[Congressional Record Volume 154, Number 78 (Tuesday, May 13, 2008)]
[Senate]
[Pages S4048-S4072]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2007
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of S. 2284, which the clerk will
report.
The assistant legislative clerk read as follows:
A bill (S. 2284) to amend the National Flood Insurance Act
of 1968, to restore the financial solvency of the flood
insurance fund, and for other purposes.
Pending:
Dodd/Shelby amendment No. 4707, in the nature of a
substitute.
McConnell amendment No. 4720 (to the text of the bill
proposed to be stricken by amendment No. 4707), of a
perfecting nature.
Allard amendment No. 4721 (to amendment No. 4720), of a
perfecting nature.
The ACTING PRESIDENT pro tempore. Under the previous order, there
will be 1 hour of debate equally divided between the two leaders or
their designees.
The Senator from Illinois.
Mr. DURBIN. Mr. President, I would like to speak to the amendment
which we will vote on shortly. It relates to the cost of gasoline. I
can't think of another issue that has been in the forefront across
America for a longer period than the cost of gasoline. It goes beyond
that, obviously, to diesel fuel and jet fuel costs. We see it every
day. You drive down the road, and you watch prices going up at the gas
station. People ask Senators and Congressmen: You are supposed to be
the bigwigs here. You are supposed to be so influential. Why haven't
you done something; the gas prices are killing us.
And they are. Whether it is a family member commuting back and forth
to work in downstate Illinois, trying to get to the State capitol,
whether it is a an over-the-road trucker spending almost $1,000 to fill
up his rig with diesel fuel, whether it is the CEO of an airline who
has seen the worst first-quarter losses in the history of that airline
because of the rise in the cost of jet fuel, it is hitting everybody. I
talked to a chiropractor over the weekend. She told me her practice was
dying because people didn't want to drive 20 miles for her services.
They said: We will see you every other week instead of every week. As
you see, it is starting to reach into every single area.
So what response do we have from the Republican side? The response is
predictable and ineffective. Here is what they say: You know what we
ought to do. We ought to start drilling for oil in the Arctic National
Wildlife Refuge and we ought to start drilling for oil off the coasts
of America.
OK. How much oil is there?
Oh, there is a lot.
In the scheme of things, it is not a lot. All of the oil reserves
within the control of the United States of America, all of them
combined come to 3 percent of the world's total oil reserves. Each
year, our Nation--a powerful, large economy--consumes 25 percent of all
the oil produced in the world. We cannot drill our way out of this
issue. We cannot drill our way to lower prices.
Here is something they fail to mention: If we gave approval today--
which I think would be a bad idea--to the Republican approach, it would
be years before the oil would start trickling in, meaning years of high
prices.
So what can we do here and now? Two things: First, we can start
dealing with the price gouging of consumers. Prices are going up
dramatically at historically high rates. They are not justified by the
barrel-of-oil prices. The spread between the cost of a barrel of oil
and the cost of refined product keeps growing larger and larger, and
the oil companies that are refining the crude oil keep making more and
more money. Price gouging is going on. That is the first issue. Is
there any mention of consumer price gouging in the Republican approach?
Not one word. In the Democratic approach, we believe price gouging
should be part of this.
Secondly, accountability of the oil companies. These oil companies,
over the last 7 years when George Bush from oil country has been our
President, have seen their profits quadruple--four
[[Page S4049]]
times the profits they were making just a few years ago. The cost of
oil and diesel fuel has gone up 2\1/2\ times; the oil company profits,
quadrupled. These companies are not only making more money than oil
companies have ever made, they are making more money than any business
in the history of America. That is a fact.
We have a windfall profits tax. We say there is a limit to how much
these oil companies should be making as profits when it causes so much
damage to American families and businesses and farmers and truckers and
the economy. We have a windfall profits tax. The Republican approach:
nothing--nothing to address the oil company profits. That is the
reality.
Now, Senator Reid, the Democratic majority leader, came to the floor
a few minutes ago and told us what is going on with the Republican
strategy. So far in this session of Congress--we have 2-year sessions
of Congress--the Republicans have initiated 70 filibusters. Today, they
will hit 71. You might say: So what. What does that mean? In the
history of the Senate--over 200 years--the maximum number of
filibusters in a 2-year period of time was 57. The Republicans have
broken that record.
What is a filibuster? A filibuster is a way to delay, slow down,
avoid, try to turn the page to another issue. Over and over and over
again--70 times--the Republicans have now set a record for obstruction
in stopping progress in the Senate, whether it is on issues of energy,
whether it is on issues of health care, helping our schools, dealing
with the war in Iraq--over and over and over again, Republican
filibusters.
Today, we will have a vote. We are going to have a vote in a short
period of time--at 12:15, maybe earlier; I am not sure. But in the
course of that vote, we will have a choice on whether we at least will
make one small step forward when it comes to dealing with gasoline
prices. We cannot justify, in the current situation, continuing to take
oil off the market where the Federal Government buys it and stores it.
It is called the Strategic Petroleum Reserve. Currently, it is at about
97 percent of capacity. We are buying the most expensive crude oil in
the history of the world, and storing it, taking it off the market,
further putting an increase on gasoline prices.
We will offer an alternative to the Republican approach which will
say that we will suspend filling the Strategic Petroleum Reserve. It
might pass. Fifty-one Democratic Senators, incidentally, wrote a letter
to the President on March 11 asking the President to suspend the
filling of the Petroleum Reserve because gasoline prices were out of
control. The President refused. Now we have to pass a law to force the
President to do something about these gasoline prices.
I think suspending shipments to the Strategic Petroleum Reserve is
the most sensible way for us to bring these prices down. I hope we can
get the cooperation of the Republicans, beyond that, to deal with the
price gouging of consumers and accountability for oil companies and not
face another Republican filibuster when it comes to that important
issue.
Mr. President, I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
Mr. DURBIN. Mr. President, can I propound one unanimous consent
request, please. I am sorry. If the Senator from New Mexico will allow
me, I ask unanimous consent that the following Senators be allocated 5
minutes each from the majority's time after the Senator from New Mexico
speaks: Senators Kennedy, Dorgan, and Bingaman.
The ACTING PRESIDENT pro tempore. Is there objection?
Mr. DOMENICI. Mr. President, just a minute. Do you have time on each
one of them?
Mr. DURBIN. We will alternate back and forth.
Mr. DOMENICI. I understand.
Mr. DURBIN. These Senators asked for 5 minutes each.
Mr. DOMENICI. I did not hear the ``5 minutes each.'' I am sorry. I
have no objection.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The Senator from New Mexico.
Mr. DOMENICI. Mr. President, following mine, we would like Senators
Hutchison, Enzi, Vitter, and Cornyn to be recognized for 5 minutes
each, and 5 minutes for wrap-up for the Senator from New Mexico, with
10 minutes right now for the Senator from New Mexico, and alternating
back and forth.
The ACTING PRESIDENT pro tempore. Is there objection?
The Chair hears none, and it is so ordered.
Mr. DOMENICI. Mr. President, I just have so much to talk about. I
wanted to follow my text I had prepared, but having heard the
Democratic Senator discuss this issue, I have to tell the American
people, one, their energy policy, if they are talking about today, is a
policy that has to do with the filling of the Strategic Petroleum
Reserve. The leader of that policy is the distinguished Senator Dorgan.
He has led that cause, and he is going to win. But literally that
cannot be an energy policy. It is 70,000 barrels a day that we are not
going to buy and put in the reserve--70,000--and that is for the rest
of this year.
Now, we use 21 million barrels of oil a day. So let's face up to it.
If you do not think 1 million barrels a day from the Alaskan arctic
wilderness--which would be American, and we could get that coming to
America for maybe 50 years--if that is not better than 70,000 barrels
for 7 or 8 months to not put in the Reserve but leave in the world
market--I will leave that to anybody who is listening.
Price gouging is in their portfolio again. They talk about it. Last
year, we gave authority to the Federal Trade Commission. They have not
yet found any gouging. We hope they do.
Now, I would like to go on and talk about what we are trying to do.
Mr. President, I ask unanimous consent that I be added as a cosponsor
to amendment No. 4737. It is now known as the Reid amendment, but it is
actually Senator Dorgan's amendment.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. DOMENICI. Mr. President, earlier this year, I gave a detailed
speech on the Senate floor about the perils of our Nation's growing
dependence on foreign oil. At that time, I noted the Nation was
ignoring policies that would increase our energy supply while the
stranglehold of foreign oil was tightening. I spoke bluntly and warned
of dark days ahead for our Nation's economy and foreign policy if we
continued to send our money abroad to buy oil from unstable and hostile
regions around the globe.
I stated that at the current price of oil, we are at a pace to send
nearly a half trillion dollars overseas annually to purchase oil--a
half trillion. When the driving season ends, and the price at the pump
subsides a bit, naturally the volume of constituent letters and phone
calls will decrease a bit. When the cameras fade and the focus of the
day begins to turn elsewhere, we should stop and reflect on the debate
we are having today.
Make no mistake, a growing and gathering storm is swirling around
this Nation. It is threatening our economic strength, our national
security, and our place in the world. That storm comes in the form of
dependence upon foreign oil.
Last year, Congress passed a strong energy bill, built on advancing
cellulosic ethanol and strengthening our fuel efficiency standards. We
made great steps in setting up policies that will reduce our gasoline
consumption. However, I said at the time, and say again today, last
year's legislation had a glaring weakness, which is highlighted today.
Last year's bill failed to include measures for domestic energy
production.
When we tried to open the Virginia Outer Continental Shelf to natural
gas leasing, the other side blocked that. When we tried to improve our
Nation's refining capacity, the other side blocked that. And when we
tried to advance domestic coal-derived fuels--a very major way for
America to diminish its dependence on foreign oil--the other side
blocked that. On conservation and efficiency and the pursuit of clean
energy, this Chamber is in wide bipartisan agreement. But on producing
more American oil and gas to reduce the price of gasoline at the pump,
it will become clear from today's debate and vote that the vast
majority on the other side opposes action.
[[Page S4050]]
When today's vote is over, regardless of the outcome, I will continue
to return to the Senate floor and speak on this important issue of our
growing dependence on foreign oil. I will continue to speak out against
policies that increase the cost of energy, when the American people so
clearly want us to provide relief from high gas prices.
I have listened intently to the increased debate over the past few
weeks about our energy challenges. I have heard some on the other side
plead with OPEC nations to increase production by one-quarter of the
amount we provide for in America with this amendment--one-quarter the
amount. I have heard ANWR opponents from a decade ago repeat their
claim from a decade ago that ANWR oil will take a decade to produce. I
never heard this argument when we were supporting increasing vehicle
fuel economy standards that we know will take a decade to come to
fruition. We passed a bill that everybody takes credit for. It will
take 10 years for it to have an impact. Yet we praise ourselves for
producing it.
Of course, all of this would be assuming the price of oil did not
increase over $100 per barrel during the time that ANWR was being
blocked. If President Clinton had not vetoed ANWR over 12 years ago, we
would have this oil from Alaska on the market today. I have also heard
my colleagues argue that 70,000 barrels of oil per day would make a
significant difference in the price of oil--that is the SPR bill--while
denying access to over 1 million barrels of oil per day from ANWR
alone.
It is time to act, and what the other side has offered at this
critical moment is talk of energy independence supported by more
Government investigations and empty threats to OPEC combined with pleas
for more OPEC production. If that were not enough, we are faced with
the prospects of a windfall profits tax like the one that passed in
April by the Chavez administration in Venezuela. We tried to implement
such a tax in the 1980s. It did not work then, and it will not work
now. We cannot produce more energy by taxing oil companies or taxing
anyone.
According to the Congressional Research Service, the imposition of a
windfall profits tax could have ``several adverse economic effects.''
And such a tax could be expected to ``reduce domestic oil production
and increase the level of oil imports.'' The architect of this tax
during the Carter administration recently called the windfall profits
tax ``a terrible idea today.''
Today, we consider real solutions to our national problem. On May 1,
I introduced the American Energy Production Act of 2008. Obviously, if
we had Democratic support and help we could make it even better, but we
had to do this with Republicans, to lay before the American people a
fact: that there are ways to produce more American oil and natural gas
without doing any real harm to the American environment. I am pleased
to have 21 cosponsors on that bill, and I am pleased Senator McConnell
has offered this legislation as an amendment to the bill currently
before us. Unfortunately, the other side has not allowed us to consider
this proposal to address record-high gas prices.
Speaking of filibusters, on our bill they have insisted there be 60
votes. That is the equivalent of a filibuster. So you can chalk one up
for us. They are filibustering the only Energy bill we have seen in a
while that would produce energy for America.
I support the bipartisan amendment on the Strategic Petroleum
Reserve, and I have already indicated to you that I do, and it needs no
further explanation. I am confident, if enacted, the American Energy
Production Act--the one we are talking about--will strengthen our
Nation's security for decades to come. In this legislation, we open
2,000 of the 19 million acres of the Arctic National Wildlife Refuge.
And I defy anyone with common sense to seriously contend that 2,000
acres out of 2 million will harm that wilderness. It can be done with a
small footprint, and everyone knows it. We have just chosen sides,
regardless of the real facts. Therefore, I assume the Democrats will
defeat it again.
Taken together, these policies enable the production of 24 billion
barrels of American oil, which would increase our domestic production
by nearly 40 percent over the next three decades. Opening ANWR alone
would create thousands of American jobs, provide $3 billion in revenues
in the next 10 years to the Federal Treasury, and bring on line over 1
million barrels of oil per day. This amendment also spurs the
commercialization of coal-derived fuels and oil shale resources.
Advancement of these policies will be spoken of in more detail by other
Senators but, clearly, they are things to look at. The American people
ought to know about them. They are sources--huge sources--of energy
that can be made in America by Americans for America. With emerging
economies around the world increasing their thirst for oil, we face a
new energy challenge in America.
The world demand for oil continues to grow. America's production of
oil has fallen to its lowest levels in 60 years. That is because we
haven't done anything new or significant to add to what we have
produced for years. If we do not start producing more of our own energy
resources, we will continue to rely on unstable foreign oil and
continue to pay a high price. That is what is at stake with today's
vote. We probably will not win, but we feel very comfortable giving the
other side an opportunity to vote no again for the production of oil
and gas that is American, by Americans, for America.
With that, I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Massachusetts is
recognized.
Employer-Employee Cooperation Act
Mr. KENNEDY. Mr. President, I yield myself 5 minutes.
We are going to be voting on some extremely important energy issues,
and I have expressed my views on those before. I wished to take an
opportunity to talk about another matter which we will be voting on
later this morning, early this afternoon, and then will be the subject
matter that will be before the Senate for the next few days. It is an
extremely important matter. It deals with our national security;
primarily homeland security. It deals with the challenges that our
first responders are faced with. I am talking about our police
officers, our firefighters, and our first responders. They are the ones
who are on the cutting edge of our domestic national security.
We are seeing massive reorganizations of our various institutions
that have dealt with homeland security. We have seen additional
resources focused on homeland security. The legislation Senator Gregg
and I offer will strengthen our national security by including those
individuals who are on the frontline into the decisionmaking about what
is helpful and useful in terms of the security of our communities,
small cities, and large cities all across this Nation. It will give
them a voice in making judgments and decisions so those decisions and
judgments are not only going to be made by policymakers and bureaucrats
but by men and women who are on the ground. The legislation is called
our Public Safety Employer-Employee Cooperation Act. It is bipartisan
in nature, and it can make an extraordinary difference.
We had the opportunity last evening to go over the essential elements
of the legislation, sort of the dos and the don'ts. There are those who
have misconstrued this legislation and have misrepresented the
legislation. We have seen that sort of technique around here in the
Senate when Members differ with the legislation. They distort it or
misrepresent it and then differ with it. It is an old technique that is
used around here.
We will have the chance this afternoon and tomorrow--and this is a
notice we will welcome--Senator Gregg and I--will welcome amendments.
This legislation has in one form or another been before the Senate
previously. It had extraordinary bipartisan support in the House of
Representatives. I believe 98 Republicans supported the legislation,
which is an indication of the breadth of support it has.
So we will look forward--and we are going to urge our colleagues to
help us move this legislation, which is of such great importance and
consequence to the security of our people--we will ask them to help us
move it forward. This week is Police Week. Police Week goes back
actually to 1962, when it was named by President Kennedy. Since that
time, police officers have gathered to pay tribute to those members of
the force who have lost their lives over the period of the last year.
It is a very impressive ceremony for those who have not gone to it. I
have on a number of
[[Page S4051]]
different occasions. But we take time this week to pay tribute to those
first responders, and we have welcomed their very strong support for
this legislation.
This legislation will affect police officers and firefighters. Some
300,000 police officers in 24 States will benefit from this bill and
are in strong support of the legislation. We also see support with
regards to the firefighters: 134,000 firefighters in 24 different
States will benefit. We have worked very closely with them. These are
the various groups that support this legislation: The International
Association of Firefighters; Fraternal Order of Police; the National
Association of Police Organizations; the International Union of Police
Associations; the American Federation of State, County, and Municipal
Employees; and the International Brotherhood of Teamsters.
So as I say, we will be ready to deal with this right after the
caucuses that we will have during the noon hour. This legislation will
hopefully be before the Senate. We are hopeful now. This is a vote on
the motion to proceed. We ought to at least have that opportunity to
debate this issue, and we are hopeful we will receive the support from
both sides of the aisle so we can move forward and debate the issue.
My time has expired and I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Texas is
recognized.
Mrs. HUTCHISON. Mr. President, I rise today to talk about the bill we
are going to vote on starting at 11 o'clock. We have an amendment filed
by the distinguished Republican leader. The Senator from New Mexico is
the prime sponsor of this amendment. I commend Senator Domenici for his
continuing leadership in the energy arena.
In January of 2007, when control of Congress changed hands, the price
of gasoline was $2.33 a gallon. Today, it is $3.73 a gallon. That is a
60-percent increase, and it is going in that direction even further.
The reason for the record-high price is simple economics. The global
demand for energy has soared, especially in fast-rising countries such
as China and India. Meanwhile, the supply of energy has remained
largely stagnant. This is a simple, classic economic principle: The law
of supply and demand. When the demand goes up and the supply stays the
same, the price goes up. Knowing that, the best way for Congress to
reduce the price of energy is to increase the supply of energy. We need
more American oil, more American natural gas, more American clean coal,
and we need more American nuclear power. That is why I joined the
ranking member of the Energy Committee to introduce the bill today that
would do exactly that.
First, the Strategic Petroleum Reserve. Two weeks ago, I wrote a
letter to the President, signed by 13 Republican Senators. I noticed it
was announced by the majority leader that 51 Senators on his side had
signed the same type of letter in March. I ask unanimous consent that
the letter be printed in the Record with the signatures of the 13
Senators.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate,
Washington, DC, April 29, 2008.
The President,
The White House,
Washington, DC.
Dear Mr. President: We write today to request that the U.S.
Department of Energy (DoE) immediately halt deposits of
domestic crude oil into the U.S. Strategic Petroleum Reserve
(SPR). As we enter the busiest driving season of the year.
the price of a barrel of West Texas Intermediate crude oil
hovers around a record $120.
The SPR was established in 1975 to provide a supply of
crude oil during times of severe supply disruptions. Today.
The SPR contains more than 701 million barrels of oil,
exceeding our International Energy Program commitments to
maintain at least 90 days of oil stocks in reserve.
High energy prices are having a ripple effect throughout
the U.S. economy and exacerbating recessionary pressures. The
Energy Information Agency reports that supplies and
inventories of crude oil and refined products are above 2007
inventories while our demand for gasoline is down. Yet, the
price of crude oil has skyrocketed 100% from last year's
levels which were just above $63 a barrel in April 2007.
Despite these economic realities, the DoE recently solicited
contracts to exchange up to 13 million barrels of royalty oil
from Federal leases in the Gulf of Mexico for deposits in the
SPR.
Some analysts blame geopolitical instability and disruption
in production for the rapid price increases; however, these
factors alone do not explain the extraordinary increase in
oil prices compared to previous years, when these same
challenges were present. Temporarily halting deposits to the
reserve can provide some relief because the increased supply
of oil available for refinement will send the right signal to
all markets that the U.S. Government will take measures
necessary to address exorbitant crude oil prices that
negatively affect the global economy. We believe, in light of
the dramatic increase in oil prices, a temporary halt to
deposits into the SPR should be considered until the economy
stabilizes.
I appreciate your attention to this matter and look forward
to hearing back from you.
Sincerely,
Kay Bailey Hutchison, John Barrasso, Kit Bond, John E.
Sununu, Johnny Isakson, Orrin G. Hatch, Jeff Sessions,
Saxby Chambliss, Judd Gregg, John Cornyn, Lisa
Murkowski, Elizabeth Dole, Sam Brownback, Susan
Collins.
Mrs. HUTCHISON. Mr. President, what we are asking the President to do
is temporarily halt deposits of oil into the SPR. Today, the SPR holds
118 days--almost 4 months--of reserve for an emergency in this country.
I wish to stop now to ask unanimous consent to be added as a
cosponsor of the Dorgan amendment No. 4737.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mrs. HUTCHISON. Because what the Dorgan amendment does--and what is
also included in our bill--is to ask for a temporary halt on any more
oil going into the SPR. Halting the daily deposits of 76,000 barrels a
day into the SPR would allow 3 million additional gallons of gasoline
to be available on the market. If we halted the 13 million barrels of
oil the Department of Energy has sought contracts for to go into SPR,
it would be more than the total February 2008 imports from Libya,
Syria, Kuwait, United Arab Emirates, Egypt, Azerbaijan, and China
combined.
The amendment offered today would halt additional contributions to
the SPR for 180 days and ensure that these resources could be utilized
immediately in the marketplace. In addition, we would open the grassy
plains of ANWR, which is unavailable for drilling today. The U.S.
Geological Survey estimates there could be as much as 10 billion
barrels of oil in ANWR. This would be almost enough oil to replace what
we import from Saudi Arabia every day. What would be drilled in ANWR
isn't near a forest or a stream. It is a grassy plain. It is 2,000
acres, about the size of National Airport, in an area of ANWR which is
the size of the State of South Carolina. So drilling in this grassy
plain would be environmentally safe, and it would make America much
more independent, much more reliant on ourselves and our resources for
our energy needs--a place we need to go.
Another area, the Outer Continental Shelf, could contain as much as
115 billion barrels of oil.
Mr. President, I ask unanimous consent that I have 3 more minutes.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mrs. HUTCHISON. There could be 115 billion barrels of oil in the
Outer Continental Shelf. That is more than Venezuela's proven reserves
of 80 billion barrels.
We need more refinement capacity. This amendment encourages
refinement expansion to alleviate supply concerns with refined
petroleum, which is gasoline.
This amendment we are voting on today would not do much to bring down
the demand because, in fact, we can't control what China and India are
demanding in oil and natural gas resources, but it can affect supply.
That is what Congress has turned a blind eye to doing.
All they talk about is a windfall profits tax on oil companies. We
tried that once before and what happened? Jobs went overseas. We had to
import more from overseas, so we became more dependent on foreign
sources and we lost jobs for our country. The price would not go down.
It would just come from foreign sources instead of ourselves. So let's
don't talk about things that will not help; let's talk about supply,
which we can help by working together to increase our utilization of
our own natural resources.
This year we will spend about $500 billion to import oil. All those
dollars
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could stay in America, creating good jobs in America and making us
self-reliant. If there is anything America stands for, it is the spirit
of self-reliance, of knowing that if we are running into a crisis, if
our economy is down, that we would be dependent on ourselves because we
have the resources to meet this demand. We have the resources. Now we
need the willpower. We need the good old American spirit to say we can
prevail. We can reduce prices. We can help the American family get over
the hump. We can do something by relying on ourselves. That is what the
amendment we are voting on will do.
I hope the American people will look at these votes. Do they want
political rhetoric, windfall profits taxes that send jobs overseas or
do they want real solutions short term, by not putting any oil in SPR
right now and putting it on the market to start bringing that price
down and to let those who are hedging on commodities know America is
going to act. The best we can do for America to show those hedgers we
are going to act is to say we are going to take the long-term steps. We
are going to drill in our own areas that we control. We are going to
put jobs in America. We are going to help the States get their
royalties if they want to drill offshore. We are going to stand up and
say: This is America, and we will take care of ourselves with our own
natural resources. That is the vote today.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from North Dakota is
recognized.
Mr. DORGAN. Mr. President, I am not going to speak so much about what
divides us. Today I wish to talk about what would unify us with respect
to the two energy plans. We are going to vote on an amendment that is a
bill I offered back in February of this year that would stop putting
oil underground. Some say that doesn't mean very much in terms of
energy prices or that it would not accomplish a lot.
We had testimony before the Senate Energy Committee by economists and
an energy expert. Dr. Verleger testified that what's coming from the
Gulf of Mexico is sweet light crude, the most valuable subset of oil.
Despite the fact that it is a small percentage of the oil usage, it
could have as much as a 10-percent impact on the price of sweet light
crude. I don't think we should underestimate the significance of this
proposal. At a time when oil prices are bouncing up in record highs,
with oil prices at $120, $124, and $126 a barrel, we have speculators
playing their fiddle. The oil prices dance up into the stratosphere;
the economy is damaged; consumers get injured; and industries are going
belly up.
The question at this time is, what unites us here? I will tell you
one thing we can agree on. There are at least 80 Senators who have
expressed themselves, including all three Presidential candidates. They
have said let's stop putting oil underground. Is it a reasonable thing
to do to set oil aside underground? We have something called the
Strategic Petroleum Reserve. Let me show you what it is. This is what
it looks like. Instead of oil going into the pipeline so you can
convert gasoline to your automobile, it is going underground. This is
what the SPR looks like. Here is where the SPR is being stored--at
Bryan Mound, Big Hill, West Hackberry, and Bayou Choctaw.
The SPR is 97 percent full. The question is this: With oil at $126 a
barrel and gasoline around $4 a gallon or more, and with the American
consumer being burned at the stake, why should its Government be
carrying the wood? Why should we be putting oil underground at a time
of record-high prices? Who thinks it is smart to go out into the
marketplace and take oil that is that valuable and stick it underground
when it is having an impact of upward pressure on oil prices? That
makes no sense at all.
As I said, all three Presidential candidates have said we ought to
stop at this time. Eighty Senators have agreed with this decision.
Somehow, the President and Vice President are insistent that we
continue to fill the SPR.
Look, there are a lot of other things happening. Number 1, we need
more production. I was one of four Senators who introduced the
legislation, with Senator Domenici, that led to opening Lease Sale 181
in the Gulf of Mexico. That is additional production, and I am proud
that became law. It should have been broader, but it got narrowed
through the legislative process. I have a bill in to expand production
in the Gulf of Mexico.
Yes, we need additional production, conservation, efficiency, and
renewables. We need all those things. We have made progress in some of
them. Last year, we finally passed reformed CAFE. We increased CAFE
standards 10 miles per gallon in 10 years. That is a historic
achievement after 32 long years in this Congress. We set us on a course
toward renewables.
There are short-term, intermediate, and long-term solutions. John
Maynard Keynes says that in the long run we are all dead. How about the
short term? How about today? I know where there is 70,000 barrels of
oil, including sweet light crude, that could go into the gas pumps and
into cars and put downward pressure on gas prices. I know how we can
take action and so do my colleagues. At least we can agree on that
piece of legislation today.
Here is another point. There is unbelievable speculation in the
commodities market. It is interesting. Let me give you a couple of
charts that show this. The senior vice president of ExxonMobil said
last month:
The price of oil should be about $50 or $55 per barrel.
Mr. Cazalot, the CEO of Marathon, said:
$100 oil isn't justified by the physical demand in the
marketplace.
A man who testified before the Energy Committee, Mr. Gheit, a senior
energy analyst with Oppenheimer, said:
There is absolutely no shortage of oil, and I am absolutely
convinced that oil prices should not be a dime above $55 a
barrel. I call it the world's largest gambling hall. It is
open 24/7.
The fact is, we have speculators, hedge funds, and investment banks
that have never been in the futures market before and are in neck deep.
They are driving up prices that have very little to do with the
fundamentals of supply and demand. Should we ignore that and say that
is OK?
Mr. President, I think I have consumed 5 minutes. I ask unanimous
consent for 2 additional minutes.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. DORGAN. Should we say that is OK, let's talk about other
subjects? I don't think so. If you want to purchase stock on margin,
you have to put up 50 percent of the money. If you want to control
$100,000 worth of oil, the subject of such speculation, all you need
now is a margin requirement between $5,000 and $7,000. It seems to me
that the margin requirement ought to be increased to the point of
wringing speculators out of the system. We need a futures market for
legitimate hedging and for liquidity.
There are times when speculative bubbles develop. In this case, the
bubble driving up the price of oil and gasoline at the pumps is
damaging our economy. A lot of industries are suffering, including
truckers and the airlines. It is hurting a lot of American families,
and we can do something about it.
We have a couple different plans. Let's take the one common part of
both plans, which is the amendment I offered as a bill in February, and
pass that today because that will make a difference. Is it a giant
step? Not at all. Is it a step that is finally at long last in the
right direction? It is. So instead of getting the worst, let's try to
get the best of both sides and say this we agree on, this we can do.
My hope is that at the end of today, at least this Congress will have
said to the President and Vice President: Stop doing what you are
doing. The last thing in the world we ought to do is put upward
pressure on gas and oil prices. We ought to put downward pressure on
that, and we can do that today with one single vote.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico is
recognized.
Mr. DOMENICI. Mr. President, I say to my friend, Senator Dorgan, I
have changed my mind about the SPR bill. I think he knows that. People
wonder about changing your mind. A lot of people change their mind. I
changed mine because of the real price of oil and because I do believe
we are not going to harm our strategic reserve by
[[Page S4053]]
this one event. I wish to make the record clear. America needs the
Strategic Petroleum Reserve. We must have it, and we should not grow
accustomed to thinking the Strategic Petroleum Reserve is going to
solve our energy supply problem. Senator Dorgan has never said that.
But it would not. I will answer some of the remaining questions when I
wrap up.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Wyoming is
recognized.
Mr. ENZI. Mr. President, last weekend, when I traveled around
Wyoming, it was clear that high energy prices were on everyone's mind.
It is a trend I have noticed each and every summer for the past several
years. Each year, our constituents ask us to do something to address
energy prices. While we talk and talk about what we are doing, rarely
do we take any meaningful action.
It is a little different this year because Americans are seeing
record prices at the pump. Those voices saying ``get to work on this
problem'' are more numerous. They are louder. Will the anguished calls
for help make it through the thick and, thus far, shut doors of
Congress? Americans are caught in a tight spot. Some are asking: How
can I put food on the table when I cannot afford the gas it takes me to
get to work? On top of that, the food is more expensive because of the
fuel it takes to produce and ship it.
No one in this Chamber has all the answers. No, but we can do
something. We can act. We can help. The question for me and my
colleagues in the Senate is, will we? We have the opportunity to do so
today. We have the opportunity to vote for an amendment that provides
short-term relief and, at the same time, helps address the long-term
issues that got us into this situation. I am a cosponsor of the
McConnell-Domenici amendment, known as the American Energy Production
Act of 2008, because it is a responsible way to address the need to
produce more domestic energy and to reduce energy prices.
The energy situation we are in has been a long time in the making,
and we are not going to fix it overnight. We don't have enough domestic
energy to meet our Nation's energy demands, but the American Energy
Production Act would help change that. It opens an important sliver of
the Arctic National Wildlife Refuge, ANWR, to environmentally conscious
leasing and allows for more production from the Outer Continental
Shelf, with consent of the State. Doing so will help the United States
produce more of its own energy. Instead of sitting at the trough of
foreign oil barons with our hands out begging, Americans will produce
more American energy.
Later today, I expect to see support for the Dorgan amendment to
suspend filling of the Strategic Petroleum Reserve. If you are worried
about roughly 70,000 barrels a day staying off the market for this
reserve fill, then you should be outraged that 1 million barrels a day
from ANWR is kept off the market because it was vetoed by President
Clinton more than 10 years ago. That is a million barrels we would not
need to purchase from South American dictators, or a million barrels
from countries who are friendly to those who wish to destroy the United
States.
What will Americans say about this vote 10 years from now? Will they
say: Better late than never, because we passed the American Energy
Production Act, or will they say: You just didn't get it and now look
at us suffer for it. The American Energy Production Act recognizes also
that coal is our Nation's most abundant energy source. It recognizes
American ingenuity. It recognizes that coal has been turned into diesel
fuel for half a century, and it encourages the building of coal-to-
diesel facilities in the United States. The United States is the
``Saudi Arabia of coal.'' Wyoming is the leading coal producer in the
United States. It makes sense that we use America's most abundant
energy source at a time when we all agree we are too dependent upon
foreign energy sources.
The amendment also includes a number of important provisions that
will help Wyoming and the Nation. The amendment repeals the mineral
royalty theft that was included in the fiscal year 2008 Omnibus
appropriations bill. It allows development of oil shale to move
forward.
I support the idea of developing more alternative energy, the use of
wind energy, and the development of better solar energy technologies.
As my constituents can tell you, Wyoming is an especially good State
for wind, and we have high solar potential as well. While we need to
develop these technologies for the long term, we need all the energy we
can get.
We need more domestically produced oil, more wind energy, more
domestic natural gas, more solar energy, more nuclear energy, and we
definitely will need more clean coal energy.
Our Nation's energy policy is haphazard, broken, and it threatens to
break our country. We need to make meaningful changes to that policy,
and voting in favor of the American Energy Production Act is the first
step in the right direction. I hope my colleagues will recognize the
need to take this step and support the McConnell-Domenici amendment.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico is
recognized.
Mr. BINGAMAN. Mr. President, let me take up to 5 minutes at this
point. If the Chair will advise me when that 5 minutes has been used, I
would appreciate it.
We have two votes coming up related to energy. The first is on the
McConnell amendment, which is a compilation of various provisions that
relate to energy but, I argue, do not hold out much promise for
affecting the price of oil or gas. Following that, we have the vote on
the proposal that is put forward by the majority leader, Senator Reid,
with regard to suspending the filling of the Strategic Petroleum
Reserve for the balance of this year.
I will be voting against the first amendment and voting for the
second amendment. I hope my colleagues will do so as well. Let me give
the reasons why I think we should vote against the Republican leader's
amendment.
First, the Republican leader's amendment doesn't do anything to deal
with the issue of speculation in oil markets. We have had testimony
repeatedly before our Senate Energy Committee that speculation in these
markets is a significant factor contributing to the $126-per-barrel
price of oil we are seeing today. So if someone is concerned--as all of
us are--about energy, consumers, and the burden that is being place
upon them, then dampening speculation in these markets should be high
on our list of work to be done. It is not in the Republican leader's
amendment.
Of course, the amendment he proposes also doesn't do anything with
regard to the weakening of the U.S. dollar, anything with our fiscal
policies. Yesterday, I went into a discussion about how that is
contributing to the increase in the price of oil. I think most
economists would agree with that.
The second reason I would oppose the Republican leader's amendment is
that it misses the boat on how to promote more supply. The argument
being used is the assumption within the amendment that the way to
promote more supply is we need to open more areas for drilling. And
particularly we need to open the east coast of the United States for
drilling offshore on the Outer Continental Shelf, we need to open the
west coast offshore on the Outer Continental Shelf, and we need to open
a portion of ANWR, the Arctic National Wildlife Refuge.
As I say, I think it misses the key issue in that we are opening
additional areas for drilling at a pretty rapid rate in the onshore
areas of the United States where oil and gas production occurs and in
the offshore areas. But additional leases by themselves are not going
to make a difference to consumers either in the near term or the medium
term. What we need to be focused on is how we can promote more diligent
development. Nearly three-quarters of what we have leased domestically
onshore is not now being produced. A little over three-quarters of what
we have leased offshore is not being produced, and that is what we
should be concentrating on--how do we build in incentives for actual
production in areas we have, in fact, leased.
Finally, with respect to future lease sales, the Republican leader's
amendment leaves out the most promising
[[Page S4054]]
area, and that is the area in the gulf coast, particularly the area we
have still not opened in the original lease sale 181 area of the gulf
coast. This is something we clearly should be addressing as well.
As I say, the second vote is going to be on the proposal to suspend
the filling of the Strategic Petroleum Reserve. A version of that is in
the Republican leader's amendment, as well as being proposed by Senator
Reid. I hope we will get a very strong bipartisan vote for that
provision.
I do think it is prudent to turn down this compilation of various
energy-related provisions that has been put forward by the Republican
leader with the claim that it is going to bring down the price of gas.
It simply will not.
Mr. President, I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Louisiana.
Mr. VITTER. Mr. President, I rise today in strong support of the
McConnell-Domenici amendment because it does what we need to do to
address this real crisis in our country--crippling energy prices,
rising energy prices that hit the pocketbook of every Louisiana family
I represent and every American family, that is causing grave concern
about our economic future.
I am afraid what we heard from the distinguished Senator from New
Mexico just now is more of the same excuses we have heard for a couple
of years now: why we can't do this, can't do that, and can't act in
general. What has that inaction, that paralysis, those excuses all led
to? I will tell you what it has led to. It has led to soaring energy
prices. In January 2007, when this Democratic Congress took office, the
average price of a gallon of gas was $2.33 at the pump. Today, it is
$3.72--a 60-percent increase. That is what those excuses, that is what
that inaction has led to.
We need to do a number of things across the board on the demand side
and on the supply side. This Domenici-McConnell amendment includes all
of those. Does it include every one of them? No. No single proposal is
ever going to include every good idea out there that we probably need
to act on, but it includes a lot on which we need to act.
I want to focus on one part of the amendment in particular of which I
am very supportive, and that is opening more of our Outer Continental
Shelf to exploration and production.
I believe one of the most important things in energy policy that we
have done since the short time I have been in the Senate is to open new
parts of the Gulf of Mexico with revenue sharing. This provision in the
Domenici-McConnell amendment will expand on that precedent. It would
say we can open areas of the Atlantic and the Pacific, but with two
very important caveats, both of which are great policy. First of all,
the host State, the State off which the activity would occur, has to
want the activity, has to agree to it. The Governor has to say: Yes, we
want this activity off our waters. And secondly, that host State in
return would get significant revenue sharing, exactly the same revenue
sharing we passed a few years ago, 37.5 percent to go to the host State
to meet its environmental or educational or highway or other needs.
That is sound policy. We passed that policy for new areas of the gulf
that were opening. We need to expand on that policy to dramatically
increase our domestic energy production, and we can do that safely and
in an environmentally friendly way.
There is much the McConnell-Domenici amendment does that is needed as
well, but I wanted to highlight that point because it is so absolutely
crucial and important. It builds on good policy we set a few years ago.
It expands on that precedent, and I believe expanding on that precedent
can significantly increase our domestic energy resources in this
country.
Do we need to do other things? Absolutely. Do we need to act on the
demand side further? Absolutely. This isn't brain surgery. Economics
101 tells us that price has to do with two lines on a graph: the demand
line and the supply line. We need to mitigate, bring down demand, and
we need to increase supply. I am for any reasonable policy that does
those two things. On the demand side, conservation, greater efficiency,
new sources and forms of energy--absolutely.
I am going to agree with Senator Dorgan and vote for his amendment
regarding the Strategic Petroleum Reserve. Like Senator Domenici, I
have changed my mind on that issue because the increases in price at
the pump have gotten so dramatic and so outrageous. So that can
mitigate demand increases as well.
But as we make all of those efforts on the demand side--and we need
to do more--we cannot constantly ignore the supply side, particularly
the domestic supply side. That is exactly what this Congress has done
for the last 2 years. Mr. President, $2.33 price at the pump then;
$3.72 price at the pump today. Let's act, and let's act now.
I yield the floor.
Ms. COLLINS. Mr. President, I wish today to support the amendment
offered by the Senator from Nevada, Mr. Reid. It embodies a policy
change that I have advocated for many months. In January, I wrote to
the Secretary of Energy and urged the administration to stop filling
the SPR while oil prices are so high. The Reid amendment would suspend
acquisition for the Strategic Petroleum Reserve, SPR, until the end of
the year or until the price of a barrel of oil goes below $75.
The SPR is an emergency stockpile and an essential safeguard against
major disruptions in global oil markets. However, the SPR already
contains nearly 700 million barrels of oil, 97 percent of its current
storage capacity. This is more than sufficient to meet a crisis.
Mr. President, our Nation faces record-high energy prices affecting
almost every aspect of daily life. The prices of gasoline, home heating
oil, and diesel are creating tremendous hardships for American
families, truckers, and small businesses. High energy prices are a
major cause of the economic downturn. Last week, crude oil was trading
at over $120 per barrel.
The administration's decision to fill the SPR when oil prices are so
high defies common sense. In 2005, the Senator from Michigan, Mr.
Levin, and I joined forces on a bipartisan amendment directing the
Department of Energy to better manage the Reserve by requiring the
Department to avoid purchases when prices are high so as not to drive
up prices further by taking oil off the market. I don't believe the
Department of Energy is abiding by this law. If it were, the Department
would not be making purchases while prices are so high.
It simply does not make sense for the Department of Energy to be
purchasing oil for the Reserve at a time when oil prices exceed $120
per barrel. The Federal Government is taking oil off the market and
thus driving up prices at a time when consumers are struggling to pay
their fuel bills.
If the administration stopped purchasing oil for the SPR, the Energy
Information Administration has estimated that the impact on gas prices
would be between 4 and 5 cents a gallon. Other experts believe it is
considerably higher. At a hearing before the Permanent Subcommittee on
Investigations in December, one energy expert, Philip Verleger, said,
``DOE's actions added between 5 and 20 percent to the price of oil.''
It is a bad deal for taxpayers for the Department of Energy to be
purchasing oil when prices are so high.
There are other short-term steps we must take to address the energy
crisis--for example, regulating energy futures markets and repealing
tax breaks for major oil companies--but suspending filling the SPR is a
key step that I hope we approve tomorrow.
In the long term, our challenge to address energy prices is, of
course, to reduce our reliance on imported oil. We need to pursue the
goal of energy independence just as fervently as the Nation embraced
President Kennedy's goal in 1961 of putting a man on the Moon. Energy
independence, stable energy costs, and environmental stewardship are
goals that are within our reach. I urge my colleagues to get us started
on the effort by supporting this proposal to suspend filling the
Strategic Petroleum Reserve.
Mr. DORGAN. Mr. President, how much time remains on each side?
The ACTING PRESIDENT pro tempore. The majority has 6 minutes 18
seconds. The Senator has 7 minutes remaining.
Mr. DOMENICI. Mr. President, as I understand it, the other side is
going to have only one speaker to use their
[[Page S4055]]
time. I am trying to find the Senator from Texas. He wanted to speak.
Let me take a couple of minutes. If he gets here, I will yield the
floor as soon as he arrives.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, first, I wish to say that my good
friend, my fellow Senator from New Mexico spoke about speculation in
this oil market. There may be some. We heard testimony there may be. So
everybody knows, there is nothing before the Senate that the Democrats
propose regarding speculation. They just have a one-shot bill, and it
is pretty good, but it is not an energy policy. Probably most of us are
going to vote for it. That is what Senator Dorgan proposed.
As I indicated, I changed my mind. If people are wondering about
that, I was reading about economic history, and I read where John
Maynard Keynes, the great economist, was asked: Why did you change your
mind? He said: When the facts change, I change my mind. That is what
happened here with reference to SPR. The facts changed, and I changed
my mind.
The good Senator from New Mexico, my colleague, also said we have a
big problem with the weakening of the dollar. I hope he doesn't intend
to imply by that, when we find we can strengthen the dollar, then we
will solve the energy problem. I don't know that we know how to do that
one any quicker than we do the energy crisis. I don't think that would
accomplish anything.
We have a lot going on in the gulf, so we said let's let those
continue. That is what the Domenici bill says. But we say the rest of
the offshore around America--and incidentally, there is probably more
than any of us know in offshore America. We probably would send such a
big signal to the world if we decided to move on that. That alone would
have a positive impact.
In addition, the bill before the Senate does a lot in a number of
areas that have not been talked about very much. It would cause the
world to take another look and to say: America is serious, they are
really going to do something about their energy problems.
Mr. President, I now yield the remainder of the time to the Senator
from Texas.
The ACTING PRESIDENT pro tempore. The Senator from Texas.
Mr. CORNYN. Mr. President, I ask unanimous consent to speak for up to
5 minutes.
The ACTING PRESIDENT pro tempore. Is there objection?
Mr. DORGAN. Mr. President, I am required by our leadership to object
because they want to get the vote off on the time predetermined. I
apologize for that, but that is what I am required to do.
The ACTING PRESIDENT pro tempore. Objection is heard.
Mr. CORNYN. Mr. President, how much time remains?
The ACTING PRESIDENT pro tempore. Four minutes.
Mr. CORNYN. Mr. President, one thing has been accomplished by the
debate leading up to this morning's vote; that is, Congress finally--
finally--has acknowledged the existence of the law of supply and
demand. If we look at these two votes we are going to have this
morning, first is the McConnell-Domenici amendment, of which I am proud
to be a cosponsor, which would produce, if implemented, potentially up
to 3 million additional barrels of oil a day from the United States of
America--3 million--making us less dependent on imported oil from some
of our Nation's enemies, countries such as Iran and Venezuela that are
part of OPEC, the Organization of Petroleum Exporting Countries.
Alternatively, our friends on the other side of the aisle have
proposed--and I will vote for it--a temporary suspension of putting oil
into the Strategic Petroleum Reserve. But how much does that represent?
It represents 70,000 barrels of oil that would not be put in the
Strategic Petroleum Reserve and would be available on the open market
as an additional supply of oil, which is then available to be refined
into gasoline. I suspect it will have some modest impact on the price
of gasoline at the pump, maybe 3 to 5 cents a gallon. But if we think
70,000 barrels of additional oil into the open market will be
beneficial in terms of bringing down the price of gasoline, how much
more beneficial would it be to have 3 million additional barrels of oil
produced from our country out on the open market available for refining
into gasoline to help bring down the price of gas at the pump?
I am pleased that our colleagues have recognized the importance of
the law of supply and demand, something Congress has turned a blind eye
to for lo these many years as we put so much of America's natural
resources out of bounds when it comes to developing those resources,
and, of course, we know what the consequences of that have been, with
$3.71 average price for gasoline in America today and the price of oil
on the spot market bouncing up around $125 a barrel.
I don't know whether this amendment, of which I am proud to be a
cosponsor, could produce ultimately 3 million new barrels of American
oil each day. I don't know whether it will get the requisite 60 votes.
But if it does not, when gasoline is $3.71 a gallon and oil is $125 a
barrel, I wonder if the same vote, if we have it again when gasoline is
$4 a gallon and oil is $150 a barrel or when gasoline is $4.50 a gallon
and the price of oil is even higher, at what point the Congress, the
Senate is going to listen to the American people and say: We need some
help; we need some relief.
Now that Congress has acknowledged the importance of additional
supply in terms of bringing down the price at the pump, ultimately it
is my hope our colleagues will vote, at least 60 of us, for the
Domenici-McConnell amendment. I think the American consumers would be
the beneficiary of that. I urge my colleagues to vote for the
amendment.
I yield the floor.
The ACTING PRESIDENT pro tempore. Time has expired.
The Senator from North Dakota has 6 minutes remaining.
Mr. DORGAN. Mr. President, let me conclude with a couple of thoughts.
First of all, my colleague from New Mexico described the issues of
speculation a bit. We do, in fact, in our larger proposal that we
announced last week, have a provision dealing with speculation. And it
is important that we do that because speculation is part of what is
driving these prices. I showed comments from executives of some of the
largest oil companies in this country that said there is no
justification for the current price given supply and demand.
They said the price of oil should not be much above $50, $60, $70 a
barrel. So what is happening? Well, let me come to that in a moment.
Let me say, first of all, my hope is that today, here on the floor of
the Senate, we will decide to do some good things.
Now, how do you do good things? You try to find areas of common
interest and legislate moving ahead where you can. That is what Senator
Reid has suggested in the underlying amendment that we will vote on
dealing with stopping and halting the putting of oil underground in the
Strategic Petroleum Reserve. This is something I introduced in the
Senate back in February.
Now, as I said before, when the American consumer is being burned at
the stake by high gas prices, its Government ought not be carrying the
wood. I mean, it is that simple. We can do something about this.
We are talking about 70,000 barrels a day, 70,000 barrels every
single day of sweet light crude that we are taking off the market. Dr.
Philip Verleger, an economist and energy analyst, testified before the
Energy Committee on the effects of such a move. He said although it is
only three-tenths of a percent of usage, because it is sweet light
crude, the most valuable subset of oil, it could have up to as much as
a 10-percent effect on the price of oil.
So it seems to me what we do is, do what the Republicans and
Democrats have now generally come together to say we should do, and say
to the President: Look, you cannot put 70,000 barrels of oil
underground every day. You cannot do that. The Strategic Petroleum
Reserve is 97 percent filled, 97 percent.
Now, oil is $120, $126 a barrel; gas is going to $4 a gallon. Let me
describe the situation we all understand that we face on this planet of
ours. We stick straws in the planet and suck oil out. We suck out 85
million barrels every day. We are required to use one-fourth of that in
this little spot of geography on the planet called the United States of
America.
[[Page S4056]]
Let me say that again. We take 85 million barrels a day, and we need
one-fourth of it to be used in the United States. Now, 60 percent of
that which we use comes from outside of our country. That holds us
hostage to others. And 70 percent of the oil we use in this country is
used to fuel vehicles. So vehicles are an important part of this issue.
I am proud to say this Congress, with this majority and some minority
help, has passed for the first time in 32 years an increase of 10 miles
per gallon in the next 10 years of CAFE standards. This will lead to
better automobile efficiency and better gas mileage.
We made some progress in other areas. We opened production in Lease
181 in the Gulf of Mexico where there are substantial reserves. We made
progress in the biofuels ethanol standards and renewable fuels
standards. We have made some progress on all of those issues, but we
have people coming to the floor today to say: Well, gas is $4 a gallon.
Let's open ANWR. That means we get oil in 10 years.
As John Maynard Keynes said, in the long run we are all dead. What
can we do in the short term? At least today, on Tuesday, we can at
least do what we both believe--that is, what the minority and majority
believe is appropriate--and that is stop putting oil underground and
put some downward pressure on gas prices and oil prices. Give the
consumer an opportunity to see some decent prices.
This speculation in the futures market is speculation that is driving
up prices. We want to do something about that as well. But at least
today we have one common theme; we can increase supply by 70,000
barrels a day of sweet light crude. Instead of it going into the supply
that comes through the pump into the cars, which puts downward pressure
on gasoline, it is now going underground, underground in the Strategic
Petroleum Reserve. It makes no sense at all.
So I am saying: Let's stop doing bad things and let's start doing
good things. We can start by taking the first step in doing that today.
Mr. President, how much time remains?
The ACTING PRESIDENT pro tempore. There remains 1 minute 20 seconds.
Mr. DORGAN. Let me make one additional point, if I can. It does not
relate specifically to this amendment, but this issue of the free
market. You have an OPEC cartel behind closed doors. You have oil
companies that are bigger through mergers. You have a futures market
that is now rife with speculation. There is no free market. So the
American people deserve, it seems to me, a Congress that will stand up
and take some steps to put some downward pressure on gasoline prices.
That is a step we can take today. It is a step that is not a giant
step, but it is a step in the right direction that will put downward
pressure on gas prices. It will help this country. My hope is,
following this vote, we will see that both parties can contribute to
something when we agree on it. I think this will be a good day to put
downward pressure on gas prices.
Amendment No. 4737
Mr. President, I call up amendment No. 4737.
The ACTING PRESIDENT pro tempore. The clerk will report the
amendment.
Mr. DOMENICI. Do we not have 1 minute left on each side? The
amendment is not in order while time remains.
The ACTING PRESIDENT pro tempore. The amendment is simply being
reported. We will have 2 minutes equally divided.
The clerk will report the amendment.
The legislative clerk read as follows:
The Senator from North Dakota [Mr. Dorgan], for Mr. Reid,
for himself and Mr. Dorgan, Mr. Bingaman, Mrs. Boxer, Mr.
Levin, Ms. Stabenow, Mr. Leahy, Mr. Schumer, Mr. Brown, Mr.
Sanders, Mr. Durbin, Mr. Kerry, Mr. Menendez, Mr. Salazar,
Ms. Landrieu, Mr. Carper, Mr. Inouye, Mr. Lautenberg, Mr.
Reed, Mr. Harkin, Mr. Domenici, and Mrs. Hutchison, proposes
an amendment numbered 4737 to amendment No. 4707.
Mr. DORGAN. Mr. President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The amendment is as follows:
(Purpose: To increase the supply and lower the cost of petroleum by
temporarily suspending the acquisition of petroleum for the Strategic
Petroleum Reserve)
At the appropriate place, insert the following:
SEC. __. SUSPENSION OF PETROLEUM ACQUISITION FOR STRATEGIC
PETROLEUM RESERVE.
(a) In General.--Except as provided in subsection (b) and
notwithstanding any other provision of law, during the period
beginning on the date of enactment of this Act and ending on
December 31, 2008--
(1) the Secretary of the Interior shall suspend acquisition
of petroleum for the Strategic Petroleum Reserve through the
royalty-in-kind program; and
(2) the Secretary of Energy shall suspend acquisition of
petroleum for the Strategic Petroleum Reserve through any
other acquisition method.
(b) Resumption.--Not earlier than 30 days after the date on
which the President notifies Congress that the President has
determined that the weighted average price of petroleum in
the United States for the most recent 90-day period is $75 or
less per barrel--
(1) the Secretary of the Interior may resume acquisition of
petroleum for the Strategic Petroleum Reserve through the
royalty-in-kind program; and
(2) the Secretary of Energy may resume acquisition of
petroleum for the Strategic Petroleum Reserve through any
other acquisition method.
(c) Existing Contracts.--In the case of any oil scheduled
to be delivered to the Strategic Petroleum Reserve pursuant
to a contract entered into by the Secretary of Energy prior
to, and in effect on, the date of enactment of this Act, the
Secretary shall, to the maximum extent practicable, negotiate
a deferral of the delivery of the oil for a period of not
less than 1 year, in accordance with procedures of the
Department of Energy in effect on the date of enactment of
this Act for deferrals of oil.
Amendment No. 4720
The ACTING PRESIDENT pro tempore. There now will be 2 minutes of
debate equally divided prior to a vote on amendment No. 4720.
Mr. DOMENICI. That means 1 minute each?
The ACTING PRESIDENT pro tempore. Correct.
Mr. DOMENICI. On behalf of the amendment, I wish to say whoever is
interested in what is going on today should know that Democrats speak
of doing other things to bring the price down, but the only thing we
are really doing is the amendment of the Senator from North Dakota on
SPR. We all agree with that.
That is a temporary 7-month deferral of purchases. Clearly, if it
does anything, it will be extremely temporary. All of the other things
that are spoken about, none of them are in this bill, whether it has to
do with fraud, speculation, or whatever.
On our side we have at least said: Let's start coal to liquid, a
great American resource. Let's start offshore around America. Let's
start on ANWR. Let's start moving on oil shale. Let's accelerate
battery research, which will move us toward automobiles that can plug
in, which will be a big American boon.
So there are lots of pluses. There is a lot of rhetoric. And there is
one amendment that the Democrats offer that we agree upon. I believe
those people interested in production should vote for the Domenici
amendment and tell the American people the truth: We can produce in
America and put pressure on the world markets and reduce the price of
oil.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I urge Senators to vote against the
McConnell amendment. It is a compilation of various proposals. The main
thrust of it is to try to lease more Federal land. People should
understand that we have been leasing a great deal of Federal land
onshore. That pie chart on the left is offshore, and the Outer
Continental Shelf, that is the pie chart on the right.
We currently have 31 million acres of land that is leased and is not
producing. What we need to do is to get diligent in the development of
these areas that are already leased.
Offshore, the same thing; the Outer Continental Shelf has 33 million
acres that are not producing. So this amendment is a compilation of
energy-related provisions that are put into the McConnell amendment. It
is not going to bring down the price of gas at the pump.
I urge Senators to oppose it and then to support the second vote on
the proposal to suspend the filling of the Strategic Petroleum Reserve.
[[Page S4057]]
I yield the floor.
The ACTING PRESIDENT pro tempore. The question is on agreeing to
amendment No. 4720.
Mr. BINGAMAN. Mr. President, I ask for the yeas and nays.
The ACTING PRESIDENT pro tempore. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
The ACTING PRESIDENT pro tempore. Are there any other Senators in the
Chamber desiring to vote?
The result was announced--yeas 42, nays 56, as follows:
[Rollcall Vote No. 123 Leg.]
YEAS--42
Alexander
Allard
Barrasso
Bennett
Bond
Brownback
Bunning
Burr
Chambliss
Coburn
Cochran
Corker
Cornyn
Craig
Crapo
DeMint
Domenici
Ensign
Enzi
Graham
Grassley
Gregg
Hagel
Hatch
Hutchison
Isakson
Kyl
Landrieu
Lugar
McConnell
Murkowski
Roberts
Sessions
Shelby
Specter
Stevens
Sununu
Thune
Vitter
Voinovich
Warner
Wicker
NAYS--56
Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Brown
Byrd
Cantwell
Cardin
Carper
Casey
Clinton
Coleman
Collins
Conrad
Dodd
Dole
Dorgan
Durbin
Feingold
Feinstein
Harkin
Inouye
Johnson
Kennedy
Kerry
Klobuchar
Kohl
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Martinez
McCaskill
Menendez
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Rockefeller
Salazar
Sanders
Schumer
Smith
Snowe
Stabenow
Tester
Webb
Whitehouse
Wyden
NOT VOTING--2
Inhofe
McCain
The ACTING PRESIDENT pro tempore. Under the previous order, requiring
60 votes for adoption of this amendment, the amendment is withdrawn.
Amendment No. 4737
There are now 2 minutes, equally divided, prior to a vote on the Reid
amendment.
Who yields time?
The Senator from North Dakota.
Mr. DORGAN. Mr. President, let me take the 1 minute.
This is a piece of legislation I introduced in February of this year.
The Strategic Petroleum Reserve is 97 percent filled. We have oil and
gas prices going through the roof in this country. We are putting
70,000 barrels of oil underground every day. It is a subset of the most
valuable kind of oil: Sweet light crude, coming from the Gulf of
Mexico.
We heard testimony before the Senate Energy Committee that even
though it is a small part of our oil usage, this subset of oil--the
70,000 barrels a day put underground--could have an impact of up to 10
percent of the price of oil. I am not suggesting this does everything,
but it is a step in the right direction.
As I said earlier, when the American consumer is being burned at the
stake by energy prices, the Government ought not be carrying the wood.
Sticking oil underground is wrong at this point in time, and this
amendment simply says: Stop it. Halt it.
Mr. LEVIN. Mr. President, I support the amendment to stop deliveries
of oil into the Strategic Petroleum Reserve, SPR.
Crude oil prices reached a record high recently of $126 per barrel,
leading to record highs in the price of other fuels produced from crude
oil, including gasoline, heating oil, diesel fuel, and jet fuel. With
prices going through the roof, it is the wrong time for the Department
of Energy, DOE, to take millions of barrels of high-priced oil off the
market and put it into the SPR. Instead of reducing supplies by taking
oil off the market and increasing the price of oil, the DOE should be
looking for ways to decrease the price of oil. One step is a moratorium
on filling the SPR until oil prices are lower.
Unfortunately, the DOE is contributing to the current price spike by
filling the SPR regardless of the cost of crude oil or the petroleum
products that are refined from crude oil.
There are three major problems with the DOE's insistence on putting
high-priced oil into the SPR. First, by placing oil into the SPR the
DOE is reducing the supply of crude oil and putting upward pressure on
the price of oil. Second, by placing very expensive crude oil into the
SPR, the DOE is significantly increasing the cost of the SPR program to
the taxpayers. Third, the DOE's approach runs counter to the direction
provided by the Congress in the Energy Policy Act of 2005, which
requires the DOE to fill in the SPR in a manner that minimizes the
impact upon prices and the costs to the taxpayers.
The DOE is currently taking about 70,000 barrels per day of crude oil
off the market and putting it into the SPR. For the first half of 2008,
this will total to about 10 million barrels of crude oil. This is
reducing our inventories of crude oil and refined products, such as
gasoline, just at a time when our refineries need to be running at
maximum to make gasoline for the spring and summer driving seasons. The
DOE also has asked for bids for another 6-month program to fill the
SPR, beginning later this year. If the DOE is permitted to continue
with this program, it will take millions more barrels of oil off the
market beginning sometime later this year.
Under the basic economic principle of supply and demand, reducing the
supply of crude oil available to U.S. refineries will increase the
price of oil and gasoline. Even the DOE agrees with this basic economic
principle. Mr. Guy Caruso, the head of the DOE's Energy Information
Administration, testified to the Congress earlier this year that an SPR
fill of 100,000 barrels per day would add about $2 per barrel to the
price of oil. Last December, Dr. Philip Verleger testified that the SPR
fill was adding about $10 per barrel to the price of crude oil.
Economists may disagree on the amount of the increase, but now there
should be no doubt that the DOE is increasing the price of oil by
filling the SPR at this time. The DOE acknowledges this. The DOE should
be working to lower oil prices, not helping to boost them to record
highs.
DOE says the amount of oil it is putting into the SPR is
insignificant compared to total global supply. This is the wrong
comparison. The amount of oil DOE is putting into the SPR represents a
significant marginal increase in the demand for oil. When supply and
demand are closely balanced, a marginal increase in demand can have a
very large impact on price. This is precisely the situation we are in
today. Supply and demand are very closely balanced. Adding a demand of
millions of barrels of oil over a period of several months can have a
very significant impact on the amount of oil on the market or in
inventories. In a tight market, taking millions of barrels off the
market can indeed have a major impact upon oil prices.
When the DOE fills the SPR it does not have to actually purchase any
crude oil. Instead, the DOE takes oil that is paid to the Federal
Government as royalties for oil produced by private oil companies on
offshore oil leases in the Gulf of Mexico and trades it back to private
oil companies for oil that is then placed into the SPR. Thus, the DOE's
program to acquire oil for the SPR does not require any Federal
appropriations. But that doesn't mean the program doesn't cost the
taxpayers any money. In fact, the opposite is true--the SPR program
costs the taxpayers a lot of money. The higher the price of oil, the
more it costs the taxpayers. This is because instead of selling the
royalty oil on the open market at whatever the market price of oil is,
recently as much as $126 a barrel, the DOE is taking that oil off the
market, trading it for oil that meets the specifications of oil for the
SPR, and leaving taxpayers without the revenue that would be created by
selling tens of millions of barrels of oil. In essence, the taxpayers
are paying the market price of oil for each barrel of oil placed into
the SPR.
A moratorium on filling the SPR until prices are lower would save the
taxpayers money. If the DOE were to acquire SPR oil at $75 per barrel
instead of $125 per barrel, it would save $50 per barrel. For 10
million barrels, that would add up to $500 million. Delaying the
filling of the SPR would not affect or harm our national security or
our energy security. The SPR is currently about 97 percent full, with
[[Page S4058]]
slightly more than 700 million barrels of oil. This amount of oil is
large enough to ensure that we are prepared for any contingencies that
the SPR is designed to cover.
To date, over the entire life of the SPR the largest withdrawal of
oil from the SPR has been for about 30 million barrels. The amount of
oil in the SPR today already is far more than has ever been needed to
cover market disruptions.
The DOE's policy to fill the SPR at the same rate regardless of the
effect on oil prices or taxpayer costs runs counter to the intent of
Congress in section 301 of the Energy Policy Act of 2005, which directs
DOE to consider and minimize the effects on oil prices and costs to the
taxpayers when acquiring oil for the SPR. I sponsored the amendment,
along with Senator Collins, that became this provision in the law. We
did not intend this to simply be a formality, whereby in every case DOE
would simply conclude that the effect on price was insignificant. Yet
that seems to be how DOE is applying this provision.
In 2003, the Permanent Subcommittee on Investigations, which I chair,
completed a detailed investigation of the SPR fill program. The
subcommittee's 2003 report is titled ``U.S. Strategic Petroleum
Reserve: Recent Policy Has Increased Costs to Consumers But Not Overall
U.S. Energy Security.'' It can be found on the Subcommittee's Web site.
The investigation found that in 2002 the Bush administration changed
the DOE's policy on how it would fill the SPR, and that this change in
policy increased the price of oil but not our overall energy security.
Before the Bush administration changed the DOE's policy on filling
the SPR, the DOE sought to put more crude oil into the SPR when
supplies were plentiful and prices low and less crude oil into the SPR
when supplies were scarce and prices high. The DOE also would allow oil
companies to defer deliveries for up to a year when supplies were
tight, provided that the oil companies would deposit more oil into the
SPR at the end of the deferral period. Through this deferral policy,
the DOE was able to obtain additional SPR oil for no additional cost to
the taxpayer. This policy made good sense.
As my subcommittee's report documented, in 2002 the White House
directed DOE to change its policy. Instead of allowing the DOE to
continue with its sensible policy, the White House directed the DOE to
fill the SPR at the same rate, regardless of market conditions. The new
policy also prohibited the DOE from accepting any deferrals, regardless
of market conditions. The career DOE staff vigorously protested the
changes ordered by the White House. The career staff pointed out that
filling the SPR in times of tight supplies and high prices would push
prices up and that not allowing any deferrals would cost the taxpayers
more money. The career staff also argued that the old policy followed
good business judgment and the new policy would be difficult to defend
under sound business principles. These memos are included as exhibits
to the subcommittee's 2003 report. The DOE career staff's
recommendations were rejected, however, and the current policy was
adopted.
Following the issuance of this report, in early 2003, I asked the
Department of Energy to suspend its filling of the SPR until prices had
abated and supplies were more plentiful. The DOE refused to change
course and continued the SPR fill without regard to market supplies or
prices. In response, I offered a bipartisan amendment, with Senator
Collins, to the Interior appropriations bill--which provides funding
for the Strategic Petroleum Reserve program--to require the DOE to
minimize the costs to the taxpayers and market impacts when placing oil
into the SPR. The Senate unanimously adopted our amendment, but it was
dropped from the conference report due to the Bush administration's
continued opposition.
The next spring, I offered another bipartisan amendment, also with
Senator Collins, to the budget resolution expressing the sense of the
Senate that the administration should postpone deliveries into the SPR
and use the savings from the postponement to increase funding for
national security programs. The amendment passed the Senate by a vote
of 52 to 43. That fall, we attempted to attach a similar amendment to
the Homeland Security appropriations bill that would have postponed the
SPR fill and used the savings for homeland security programs, but the
amendment was defeated by a procedural vote, even though the majority
of Senators voted in favor of the amendment, 48 to 47.
The next year, the Senate passed the Levin-Collins amendment to the
Energy Policy Act of 2005 to require the DOE to consider price impacts
and minimize the costs to the taxpayers and market impacts when placing
oil into the SPR. The Levin-Collins amendment was agreed to by the
conferees and signed into law as section 301 of the Energy Policy Act
of 2005.
But, unfortunately, passage of this provision has had no effect upon
the DOE's actions. The DOE continues to fill the SPR regardless of the
market effects of buying oil, thereby taking oil off the market and
reducing supply by placing it into the SPR. In the past year, no matter
what the price of oil or market conditions, the DOE has consistently
said that the market effects are negligible and claimed that there is
no reason to delay filling the SPR, effectively ignoring the section
301 requirements of the Energy Policy Act. The result is that we have
the current contradiction of DOE depositing oil into the SPR at the
same time the President is urging OPEC to put more oil on to the
market.
Now is not the time to be filling the SPR. When oil prices are at
record highs, we should be looking for ways to increase oil supplies
and reduce prices. The Department of Energy is doing just the opposite.
It is taking oil off the market and increasing prices, doing so at
great costs to taxpayers and despite enacted law requiring that they do
otherwise. There is now a strong bipartisan consensus to put a halt to
the administration's misguided SPR policy. I urge my colleagues to vote
for this amendment to postpone the filling of the SPR until oil prices
have fallen to lower levels.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I want the Republicans to know I have
changed my mind over the past 3 or 4 weeks, and it is simply because
the price of oil is now up to $125 a barrel--perhaps in real dollars
$110. I think for 7 months to stop filling SPR could have a chance of
reducing the price by a small amount.
Make no bones about it now, this is no big energy policy. This is one
little thing we can do, and I think we ought to go ahead and do it. I
know there are some who take the fact that we need a big reserve very
seriously, and they think we ought to continue to fill it even more
than we are, and I respect those views. But with reference to this
amendment, by Senator Dorgan, I think we ought to support it and at
least do one positive thing. It was in our bill, incidentally, as one
of a number of positive things we would do, including Alaska, which is
complained so much about. It would produce a million barrels
permanently, more or less. This is 70,000 barrels one time--so we
understand.
I yield the floor.
Mr. President, I ask for the yeas and nays.
The ACTING PRESIDENT pro tempore. All time has expired.
Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the amendment.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
The ACTING PRESIDENT pro tempore. Are there any other Senators in the
Chamber desiring to vote?
The result was announced--yeas 97, nays 1, as follows:
[Rollcall Vote No. 124 Leg.]
YEAS--97
Akaka
Alexander
Barrasso
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Brown
Brownback
Bunning
Burr
Byrd
Cantwell
Cardin
Carper
Casey
Chambliss
Clinton
Coburn
Cochran
Coleman
Collins
Conrad
Corker
Cornyn
Craig
Crapo
DeMint
Dodd
Dole
Domenici
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Graham
Grassley
Gregg
Hagel
Harkin
[[Page S4059]]
Hatch
Hutchison
Inouye
Isakson
Johnson
Kennedy
Kerry
Klobuchar
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Lugar
Martinez
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Obama
Pryor
Reed
Reid
Roberts
Rockefeller
Salazar
Sanders
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Tester
Thune
Vitter
Voinovich
Warner
Webb
Whitehouse
Wicker
Wyden
NAYS--1
Allard
NOT VOTING--2
Inhofe
McCain
The ACTING PRESIDENT pro tempore. Under the previous order requiring
60 votes for the adoption of this amendment, the amendment is agreed
to.
The amendment (No. 4737) was agreed to.
Mr. REID. Mr. President, first I move to reconsider that vote.
Mr. DURBIN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. REID. Mr. President, I am going to ask unanimous consent, if
everyone would be kind enough to listen to me--we just passed an
amendment by 97 votes, I think I heard the Chair announce. I would
therefore ask, as a result of that vote, that the Senate--the one we
just concluded--I now ask unanimous consent that the Senate proceed to
a bill, which is at the desk, which encompasses the text of this SPR
amendment which the Senate just adopted; that the bill be read a third
time, passed, and the motion to reconsider be laid upon the table, and
that there be no intervening action or debate.
Mr. DOMENICI. I object.
Mr. REID. Mr. President, we could have this out of here today. The
House could take care of it either tonight or tomorrow and be on the
President's desk on Wednesday. I have been told by my distinguished
friend, Senator Domenici, that there is going to be an objection on the
other side. I think it is really unfortunate. That is one reason people
are a little concerned about our conduct here. We just passed something
by almost 100 votes, and someone now is objecting to taking this up as
a bill. I think that doesn't make a lot of sense. I am terribly
disappointed that we have more of this stalling and obstructionism that
has gone on this entire Congress.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I did object, and I object now.
The ACTING PRESIDENT pro tempore. Objection is heard.
Mr. REID. Mr. President, I now ask unanimous consent that the
previous order with respect to S. 2284 be further modified to provide
that following third reading of S. 2284, the Banking Committee be
discharged from further consideration of H.R. 3121, the House
companion, and the Senate then proceed to its consideration; that all
after the enacting clause be stricken, and the text of S. 2284, as
amended, be inserted in lieu thereof; that the bill be read a third
time, and the Senate then vote on passage of H.R. 3121; that upon
passage of H.R. 3121, S. 2284 be returned to the calendar, with the
remaining provisions of the previous order remaining in effect, and
without further intervening action or debate.
The ACTING PRESIDENT pro tempore. Is there objection?
Mr. DORGAN. Mr. President, reserving the right to object, I do not
object, of course, but might I observe that I understood the objection
to the previous unanimous consent request. My hope would be that in the
coming hours today we might have some discussions between the
leadership of the minority and majority so that we can proceed on the
SPR amendment. I understand the objection was raised, but there has
been an overwhelming amount of support by the Senate. I hope we could
have those discussions this afternoon and perhaps proceed on the basis
that Senator Reid has suggested.
The ACTING PRESIDENT pro tempore. Is there objection?
Without objection, it is so ordered.
Under the previous order, the substitute amendment, as amended, is
agreed to.
The amendment (No. 4707), as amended, was agreed to.
Mr. DODD. Mr. President, last week, the Senate had a fruitful debate
on, and today the Senate will vote on passage of the Flood Insurance
Reform and Modernization Act. This bill extends the flood insurance
program for 5 years, while making commonsense reforms so that flood
insurance remains available to millions of Americans who live in flood-
prone areas.
Though many people think of floods as confined to coastal areas, I
want to let my colleagues know that in the last year, there have been
flood claims in all 50 States. Every State has at-risk areas, and in
the absence of private insurance, the National Flood Insurance Program
is the only way for home and business owners to ensure they can rebuild
after the waters recede.
The bill we are considering makes some tough choices, as I talked
about last week.
In order to assure the continuation and availability of flood
insurance, this bill essentially restarts the flood program. It
forgives the $17 billion of program debt so that all policyholders will
not face steep premium increases. All 5.5 million policyholders would
have to double their premium payments just to pay the interest on this
debt. To make a dent in the principal, premiums would have to increase
many times over. Increases of this magnitude would drive untold numbers
of people to drop flood insurance--at a time when we ought to be
encouraging more people to purchase this critical coverage.
In an effort to avoid these steep premium increases, the bill
forgives the debt. In addition, it reforms the premium structure so
rates are actuarially based. Yes, this reform will result in some
policyholders paying more for flood coverage, but the premium increases
are much less than they would be if this bill were not to pass. If we
do nothing, FEMA's $17 billion debt hangs over the entire program.
Last week, we accepted 11 amendments. We were able to accommodate
Senators on both sides of the aisle--specifically Senators Menendez,
Coburn, McCaskill, DeMint, Dole, Thune, Durbin, and Landrieu. Their
amendments help to strengthen this bill and the flood insurance
program. These amendments include provisions to ensure that FEMA does
outreach when mapping changes occur, to make policy exclusions clear to
home and business owners, and to strengthen the flood insurance
advocate created in the committee-passed bill.
I want to thank Senator Shelby and his staff for working so closely
with us on this bipartisan bill. I also want to thank the majority and
minority leaders for agreeing to move to this bill, and for supporting
our efforts last week to accommodate debate and amendments.
I especially thank the staff who have worked on this legislation. In
particular I want to thank Lula Davis, Tim Mitchell, Tricia Engle, and
Mark Wetjen on Leader Reid's staff, and I want to thank Rohit Kumar and
Dave Schiappa on minority leader McConnell's staff.
Senator Shelby's staff have been invaluable, and I want to recognize
the work of Bill Duhnke, Mark Oesterle, Mark Calabria and Jim Johnson.
I also want to acknowledge the hard work of my own staff, including
Shawn Maher, Jennifer Fogel-Bublick, and Sarah Kline.
As I have said, this is a strong bill that ensures flood insurance
will be available for many years to come. I urge my colleagues to
support this bill so that families can rebuild their homes and their
lives after a flood.
Mr. DURBIN. Mr. President, I rise in support of the Flood Insurance
Reform and Modernization Act of 2007.
After Hurricane Katrina, I had a chance to meet some of the survivors
who were displaced by the storm and ended up in Illinois. Many had lost
their homes, their jobs, their communities, everything. Nearly 3 years
later, some are still picking up the pieces of a former life.
We can't stop every disaster from happening. But we can be prepared,
so what happened after Katrina never happens again.
Katrina taught us the importance of being prepared. We need to
understand the risks of disaster, prepare homes
[[Page S4060]]
and communities to withstand disaster, and make sure that once disaster
strikes, communities can get back on their feet as quickly as possible.
The national flood insurance program is one of the best ways we do
this. It allows people who live near rivers or other flood-prone areas
to insure themselves at an affordable rate against the risk of a flood.
If the worst happens, it covers some of the costs of recovery.
This program is critically important to Illinois.
Illinois has the largest inland system of rivers, lakes, and streams
in the Nation. Floods are 98 percent of Illinois' declared disasters.
That is why only three other States have more communities participating
in the flood insurance program than Illinois.
The bill before us today renews the flood insurance program, which
expires this September, and strengthens the program in several
important ways.
It puts the program on sound financial footing. It forgives the $17
billion debt from Katrina and other storm-related losses, a debt the
program could never repay. But the bill also requires FEMA to establish
a reserve fund so we are in better shape to cover future losses.
It encourages more people to buy flood insurance.
It provides more funding to update old flood maps, so communities
know where the hazards are and can plan accordingly.
And I am pleased that this legislation also contains an amendment I
offered to make sure that the costs of flood insurance are shared
fairly between Illinois and Missouri down near St. Louis.
Floods are among the most common and costly natural disasters.
Passing this bill will strengthen our ability to prepare for what we
know is coming and to return to our lives as soon as possible once the
flood waters recede. This bill helps ensure that when the next Katrina-
like disaster hits, we won't see a Katrina-like aftermath.
I thank Senators Dodd and Shelby for their hard work on this bill and
urge my colleagues to support it.
Mr. SPECTER. Mr. President, I seek recognition to express my views
about the pending energy amendment aimed at increasing domestic oil and
gas production. In recognizing that this is a symbolic vote aimed at
stimulating debate on the Nation's energy situation, I am voting for
this amendment today because I want to affirm the principle of taking
decisive action on the Nation's energy issues. I do, however, have
reservations about some of the provisions contained within this
measure.
While I fully support measures contained in the package which would
further the development of alternative fuels for the transportation
sector and for electric-powered vehicles; set goals for the use of
coal-derived fuels; suspend filling the Strategic Petroleum Reserve;
and streamline the permitting process for new oil refineries, I believe
further debate is necessary on some other provisions.
Specifically, when these energy issues are revisited, there should be
further discussion of opening additional areas of the Outer Continental
Shelf to drilling as well as further discussion on the moratorium on
commercial leasing of oil shale in the Western United States. I
understand the need to develop our domestic resources due to growing
global demand for oil, but we must ensure these steps are taken with
the utmost environmental sensitivity.
Mr. LEVIN. Mr. President, I will vote for the Flood Insurance Reform
and Modernization Act because it would help place the National Flood
Insurance Program, NFIP, back on solid financial footing. It is not a
perfect bill, but I hope that some of my concerns can be addressed in
the House Senate conference process.
When Congress established the NFIP in 1968, flood insurance was not
available at an affordable price, resulting in frequent and costly
Federal disaster aid payments. The new program created a method to
share the risk of flood losses through a national insurance program and
required preventive and protective measures to mitigate the risk.
Currently, Michigan has over 27,000 flood insurance policies, and since
the program's inception, over $42.6 million in flood claims have been
paid to Michigan policyholders. This bipartisan reform bill extends
this important program through 2013, and enhances the long-term
viability of the program, helping to provide self-sustaining, critical
insurance coverage for millions of home and business owners throughout
the country.
Historically, the flood insurance program has covered most claims
through the premiums it has collected. However, recent losses from the
2004 floods and 2005 catastrophic hurricanes have left the program over
$17 billion in debt to the U.S. Treasury. This reform bill takes the
painful but necessary step of forgiving that debt. At the same time,
this legislation makes changes to the program to help ensure its
continued long-term financial solvency. The aim is to ensure that each
time a hurricane, deluge or other natural disaster hits, flood claims
can be paid without relying on taxpayer funds from across the country.
There are a number of measures in this bill aimed at restoring the
program's financial stability. These include requiring certain at-risk
properties to pay phased-in actuarial rates, extending the Severe
Repetitive Loss Mitigation program to mitigate losses on the most at-
risk properties, and requiring the program to build up reserves. These
and other new requirements reflect difficult choices because they are
not without cost to property owners, many of whom are already stretched
by staggering gas and grocery prices, falling home values and a dismal
economy. This bill attempts to recognize that reality by maintaining
some subsidized rates for Federal flood insurance where buildings were
built before the existence of a federal flood map, and phasing-in new
actuarial rates.
The bill also expands and encourages the purchase of flood insurance
for properties in areas with flood risks. Property owners in a 500-year
floodplain would be notified about the risks they face, but would not
be required to purchase flood insurance. To better define areas of
flood risk, the bill would require FEMA to establish an ongoing map
modernization program using the most accurate data and consistent
standards for mapping. These changes will help generate the necessary
premium income for the program while striving to maintain affordability
for homeowners.
The bill also expands and encourages the purchase of flood insurance
for properties in areas located behind levees, dams, and other man-made
structures, recognizing that these structures could be breached. While
recent history has shown us that levees can and do fail and that no
properties are entirely risk-free, I am concerned that imposing this
mandatory requirement in a uniform fashion may not accurately reflect
the risks these communities face. Michigan has 2,500 dams and numerous
levees scattered across the State; properties behind these structures
would be required to purchase federal flood insurance regardless of the
risks they face. We need to better understand the implications of
requiring mandatory insurance for all of these areas before we impose a
blanket requirement on all of them. For this reason, I voted in support
of an amendment offered by Senator Landrieu that would have lifted this
new mandatory requirement and would have instead required a study to be
conducted to assess the impact, effectiveness, and feasibility of
extending mandatory flood coverage to these areas. I believe Senator
Landrieu's more thoughtful approach is warranted. Unfortunately, the
amendment failed 30-62.
While I recognize that making the NFIP more financially sound
requires making some tough decisions, I believe some of the choices
reflected in this bill lead to unfair results. For example, I am
concerned about what will happen to property owners currently not
mapped into a floodplain should a new map require them to purchase
flood insurance. Currently, these property owners would receive
subsidized policies, because the buildings were built before the flood
risk was known. However, this bill removes the subsidized rate for
properties that get remapped into a floodplain. While the bill provides
a 2-year phase-in for these unsubsidized rates, it is not fair to
demand higher rates from those who, through no fault of their own, had
no idea they had exposure to flood damage, especially at a time when so
many families are struggling to meet their monthly expenses. This
inequity is one that I hope can be addressed when this bill is
conferenced with the House version passed last year.
There are also inequities in existing approaches of FEMA's mapping of
flood risk which need to be corrected in conference. For instance,
revised flood
[[Page S4061]]
maps are being developed by FEMA for the city of Grand Rapids in such a
way that does not incorporate the existing flood protection provided by
the city's recently completed $12.4 million floodwall improvement
project. The revised flood maps would put over 6,000 additional
properties into the 100-year floodplain, at a cost of over $6 million
per year. This is an area that has not flooded at that level since
1905, and that occurred when the city did not have structural flood
protection. FEMA's action appears arbitrary, ignores the participation
of its State partner, and would likely decrease property values and the
tax base of the community, hampers economic development, and imposes
unfair costs on thousands of people in the city of Grand Rapids. FEMA
should more thoroughly and accurately reassess flood risks using a
risk-based analysis to account for local conditions and incorporate
protection by the city's improved floodwalls, rather than ignoring
their presence. I am hopeful that the managers will work with us in
conference to address this unconscionable and unnecessary burden the
city of Grand Rapids and its citizens are facing.
I wish that no American had to worry about suffering damage from a
natural disaster, but it is a fact of nature that such damage can
happen. That is why it is important to do what we can to help property
owners have adequate insurance. The goals of the National Flood
Insurance Program are important, and reauthorizing and revamping this
program is necessary. This bill represents a necessary step to ensure
that more at-risk property owners are protected while the cost of
disaster relief and adequate insurance is less of a burden to the
average taxpayer. Flooding is a risk that many communities face, and
the availability of flood insurance is important for ensuring that our
citizens can recover from any losses suffered. However, this must be
done in a way that does not unduly and unfairly burden our communities.
I will continue to work to strengthen the National Flood Insurance
Program in a fair and responsible manner as it proceeds to conference.
The ACTING PRESIDENT pro tempore. The clerk will read the bill for
the third time.
The bill was ordered to be engrossed for a third reading and was read
the third time.
The ACTING PRESIDENT pro tempore. Under the previous order, the
Banking Committee is discharged from further consideration of H.R.
3121, which the clerk will report by title.
The legislative clerk read as follows:
A 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.
The ACTING PRESIDENT pro tempore. Under the previous order, all after
the enacting clause is stricken and the text of S. 2284, as amended, is
inserted in lieu thereof.
The clerk will read the bill for the third time.
The amendment was ordered to be engrossed and the bill to be read a
third time.
The bill was read the third time.
The ACTING PRESIDENT pro tempore. The bill having been read the third
time, the question is, Shall the bill pass?
Mr. DODD. Mr. President, I ask for the yeas and nays.
The ACTING PRESIDENT pro tempore. Is there a sufficient second?
There is a sufficient second.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Oklahoma (Mr. Inhofe) and the Senator from Arizona (Mr. McCain).
The ACTING PRESIDENT pro tempore. Are there any other Senators in the
Chamber desiring to vote?
The result was announced--yeas 92, nays 6, as follows:
[Rollcall Vote No. 125 Leg.]
YEAS--92
Akaka
Alexander
Allard
Barrasso
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Brown
Brownback
Bunning
Burr
Byrd
Cantwell
Cardin
Carper
Casey
Chambliss
Clinton
Cochran
Coleman
Collins
Conrad
Corker
Cornyn
Craig
Crapo
DeMint
Dodd
Dole
Domenici
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Graham
Grassley
Gregg
Hagel
Harkin
Hatch
Hutchison
Inouye
Isakson
Johnson
Kennedy
Kerry
Klobuchar
Kohl
Kyl
Lautenberg
Leahy
Levin
Lieberman
Lugar
Martinez
McCaskill
McConnell
Menendez
Mikulski
Murkowski
Murray
Nelson (NE)
Obama
Reed
Reid
Roberts
Rockefeller
Salazar
Sanders
Schumer
Sessions
Shelby
Smith
Snowe
Specter
Stabenow
Stevens
Sununu
Tester
Thune
Voinovich
Warner
Webb
Whitehouse
Wicker
Wyden
NAYS--6
Coburn
Landrieu
Lincoln
Nelson (FL)
Pryor
Vitter
NOT VOTING--2
Inhofe
McCain
The bill (H.R. 3121), as amended, was passed, as follows:
H.R. 3121
Resolved, That the bill from the House of Representatives
(H.R. 3121) entitled ``An Act 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.'', do pass with the following amendment:
Strike out all after the enacting clause and insert:
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of contents.
TITLE I--FLOOD INSURANCE REFORM AND MODERNIZATION
Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Definitions.
Sec. 104. Extension of National Flood Insurance Program.
Sec. 105. Availability of insurance for multifamily properties.
Sec. 106. Reform of premium rate structure.
Sec. 107. Mandatory coverage areas.
Sec. 108. Premium adjustment.
Sec. 109. State chartered financial institutions.
Sec. 110. Enforcement.
Sec. 111. Escrow of flood insurance payments.
Sec. 112. Borrowing authority debt forgiveness.
Sec. 113. Minimum deductibles for claims under the National Flood
Insurance Program.
Sec. 114. Considerations in determining chargeable premium rates.
Sec. 115. Reserve fund.
Sec. 116. Repayment plan for borrowing authority.
Sec. 117. Payment of condominium claims.
Sec. 118. Technical Mapping Advisory Council.
Sec. 119. National Flood Mapping Program.
Sec. 120. Removal of limitation on State contributions for updating
flood maps.
Sec. 121. Coordination.
Sec. 122. Interagency coordination study.
Sec. 123. Nonmandatory participation.
Sec. 124. Notice of flood insurance availability under RESPA.
Sec. 125. Testing of new flood proofing technologies.
Sec. 126. Participation in State disaster claims mediation programs.
Sec. 127. Reiteration of FEMA responsibilities under the 2004 Reform
Act.
Sec. 128. Additional authority of FEMA to collect information on claims
payments.
Sec. 129. Expense reimbursements of insurance companies.
Sec. 130. Extension of pilot program for mitigation of severe
repetitive loss properties.
Sec. 131. Flood insurance advocate.
Sec. 132. Studies and Reports.
Sec. 133. Feasibility study on private reinsurance.
Sec. 134. Policy disclosures.
Sec. 135. Report on inclusion of building codes in floodplain
management criteria.
TITLE II--COMMISSION ON NATURAL CATASTROPHE RISK MANAGEMENT AND
INSURANCE
Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Establishment.
Sec. 204. Membership.
Sec. 205. Duties of the Commission.
Sec. 206. Report.
Sec. 207. Powers of the Commission.
Sec. 208. Commission personnel matters.
Sec. 209. Termination.
Sec. 210. Authorization of appropriations.
TITLE III--MISCELLANEOUS
Sec. 301. Big Sioux River and Skunk Creek, Sioux Falls, South Dakota.
Sec. 302. Suspension of petroleum acquisition for Strategic Petroleum
Reserve.
TITLE I--FLOOD INSURANCE REFORM AND MODERNIZATION
SEC. 101. SHORT TITLE.
This title may be cited as the ``Flood Insurance Reform and
Modernization Act of 2008''.
SEC. 102. FINDINGS.
Congress finds that--
(1) the flood insurance claims resulting from the hurricane
season of 2005 will likely exceed all previous claims paid by
the National Flood Insurance Program;
[[Page S4062]]
(2) in order to pay the legitimate claims of policyholders
from the hurricane season of 2005, the Federal Emergency
Management Agency has borrowed over $20,000,000,000 from the
Treasury;
(3) the interest alone on this debt, is almost
$1,000,000,000 annually, and that the Federal Emergency
Management Agency has indicated that it will be unable to pay
back this debt;
(4) the flood insurance program must be strengthened to
ensure it can pay future claims;
(5) while flood insurance is mandatory in the 100-year
floodplain, substantial flooding occurs outside of existing
special flood hazard areas;
(6) recent events throughout the country involving areas
behind man-made structures, known as ``residual risk'' areas,
have produced catastrophic losses;
(7) although such man-made structures produce an added
element of safety and therefore lessen the probability that a
disaster will occur, they are nevertheless susceptible to
catastrophic loss, even though such areas at one time were
not included within the 100-year floodplain; and
(8) voluntary participation in the National Flood Insurance
Program has been minimal and many families residing outside
the 100-year floodplain remain unaware of the potential risk
to their lives and property.
SEC. 103. DEFINITIONS.
(a) In General.--In this title, the following definitions
shall apply:
(1) Director.--The term ``Director'' means the
Administrator of the Federal Emergency Management Agency.
(2) National flood insurance program.--The term ``National
Flood Insurance Program'' means the program established under
the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et
seq.).
(3) 100-year floodplain.--The term ``100-year floodplain''
means that area which is subject to inundation from a flood
having a 1 percent chance of being equaled or exceeded in any
given year.
(4) 500-year floodplain.--The term ``500-year floodplain''
means that area which is subject to inundation from a flood
having a 0.2 percent chance of being equaled or exceeded in
any given year.
(5) Write your own.--The term ``Write Your Own'' means the
cooperative undertaking between the insurance industry and
the Flood Insurance Administration which allows participating
property and casualty insurance companies to write and
service standard flood insurance policies.
(b) Common Terminology.--Except as otherwise provided in
this title, any terms used in this title shall have the
meaning given to such terms under section 1370 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4121).
SEC. 104. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.
Section 1319 of the National Flood Insurance Act of 1968
(42 U.S.C. 4026), is amended by striking ``2008'' and
inserting ``2013.''.
SEC. 105. AVAILABILITY OF INSURANCE FOR MULTIFAMILY
PROPERTIES.
Section 1305 of the National Flood Insurance Act of 1968
(42 U.S.C. 4012) is amended by adding at the end the
following:
``(d) Availability of Insurance for Multifamily
Properties.--
``(1) In general.--The Director shall make flood insurance
available to cover residential properties of more than 4
units. Notwithstanding any other provision of law, the
maximum coverage amount that the Director may make available
under this subsection to such residential properties shall be
equal to the coverage amount made available to commercial
properties.
``(2) Rule of construction.--Nothing in this subsection
shall be construed to limit the ability of individuals
residing in residential properties of more than 4 units to
obtain insurance for the contents and personal articles
located in such residences.''.
SEC. 106. REFORM OF PREMIUM RATE STRUCTURE.
(a) To Exclude Certain Properties From Receiving Subsidized
Premium Rates.--
(1) In general.--Section 1307 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4014) is amended--
(A) in subsection (a)--
(i) in paragraph (2), by striking ``; and'' and inserting a
semicolon;
(ii) in paragraph (3), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(4) the exclusion of prospective insureds from purchasing
flood insurance at rates less than those estimated under
paragraph (1), as required by paragraph (2), for certain
properties, including for--
``(A) any property which is not the primary residence of an
individual;
``(B) any severe repetitive loss property, as defined in
section 1361A(b);
``(C) any property that has incurred flood-related damage
in which the cumulative amounts of payments under this title
equaled or exceeded the fair market value of such property;
``(D) any business property; and
``(E) any property which on or after the date of enactment
of the Flood Insurance Reform and Modernization Act of 2008
has experienced or sustained--
``(i) substantial damage exceeding 50 percent of the fair
market value of such property; or
``(ii) substantial improvement exceeding 30 percent of the
fair market value of such property.''; and
(B) by adding at the end the following:
``(g) No Extension of Subsidy to New Policies or Lapsed
Policies.--The Director shall not provide flood insurance to
prospective insureds at rates less than those estimated under
subsection (a)(1), as required by paragraph (2) of that
subsection, for--
``(1) any property not insured by the flood insurance
program as of the date of enactment of the Flood Insurance
Reform and Modernization Act of 2008;
``(2) any policy under the flood insurance program that has
lapsed in coverage, as a result of the deliberate choice of
the holder of such policy; and
``(3) any prospective insured who refuses to accept any
offer for mitigation assistance by the Administrator
(including an offer to relocate), including an offer of
mitigation assistance--
``(A) following a major disaster, as defined in section 102
of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5122); or
``(B) in connection with--
``(i) a repetitive loss property; or
``(ii) a severe repetitive loss property, as that term is
defined under section 1361A.''.
(2) Effective date.--The amendments made by paragraph (1)
shall become effective 90 days after the date of the
enactment of this title.
(b) 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--
(1) by striking ``under this title for any properties
within any single'' and inserting the following: ``under this
title for any properties--
``(1) within any single''; and
(2) by striking ``10 percent'' and inserting ``15
percent''; and
(3) by striking the period at the end and inserting the
following: ``; and
``(2) described in section 1307(a)(4) shall be increased by
25 percent each year, until the average risk premium rate for
such properties is equal to the average of the risk premium
rates for properties described under paragraph (1).''.
SEC. 107. MANDATORY COVERAGE AREAS.
(a) Special Flood Hazard Areas.--Not later than 90 days
after the date of enactment of this title, the Director shall
issue final regulations establishing a revised definition of
areas of special flood hazards for purposes of the National
Flood Insurance Program.
(b) Residual Risk Areas.--The regulations required by
subsection (a) shall--
(1) include any area previously identified by the Director
as an area having special flood hazards under section 102 of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a);
and
(2) require the expansion of areas of special flood hazards
to include areas of residual risk, including areas that are
located behind levees, dams, and other man-made structures.
(c) Mandatory Participation in National Flood Insurance
Program.--
(1) In general.--Any area described in subsection (b) shall
be subject to the mandatory purchase requirements of sections
102 and 202 of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a, 4106).
(2) Limitation.--The mandatory purchase requirement under
paragraph (1) shall have no force or effect until the mapping
of all residual risk areas in the United States that the
Director determines essential in order to administer the
National Flood Insurance Program, as required under section
119, are in the maintenance phase.
(3) Accurate pricing.--In carrying out the mandatory
purchase requirement under paragraph (1), the Director shall
ensure that the price of flood insurance policies in areas of
residual risk accurately reflects the level of flood
protection provided by any levee, dam, or other the man-made
structure in such area.
(d) Decertification.--Upon decertification of any levee,
dam, or man-made structure under the jurisdiction of the Army
Corp of Engineers, the Corp shall immediately provide notice
to the Director of the National Flood Insurance Program.
SEC. 108. PREMIUM ADJUSTMENT.
Section 1308 of the National Flood Insurance Act of 1968
(42 U.S.C. 4015) is amended by adding at the end the
following:
``(g) Premium Adjustment To Reflect Current Risk of
Flood.--Notwithstanding subsection (f), and upon completion
of the updating of any flood insurance rate map under this
Act, the Flood Disaster Protection Act of 1973, or the Flood
Insurance Reform and Modernization Act of 2008, any property
located in an area that is participating in the national
flood insurance program shall have the risk premium rate
charged for flood insurance on such property adjusted to
accurately reflect the current risk of flood to such
property, subject to any other provision of this Act. Any
increase in the risk premium rate charged for flood insurance
on any property that is covered by a flood insurance policy
on the date of completion of such updating or remapping that
is a result of such updating or remapping shall be phased in
over a 2-year period at the rate of 50 percent per year.
``(h) Use of Maps to Establish Rates for Certain
Counties.--
``(1) In general.--Until such time as the updating of flood
insurance rate maps under section 19 of the Flood
Modernization Act of 2007 is completed (as determined by the
district engineer) for all areas located in the St. Louis
District of the Mississippi Valley Division of the Corps of
Engineers, the Director shall not--
``(A) adjust the chargeable premium rate for flood
insurance under this title for any type or class of property
located in an area in that District; and
``(B) require the purchase of flood insurance for any type
or class of property located in an area in that District not
subject to such purchase requirement prior to the updating of
such national flood insurance program rate map.
``(2) Rule of construction.--For purposes of this
subsection, the term `area' does not include any area (or
subdivision thereof) that has chosen not to participate in
the flood insurance
[[Page S4063]]
program under this title as of the date of enactment of this
subsection.''.
SEC. 109. STATE CHARTERED FINANCIAL INSTITUTIONS.
Section 1305(c) of the National Flood Insurance Act of 1968
(42 U.S.C. 4012(c)) is amended--
(1) in paragraph (1), by striking ``; and'' and inserting a
semicolon;
(2) in paragraph (2), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following:
``(3) given satisfactory assurance that by December 31,
2008, lending institutions chartered by a State, and not
insured by the Federal Deposit Insurance Corporation, shall
be subject to regulations by that State that are consistent
with the requirements of section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a).''.
SEC. 110. ENFORCEMENT.
Section 102(f)(5) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a(f)(5)) is amended--
(1) in the first sentence, by striking ``$350'' and
inserting ``$2,000''; and
(2) by striking the second sentence.
SEC. 111. ESCROW OF FLOOD INSURANCE PAYMENTS.
(a) In General.--Section 102(d) of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a(d)) is amended--
(1) by amending paragraph (1) to read as follows:
``(1) Regulated lending institutions.--
``(A) Federal entities responsible for lending
regulations.--Each Federal entity for lending regulation
(after consultation and coordination with the Federal
Financial Institutions Examination Council) shall, by
regulation, direct that any premiums and fees for flood
insurance under the National Flood Insurance Act of 1968, on
any property for which a loan has been made for acquisition
or construction purposes, shall be paid to the mortgage
lender, with the same frequency as payments on the loan are
made, for the duration of the loan. Upon receipt of any
premiums or fees, the lender shall deposit such premiums and
fees in an escrow account on behalf of the borrower. Upon
receipt of a notice from the Director or the provider of the
flood insurance that insurance premiums are due, the
remaining balance of an escrow account shall be paid to the
provider of the flood insurance.
``(B) State entities responsible for lending regulations.--
In order to continue to participate in the flood insurance
program, each State shall direct that its entity or agency
with primary responsibility for the supervision of lending
institutions in that State require that premiums and fees for
flood insurance under the National Flood Insurance Act of
1968, on any property for which a loan has been made for
acquisition or construction purposes shall be paid to the
mortgage lender, with the same frequency as payments on the
loan are made, for the duration of the loan. Upon receipt of
any premiums or fees, the lender shall deposit such premiums
and fees in an escrow account on behalf of the borrower. Upon
receipt of a notice from such State entity or agency, the
Director, or the provider of the flood insurance that
insurance premiums are due, the remaining balance of an
escrow account shall be paid to the provider of the flood
insurance.''; and
(2) by adding at the end the following:
``(6) Notice upon loan termination.--Upon final payment of
the mortgage, a regulated lending institution shall provide
notice to the policyholder that insurance coverage may cease
with such final payment. The regulated lending institution
shall also provide direction as to how the homeowner may
continue flood insurance coverage after the life of the
loan.''.
(b) Applicability.--The amendment made by subsection (a)(1)
shall apply to any mortgage outstanding or entered into on or
after the expiration of the 2-year period beginning on the
date of enactment of this title.
SEC. 112. BORROWING AUTHORITY DEBT FORGIVENESS.
(a) In General.--The Secretary of the Treasury relinquishes
the right to any repayment of amounts due from the Director
in connection with the exercise of the authority vested to
the Director to borrow such sums under section 1309 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4016), to the
extent such borrowed sums were used to fund the payment of
flood insurance claims under the National Flood Insurance
Program for any damage to or loss of property resulting from
the hurricanes of 2005.
(b) Certification.--The debt forgiveness described under
subsection (a) shall only take effect if the Director
certifies to the Secretary of Treasury that all authorized
resources or funds available to the Director to operate the
National Flood Insurance Program--
(1) have been otherwise obligated to pay claims under the
National Flood Insurance Program; and
(2) are not otherwise available to make payments to the
Secretary on any outstanding notes or obligations issued by
the Director and held by the Secretary.
(c) Decrease in Borrowing Authority.--The first sentence of
subsection (a) of section 1309 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4016(a)) is amended by
striking ``; except that, through September 30, 2008, clause
(2) of this sentence shall be applied by substituting
`$20,775,000,000' for `$1,500,000,000' ''.
SEC. 113. MINIMUM DEDUCTIBLES FOR CLAIMS UNDER THE NATIONAL
FLOOD INSURANCE PROGRAM.
Section 1312 of the National Flood Insurance Act of 1968
(42 U.S.C. 4019) is amended--
(1) by striking ``The Director is'' and inserting the
following:
``(a) In General.--The Director is''; and
(2) by adding at the end the following:
``(b) Minimum Annual Deductible.--
``(1) Pre-firm properties.--For any structure which is
covered by flood insurance under this title, and on which
construction or substantial improvement occurred on or before
December 31, 1974, or before the effective date of an initial
flood insurance rate map published by the Director under
section 1360 for the area in which such structure is located,
the minimum annual deductible for damage to such structure
shall be--
``(A) $1,500, if the flood insurance coverage for such
structure covers loss of, or physical damage to, such
structure in an amount equal to or less than $100,000; and
``(B) $2,000, if the flood insurance coverage for such
structure covers loss of, or physical damage to, such
structure in an amount greater than $100,000.
``(2) Post-firm properties.--For any structure which is
covered by flood insurance under this title, and on which
construction or substantial improvement occurred after
December 31, 1974, or after the effective date of an initial
flood insurance rate map published by the Director under
section 1360 for the area in which such structure is located,
the minimum annual deductible for damage to such structure
shall be--
``(A) $750, if the flood insurance coverage for such
structure covers loss of, or physical damage to, such
structure in an amount equal to or less than $100,000; and
``(B) $1,000, if the flood insurance coverage for such
structure covers loss of, or physical damage to, such
structure in an amount greater than $100,000.''.
SEC. 114. CONSIDERATIONS IN DETERMINING CHARGEABLE PREMIUM
RATES.
Section 1308 of the National Flood Insurance Act of 1968
(42 U.S.C. 4015(b)) is amended--
(1) in subsection (a), by striking ``, after consultation
with'' and all that follows through ``by regulation'' and
inserting ``prescribe, after providing notice'';
(2) in subsection (b)--
(A) in paragraph (1), by striking the period at the end and
inserting a semicolon;
(B) in paragraph (2), by striking the comma at the end and
inserting a semicolon;
(C) in paragraph (3), by striking ``, and'' and inserting a
semicolon;
(D) in paragraph (4), by striking the period and inserting
``; and''; and
(E) by adding at the end the following:
``(5) adequate, on the basis of accepted actuarial
principles, to cover the average historical loss year
obligations incurred by the National Flood Insurance Fund.'';
and
(3) by adding at the end the following:
``(h) Rule of Construction.--For purposes of this section,
the calculation of an `average historical loss year'--
``(1) includes catastrophic loss years; and
``(2) shall be computed in accordance with generally
accepted actuarial principles.''.
SEC. 115. RESERVE FUND.
Chapter I of the National Flood Insurance Act of 1968 (42
U.S.C. 4011 et seq.) is amended by inserting after section
1310 the following:
``SEC. 1310A. RESERVE FUND.
``(a) Establishment of Reserve Fund.--In carrying out the
flood insurance program authorized by this chapter, the
Director shall establish in the Treasury of the United States
a National Flood Insurance Reserve Fund (in this section
referred to as the `Reserve Fund') which shall--
``(1) be an account separate from any other accounts or
funds available to the Director; and
``(2) be available for meeting the expected future
obligations of the flood insurance program.
``(b) Reserve Ratio.--Subject to the phase-in requirements
under subsection (d), the Reserve Fund shall maintain a
balance equal to--
``(1) 1 percent of the sum of the total potential loss
exposure of all outstanding flood insurance policies in force
in the prior fiscal year; or
``(2) such higher percentage as the Director determines to
be appropriate, taking into consideration any circumstance
that may raise a significant risk of substantial future
losses to the Reserve Fund.
``(c) Maintenance of Reserve Ratio.--
``(1) In general.--The Director shall have the authority to
establish, increase, or decrease the amount of aggregate
annual insurance premiums to be collected for any fiscal year
necessary--
``(A) to maintain the reserve ratio required under
subsection (b); and
``(B) to achieve such reserve ratio, if the actual balance
of such reserve is below the amount required under subsection
(b).
``(2) Considerations.--In exercising the authority granted
under paragraph (1), the Director shall consider--
``(A) the expected operating expenses of the Reserve Fund;
``(B) the insurance loss expenditures under the flood
insurance program;
``(C) any investment income generated under the flood
insurance program; and
``(D) any other factor that the Director determines
appropriate.
``(3) Limitations.--In exercising the authority granted
under paragraph (1), the Director shall be subject to all
other provisions of this Act, including any provisions
relating to chargeable premium rates or annual increases of
such rates.
``(d) Phase-In Requirements.--The phase-in requirements
under this subsection are as follows:
``(1) In general.--Beginning in fiscal year 2008 and not
ending until the fiscal year in which the ratio required
under subsection (b) is achieved, in each such fiscal year
the Director shall place in the Reserve Fund an amount equal
to not less than 7.5 percent of the reserve ratio required
under subsection (b).
[[Page S4064]]
``(2) Amount satisfied.--As soon as the ratio required
under subsection (b) is achieved, and except as provided in
paragraph (3), the Director shall not be required to set
aside any amounts for the Reserve Fund.
``(3) Exception.--If at any time after the ratio required
under subsection (b) is achieved, the Reserve Fund falls
below the required ratio under subsection (b), the Director
shall place in the Reserve Fund for that fiscal year an
amount equal to not less than 7.5 percent of the reserve
ratio required under subsection (b).
``(e) Limitation on Reserve Ratio.--In any given fiscal
year, if the Director determines that the reserve ratio
required under subsection (b) cannot be achieved, the
Director shall submit a report to Congress that--
``(1) describes and details the specific concerns of the
Director regarding such consequences;
``(2) demonstrates how such consequences would harm the
long-term financial soundness of the flood insurance program;
and
``(3) indicates the maximum attainable reserve ratio for
that particular fiscal year.''.
SEC. 116. REPAYMENT PLAN FOR BORROWING AUTHORITY.
Section 1309 of the National Flood Insurance Act of 1968
(42 U.S.C. 4016) is amended by adding at the end the
following:
``(c) Any funds borrowed by the Director under the
authority established in subsection (a) shall include a
schedule for repayment of such amounts which shall be
transmitted to the--
``(1) Secretary of the Treasury;
``(2) Committee on Banking, Housing, and Urban Affairs of
the Senate; and
``(3) Committee on Financial Services of the House of
Representatives.
``(d) In addition to the requirement under subsection (c),
in connection with any funds borrowed by the Director under
the authority established in subsection (a), the Director,
beginning 6 months after the date on which such borrowed
funds are issued, and continuing every 6 months thereafter
until such borrowed funds are fully repaid, shall submit a
report on the progress of such repayment to the--
``(1) Secretary of the Treasury;
``(2) Committee on Banking, Housing, and Urban Affairs of
the Senate; and
``(3) Committee on Financial Services of the House of
Representatives.''.
SEC. 117. PAYMENT OF CONDOMINIUM CLAIMS.
Section 1312 of the National Flood Insurance Act of 1968
(42 U.S.C. 4019), as amended by section 113, is further
amended by adding at the end the following:
``(c) Payment of Claims to Condominium Owners.--The
Director may not deny payment for any damage to or loss of
property which is covered by flood insurance to condominium
owners who purchased such flood insurance separate and apart
from the flood insurance purchased by the condominium
association in which such owner is a member, based, solely or
in any part, on the flood insurance coverage of the
condominium association or others on the overall property
owned by the condominium association. Notwithstanding any
regulations, rules, or restrictions established by the
Director relating to appeals and filing deadlines, the
Director shall ensure that the requirements of this
subsection are met with respect to any claims for damages
resulting from flooding in 2005 and 2006.''.
SEC. 118. TECHNICAL MAPPING ADVISORY COUNCIL.
(a) Establishment.--There is established a council to be
known as the Technical Mapping Advisory Council (in this
section referred to as the ``Council'').
(b) Membership.--
(1) In general.--The Council shall consist of the Director,
or the designee thereof, and 12 additional members to be
appointed by the Director or the designee of the Director,
who shall be--
(A) the Under Secretary of Commerce for Oceans and
Atmosphere (or the designee thereof);
(B) a member of a recognized professional surveying
association or organization
(C) a member of a recognized professional mapping
association or organization;
(D) a member of a recognized professional engineering
association or organization;
(E) a member of a recognized professional association or
organization representing flood hazard determination firms;
(F) a representative of the United States Geological
Survey;
(G) a representative of a recognized professional
association or organization representing State geographic
information;
(H) a representative of State national flood insurance
coordination offices;
(I) a representative of the Corps of Engineers;
(J) the Secretary of the Interior (or the designee
thereof);
(K) the Secretary of Agriculture (or the designee thereof);
(L) a member of a recognized regional flood and storm water
management organization;
(M) a representative of a State agency that has entered
into a cooperating technical partnership with the Director
and has demonstrated the capability to produce flood
insurance rate maps; and
(N) a representative of a local government agency that has
entered into a cooperating technical partnership with the
Director and has demonstrated the capability to produce flood
insurance rate maps.
(2) Qualifications.--Members of the Council shall be
appointed based on their demonstrated knowledge and
competence regarding surveying, cartography, remote sensing,
geographic information systems, or the technical aspects of
preparing and using flood insurance rate maps.
(c) Duties.--The Council shall--
(1) recommend to the Director how to improve in a cost-
effective manner the--
(A) accuracy, general quality, ease of use, and
distribution and dissemination of flood insurance rate maps
and risk data; and
(B) performance metrics and milestones required to
effectively and efficiently map flood risk areas in the
United States;
(2) recommend to the Director mapping standards and
guidelines for--
(A) flood insurance rate maps; and
(B) data accuracy, data quality, data currency, and data
eligibility;
(3) recommend to the Director how to maintain on an ongoing
basis flood insurance rate maps and flood risk
identification;
(4) recommend procedures for delegating mapping activities
to State and local mapping partners;
(5) recommend to the Director and other Federal agencies
participating in the Council--
(A) methods for improving interagency and intergovernmental
coordination on flood mapping and flood risk determination;
and
(B) a funding strategy to leverage and coordinate budgets
and expenditures across Federal agencies; and
(6) submit an annual report to the Director that contains--
(A) a description of the activities of the Council;
(B) an evaluation of the status and performance of flood
insurance rate maps and mapping activities to revise and
update flood insurance rate maps, as required under section
119; and
(C) a summary of recommendations made by the Council to the
Director.
(d) Future Conditions Risk Assessment and Modeling
Report.--
(1) In general.--The Council shall consult with scientists
and technical experts, other Federal agencies, States, and
local communities to--
(A) develop recommendations on how to--
(i) ensure that flood insurance rate maps incorporate the
best available climate science to assess flood risks; and
(ii) ensure that the Federal Emergency Management Agency
uses the best available methodology to consider the impact
of--
(I) the rise in the sea level; and
(II) future development on flood risk; and
(B) not later than 1 year after the date of enactment of
this title, prepare written recommendations in a future
conditions risk assessment and modeling report and to submit
such recommendations to the Director.
(2) Responsibility of the director.--The Director, as part
of the ongoing program to review and update National Flood
Insurance Program rate maps under section 119, shall
incorporate any future risk assessment submitted under
paragraph (1)(B) in any such revision or update.
(e) Chairperson.--The members of the Council shall elect 1
member to serve as the chairperson of the Council (in this
section referred to as the ``Chairperson'').
(f) Coordination.--To ensure that the Council's
recommendations are consistent, to the maximum extent
practicable, with national digital spatial data collection
and management standards, the Chairperson shall consult with
the Chairperson of the Federal Geographic Data Committee
(established pursuant to OMB Circular A-16).
(g) Compensation.--Members of the Council shall receive no
additional compensation by reason of their service on the
Council.
(h) Meetings and Actions.--
(1) In general.--The Council shall meet not less frequently
than twice each year at the request of the Chairperson or a
majority of its members, and may take action by a vote of the
majority of the members.
(2) Initial meeting.--The Director, or a person designated
by the Director, shall request and coordinate the initial
meeting of the Council.
(i) Officers.--The Chairperson may appoint officers to
assist in carrying out the duties of the Council under
subsection (c).
(j) Staff.--
(1) Staff of fema.--Upon the request of the Chairperson,
the Director may detail, on a nonreimbursable basis,
personnel of the Federal Emergency Management Agency to
assist the Council in carrying out its duties.
(2) Staff of other federal agencies.--Upon request of the
Chairperson, any other Federal agency that is a member of the
Council may detail, on a non-reimbursable basis, personnel to
assist the Council in carrying out its duties.
(k) Powers.--In carrying out this section, the Council may
hold hearings, receive evidence and assistance, provide
information, and conduct research, as it considers
appropriate.
(l) Report to Congress.--The Director, on an annual basis,
shall report to the Committee on Banking, Housing, and Urban
Affairs of the Senate, the Committee on Financial Services of
the House of Representatives, and the Office of Management
and Budget on the--
(1) recommendations made by the Council; and
(2) actions taken by the Federal Emergency Management
Agency to address such recommendations to improve flood
insurance rate maps and flood risk data.
SEC. 119. NATIONAL FLOOD MAPPING PROGRAM.
(a) Reviewing, Updating, and Maintaining Maps.--The
Director, in coordination with the Technical Mapping Advisory
Council established under section 118, shall establish an
ongoing program under which the Director shall review,
update, and maintain National Flood Insurance Program rate
maps in accordance with this section.
(b) Mapping.--
(1) In general.--In carrying out the program established
under subsection (a), the Director shall--
(A) identify, review, update, maintain, and publish
National Flood Insurance Program rate maps with respect to--
[[Page S4065]]
(i) all areas located within the 100-year floodplain;
(ii) all areas located within the 500-year floodplain;
(iii) areas of residual risk that have not previously been
identified, including areas that are protected levees, dams,
and other man-made structures; and
(iv) areas that could be inundated as a result of the
failure of a levee, dam, or other man-made structure;
(v) the level of protection provided by man-made
structures.
(B) establish or update flood-risk zone data in all such
areas, and make estimates with respect to the rates of
probable flood caused loss for the various flood risk zones
for each such area; and
(C) use, in identifying, reviewing, updating, maintaining,
or publishing any National Flood Insurance Program rate map
required under this section or under the National Flood
Insurance Act of 1968, the most accurate topography and
elevation data available.
(2) Mapping elements.--Each map updated under this section
shall:
(A) Ground elevation data.--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.--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.
(3) Other inclusions.--In updating maps under this section,
the Director shall include--
(A) 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;
(B) any relevant information of the United States
Geological Survey on stream flows, watershed characteristics,
and topography that is useful in the identification of flood
hazard areas, as determined by the Director;
(C) any relevant information on land subsidence, coastal
erosion areas, and other floor-related hazards;
(D) any relevant information or data of the National
Oceanic and Atmospheric Administration and the United States
Geological Survey relating to the best available climate
science and the potential for future inundation from sea
level rise, increased precipitation, and increased intensity
of hurricanes due to global warming; and
(E) any other relevant information as may be recommended by
the Technical Mapping Advisory Committee.
(c) Standards.--In updating and maintaining maps under this
section, the Director shall--
(1) establish standards to--
(A) ensure that maps are adequate for--
(i) flood risk determinations; and
(ii) use by State and local governments in managing
development to reduce the risk of flooding; and
(B) facilitate identification and use of consistent methods
of data collection and analysis by the Director, in
conjunction with State and local governments, in developing
maps for communities with similar flood risks, as determined
by the Director; and
(2) publish maps in a format that is--
(A) digital geospatial data compliant;
(B) compliant with the open publishing and data exchange
standards established by the Open Geospatial Consortium; and
(C) compliant with the North American Vertical Datum of
1998 for New Hydrologic and Hydraulic Engineering.
(d) Communication and Outreach.--
(1) In general.--The Director shall--
(A) work to enhance communication and outreach to States,
local communities, and property owners about the effects of--
(i) any potential changes to National Flood Insurance
Program rate maps that may result from the mapping program
required under this section; and
(ii) that any such changes may have on flood insurance
purchase requirements; and
(B) engage with local communities to enhance communication
and outreach to the residents of such communities on the
matters described under subparagraph (A).
(2) Required activities.--The communication and outreach
activities required under paragraph (1) shall include--
(A) notifying property owners 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;
(B) educating property owners 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;
(C) educating property owners regarding the benefits and
costs of maintaining or acquiring flood insurance, including,
where applicable, lower-cost preferred risk policies under
the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et
seq.) for such properties and the contents of such
properties;
(D) educating property owners about flood map revisions and
the process available such owners to appeal proposed changes
in flood elevations through their community; and
(E) encouraging property owners to maintain or acquire
flood insurance coverage.
(e) Authorization of Appropriations.--There is authorized
to be appropriated to the Director to carry out this section
$400,000,000 for each of fiscal years 2008 through 2013.
SEC. 120. REMOVAL OF LIMITATION ON STATE CONTRIBUTIONS FOR
UPDATING FLOOD MAPS.
Section 1360(f)(2) of the National Flood Insurance Act of
1968 (42 U.S.C. 4101(f)(2)) is amended by striking ``, but
which may not exceed 50 percent of the cost of carrying out
the requested revision or update''.
SEC. 121. COORDINATION.
(a) Interagency Budget Crosscut Report.--
(1) In general.--The Secretary of Homeland Security, the
Director, the Director of the Office of Management and
Budget, and the heads of each Federal department or agency
carrying out activities under sections 118 and 119 shall work
together to ensure that flood risk determination data and
geospatial data are shared among Federal agencies in order to
coordinate the efforts of the Nation to reduce its
vulnerability to flooding hazards.
(2) Report.--Not later than 30 days after the submission of
the budget of the United States Government by the President
to Congress, the Director of the Office of Management and
Budget, in coordination with the Federal Emergency Management
Agency, the United States Geological Survey, the National
Oceanic and Atmospheric Administration, the Corps of
Engineers, and other Federal agencies, as appropriate, shall
submit to the appropriate authorizing and appropriating
committees of the Senate and the House of Representatives a
financial report, certified by the Secretary or head of each
such agency, an interagency budget crosscut report that
displays the budget proposed for each of the Federal agencies
working on flood risk determination data and digital
elevation models, including any planned interagency or
intraagency transfers.
(b) Duties of the Director.--In carrying out sections 118
and 119, the Director shall--
(1) participate, pursuant to section 216 of Public Law 107-
347 (116 Stat. 2945), in the establishment of such standards
and common protocols as are necessary to assure the
interoperability of geospatial data for all users of such
information;
(2) coordinate with, seek assistance and cooperation of,
and provide liaison to the Federal Geographic Data Committee
pursuant to Office of Management and Budget Circular A-16 and
Executive Order 12906 for the implementation of and
compliance with such standards;
(3) integrate with, leverage, and coordinate funding of, to
the maximum extent practicable, the current flood mapping
activities of each unit of State and local government;
(4) integrate with, leverage, and coordinate, to the
maximum extent practicable, the current geospatial activities
of other Federal agencies and units of State and local
government; and
(5) develop a funding strategy to leverage and coordinate
budgets and expenditures, and to establish joint funding
mechanisms with other Federal agencies and units of State and
local government to share the collection and utilization of
geospatial data among all governmental users.
SEC. 122. INTERAGENCY COORDINATION STUDY.
(a) In General.--The Director shall enter into a contract
with the National Academy of Public Administration to conduct
a study on how the Federal Emergency Management Agency--
(1) should improve interagency and intergovernmental
coordination on flood mapping, including a funding strategy
to leverage and coordinate budgets and expenditures; and
(2) can establish joint funding mechanisms with other
Federal agencies and units of State and local government to
share the collection and utilization of data among all
governmental users.
(b) Timing.--Not later than 180 days after the date of
enactment of this title, the National Academy of Public
Administration shall report the findings of the study
required under subsection (a) to the--
(1) Committee on Banking, Housing, and Urban Affairs of the
Senate;
(2) Committee on Financial Services of the House of
Representatives;
(3) Committee on Appropriations of the Senate; and
(4) Committee on Appropriations of the House of
Representatives.
SEC. 123. NONMANDATORY PARTICIPATION.
(a) Nonmandatory Participation in National Flood Insurance
Program for 500-Year Floodplain.--Any area located within the
500-year floodplain shall not be subject to the mandatory
purchase requirements of sections 102 or 202 of the Flood
Disaster Protection Act of 1973 (42 U.S.C. 4012a, 4106).
(b) Notice.--
(1) By director.--In carrying out the National Flood
Insurance Program, the Director shall provide notice to any
community located in an area within the 500-year floodplain.
(2) Timing of notice.--The notice required under paragraph
(1) shall be made not later than 6 months after the date of
completion of the initial mapping of the 500-year floodplain,
as required under section 118.
(3) Lender required notice.--
(A) Regulated lending institutions.--Each Federal or State
entity for lending regulation (after consultation and
coordination with the Federal Financial Institutions
Examination Council) shall, by regulation, require regulated
lending institutions, as a condition of making, increasing,
extending, or renewing any loan secured by property located
in an area within the
[[Page S4066]]
500-year floodplain, to notify the purchaser or lessee (or
obtain satisfactory assurances that the seller or lessor has
notified the purchaser or lessee) and the servicer of the
loan that such property is located in an area within the 500-
year floodplain, in a manner that is consistent with and
substantially identical to the notice required under section
1364(a)(1) of the National Flood Insurance Act of 1968 (42
U.S.C. 4104a(a)(1)).
(B) Federal or state agency lenders.--Each Federal or State
agency lender shall, by regulation, require notification in
the same manner as provided under subparagraph (A) with
respect to any loan that is made by a Federal or State agency
lender and secured by property located in an area within the
500-year floodplain.
(C) Penalty for noncompliance.--Any regulated lending
institution or Federal or State agency lender that fails to
comply with the notice requirements established by this
paragraph shall be subject to the penalties prescribed under
section 102(f)(5) of the Flood Disaster Protection Act of
1973 (42 U.S.C. 4012a(f)(5)).
SEC. 124. NOTICE OF FLOOD INSURANCE AVAILABILITY UNDER RESPA.
Section 5(b) of the Real Estate Settlement Procedures Act
of 1974 (12 U.S.C. 2604(b)) is amended--
(1) in paragraph (4), by striking ``; and'' and inserting a
semicolon;
(2) in paragraph (5), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(6) an explanation of flood insurance and the
availability of flood insurance under the National Flood
Insurance Program, whether or not the real estate is located
in an area having special flood hazards.''.
SEC. 125. TESTING OF NEW FLOODPROOFING TECHNOLOGIES.
(a) Permissible Testing.--A temporary residential structure
built for the purpose of testing a new flood proofing
technology, as described in subsection (b), in any State or
community that receives mitigation assistance under section
1366 of the National Flood Insurance Act of 1968 (42 U.S.C.
4104c) may not be construed to be in violation of any flood
risk mitigation plan developed by that State or community and
approved by the Director of the Federal Emergency Management
Agency.
(b) Conditions on Testing.--Testing permitted under
subsection (a) shall--
(1) be performed on an uninhabited residential structure;
(2) require dismantling of the structure at the conclusion
of such testing; and
(3) require that all costs associated with such testing and
dismantling be covered by the individual or entity conducting
the testing, or on whose behalf the testing is conducted.
(c) Rule of Construction.--Nothing in this section shall be
construed to alter, limit, or extend the availability of
flood insurance to any structure that may employ, utilize, or
apply any technology tested under subsection (b).
SEC. 126. 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 inserting after section
1313 the following:
``SEC. 1314. PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION
PROGRAMS.
``(a) Requirement to Participate.--In the case of the
occurrence of a major disaster, as defined in section 102 of
the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5122) that may have resulted in
flood damage under the flood insurance program established
under this chapter and other personal lines residential
property insurance coverage offered by a State regulated
insurer, 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 major disaster, the Director shall cause
representatives of the flood insurance program to participate
in such a State program where claims under the flood
insurance program are involved to expedite settlement of
flood damage claims resulting from such disaster.
``(b) Extent of Participation.--In satisfying the
requirements of subsection (a), the Director shall require
that each representative of the Director--
``(1) be certified for purposes of the flood insurance
program to settle claims against such program resulting from
such disaster in amounts up to the limits of policies under
such program;
``(2) attend State-sponsored mediation meetings regarding
flood insurance claims resulting from such disaster at such
times and places as may be arranged by the State;
``(3) participate in good faith negotiations toward the
settlement of such claims with policyholders of coverage made
available under the flood insurance program; and
``(4) finalize the settlement of such claims on behalf of
the flood insurance program with such policyholders.
``(c) Coordination.--Representatives of the Director shall
at all times coordinate their activities with insurance
officials of the State and representatives of insurers for
the purposes of consolidating and expediting settlement of
claims under the national flood insurance program resulting
from such disaster.
``(d) Qualifications of Mediators.--Each State mediator
participating in State-sponsored mediation under this section
shall be--
``(1)(A) a member in good standing of the State bar in the
State in which the mediation is to occur with at least 2
years of practical experience; and
``(B) an active member of such bar for at least 1 year
prior to the year in which such mediator's participation is
sought; or
``(2) a retired trial judge from any United States
jurisdiction who was a member in good standing of the bar in
the State in which the judge presided for at least 5 years
prior to the year in which such mediator's participation is
sought.
``(e) Mediation Proceedings and Documents Privileged.--As a
condition of participation, all statements made and documents
produced pursuant to State-sponsored mediation involving
representatives of the Director shall be deemed privileged
and confidential settlement negotiations made in anticipation
of litigation.
``(f) Liability, Rights, or Obligations Not Affected.--
Participation in State-sponsored mediation, as described in
this section does not--
``(1) affect or expand the liability of any party in
contract or in tort; or
``(2) affect the rights or obligations of the parties, as
established--
``(A) in any regulation issued by the Director, including
any regulation relating to a standard flood insurance policy;
``(B) under this Act; and
``(C) under any other provision of Federal law.
``(g) Exclusive Federal Jurisdiction.--Participation in
State-sponsored mediation shall not alter, change, or modify
the original exclusive jurisdiction of United States courts,
as set forth in this Act.
``(h) Cost Limitation.--Nothing in this section shall be
construed to require the Director or a representative of the
Director to pay additional mediation fees relating to flood
insurance claims associated with a State-sponsored mediation
program in which such representative of the Director
participates.
``(i) Exception.--In the case of the occurrence of a major
disaster that results in flood damage claims under the
national flood insurance program and that 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 under section 205 of the Bunning-
Bereuter-Blumen-auer Flood Insurance Reform Act of 2004 (42
U.S.C. 4011 note) and the regulations issued pursuant to such
section shall apply exclusively.
``(j) Representatives of the 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 under
section 205 of the Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act of 2004 (42 U.S.C. 4011 note).''.
SEC. 127. REITERATION OF FEMA RESPONSIBILITIES UNDER THE 2004
REFORM ACT.
(a) Minimum Training and Education Requirements.--The
Director shall 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, as
such standards were determined by the Director in the notice
published in the Federal Register on 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).
(b) Report on the Overall Implementation of the Reform Act
of 2004.--Not later than 3 months after the date of the
enactment of this title, the Director shall submit a report
to Congress--
(1) describing the implementation of each provision of the
Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of
2004 (Public Law 108-264; 118 Stat. 712);
(2) identifying each regulation, order, notice, and other
material issued by the Director in implementing each
provision of that Act;
(3) explaining any statutory or implied deadlines that have
not been met; and
(4) providing an estimate of when the requirements of such
missed deadlines will be fulfilled.
SEC. 128. ADDITIONAL AUTHORITY OF FEMA TO COLLECT INFORMATION
ON CLAIMS PAYMENTS.
(a) In General.--The Director shall collect, from property
and casualty insurance companies that are authorized by the
Director to participate in the Write Your Own program any
information and data needed to determine the accuracy of the
resolution of flood claims filed on any property insured with
a standard flood insurance policy obtained under the program
that was subject to a flood.
(b) Type of Information To Be Collected.--The information
and data to be collected under subsection (a) may include--
(1) any adjuster estimates made as a result of flood
damage, and if the insurance company also insures the
property for wind damage--
(A) any adjuster estimates for both wind and flood damage;
(B) the amount paid to the property owner for wind and
flood claims;
(C) the total amount paid to the policyholder for damages
as a result of the event that caused the flooding and other
losses;
(2) any amounts paid to the policyholder by the insurance
company for damages to the insured property other than flood
damages; and
(3) the total amount paid to the policyholder by the
insurance company for all damages incurred to the insured
property as a result of the flood.
SEC. 129. EXPENSE REIMBURSEMENTS OF INSURANCE COMPANIES.
(a) Submission of Biennial Reports.--
(1) To the director.--Not later than 20 days after the date
of enactment of this title, each
[[Page S4067]]
property and casualty insurance company that is authorized by
the Director to participate in the Write Your Own program
shall submit to the Director any biennial report prepared in
the prior 5 years by such company.
(2) To gao.--Not later than 10 days after the submission of
the biennial reports under paragraph (1), the Director shall
submit all such reports to the Comptroller General of the
United States.
(3) Notice to congress of failure to comply.--The Director
shall notify and report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives on any
property and casualty insurance company participating in the
Write Your Own program that failed to submit its biennial
reports as required under paragraph (1).
(4) Failure to comply.--A property and casualty insurance
company that is authorized by the Director to participate in
the Write Your Own program which fails to comply with the
reporting requirement under this subsection or the
requirement under section 62.23(j)(1) of title 44, Code of
Federal Regulations (relating to biennial audit of the flood
insurance financial statements) shall be subject to a civil
penalty in an amount equal to $1,000 per day for each day
that the company remains in noncompliance with either such
requirement.
(b) FEMA Rulemaking on Expenses of WYO Program.--Not later
than 180 days after the date of enactment of this title, the
Director shall conduct a rulemaking proceeding to devise a
data collection methodology to allow the Federal Emergency
Management Agency to collect consistent information on the
expenses (including the operating and administrative expenses
for adjustment of claims) of property and casualty insurance
companies participating in the Write Your Own program for
selling, writing, and servicing, standard flood insurance
policies.
(c) Submission of Expense Reports.--Not later than 60 days
after the effective date of the final rule established
pursuant to subsection (b), each property and casualty
insurance company participating in the Write Your Own program
shall submit a report to the Director that details for the
prior 5 years the expense levels of each such company for
selling, writing, and servicing standard flood insurance
policies based on the methodologies established under
subsection (b).
(d) FEMA Rulemaking on Reimbursement of Expenses Under the
WYO Program.--Not later than 15 months after the date of
enactment of this title, the Director shall conduct a
rulemaking proceeding to formulate revised expense
reimbursements to property and casualty insurance companies
participating in the Write Your Own program for their
expenses (including their operating and administrative
expenses for adjustment of claims) in selling, writing, and
servicing standard flood insurance policies, including how
such companies shall be reimbursed in both catastrophic and
non-catastrophic years. Such reimbursements shall be
structured to ensure reimbursements track the actual
expenses, including standard business costs and operating
expenses, of such companies as close as practicably possible.
(e) Report of the Director.--Not later than 60 days after
the effective date of any final rule established pursuant to
subsection (b) or subsection (d), the Director shall submit
to the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the
House of Representatives a report containing--
(1) the specific rationale and purposes of such rule;
(2) the reasons for the adoption of the policies contained
in such rule; and
(3) the degree to which such rule accurately represents the
true operating costs and expenses of property and casualty
insurance companies participating in the Write Your Own
program.
(f) GAO Study and Report on Expenses of WYO Program.--
(1) Study.--Not later than 180 days after the effective
date of the final rule established pursuant to subsection
(d), the Comptroller General of the United States shall--
(A) conduct a study on the efficacy, adequacy, and
sufficiency of the final rules established pursuant to
subsections (b) and (d); and
(B) report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives on the findings of the study
conducted under subparagraph (A).
(2) GAO authority.--In conducting the study and report
required under paragraph (1), the Comptroller General--
(A) may use any previous findings, studies, or reports that
the Comptroller General previously completed on the Write
Your Own program;
(B) shall determine if--
(i) the final rules established pursuant to subsections (b)
and (d) allow the Federal Emergency Management Agency to
access adequate information regarding the actual expenses of
property and casualty insurance companies participating in
the Write Your Own program; and
(ii) the actual reimbursements paid out under the final
rule established in subsection (d) accurately reflect the
expenses reported by property and casualty insurance
companies participating in the Write Your Own program,
including the standard business costs and operating expenses
of such companies; and
(C) shall analyze the effect of such rules on the level of
participation of property and casualty insurers in the Write
Your Own program.
SEC. 130. EXTENSION OF PILOT PROGRAM FOR MITIGATION OF SEVERE
REPETITIVE LOSS PROPERTIES.
(a) In General.--Section 1361A of the National Flood
Insurance Act of 1968 (42 U.S.C. 4102a) is amended--
(1) in subsection (k)(1)--
(A) in the first sentence, by striking ``in each of fiscal
years 2005, 2006, 2007, 2008, and 2009'' and inserting ``in
each fiscal year through fiscal year 2013''; and
(B) by adding at the end the following new sentence: ``For
fiscal years 2008 through the 2013, the total amount that the
Director may use to provide assistance under this section
shall not exceed $240,000,000.''; and
(2) by striking subsection (l).
(b) Report to Congress on Implementation Status.--Not later
than 6 months after the date of enactment of this title, the
Director shall report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives on the
status of the implementation of the pilot program for severe
repetitive loss properties authorized under section 1361A of
the National Flood Insurance Act of 1968 (42 U.S.C. 4102a).
(c) Rulemaking.--No later than 90 days after the date of
enactment of this title, the Director shall issue final rules
to carry out the severe repetitive loss pilot program
authorized under section 1361A of the National Flood
Insurance Act of 1968 (42 U.S.C. 4102a).
SEC. 131. FLOOD INSURANCE ADVOCATE.
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. OFFICE OF THE FLOOD INSURANCE ADVOCATE.
``(a) Establishment of Position.--
``(1) In general.--There shall be in the Federal Emergency
Management Agency an Office of the Flood Insurance Advocate
which shall be headed by the National Flood Insurance
Advocate. The National Flood Insurance Advocate shall--
``(A) to the extent amounts are provided pursuant to
subsection (n), 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;
``(B) be appointed by the Director without regard to
political affiliation;
``(C) report to and be under the general supervision of the
Director, but shall not report to, or be subject to
supervision by, any other officer of the Federal Emergency
Management Agency; and
``(D) consult with the Assistant Administrator for
Mitigation or any successor thereto, but shall not report to,
or be subject to the general supervision by, the Assistant
Administrator for Mitigation or any successor thereto.
``(2) Qualifications.--An individual appointed under
paragraph (1)(B) shall have a background in customer service,
or experience representing insureds, as well as experience in
investigations or audits.
``(3) 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 2 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.
``(4) Staff.--To the extent amounts are provided pursuant
to subsection (n), the National Flood Insurance Advocate may
employ such personnel as may be necessary to carry out the
duties of the Office.
``(5) Independence.--The Director shall not prevent or
prohibit the National Flood Insurance Advocate from
initiating, carrying out, or completing any audit or
investigation, or from issuing any subpoena or summons during
the course of any audit or investigation.
``(6) Removal.--The President and the Director shall have
the power to remove, discharge, or dismiss the National Flood
Insurance Advocate. Not later than 15 days after the removal,
discharge, or dismissal of the Advocate, the President or the
Director shall report to the Committee on Banking of the
Senate and the Committee on Financial Services of the House
of Representatives on the basis for such removal, discharge,
or dismissal.
``(b) Functions of Office.--It shall be the function of the
Office of the Flood Insurance Advocate to--
``(1) assist injure under the national flood insurance
program in resolving problems with the Federal Emergency
Management Agency relating to such program;
``(2) identify areas in which such injure have problems in
dealings with the Federal Emergency Management Agency
relating to such program;
``(3) propose changes in the administrative practices of
the Federal Emergency Management Agency to mitigate problems
identified under paragraph (2);
``(4) identify potential legislative, administrative, or
regulatory changes which may be appropriate to mitigate such
problems;
``(5) conduct, supervise, and coordinate--
``(A) systematic and random audits and investigations of
insurance companies and associated entities that sell or
offer policies under the National Flood Insurance Program to
determine whether such insurance companies or associated
entities are allocating only flood losses under such
insurance policies to the National Flood Insurance Program;
and
``(B) audits and investigations to determine if an
insurance company or associated entity described under
subparagraph (A) is negotiating on behalf of the National
Flood Insurance Program with third parties in good faith;
``(6) conduct, supervise, and coordinate investigations
into the operations of the national flood insurance program
for the purpose of--
[[Page S4068]]
``(A) promoting economy and efficiency in the
administration of such program;
``(B) preventing and detecting fraud and abuse in the
program; and
``(C) identifying, and referring to the Attorney General
for prosecution, any participant in such fraud or abuse; and
``(7) identify and investigate conflicts of interest that
undermine the economy and efficiency of the national flood
insurance program.
``(c) Authority of the National Flood Insurance Advocate.--
The National Flood Insurance Advocate may--
``(1) have access to all records, reports, audits, reviews,
documents, papers, recommendations, or other material
available to the Director which relate to administration or
operation of the national flood insurance program with
respect to which the National Flood Insurance Advocate has
responsibilities under this section, including information
submitted pursuant to Section 128 of this Act;
``(2) undertake such investigations and reports relating to
the administration or operation of the national flood
insurance program as are, in the judgment of the National
Flood Insurance Advocate, necessary or desirable;
``(3) request such information or assistance as may be
necessary for carrying out the duties and responsibilities
provided by this section from any Federal, State, or local
governmental agency or unit thereof;
``(4) request the production of information, documents,
reports, answers, records (including phone records),
accounts, papers, emails, hard drives, backup tapes,
software, audio or visual aides, and any other data and
documentary evidence necessary in the performance of the
functions assigned to the National Flood Insurance Advocate
by this section;
``(5) request the testimony of any person in the employ of
any insurance company or associated entity participating in
the National Flood Insurance Program, described under
subsection (b)(5)(A), or any successor to such company or
entity, including any member of the board of such company or
entity, any trustee of such company or entity, any partner in
such company or entity, or any agent or representative of
such company or entity;
``(6) select, appoint, and employ such officers and
employees as may be necessary for carrying out the functions,
powers, and duties of the Office subject to the provisions of
title 5, United States Code, governing appointments in the
competitive service, and the provisions of chapter 51 and
subchapter III of chapter 53 of such title relating to
classification and General Schedule pay rates;
``(7) obtain services as authorized by section 3109 of
title 5, United States Code, at daily rates not to exceed the
equivalent rate prescribed for the rate of basic pay for a
position at level IV of the Executive Schedule; and
``(8) to the extent and in such amounts as may be provided
in advance by appropriations Acts, enter into contracts and
other arrangements for audits, studies, analyses, and other
services with public agencies and with private persons, and
to make such payments as may be necessary to carry out the
provisions of this section.
``(d) Additional Duties of the NFIA.--The National Flood
Insurance Advocate shall--
``(1) monitor the coverage and geographic allocation of
regional offices of flood insurance advocates;
``(2) develop guidance to be distributed to all Federal
Emergency Management Agency officers and employees having
duties with respect to the national flood insurance program,
outlining the criteria for referral of inquiries by insureds
under such program to regional offices of flood insurance
advocates;
``(3) ensure that the local telephone number for each
regional office of the flood insurance advocate is published
and available to such insureds served by the office; and
``(4) establish temporary State or local offices where
necessary to meet the needs of qualified insureds following a
flood event.
``(e) Other Responsibilities.--
``(1) Additional requirements relating to certain audits.--
Prior to conducting any audit or investigation relating to
the allocation of flood losses under subsection (b)(5)(A),
the National Flood Insurance Advocate may--
``(A) consult with appropriate subject-matter experts to
identify the data necessary to determine whether flood claims
paid by insurance companies or associated entities on behalf
the national flood insurance program reflect damages caused
by flooding;
``(B) collect or compile the data identified in
subparagraph (A), utilizing existing data sources to the
maximum extent practicable; and
``(C) establish policies, procedures, and guidelines for
application of such data in all audits and investigations
authorized under this section.
``(2) Annual reports.--
``(A) Activities.--Not later than December 31 of each
calendar year, the National Flood Insurance Advocate shall
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives on the activities of the
Office of the Flood Insurance Advocate during the fiscal year
ending during such calendar year. Any such report shall
contain a full and substantive analysis of such activities,
in addition to statistical information, and shall--
``(i) identify the initiatives the Office of the Flood
Insurance Advocate has taken on improving services for
insureds under the national flood insurance program and
responsiveness of the Federal Emergency Management Agency
with respect to such initiatives;
``(ii) describe the nature of recommendations made to the
Director under subsection (i);
``(iii) contain a summary of the most serious problems
encountered by such insureds, including a description of the
nature of such problems;
``(iv) contain an inventory of any items described in
clauses (i), (ii), and (iii) for which action has been taken
and the result of such action;
``(v) contain an inventory of any items described in
clauses (i), (ii), and (iii) for which action remains to be
completed and the period during which each item has remained
on such inventory;
``(vi) contain an inventory of any items described in
clauses (i), (ii), and (iii) for which no action has been
taken, the period during which each item has remained on such
inventory and the reasons for the inaction;
``(vii) identify any Flood Insurance Assistance
Recommendation which was not responded to by the Director in
a timely manner or was not followed, as specified under
subsection (i);
``(viii) contain recommendations for such administrative
and legislative action as may be appropriate to resolve
problems encountered by such insureds;
``(ix) identify areas of the law or regulations relating to
the national flood insurance program that impose significant
compliance burdens on such insureds or the Federal Emergency
Management Agency, including specific recommendations for
remedying these problems;
``(x) identify the most litigated issues for each category
of such insureds, including recommendations for mitigating
such disputes;
``(xi) identify ways to promote the economy, efficiency,
and effectiveness in the administration of the national flood
insurance program;
``(xii) identify fraud and abuse in the national flood
insurance program; and
``(xiii) include such other information as the National
Flood Insurance Advocate may deem advisable.
``(B) Direct submission of report.--Each report required
under this paragraph shall be provided directly to the
committees identified in subparagraph (A) 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.
``(3) Information and assistance from other agencies.--
``(A) In general.--Upon request of the National Flood
Insurance Advocate for information or assistance under this
section, the head of any Federal agency shall, insofar as is
practicable and not in contravention of any statutory
restriction or regulation of the Federal agency from which
the information is requested, furnish to the National Flood
Insurance Advocate, or to an authorized designee of the
National Flood Insurance Advocate, such information or
assistance.
``(B) Refusal to comply.--Whenever information or
assistance requested under this subsection is, in the
judgment of the National Flood Insurance Advocate,
unreasonably refused or not provided, the National Flood
Insurance Advocate shall report the circumstances to the
Director without delay.
``(f) Compliance With GAO Standards.--In carrying out the
responsibilities established under this section, the National
Flood Insurance Advocate shall--
``(1) comply with standards established by the Comptroller
General of the United States for audits of Federal
establishments, organizations, programs, activities, and
functions;
``(2) establish guidelines for determining when it shall be
appropriate to use non-Federal auditors;
``(3) take appropriate steps to assure that any work
performed by non-Federal auditors complies with the standards
established by the Comptroller General as described in
paragraph (1); and
``(4) take the necessary steps to minimize the publication
of proprietary and trade secrets information.
``(g) Personnel Actions.--
``(1) In general.--The National Flood Insurance Advocate
shall have the responsibility and authority to--
``(A) appoint regional flood insurance advocates in a
manner that will provide appropriate coverage based upon
regional flood insurance program participation; and
``(B) hire, evaluate, and take personnel actions (including
dismissal) with respect to any employee of any regional
office of a flood insurance advocate described in
subparagraph (A).
``(2) Consultation.--The National Flood Insurance Advocate
may consult with the appropriate supervisory personnel of the
Federal Emergency Management Agency in carrying out the
National Flood Insurance Advocate's responsibilities under
this subsection.
``(h) Operation of Regional Offices.--
``(1) In general.--Each regional flood insurance advocate
appointed pursuant to subsection (d)--
``(A) shall report to the National Flood Insurance Advocate
or delegate thereof;
``(B) may consult with the appropriate supervisory
personnel of the Federal Emergency Management Agency
regarding the daily operation of the regional office of the
flood insurance advocate;
``(C) shall, at the initial meeting with any insured under
the national flood insurance program seeking the assistance
of a regional office of the flood insurance advocate, notify
such insured that the flood insurance advocate offices
operate independently of any other Federal Emergency
Management Agency office and report directly to Congress
through the National Flood Insurance Advocate; and
``(D) may, at the flood insurance advocate's discretion,
not disclose to the Director contact with, or information
provided by, such insured.
``(2) Maintenance of independent communications.--Each
regional office of the flood insurance advocate shall
maintain a separate
[[Page S4069]]
phone, facsimile, and other electronic communication access.
``(i) Flood Insurance Assistance Recommendations.--
``(1) Authority to issue.--Upon application filed by a
qualified insured with the Office of the Flood Insurance
Advocate (in such form, manner, and at such time as the
Director shall by regulation prescribe), the National Flood
Insurance Advocate may issue a Flood Insurance Assistance
Recommendation, if the Advocate finds that the qualified
insured is suffering a significant hardship, such as a
significant delay in resolving claims where the insured is
incurring significant costs as a result of such delay, or
where the insured is at risk of adverse action, including the
loss of property, as a result of the manner in which the
flood insurance laws are being administered by the Director.
``(2) Terms of a flood insurance assistance
recommendation.--The terms of a Flood Insurance Assistance
Recommendation may recommend to the Director that the
Director, within a specified time period, cease any action,
take any action as permitted by law, or refrain from taking
any action, including the payment of claims, with respect to
the qualified insured under any other provision of law which
is specifically described by the National Flood Insurance
Advocate in such recommendation.
``(3) Director response.--Not later than 15 days after the
receipt of any Flood Insurance Assistance Recommendation
under this subsection, the Director shall respond in writing
as to--
``(A) whether such recommendation was followed;
``(B) why such recommendation was or was not followed; and
``(C) what, if any, additional actions were taken by the
Director to prevent the hardship indicated in such
recommendation.
``(4) Responsibilities of director.--The Director shall
establish procedures requiring a formal response consistent
with the requirements of paragraph (3) to all recommendations
submitted to the Director by the National Flood Insurance
Advocate under this subsection.
``(j) Reporting of Potential Criminal Violations.--In
carrying out the duties and responsibilities established
under this section, the National Flood Insurance Advocate
shall report expeditiously to the Attorney General whenever
the National Flood Insurance Advocate has reasonable grounds
to believe there has been a violation of Federal criminal
law.
``(k) Coordination.--
``(1) With other federal agencies.--In carrying out the
duties and responsibilities established under this section,
the National Flood Insurance Advocate--
``(A) shall give particular regard to the activities of the
Inspector General of the Department of Homeland Security with
a view toward avoiding duplication and insuring effective
coordination and cooperation; and
``(B) may participate, upon request of the Inspector
General of the Department of Homeland Security, in any audit
or investigation conducted by the Inspector General.
``(2) With state regulators.--In carrying out any
investigation or audit under this section, the National Flood
Insurance Advocate shall coordinate its activities and
efforts with any State insurance authority that is
concurrently undertaking a similar or related investigation
or audit.
``(3) Avoidance of redundancies in the resolution of
problems.--In providing any assistance to a policyholder
pursuant to paragraphs (1) and (2) of subsection (b), the
National Flood Insurance Advocate shall consult with the
Director to eliminate, avoid, or reduce any redundancies in
actions that may arise as a result of the actions of the
National Flood Insurance Advocate and the claims appeals
process described under section 62.20 of title 44, Code of
Federal Regulations.
``(l) Authority of the Director To Levy Penalties.--The
Director and the Advocate shall establish procedures to take
appropriate action against an insurance company, including
monetary penalties and removal or suspension from the
program, when a company refuses to cooperate with an
investigation or audit under this section or where a finding
has been made of improper conduct.
``(m) Definitions.--For purposes of this subsection:
``(1) Associated entity.--The term `associated entity'
means any person, corporation, or other legal entity that
contracts with the Director or an insurance company to
provide adjustment services, benefits calculation services,
claims services, processing services, or record keeping
services in connection with standard flood insurance policies
made available under the national flood insurance program.
``(2) Insurance company.--The term `insurance company'
refers to any property and casualty insurance company that is
authorized by the Director to participate in the Write Your
Own program under the national flood insurance program.
``(3) National flood insurance advocate.--The term
`National Flood Insurance Advocate' includes any designee of
the National Flood Insurance Advocate.
``(4) Qualified insured.--The term `qualified insured'
means an insured under coverage provided under the national
flood insurance program under this title.
``(n) Funding.--Pursuant to section 1310(a)(8), the
Director may use amounts from the National Flood Insurance
Fund to fund the activities of the Office of the Flood
Advocate in each of fiscal years 2009 through 2014, except
that the amount so used in each such fiscal year may not
exceed $5,000,000 and shall remain available until expended.
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.''.
SEC. 132. STUDIES AND REPORTS.
(a) Report on Expanding the National Flood Insurance
Program.--Not later than 1 year after the date of the
enactment of this title, the Comptroller General of the
United States shall conduct a study and submit a report to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives, on--
(1) the number of flood insurance policy holders currently
insuring--
(A) a residential structure up to the maximum available
coverage amount, as established in section 61.6 of title 44,
Code of Federal Regulations, of--
(i) $250,000 for the structure; and
(ii) $100,000 for the contents of such structure; or
(B) a commercial structure up to the maximum available
coverage amount, as established in section 61.6 of title 44,
Code of Federal Regulations, of $500,000;
(2) the increased losses the National Flood Insurance
Program would have sustained during the 2004 and 2005
hurricane season if the National Flood Insurance Program had
insured all policyholders up to the maximum conforming loan
limit for fiscal year 2006 of $417,000, as established under
section 302(b)(2) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)(2));
(3) the availability in the private marketplace of flood
insurance coverage in amounts that exceed the current limits
of coverage amounts established in section 61.6 of title 44,
Code of Federal Regulations; and
(4) what effect, if any--
(A) raising the current limits of coverage amounts
established in section 61.6 of title 44, Code of Federal
Regulations, would have on the ability of private insurers to
continue providing flood insurance coverage; and
(B) reducing the current limits of coverage amounts
established in section 61.6 of title 44, Code of Federal
Regulations, would have on the ability of private insurers to
provide sufficient flood insurance coverage to effectively
replace the current level of flood insurance coverage being
provided under the National Flood Insurance Program.
(b) Report of the Director on Activities Under the National
Flood Insurance Program.--
(1) In general.--The Director shall, on an annual basis,
submit a full report on the operations, activities, budget,
receipts, and expenditures of the National Flood Insurance
Program for the preceding 12-month period to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives.
(2) Timing.--Each report required under paragraph (1) shall
be submitted to the committees described in paragraph (1) not
later than 3 months following the end of each fiscal year.
(3) Contents.--Each report required under paragraph (1)
shall include--
(A) the current financial condition and income statement of
the National Flood Insurance Fund established under section
1310 of the National Flood Insurance Act of 1968 (42 U.S.C.
4017), including--
(i) premiums paid into such Fund;
(ii) policy claims against such Fund; and
(iii) expenses in administering such Fund;
(B) the number and face value of all policies issued under
the National Flood Insurance Program that are in force;
(C) a description and summary of the losses attributable to
repetitive loss structures;
(D) a description and summary of all losses incurred by the
National Flood Insurance Program due to--
(i) hurricane related damage; and
(ii) nonhurricane related damage;
(E) the amounts made available by the Director for
mitigation assistance under section 1366(e)(5) of the
National Flood Insurance Act of 1968 (42 U.S.C. 4104c(e)(5))
for the purchase of properties substantially damaged by flood
for that fiscal year, and the actual number of flood damaged
properties purchased and the total cost expended to purchase
such properties;
(F) the estimate of the Director as to the average
historical loss year, and the basis for that estimate;
(G) the estimate of the Director as to the maximum amount
of claims that the National Flood Insurance Program would
have to expend in the event of a catastrophic year;
(H) the average--
(i) amount of insurance carried per flood insurance policy;
(ii) premium per flood insurance policy; and
(iii) loss per flood insurance policy; and
(I) the number of claims involving damages in excess of the
maximum amount of flood insurance available under the
National Flood Insurance Program and the sum of the amount of
all damages in excess of such amount.
(c) GAO Study on Pre-FIRM Structures.--Not later than 1
year after the date of the enactment of this title, the
Comptroller General of the United States shall conduct a
study and submit a report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives, on the--
(1) composition of the remaining pre-FIRM structures that
are explicitly receiving discounted premium rates under
section 1307 of the National Flood Insurance Act of 1968 (42
U.S.C. 4104), including the historical basis for the receipt
of such subsidy and whether such subsidy has outlasted its
purpose;
(2) number and fair market value of such structures;
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(3) respective income level of each owner of such
structure;
(4) number of times each such structure has been sold since
1968, including specific dates, sales price, and any other
information the Secretary determines appropriate;
(5) total losses incurred by such structures since the
establishment of the National Flood Insurance Program
compared to the total losses incurred by all structures that
are charged a nondiscounted premium rate;
(6) total cost of foregone premiums since the establishment
of the National Flood Insurance Program, as a result of the
subsidies provided to such structures;
(7) annual cost to the taxpayer, as a result of the
subsidies provided to such structures;
(8) the premium income collected and the losses incurred by
the National Flood Insurance Program as a result of such
explicitly subsidized structures compared to the premium
income collected and the losses incurred by such Program as
result of structures that are charged a nondiscounted premium
rate, on a State-by-State basis; and
(9) the most efficient way to eliminate the subsidy to such
structures.
(d) GAO Review of FEMA Contractors.--The Comptroller
General of the United States, in conjunction with the
Department of Homeland Security's Inspectors general Office,
shall--
(1) conduct a review of the 3 largest contractors the
Director uses in administering the National Flood Insurance
Program; and
(2) not later than 18 months after the date of enactment of
this title, submit a report on the findings of such review to
the Director, the Committee on Banking, Housing, and Urban
Affairs of the Senate, and the Committee on Financial
Services of the House of Representatives.
SEC. 133. FEASIBILITY STUDY ON PRIVATE REINSURANCE.
Not later than 1 year after the date of enactment of this
Act, the Comptroller General of the United States shall
conduct and submit a report to Congress on--
(1) the feasibility of requiring the Director, as part of
carrying out the responsibilities of the Director under the
National Flood Insurance Program, to purchase private
reinsurance or retrocessional coverage, in addition to any
such reinsurance coverage required under section 1335 of the
National Flood Insurance Act of 1968 (42 U.S.C. 4055), to
underlying primary private insurers for losses arising due to
flood insurance coverage provided by such insurers;
(2) the feasibility of repealing the reinsurance
requirement under such section 1335, and requiring the
Director, as part of carrying out the responsibilities of the
Director under the National Flood Insurance Program, to
purchase private reinsurance or retrocessional coverage to
underlying primary private insurers for losses arising due to
flood insurance coverage provided by such insurer; and
(3) the estimated total savings to the taxpayer of taking
each such action described in paragraph (1) or (2).
SEC. 134. POLICY DISCLOSURES.
(a) In General.--Notwithstanding any other provision of
law, in addition to any other disclosures that may be
required, each policy under the National Flood Insurance
Program shall state all conditions, exclusions, and other
limitations pertaining to coverage under the subject policy,
regardless of the underlying insurance product, in plain
English, in boldface type, and in a font size that is twice
the size of the text of the body of the policy.
(b) Violations.--Any person that violates the requirements
of this section shall be subject to a fine of not more than
$50,000 at the discretion of the Director.
SEC. 135. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN
MANAGEMENT CRITERIA.
Not later than 6 months after 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.
TITLE II--COMMISSION ON NATURAL CATASTROPHE RISK MANAGEMENT AND
INSURANCE
SEC. 201. SHORT TITLE.
This title may be cited as the ``Commission on Natural
Catastrophe Risk Management and Insurance Act of 2008''.
SEC. 202. FINDINGS.
Congress finds that--
(1) Hurricanes Katrina, Rita, and Wilma, which struck the
United States in 2005, caused, by some estimates, in excess
of $200,000,000,000 in total economic losses;
(2) many meteorologists predict that the United States is
in a period of increased hurricane activity;
(3) the Federal Government and State governments have
provided billions of dollars to pay for losses from natural
catastrophes, including hurricanes, earthquakes, volcanic
eruptions, tsunamis, tornados, flooding, wildfires, droughts,
and other natural catastrophes;
(4) many Americans are finding it increasingly difficult to
obtain and afford property and casualty insurance coverage;
(5) some insurers are not renewing insurance policies, are
excluding certain risks, such as wind damage, and are
increasing rates and deductibles in some markets;
(6) the inability of property and business owners in
vulnerable areas to obtain and afford property and casualty
insurance coverage endangers the national economy and public
health and safety;
(7) almost every State in the United States is at risk of a
natural catastrophe, including hurricanes, earthquakes,
volcanic eruptions, tsunamis, tornados, flooding, wildfires,
droughts, and other natural catastrophes;
(8) building codes and land use regulations play an
indispensable role in managing catastrophe risks, by
preventing building in high risk areas and ensuring that
appropriate mitigation efforts are completed where building
has taken place;
(9) several proposals have been introduced in Congress to
address the affordability and availability of natural
catastrophe insurance across the United States, but there is
no consensus on what, if any, role the Federal Government
should play; and
(10) an efficient and effective approach to assessing
natural catastrophe risk management and insurance is to
establish a nonpartisan commission to study the management of
natural catastrophe risk, and to require such commission to
timely report to Congress on its findings.
SEC. 203. ESTABLISHMENT.
There is established a nonpartisan Commission on Natural
Catastrophe Risk Management and Insurance (in this title
referred to as the ``Commission'').
SEC. 204. MEMBERSHIP.
(a) Appointment.--The Commission shall be composed of 16
members, of whom--
(1) 2 members shall be appointed by the majority leader of
the Senate;
(2) 2 members shall be appointed by the minority leader of
the Senate;
(3) 2 members shall be appointed by the Speaker of the
House of Representatives;
(4) 2 members shall be appointed by the minority leader of
the House of Representatives;
(5) 2 members shall be appointed by the Chairman of the
Committee on Banking, Housing, and Urban Affairs of the
Senate;
(6) 2 members shall be appointed by the Ranking Member of
the Committee on Banking, Housing, and Urban Affairs of the
Senate;
(7) 2 members shall be appointed by the Chairman of the
Committee on Financial Services of the House of
Representatives; and
(8) 2 members shall be appointed by the Ranking Member of
the Committee on Financial Services of the House of
Representatives.
(b) Qualification of Members.--
(1) In general.--Members of the Commission shall be
appointed under subsection (a) from among persons who--
(A) have expertise in insurance, reinsurance, insurance
regulation, policyholder concerns, emergency management, risk
management, public finance, financial markets, actuarial
analysis, flood mapping and planning, structural engineering,
building standards, land use planning, natural catastrophes,
meteorology, seismology, environmental issues, or other
pertinent qualifications or experience; and
(B) are not officers or employees of the United States
Government or of any State government.
(2) Diversity.--In making appointments to the Commission--
(A) every effort shall be made to ensure that the members
are representative of a broad cross section of perspectives
within the United States; and
(B) each member of Congress described in subsection (a)
shall appoint not more than 1 person from any single primary
area of expertise described in paragraph (1)(A) of this
subsection.
(c) Period of Appointment.--
(1) In general.--Each member of the Commission shall be
appointed for the duration of the Commission.
(2) Vacancies.--A vacancy on the Commission shall not
affect its powers, but shall be filled in the same manner as
the original appointment.
(d) Quorum.--
(1) Majority.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number, as determined
by the Commission, may hold hearings.
(2) Approval actions.--All recommendations and reports of
the Commission required by this title shall be approved only
by a majority vote of all of the members of the Commission.
(e) Chairperson.--The Commission shall, by majority vote of
all of the members, select 1 member to serve as the
Chairperson of the Commission (in this title referred to as
the ``Chairperson'').
(f) Meetings.--The Commission shall meet at the call of its
Chairperson or a majority of the members.
SEC. 205. DUTIES OF THE COMMISSION.
The Commission shall examine the risks posed to the United
States by natural catastrophes, and means for mitigating
those risks and for
[[Page S4071]]
paying for losses caused by natural catastrophes, including
assessing--
(1) the condition of the property and casualty insurance
and reinsurance markets prior to and in the aftermath of
Hurricanes Katrina, Rita, and Wilma in 2005, and the 4 major
hurricanes that struck the United States in 2004;
(2) the current condition of, as well as the outlook for,
the availability and affordability of insurance in all
regions of the country;
(3) the current ability of States, communities, and
individuals to mitigate their natural catastrophe risks,
including the affordability and feasibility of such
activities;
(4) the ongoing exposure of the United States to natural
catastrophes, including hurricanes, earthquakes, volcanic
eruptions, tsunamis, tornados, flooding, wildfires, droughts,
and other natural catastrophes;
(5) the catastrophic insurance and reinsurance markets and
the relevant practices in providing insurance protection to
different sectors of the American population;
(6) implementation of a catastrophic insurance system that
can resolve key obstacles currently impeding broader
implementation of catastrophic risk management and financing
with insurance;
(7) the financial feasibility and sustainability of a
national, regional, or other pooling mechanism designed to
provide adequate insurance coverage and increased
underwriting capacity to insurers and reinsurers, including
private-public partnerships to increase insurance capacity in
constrained markets;
(8) methods to promote public insurance policies to reduce
losses caused by natural catastrophes in the uninsured
sectors of the American population;
(9) approaches for implementing a public or private
insurance scheme for low-income communities, in order to
promote risk reduction and insurance coverage in such
communities;
(10) the impact of Federal and State laws, regulations, and
policies (including rate regulation, market access
requirements, reinsurance regulations, accounting and tax
policies, State residual markets, and State catastrophe
funds) on--
(A) the affordability and availability of catastrophe
insurance;
(B) the capacity of the private insurance market to cover
losses inflicted by natural catastrophes;
(C) the commercial and residential development of high-risk
areas; and
(D) the costs of natural catastrophes to Federal and State
taxpayers;
(11) the present and long-term financial condition of State
residual markets and catastrophe funds in high-risk regions,
including the likelihood of insolvency following a natural
catastrophe, the concentration of risks within such funds,
the reliance on post-event assessments and State funding, and
the adequacy of rates;
(12) the role that innovation in financial services could
play in improving the affordability and availability of
natural catastrophe insurance, specifically addressing
measures that would foster the development of financial
products designed to cover natural catastrophe risk, such as
risked-linked securities;
(13) the need for strengthened land use regulations and
building codes in States at high risk for natural
catastrophes, and methods to strengthen the risk assessment
and enforcement of structural mitigation and vulnerability
reduction measures, such as zoning and building code
compliance;
(14) the benefits and costs of proposed Federal natural
catastrophe insurance programs (including the Federal
Government providing reinsurance to State catastrophe funds,
private insurers, or other entities), specifically addressing
the costs to taxpayers, tax equity considerations, and the
record of other government insurance programs (particularly
with regard to charging actuarially sound prices);
(15) the ability of the United States private insurance
market--
(A) to cover insured losses caused by natural catastrophes,
including an estimate of the maximum amount of insured losses
that could be sustained during a single year and the
probability of natural catastrophes occurring in a single
year that would inflict more insured losses than the United
States insurance and reinsurance markets could sustain; and
(B) to recover after covering substantial insured losses
caused by natural catastrophes;
(16) the impact that demographic trends could have on the
amount of insured losses inflicted by future natural
catastrophes;
(17) the appropriate role, if any, for the Federal
Government in stabilizing the property and casualty insurance
and reinsurance markets; and
(18) the role of the Federal, State, and local governments
in providing incentives for feasible risk mitigation efforts.
SEC. 206. REPORT.
(a) In General.--Not later than 9 months after the date of
enactment of this title, the Commission shall submit to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House
of Representatives a final report containing--
(1) a detailed statement of the findings and assessments
conducted by the Commission pursuant to section 205; and
(2) any recommendations for legislative, regulatory,
administrative, or other actions at the Federal, State, or
local levels that the Commission considers appropriate, in
accordance with the requirements of section 205.
(b) Extension of Time.--The Commission may request Congress
to extend the period of time for the submission of the report
required under subsection (a) for an additional 3 months.
SEC. 207. POWERS OF THE COMMISSION.
(a) Meetings; Hearings.--The Commission may hold such
hearings, sit and act at such times and places, take such
testimony, and receive such evidence as the Commission
considers necessary to carry out the purposes of this title.
Members may attend meetings of the Commission and vote in
person, via telephone conference, or via video conference.
(b) Authority of Members or Agents of the Commission.--Any
member or agent of the Commission may, if authorized by the
Commission, take any action which the Commission is
authorized to take by this title.
(c) Obtaining Official Data.--
(1) Authority.--Notwithstanding any provision of section
552a of title 5, United States Code, the Commission may
secure directly from any department or agency of the United
States any information necessary to enable the Commission to
carry out this title.
(2) Procedure.--Upon request of the Chairperson, the head
of such department or agency shall furnish to the Commission
the information requested.
(d) Postal Services.--The Commission may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
(e) Administrative Support Services.--Upon the request of
the Commission, the Administrator of General Services shall
provide to the Commission, on a reimbursable basis, any
administrative support services necessary for the Commission
to carry out its responsibilities under this title.
(f) Acceptance of Gifts.--The Commission may accept, hold,
administer, and utilize gifts, donations, and bequests of
property, both real and personal, for the purposes of aiding
or facilitating the work of the Commission. The Commission
shall issue internal guidelines governing the receipt of
donations of services or property.
(g) Volunteer Services.--Notwithstanding the provisions of
section 1342 of title 31, United States Code, the Commission
may accept and utilize the services of volunteers serving
without compensation. The Commission may reimburse such
volunteers for local travel and office supplies, and for
other travel expenses, including per diem in lieu of
subsistence, as authorized by section 5703 of title 5, United
States Code.
(h) Federal Property and Administrative Services Act of
1949.--Subject to the Federal Property and Administrative
Services Act of 1949, the Commission may enter into contracts
with Federal and State agencies, private firms, institutions,
and individuals for the conduct of activities necessary to
the discharge of its duties and responsibilities.
(i) Limitation on Contracts.--A contract or other legal
agreement entered into by the Commission may not extend
beyond the date of the termination of the Commission.
SEC. 208. COMMISSION PERSONNEL MATTERS.
(a) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Commission.
(b) Subcommittees.--The Commission may establish
subcommittees and appoint members of the Commission to such
subcommittees as the Commission considers appropriate.
(c) Staff.--Subject to such policies as the Commission may
prescribe, the Chairperson may appoint and fix the pay of
such additional personnel as the Chairperson considers
appropriate to carry out the duties of the Commission. The
Commission shall confirm the appointment of the executive
director by majority vote of all of the members of the
Commission.
(d) Applicability of Certain Civil Service Laws.--Staff of
the Commission may be--
(1) appointed without regard to the provisions of title 5,
United States Code, governing appointments in the competitive
service; and
(2) paid without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of that title relating to
classification and General Schedule pay rates, except that an
individual so appointed may not receive pay in excess of the
annual rate of basic pay prescribed for GS-15 of the General
Schedule under section 5332 of that title.
(e) Experts and Consultants.--In carrying out its
objectives, the Commission may procure temporary and
intermittent services of consultants and experts under
section 3109(b) of title 5, United States Code, at rates for
individuals which do not exceed the daily equivalent of the
annual rate of basic pay prescribed for GS-15 of the General
Schedule under section 5332 of that title.
(f) Detail of Government Employees.--Upon request of the
Chairperson, any Federal Government employee may be detailed
to the Commission to assist in carrying out the duties of the
Commission--
(1) on a reimbursable basis; and
(2) such detail shall be without interruption or loss of
civil service status or privilege.
SEC. 209. TERMINATION.
The Commission shall terminate 90 days after the date on
which the Commission submits its report under section 206.
SEC. 210. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Commission,
such sums as may be necessary to carry out this title, to
remain available until expended.
TITLE III--MISCELLANEOUS
SEC. 301. BIG SIOUX RIVER AND SKUNK CREEK, SIOUX FALLS, SOUTH
DAKOTA.
The project for flood control, Big Sioux River and Skunk
Creek, Sioux Falls, South Dakota, authorized by section
101(a)(28) of the Water Resources Development Act of 1996
(110 Stat. 3666), is modified to authorize the Secretary to
[[Page S4072]]
reimburse the non-Federal interest for funds advanced by the
non-Federal interest for the Federal share of the project,
only if additional Federal funds are appropriated for that
purpose.
SEC. 302. SUSPENSION OF PETROLEUM ACQUISITION FOR STRATEGIC
PETROLEUM RESERVE.
(a) In General.--Except as provided in subsection (b) and
notwithstanding any other provision of law, during the period
beginning on the date of enactment of this Act and ending on
December 31, 2008--
(1) the Secretary of the Interior shall suspend acquisition
of petroleum for the Strategic Petroleum Reserve through the
royalty-in-kind program; and
(2) the Secretary of Energy shall suspend acquisition of
petroleum for the Strategic Petroleum Reserve through any
other acquisition method.
(b) Resumption.--Not earlier than 30 days after the date on
which the President notifies Congress that the President has
determined that the weighted average price of petroleum in
the United States for the most recent 90-day period is $75 or
less per barrel--
(1) the Secretary of the Interior may resume acquisition of
petroleum for the Strategic Petroleum Reserve through the
royalty-in-kind program; and
(2) the Secretary of Energy may resume acquisition of
petroleum for the Strategic Petroleum Reserve through any
other acquisition method.
(c) Existing Contracts.--In the case of any oil scheduled
to be delivered to the Strategic Petroleum Reserve pursuant
to a contract entered into by the Secretary of Energy prior
to, and in effect on, the date of enactment of this Act, the
Secretary shall, to the maximum extent practicable, negotiate
a deferral of the delivery of the oil for a period of not
less than 1 year, in accordance with procedures of the
Department of Energy in effect on the date of enactment of
this Act for deferrals of oil.
Mr. REID. Mr. President, I move to reconsider the vote, and I move to
lay that motion on the table.
The motion to lay on the table was agreed to.
____________________