayer Advocate Service, which has helped countless constituents
navigate the Internal Revenue Services.
Mr. Chairman, I urge my colleagues to support the adoption of this
amendment, and I urge support for passage of the bill.
Mrs. CAPITO. Mr. Chairman, I would like to claim time in opposition
to the amendment, but I am not necessarily opposed to it.
The Acting CHAIRMAN. Without objection, the gentlewoman from West
Virginia is recognized for 5 minutes.
There was no objection.
Mrs. CAPITO. Mr. Chairman, I would like to yield 2 minutes to the
gentleman from Texas (Mr. Culberson).
Mr. CULBERSON. I am glad we are considering this amendment to have
FEMA give us a comprehensive report of the problems facing the flood
insurance program. We already established that this legislation, in
essence, is going to create a public-private partnership in which the
insurance companies are going to collect the premium and the taxpayers
are going to pay the bill. We have already established, as Mr. Baker
pointed out earlier, that there is potentially $19 trillion worth of
valuation of property out there along the coastlines that are, again, a
risk that the taxpayers are assuming. The TRIA legislation, Terrorism
Risk Insurance legislation that the liberal leadership of this House
pushed through last week puts taxpayers potentially on the hook for
$100 billion.
I wanted, if I could, to just get an answer to my question in the
time that I have got. Other than Social Security and Medicare and not
counting the Mars program that the chairman mentioned, because there is
no such program, can the chairman or anyone else on that side identify
a single piece of legislation that has created a bigger potential risk
to the taxpayers than this bill? This, I won't say boondoggle, but this
piece of legislation creates potentially trillions of dollars worth of
liability. Is there any piece of legislation you can identify other
than Social Security or Medicare that creates potentially trillions of
dollars worth of liability to the taxpayers?
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
Mr. CULBERSON. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. Virtually every piece of legislation we
deal with, because this legislation has two parts, one part which will
reduce an existing liability, that is, there is already out there a
flood insurance liability. This bill, unanimously agreed to by all in
the committee who worked on it, will reduce that in the flood part.
With regard to water, this will raise premiums and restrict
placement. With regard to the new part, the wind part, it will create
no liability, because as I have said several times, the bill strictly
says that premiums will have to be actuarially sound. And CBO has
certified that that is accurate. So CBO has certified this will, over
time, produce no new liability on wind and save money on water.
Mr. PATRICK J. MURPHY of Pennsylvania. Mr. Chairman, I yield myself
the balance of my time.
Mr. Chairman, in closing, I want to tell you about Nancy Rees of
Yardley, Pennsylvania. Over the last 3 years, Yardley was hit with
three floods. Mrs. Rees came to our office because her insurance policy
was rated with the wrong formulas. This seemingly simple mistake cost
her an extra $10,000 per year in insurance premiums. $10,000 more a
year. Thankfully for Mrs. Rees, after countless hours of working with
our staff, she was successful. But in this case, a flood insurance
advocate could have stood up for her in the wake of a major flood. That
is why we need to pass this amendment.
Mrs. CAPITO. Mr. Chairman, I yield my remaining time to the gentleman
from Texas (Mr. Culberson).
Mr. CULBERSON. In response to the distinguished chairman's point that
the legislation requires that the program be actuarially sound, that is
true that is in the bill that you produced here. However, the law also
requires that the flood insurance program be actuarially sound. It is
$20 billion in debt. The legislation before the House asked the Federal
Government, the taxpayers, to assume a potential liability for the $19
trillion worth of insured property, a valuation of property just along
the coastline. It is important to remember that the taxpayers of the
United States are already facing liability of $50.5 trillion according
to the Government Accountability Office. It is just irresponsible. It
is dangerous to pass legislation like this, creating a massive new
expansion of an existing program that is already $20 billion in debt at
a time when the country faces massive debt and massive deficits. It is
just irresponsible and dangerous.
I wanted to point out to the House and to the people out there
listening, Mr. Chairman, that this legislation is fiscally
irresponsible. It is dangerous.
Mr. Chairman, I urge the House to defeat it. It is a bad idea to pass
on the liability like this to the taxpayers.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
Mr. CULBERSON. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. The mistakes the gentleman makes are
these; the basis on which the flood insurance policies are set is
different. The one in this bill, the wind policy, it is a much tougher
requirement to be actuarially sound. And CBO, unlike the gentleman from
Texas, can read the bill.
Mr. CULBERSON. This is a brand new liability that we are passing on
to my daughter and to the children of America, to the people of the
United States who are already saddled with $15.5 trillion worth of
liability, and it is just irresponsible. It is unacceptable. It is
outrageous to create a massive new program like this that if it passes
that could create, potentially, liability in the trillions of dollars.
That is my point. There has never been a more expensive nor more
massive creation of potential liability to the taxpayers than this
legislation before the House today. That is my point.
Mr. Chairman, I urge every Member who cares about the fiscal solvency
of the United States to vote ``no'' against this legislation.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Pennsylvania (Mr. Patrick J. Murphy).
The amendment was agreed to.
Amendment No. 7 Offered by Mr. Taylor
The Acting CHAIRMAN. It is now in order to consider amendment No. 7
printed in part B of House Report 110-351.
Mr. TAYLOR. 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 Mr. Taylor:
In the matter proposed to be inserted by the amendment made
by section 7(a)(2) of the bill, in subsection (c)(7)(A),
after ``residential properties'' insert the following: ``,
which shall include structures containing multiple dwelling
units that are made available for occupancy by rental
(notwithstanding any treatment or classification of such
properties for purposes of section 1306(b))''.
In the matter proposed to be inserted by the amendment made
by section 7(a)(2) of the bill, in subsection (c)(7)(A)(ii),
before the semicolon insert the following: ``, which limit,
in the case of such a structure containing multiple dwelling
units that are made available for occupancy by rental, shall
be applied so as to enable any insured or applicant for
insurance to receive coverage for the structure up to a total
amount that is equal to the product of the total number of
such rental dwelling units in such property and the maximum
coverage limit per dwelling unit specified in this clause''.
In section 8 of the bill, strike paragraph (3) and insert
the following:
(2) in paragraph (4)--
(A) by striking ``$500,000'' each place such term appears
and inserting ``$670,000''; and
(B) by inserting before ``; and'' the following: ``; except
that, in the case of any nonresidential property that is a
structure containing more than one dwelling unit that is made
available for occupancy by rental (notwithstanding the
provisions applicable to the determination of the risk
premium rate for such property), additional flood insurance
in excess of such limits shall be made available to every
insured upon renewal and every applicant for insurance so as
to enable any such insured or applicant to receive coverage
up to a total amount that is equal to the product of the
total number of such rental dwelling units in such property
and the maximum coverage limit per dwelling unit specified in
paragraph (2); except that in the case of any such multi-
unit, nonresidential rental property that is a pre-FIRM
structure (as such term is defined in section 578(b) of the
National Flood Insurance Reform Act of 1994 (42 U.S.C. 4014
[[Page H10983]]
note)), the risk premium rate for the first $500,000 of
coverage shall be determined in accordance with section
1307(a)(2) and the risk premium rate for any coverage in
excess of such amount shall be determined in accordance with
section 1307(a)(1)''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Mississippi (Mr. Taylor) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Mississippi.
Mr. TAYLOR. Mr. Chairman, I thank the chairman of the committee for
allowing this amendment to be considered and hopefully for his help on
it.
Mr. Chairman, anyone who has traveled to south Mississippi or south
Louisiana after the wakes of Hurricanes Rita and Katrina know we have
an incredible housing shortage. Today, 19,000 Mississippi families are
still living in FEMA trailers. They are grateful for the trailers. They
would rather be someplace else. Part of that problem is, in particular,
for renters. In addition to homes being destroyed, a heck of a lot of
rental properties were destroyed.
Prior to this amendment, if you are a condo owner or building a
condo, you can build a condo with as many number of units as you would
like, and each one of those units can be insured up to the value of the
Federal flood insurance program. If it is 100 units, each one of them
can be insured up to $250,000. On the other hand, if you are
considering building rental property, you have two strikes against you.
Number one, in the wakes of Hurricanes Katrina and Rita, this private
sector that so many people are saying are being so good to us have now
said that just for wind insurance it is going to be $300 per unit per
month even for a modest apartment.
Secondly, if you are considering building a building, you can insure
that building for only $500,000. Whether it is one unit or 1,000 units,
you can only get $500,000 worth of coverage for that entire building.
It is a disincentive for the private sector to rebuild and to build the
sort of housing that we need.
This amendment is all about parity. If we, as a Nation, can insure
condominiums for folks who can afford to buy them, then we, as a
Nation, ought to be making available insurance for folks who can't
afford a condo but who need to rent a place to live.
Like every amendment that I have offered and every amendment that has
been made in order, it has been judged by the Congressional Budget
Office that this amendment will pay for itself. It has no impact on the
Treasury.
Mr. Chairman, I reserve the balance of my time.
Mrs. CAPITO. Mr. Chairman, I rise in opposition to the amendment.
The Acting CHAIRMAN. The gentlewoman from West Virginia is recognized
for 5 minutes.
Mrs. CAPITO. Mr. Chairman, I rise today in opposition to this
amendment offered by the gentleman from Mississippi. The bill we are
debating today is troubled, I think, because of the deeply in-debt
flood insurance program, and now we are not debating, because we were
unable to debate on the full floor of the House whether we should
include wind in this. Wind is in this bill as a peril. But what this
amendment does is further expand that coverage that is very debatable,
I think premature, has been unstudied, and I believe this would be very
unwise to include this amendment as a coverage expansion.
We have talked about the fact that the flood insurance program owes
the U.S. Treasury $18 billion. We have talked about the fact that at a
hearing in July on whether we should add wind to the NFIP, that the
National Association of Insurance Commissioners, insurance experts,
environmental groups, floodplain management groups, Treasury and FEMA
all opposed the initial expansion. And suffice it to say they would
certainly oppose, or they could certainly oppose, an even further
expansion of this that this amendment represents.
I think that the wind insurance premiums are supposed to be
actuarially sound, and the chairman of the full committee has made that
point several times. The majority of the NFIP policies are supposed to
be actuarially sound. And yet, the nonpartisan GAO says that they are
not actuarially sound. We know that very few government insurance
programs are ever actuarially sound.
Mr. Chairman, I urge my colleagues to oppose this amendment and to
avoid a further expansion that this new mandate in this amendment
represents.
Mr. Chairman, I reserve the balance of my time.
Mr. TAYLOR. First, Mr. Chairman, I would like to encourage the
gentlewoman, let's deal with the facts. If you have an organization
that is opposed to this amendment, name the organization. But let's
don't suppose for anyone whether they are for it or against.
Secondly, Mr. Chairman, I yield the remainder of my time to the
chairman of the committee.
Mr. FRANK of Massachusetts. Mr. Chairman, I thank the gentleman, and
I regret to say the entertainment value of what was not an exciting
subject from the beginning appears to have gone down because the
gentleman from Texas (Mr. Culberson) has left the floor. I thought his
method of argument, which is the frequent repetition of error at
increasing volume, added a certain panache to the proceedings. But
since the last time he reiterated those errors, I thought it would be
useful to correct them.
First of all, this bill and this amendment not only doesn't add to
the Federal Government's liability, it diminishes existing liability.
The flood program was allowed to get deeply in debt. This bill with
respect to flood says that there will be higher premiums and there will
be fewer buildings in the floodplain areas. So it clearly reduces. It
is supported in that respect by environmentalists and taxpayers.
The wind part does add a new program. It adds a new program subject
to the PAYGO rules, and it requires that it be strictly actuarially
sound. Now, the gentleman from Texas could not seem to understand the
basic distinction. He said, ``Well, the flood program was supposed to
be actuarially sound and it isn't.'' True. That is why when we did the
wind program, we wrote a much more specific and binding set of
instructions that it be actuarially sound.
The fact is that the flaws that led the water program to be in debt
are corrected in this bill. That is not simply the opinion of the
author, the gentleman from Mississippi, or this committee. It is CBO,
the Congressional Budget Office's certification. So the notion that
this adds to liability is simply wrong. It will reduce the outgo with
regard to the water program. With regard to the wind program, it is
actuarially sound, and in this bill, if it begins to run into deficit,
the program cuts off.
So an analogy between the wind funding and the water funding is
flatly wrong. They are written differently. We have learned from our
mistakes. And that is true of this amendment, too. The gentleman has
offered an amendment that would increase coverage subject, again, to
the very strict rules that say we will be actuarially sound.
Now, I have no particular hope that this is going to sink in
everywhere, but it does seem to me to be useful to have the fundamental
facts out there on the record.
{time} 1515
Mrs. CAPITO. Mr. Chairman, I take heed to the gentleman's words from
Michigan, and I tried to sort of recorrect my initial assumption that
they would oppose the amendment. So I apologize for that.
Mr. Chairman, I would like to place in the Record letters from folks
who do oppose the bill in general because of the wind addition. That
would be: Friends of the Earth, National Wildlife Federation, U.S.
Public Interest Group, America Insurance Association, Property Casualty
Insurers, Financial Services Roundtable, Consumer Federation of
America, Reinsurance Association of America.
September 26, 2007.
Re: Support For the Blumenauer-Gilchrest Global Warming
Amendment to H.R. 3121 and opposition to provisions
expanding the National Flood Insurance Program (NFIP) to
include wind coverage
Dear Representative: We write to express our support for
the Blumenauer-Gilchrest Global Warming Amendment to the
Flood Insurance Reform and Modernization Act, H.R. 3121. This
amendment would require that the Federal Emergency Management
Agency, FEMA, consider the impacts of global warming on flood
risks as it administers
[[Page H10984]]
the National Flood Insurance Program, NFIP, Map Modernization
Program. To adjust to the reality of global warming, Congress
must require that the NFIP floodplain maps incorporate the
best available climate science. Accurate floodplain maps will
ensure that citizens are aware of the flood risks in their
community and help prevent the loss of human life, property,
and important wildlife habitat as we face more global
warming-powered weather events.
Section 22 of H.R. 3121 provides much needed guidelines and
ongoing mapping support for FEMA's map modernization effort.
Flood insurance maps are the basic planning documents for the
NFIP and provide a foundation for planning in developing
communities. According to the Congressional Research Service,
however, over 75 percent of the nation's 100,000 flood maps
are at least 10 years old. Currently, H.R. 3121 fails to
require FEMA to consider modern climate science when mapping
floodplains. Under current methodologies, many of FEMA' s
maps are already out of date and inaccurate when they are
certified because they fail to take into account both
critical new information beyond past flooding history,
including the impacts of global warming. These outdated maps
have resulted in more instances of storms with significantly
greater flooding than predicted and give citizens a false
sense of security that they will not be subject to flooding.
This false sense of security is especially troubling as
global warming's impacts become evident. Global warming will
result in more flooding of coastal and riverine communities
through intense hurricanes, reduced snow pack, and sea level
rise.
The Blumenauer-Gilchrest Amendment would ensure that the
FEMA Director consider impacts of global warming on our
nation's flood risks and the potential future impact of
global warming on the intensity of storms, storm surge
modeling, sea level rise, and increased hurricane activity.
Considerable experience exists in these areas, and the
Blumenauer Amendment would ensure that FEMA incorporates the
best available climate science into its mapping effort. We
strongly support this amendment.
We urge Congress to oppose the multiperil, wind and
flooding, insurance program in H.R. 3121, because it could
overwhelm the NFIP, cost the taxpayers' billions, increase
incentives to develop in hazard-prone and ecologically-
sensitive coastal areas and floodplains, and place more
lives, properties, and wildlife habitat at risk. We applaud
Representative Taylor and other Members for raising the
nation's awareness of the increasing risks associated with
global warming-powered coastal storms. We are also
sympathetic to citizens' desires to remove wind damage and
flooding damage distinctions in homeowner's insurance
policies in the aftermath of Hurricanes Katrina, Rita, and
Wilma. Yet, we oppose adding a wind peril dimension to the
NFIP because it would substantially undermine the program's
already precarious financial position, would add greater risk
and uncertainty especially for the taxpayers and the public,
and would distract from the critical missions of the NFIP.
Essentially, we must fix the NFIP before we expand it.
Hurricanes Katrina and Wilma have already driven the NFIP
into the most dire financial condition in its history, now
with a virtually insurmountable U.S. Treasury debt of
approximately $18 billion. H.R. 3121 would mandate that FEMA
begin the sale of a new federal wind insurance (multiple
peril including wind and flood) beginning on June 30, 2008,
right before the 2008 Hurricane Season and almost immediately
increasing the exposure of the U.S. taxpayers to potentially
billions of dollars in new claims. The chances of exposure of
a catastrophic storm could swamp the national flood insurance
program and leave it crippled forever. The rates of coverage
are also significantly greater than those provided by current
flood insurance alone: $650,000 for residential structures
and contents and $1.75 million for commercial properties and
contents. These coverage caps expose the taxpayers to
considerable liability. In fact, recent insurance industry
estimates show that costs of storms like Hurricane Katrina
that were in the $15 to $20 billion range for the NFIP
currently, could be three to five times or more, if wind
perils were also included. Such costs could potentially
overwhelm the program and the costs to taxpayers could
balloon to staggering levels.
For these reasons, again, we support the Blumenauer-
Gilchrest Global Warming Amendment, which will ensure that
FEMA address the realities of global warming in its map
modernization effort. We oppose the provisions within H.R.
3121 that expand the NFIP to include wind. These provisions
threaten to overwhelm an already failing National Flood
Insurance Program that needs substantial reforms to turn the
corner on expanding flood risk and to accomplish its other
purposes. Although many of the reforms contained within H.R.
3121 represent steps in the right direction, the proposed
legislation will not go far enough in fixing the essentially
bankrupt NFIP. Congress will have missed an historic
opportunity to strengthen the NFIP if it passes this bill in
its current form.
Please see the attached overview of our additional concerns
with the bill.
Thank you for you attention to this matter.
Sincerely,
Erich Pica,
Director of Domestic Programs, Friends of the Earth.
Adam Kolton,
Senior Director, Congressional & Federal Affairs, National
Wildlife Federation.
David Jenkins,
Government Affairs Director, Republicans for Environmental
Protection.
Emily Figdor,
Federal Global Warming Program Director, U.S. Public
Interest Research Group (PIRG).
____
September 26, 2007.
Hon. Nancy Pelosi, Speaker,
Hon. John Boehner, Minority Leader,
House of Representatives,
Washington, DC.
Dear Madam Speaker and Minority Leader Boehner: On behalf
of the undersigned associations, we are writing to express
our opposition to House passage of H.R. 3121, ``The Flood
Insurance Reform and Modernization Act of 2007.'' While we
are supportive of the reforms to the National Flood Insurance
Program (NFIP) contained in the legislation, we strongly
object to the provisions that would add the peril of
windstorm to the NFIP.
The addition of wind coverage to the NFIP has the potential
to dramatically increase the exposure of the NFIP and the
federal government to catastrophic losses. The states along
the Gulf coast and eastern seaboard contain more than $19
trillion in insured property values. The majority of these
risks are currently insured in the private marketplace or in
state residual market programs where the private insurance
industry shares the potential losses. Writing a significant
number of these properties in the NFIP would markedly
increase the federal government's exposure to loss and,
despite the provision that calls for ``actuarially sound''
rates for the windstorm portion of this coverage, the
potential for a significant taxpayer subsidy. The bill also
calls for the NFIP to stop writing and renewing multiple-
peril coverage for these policyholders if it is required to
borrow federal funds to pay its losses. This has already
occurred at the state level, following the events of 2005,
several state windstorm residual market plans, which are
statutorily required to use ``actuarially sound'' rates,
exhausted all of their available assets and had to fund these
shortfalls by assessing the insurance industry and/or
policyholders.
The policyholders most likely to buy this new federal
coverage would be those living in areas that are highly
exposed to wind damage, creating adverse selection, as
happens with state residual market wind pools today. The
amount of ``multiple-peril'' insurance that the NFIP would
sell cannot accurately be determined at this time; thus,
determining the unsubsidized premium for such coverage would
be, even using the best actuarial science, a guess. Although
the ``pay as you go'' (PAY-GO) rules require that the costs
of the insurance program be unsubsidized by taxpayers, there
is a real possibility that the program will not be self-
sustaining, particularly in early years when the accumulation
of premiums could be vastly exceeded by losses in the event
of a hurricane of any significance.
Finally, nationalizing wind coverage under the NFIP, as
proposed by this bill, will not resolve ``wind versus water''
disputes following a hurricane, and would do little to
facilitate the resolution of these claims because many
homeowners, even in flood-prone regions, do not purchase
flood insurance--for example, fewer than 20 percent in
coastal Mississippi prior to Hurricane Katrina. H.R. 3121
does not mandate the purchase of flood insurance and will not
facilitate the resolution of claims for policyholders who do
not purchase this coverage.
For these reasons, we strongly urge members to vote no on
passage of H.R. 3121.
Respectfully,
American Insurance Association.
National Association of Mutual Insurance Companies.
Property Casualty Insurers Association of America.
The Financial Services Roundtable.
Reinsurance Association of America,
Washington, DC, July 25, 2007.
Chairman Barney Frank,
Ranking Member Spencer Bachus,
House Financial Services Committee, House of Representatives,
Washington, DC.
Dear Chairman Frank and Ranking Member Bachus: The
Reinsurance Association of America (RAA) strongly opposes the
inclusion of the Multiple Peril Insurance Act of 2007 to the
flood insurance reform bill (H.R. 3121). The legislation
would unnecessarily expand the scope of the National Flood
Insurance Program (NFIP) to offer windstorm coverage that is
currently being provided by private sector insurers,
reinsurers, capital market participants and residual market
programs.
The RAA, headquartered in Washington, D.C., is a non-profit
trade association of property and casualty reinsurers and
reinsurance intermediaries. RAA underwriting members and
their affiliates write more than two-thirds of the gross
reinsurance coverage provided by U.S. professional
reinsurance companies.
A Robust Private Market for Wind Coverage Already Exists
This legislation fundamentally alters who bears the risk of
loss from wind. Instead of spreading this risk throughout the
worldwide private insurance marketplace, this legislation
puts the entire burden of deficits on the U.S. taxpayer. This
fundamental shift is unnecessary. There is adequate wind
capacity being provided by direct insurers and/or state
residual markets. Moreover, there is a very robust global
private reinsurance
[[Page H10985]]
market for wind to help insurance companies manage their risk
of loss. Over $35 billion of new capital has entered the
private reinsurance capital markets to cover wind risk since
Hurricane Katrina. RAA questions why Congress would want to
shift the risk of loss to the U.S. taxpayers, rather than
spreading this risk throughout the private insurance
marketplace.
Federal Taxpayers Will Subsidize Coastal Insured's
The RAA also has serious concerns that the NFIP will
recklessly attract policyholders into buying wind coverage by
suppressing the federal insurance rates. This has occurred in
most state property insurance residual markets, which are
under intense political pressure to maintain rates that are
not sufficient to pay losses. Suppressing rates and loosening
underwriting standards only places the U.S. taxpayer at
further risk and encourages more development in high-risk
areas.
The NFIP Is Not Equipped to Offer Wind Insurance
The underwriting and pricing of flood and wind risk are
fundamentally different. The Federal government has no
institutional knowledge in these areas and it would be a
daunting undertaking for them to develop such technical
expertise. In addition to updating flood maps, FEMA would
also have to develop wind maps for the entire United States.
These tasks will only result in the creation of greater
federal bureaucracy.
All State And Federal Disaster Insurance Programs Operate At An
Expected Loss
The NFIP is already $17 billion in the red. What if the
NFIP had borne the wind loss associated with the 2004 and
2005 storms? The private marketplace paid $16.5 billion of
wind insured losses in 2004 and over $60 billion of insured
losses for the 2005 season. If this legislation were in place
when these storms hit, the U.S. taxpayer would be paying
greater deficits for these losses, rather than the private
global insurance and reinsurance marketplace.
We urge you to oppose the inclusion of the Multiple Peril
Insurance Act into H.R 3121 and support the Rep. Brown-Waite,
Feeney and Putnam amendment to have the GAO conduct a study
of this issue.
Sincerely,
Franklin W. Nutter,
President.
Mr. TAYLOR. Mr. Chairman, I very much appreciate the gentlewoman's
remarks. I would like to mention to the gentlewoman, and add for the
Record, the support for this bill, including the wind language, from
the National Association of Realtors, National Association of
Homebuilders, National Association of Bankers.
National Association of Realtors,
Washington, DC, September 26, 2007.
House of Representatives,
Washington, DC.
Dear Representative: On behalf of the more than 1.3 million
members of the National Association of REALTORS'
(NAR), I ask for your vote in favor of H.R. 3121, the Flood
Insurance Reform and Modernization Act of 2007, when it is
considered by the House of Representatives on Thursday,
September 27.
The National Flood Insurance Program (NFIP) offers
essential flood loss protection to homeowners and commercial
property owners in more than 20,000 communities nationwide.
The bill, as written, will help protect homeowners, renters
and commercial property owners from losses sustained from
flooding. NAR strongly supports the following changes to the
NFIP contained in the bill including:
Extending the NFIP for five years;
Ensuring that the 100-year flood maps are updated as
expeditiously as possible;
Increasing coverage limits to $335,000 for residential and
$670,000 for commercial properties;
Supporting education of tenants about the availability of
flood insurance while providing flexibility to property
owners and managers in the manner of providing such notice;
Adding coverage for living expenses, business interruption,
and basement improvements;
Extending the pilot program for mitigation of severe
repetitive loss properties; and
Studying the impacts of eliminating subsidies on
homeowners, renters and local economies.
It is critical that flood insurance remain accessible for
all individuals who own or rent property in a floodplain. I
urge you to vote in favor of H.R. 3121, the Flood Insurance
Reform and Modernization Act of 2007, on Thursday.
Sincerely,
Pat V. Combs,
2007 President,
National Association of Realtors.'
____
National Association
of Home Builders,
Washington, DC, September 26, 2007.
House of Representatives,
Washington, DC.
Dear Representatives: On behalf of the 235,000 members of
the National Association of Home Builders (NAHB), I am
writing to express our support for H.R. 3121, the Flood
Insurance Reform and Modernization Act of 2007 as amended by
the Manager's Amendment, which includes much-needed technical
improvements to the underlying bill.
As you know, Hurricanes Katrina, Rita and Wilma radically
disrupted the lives of those living on the Gulf Coast. After
the storms' passing, many homeowners found themselves in
dispute with their property insurance companies over whether
water or wind was the primary cause of damage to their homes.
After much debate, one proposed solution which has emerged to
address this conflict is to expand the authority of the
National Flood Insurance Program (NFIP) to include wind
coverage.
NAHB is pleased that the bill incorporates new language to
provide wind insurance coverage for home owners. H.R. 3121,
as amended by the Manager's Amendment, would provide a needed
addition in expanding the availability and affordability of
property insurance in high hazard areas. Additionally, it
references the mitigation requirements of consensus-based
building codes as a measure to lessen the potential damage
caused by a natural disaster and thus further ensure the
financial stability of the NFIP.
NAHB remains concerned about the overall solvency of the
NFIP, but we also view this program as not simply about flood
insurance premiums and payouts. The NFIP is a comprehensive
tool to guide the development of growing communities while
simultaneously balancing the need for reasonable protection
of life and property. The specific method Congress uses to
achieve this balance could potentially impact housing
affordability as well as the control local communities have
over their growth and development. NAHB believes that H.R.
3121 strikes the proper balance in protecting the NFIP's
long-term financial stability while ensuring that federally-
backed flood insurance remains available and affordable.
As this new NFIP expansion moves forward, NAHB encourages
Congress to limit the amount of the program's fiscal exposure
to ensure its financial sustainability and to require
premiums for the new multi-peril coverage to be risk-based
and actuarially sound. NAHB commends the work of the House
Financial Services Committee in crafting legislation to
preserve and enhance this important federal program, and we
urge your support for H.R. 3121, as amended by the Manager's
Amendment, when it comes to the House floor this week.
Thank you for your attention to our views.
Sincerely,
Joseph M. Stanton.
____
September 26, 2007.
To: Members of the U.S. House of Representatives.
From: Floyd Stoner, Executive Director, Congressional
Relations & Public Policy, ABA.
Re: Support for H.R. 3121, the Flood Insurance Reform and
Modernization Act of 2007.
I am writing on behalf of the members of the American
Bankers Association (ABA) to express our support for H.R.
3121, the Flood Insurance Reform and Modernization Act of
2007, scheduled to be considered by the full House later this
week.
Since 1968, nearly 20,000 communities across the United
States and its territories have participated in the National
Flood Insurance Program (NFIP) by adopting and enforcing
floodplain management ordinances to reduce future flood
damage. In exchange, the NFIP makes federally backed flood
insurance available to homeowners, renters, and business
owners in these communities.
Losses from three large hurricanes (Katrina, Rita, and
Wilma) in 2005 have left the NFIP more than $23 billion in
debt to the Treasury. There is no way that the NFIP can
reasonably repay this debt and provide payment for future
losses under the current rate structure. The likelihood of
additional flood events and resulting claims against the
program make reforms vital.
This legislation would require the Federal Emergency
Management Agency (FEMA) to update the flood maps, and it
would provide a phase-in of actuarial rates for commercial
properties and non-primary residences. ABA supports these
efforts as being necessary to sustain the program over the
long term.
H.R. 3121 also would increase the penalties for non-
compliance in placing flood insurance, from $350 per
violation to $2000 per violation. We are pleased that the
legislation would provide a ``safe harbor'' for an
institution which is in non-compliance due to circumstances
beyond its control (such as outdated mapping by FEMA). We
also are pleased that the legislation would provide
institutions with an opportunity to correct non-compliance
before a penalty is assessed and place a reasonable limit for
total penalties per institution/per year.
We urge you to support this important legislation.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Mississippi (Mr. Taylor).
The question was taken; and the Acting Chairman announced that the
ayes appeared to have it.
Mrs. CAPITO. Mr. Chairman, I demand a recorded vote.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Mississippi
will be postponed.
[[Page H10986]]
Amendment No. 8 Offered by Mr. Taylor
The Acting CHAIRMAN. It is now in order to consider amendment No. 8
printed in part B of House Report 110-351.
Mr. TAYLOR. 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 Mr. Taylor:
At the end of the bill, add the following new section:
SEC. 30. REQUIREMENTS RELATING TO WINDSTORM AND FLOOD.
Section 1345 of the National Flood Insurance Act of 1968
(42 U.S.C. 4081) is amended by adding at the end the
following new subsection:
``(d) Requirements for Write-Your-Own Insurers Relating to
Windstorm and Flood.--The Director may not utilize the
facilities or services of any insurance company or other
insurer to offer flood insurance coverage under this title
unless such company or insurer enters into a written
agreement with the Director that provides as follows:
``(1) Prohibition on exclusion of wind damage coverage.--
The agreement shall prohibit the company or insurer from
including, in any policy provided by the company or insurer
for homeowners' insurance coverage or coverage for damage
from windstorms, any provision that excludes coverage for
wind or other damage solely because flooding also contributed
to damage to the insured property.
``(2) Fiduciary responsibility.--The agreement shall
provide that the company or insurer--
``(A) has a fiduciary duty with respect to the Federal
taxpayers;
``(B) in selling and servicing policies for flood insurance
coverage under this title and adjusting claims under such
coverage, will act in the best interests the national flood
insurance program rather than in the interests of the company
or insurer; and
``(C) will provide written guidance to each insurance agent
and claims adjuster for the company or insurer setting forth
the terms of the agreement pursuant to subparagraphs (A) and
(B).''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Mississippi (Mr. Taylor) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Mississippi.
Mr. TAYLOR. Mr. Chairman, in the course of today's debate, a lot of
Members are learning a lot about insurance that they kind of wish they
didn't know. Unfortunately, a lot of folks in my district learned a lot
in the wake of that storm that they wish they knew.
As I have told you before, the United States Navy has modeled
Hurricane Katrina. According to the United States Navy, there were four
to five hours of hurricane force winds that hit south Mississippi
before the water ever got there. Now, that is a fact from the United
States Navy.
We have a policy under the National Write Your Own Program where we
as a Nation allow the private sector to sell that policy, even though
we back it. That is not a problem. It cuts down on administrative
costs. We also have a line in that contract, though, with those private
firms that says you will do a fair adjustment of the claim.
Think about it. I can't think of any other person that can send a
bill to the Federal Government, up to $250,000, plus another $100,000
for contents, and no one ever questions it. And yet we gave the
insurance industry this incredible responsibility, and I can tell you,
they misused it. But it says there has to be a fair adjustment. That is
the law.
Unfortunately, in the policies that they wrote for people, that were
multiple pages thick, buried in that policy is something called
``concurrent causation,'' which says, in effect, that after those four
to five hours of hurricane force winds hit south Mississippi, if on a
residence there's a single two-by-four left standing, the roof is gone,
the windows have been blown in, the curtains are gone, the house is
gone, if there's one two-by-four left standing, then there is a
concurrent causation of wind and water, and they don't have to pay.
It's in their policies.
Under oath there have been insurance agents who admitted they didn't
even know it was in the policy. If the insurance agents didn't know, do
you think an individual has a chance?
There is an extremely influential Senator on the other end of the
building, a law degree from the University of Mississippi; he didn't
know it was in there. Federal Judge Lou Garrolla, a Federal judge, he
didn't know it was in there. If an extremely influential U.S. Senator,
if a Federal judge doesn't know, what chance does a corrugated box
salesman have? What chance does a shrimper have, a housewife, a school
teacher?
The fact of the matter is that's wrong. The taxpayers ended up paying
the bill that the insurance company should have paid because they stuck
it to the taxpayers through the flood insurance policy every time.
This amendment would tell the insurance companies that if they want
to do business with our Nation through the Federal flood insurance
program, that they can no longer have a concurrent causation clause in
their contract because it's completely contrary to the contract they
have with our Nation that says it's going to be a fair adjustment of
the claim.
If after 4 hours of hurricane force winds the house is almost gone,
but there's one board left, and a wave comes along and knocks that last
board down, under their rules, the taxpayers pay. Under what is fair
and right, they ought to pay for what the wind did and let the
taxpayers pay for what the water did.
We recognize there's a problem, we are addressing that problem, and
only a shill for the insurance industry can turn around and say that
this is right. If you really are concerned about the Treasury, then you
ought to be concerned about the Treasury being ripped off by insurance
companies by letting their agents be the sole determining factor of
who's going to pay and sticking our Nation with the bill. This is an
opportunity to close that loophole and to right an egregious wrong.
Mr. Chairman, I reserve the balance of my time.
The Acting CHAIRMAN. Does any Member claim the time in opposition?
The Chair recognizes the gentleman from Mississippi.
Mr. TAYLOR. I yield the remainder of my time to the chairman of the
committee.
The Acting CHAIRMAN. The gentleman from Massachusetts is recognized
for 1 minute.
Mr. FRANK of Massachusetts. Mr. Chairman, this is actually a very
conciliatory amendment by the gentleman from Mississippi because
previously, and I know the gentleman has left the floor, he's been here
very diligently, I don't mean anything critical, but the gentleman from
Georgia (Mr. Kingston) said why don't we try to make the private
companies live up to their responsibilities and stop them from walking
away.
This amendment is the first chance we get to do that, because what
this amendment does is not extend Federal coverage, but try to hold
those companies which are voluntarily participating with the Federal
Government to a reasonable standard with regard to their own coverage.
So this is a chance to hold the private companies to their social
responsibility.
Mr. TAYLOR. I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Mississippi (Mr. Taylor).
The amendment was agreed to.
Amendment No. 9 Offered by Mr. Costello
The Acting CHAIRMAN. It is now in order to consider amendment No. 9
printed in part B of House Report 110-351.
Mr. COSTELLO. 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. 9 offered by Mr. Costello:
Subsection (k) of section 1360 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4101), as added by section
22(a) of the bill, is amended by redesignating paragraph (8)
as paragraph (9).
Subsection (k) of section 1360 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4101), as added by section
22(a) of the bill, is amended by inserting after paragraph
(7) the following new paragraph:
``(8) Use of maps for rates.--The Director shall not adjust
the chargeable premium rate for flood insurance under this
title based on an updated national flood insurance program
rate map or require the purchase of flood insurance for a
property not subject to such a requirement of purchase prior
to the updating of such national flood insurance program rate
map until an updated national flood insurance program rate
map is completed for the entire district of the Corps of
Engineers affected by the map, as determined by the district
engineer for such district.''.
[[Page H10987]]
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Illinois (Mr. Costello) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Illinois.
Mr. COSTELLO. Mr. Chairman, I yield myself as much time as I may
consume.
I thank the Rules Committee for making this amendment in order and
thank Chairman Frank as well. My amendment is a commonsense, simple
amendment that will bring fairness to FEMA's remapping process. If my
amendment is adopted, FEMA would not be able to adjust premium rates or
require the purchase of flood insurance until all remapping has been
completed for an entire district of the Corps of Engineers affected by
the remapping.
Under the current system, one geographic area of a floodplain or
watershed can be updated, while another geographic area of the same
floodplain or watershed may not be remapped for a few years.
If you look at the St. Louis area, preliminary maps will be available
for review in December of this year for the Illinois side of the
Mississippi River, but will not be available for the Missouri side of
the river for two to three years. The remapping process should not be
stopped, but remapping should be implemented for the entire floodplain
or watershed together, as opposed to the current piecemeal approach.
Mr. Chairman, I urge my colleagues to support this amendment.
Mr. Chairman, I reserve the balance of my time.
The Acting CHAIRMAN. Does anyone seek time in opposition to this
amendment?
The Chair recognizes the gentleman from Illinois.
Mr. COSTELLO. Mr. Chairman, I yield 2 minutes to my friend from
Illinois (Mr. Shimkus).
(Mr. SHIMKUS asked and was given permission to revise and extend his
remarks.)
Mr. SHIMKUS. Mr. Chairman, I want to commend my colleague,
Congressman Costello, for his great work. It is a pretty simple premise
that if we are going to do the FEMA floodplain analysis, it ought to be
in a watershed. As he so aptly put, when floods come across rivers,
they will flow across banks on both sides. So as we have to address how
to do the compensation, it only makes sense that they do it that way.
So I appreciate him bringing this forward, and I appreciate Chairman
Frank's effort in this aspect.
Mr. COSTELLO. Mr. Chairman, I urge adoption of my amendment, and I
yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Illinois (Mr. Costello).
The amendment was agreed to.
Amendment No. 10 Offered by Mr. Gene Green of Texas
The Acting CHAIRMAN. It is now in order to consider amendment No. 10
printed in part B of House Report 110-351.
Mr. GENE GREEN 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. 10 offered by Mr. Gene Green of Texas:
At the end of section 22 of the bill, add the following new
subsection:
(e) Phase-In of Flood Insurance Premiums for Low-Cost
Properties.--Section 1308 of the National Flood Insurance Act
of 1968 (42 U.S.C. 4015), as amended by the preceding
provisions of this Act, is further amended--
(1) in subsection (c), by inserting ``and subsection (g)''
before the first comma; and
(2) by adding at the end the following new subsection:
``(g) 5-Year Phase-In of Premiums for Newly Covered Low-
Cost Properties.--
``(1) In general.--In the case of any area not previously
designated as an area having special flood hazards that
becomes designated as such an area as a result of remapping
pursuant to section 1360(k), during the 5-year period that
begins upon the initial such designation of the area, the
chargeable premium rate for flood insurance under this title
with respect to any low-cost property that is located within
such area shall be--
``(A) for the first year of such 5-year period, 20 percent
of the chargeable risk premium rate otherwise applicable
under this title to the property;
``(B) for the second year of such 5-year period, 40 percent
of the chargeable risk premium rate otherwise applicable
under this title to the property;
``(C) for the third year of such 5-year period, 60 percent
of the chargeable risk premium rate otherwise applicable
under this title to the property;
``(D) for the fourth year of such 5-year period, 80 percent
of the chargeable risk premium rate otherwise applicable
under this title to the property; and
``(E) for the fifth year of such 5-year period, 100 percent
of the chargeable risk premium rate otherwise applicable
under this title to the property.
``(2) Low-cost property.--For purposes of this subsection,
the term ``low-cost property'' means a single-family
dwelling, or a dwelling unit in a residential structure
containing more than one dwelling unit, that--
``(A) is the principal residence of the owner or renter
occupying the dwelling or unit; and
``(B) has a value, at the time of the initial designation
of the area having special flood hazards, that does not
exceed 75 percent of median home value for the State in which
the property is located.''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Texas (Mr. Gene Green) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Texas.
Mr. GENE GREEN of Texas. Mr. Chairman, I yield myself such time as I
may consume.
(Mr. GENE GREEN of Texas asked and was given permission to revise and
extend his remarks.)
Mr. GENE GREEN of Texas. Mr. Chairman, I rise in strong support of
H.R. 3121, the Flood Insurance Reform and Modernization Act, that will
help bring national flood insurance programs into the 21st century. I
particularly want to thank the chairman of the committee, Barney Frank,
as well as the sponsor of the bill and subcommittee Chair Maxine Waters
for her hard work in bringing this bipartisan bill to the floor today.
Mr. Chairman, in June of 2001, Texas and other States witnessed
damage wrought by Tropical Storm Allison after it swept through Texas
and up the east coast causing substantial flood damage to thousands of
my constituents, along with everyone else, both homes and businesses.
The good news was that some of these losses were protected by the
National Flood Insurance Program. The bad news was that many of my
constituents who needed flood insurance could not afford to purchase
the policy. We all know that the flood insurance program plays a
critical role in lessening the impact of major flooding disasters; but
to make the program more effective, we need greater participation from
Americans of all incomes.
H.R. 3121 requires FEMA to conduct a survey to review the Nation's
flood maps. Inevitably, these updates will identify undesignated homes
as being located in flood-prone areas. For many low-income families,
such designation of their homes means having to purchase flood
insurance that is either unaffordable or difficult to immediately
budget for on modest means. Our amendment seeks to bridge that
insurance gap between those who can afford a flood policy and those who
cannot, and still be able to expand the people paying into the system.
The amendment is simple: it would provide a limited 5-year phase-in
of flood insurance premiums for low-income homeowners or renters whose
primary residence is placed within the floodplain through an updating
of the flood insurance program maps. These homes can be valued at no
more than 75 percent of the median home value for the State in which
the property is located.
This amendment would make the National Flood Insurance Program more
affordable for low-income homeowners, increase participation in the
program and decrease the likelihood of an a taxpayer bailout in the
event of a flood. I believe the amendment will bring security and peace
of mind to many hardworking families who don't live in mansions, but
live in their basic homes and that need help in obtaining protection
that their homes deserve.
Mr. Chairman, I urge support for the amendment.
Mr. Chairman, I reserve the balance of my time.
The Acting CHAIRMAN. Does any Member seek recognition in opposition
to the amendment?
The Chair recognizes the gentleman from Texas.
Mr. GENE GREEN of Texas. I yield to the Chair of the committee.
[[Page H10988]]
Mr. FRANK of Massachusetts. Mr. Chairman, I just want to thank the
gentleman for taking this up. I want to stress what we are doing.
People have said, well, you are giving people breaks. No. The
amendment that the gentleman from California (Mr. Cardoza) offered
earlier and this one deal with people who having lived somewhere, now
will find themselves in a floodplain not because they moved, but
because the designation is different.
This does not exempt them from having to pay the insurance. It does
in certain cases, the gentleman from California's case. And this one
that has to do with remapping, new maps or updating maps, it allows
them to phase in. The result will be more people paying in and more
people living in a floodplain who will be having to pay flood
insurance. The remapping means there will be more restrictions on
future building there.
I did want to stress that we did not in this bill and not in any of
the amendments give any reductions to people already covered. But we
have said, again, where people did not move in but found themselves
where they had previously been living now included in the zone, we give
people some leeway in the phasing in of the policy charge.
Mr. GENE GREEN of Texas. Mr. Chairman, I yield back the balance of my
time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Texas (Mr. Gene Green).
The amendment was agreed to.
{time} 1530
Amendment No. 11 Offered by Mr. Berry
The Acting CHAIRMAN (Mr. Gene Green of Texas). It is now in order to
consider amendment No. 11 printed in part B of House Report 110-351.
Mr. BERRY. 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. 11 offered by Mr. Berry:
At the end of the bill add the following new section:
SEC. __. NOTATIONS ON FLOOD INSURANCE RATE MAPS FOR AREAS
PROTECTED AGAINST 100-YEAR AND 500-YEAR FLOODS
BY CERTIFIED FLOOD CONTROL STRUCTURE.
The National Flood Insurance Act of 1968 is amended by
inserting after section 1361A (42 U.S.C. 4102a) the following
new section:
``SEC. 1362. NOTATIONS ON FLOOD INSURANCE RATE MAPS FOR AREAS
PROTECTED AGAINST 100-YEAR AND 500-YEAR FLOODS
BY CERTIFIED FLOOD CONTROL STRUCTURE.
``(a) 100-Year Floodplain.--The Director may publish,
through the publication of a national flood insurance program
rate map, a note to designate areas protected against at
least the 100-year flood by a certified flood control
structure which shall read as follows: `NOTE: This area is
shown as being protected from at least the 1-percent-annual-
chance flood hazard by levee, dike, or other structure.
Overtopping or failure of any flood control structure is
possible. Property owners are encouraged to evaluate their
flood risk, based on full and accurate information, and to
consider flood insurance coverage as appropriate.'.
``(b) 500-Year Floodplain.--The Director may publish,
through the issuance of a national flood insurance program
rate map, a note to designate areas protected against at
least the 500-year flood by a certified flood control
structure which shall read as follows: `NOTE: This area is
shown as being protected from at least the 0.2-percent-
annual-chance flood hazard by levee, dike, or other
structure. Overtopping or failure of any flood control
structure is possible. Property owners are encouraged to
evaluate their flood risk, based on full and accurate
information, and to consider flood insurance coverage as
appropriate.'.
``(c) Effect of Notes.--The publication of a note under
subsection (a) or (b) shall not be considered a requirement
of participation in the national flood insurance program.''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Arkansas (Mr. Berry) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Arkansas.
Mr. BERRY. Mr. Chairman, first of all, I want to thank the
distinguished chairman of the Committee on Financial Services for his
magnificent leadership on this issue of modernizing and reforming
FEMA's flood insurance program.
I rise to offer this amendment along with my colleagues, Mrs. Emerson
and Mr. Hulshof from Missouri, Mr. Costello and Mr. Hare of Illinois,
and Mr. Ross of Arkansas.
This amendment addresses concerns that we have heard from property
owners, local governments, small businesses, Realtors, lenders, and
others regarding FEMA's flood maps and the uncertainty they have caused
in our local communities. The arbitrary and technically deficient
blanket warning note that FEMA currently uses has caused confusion as
to whether or not some areas are in a floodplain or not, whether flood
insurance is needed or not. This has placed an unnecessary burden on
property owners and threatens economic development in some of the most
impoverished areas of the Nation.
This amendment dramatically improves FEMA's current policy, requiring
any note placed on flood maps to more fully and accurately inform the
property owners about the protection value of their levees. This
amendment will continue the objective of educating property owners and
reminding them of the importance of honestly assessing their risk,
reminding them that they may consider optional purchase of flood
insurance, even if they are not in a special flood hazard area.
I believe this is a reasonable amendment which maintains the
important objectives of providing accurate information about the safety
of the levees, encouraging honest assessments of flood risks, while
eliminating the uncertainty that FEMA has created. I urge my colleagues
to adopt this amendment.
Mr. Chairman, I reserve the balance of my time.
Mrs. EMERSON. Mr. Chairman, I claim the time in opposition, although
I am not opposed to the amendment.
The Acting CHAIRMAN. Without objection, the gentlewoman from Missouri
is recognized for 5 minutes.
There was no objection.
Mrs. EMERSON. Mr. Chairman, I want to thank the gentleman from
Arkansas (Mr. Berry) for his leadership, and my colleagues on the
Financial Services Committee for their efforts to improve the National
Flood Insurance Program.
The Berry amendment is a commonsense approach towards both increased
risk awareness and sound decisionmaking. The lack of preparedness on
the Federal, State and local level exposed by Hurricane Katrina
certainly suggests a real lack of awareness of the risks posed by
living in the shadow of levees. Appropriately, this amendment
recognizes the important role that Congress and the administration must
play in increasing risk awareness.
However, I would be negligent if I did not relay my concern regarding
the direction in which I sense the National Flood Insurance Program is
drifting. The decision to participate in the National Flood Insurance
Program should be entered into deliberately and after careful
consideration, not, and I stress ``not,'' based on blanket warnings
from FEMA.
As a Nation, taxpayers have contributed billions to build up our
levee and flood protection systems. At the same time, our local
communities have taken on the added burden of meeting local cost-share
requirements. These substantial investments were based in part on the
savings from removing the need to purchase flood insurance.
Mandatory requirements to purchase flood insurance should be
carefully studied. Blanket, one-size-fits-all warnings from an
organization, even an organization like FEMA, should be entered into
only after thoughtful consideration and ample review.
In my view, the Berry amendment would bring these principles to bear
on at least one bureaucratic decision, and I urge its adoption.
Mr. Chairman, I reserve the balance of my time.
Mr. BERRY. Mr. Chairman, I yield 2 minutes to my colleague from south
Arkansas (Mr. Ross).
Mr. ROSS. Mr. Chairman, I thank Mr. Berry for offering this
amendment. It is a bipartisan amendment. It is what I would call a
commonsense amendment.
I don't have to tell you, Mr. Chairman, that the Federal Emergency
Management Agency, they need help in trying to figure this program out.
This is the same Federal agency that has 8,000 brand new, fully
furnished mobile homes sitting in a cow pasture in Hope, Arkansas
several years after Hurricane Katrina, mobile homes that never got to
the victims. And when we had a tornado on the Mississippi River in
[[Page H10989]]
Dumas, Arkansas, it took FEMA 3 weeks to figure out how to move 30 of
them 2\1/2\ hours down the road, and now FEMA is trying to wreak havoc
on our National Flood Insurance Program.
The gentlewoman from Missouri is absolutely correct; it seems to me
what FEMA is trying to do here is pay for their flood insurance program
by forcing people to buy insurance who they know are never going to
have a claim. This is a step in the right direction in trying to
provide a commonsense fix to another mess that has been created by
FEMA, and I am pleased to stand here with my colleagues from Arkansas
and Missouri in support of it.
Mrs. EMERSON. Mr. Chairman, I yield 2 minutes to the gentleman from
central Missouri (Mr. Hulshof).
Mr. HULSHOF. Mr. Chairman, I appreciate my colleague from the Show Me
State for yielding, and I rise in support of the Berry-Ross-Hare-
Emerson-Hulshof-Costello amendment.
We have tasked the Federal Emergency Management Agency with educating
the public of the flood risks to their homes and businesses. I think we
agree and support their continued efforts in the education campaign so
long as it is done based upon the best modeling and sound science
available.
But I do not support FEMA pushing homeowners into purchasing flood
insurance when they don't need it. This is exactly what FEMA seems to
be doing with the zone X shaded floodplain note. Zone X shaded is the
area behind a certified 100-year or 500-year levee but still within the
100-year floodplain. Within these zones, FEMA attaches a note, the
purpose of which I believe seems to intimidate homeowners into
purchasing flood insurance through a very strongly worded suggestion.
Now, if you talk to FEMA, they will tell you those notes don't
require individuals to purchase flood insurance; and I guess I can say
my beautiful wife, Renee, doesn't require me to buy an anniversary
present, but there are some things that just seem to be understood.
Of particular concern, as has been expressed, is that when you have
certain lenders or others who see this warning, this stark warning,
that they may in fact require homeowners when in fact the law does not.
Again, I acknowledge what my colleague and friend from Cape Giradeau
has said. I am for floor insurance. It should be, for instance,
mandatory in special flood hazard areas. But we have areas in this
country where tremendous resources have been used to create a very
adequate flood protection system. Mrs. Emerson's district is one of
those, systems that are constructed and maintained and certified by the
Federal Government.
So individuals that live behind these certified levees, whether they
have been constructed by the Federal Government or constructed under
the supervision of the Federal Government, they pay their due, they pay
Federal taxes, and often they have participated in the levee districts
themselves. I think this is a commonsense amendment, and I am proud to
support it.
Mr. BERRY. Mr. Chairman, I appreciate very much the bipartisan way
this amendment has been developed and I think it demonstrates that we
can work together on both sides of the aisle to do commonsense things.
It is unfortunate that we have been put in the position by a Federal
agency because of severe mismanagement to where we have to become
involved in such matters. But I thank everyone for their approach to
this, and particularly thank the committee.
Mr. Chairman, I yield back the balance of my time.
Mrs. EMERSON. Mr. Chairman, I too want to thank Mr. Berry and the
other sponsors, thank the committee chairman and ranking member, and
hope that everyone will be in support of this very commonsense
amendment. There is no excuse for FEMA putting at risk the economic
development up and down the Mississippi River or around any other area
that is protected by a 100-year or 500-year levee, and that would
happen if we do not take this action.
Mr. COSTELLO. Mr. Chairman, I am offering an amendment with my
colleagues that would replace the current note FEMA uses which does not
distinguish levees according to their structural integrity or
protection value and replaces it with one that is more accurate to
clarify the protection level of flood control structures and the legal
requirements of flood Insurance coverage.
I strongly believe all property owners should be properly educated
about their flood risks and encouraged to assess their need for flood
insurance. However, no local governments, lenders, and the general
public should have uncertainty with regard to flood risks and whether
there is a requirement to participate in the Federal flood insurance
program.
Alexander County in my Congressional district and other areas
throughout the State of Illinois will be affected by these ``warning
labels'' and this amendment ensures that we are being clear in our
intent.
This amendment is important to my district and to the Nation and has
bipartisan support.
I urge my colleagues to support this amendment.
Mrs. EMERSON. Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Arkansas (Mr. Berry).
The amendment was agreed to.
Amendment No. 12 Offered by Mr. Walz of Minnesota
The Acting CHAIRMAN (Mr. Ross). It is now in order to consider
amendment No. 12 printed in part B of House Report 110-351.
Mr. WALZ of Minnesota. 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. 12 offered by Mr. Walz of Minnesota:
Subsection (k)(2)(A)(ii) of section 1360 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4101), as added by
section 22(a) of the bill, is amended by striking ``and''.
Subsection (k)(2)(A)(iii) of section 1360 of the National
Flood Insurance Act of 1968 (42 U.S.C. 4101), as added by
section 22(a) of the bill, is amended by striking the final
period and inserting ``; and''.
Subsection (k)(2)(A) of section 1360 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4101), as added by section
22(a) of the bill, is amended by adding at the end the
following new clause:
``(iv) the 100-year floodplain, including any area that
would be in the 100-year floodplain if not protected by a
levee, dam, or other man-made structure.''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from Minnesota (Mr. Walz) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Minnesota.
Mr. WALZ of Minnesota. Mr. Chairman, I thank the chairman of the
committee and the ranking member for offering this incredibly important
piece of legislation modernizing the National Flood Insurance Program.
On the evening of August 18 into the morning of August 19,
devastating storms swept across the Midwest. Seven of the 22 counties
in my congressional district are now Federal disaster areas as up to 18
inches of rain fell in a 24-hour period. Seven individuals in my
district lost their lives, and countless others were injured. Thousands
of homes were destroyed. Millions of dollars in damage to roads and
bridges which were washed away literally overnight.
Subsequently, many Minnesotans found out how quickly they needed to
become experts in the National Flood Insurance Program, so I
congratulate the committee for taking up this legislation.
One of the improvements that you are hearing about is the
improvements to the mapping of the 100-year and 500-year floodplains.
What my amendment does, we are getting the 500-year floodplains, and
they are dealing with areas that could be flooded if a levee or dam
fails. But they do not require FEMA at this time to map areas in the
100-year floodplain that, if not for a flood-control measure other than
a dam or levee, could flood, and my amendment simply asks for those
areas to be mapped.
When a flood-control measure fails, it is obvious that it is
catastrophic. Whether it be a flood wall or a levee in New Orleans, or
as we found out in Minnesota, a culvert in St. Charles, Minnesota, or a
storm sewer in Hokah, Minnesota, the impact is devastating.
This amendment is very simple. It adds one sentence to this bill
requiring FEMA to map ``areas in the 100-year floodplain, including any
area that would be in the floodplain if not protected by a dam, levee,
or other man-made structure.''
This does not put any new requirements on residents living in those
[[Page H10990]]
areas, or put any additional burden on residents who live near dams or
levees. The amendment simply requires FEMA to make information
available about the risk of flooding that might occur if a flood
control measure other than a dam or levee would fail. Some of the
structures we are talking about: culverts, storm sewers, certain
bridges and certain elevated rural roadways.
The recent floods in Minnesota showed the need for communities to
have a comprehensive information plan on the risks that they face. This
amendment would help do exactly that, and I urge my colleagues to adopt
this small change that could make a big difference in how people adjust
to the circumstances based on the potential of flooding.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Minnesota (Mr. Walz).
The amendment was agreed to.
Amendment No. 13 Offered by Mr. Stark
The Acting CHAIRMAN. It is now in order to consider amendment No. 13
printed in part B of House Report 110-351.
Mr. STARK. 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. 13 offered by Mr. Stark:
In the matter proposed to be inserted by the amendment made
by section 23 of the bill, in section 1363(a)(2), strike
``and'' at the end.
In the matter proposed to be inserted by the amendment made
by section 23 of the bill, in section 1363(a)(3), strike the
period at the end and insert ``; and''.
In the matter proposed to be inserted by the amendment made
by section 23 of the bill, after paragraph (3) of section
1363(a) insert the following new paragraph:
``(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
``(C) the mailing address and phone number of a person the
owner may contact for more information or to initiate an
appeal.''.
The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman
from California (Mr. Stark) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from California.
Mr. STARK. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, this is a simple amendment. The gentleman from Indiana
(Mr. Burton) and I are offering this jointly. Very quickly, it makes it
mandatory for FEMA to send a first-class mail notification to affected
property owners under the flood insurance sections.
The notification that they send must include an explanation of the
appeal process and contact information for responsible officials with
whom they should deal.
{time} 1545
It's needed because ordinary citizens don't read the Federal
Register, and often the announcements are printed in the legal page of
newspapers. The first that my constituents have heard about this is
from the mortgage lender who tells them they have got 45 days to buy
insurance, and they are then precluded from an appeals process, which
if they find out at least 90 days beforehand, they have a right to
utilize a community appeals process which is far less cumbersome and
expensive.
I can only suggest in support of the amendment that my good friend
Chairman Frank at one point stated when Burton and Stark get together,
you may not like the amendment, but you should save one of the puppies.
It is a bill that I think will help make this process simpler for all
of our constituents, and I urge the adoption.
Mr. BURTON of Indiana. Mr. Chairman, I rise in strong support of the
Stark-Burton amendment to H.R. 3121 the ``Flood Insurance Reform and
Modernization Act of 2007.'' This amendment is nearly identical to an
amendment we offered last year which passed this House unanimously. I
want to thank my colleague from California, Mr. Stark for once again
cosponsoring this amendment. I would also like to thank Chairman Frank
and Ranking Member Bachus for including parts of our original amendment
in this years legislation which will ensure that FEMA notifications of
elevation changes are published in the Federal Register, published in
the most widely circulated local newspapers and provided to the chief
executive officer of each affected community by certified mail.
Unfortunately, while extending notifications of changes in flood
elevations to newspapers and local officials is helpful, H.R. 3121
misses the bull's eye by ignoring the most important part of the
Burton/Stark amendment from last year; namely the requirement that FEMA
provide written notification by first class mail to each property owner
affected by a proposed change in flood elevations. Last year in my
district we had about 300 or 400 people who had no idea that FEMA was
redrawing the flood map in their area until they suddenly received
notice from their insurance companies and mortgage lenders saying that
they now lived in a flood plain and they needed to spend an extra
thousand or $2,000 a year for flood insurance. There hadn't been a
flood in that area of Johnson County, Indiana for over 100 years. In
fact, no one had ever heard of having a flood in this area.
Once these flood maps have been finalized the only way to remove a
property from the flood plan is to file an individual appeal complete
with extensive survey work paid for entirely at the property owner's
expense. The process is expensive and time-consuming and homeowners
must still buy and retain flood insurance throughout the process.
However, if homeowners can find out while the maps are still
preliminary, they have time to utilize an automatic 90-day appeal
process to have the remaps reevaluated, and potentially remove blocks
of homes from the flood plain, at little to no expense to the owners.
What the Stark-Burton amendment does is very simple:
Requires FEMA to provide written notification by first-class mail to
each property owner affected by a proposed change in flood elevations;
Requires the notifications be sent after the preliminary maps are
released but before the required 90-day appeal period; and,
Requires the notification include an explanation of the appeal
process and contact information for responsible officials.
Mail notices to each property owner affected by projected flood
elevation remapping would be a simple and effective way to notify
residents of changes. Such a process is direct and ensures that all
affected parties are able to take full advantage of FEMA's community
appeals process. The cost to the Federal Government of these mail
notifications would be small compared to the millions of dollars
homeowners would otherwise have to pay in last-minute flood insurance
or to challenge FEMA's flood elevation determinations.
As Chairman Frank said last year when we debated this issue, and my
colleague Mr. Stark just said so briefly and eloquently, anytime a
conservative from Indiana and liberal from California can come together
on an issue it is truly bipartisan. In fact this is a nonpartisan issue
that affects nearly everyone in the 20,000 communities nationwide that
participate in the National Flood Insurance Program. To ensure that all
property owners are fully aware of any changes in flood plain area
maps, and consequently their property values, is simply the right and
fair thing to do. I urge my colleagues to support the Stark/Burton
amendment to H.R. 3121.
Mr. STARK. Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from California (Mr. Stark).
The amendment was agreed to.
Announcement by the Acting Chairman
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, proceedings
will now resume on the amendment on which further proceedings were
postponed.
Amendment No. 7 Offered by Mr. Taylor
The Acting CHAIRMAN. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from
Mississippi (Mr. Taylor) on which further proceedings were postponed
and on which the ayes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIRMAN. A recorded vote has been demanded.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 268,
noes 143, not voting 26, as follows:
[[Page H10991]]
[Roll No. 919]
AYES--268
Abercrombie
Ackerman
Alexander
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baker
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bilirakis
Bishop (GA)
Bishop (NY)
Blumenauer
Bonner
Bordallo
Boren
Boswell
Boucher
Boustany
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Brown-Waite, Ginny
Buchanan
Burgess
Butterfield
Buyer
Cannon
Capps
Capuano
Cardoza
Carnahan
Carney
Castor
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
Davis, Tom
Deal (GA)
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Edwards
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Etheridge
Farr
Fattah
Ferguson
Filner
Fortenberry
Frank (MA)
Franks (AZ)
Gerlach
Giffords
Gilchrest
Gillibrand
Gonzalez
Gordon
Graves
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hall (TX)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hirono
Hobson
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Hulshof
Hunter
Inslee
Israel
Jackson (IL)
Jefferson
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Keller
Kildee
Kilpatrick
Kind
Klein (FL)
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McCrery
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Melancon
Mica
Michaud
Miller (FL)
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Peterson (MN)
Pickering
Platts
Poe
Pomeroy
Price (NC)
Rahall
Ramstad
Rangel
Renzi
Reyes
Richardson
Rodriguez
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Saxton
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Space
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Terry
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Weller
Wexler
Wicker
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
Young (AK)
Young (FL)
NOES--143
Aderholt
Akin
Bachmann
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bishop (UT)
Blackburn
Blunt
Boehner
Bono
Boozman
Brady (TX)
Broun (GA)
Brown (SC)
Burton (IN)
Calvert
Camp (MI)
Campbell (CA)
Cantor
Capito
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
English (PA)
Fallin
Feeney
Flake
Forbes
Fossella
Foxx
Frelinghuysen
Gallegly
Garrett (NJ)
Gingrey
Gohmert
Goode
Goodlatte
Granger
Hastert
Hastings (WA)
Hayes
Heller
Hensarling
Hoekstra
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jordan
King (IA)
King (NY)
Kingston
Kirk
Knollenberg
Kuhl (NY)
Lamborn
Latham
LaTourette
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McHenry
McKeon
McMorris Rodgers
Miller (MI)
Miller, Gary
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Paul
Pearce
Pence
Peterson (PA)
Petri
Pitts
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Regula
Rehberg
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Royce
Ryan (WI)
Sali
Schmidt
Sensenbrenner
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Stearns
Sullivan
Tancredo
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Westmoreland
Whitfield
Wilson (NM)
Wilson (SC)
Wolf
NOT VOTING--26
Bachus
Carson
Christensen
Conyers
Cubin
Davis, Jo Ann
Doyle
Everett
Faleomavaega
Fortuno
Herger
Hinojosa
Jackson-Lee (TX)
Jindal
Johnson (GA)
Johnson, E. B.
Kennedy
Kline (MN)
LaHood
Lewis (CA)
Meek (FL)
Meeks (NY)
Moran (KS)
Norton
Perlmutter
Reichert
{time} 1613
Mr. PEARCE changed his vote from ``aye'' to ``no.''
Ms. GINNY BROWN-WAITE of Florida and Mr. BONNER changed their vote
from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
The Acting CHAIRMAN. There being no further amendments, the Committee
rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Tierney) having assumed the chair, Mr. Ross, 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. 3121) to
restore the financial solvency of the national flood insurance program
and to provide for such program to make available multiperil coverage
for damage resulting from windstorms and floods, and for other
purposes, pursuant to House Resolution 683, he reported the bill, as
amended by that resolution, back to the House with sundry further
amendments adopted by the Committee of the Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any further amendment reported from
the Committee of the Whole? If not, the Chair will put them en gros.
The amendments were agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit Offered by Mrs. Bachmann
Mrs. BACHMANN. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
Mrs. BACHMANN. In its current form, I am.
Mr. FRANK of Massachusetts. Mr. Speaker, I reserve a point of order.
The SPEAKER pro tempore. The gentleman reserves a point of order.
The Clerk will report the motion to recommit.
The Clerk read as follows:
Mrs. Bachmann moves to recommit the bill H.R. 3121 to the
Committee on Financial Services with instructions to report
the same back to the House forthwith with the following
amendments:
In the matter proposed to be inserted by the amendment made
by section 7(a)(2) of the bill, in subsection (c)(1), strike
``paragraph (8)'' and insert ``paragraphs (8) and (9)''.
In the matter proposed to be inserted by the amendment made
by section 7(a)(2) of the bill, redesignate paragraphs (8)
and (9) of subsection (c) as paragraphs (9) and (10),
respectively.
In the matter proposed to be inserted by the amendment made
by section 7(a)(2) of the bill, after paragraph (7) of
subsection (c), insert the following new paragraph:
``(8) DHS certification requirements for coverage
availability.--
``(A) Requirement.--The Director may not make any
multiperil coverage available under this subsection unless
the Secretary of Homeland Security, in consultation with
Comptroller General of the United States and the Director of
the Congressional Budget Office, has certified to the
Congress that--
``(i) the national flood insurance program is actuarially
sound;
``(ii) chargeable premium rates for flood insurance
coverage under such program will not be increased as a result
of the implementation of the program under this subsection
for multiperil coverage; and
``(iii) if the program under this subsection for multiple
peril coverage is implemented, it will be operated in an
actuarially sound manner.
``(B) Determination.--The Director shall make a
determination of whether the national flood insurance program
meets the conditions specified in clauses (i) and (ii) of
subparagraph (A) not later than the expiration of the 6-month
period beginning on the date of the enactment of the Flood
Insurance Reform and Modernization Act of 2007.
``(C) Actuarially sound.--For purposes of this paragraph,
the term `actuarially sound' means, with respect to the
national flood insurance program that premiums under such
program are priced according to risk, or by such standards
and methods as a generally accepted by the actuary industry,
incorporating up-to-date modeling technology,
[[Page H10992]]
and taking into consideration administrative expenses,
including potential debt service, in the case of a
deficit.''.
The SPEAKER pro tempore. The gentlewoman from Minnesota is recognized
for 5 minutes.
Mrs. BACHMANN. Mr. Speaker, today, over 5 million Americans rely on
the National Flood Insurance Program to protect their homes and
businesses in the event of a flood.
But since January of last year, there have been over 77 declared
disasters involving flooding. And just this August, in our home State
of southeastern Minnesota, we experienced severe flooding that caused
distress to over 1,500 homes.
According to FEMA, and according to the Minnesota Homeland Security
and the Emergency Management, the Federal Government has disbursed at
this point nearly $31 million in Federal recovery funds to over 4,200
people. And currently, there are over 8,000 people, specifically, there
are 8,434 national flood insurance policies in effect in my home State
of Minnesota.
But, unfortunately, as floods continue to occur across our great
Nation, the National Flood Insurance Program is in trouble. It's not
good news. It's bad news. And the program today, unfortunately, is $18
billion in debt. That's today, as it stands, and it's required to pay
that debt back with interest over time. This debt will be paid back
with the premiums that are charged to those families who are relying on
this flood insurance program.
The base bill that's before us is a good one because it attempts to
help solve some of the fiscal problems today that are facing the
National Flood Insurance Program. We agree with that, Mr. Speaker.
But, yet, there is one provision in this bill that has the potential
to undo the very positive reform that is before us, and that is to send
the flood insurance program into even further fiscal disarray and
result in premium increases for homeowners all across America,
something that no one in this body would want to do.
The proposal, Mr. Speaker, that's included in this bill is to expand
the National Flood Insurance Program by creating a brand-new insurance
program for wind damage. That's something that has never existed
before, and it's akin to a homeowner who, upon discovering that his
foundation is rotting, decides to ignore that problem and instead adds
a second story on to that rotting house. And he shouldn't be surprised
then when the whole house collapses around him.
I have a very simple amendment, Mr. Speaker, and it says this: it
does not strike the brand-new wind insurance program. What it does is
this: it stipulates that before the program can go into effect, three
things have to occur. This is something that we can all agree on:
Number one, there has to be a certification that the existing
National Flood Insurance Program, in fact, is actuarially sound, and
this certification would provide all of us with the assurance that this
program is correctly pricing its policies and has adequate reserves on
hand to handle large flood events. We've seen that there's been a
problem with this in some of the State reserve accounts.
Today, right now, both the Government Accountability Office and the
Congressional Budget Office have reported that the National Flood
Insurance Program is likely to not be actuarially sound.
Second, there has to be a certification that premiums for people in
the existing flood insurance program will not be increased to subsidize
this brand-new insurance program. People all over America are wondering
if that's going to happen to them as well as the insurance companies.
And then third, of this simple amendment, it says there has to be a
certification that the new wind insurance program will, itself, be
fiscally sound. Who can argue with that?
So, Mr. Speaker, the 8,434 people of the State of Minnesota and the 5
million Americans who today rely on our National Flood Insurance
Program, they need to serve as a lifeline in the event of a major
storm, that they would not have that program in endangered, that their
premiums would not, in fact, be increased in order to help create, in
fact, this new expansion of an expansion of a wind program.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Does the gentleman from Massachusetts
continue to reserve his point of order?
Mr. FRANK of Massachusetts. No, Mr. Speaker, I do not press the point
of order.
The SPEAKER pro tempore. The point of order is withdrawn.
Is the gentleman from Massachusetts opposed to the motion?
Mr. FRANK of Massachusetts. I am opposed to the motion. I would
press, instead, a point of logic, more appropriate here.
The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
Mr. FRANK of Massachusetts. And the logic is this: we have a proposal
that came forward, brought forward by the gentleman from Mississippi to
add a program to the National Flood Insurance Program that says that if
you have national water insurance, you can, at your option, add wind
insurance. Remember, no new insured are eligible here. You have to have
water and then you can get wind.
The argument that the gentleman from Mississippi has made irrefutably
on this House floor is that you simply cannot, days after a storm has
damaged, try to sort out what was wind and what was water.
Now, unlike the flood program, the gentlewoman from Minnesota is
right, the flood program is in deep debt. We inherited, from our
Republican colleagues, a flood insurance program that is hurting. They
had control of that program, House, Senate and President; and it went
into debt.
As the gentlewoman says, we have a bill, and we had it last year in
the House too, but not in the Senate, that makes it better. Everyone
agrees that our bill, everyone who has read it agrees that our bill
reduces the financial problems with flood, but it doesn't wipe them
out. There's a large problem there. Billions of dollars.
Here's the illogic. The gentleman from Mississippi has put forward a
proposal for optional wind insurance which will have to be actuarially
sound. When the flood insurance program was passed, there was no PAYGO.
Flood insurance is hurting. They're supposed to be actuarially sound,
but it's very loose.
We have written into this bill, with regard to wind, requirements
that it be actuarially sound, that it break even for the Federal
Government, that the Congressional Budget Office certifies as perfectly
good. So there is no argument possible that the wind program will add
to the danger. CBO has certified that it is sound. So we have a new
wind program that will be actuarially sound; CBO certifies that. And
the bill says that if the program starts to run into a deficit, it cuts
off. Automatic.
We then have the water program, which the Republicans left us as
their inheritance, which is deeply in debt. They are saying that the
fiscally sound wind program that's in this bill, certified by CBO,
cannot go into effect until we've solved the problem they left us in
the water program. They are saying that. They don't have anything to
say bad about the wind program. They're saying that you can't do the
wind program until you've solved the water problem. And the water
problem is billions.
How would you solve it?
Well, you'd substantially raise people's premiums.
I should note, Mr. Speaker, that no one on the Republican side has
proposed to try to make it actuarially sound. We are trying to get in
that direction. But no one on the Republican side thinks it's
reasonable to immediately wipe out that huge debt.
They don't like the wind program. They don't want to take it on head
on, so they have come up with this scheme which says, the fiscally
sound, CBO-certified, actuarially-legitimate wind program can't go
forward until we clean up the $19 billion problem they left us in the
flood program. I do not think that is very logical.
The gentleman from Mississippi, as I said, made the case for the wind
program. So this becomes a case for the wind program.
Here's the deal: you're told to leave your house because a
hurricane's coming. You come back a few days later and there's
devastation, and you have to figure out what was caused by wind
[[Page H10993]]
and what was caused by water because if you have a wind policy from a
private company, they will argue, in many cases, that water caused all
the damage, and you are very hard pressed to find it out.
If you then, instead, have a combined wind and water policy from the
Federal Government, you then don't have to go through this metaphysical
exercise. You simply get the payment for your damages.
Now, that's the logical point that the gentleman from Mississippi put
forward. And it is going to be, as CBO said, break even for the Federal
Government.
So here's the recommit: the Federal Government cannot go to the aid
of people facing that dilemma of trying to decide wind versus water,
which has been certified as fiscally neutral by CBO, until we solve the
problem that we got in the water issue.
It really is not a logical thing to do. It is simply a way to try to
kill the wind program. A more straightforward way would have been to
simply kill the wind program. I'm sorry they didn't get an amendment to
do that. But they could have done that straightforwardly in the
recommit.
So I hope that Members will vote ``no.'' The only issue here is
should we initiate a voluntary program whereby people who have Federal
water insurance can also get wind insurance in a manner that is
certified by CBO to add nothing to the deficit, to do nothing to hurt
the Federal flood insurance program, but to be actuarially sound.
I hope the motion is defeated.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mrs. BACHMANN. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair
will reduce to 5 minutes the minimum time for any electronic vote on
the question of passage.
The vote was taken by electronic device, and there were--ayes 179,
noes 232, not voting 21, as follows:
[Roll No. 920]
AYES--179
Aderholt
Akin
Alexander
Bachmann
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blumenauer
Blunt
Boehner
Bono
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Capito
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Dent
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
English (PA)
Fallin
Feeney
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastings (WA)
Hayes
Heller
Hensarling
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Knollenberg
Kuhl (NY)
Lamborn
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Murphy (CT)
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Paul
Pearce
Pence
Peterson (PA)
Petri
Pitts
Poe
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Royce
Ryan (WI)
Sali
Schmidt
Sensenbrenner
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Souder
Stearns
Sullivan
Tancredo
Terry
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Weller
Westmoreland
Whitfield
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
NOES--232
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Bonner
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Butterfield
Capps
Capuano
Cardoza
Carnahan
Carney
Castor
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Edwards
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Etheridge
Farr
Fattah
Ferguson
Filner
Frank (MA)
Gerlach
Giffords
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jefferson
Johnson (GA)
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Kildee
Kilpatrick
Kind
Klein (FL)
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Murphy, Patrick
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Peterson (MN)
Pickering
Platts
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Richardson
Rodriguez
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Saxton
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Space
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wexler
Wicker
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
NOT VOTING--21
Bachus
Carson
Conyers
Cubin
Davis, Jo Ann
Doyle
Everett
Hastert
Herger
Hinojosa
Jackson-Lee (TX)
Jindal
Johnson, E. B.
Kennedy
Kline (MN)
LaHood
Markey
Moran (KS)
Moran (VA)
Perlmutter
Reichert
{time} 1646
Messrs. SPACE, HODES, and FERGUSON changed their vote from ``aye'' to
``no.''
Mr. TOM DAVIS of Virginia changed his vote from ``no'' to ``aye.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. FRANK of Massachusetts. Mr. Speaker, on that I demand the yeas
and nays.
The yeas and nays were ordered.
The vote was taken by electronic device, and there were--yeas 263,
nays 146, not voting 23, as follows:
[Roll No. 921]
YEAS--263
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bilirakis
Bishop (GA)
Bishop (NY)
Bishop (UT)
Blumenauer
Bonner
Boren
Boswell
Boucher
Boustany
Boyd (FL)
Boyda (KS)
Brady (PA)
Brady (TX)
Braley (IA)
Brown (SC)
Brown, Corrine
Brown-Waite, Ginny
Buchanan
Burgess
Butterfield
Camp (MI)
Capps
Capuano
Cardoza
Carnahan
Carney
Castor
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
Davis, Tom
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Doggett
Donnelly
Drake
Edwards
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Etheridge
Farr
Fattah
Ferguson
[[Page H10994]]
Filner
Forbes
Frank (MA)
Gerlach
Giffords
Gilchrest
Gillibrand
Gonzalez
Gordon
Graves
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Hill
Hinchey
Hirono
Hobson
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Hulshof
Inslee
Israel
Jackson (IL)
Jefferson
Johnson (GA)
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Keller
Kildee
Kilpatrick
Kind
Kirk
Klein (FL)
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Mica
Michaud
Miller (FL)
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Peterson (MN)
Pickering
Platts
Poe
Pomeroy
Price (NC)
Rahall
Ramstad
Rangel
Regula
Reyes
Richardson
Rodriguez
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Saxton
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Space
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tiahrt
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Weldon (FL)
Weller
Wexler
Whitfield
Wicker
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
Young (FL)
NAYS--146
Aderholt
Akin
Alexander
Bachmann
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Blackburn
Blunt
Boehner
Bono
Boozman
Broun (GA)
Burton (IN)
Buyer
Calvert
Campbell (CA)
Cannon
Cantor
Capito
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Deal (GA)
Doolittle
Dreier
Duncan
Ehlers
Emerson
English (PA)
Fallin
Feeney
Flake
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gingrey
Gohmert
Goode
Goodlatte
Granger
Hall (TX)
Hastings (WA)
Hayes
Heller
Hensarling
Higgins
Hoekstra
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jordan
King (IA)
King (NY)
Kingston
Knollenberg
Kuhl (NY)
Lamborn
Latham
Lewis (CA)
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McKeon
McMorris Rodgers
Miller (MI)
Miller, Gary
Musgrave
Myrick
Neugebauer
Nunes
Paul
Pearce
Pence
Peterson (PA)
Petri
Pitts
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Rehberg
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Royce
Ryan (WI)
Sali
Schmidt
Sensenbrenner
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Souder
Stearns
Sullivan
Tancredo
Terry
Thornberry
Tiberi
Turner
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Westmoreland
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
NOT VOTING--23
Bachus
Carson
Conyers
Cubin
Davis, Jo Ann
Dingell
Doyle
Everett
Green, Al
Hastert
Herger
Hinojosa
Jackson-Lee (TX)
Jindal
Johnson, E. B.
Kennedy
Kline (MN)
LaHood
Marshall
Moran (KS)
Moran (VA)
Perlmutter
Reichert
{time} 1655
Mr. CONAWAY changed his vote from ``yea'' to ``nay.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________