[Congressional Record (Bound Edition), Volume 152 (2006), Part 9]
[House]
[Pages 12706-12709]
[From the U.S. Government Publishing Office, www.gpo.gov]




 PROVIDING FOR CONSIDERATION OF H.R. 4973, FLOOD INSURANCE REFORM AND 
                       MODERNIZATION ACT OF 2006

  Mr. SESSIONS. Madam Speaker, by direction of the Committee on Rules, 
I call up House Resolution 891 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 891

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 4973) to restore the financial solvency of the 
     national flood insurance program, and for other purposes. The 
     first reading of the bill shall be dispensed with. All points 
     of order against consideration of the bill are waived. 
     General debate shall be confined to the bill and shall not 
     exceed one hour equally divided and controlled by the 
     chairman and ranking minority member of the Committee on 
     Financial Services. After general debate the bill shall be 
     considered for amendment under the five-minute rule. The bill 
     shall be considered as read. Notwithstanding clause 11 of 
     rule XVIII, no amendment to the bill shall be in order except 
     those printed in the Committee on Rules accompanying this 
     resolution. Each such amendment may be offered only in the 
     order printed in the report, may be offered only by a Member 
     designated in the report, shall be considered as read, shall 
     be debatable for the time specified in the report equally 
     divided and controlled by the proponent and an opponent, 
     shall not be subject to amendment, and shall not be subject 
     to a demand for division of the question in the House or in 
     the Committee of the Whole. All points of order against such 
     amendments are waived. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. The previous question shall be considered as ordered 
     on the bill and amendments thereto to final passage without 
     intervening motion except one motion to recommit with or 
     without instructions.

  The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is 
recognized for 1 hour.
  Mr. SESSIONS. Madam Speaker, for purposes of debate only, I yield the 
customary 30 minutes to the gentlewoman from California, my friend, 
Congresswoman Matsui, pending which I yield myself such time as I may 
consume. During consideration of this resolution, all time yielded is 
for purposes of debate only.
  This structured rule provides 1 hour of general debate, equally 
divided and controlled by the chairman and ranking minority member of 
the Committee on Financial Services. It waives all points of order 
against consideration of the bill and makes in order only those 
amendments printed in the Rules Committee report accompanying the 
resolution.
  It provides that the amendments printed in the report may be offered 
only in the order printed in the report and offered only by a Member 
designated in the report. They shall be considered as read, shall be 
debatable for the time specified in the report, equally divided and 
controlled by the proponent and an opponent. These amendments shall not 
be subject to amendment and shall not be subject to a demand for 
division of the question in the House or in the Committee of the Whole.
  Finally, the rule waives all points of order against the amendments 
printed in the report, and, as always, it provides the minority with 
one motion to recommit with or without instructions.
  Madam Speaker, I rise today in support of this rule and the 
underlying legislation brought to the floor from the Financial Services 
Committee under the leadership of Coach Mike Oxley and Chairman Richard 
Baker.
  Yesterday evening, despite inclement weather, the Rules Committee met 
and took testimony from Members regarding their thoughts on how to 
improve this legislation. The committee determined that many of these 
amendments should be considered and made two-thirds of those amendments 
submitted to the committee in order, including seven Democrat and 
bipartisan amendments.
  This legislation follows upon sensible reforms of the Flood Insurance 
Reform Act of 2004, which also sought to update and modernize the 
National Flood Insurance Program. Although this previous effort at 
reforming the program was well intended, a number of provisions 
included in the 2004 act have yet to be implemented.
  Also, this earlier effort is currently incomplete because it was 
passed by Congress before Hurricanes Katrina and Rita devastated the 
gulf coast and, therefore, did not incorporate the lessons learned from 
these storms and how best to administer the NFIP.
  The Flood Insurance Reform and Modernization Act makes a number of 
commonsense changes to current law. Among other things, it does the 
following: it requires the Comptroller

[[Page 12707]]

General of the United States to study the effects of extending the 
mandatory flood insurance purchase requirements to all properties 
located in flood hazard areas and report back to Congress within 6 
months on the findings.

                              {time}  1030

  It increases the fine levied against federally regulated lending 
institutions for each failure to require mandatory flood insurance 
purchase requirements to $2,000 and increases the total cap on fines 
for institutions to $1 million.
  It reiterates FEMA's responsibilities to implement provisions of the 
Flood Insurance Reform Act of 2004 and directs FEMA to continue to work 
with the insurance industry, State insurance regulators and other 
interested parties to implement the minimum training and education 
standards for all insurance agents who sell flood insurance policies, 
and mandates that FEMA submit a report to Congress on implementation of 
these provisions.
  It directs FEMA to maintain and periodically publish an inventory of 
levees located in the United States so that these levees can be 
identified for National Flood Insurance Programs.
  In addition to improving and reforming this program, this legislation 
also ensures that taxpayers are protected, including provisions to 
establish that nonresidential properties and nonprimary residences will 
be charged actuarial instead of subsidized rates.
  It increases the NFIP's borrowing authority to $25 billion, but also 
a requirement that FEMA submit a report to Congress on how it intends 
to repay funds borrowed under this increased authority.
  It requires a semiannual report by FEMA to Congress on the financial 
status of the National Flood Insurance Program.
  It extends the current pilot program for mitigation of severe 
repetitive loss properties, which is set to expire September 30, 2009, 
to 2011.
  Madam Speaker, I would like to commend Chairman Oxley and Chairman 
Baker for their hard work on this legislation. Listening to people, 
learning from the mistakes of the past and also from the impact of 
these devastating hurricanes has meant that we will continue our 
efforts to protect homeowners, taxpayers, while ensuring that a viable 
market for flood insurance continues to operate effectively and 
efficiently in the United States.
  I urge my colleagues to support this rule and the underlying 
legislation.
  Madam Speaker, I reserve the balance of my time.
  Ms. MATSUI. Madam Speaker, I thank the gentleman from Texas for 
yielding me this time.
  Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, as the representative of a district in a floodplain, I 
understand the need for a healthy flood insurance program. My hometown 
of Sacramento is the most at-risk river city in the Nation. Whenever I 
talk about our efforts to improve Sacramento's level of flood 
protection, I also mention the importance of flood insurance. If you 
live behind a levee, you should have flood insurance.
  I also recognize that to accomplish this we need a healthy and robust 
National Flood Insurance Program. That is why the legislation we debate 
today, the Flood Insurance Reform and Modernization Act, is so 
significant.
  Through this legislation, we will meet our responsibilities. We will 
ensure coverage is available to those at risk, and we will educate 
those same individuals as to the benefits of flood insurance. This bill 
takes us in that positive direction.
  In the aftermath of Hurricane Katrina, the deficiencies in the 
program were laid bare. What remained was a program $25 billion in debt 
with a questionable future. It is imperative that we rebuild the flood 
insurance program.
  For many Americans, owning insurance that protects against a flood is 
more valuable than in case of a fire. That is because homes in a 
federally designated special flood hazard area are three times as 
likely to be destroyed by flood as a fire. This is the case for almost 
three-fourths of all homes in Sacramento. This is an important program 
that must be reformed to ensure its long-term stability and solvency.
  The bill we are considering today makes reasonable reforms. It will 
lay the foundation for a stronger and improved flood insurance program. 
For that, I would like to thank Chairman Oxley, subcommittee Chairman 
Richard Baker and Ranking Member Barney Frank for their work on this 
bill, as well as the minority staff of the Financial Services 
Committee, particularly Jeff Riley, for all their tireless work.
  This bill takes important steps to modernize the flood insurance 
program. It raises maximum coverage limits to keep up with inflation. 
It provides new coverage for living expenses if you have to vacate your 
home, and it also provides optional coverage for basements and business 
interruption coverage for commercial properties.
  These are all positive steps that will allow the program to continue 
to provide peace of mind to those impacted when a flood event occurs.
  Moving forward, Congress is also making the flood insurance program 
sustainable in the long run. It tightens enforcement of purchase 
requirements and ends subsidies on vacation homes, second homes and 
businesses. These steps may not be popular, but the program needs this 
kind of tough medicine.
  Additionally, it directs FEMA to provide Congress with information 
that will allow us to evaluate whether we should modify the program's 
mandatory purchase requirements. This is an issue that demands serious 
consideration, and I know that we will hear further debate on it once 
this bill reaches conference.
  As I conclude, I would like to express my disappointment that an 
important amendment I offered was not adopted. It would have created an 
educational outreach grant program to ensure homeowners in high-risk 
flood areas retain their flood insurance. This grant program works.
  Last year, the Sacramento Area Flood Control Agency, with a FEMA 
grant, conducted just such a campaign, SAFCA, and reached out to more 
than 45,000 NFIP policyholders in the American River floodplain with 
impressive results.
  Of this group, 43 percent now carry preferred risk flood insurance. 
Preferred risk policies provide policy owners who are protected by a 
levee or other flood mitigation method with full flood insurance at a 
reduced price. Because of the lower price, the preferred risk policies 
have a higher level of policy retention.
  To put the success in perspective, FEMA more than recouped its 
investment. SAFCA exceeded its target for policies, retained more than 
20 times over, adding millions to the flood insurance program's bottom 
line.
  Extending these grants to other flood plains will only strengthen the 
National Flood Insurance Program. I will continue to move this program 
idea forward; and I look forward to working with Chairman Oxley, 
Chairman Baker and Ranking Member Frank on this grant program.
  Ensuring the long-term stability and solvency of this nearly 40-year-
old program is critical. The Flood Insurance Reform and Modernization 
Act is an excellent step in the right direction. As my grant program 
demonstrates, there is still more to do.
  Having said that, this is a good bill and a much-needed start. I urge 
my colleagues to support the rule so that we can enact this important 
legislation.
  Madam Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Madam Speaker, at this time, I yield such time as she 
chooses to consume to the gentlewoman from Florida (Ms. Ginny Brown-
Waite).
  Ms. GINNY BROWN-WAITE of Florida. Madam Speaker, I rise in support of 
the rule; and I want to thank Mr. Sessions, as well as Chairman Oxley 
and Mr. Baker and the ranking member of the Financial Services 
Committee, Barney Frank, for working hard to bring this updating 
measure to us today.

[[Page 12708]]

  Madam Speaker, when the Financial Services Committee debated this 
bill, an issue came to my attention that needed a remedy.
  Many States like Florida that have far too many experiences with 
flooding have established a mediation process for residents who have 
flood claims. This process gives residents the opportunity to settle a 
claim dispute with FEMA without having to go to court. Florida has a 90 
percent success rate with this process, which other States have 
actually begun emulating. This process brings quick results to 
homeowners, saves millions of dollars in court costs and is something 
that should be encouraged.
  However, oftentimes representatives from FEMA refuse to show up, even 
though the mediation program is nonbinding. This is a travesty to 
residents who have already lost so much.
  Accordingly, my colleague and I from Florida, Congresswoman Debbie 
Wasserman Schultz, introduced an amendment that requires FEMA to 
participate in State mediation claims. Again, this process is 
nonbinding. If a resident is unhappy with the results of the 
proceedings, they may choose to file suit. But the language will ensure 
that residents have a choice, instead of FEMA making that choice for 
them by simply avoiding the process.
  I urge all Members to give homeowners the opportunity to settle their 
claims quickly without a team of lawyers and mountains of legal fees. I 
urge your support for the rule and also the underlying bill so that 
homeowners living in flood-prone areas will have some certainty.
  Ms. MATSUI. Madam Speaker, I yield 4 minutes to the gentleman from 
Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Madam Speaker, I rise in support of this 
rule and in the hopes that this rule will be a model that my colleagues 
will follow. It actually puts in order just about every amendment that 
ought to be put in order, and I hope that is a precedent.
  The bill also represents, I think, the legislative process at its 
best. We began this a couple of years ago. The gentleman from Oregon 
(Mr. Blumenauer), who is still a Member, and the former Member from 
Nebraska (Mr. Bereuter) formed a very effective bipartisan coalition to 
take the floodplain program and to preserve its essence to provide 
assistance to Americans who could not get it from the private market 
without this government program.
  Let me stress that this is a case where we are putting forward a 
Federal government program to meet a problem that will not be met by 
the private market. And for my friends who subscribe to the maxim of 
the former majority leader from Texas (Mr. Armey) that markets are 
smart and government is dumb, I guess he would think what we are doing 
today is dumb, but he is probably the only one in the country who does. 
Because we are now dealing with a market failure in the economic sense 
by having a government program, but it should be a sensible government 
program. It was not as sensible as it should be.
  We began a process when the gentleman from Oregon and the gentleman 
from Nebraska came to us, and this was a collaborative effort between 
myself as the ranking member and the chairman of the committee, the 
gentleman from Ohio (Mr. Oxley). We found one of those cases where you 
could improve a program from both the environmental and fiscal 
standpoints, and we have legislation today that takes an important 
program that meets a very pressing social need, the ability of people 
who live in flood plain areas to continue to live and to get insurance 
at a reasonable cost, and we make it better environmentally, less 
likely that there will be building in environmentally unwise areas and 
in unwise circumstances, and we make it less of a fiscal problem with 
the Federal Government.
  Now, clearly, people recognize the problem. In the case of Katrina, 
we spent a great deal of money and got too little in return. There were 
some problems there from the standpoint of levee construction and a 
number of other things. We can't, in a bill like this, obviously, 
prevent disasters. What we can do is increase our ability to work with 
them.
  So I am very proud of this bill. There is one amendment in 
particular, and a number of the amendments will get bipartisan support. 
Our colleague from Mississippi (Mr. Taylor), who lived through some of 
the worst of this personally, has a very important amendment. I 
strongly advocate for it. I wish he had gotten more than 10 minutes to 
discuss it. So I am going to talk a little bit about it now. We will 
talk some more about it in the general debate.
  It deals with the problem that homeowners face when they are told 
that they will not get any compensation for damage if it was caused by 
water, when they are told that it was caused by water, when they have 
very good reason to think it was caused by wind.
  There is this split. Wind damage is covered by private homeowner 
policies, water damage by flood damage, by the flood insurance program. 
There is very good reason to believe that people have not been treated 
fairly in this situation.
  The gentleman from Mississippi, who has been one of the most tireless 
and energetic defenders of the rights of citizens in this program, has 
an amendment that would bring to bear the administrative resources to 
look into this issue. We cannot regulate State insurance, but we can, 
at the intersection of the Federal fund insurance program, the State 
insurance, bring to bear our investigative and other resources.
  The gentleman from Mississippi's amendment is an essential piece of 
trying to treat people fairly in the past but, even more, preventing 
abuses in the future. So I strongly urge people to vote for it.
  In general, we have a good bill. There are amendments from both 
parties that will improve it. There are some amendments that I will 
oppose on the whole. It is a legislative effort that will make an 
important program environmentally better and fiscally better and meet, 
as I said, a defect the private market on its own cannot meet.
  Mr. SESSIONS. Madam Speaker, at this time, I would like to notify my 
colleague, Ms. Matsui, that I do not have any additional speakers. I 
would welcome the opportunity to have her go through those speakers, 
have her close, then I will do the same after she is through.
  Madam Speaker, I reserve the balance of my time.

                              {time}  1045

  Ms. MATSUI. Madam Speaker, I yield 5 minutes to the gentleman from 
Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Madam Speaker, I appreciate the gentlewoman's 
courtesy in permitting me to speak on the rule, and I appreciate her 
interest in dealing with these sensitive issues, given the district 
that she represents. It was my privilege to have worked with her 
husband on some of these in the past, and I appreciate her following 
through, because it is critical to people in the greater Sacramento 
area.
  As we have seen outside our window here in Washington, DC, it is 
critical to people around the country because flooding is not just 
something that occurs in storm-racked coastal areas or immediately 
adjacent to rivers. What we are finding is that there can be flash 
floods in deserts. We are seeing throughout a four-state region now the 
havoc that can be wreaked given torrential rain, having the ground 
soaked, having development that has taken away the natural absorptive 
capacity as wetlands disappear. This is an issue that everybody needs 
to be concerned about.
  I appreciate the words of the gentleman from Massachusetts, the 
ranking member of the Financial Services Committee, who has been 
focusing in a laser-like fashion, on these issues, along with the 
Chair, Mr. Oxley. We are seeing more progress that has been made in 
this area in the last 3 years, frankly, than we saw with the late Hale 
and Lindy Boggs, when the program was first set up. And it is 
important.
  We are talking about areas now in the aftermath of Katrina where 
people understand, for the first time, the

[[Page 12709]]

issues. The rule that has been offered up, one where we are going to 
have a number of amendments in order, which is going to permit an 
opportunity for us to deal with some serious legislation to try and 
teach one another about this issue, and to make it better over the long 
term.
  One of the fundamental issues that is going to come up throughout the 
rules that are before us is who is going to be subsidized under this 
program. There are those who feel that, well, frankly, we shouldn't 
rigorously impose the flood insurance program. We shouldn't try to 
expand the net for people that are involved. We shouldn't make sure 
that people have flood insurance.
  Well, frankly, I think history has shown in the last year that we do 
people no favors by not having an effective flood insurance program, by 
not helping people prepare; indeed, to the contrary. What we are doing 
is we are encouraging more people to be in harm's way. We are allowing 
some people to avoid flood insurance, and we are shifting the burden on 
those who are responsible flood insurance policy-holders.
  If we are able to avoid a single 10% unnecessary rate increase, this 
ripples across to save $150 to $200 million for 4 million policy-
holders. It is a savings that is compounded over time. So it is $150 to 
$200 million each and every year.
  Now, part of the problem of having people who should have flood 
insurance avoid that responsibility, and we are finding that there are 
almost a half million properties, vacation homes, second homes, 
commercial properties, that don't have flood insurance. What that does 
is that transfers the burden to those that do. It artificially inflates 
the rate that others pay inequitably.
  In addition, it poses a problem because those people that don't have 
flood insurance that should, well, frankly, it tugs at our heart 
strings, and we come forward with aid to try and help people after the 
fact. We are spending billions of dollars that could have been avoided 
if we had been dealing with an effective flood insurance program, and 
if we would have implemented some of the initiatives that we brought 
forward for mitigation to prevent flood damage in the first place.
  So, Madam Speaker, I appreciate the opportunity to be involved with 
the debate today. I join my colleague, Mr. Frank, in thanking the Rules 
Committee for allowing a full and vigorous debate. I hope we see more. 
This shouldn't be the exception. I hope it becomes a pattern.
  This is one of those issues that is not partisan. It is not 
geographical. It is not philosophical. It is one of the things that 
simply good government, hard legislating, will benefit from a full and 
vigorous debate on the floor of the House, and I look forward to being 
a part of it.
  Ms. MATSUI. Madam Speaker, I have no additional speakers, and I will 
proceed to close.
  Mr. SESSIONS. Madam Speaker, I have no further speakers. I reserve 
the balance of my time.
  Ms. MATSUI. Madam Speaker, I yield myself the balance of my time.
  Madam Speaker, this bill represents an incredible amount of 
collaboration between Chairman Baker and Ranking Member Frank.
  This is a very important bill. It makes reasonable changes to the 
flood insurance program. It will lay the foundation for a stronger, 
improved flood insurance program. I urge my colleagues to support the 
rule so that we can enact this important legislation.
  Madam Speaker, I yield back the balance of my time.
  Mr. SESSIONS. Madam Speaker, as you have heard today on the floor, 
this rule is fair; it is balanced. It is not an exception; it is a 
rule. And I appreciate the kind comments that have been made by my 
colleagues on both sides of the aisle about underlying legislation 
which will help improve the national flood insurance program.
  I want to thank Chairman Richard Baker from Louisiana and Chairman 
Mike Oxley from Ohio for their strong leadership on behalf of this 
great bill.
  Madam Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. Without objection, the Clerk will effect a 
technical correction in the engrossment of the resolution by inserting 
``the report of'' after ``printed in'' on page 2, line 9.
  There was no objection.

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