[Congressional Record Volume 165, Number 121 (Thursday, July 18, 2019)]
[Senate]
[Pages S4950-S4954]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. THUNE (for himself, Mr. Cardin, and Mr. Roberts):
S. 2156. A bill to amend the Internal Revenue Code of 1986 to provide
for S corporation reform, and for other purposes; to the Committee on
Finance.
Mr. THUNE Mr. President, I ask unanimous consent that the text of the
bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 2156
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE.
(a) Short Title.--This Act may be cited as the ``S
Corporation Modernization Act of 2019''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
SEC. 2. MODIFICATIONS TO S CORPORATION PASSIVE INVESTMENT
INCOME RULES.
(a) Increased Percentage Limit.--Section 1375(a)(2) is
amended by striking ``25 percent'' and inserting ``60
percent''.
(b) Repeal of Excessive Passive Income as a Termination
Event.--Section 1362(d) is amended by striking paragraph (3).
(c) Conforming Amendments.--
(1) Section 1375(b) is amended by striking paragraphs (3)
and (4) and inserting the following new paragraph:
``(3) Passive investment income defined.--
``(A) In general.--Except as otherwise provided in this
paragraph, the term `passive investment income' means gross
receipts derived from royalties, rents, dividends, interest,
and annuities.
``(B) Exception for interest on notes from sales of
inventory.--The term `passive investment income' shall not
include interest on any obligation acquired in the ordinary
course of the corporation's trade or business from its sale
of property described in section 1221(a)(1).
``(C) Treatment of certain lending or finance companies.--
If the S corporation meets the requirements of section
542(c)(6) for the taxable year, the term `passive investment
income' shall not include gross receipts for the taxable year
which are derived directly from the active and regular
conduct of a lending or finance business (as defined in
section 542(d)(1)).
``(D) Treatment of certain dividends.--If an S corporation
holds stock in a C corporation meeting the requirements of
section 1504(a)(2), the term `passive investment income'
shall not include dividends from such C corporation to the
extent such dividends are attributable to the earnings and
profits of such C corporation derived from the active conduct
of a trade or business.
``(E) Exception for banks, etc.--In the case of a bank (as
defined in section 581) or a depository institution holding
company (as defined in section 3(w)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(w)(1))), the term `passive
investment income' shall not include--
``(i) interest income earned by such bank or company, or
``(ii) dividends on assets required to be held by such bank
or company, including stock in the Federal Reserve Bank, the
Federal Home Loan Bank, or the Federal Agricultural Mortgage
Bank or participation certificates issued by a Federal
Intermediate Credit Bank.
``(F) Gross receipts from the sales of certain assets.--For
purposes of this paragraph--
``(i) Capital assets other than stock and securities.--In
the case of dispositions of
[[Page S4951]]
capital assets (other than stock and securities), gross
receipts from such dispositions shall be taken into account
only to the extent of capital gain net income therefrom.
``(ii) Stock and securities.--In the case of sales or
exchanges of stock or securities, gross receipts shall be
taken into account only to the extent of the gain therefrom.
``(G) Coordination with section 1374.--The amount of
passive investment income shall be determined by not taking
into account any recognized built-in gain or loss of the S
corporation for any taxable year in the recognition period.
Terms used in the preceding sentence shall have the same
respective meanings as when used in section 1374.''.
(2)(A) Section 26(b)(2)(J) is amended by striking ``25
percent'' and inserting ``60 percent''.
(B) Section 1375(b)(1)(A)(i) is amended by striking ``25
percent'' and inserting ``60 percent''.
(C) The heading for section 1375 is amended by striking
``25 percent'' and inserting ``60 percent''.
(D) The item relating to section 1375 in the table of
sections for part III of subchapter S of chapter 1 is amended
by striking ``25 percent'' and inserting ``60 percent''.
(3) Section 1042(c)(4)(A)(i) is amended by striking
``section 1362(d)(3)(C)'' and inserting ``section
1375(b)(3)''.
(4) Section 1362(f)(1)(B) is amended by striking
``paragraph (2) or (3) of subsection (d)'' and inserting
``subsection (d)(2)''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2019.
SEC. 3. EXPANSION OF S CORPORATION ELIGIBLE SHAREHOLDERS TO
INCLUDE IRAS.
(a) In General.--Section 1361(c)(2)(A)(vi) is amended to
read as follows:
``(vi) A trust which constitutes an individual retirement
account under section 408(a), including one designated as a
Roth IRA under section 408A.''.
(b) Sale of Stock in IRA Relating to S Corporation Election
Exempt From Prohibited Transaction Rules.--Section
4975(d)(16) is amended--
(1) by striking subparagraphs (A) and (B) and by
redesignating subparagraphs (C), (D), (E), and (F) as
subparagraphs (A), (B), (C), and (D), respectively, and
(2) by striking ``such bank or company'' in subparagraph
(A) (as so redesignated) and inserting ``the issuer of such
stock''.
(c) Effective Date.--The amendments made by this section
shall take effect on January 1, 2020.
SEC. 4. TREATMENT OF S CORPORATION BUILT-IN GAIN AMOUNT UPON
DEATH OF SHAREHOLDER.
(a) In General.--Part II of subchapter S of chapter 1 is
amended by adding at the end the following:
``SEC. 1369. AMORTIZATION OF BUILT-IN GAIN AMOUNT UPON DEATH
OF SHAREHOLDER.
``(a) In General.--A person holding stock in an electing S
corporation the basis of which is determined under section
1014(a) (hereafter in this section referred to as the
`shareholder') shall be allowed a deduction with respect to
the S corporation built-in gain amount. The amount of such
deduction for any taxable year shall be determined by
amortizing the S corporation built-in gain amount over the
15-year period beginning with the month which includes the
applicable valuation date.
``(b) S Corporation Built-In Gain Amount.--For purposes of
this section, the term `S corporation built-in gain amount'
means the lesser of--
``(1) the excess (if any) of--
``(A) the basis of the stock referred to in subsection (a)
as determined under section 1014(a), over
``(B) the adjusted basis of such stock immediately before
the death of the decedent, or
``(2) the pro rata share (determined as of the applicable
valuation date) of--
``(A) the aggregate fair market value of all property held
by the S corporation which is of a character subject to
depreciation or amortization, over
``(B) the aggregate adjusted basis of all such property
held by the S corporation as of such date.
``(c) Electing S Corporation.--For purposes of this
section, the term `electing S corporation' means, with
respect to any shareholder, any S corporation which elects
the application of this section with respect to such
shareholder at such time and in such form and manner as the
Secretary may prescribe.
``(d) Applicable Valuation Date.--For purposes of this
section, the term `applicable valuation date' means--
``(1) in the case of a decedent with respect to which the
executor of the decedent's estate elects the application of
section 2032, the date 6 months after the decedent's death,
and
``(2) in the case of any other decedent, the date of the
decedent's death.
``(e) Accelerated Deduction in Case of Disposition of S
Corporation Property.--
``(1) In general.--If the electing S corporation disposes
of any property which was taken into account under subsection
(b)(2), then the deduction allowed under subsection (a) with
respect to any stock, for the taxable year of the shareholder
in which or with which the taxable year of the S corporation
which includes the date of such disposition ends, shall
(except as otherwise provided in this section) not be less
than the lesser of--
``(A) the pro rata share of the gain recognized on such
disposition, or
``(B) the amount determined under subsection (b)(2) by only
taking into account such property.
``(2) Overall allowance not increased.--No deduction shall
be allowed under subsection (a) with respect to any stock for
any taxable year to the extent that such deduction (when
added to the deductions so allowed for all prior taxable
years) exceeds the S corporation built-in gain amount with
respect to such stock.
``(f) Recharacterization of Gains as Ordinary Income to
Extent of Deduction.--If--
``(1) stock of an S corporation with respect to which a
deduction was allowed under this section, or
``(2) property which was taken into account under
subsection (b)(2) with respect to such stock,
is disposed of at a gain (determined without regard to
whether or not such gain is recognized and reduced by any
amount of gain which is treated as ordinary income under any
other provision of this subtitle), the amount of such gain
(or the shareholder's pro rata share of such gain in the case
of property described in paragraph (2)) shall be treated as
gain which is ordinary income (and shall be recognized
notwithstanding any other provision of this subtitle) to the
extent of the excess of the aggregate deductions allowable
under this section with respect to such stock for the taxable
year of such disposition and all prior taxable years over the
amounts taken into account under this subsection for all
prior taxable years.
``(g) Termination of Amortization.--No deduction shall be
allowed under subsection (a) with respect to any stock in an
electing S corporation with respect to any period beginning
after the earlier of--
``(1) the date on which the corporation's election under
section 1362 terminates, or
``(2) the date on which the shareholder transfers such
stock to any other person.
``(h) Treatment of Certain Transfers.--
``(1) Distributions from estates or trusts.--
Notwithstanding any other provision of this section, in the
case of a distribution of stock from an estate or trust to a
beneficiary, the beneficiary (and not the estate or trust)
shall be treated as the shareholder to which this section
applies with respect to periods after such distribution.
``(2) Certain transfers involving spouses.--Notwithstanding
any other provision of this section, in the case of a
transfer described in section 1041, the transferee (and not
the transferor) shall be treated as the shareholder to which
this section applies with respect to periods after such
transfer.
``(i) Treatment of Income in Respect of the Decedent.--
``(1) Adjustment to built-in gain of property held by s
corporation.--For purposes of subsection (b)(2), the fair
market value of any property taken into account under
subparagraph (A) thereof shall be decreased by any amount of
income in respect of the decedent with respect to such
property to which section 691 applies. For purposes of
subsection (e)(1)(A), the gain recognized on the disposition
of such property shall be reduced by such amount.
``(2) Adjustment to basis of s corporation stock.--For
adjustment to basis of S corporation stock, see section
1367(b)(4)(B).
``(j) Reporting.--Except as otherwise provided by the
Secretary, for purposes of section 6037, the amounts
determined under subsections (b)(2), (e)(1), and (f)(2) shall
be treated as items of the corporation and the pro rata share
determined under such subsection shall be furnished to the
shareholder under section 6037(b).''.
(b) Adjustment to Basis of Stock.--
(1) In general.--Section 1367(a)(2) is amended by striking
``and'' at the end of subparagraph (D), by striking the
period at the end of subparagraph (E) and inserting ``,
and'', and by inserting after subparagraph (E) the following
new subparagraph:
``(F) the amount of the shareholder's deduction allowable
under section 1369.''.
(2) Adjustment not taken into account in determining
treatment of distributions.--Section 1368 is amended--
(A) in subsection (d)(1), by inserting ``(other than
subsection (a)(2)(F) thereof)'' after ``section 1367'', and
(B) in subsection (e)(1)(A)--
(i) by striking ``this title and the phrase'' and inserting
``this title, the phrase'', and
(ii) by inserting ``, and no adjustment shall be made under
section 1367(a)(2)(F)'' after ``section 1367(a)(2)''.
(c) Clerical Amendment.--The table of sections for part II
of subchapter S of chapter 1 is amended by adding at the end
the following new item:
``Sec. 1369. Amortization of built-in gain amount upon death of
shareholder.''.
(d) Effective Date.--The amendments made by this section
shall apply with respect to decedents dying after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 5. REVOCATIONS OF S CORPORATION ELECTIONS.
(a) Revocations.--Paragraph (1) of section 1362(d) is
amended--
(1) by striking ``subparagraph (D)'' in subparagraph (C)
and inserting ``subparagraphs (D) and (E)'', and
(2) by adding at the end the following new subparagraph:
``(E) Authority to treat late revocations as timely.--If--
[[Page S4952]]
``(i) a revocation under subparagraph (A) is made for any
taxable year after the date prescribed by this paragraph for
making such revocation for such taxable year or no such
revocation is made for any taxable year, and
``(ii) the Secretary determines that there was reasonable
cause for the failure to timely make such revocation,
the Secretary may treat such a revocation as timely made for
such taxable year.''.
(b) Effective Date.--The amendments made by this section
shall apply to revocations after December 31, 2019.
______
By Mr. LEAHY (for himself and Mrs. Murray):
S. 2180. A bill to provide oversight of the border zone in which
Federal agents may conduct vehicle checkpoints and stops and enter
private land without a warrant, and to make technical corrections; to
the Committee on the Judiciary.
Mr. LEAHY. Mr. President, ``Show me your papers.'' Those are words
that you should never hear once inside the United States. Unless a
government agent has a legitimate reason to stop and search you--a
reasonable suspicion or probable cause--Americans should not be subject
to questioning and detention for merely going about their daily lives.
This is a fundamental tenet of the Fourth Amendment. Yet Customs and
Border Protection (CBP) operations are effectively immune from the
Fourth Amendment within a broadly defined ``border zone.''
And this so-called border zone need not be near the border at all:
Seventy-year-old regulations define it as up to 100 miles from any
border, land or sea. According to the CBP, southern Vermont is in the
border zone, as is the entire State of Florida, and even Richmond,
Virginia. In fact two-thirds of the entire U.S. population is in the
border zone.
In Vermont, under the Trump administration, the border zone has
resulted in highway checkpoints and bus boardings. In May, Customs and
Border Protection (CBP) agents set up the first highway checkpoint in a
decade. The checkpoint was set up miles from the Canadian border in
South Hero, Vermont. It was in operation for hours. We do not know how
many hundreds of cars were stopped, but we do know that it did not lead
to a single arrest or seizure. Last month, the CBP established a second
checkpoint in the same location. This time nearly 900 cars were
stopped, and only one individual was detained--for a visa overstay.
Border Patrol agents have also boarded Amtrak trains in White River
Junction and boarded a Greyhound bus at the Burlington airport,
demanding to know whether passengers were citizens.
Today, I am joining with Senator Murray in reintroducing the Border
Zone Reasonableness Restoration Act of 2019. Our legislation would
establish critical privacy protections by reducing the unjustifiably
large border zone from 100 miles to 25 miles.
I find it difficult to believe that these checkpoints are an
effective use of law enforcement resources. Border Patrol stations in
Vermont are already stretched thin, And just last month the Senate
passed a bipartisan $4.6 billion emergency supplemental appropriations
bill to address the humanitarian crisis on the southern border. The
Department of Homeland Security's limited resources should be focused
on improving conditions of detention and providing food, appropriate
shelter, and medical care to families fleeing violence and dire
poverty, not conducting pointless vehicle checkpoints miles from the
northern border in Vermont.
The Border Zone Reasonableness Restoration Act is based on an
amendment that Senator Murray and I successfully attached to
comprehensive immigration reform legislation in 2013. The 100 mile
``border zone''--and the similar 25 mile zone where many types of
warrantless property searches are permitted--predates this current
administration, but the actions of this administration have shown just
how much we need it. That bill passed the Senate with a bipartisan vote
of 68 to 32.
Americans' right to privacy does not end simply because you are
within 100 miles from our land and sea borders. I hope all members of
Congress will join us and support this commonsense legislation to
ensure that every person in this country receives the constitutional
protections to which they are entitled.
______
By Mr. DURBIN (for himself, Mr. Reed, Mr. Brown, Mr. Cardin, Ms.
Baldwin, and Ms. Smith):
S. 2184. A bill to amend the Truth in Lending Act and the Higher
Education Act of 1965 to require certain creditors to obtain
certifications from institutions of higher education, and for other
purposes; to the Committee on Banking, Housing, and Urban Affairs.
Mr. DURBIN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 2184
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Know Before You Owe Private
Education Loan Act of 2019''.
SEC. 2. AMENDMENTS TO THE TRUTH IN LENDING ACT.
(a) In General.--Section 128(e) of the Truth in Lending Act
(15 U.S.C. 1638(e)) is amended--
(1) by striking paragraph (3) and inserting the following:
``(3) Institutional certification required.--
``(A) In general.--Except as provided in subparagraph (B),
before a creditor may issue any funds with respect to an
extension of credit described in this subsection, the
creditor shall obtain from the relevant institution of higher
education where such loan is to be used for a student, such
institution's certification of--
``(i) the enrollment status of the student;
``(ii) the student's cost of attendance at the institution
as determined by the institution under part F of title IV of
the Higher Education Act of 1965; and
``(iii) the difference between--
``(I) such cost of attendance; and
``(II) the student's estimated financial assistance,
including such assistance received under title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) and
other financial assistance known to the institution, as
applicable.
``(B) Exception.--Notwithstanding subparagraph (A), a
creditor may issue funds with respect to an extension of
credit described in this subsection without obtaining from
the relevant institution of higher education such
institution's certification if such institution fails to
provide within 15 business days of the creditor's request for
such certification--
``(i) notification of the institution's refusal to certify
the request; or
``(ii) notification that the institution has received the
request for certification and will need additional time to
comply with the certification request.
``(C) Loans disbursed without certification.--If a creditor
issues funds without obtaining a certification, as described
in subparagraph (B), such creditor shall report the issuance
of such funds in a manner determined by the Director of the
Consumer Financial Protection Bureau.'';
(2) by redesignating paragraphs (9), (10), and (11) as
paragraphs (10), (11), and (12), respectively; and
(3) by inserting after paragraph (8) the following:
``(9) Provision of information.--
``(A) Provision of information to students.--
``(i) Loan statement.--A creditor that issues any funds
with respect to an extension of credit described in this
subsection shall send loan statements, where such loan is to
be used for a student, to borrowers of such funds not less
than once every 3 months during the time that such student is
enrolled at an institution of higher education.
``(ii) Contents of loan statement.--Each statement
described in clause (i) shall--
``(I) report the borrower's total remaining debt to the
creditor, including accrued but unpaid interest and
capitalized interest;
``(II) report any debt increases since the last statement;
and
``(III) list the current interest rate for each loan.
``(B) Notification of loans disbursed without
certification.--On or before the date a creditor issues any
funds with respect to an extension of credit described in
this subsection, the creditor shall notify the relevant
institution of higher education, in writing, of the amount of
the extension of credit and the student on whose behalf
credit is extended. The form of such written notification
shall be subject to the regulations of the Bureau.
``(C) Annual report.--A creditor that issues funds with
respect to an extension of credit described in this
subsection shall prepare and submit an annual report to the
Bureau containing the required information about private
student loans to be determined by the Director of the Bureau,
in consultation with the Secretary of Education.''.
(b) Definition of Private Education Loan.--Section
140(a)(8)(A) of the Truth in Lending Act (15 U.S.C.
1650(a)(8)(A)) is amended--
(1) by redesignating clause (ii) as clause (iii);
(2) in clause (i), by striking ``and'' after the semicolon;
and
(3) by adding after clause (i) the following:
``(ii) is not made, insured, or guaranteed under title VII
or title VIII of the Public
[[Page S4953]]
Health Service Act (42 U.S.C. 292 et seq. and 296 et seq.);
and''.
(c) Regulations.--Not later than 365 days after the date of
enactment of this Act, the Director of the Consumer Financial
Protection Bureau shall issue regulations in final form to
implement paragraphs (3) and (9) of section 128(e) of the
Truth in Lending Act (15 U.S.C. 1638(e)), as amended by
subsection (a). Such regulations shall become effective not
later than 6 months after their date of issuance.
SEC. 3. AMENDMENT TO THE HIGHER EDUCATION ACT OF 1965.
(a) Amendment to the Higher Education Act of 1965.--Section
487(a) of the Higher Education Act of 1965 (20 U.S.C.
1094(a)) is amended by striking paragraph (28) and inserting
the following:
``(28)(A) Upon the request of a private educational lender,
acting in connection with an application initiated by a
borrower for a private education loan in accordance with
section 128(e)(3) of the Truth in Lending Act, the
institution shall within 15 days of receipt of the request--
``(i) provide certification to such private educational
lender--
``(I) that the student who initiated the application for
the private education loan, or on whose behalf the
application was initiated, is enrolled or is scheduled to
enroll at the institution;
``(II) of such student's cost of attendance at the
institution as determined under part F of this title; and
``(III) of the difference between--
``(aa) the cost of attendance at the institution; and
``(bb) the student's estimated financial assistance
received under this title and other assistance known to the
institution, as applicable;
``(ii) notify the creditor that the institution has
received the request for certification and will need
additional time to comply with the certification request; or
``(iii) provide notice to the private educational lender of
the institution's refusal to certify the private education
loan pursuant to subparagraph (D).
``(B) With respect to a certification request described in
subparagraph (A), and prior to providing such certification
under subparagraph (A)(i) or providing notice of the refusal
to provide certification under subparagraph (A)(iii), the
institution shall--
``(i) determine whether the student who initiated the
application for the private education loan, or on whose
behalf the application was initiated, has applied for and
exhausted the Federal financial assistance available to such
student under this title and inform the student accordingly;
and
``(ii) provide the borrower whose loan application has
prompted the certification request by a private educational
lender, as described in subparagraph (A)(i), with the
following information and disclosures:
``(I) The amount of additional Federal student assistance
for which the borrower is eligible and the advantages of
Federal loans under this title, including disclosure of the
fixed interest rates, deferments, flexible repayment options,
loan forgiveness programs, and additional protections, and
the higher student loan limits for dependent students whose
parents are not eligible for a Federal Direct PLUS Loan.
``(II) The borrower's ability to select a private
educational lender of the borrower's choice.
``(III) The impact of a proposed private education loan on
the borrower's potential eligibility for other financial
assistance, including Federal financial assistance under this
title.
``(IV) The borrower's right to accept or reject a private
education loan within the 30-day period following a private
educational lender's approval of a borrower's application and
about a borrower's 3-day right to cancel period.
``(C) For purposes of this paragraph, the terms `private
educational lender' and `private education loan' have the
meanings given such terms in section 140 of the Truth in
Lending Act (15 U.S.C. 1650).''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the effective date of the regulations
described in section 2(c).
(c) Preferred Lender Arrangement.--Section 151(8)(A)(ii) of
the Higher Education Act of 1965 (20 U.S.C. 1019(8)(A)(ii))
is amended by inserting ``certifying,'' after ``promoting,''.
SEC. 4. REPORT.
(a) In General.--Not later than 24 months after the
issuance of regulations under section 2(c), the Director of
the Consumer Financial Protection Bureau and the Secretary of
Education shall jointly submit to Congress a report on the
compliance of--
(1) private educational lenders with section 128(e)(3) of
the Truth in Lending Act (15 U.S.C. 1638(e)(3)), as amended
by section 2; and
(2) institutions of higher education with section
487(a)(28) of the Higher Education Act of 1965 (20 U.S.C.
1094(a)(28)), as amended by section 3.
(b) Contents.--The contents of the report described in
subsection (a) shall include information about the degree to
which specific institutions utilize certifications in
effectively--
(1) encouraging the exhaustion of Federal student loan
eligibility by borrowers prior to taking on private education
loan debt; and
(2) lowering private education loan debt by borrowers.
______
By Mr. REED (for himself, Mr. Kennedy, and Mr. Menendez):
S. 2192. A bill to amend the National Flood Insurance Act of 1968 to
allow the Administrator of the Federal Emergency Management Agency to
provide capitalization grants to States to establish revolving funds to
provide funding assistance to reduce flood risks, and for other
purposes; to the Committee on Banking, Housing, and Urban Affairs.
Mr. REED. Mr. President, today I am reintroducing the State Flood
Mitigation Revolving Fund Act of 2019 along with Senators Kennedy and
Menendez.
The purpose of our bill is to reduce flood risk and the costs
associated with flooding by establishing a State revolving loan program
to fund mitigation projects for property owners and communities that
participate in the National Flood Insurance Program. By funding
projects that reduce risk, such as home elevations, flood proofing,
acquisitions, and environmental restoration, the bill also provides an
avenue to help middle-income and low-income property owners reduce
their flood insurance premiums. It is a proposal that has been endorsed
by over 200 local and national organizations, including the Pew
Charitable Trusts, Association of State Floodplain Managers, National
Association of Mutual Insurance Companies, the Property Casualty
Insurance Association of America, the Nature Conservancy, the Union of
Concerned Scientists, the U.S. Resiliency Council, and others.
Flooding is the most costly hazard facing American property owners.
With increasing frequency we see news stories of catastrophic flooding
in communities across the Nation. According to the Pew Charitable
Trusts, seven out of ten Presidential Disaster Declarations in the last
ten years have involved flooding, and data from the National Oceanic
and Atmospheric Administration show that there were 27 flooding
disasters or hurricanes in the last decade that each caused more than
$1 billion in damage.
But the increase in major flooding disasters has also been
accompanied by increases in nuisance, urban, and high tide flooding
events, which don't trigger the full complement of Federal disaster
assistance but are devastating to every homeowner and community that is
affected.
Experts agree that the best way to reduce the cost of flooding is to
engage in proactive, not reactive, flood mitigation. The National
Institute of Building Sciences' 2018 Natural Hazard Mitigation Saves
study found that every Federal dollar spent on up-front mitigation
provides $6 in national benefits, and investments in flood mitigation
yield $7 in benefits per dollar spent. This is the kind of saving the
State Flood Mitigation Revolving Fund Act seeks to promote and
leverage.
Modeled on the successful Clean Water and Drinking Water State
Revolving Funds, this bill creates a straightforward and easily
accessible program through which States can offer low-interest loans to
property owners and communities who want to mitigate their flood risk.
By creating a revolving fund, the bill will allow States to design and
more efficiently implement their own flood mitigation strategies
provided that such strategies help achieve Federal objectives such as
reducing disaster payments.
Within this construct, the bill gives States the flexibility to
undertake flood mitigation projects expeditiously. The bill requires
States to provide matching funds and gives them the ability to further
leverage Federal dollars, as many already do under the drinking water
and clean water SRF programs.
Additionally, the bill ensures mitigation assistance is focused on
where the flood risk is greatest and where people are most vulnerable.
The bill requires states to prioritize mitigation assistance for low-
income homeowners and geographic areas, pre-FIRM buildings, and severe
repetitive loss and repetitive loss buildings. Finally, it gives states
the option of providing additional subsidization for low-income
property-owners and communities that simply do not have the wherewithal
to assume additional debt.
Mr. President, as we talk about appropriate investments in
infrastructure, mitigation is one place where we
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should be investing. I invite the rest of our colleagues to join me,
Senator Kennedy, and Senator Menendez in supporting this bipartisan
legislation.
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