[Congressional Record (Bound Edition), Volume 153 (2007), Part 18]
[House]
[Pages 25733-25773]
[From the U.S. Government Publishing Office, www.gpo.gov]




          FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2007

  The SPEAKER pro tempore. Pursuant to House Resolution 683 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 3121.

                              {time}  1253


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 3121) to restore the financial solvency of the national flood 
insurance program and to provide for such program to make available 
multiperil coverage for damage resulting from windstorms and floods, 
and for other purposes, with Mr. Costa in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Massachusetts (Mr. Frank) and the gentlewoman from 
West Virginia (Mrs. Capito) each will control 30 minutes.
  The Chair recognizes the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, preliminarily, I recognize 
myself for 1 minute just to say that I want to be very clear that I 
regret the decision not to allow a number of amendments offered by 
members of the minority to this bill. And I will give them my word that 
as this legislative process goes forward, I intend to seek out 
opportunities to give them fair consideration.
  I must say, Mr. Chairman, I'm never happy when I see my colleagues on 
the Republican side being a little obstreperous, but when they're being 
obstreperous with good reason, I really find that hard to tolerate. So 
I did want to make clear my view and my hope that we can deal with 
that.
  Mr. Chairman, I yield such time as she may consume to the Chair of 
the Subcommittee on Housing, from which this bill came forward, who has 
done a great job all year on this legislation, the gentlewoman from 
California.
  Ms. WATERS. Mr. Chairman and Members, I rise in strong support of 
H.R. 3121, the Flood Insurance Reform and Modernization Act of 2007. 
And I would like to thank my colleague from Mississippi, Mr. Gene 
Taylor, for all of the work that he has put into this issue and the way 
that he helped to focus my committee and the overall Financial Services 
Committee on this very issue.
  He will be speaking today. And I don't think there is anybody who can 
describe what happened as a result of Hurricanes Katrina and Rita and 
Wilma and what happened in the gulf coast, in particular, his district, 
any better than Mr. Taylor will do. And by the time he finishes his 
presentation here today, I think all of the Members will very well 
understand why it is so necessary that we move with a real reform bill 
to deal with these kinds of catastrophes.
  As you know, I introduced a bill on July 19, 2007, following 
substantial consideration by the Financial Services Committee on flood 
insurance and related issues. Specifically, the committee held two 
hearings on June 12, one examining the issues of the national flood 
insurance program raised by the gulf coast hurricanes, and a second 
hearing on the predecessor to this bill, H.R. 1682, introduced by 
Chairman Frank. Thereafter, on July 17, the committee held a hearing on 
related legislation, H.R. 920, the Multiple Peril Insurance Act of 
2007, that was introduced by Mr. Taylor.
  H.R. 3121 reflects this extensive committee analysis on the NFIP, 
wind insurance and related issues. Accordingly, on July 26, 2007, the 
Financial Services Committee reported out H.R. 3121 with a favorable 
recommendation. I hope that we're able to pass H.R. 3121 today because 
it makes critical improvements to the NFIP in light of the devastating 
lessons of the 2005 hurricane season.
  In the aftermath of Hurricanes Katrina, Rita and Wilma, NFIP faced 
unprecedented financial and regulatory strains as it confronted 
approximately $21.9 billion in NFIP-insured losses. The program had to 
borrow in excess of $17.5 billion from the United States Treasury in 
order to pay claims and interest resulting from Hurricane Katrina 
alone.
  Those of us concerned about NFIP in the wake of the 2005 storms saw 
the urgent need to put the program on sounder financial footing by 
addressing the issues stakeholders had raised around the substantial 
premium discounts and cross-subsidies among classes of its 
policyholders, outdated flood insurance rate maps, allegations of 
uneven compliance with mandatory purchase requirements, and questions 
as to the performance and efficiency of private insurers operating 
under the NFIP's Write Your Own program.
  Additionally, the committee hearing on H.R. 920, the Multiple Peril 
Insurance Act of 2007, made it clear the need to address perverse 
incentives created by dual government and private insurance regimes 
when damage can be a result of wind and flood. I'm proud to say that 
H.R. 3121 prudently addresses these concerns.
  Specifically, the bill would increase NFIP's borrowing authority to 
$21.5 billion from $20.8 billion, but require that it satisfy 
traditional criteria for actuarial soundness by phasing out discounted 
premiums; allow the Federal Emergency Management Agency, that is, FEMA, 
to increase flood policy rates by 15 percent a year, up from 10 
percent; raise civil penalties on federally regulated lenders who fail 
to enforce mandatory purchase of flood insurance for mortgage holders; 
increase program participation incentives; encourage the revisions to 
flood maps; and starting in mid-2008, allow for the purchase of 
optional insurance for wind as well as water damage.
  These reforms are desperately needed because, as we have seen, storms 
will become stronger and more intense. We need a program that can 
contend with the worst that Mother Nature can throw at us. Simply put, 
we cannot wait and let another hurricane season pass without putting 
the National Flood Insurance Program on solid footing.
  I would urge my colleagues to support H.R. 3121, the Flood Insurance 
Reform and Modernization Act of 2007.
  And I thank you so very much, Mr. Chairman, for all of the time that 
you have put in trying to make us very credible as we relate to these 
reforms by not only giving us the leadership, but allowing us to hold 
the hearings that are so necessary to get the information that is so 
desperately needed to do this.
  Mrs. CAPITO. Mr. Chairman, I yield myself as much time as I may 
consume.
  Mr. Chairman, floods are amongst the most frequent and costly 
national disasters in terms of human hardship and economic loss. In 
fact, 75 percent of Federal disaster declarations are related to 
flooding.
  Before I discuss the merits of the legislation, I would like to talk 
briefly about the process that is being considered. We are debating a 
huge expansion of an already struggling existing Federal program, and 
yet we have not been able to have our amendments out on the floor to 
have an open and frank discussion about this.
  I would like to accept the chairman's offer to continue to work on 
the amendments that were not allowed to be offered, and I hope that we 
can see democracy being served by letting everybody's voice be heard.

                              {time}  1300

  In 1968, Congress established the National Flood Insurance Program, 
NFIP. The program is a partnership between the Federal Government and 
participating communities. If a community adopts and enforces a 
floodplain management ordinance to reduce future flood risk to new 
construction, the Federal Government will make flood

[[Page 25734]]

insurance available to that community. Today, NFIP is the largest 
single-line property insurer in the Nation, serving nearly 20,000 
communities and providing flood insurance coverage for 5.4 million 
consumers.
  Mr. Chairman, recent events have underscored the need to reform and 
modernize certain aspects of the program. While the NFIP is designed to 
be actuarially sound, it does not collect sufficient premiums to build 
up reserves for unexpected disasters. Due to the claims resulting from 
Hurricanes Katrina and Rita, the NFIP was forced to borrow $7.6 billion 
from the Treasury, an amount it estimates it will never be able to 
repay. Consequently, NFIP sits on the GAO's High-Risk Programs list, 
which recommends increased congressional oversight. Additionally, the 
2005 storms shed light on the problem of outdated flood maps, resulting 
in many homeowners in the gulf region being unaware that their homes 
were located in floodplains.
  To address these and other concerns in 2006, the House overwhelmingly 
passed flood insurance reform legislation. Earlier this year, Chairman 
Frank and Representative Judy Biggert introduced legislation identical 
to that bipartisan bill. That bill includes many reforms, including the 
phasing in of actuarial rates, but unfortunately, the flood insurance 
bill that the majority chose to move out of the Financial Services 
Committee was amended to incorporate legislation offered by the 
gentleman from Mississippi (Mr. Taylor) which expands the NFIP to 
include coverage for wind events.
  Mr. Chairman, no Member of this House was more personally affected by 
the 2005 hurricanes than Congressman Taylor. I do not, and no one 
questions his sincerity or his commitment to assisting those who have 
lost everything they owned in these storms. While I share his concern 
over the rising costs and outright unavailability of homeowners' wind 
coverage in some areas, I have three principal objections to linking 
wind insurance to the reform of the National Flood Insurance Program.
  First, expanding the program increases liabilities for taxpayers 
while decreasing options for customers or consumers. Properties located 
along the eastern seaboard and gulf coast represent $19 trillion of 
insured value. Shifting the risk on even a portion of these properties 
to the troubled NFIP could expose taxpayers to massive losses. The fact 
is that insurance will choose not to engage a competitor that does not 
pay taxes, has subsidized borrowing costs, and is not required to build 
a reserve surplus and is protected from most lawsuits, State regulation 
and enforcement.
  Second, adding wind coverage to the NFIP will exacerbate the 
program's well-documented administrative problems. Both the Department 
of Homeland Security and GAO have criticized the NFIP for being 
understaffed, not having adequate flood maps and not collecting 
sufficient information on wind payments when claims were submitted for 
flood damage. Expanding the portfolio further before much-needed 
reforms are in place is premature.
  Third, no consensus yet exists about the necessity or desirability of 
creating a Federal wind insurance program. In testimony before our 
committee, representatives of flood management groups, the insurance 
industry, environmental organizations, Treasury and FEMA all expressed 
agreement that a comprehensive study of the proposed wind insurance 
mandate should first be commissioned to provide Congress with a better 
understanding of the possible implications this expansion could have 
for consumers, NFIP and the market.
  Mr. Chairman, we must not let the desire to meet every perceived 
problem with a new Government program drive us towards premature 
actions that yield unwanted consequences. The NFIP's mission should not 
be expanded, exposing taxpayers to massive new risks, until reforms are 
in place and adequate study has been conducted.
  In addition to the above reservations, I have serious concerns with 
the effect the addition of wind coverage will have on communities that 
are now relying on NFIP. This program is already financially unstable, 
yet we are about to add $19 trillion of risk. Despite this fiscal 
instability, States like West Virginia, that I represent, will still 
rely on the program to provide assistance in the case of serious 
flooding. There have not been major problems this year, thankfully, but 
as recently as 2001, FEMA has declared counties in my State national 
disasters due to flooding and provided $17 million in assistance. These 
are serious needs across the Nation for the flood insurance program. We 
should be modernizing NFIP so it can become financially stable.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, I agree that we should have had an amendment that would 
have allowed us to debate whether or not to strike the wind addition. I 
would have vigorously defended it as I will do now.
  The problem is that we now give the insured and the people who 
administer insurance an impossible task. It is to evacuate a home on 
the notice of a hurricane and to return to that home some period of 
time later after there has been devastation from a hurricane and decide 
with some degree of certainty what damage was caused by water and what 
by wind, because the Federal Flood Insurance Program protects against 
water damage. Wind damage is under the auspices of private companies. 
In some cases, of course, the same company would be involved, and some 
of the adjusters would have an interest in whether or not it was water 
versus wind. The more it was water, the less they would have to pay. 
But even aside from that conflict of interest, it is inherently 
difficult, in fact impossible, to decide, if you go back and there is 
all this devastation, was it the wind that blew the roof off? Was it 
the flood that did it? Was the window broken by a wind-driven 
projectile? It is impossible to tell. We give people this impossible 
decision.
  Now, the way the wind program works under the bill, in the first 
place, it is not a complete expansion. You only would be eligible to 
buy wind insurance if you already have flood insurance. It will lead to 
no new insureds. That has to be very clear. No one who is not now 
taking out insurance, not just eligible, but taking out insurance, will 
be allowed to take this out, because it can only be an adjunct to your 
water policy. It is aimed at trying to avoid having this impossible 
arbitration between wind and water damage.
  Secondly, and CBO scores it this way, it is subject to PAYGO. The 
mandate in the legislation is that it has to be actuarially sound. And 
people have said, well, the previous flood insurance program wasn't 
actuarially sound. True. It wasn't subjected to that statutory mandate. 
It wasn't subject to PAYGO.
  We have in here language that mandates that the wind coverage be 
actuarially sound. CBO has certified, and as Members know, we don't 
always get from CBO what we think is the right answer, but in this 
case, CBO has certified that this meets PAYGO and that wind will be 
there.
  So what we are saying is that if you already have water and you are 
in an area where you are likely to have a combination of wind and 
water, we will allow you to buy wind as an adjunct so that, and you 
will have to pay the going rate for it, the actuarially sound rate, but 
then you will avoid this terrible, intractable problem of arbitrating 
wind versus water.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. CAPITO. I yield 4 minutes to one of the original authors of the 
bill that was presented initially to this Congress, the gentlewoman 
from Illinois, Representative Judy Biggert.
  Mrs. BIGGERT. Mr. Chairman, I would like to express congratulations 
to the ranking member on her taking over as the ranking member of the 
Housing Subcommittee.
  Mr. Chairman, I have always known Chairman Frank to never shy away 
from a debate. I appreciate his acknowledgement that he would have 
liked to have had the opportunity to

[[Page 25735]]

debate the amendments that were not made in order. I know how concerned 
he was about that and it shows by his vote on the floor. So I really 
appreciate that. He has always been ready, willing and able to know 
what the opposition is and their concerns and to debate that.
  Mr. Chairman, Chairman Frank and I did introduce H.R. 1682 earlier. 
That was the Flood Insurance Reform and Modernization Act of 2007. That 
was to address the much-needed reforms to NFIP, the Nation's largest 
single-line property insurance provider. Unfortunately, the legislation 
before us today, I think, jeopardizes our commitment to enact these 
reforms because it does couple H.R. 1682 with H.R. 920, which is 
Representative Taylor's bill. We all know how sincere he is about this 
much-needed reform. But it does add wind to the National Flood 
Insurance Program. I really am concerned about this.
  We had several hearings. Witness after witness testified that adding 
wind to the flood insurance program was not a good idea. At one of the 
hearings, adding wind to NFIP, the National Association of Insurance 
Commissioners, the insurance experts, environmental groups, floodplain 
management groups, the Treasury and FEMA all were opposed to such an 
expansion.
  In previous Congresses, flood modernization bills virtually identical 
to H.R. 1682, the Frank-Biggert bill, enjoyed broad, bipartisan 
support. During the last Congress, the Financial Services Committee 
considered H.R. 4973, the Act of 2006, which the House passed by a vote 
of 416-4 on June 27, 2006.
  But instead of embracing this approach and the recent track record of 
bipartisanship on NFIP, the other side of the aisle has chosen to 
introduce this new bill and include language that I think really 
threatens the passage of necessary reforms to the program. I am 
disappointed by this action. NFIP needs reform now, not a controversy 
and costly program expansion.
  For the majority of its 39-year history, NFIP has been a self-funding 
program. However, flood insurance claims from the 2005 hurricane season 
have grown to almost $18 billion, a total greater than all the claims 
from all the other years combined. Unless the NFIP program is reformed 
soon, the program will face insolvency. In January, the GAO placed the 
flood insurance program on its High-Risk Series list, which recommends 
increased congressional oversight for troubled programs.
  So, Mr. Chairman, it is clear that NFIP reform is needed now. 
Therefore, before expanding the NFIP program to include wind, we should 
keep our commitment to reform NFIP and move H.R. 1682 instead of the 
bill before us today. The administration has said that if the wind 
provision is included in this bill, the President will veto it. So 
adding wind, really, to me, is a poison pill to the flood insurance 
reform bill and is compromising our efforts to enact much-needed 
bipartisan reform of the National Flood Insurance Program.
  Mr. FRANK of Massachusetts. I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the representative 
from Illinois (Mr. Roskam), a member of the Financial Services 
Committee.
  Mr. ROSKAM. I thank the gentlewoman for yielding.
  Mr. Chairman, have you ever walked by a construction site? When they 
are putting up big buildings, it is really a sight to behold. And you 
look down at the foundation upon which they are building. If they are 
building the house right, they are putting it on a foundation of 
absolute bedrock. As you are watching them put it together, they are 
bringing in large pieces of concrete and steel. They are putting it 
down ever so slowly, ever so slowly, because when they finally put it 
down on the foundation, it is not going to move again. That is why they 
are very, very careful.
  I think today we are missing an opportunity to build on a solid 
foundation. We have an opportunity to fix a failed and struggling 
program, and that is the National Flood Insurance Program. That is not 
bedrock. It is peat moss. It is very, very soft stuff. It has an $18 
billion liability right now.
  Unfortunately, rather than dealing with the flood component, what is 
happening is that an additional liability is being placed on a program 
that doesn't have a solid foundation. We are giving additional 
responsibility in this bill to FEMA without any substantive reforms of 
FEMA. I know that over the past years, FEMA has been subject to and 
receives a great deal of criticism with the way in which it conducted 
itself following Hurricanes Katrina and Rita.

                              {time}  1315

  I think that the lost opportunity here is a sad thing. The vast 
majority, not the overwhelming majority, but the vast majority of 
claims have been settled in the previous conflict, and now here we have 
got the chance to fix the flood program. My district wants a flood 
program that is dynamic and vibrant and solvent and based on a good 
foundation.
  As was previously mentioned, the GAO has put the NFIP on a watch 
list, and yet we are entrusting the NFIP with the new responsibility. 
That we ought not do.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield such time as he may 
consume to the gentleman from Mississippi (Mr. Taylor).
  Mr. TAYLOR. I want to thank Chairman Frank, Chairwoman Waters, 
Chairman Mel Watt, the Democratic members of the Financial Services 
Committee for bringing this incredibly important bill to the floor.
  Mr. Chairman, a little over 2 years ago, the Nation's worst disaster 
hit a number of places, including the district I have the privilege of 
representing. An unprecedented number of homes were destroyed, 
including my own. As the crow flies between my house and Senator Lott's 
house is 40 miles. As inconceivable as it may be, in that 40 miles 
between our houses, only a handful of houses within several blocks of 
the Gulf of Mexico remained.
  A number of things occurred after that storm, most of them good. 
People in south Mississippi pulled together. They did what they could 
to take care of themselves. People from all over America came to our 
assistance. Congressman Gilchrest's district raised something in the 
neighborhood of $40,000 to $50,000 for the people of my district, as 
well as the people of St. Mary's County. There are so many of these 
things, that I can't enumerate them all. The people of St. Mary's 
County sent down three truckloads of Christmas presents to kids who 
lost everything.
  To this day, there are still young volunteers and not-so-young 
volunteers from all over the country who come down there trying to help 
people rebuild their lives. About the only group that didn't try to 
help the people of south Mississippi is the insurance industry. You 
see, within days of the storm, the insurance industry issued a memo to 
their employees that said whenever wind and water occur concurrently, 
blame it all on the water.
  Mr. Chairman, the United States Navy has modeled what happened that 
day in Mississippi, and the United States Navy tells us that for 4 to 5 
hours in south Mississippi we had hurricane force winds before the 
water ever got there.
  Under the National Write Your Own program, we count on the private 
sector for two things: we count on them to sell the policy, and that 
way our Nation does not have the administrative expense of having a 
sales force. But we also count on them to adjudicate the claim fairly. 
Those things that are wind, say the wind did it, and they have to pay. 
Those things that are attributed to water, you can blame it on the 
flood insurance, and the Nation pays.
  Within days of the storm, State Farm and other companies had issued 
the following e-mails to their employees: Where wind acts concurrently 
with flooding to cause damage to the insured property, coverage for the 
loss exists only under flood coverage.
  So, on one hand, they have a contract with the Nation that says we 
are going to pay if it's wind damage, the Nation is going to pay if 
it's flood damage. They get to adjust the claim. We don't

[[Page 25736]]

have a Federal employee following them around. The total discretion to 
make this claim is with the private sector.
  Put yourself in the position of that 25-year-old claims adjuster. 
You're looking for your Christmas bonus; you're hoping for a promotion. 
You can walk on that property and say what is fair, that, yeah, there 
was wind and there was water, or you can be a company man and you can 
follow the memo from company headquarters and blame it all on the water 
and stick the taxpayer with the bill. That is not fair to the taxpayer 
right off the bat, and it's not fair to the citizens.
  Let me further clarify this, and I have kind of become an expert at 
it the hard way. Every homeowner's policy has something in it called 
``Cost of Living Expenses,'' and that is if your home burns down 
tonight, and you have got a homeowners policy, they will pay to put you 
up until they fix your house. But if they deny the claim, they don't 
put you up.
  The President came down shortly after the storm and said, you know 
what, if you have lost your house, or if your house is substantially 
damaged, we are going to get you a trailer to live in. They assigned, 
just in south Mississippi, 42,000 trailers; one for every family of 
five, $16,000 per trailer.
  Then they gave another contract to an outfit called Bechtel to haul 
those trailers the last 70 miles, from a place called Purvis, 
Mississippi, down to the site where a home was, hook it up to a garden 
hose, plug it in, hook it up to the sewer tap. It worked out where that 
company got another $16,000 just for doing the very simple thing that 
grandmoms and grandpops and moms and dads do every weekend, which is 
called hooking up a travel trailer.
  We are now up to $32,000 per trailer, times 42,000 times, because 
they decided they weren't going to pay on their homeowners claims, that 
the Nation would pay. Now, you can come to this floor and defend that, 
but I don't think you can.
  So the individual who had a homeowners policy, because if you live in 
hurricane country, and this has happened three times in my lifetime, 
it's the only time I lost my house, but three times in my lifetime I 
have seen terrible storms. You don't know if it's going to be more wind 
than water or more water than wind. So you buy both policies, with the 
idea if I get flooded, I've got a flood policy. If it's wind tearing my 
roof off, I've got a wind policy. You have both.
  As the chairman pointed out, our Nation spends a fortune to have 
hurricane hunters fly into these storms. Our Nation spends a fortune to 
put satellites that track storms into space. Why do they do that? To 
give people warning so that they don't die in the storm. Our sheriffs 
departments and police chiefs did a wonderful job: get the heck out of 
here, this is going to be a bad storm. So the logical people and the 
people who weren't hard-headed got the heck out of there. We lost a 
rocket scientist. I am certainly not going to say that man was dumb, 
but he built what he thought was a hurricane-proof house. He died in 
that hurricane-proof house.
  The point is that the few folks who stayed behind almost all died, 
but the few folks who stayed behind had their claims paid because they 
could sign an affidavit and say I saw my roof fly off before the water 
got there, I saw my windows fly in. And, by the way, I was 10 miles 
inland that day and the windows in my brother's house flew in. The 
insurance companies paid wind claims in all 82 counties of Mississippi, 
all the way to Memphis, Tennessee; but they are somehow trying to 
convince this Congress that the wind somehow miraculously leap-frogged 
over the coast and they shouldn't have had to pay where it hit first.
  Mr. Chairman, what we are trying to do with this is tell the people 
of America, the 52 percent of the people that live in coastal America, 
that if you build the house the way you should, if you pay your 
premiums, if you buy this additional coverage, if your house is 
destroyed in the course of a hurricane or substantially damaged in the 
course of a hurricane, you don't have to be there with a video camera 
to record whether it's wind or whether it's water. You paid your 
premium, you built it right, you are going to get paid.
  One of the gentlemen mentioned that the insurance companies have 
settled 90-something percent of the claims. Let me address that.
  I was pretty busy, as you might guess, after the storm. I put off 
meeting with my adjuster for 2 weeks. By the time I met with my 
adjuster, I had heard dozens, if not hundreds, of my constituents as I 
am going around passing out MREs, told me, ``They already told me they 
are not going to pay me. I had a homeowners policy. They are not going 
to pay me.''
  So by the time they came to my house, I asked my agent, Please don't 
say a word. Each one of my steps is about 3 feet. Let's just count the 
steps until we find my roof. We paced off about 150 of them, 450 feet. 
I showed them my roof and pointed out it was tin. I reminded them that 
tin doesn't float. I showed them the holes where it had been ripped 
through the bolts.
  I said, This is my roof. I am the only guy in this neighborhood that 
has this style roof. This is my roof, and it is 450 feet from where my 
house used to be. Now let's walk back to where my house used to be. 
Miss, what do you have to say? This to the claims adjuster.
  The first words out of her mouth, I see no evidence of wind damage. 
We are, however, prepared to pay your flood claim. To which I reminded 
her that was very sweet of State Farm. That is not their money; that is 
the Nation's money. What about the claim for that roof that flew over 
there?
  What we are trying to do with this is prevent the need for my 
constituents, your constituents, anyone who lives in coastal America, 
to have to stay behind with a video camera to record the destruction 
and possibly die with these claims. If you build it right, if you pay 
your premiums, then you get paid. Pretty simple. Under the PAYGO rules 
of this House, it will pay for itself. It has to. It is written in the 
law.
  Lastly, we quit putting the insurance companies in a position where 
they can bilk the taxpayers for billions of dollars. What some of you 
may not know, something I will be entirely grateful for, is because so 
many homeowners claims weren't paid in south Mississippi of people who 
lived outside the floodplain, who had homeowners insurance but didn't 
get paid, in one of the appropriations bills after Katrina, $4 billion 
in taxpayer dollars was included to pay those people's insurance 
claims. The taxpayers paid for what State Farm, Nationwide, and 
Allstate should have paid.
  So when people say this is some sort of raid on the Treasury, I see 
it as just the opposite. This is creating a program where the Nation 
won't have to ride to the rescue next time because people will have 
bought insurance ahead of time, in a program that pays for itself, in a 
program that says if you built it right, if you pay your premiums, an 
act of God destroys your house, you are going to get paid.
  I can't think of anything that is more fiscally responsible. I can't 
think of anything that is more right for the citizens. And I would 
remind my colleagues that the National Association of Homebuilders, the 
National Association of Realtors, and the National Association of 
Bankers, when given the opportunity to look at this bill in its 
totality, have endorsed this bill as it is written, including the wind 
versus water language to allow people to buy all-perils insurance.
  I thank the chairman for his leadership on this. No one can say they 
have been blindsided on this issue. The hearings on this issue began in 
January. The debate on this issue started the week after the storm. 
There has been ample opportunity for people to weigh in on this issue.
  I very much thank again the chairman, Ms. Waters, Mr. Mel Watt, for 
the opportunity to bring this to the floor and the opportunity to right 
an egregious wrong against the American people.
  Lastly, I would like to remind people that even with Katrina, the 
insurance industry made $42 billion in profits the year of Katrina. So 
while they are simultaneously telling their employees, don't pay the 
individual, while they are

[[Page 25737]]

sticking the bill to the citizen, if you have any doubt in your mind 
why flood insurance lost so much money, it is because they made so much 
money that year. We are trying to correct that. I hope you will help 
us.
  Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from 
South Carolina (Mr. Barrett).
  Mr. BARRETT of South Carolina. I thank the gentlewoman for yielding.
  Mr. Chairman, I appreciate that many homeowners around the country 
require affordable insurance against natural disasters. However, I also 
know that the Federal Government cannot afford spending at the 
excessive levels we are spending at. By expanding the National Flood 
Insurance Program, the NFIP, H.R. 3121 would put the Federal Government 
on the hook for even more billions of dollars.
  Coming from a State prone to hurricanes, I am sensitive to those 
needs and to those who live in high-risk areas for natural disasters. 
But it would be irresponsible for the Federal Government to expand its 
program without fully understanding the repercussions. Unfortunately, 
many Americans will likely once again find themselves affected by 
devastating natural catastrophes such as hurricanes. The NFIP already 
owes the Department of Treasury around $18 billion, and it is unlikely 
that they will ever be able to repay this amount; $18 billion.
  So should we now increase the NFIP's exposure, thus increasing the 
Federal Government's liability, by expanding this program to include 
wind insurance? To do so would be unfair to the taxpayers who would be 
stuck with this bill, Mr. Chairman.

                              {time}  1330

  Expanding this already distressed program will increase the Federal 
Government's liability, and will almost definitely increase government 
spending on a huge scale while crowding out private insurance markets.
  Therefore, I urge my colleagues to join me in voting against H.R. 
3121, the Flood Insurance Reform and Modernization Act.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 4 minutes to the 
gentleman from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Chairman, I thank the gentleman for yielding me 
this time and permitting me to speak, and for the hard work he and his 
committee have invested in this.
  Mr. Chairman, the area of flood insurance is one that I have been 
focusing on over the last half dozen years. I was pleased to work with 
our former colleague, Doug Bereuter, with Chairman Frank and with then-
Chairman Oxley on some serious flood insurance reform that predated the 
most recent disaster with Katrina. During that time, I had a chance to 
learn a lot about opportunities that the Federal Government has to 
alter its programs and policies to reduce this long-term exposure, and 
to think about the redesign of the partnership between the private 
sector, the State and local governments.
  While I appreciate my friend from Mississippi's tenacity in zeroing 
in on an area of very serious problem dealing with wind damage, and he 
has documented in great detail the almost impossible situation that 
many of his constituents and others in the Hurricane Katrina area have 
faced, I am trying to keep an open mind in terms of how far we go along 
the lines in terms of expanding it to add wind damage.
  I don't think that we have seen the end of this process. I am looking 
forward to working with my colleague on the legislative process as it 
moves along. I am deeply concerned that we haven't come to grips with 
the financing of our flood insurance program. We are looking at upwards 
of $20 billion, and we are slowly having some actuarial balance added 
to these programs; but, it still lags. Not only is there a problem of 
not having actuarial balance to be able to provide the sums that are 
necessary to maintain this as a self-supporting program, because as it 
stands now, that is going to be a stretch. It is going to take a long 
time without serious incident for us to get there.
  I am also concerned that we need to do a better job of making sure 
that the Federal Government and State and local governments aren't 
putting more people in harm's way. In too many areas we have seen that 
there has been, shall we say, reluctance on the part of local 
authorities and State authorities to be rigorous in making sure that we 
are not pouring large sums of public investment in areas where it is 
encouraging people to locate in places where we know there is going to 
be damage over time.
  Last but not least, later in this debate we will be talking about 
working with FEMA to make some adjustments to take into account global 
warming, climate change and rising sea levels, because this is an area 
that is going to compound lax local land use controls and unsteady 
development processes that is going to end up creating a disaster out 
of our disaster relief.
  I can't say enough about how much I appreciate the committee's 
willingness to be involved in an area that some think is esoteric, that 
is sort of mundane, that is sort of too detailed and unexciting. But it 
is precisely that sort of attention that is going to make us have a 
stronger program that is going to meet the needs of people and is going 
to do so in a way that actually helps keep people out of harm's way, 
which ought to be our ultimate objective.
  We ought to make sure that all of these forces save money, save lives 
and protects the environment. I think this legislation moves in that 
direction. I look forward to working with the committee as this 
legislation works its way through the legislative process to better 
achieve that goal.
  Mrs. CAPITO. Mr. Chairman, it is my pleasure to yield 3 minutes to 
the gentlewoman from Florida (Mrs. Ginny Brown-Waite).
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield an additional 
minute to the gentlewoman from Florida.
  Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, I thank the 
gentlewoman for yielding me this time.
  I rise to engage my good friend Chairman Frank in a colloquy 
concerning the bill.
  Mr. Frank, as you recall during the committee process before we 
actually marked up H.R. 3121, my Florida colleagues and I raised some 
serious questions and concerns over expanding the flood program to 
cover wind. We are concerned that while this expansion may help some in 
areas of the United States, we were uncertain whether it would hinder 
some States like Florida that tend to be excluded from the national 
insurance market.
  You will remember Representatives Feeney, Putnam and I introduced an 
amendment that struck the provisions expanding NFIP to cover wind 
losses. The amendment put a GAO study in its place to give members in 
the department time to vet this issue further. Unfortunately, the 
amendment did not pass the committee, but you and I asked for a GAO 
study very similar to the one included in the amendment.
  You and I have worked closely on issues in the past, and I know that 
you are a man of your word and you have always given those of us with 
differing thoughts an opportunity for ample discussion and 
consideration.
  I am hoping today to get your word that when the GAO study is 
released in April, that the committee and the regulators will take into 
serious consideration their findings. For example, some of the 
questions we asked were whether consumers would be able to purchase 
wind and flood policies at sound, actuarial rates; whether FEMA had 
staff available and was prepared to administer such an expansion; and 
how much an expansion of this nature would expose taxpayers to future 
losses. Those and other questions that were posed, they are tough 
questions that GAO will be responding to.
  But I hope I have your commitment that the Committee on Financial 
Services members who support an expansion and the regulators listen and 
respect the findings, regardless of the outcome. I would ask for that 
commitment, Mr. Chairman.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentlewoman yield?
  Ms. GINNY BROWN-WAITE of Florida. I yield to the gentleman from 
Massachusetts.

[[Page 25738]]


  Mr. FRANK of Massachusetts. I must say, Mr. Chairman, the gentlewoman 
asks for my word, and I am tempted to assume a cultural pose which I 
haven't always had and simply say, ``Word.'' But I am not sure that is 
still in vogue. I'm sometimes behind in my fashionableness.
  I will say this to the gentlewoman; she has been very constructive 
and we have been able to work together on this and other matters, 
including on the most recent legislation involving floods. Certainly I 
will do everything I can to see that this is given very serious 
consideration.
  Now I should add, the recommendations may mean a curtailment of the 
program or an adjustment of the program. If the argument is that FEMA 
is not well structured, the response might be to try to improve the 
structure of FEMA. But I take this report very seriously. So she has my 
word that we will take this very, very seriously. In fact, I would say 
when we get the report, the first thing we will do will be to have a 
hearing on it and then go from there.
  Ms. GINNY BROWN-WAITE of Florida. I look forward to continuing this 
ongoing work relating to the NFIP program.
  Mr. FRANK of Massachusetts. Mr. Chairman, I have no further requests 
for time, and so I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to Mr. Gilchrest from 
Maryland.
  Mr. GILCHREST. Mr. Chairman, I thank the gentlewoman for yielding, 
and thank Members on both sides and staff for working on this vital 
issue.
  I want to take a minute or two to tell the Members that there will be 
an amendment coming up during the amendment process offered by Mr. 
Blumenauer and myself to deal more effectively with how the Federal 
Government determines taking into consideration future effects of 
climate change on the American taxpayer and homeowners. I would urge 
all of my colleagues to vote for the amendment.
  The amendment does basically two things: Are we, as a Federal 
Government, providing incentives to put more people in harm's way in 
coastal areas and are we adding cost to the Federal taxpayers as a 
result of that; and are we incentivizing ecological degradation?
  I say that because there are maps on coastal areas and there are maps 
on flooding and there are maps on predicting storms that are all based 
on history. Nothing is projected into the future with an understanding 
of what global warming is going to do.
  Let me tell you how it has impacted my district in the Chesapeake 
Bay. Poplar Island for decades was a popular place for many people in 
Maryland, including Presidents of the United States. It was 1,500 
acres. It is now 5 acres as a result of sea level rise. We are now 
restoring that island with dredged material.
  Holland Island, 350 people lived on Holland Island. It was 5 miles 
long and a mile and a half wide. It is down to 100 acres today, and 
nobody lives on Holland Island.
  Barren Island was 582 acres. It is down to 120 acres now.
  Areas in my district, Blackwater Refuge, for example, in Dorchester 
County, loses 120 acres a year due to sea level rise and exacerbated 
erosion problems.
  It is not taken into consideration by the Federal Government, by 
FEMA, or anybody else, to project those natural causes that are 
occurring right now. In the Chesapeake Bay, sea level used to rise 3 
feet every 1,000 years. In the last 100 years, it has risen a foot and 
a half. It is important for us to take these things into consideration.
  I urge Members' vote on Mr. Blumenauer's amendment when we come to 
that point in the debate.
  Mrs. CAPITO. Mr. Chairman, I yield 3 minutes to the gentleman from 
Texas (Mr. Hensarling), a member of the Financial Services Committee.
  Mr. HENSARLING. Mr. Chairman, I thank the gentlewoman for yielding me 
this time.
  I listened very carefully to the gentleman from Mississippi, and he 
may recall that I went to his hometown and I saw what was left of his 
home. I saw that devastation and I spoke to those people firsthand.
  Although my family didn't feel quite that devastation, my in-laws 
lived in New Orleans and their home was severely damaged in Hurricane 
Katrina. My father-in-law was in the New Orleans Convention Center when 
all of the violence broke out. That is something that my family knows 
about, so I know there has been a lot of pain in that community. And I 
have no doubt that the Federal Government, which has already rendered 
over $100 billion of taxpayer aid, can do more good; but I fear, I fear 
this is not the solution.
  Now I look at the legislation and I understand it is designed to be 
actuarially sound. I understand that the taxpayers aren't supposed to 
have to pay more. I understand that factory worker in Mesquite, Texas, 
in my district, who generously gave to help fellow Americans in their 
time of need, he has come to me and said, ``Congressman, I want to be 
helpful, but tell me we don't have to do this again.''
  Congress can't outlaw hurricanes, but what do we do to make sure that 
he doesn't have to pay again.
  So now we have a program that is not actuarially sound. It was 
designed to be, but it is not. So on the coverages that we have, and I 
will admit under the chairman's leadership there have been a number of 
reforms put into the program that I support, but we are increasing 
coverages. We are upping coverages. We are adding wind on top of a 
program that already owes the taxpayer $20 billion that they have no 
way to pay for whatsoever.
  I would note, we had other insurance programs that were supposed to 
be financially sound: Social Security, which now is a long-term deficit 
of $8.9 trillion; Federal Pension Benefit Guaranty Corporation is 
supposed to be fiscally sound, running a deficit of $18 billion, off-
balance sheet liability of $73 billion. We have already talked about 
the National Flood Insurance Program, Federal crop insurance, Medicaid. 
I could go on and on.
  Mr. Chairman, I have no doubt again that the people on the gulf coast 
continue to be in need. But we were told a little earlier this week, I 
believe by our Speaker, this is supposed to the Congress of the child. 
Well, let's look at the future of our children. When you look at the 
spending of the Federal Government already, we know that Chairman 
Bernanke has said, ``Without early and meaningful action, the U.S. 
economy will be seriously weakened, with future generations bearing 
much of the cost.''

                              {time}  1345

  That's just with the government we have today. The GAO has said we're 
on the verge of being the first generation in America's history to 
leave the next generation with the lowest standard of living due to all 
of this spending. This program makes it worse. It must be rejected.
  The CHAIRMAN. The gentleman from Massachusetts has 3\1/2\ minutes 
remaining. The gentlewoman from West Virginia has 8 minutes remaining.
  Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from 
North Carolina (Mr. McHenry).
  Mr. McHENRY. Mr. Chairman, I thank my colleague from West Virginia 
for yielding. The ranking member is very generous with yielding.
  I want to thank the committee chairman, my colleague from 
Massachusetts, for having an open and fair process in the committee. We 
had a number of amendments through that whole process that were 
vigorously debated, and there was a lot of discussion about continuing 
that vigorous debate on the House floor to work out some compromises, 
and the committee Chair honors his word in committee. I want to thank 
him for that.
  Unfortunately, the Rules Committee did not allow these amendments to 
come forward to the House floor, and that is a great shame. I think the 
work product coming off this House floor will be less than it could 
have been had we had an open and fair process here on the House floor.
  It is obvious and true that the National Flood Insurance Program is 
already in deep trouble. It's $18 billion in

[[Page 25739]]

the hole. Since 1981, over the last 26 years, it's borrowed from the 
Treasury 14 times, $18 billion in the hole. Certainly it needs reform.
  I think the underlying reforms for flood insurance in this bill are 
appropriate and good, and I appreciate the chairman of the committee, 
and I appreciate my colleague from Massachusetts accepting my amendment 
in the committee that says that new and renewing multi-peril policies 
shouldn't be extended in a time when the National Flood Insurance 
Program is borrowing from the Treasury. I think that's proper, and I 
appreciate him accepting that in this bill.
  But overall, this addition of wind will actually step into the 
private sector and private market that is largely working and has 
largely worked for the last 100 years in this country. There have been 
a number of failures, and that is on occasion what happens; but with 
the private sector, it can be done on an actuarially sound basis.
  What we're doing under this bill by adding a wind proposal is 
exposing the taxpayers to tens of billions of dollars' worth of 
additional unfunded liabilities, and that's why I'm going to have to 
sadly vote against this bill.
  I urge my colleagues to vote ``no.''
  Mrs. CAPITO. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from Georgia (Mr. Kingston).
  Mr. KINGSTON. Mr. Chairman, I thank the gentlewoman for yielding the 
time, and I want to talk a little bit about my own background.
  I was in the insurance business for 13 years, worked strictly on 
commission. I was a broker, which meant I worked for the buyer, helping 
them find the best quality insurance in the insurance marketplace. I 
also represent the entire coast of the State of Georgia. I've been 
involved in flood insurance and wind storm insurance and fire insurance 
a great deal of my adult life. So I'm very familiar with this. In fact, 
I'm the only CPCU in Congress, which means Charter Property and 
Casualty Underwriter. That's a professional designation. I know this 
stuff is my point.
  Now, what you have with the insurance business is you have two types 
of profits, one they make from underwriting. They don't want to insure 
a building if they know it's going to burn down because they won't make 
an underwrite profit. Fair game. They do everything they can to make 
sure the building does not burn down.
  They also make a second kind of profit called investment profit. When 
they get the cash flow from premiums from underwriting, they invest it 
and they make a lot of money in that. But generally speaking, insurance 
companies are risk averse. They don't want to insure wind if you're on 
the coast. They don't want to insure flood if you're in a flood zone. 
It makes sense from a business standpoint.
  But as they will gladly cede this to the Federal Government, then 
what happens is exactly what Mr. McHenry said: you have the private 
sector pulls out of it. They don't put in their ingenuity to it.
  Now my friend Mr. Taylor, and I know having represented coastal 
areas, it is possible that there are a lot of buildings and homes that 
have been constructed that probably shouldn't be there or probably 
shouldn't use the construction standards that they should, I know as I 
go over the entire district of Georgia on the coast that people in 
Idaho and Iowa and Maine are subsidizing the flood policies for my 
homeowners out there.
  It's hard to say this is politically unpopular, but it is the truth. 
I just want to say that the insurance companies need to own up to their 
social responsibility. They don't need to take a walk on this.
  The Federal Government is already supplying health care, retirement 
benefits, transportation benefits, food, drugs, even school uniforms 
and babysitting. Yes, there are programs for that. I don't believe the 
Federal Government needs to get into the wind storm pool in a major 
way. We need to let the private sector continue to provide this 
service, and we need to look ourselves in the eye and say maybe not all 
these buildings should be built.
  I urge a ``no'' vote on this.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 2 minutes to 
take up the suggestion of the gentleman from Georgia. He said that the 
insurance companies should be required, I guess, to live up to their 
social responsibility. I agree.
  The committee of which I'm the Chair has the jurisdiction on that; 
and if he has any recommendations about what we can do, I'd be glad to 
do it, but not in that way right now.
  Mr. KINGSTON. Mr. Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield to the gentleman from Georgia.
  Mr. KINGSTON. If they want to make a profit from it, then we should 
not let them take a walk from it. They will figure out a way to do it.
  Mr. FRANK of Massachusetts. It is not in our power to tell them not 
to take a walk. They are a private sector entity. So unless there was 
to be some legislative change, there's simply no power, particularly at 
the Federal level, because insurance has historically been a State 
issue; but when the gentleman says we shouldn't let them walk away, I 
might be inclined to agree with that.
  There's nothing in the Federal Government now that would allow us to 
stop them from walking away, and our committee is available if anybody 
has any proposals to increase the role of the Federal Government, and I 
yield to the gentleman.
  Mr. KINGSTON. Keep in mind, we did not even have a flood program 
until recent times. The underwriter will take care of it.
  Mr. FRANK of Massachusetts. I'll take back my time to say that's 
irrelevant. We weren't talking about the history of the flood program.
  The gentleman said we shouldn't let the private companies walk away 
from their social responsibility. I wish he would tell me how he thinks 
we can do that. I will be glad to yield to the gentleman if he wants to 
get back to the subject, but not when I'm still posing the question, 
because he apparently didn't understand it.
  He said if they're not living up to their social responsibility, we 
should make them do it. I don't know how we can do that. If he wants to 
suggest to me new powers it would seem to me for us to take to do that, 
I'll listen.
  I yield to the gentleman.
  Mr. KINGSTON. Let me say this, we were not in the Federal flood 
insurance program until recent times.
  Case in point, I used to sell flood insurance; but when the Federal 
Government grew into it, the private sector withdrew from the market.
  Mr. FRANK of Massachusetts. I will take back my time, Mr. Chairman, 
to say that simply isn't accurate today. Others know it better than I, 
but we've had insurance companies withdrawing from offering policies 
that are not covered by Federal flood insurance. The Federal Government 
covers only flood insurance.
  So I would repeat to him, his history is interesting; but he says we 
shouldn't allow them to walk away, and I don't know any way we can 
prevent them.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I yield 30 seconds to the gentleman from 
Georgia.
  Mr. KINGSTON. Let me say this, I would love to continue this dialogue 
and that's why we wanted some amendments so that we could try to work 
out some of these differences.
  But in your great State, in Massachusetts, in Boston or in Savannah, 
Georgia, historically very old communities, there weren't Federal 
programs that did the underwriting. These were all built by the private 
sector.
  What I'm saying is if you just step back and let the market do its 
place, the market will continue to work wonders as it did for hundreds 
of years in the United States of America until the Federal Government 
let them start taking a walk by providing products that competed with 
the private sector.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself 1 minute to 
say that simply isn't true. That's not the causality.
  The notion that it was the Federal Government trotting them out is 
simply not accurate, and again, the phraseology of the gentleman is not 
that we

[[Page 25740]]

should allow them to do it, we shouldn't let them walk away. I don't 
know any way to not let them walk away.
  Mr. Chairman, I yield the balance of my time to the gentleman from 
Mississippi (Mr. Taylor).
  Mr. TAYLOR. Mr. Chairman, I'd like to remind the gentleman from 
Georgia that what this is all about is getting the companies to live by 
their contract.
  Thousands of my constituents, including one of the most powerful 
Members of the United States Senate and a Federal judge, had to hire 
lawyers and engineers to get fairness from their insurance companies. 
If they're going to do that to a powerful Senator or if they're going 
to do that to a Federal judge, what kind of chance does a 
schoolteacher, a chief petty officer, a high school football coach 
have?
  The fact of the matter is they have not lived up to their 
responsibilities. That's what brings this bill to the floor today.
  Mr. KINGSTON. Mr. Chairman, will the gentleman yield?
  Mr. TAYLOR. I yield to the gentleman from Georgia.
  Mr. KINGSTON. Because as I understand it, Trent Lott lost a family 
home that was like 100 years old or something in Mississippi. There was 
no Federal insurance program of any nature when that house was built, 
which is my point for Boston and for Savannah, Georgia. All of those 
old buildings never had any Federal insurance programs: fire, flood or 
windstorm or anything else.
  And what I'm saying is I agree with you. They are not pleasant to 
work with, and I understand and I want to commend the gentleman for his 
great work on this. But the reality is, if the Federal Government steps 
in, the private sector will move out.
  The CHAIRMAN. The gentleman from Massachusetts' time has expired. The 
gentlewoman from West Virginia has 3 minutes to close.
  Mrs. CAPITO. Mr. Chairman, I yield the remaining time to close to 
someone who has lived and breathed this issue for many, many years, an 
expert in the area, the gentleman from Louisiana (Mr. Baker).
  Mr. BAKER. Mr. Chairman, I thank the gentlewoman for yielding and 
wish to quickly say as a Louisianan, obviously I am a defender of the 
flood insurance program.
  I want to commend Chairman Frank for his willingness to work with us 
and all affected parties in crafting a flood insurance program reform 
which I thought was a very good product. It was only with the addition 
of the wind exposure element to the underlying bill that I began to 
have any concerns about the legislative direction of the chairman's 
recommendation.
  Currently, the notional value of flood insurance in effect, just 
flood, not to confuse with wind, today is $1,092,932,778,000 as of a 
June 30 FEMA report. That's the potential exposure of the flood 
insurance program to claims pursuant to contract.
  We know that the current flood program with the actuarial system in 
place cannot repay the debt it currently has. To put into scale what 
the additional risk brought onto the U.S. Government books will look 
like, the industry estimate from New England to the gulf coast only is 
an additional $19 trillion of risk exposure.
  The limits in the bill that have been described is it's only 
available where you can buy flood insurance. We sell flood insurance in 
New Mexico. We sell it in Boulder, Colorado, and we sell flood 
insurance in Guam, and the entry to the wind program is to buy the 
flood policy, so that we will, in fact, nationalize wind insurance 
coverage via the flood program, opening the U.S. taxpayer to a risk and 
a payment for which there is not an adequate stream.
  Some say, well, the bill requires actuarial rating. The flood 
insurance program has actuarial rating, but it's not industry 
actuarial. It only looks to historical claims data. There's no risk 
modeling to look forward.
  Those who have laid claim to the fact that weather cycles are more 
severe, damages are likely to escalate, that is not data which is 
incorporated into the flood insurance premium structure. So there will 
be problems with the implementation of the program as currently 
drafted.
  Am I suggesting we do nothing? Absolutely not. Do I think that the 
current system is adequately taking care of the risk of those who live 
along coastal areas? Of course it isn't.
  I have legislation which I am planning to introduce and hoped to have 
had introduced before consideration of this bill on the floor which 
will enable the issuance of a privately issued policy, multi-peril; but 
it would be exempt from State price controls.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. BAKER. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. His point about the flood insurance not 
being actuarially sound is right; but in this bill, because it is 
subject to PAYGO, we have a more stringent standard. So it is not 
totally valid to say, oh, look, it was supposed to be actuarially done. 
The wind program here is written to a much stricter standard.
  Mr. BAKER. If I may reclaim, I would only make the observation that 
both flood and wind have access to a line of credit. The line of credit 
is not conditioned for flood only. Therefore, the taxpayer does have 
exposure to the limit authorized by statute, which is $20.8 billion.
  Mr. FRANK of Massachusetts. But not according to CBO, I would say to 
the gentleman.
  Mr. BAKER. Well, we have a dispute.
  Mr. FRANK of Massachusetts. Mr. Chairman, I submit the following 
exchange of letters regarding H.R. 3121.

                 National Association of Realtors',

                               Washington, DC, September 26, 2007.
     House of Representatives,
     Washington, DC.
       Dear Representatives: On behalf of the more than 1.3 
     million members of the National Association of 
     REALTORS' (NAR), I ask for your vote in favor of 
     H.R. 3121, the Flood Insurance Reform and Modernization Act 
     of 2007, when it is considered by the House of 
     Representatives on Thursday, September 27.
       The National Flood Insurance Program (NFIP) offers 
     essential flood loss protection to homeowners and commercial 
     property owners in more than 20,000 communities nationwide. 
     The bill, as written, will help protect homeowners, renters 
     and commercial property owners from losses sustained from 
     flooding. NAR strongly supports the following changes to the 
     NFIP contained in the bill including:
       Extending the NFIP for five years;
       Ensuring that the 100-year flood maps are updated as 
     expeditiously as possible;
       Increasing coverage limits to $335,000 for residential and 
     $670,000 for commercial properties;
       Supporting education of tenants about the availability of 
     flood insurance while providing flexibility to property 
     owners and mangers in the manner of providing such notice;
       Adding coverage for living expenses, business interruption, 
     and basement improvements;
       Extending the pilot program for mitigation of severe 
     repetitive loss properties; and
       Studying the impacts of eliminating subsidies on 
     homeowners, renters and local economies.
       It is critical that flood insurance remain accessible for 
     all individuals who own or rent property in a floodplain. I 
     urge you to vote in favor of H.R. 3121, the Flood Insurance 
     Reform and Modernization Act of 2007, on Thursday.
           Sincerely,
                                 Pat V. Combs, ABR, CRS, GRI, PMN,
                                        2007 President, National  
                               Association of Realtors'
                                  ____
                                  
                                           National Association of


                                                Home Builders,

                               Washington, DC, September 26, 2007.
     House of Representatives,
     Washington, DC.
       Dear Representatives: On behalf of the 235,000 members of 
     the National Association of Home Builders (NAHB), I am 
     writing to express our support for H.R. 3121. the Flood 
     Insurance Reform and Modernization Act of 2007 as amended by 
     the Manager's Amendment. which includes much-needed technical 
     improvements to the underlying bill.
       As you know, Hurricanes Katrina, Rita and Wilma radically 
     disrupted the lives of those living on the Gulf Coast. After 
     the storms' passing, many homeowners found themselves in 
     dispute with their property insurance companies over whether 
     water or wind was the primary cause of damage to their homes. 
     After much debate, one proposed solution which has emerged to 
     address this conflict is to expand the authority of the 
     National Flood Insurance Program (NFIP) to include wind 
     coverage.
       NAHB is pleased that the bill incorporates new language to 
     provide wind insurance coverage for home owners. H.R. 3121, 
     as amended

[[Page 25741]]

     by the Manager's Amendment, would provide a needed addition 
     in expanding the availability and affordability of property 
     insurance in high hazard areas. Additionally, it references 
     the mitigation requirements of consensus-based building codes 
     as a measure to lessen the potential damage caused by a 
     natural disaster and thus further ensure the financial 
     stability of the NFIP.
       NAHB remains concerned about the overall solvency of the 
     NFIP, but we also view this program as not simply about flood 
     insurance premiums and payouts. The NFIP is a comprehensive 
     tool to guide the development of growing communities while 
     simultaneously balancing the need for reasonable protection 
     of life and property. The specific method Congress uses to 
     achieve this balance could potentially impact housing 
     affordability as well as the control local communities have 
     over their growth and development. NAHB believes that H.R. 
     3121 strikes the proper balance in protecting the NFIP' s 
     long-term financial stability while ensuring that federally-
     backed flood insurance remains available and affordable.
       As this new NFIP expansion moves forward, NAHB encourages 
     Congress to limit the amount of the program's fiscal exposure 
     to ensure its financial sustainability and to require 
     premiums for the new multi-peril coverage to be risk-based 
     and actuarially sound. NAHB commends the work of the House 
     Financial Services Committee in crafting legislation to 
     preserve and enhance this important federal program, and we 
     urge your support for H.R. 3121, as amended by the Manager's 
     Amendment, when it comes to the House floor this week.
       Thank you for your attention to our views.
           Sincerely,
                                                 Joseph M. Stanton
                                  ____
                                  
     Re: Support for H.R. 3121, the Flood Insurance Reform and 
         Modernization Act of 2007.
                                Washington, DC, September 26, 2007
     Members of the House of Representatives,
       I am writing on behalf of the members of the American 
     Bankers Association (ABA) to express our support for H.R. 
     3121, the Flood Insurance Reform and Modernization Act of 
     2007, scheduled to be considered by the full House later this 
     week.
       Since 1968, nearly 20,000 communities across the United 
     States and its territories have participated in the National 
     Flood Insurance Program (NFIP) by adopting and enforcing 
     floodplain management ordinances to reduce future flood 
     damage. In exchange, the NFIP makes federally backed flood 
     insurance available to homeowners, renters, and business 
     owners in these communities.
       Losses from three large hurricanes (Katrina, Rita, and 
     Wilma) in 2005 have left the NFIP more than $23 billion in 
     debt to the Treasury. There is no way that the NFIP can 
     reasonably repay this debt and provide payment for future 
     losses under the current rate structure. The likelihood of 
     additional flood events and resulting claims against the 
     program make reforms vital.
       This legislation would require the Federal Emergency 
     Management Agency (FEMA) to update the flood maps, and it 
     would provide a phase-in of actuarial rates for commercial 
     properties and non-primary residences. ABA supports these 
     efforts as being necessary to sustain the program over the 
     long term.
       H.R. 3121 also would increase the penalties for non-
     compliance in placing flood insurance, from $350 per 
     violation to $2000 per violation. We are pleased that the 
     legislation would provide a ``safe harbor'' for an 
     institution which is in non-compliance due to circumstances 
     beyond its control (such as outdated mapping by FEMA). We 
     also are pleased that the legislation would provide 
     institutions with an opportunity to correct non-compliance 
     before a penalty is assessed and place a reasonable limit for 
     total penalties per institution/per year.
       We urge you to support this important legislation.

                                             Floyd Stoner,    

                                           Executive Director,    
                                     Congressional Relations &    
                                               Public Policy, ABA.

  Mr. PAUL. Mr. Chairman, Madam Speaker, I am pleased to lend my 
support to 2 amendments to H.R. 3121, the Flood Insurance Reform and 
Modernization Act, that will help those Americans, including many in my 
congressional district, at risk of increased flood insurance premiums 
because of actions of the Federal Emergency Management Association 
(FEMA). FEMA is demanding that many towns and communities spend 
thousands of dollars in taxpayer money to certify levies and other 
mitigation devices. If the levies are not certified to FEMA's 
satisfaction, the residents of those communities will face higher flood 
insurance premiums. Many local governments are struggling to raise the 
funds to complete the certification in time to meet the FEMA-imposed 
certification deadlines.
  Several communities in my own district have been impacted by these 
requirements. My office is working with these jurisdictions and FEMA to 
establish a more reasonable schedule for completing the certifications. 
My office is also doing every thing it can to help these local 
jurisdictions fund these projects. Unfortunately, even though there is 
never a shortage of available funds for overseas programs, there are no 
funds available to help countries comply with this new federal demand.
  While FEMA has thus far been willing to cooperate with my office and 
the local officials in providing extensions of deadlines for 
certification, there remains a serious possibility that many Americans 
will see their flood insurance premiums skyrocket because their local 
governments where unable to comply with these unreasonable federal 
demands. In some cases, people may even loose their flood insurance 
completely.
  The amendments offered by Mr. Cardoza of California will help 
alleviate this problem by providing a five-year grace period for 
homeowners whose flood insurance coverage is affected by 
decertification of a levy. During this five-year, these homeowners 
would receive a 50 percent reduction in flood insurance premiums. 
Another amendment, offered by Mr. Green provides a five-year phasing in 
of any changes for flood insurance premiums for low-income homeowners 
impacted by the updating of the flood maps. These amendments will 
benefit my constituents, and all Americans, whose flood insurance is 
endangered by FEMA's certifying requirements, and I hope my colleagues 
will support them. I also hope my colleagues will continue to work to 
help those communities impacted by the new mitigation requirements.
  Mr. BILIRAKIS. Mr. Chairman, I rise today in support of H.R. 3121. 
This bill, the Flood Insurance Reform and Modernization Act, takes 
important steps towards bolstering the protection provided to 
homeowners in disaster-prone areas who face a constant threat of flood 
and windstorm damage.
  Nearly all of my constituents and my fellow Floridians fall into this 
category. In Florida, especially, H.R. 3121 will help to ease the 
homeowners' insurance crisis that grows worse everyday.
  Expanding the federal flood-insurance program to include wind damage 
simply makes sense. Those who have their homes flooded are often in the 
path of destructive storms that wield powerful winds.
  Common sense would dictate that if we are seeking to help protect 
homeowners from the liability that comes from destructive natural 
disasters like hurricanes, we would consider all of the forces of 
nature associated with these storms.
  Instead of arguing today why we should include wind damage into this 
program, the discussion should rather be about why we have gone for so 
long without it.
  While I understand the costs associated with this bill are an issue 
with some of my colleagues, the cost of doing nothing is much greater.
  Many of the homeowners in my District, in the State of Florida, and 
in disaster-prone areas throughout the United States spend each day 
staring down the barrel of a gun--waiting for the storm to hit that 
will put them and their families on a path to financial ruin.
  We have a chance to do something about this today.
  It is this body's responsibility to act in the interest and welfare 
of the American people. Vote YES on H.R. 3121, and vote yes to protect 
millions of homeowners and their families.
  Mrs. CAPPS. Mr. Chairman, I rise in strong support of the Cardoza-
Ross-Reyes Amendment to H.R. 3121, the Flood Insurance Reform and 
Modernization Act of 2007.
  This amendment will provide a 5 year grace period for homeowners who 
are required to purchase flood insurance as a result of new flood maps 
that decertify previously certified levees. During this period, 
homeowners would be entitled to a 50 percent reduction in their flood 
insurance premium while the levees are being recertified.
  Recently, while updating flood maps in my congressional district, 
FEMA asked the Army Corps of Engineers to certify that the Santa Maria 
Valley levees would protect the City of Santa Maria for the next 100 
years. Without the Corps' certification, much of the community will be 
placed in a flood zone and many of my constituents will be required to 
purchase expensive Federal flood insurance, something that many of them 
cannot afford.
  The Cardoza-Ross-Reyes Amendment addresses this problem.
  Since the Army Corps of Engineers completed the 26-mile Santa Maria 
Valley levees in 1963, the City has prospered, becoming the largest in 
Santa Barbara County. However, I over the years, natural deterioration 
of the levees has undermined their strength, leaving the community 
vulnerable to potentially devastating flooding by the Santa Maria 
River.
  I am working with the City of Santa Maria, Santa Barbara County, and 
the area's other elected officials to restore the levees so they

[[Page 25742]]

can be certified by the Army Corps of Engineers and, more importantly, 
so our community can avoid a catastrophic flooding event.
  Mr. Chairman, this amendment is extremely important to my 
constituents. It will provide them with much needed relief in a 
potentially expensive time.
  I urge all of my colleagues to support the Cardoza-Ross-Reyes 
Amendment.
  Mr. HOLT. Mr. Chairman, I rise today in support of H.R. 3121, the 
Flood Insurance Reform and Modernization Act of 2007.
  In April of this year, severe rainstorms in New Jersey caused the 
Delaware River to overflow for the fourth time in the past 2 years. 
Each of these floods caused substantial damage to the homes and 
businesses of my constituents in Mercer and Hunterdon counties. After 
each incident I toured the affected areas and met with local officials, 
residents, and business owners. Two primary concerns were raised by my 
constituents in each of these meetings. Residents wanted to know what 
efforts are being made to prevent future flooding and they wanted to be 
assured access to the financial resources available to them.
  The legislation before us today provides needed comprehensive flood 
insurance reform. It will address concerns of the residents in my 
Central New Jersey district by expanding, improving and reauthorizing 
the National Flood Insurance Program, NFIP, through 2013. The NFIP is 
federally backed flood insurance available for purchase to homeowners, 
renters and business owners in 20,000 communities across the nation. In 
order to be eligible, these communities are required to adopt 
floodplain management ordinances to reduce future flood damage.
  H.R. 3121 will improve the NFIP by increasing and expanding access to 
flood insurance policies. For the first time since 1994, the bill 
updates maximum insurance coverage limits for residential and 
nonresidential properties. It will create business interruption 
coverage policies for business owners to better prepare them to meet 
payroll and other obligations after a flood occurs. Additionally, this 
bill makes optional coverage at actuarial rates for basement 
improvements and for the replacement of items damaged by flooding. It 
also encourages participation in the NFIP through community outreach 
programs.
  This legislation will help protect consumers and ensure that 
homeowners who should have flood insurance have it. H.R. 3121 increases 
the fines on lenders who do not enforce the mandatory flood insurance 
policy purchase requirement for those who live in a floodplain and hold 
a federally-backed mortgage. It will also clarify the disclosure 
requirements for flood insurance availability and require plain 
language information on flood insurance policies. It removes the 
current $500,000 per apartment building insurance cap and will allow 
each unit in the building to be insured for its total value. It 
requires landlords to notify their tenants of contents coverage 
availability. Further, the bill makes flood insurance effective 
immediately upon purchase of a home.
  Not only does this bill work to ensure that insurance coverage is 
available to those who need it, it will help us to find better ways to 
prevent flooding in the future by requiring the Federal Emergency 
Management Administration, FEMA, to map the 500-year floodplain. It 
also makes the updating and modernization of flood maps an ongoing 
process, and increases funding for mapping. According to the Delaware 
River Basin Commission which works on issues relating to the Delaware 
River, updated floodplain maps will allow us to better predict areas 
that are vulnerable to flooding and identify ways to prevent floods 
from happening.
  I urge my colleagues to support H.R. 3121.
  Mr. BACA. Mr. Chairman, I ask unanimous consent to revise and extend 
my remarks. I rise to support of H.R. 3121 a bill that will modernize 
and reform FEMA's flood insurance program and thank Chairman Frank and 
Maxine Waters for their leadership on this legislation.
  This bill will provide long overdue and much-needed reforms to the 
National Flood Insurance Program, NFIP, and update the program to meet 
the needs of the 21st century.
  Hurricane Katrina caused property damage from both wind and flooding 
in parts of five parishes of Louisiana, three counties of Mississippi, 
and two counties of Alabama.
  Yet insurance companies in those areas have refused to count claims 
where property damage was a result of both wind and water. Instead, for 
2 years they engaged in the practice of denying and delaying claims and 
took advantage of the desperation of disaster victims who lost 
everything.
  This bill provides fair and equitable protection of combined wind and 
flood losses by allowing property owners to purchase wind and flood 
coverage in a single policy. It will help us right that wrong for many 
victims.
  As we saw during Hurricane Katrina, FEMA's maps are significantly 
outdated, often understating flood risk and leaving homeowners without 
enough information to protect themselves.
  I am pleased that this bill includes provisions to address this 
problem by requiring FEMA to conduct a thorough review of the nation's 
flood maps, making the updating and modernization of flood maps an 
ongoing process, and increasing funding for mapping.
  H.R. 3121 addresses a number of weaknesses in the Flood Insurance 
Program that were exposed by the unprecedented 2005 hurricane season. 
It is a strong bill that will ensure the program's continued viability, 
encourage broader participation, and increase financial accountability.
  I urge my colleagues to support this important legislation.
  Mr. WELDON of Florida. Mr. Chairman, I am very concerned about the 
need to enhance access to affordable storm damage insurance, 
particularly for those living in communities like the one I represent 
in Florida. Indeed I have cosponsored and authored legislation that 
would do just this and compliment the steps that have already been 
taken by the State of Florida to address this issue.
  Asking American taxpayers to assume $19 trillion in potential 
liabilities under a program that the Government Accountability Office, 
GAO, has already deemed insolvent just does not make good common sense. 
If an insolvent private company came before the regulators asking the 
regulator to further expand their liabilities, as is being done in H.R. 
3121, the regulators would reject the application outright.
  Increasing the potential liabilities of the National Flood Insurance 
Program, NFIP, as is done in H.R. 3121--without first paying off the 
NFIP's $19 billion debt--is unwise. Furthermore, the GAO and the 
Congressional Budget Office, CBO, admit that the $2 billion in annual 
premiums that NFIP takes in each year makes it virtually impossible for 
the NFIP to pay off this debt. No rational person would buy insurance 
from a private company who was $18 billion in debt or has borrowed from 
the U.S. Treasury (taxpayers) 14 times just to keep from going 
bankrupt.
  Forcing H.R. 3121 to the floor while blocking amendments from 
Republican Members of Congress, especially from Members from Florida 
and other States who deal with hurricanes on a regular basis, does not 
speak highly of the integrity of this program.
  As a father, I worry greatly about the burden we are passing onto our 
children. With reckless abandon, this Congress is rushing headlong into 
the future without any thought of what the ramifications of our 
decisions will have on our children and grandchildren. With every 
indication that Social Security will be bankrupt by 2042, with the 
Medicare program $17 trillion short already, the House passed another 
massive spending program with unfunded liabilities estimated at $180 
billion this week in the State Children's Health Insurance Program, 
SCHIP. In the college student loan bill that we passed earlier this 
year, this Congress added tens of billions of dollars in potential 
liabilities. Today this House is going to ram through another massive 
spending program where, as stated in a study by actuaries Towers 
Perrin, payouts to insurers for wind damage in a given storm could be 
$100 to $200 billion.
  The GAO estimates that the current unfunded liability that our 
children face is over $46 trillion, amounting to nearly $375,000 per 
full time working American. Adding the additional potential liability 
of $19 trillion in this bill would raise that to more than $500,000 per 
full-time working American. We need to face reality and begin to think 
about our children and the America that we are going to leave them.
  As we think about the type of America we are creating for our 
children, I am reminded of a warning given years ago:
  A democracy cannot exist as a permanent form of government. It can 
only exist until the voters discover that they can vote themselves 
largess from the public treasury. From that moment on, the majority 
always votes for the candidates promising the most benefits from the 
public treasury with the result that a democracy always collapses over 
loose fiscal policy . . .
  That is what this bill before us today does. It votes largess today, 
for political gain, while saddling our children with the debt. In good 
conscience I cannot do that. We owe it to future generations of 
Americans to turn the corner here and put their interests above our 
own.
  As the Comptroller of the GAO stated in his testimony before the 
Senate Homeland Security Committee in 2005, the United States is on an 
unsustainable fiscal path and our future

[[Page 25743]]

standard of living will be gradually eroded--if not suddenly damaged--
if we continue on this path.
  Reforming the NFIP is necessary, and this bill includes some 
important reforms, such as a phase-in of actuarially determined rates 
for some currently subsidized property owners. However, this bill does 
nothing to address the concerns raised by the GAO in the 2006 report 
that outlines the management and accountability problems after 
hurricanes Katrina and Rita.
  The easy thing to do would be to simply vote for this bill and put 
the burden of paying for it on our children and grandchildren, much 
like Washington has done already with dozens of other insolvent federal 
programs. But that would not be the right thing to do, and it is for 
that reason that I cannot vote to further burden our children with 
costs that we are not willing to pay for ourselves today.
  Mr. AL GREEN of Texas. Mr. Chairman, I am honored to be a co-sponsor 
of H.R. 3121, ``The Flood Insurance Reform and Modernization Act of 
2007'' and I would like to thank Chairman Frank. Subcommittee 
Chairwoman Waters, Representative Taylor, and Representative Jindal for 
their leadership in reforming a program that plays a vital role in 
protecting residents and communities in flood prone areas.
  Flood protection is an important issue in my district and in Texas, a 
state which has experienced the greatest number of flood and flash 
flood deaths over the past 36 years. In 2006, Texas saw an increase of 
over 20 percent in new flood insurance policies under the National 
Flood Insurance Program.
  I want to thank Chairman Frank for working with Congressman Hinojosa 
and I in committee to preserve subsidies for those properties that 
serve as affordable rental housing for many families. A measure was 
included in the bill to acknowledge that the loss of subsidies for 
properties that serve as primary homes for rental households could 
result in significantly higher premiums, to the detriment of these 
families. Higher premiums would increase the cost of property 
ownership, a cost that apartment owners would likely pass on to tenants 
in the form of higher rents. By protecting subsidies for these 
properties, this measure would ensure their continued affordability at 
a time when our nation is faced with a shortage of affordable housing.
  I want to also express my strong support for a provision in the bill 
authored by my colleague Congressman Taylor to expand the National 
Flood Insurance Program to include coverage for wind damage.
  Multi-peril coverage, or the coverage of both wind and flood risk in 
one policy, has proven especially important in the aftermath of 
Hurricanes Katrina and Rita as survivors continue to struggle to 
receive fair compensation for the damages they experienced. Private 
insurers have used anti-concurrent causation clauses to deny payment 
for damages on the grounds that the damages occurred as a result of 
flooding, which is covered by the Federal government. Multi-peril 
coverage would shield consumers from these arguably deceptive 
practices, protecting consumers in the absence of a solution to this 
controversy.
  Again, I express my full support for this important piece of 
legislation.
  Mrs. CAPITO. Mr. Chairman, floods are amongst the most frequent and 
costly national disasters in terms of human hardship and economic loss. 
In fact, 75 percent of Federal disaster declarations are related to 
flooding.
  Before I discuss the merits of the legislation, I would like to talk 
briefly about the process that is being considered. We are debating a 
huge expansion of an already struggling existing Federal program, and 
yet we have not been able to have our amendments out on the floor to 
have an open and frank discussion about this.
  I would like to accept the chairman's offer to continue to work on 
the amendments that were not allowed to be offered, and I hope that we 
can see democracy being served by letting everybody's voice be heard.
  In 1968, Congress established the National Flood Insurance Program, 
NFIP. The program is a partnership between the Federal Government and 
participating communities. If a community adopts and enforces a 
floodplain management ordinance to reduce future flood risk to new 
construction, the Federal Government will make flood insurance 
available to that community. Today, NFIP is the largest single-line 
property insurer in the Nation, serving nearly 20,000 communities and 
providing flood insurance coverage for 5.4 million consumers.
  Mr. Chairman, recent events have underscored the need to reform and 
modernize certain aspects of the program. While the NFIP is designed to 
be actuarially sound, it does not collect sufficient premiums to build 
up reserves for unexpected disasters. Due to the claims resulting from 
Hurricanes Katrina and Rita, the NFIP was forced to borrow $7.6 billion 
from the Treasury, an amount it estimates it will never be able to 
repay. Consequently, NFIP sits on the GAO's High-Risk Programs list, 
which recommends increased congressional oversight. Additionally, the 
2005 storms shed light on the problem of outdated flood maps, resulting 
in many homeowners in the gulf region being unaware that their homes 
were located in floodplains.
  To address these and other concerns in 2006, the House overwhelmingly 
passed flood insurance reform legislation. Earlier this year, Chairman 
Frank and Representative Judy Biggert introduced legislation identical 
to that bipartisan bill. That bill includes many reforms, including the 
phasing in of actuarial rates, but unfortunately, the flood insurance 
bill that the majority chose to move out of the Financial Services 
Committee was amended to incorporate legislation offered by the 
gentleman from Mississippi (Mr. Taylor) which expands the NFIP to 
include coverage for wind events.
  Mr. Chairman, no Member of this House was more personally affected by 
the 2005 hurricanes than Congressman Taylor. I do not, and no one 
questions his sincerity or his commitment to assisting those who have 
lost everything they owned in these storms. While I share his concern 
over the rising costs and outright unavailability of homeowners' wind 
coverage in some areas, I have three principal objections to linking 
wind insurance to the reform of the National Flood Insurance Program.
  First, expanding the program increases liabilities for taxpayers 
while decreasing options for customers or consumers. Properties located 
along the eastern seaboard and gulf coast represent $19 trillion of 
insured value. Shifting the risk on even a portion of these properties 
to the troubled NFIP could expose taxpayers to massive losses. The fact 
is that insurance will choose not to engage a competitor that does not 
pay taxes, has subsidized borrowing costs, and is not required to build 
a reserve surplus and is protected from most lawsuits, State regulation 
and enforcement.
  Second, adding wind coverage to the NFIP will exacerbate the 
program's well-documented administrative problems. Both the Department 
of Homeland Security and GAO have criticized the NFIP for being 
understaffed, not having adequate flood maps and not collecting 
sufficient information on wind payments when claims were submitted for 
flood damage. Expanding the portfolio further before much-needed 
reforms are in place is premature.
  Third, no consensus yet exists about the necessity or desirability of 
creating a Federal wind insurance program. In testimony before our 
committee, representatives of flood management groups, the insurance 
industry, environmental organizations, Treasury and FEMA all expressed 
agreement that a comprehensive study of the proposed wind insurance 
mandate should first be commissioned to provide Congress with a better 
understanding of the possible implications this expansion could have 
for consumers, NFIP and the market.
  Mr. Chairman, we must not let the desire to meet every perceived 
problem with a new Government program drive us towards premature 
actions that yield unwanted consequences. The NFIP's mission should not 
be expanded, exposing taxpayers to massive new risks, until reforms are 
in place and adequate study has been conducted.
  In addition to the above reservations, I have serious concerns with 
the effect the addition of wind coverage will have on communities that 
are now relying on NFIP. This program is already financially unstable, 
yet we are about to add $19 trillion of risk. Despite this fiscal 
instability, States like West Virginia, that I represent, will still 
rely on the program to provide assistance in the case of serious 
flooding. Thankfully, there have not been major problems this year, but 
since I was elected to Congress in 2000, there have been nine federally 
declared flooding disasters in West Virginia. In 2001 alone, FEMA 
provided $17 million in assistance to my State, and between 2004 and 
2006 the National Flood Insurance Program received and paid more than 
$30 million in claims from West Virginia flood victims.
  There are serious needs in West Virginia and across the Nation for 
the flood insurance program. We should be modernizing NFIP so it can 
become financially stable, not jeopardizing its existence by exposing 
it--and our taxpayers--to trillions of dollars of liability.
  Mr. KENNEDY. Mr. Chairman, I rise in support of the Flood Insurance 
Reform and Modernization Act which would put the National Flood 
Insurance Program, an important program to the residents of Rhode 
Island, back on solid footing. Devastated by the impact of Hurricane 
Katrina, the National Flood Insurance Program has operated in deficits 
for over 2 years. This bill authorizes increased funds for the program 
and includes additional provisions to improve flood plain mapping. 
Under this legislation, FEMA is required to conduct a

[[Page 25744]]

review of U.S. flood maps and make the necessary changes to ensure 
accuracy and comprehensiveness. We owe it to homeowners across the 
country to provide a fiscally sound insurance policy for natural 
disasters that create a flood crisis. In my district, the National 
Flood Insurance Program is essential to economic growth. My home state 
of Rhode Island saw a 15 percent increase in policy growth to the NFIP 
as many residents reside in coastal areas that would be threatened by a 
flood disaster. This bill can give homeowners in my district some peace 
of mind during storms and violent weather. Though questions remain over 
the cost of the optional wind coverage in the National Flood Insurance 
Program, I support the pending study by the General Accountability 
Office to investigate the financial viability of the wind program. I 
applaud Chairman Frank, and Congresswoman Waters' efforts to infuse 
federal dollars back into the National Flood Insurance Program so that 
it continues to serve as a safety net for victims of future natural 
disasters. Congress has an obligation to ensure that this program is on 
sound financial footing and I urge my colleagues to pass this important 
piece of legislation.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
printed in the bill, modified by the amendment printed in part A of 
House Report 110-351, is adopted. The bill, as amended, shall be 
considered as an original bill for the purpose of further amendment 
under the 5-minute rule and shall be considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 3121

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Flood 
     Insurance Reform and Modernization Act of 2007''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Study regarding status of pre-firm properties and mandatory 
              purchase requirement for natural 100-year floodplain and 
              non-federally related loans.
Sec. 4. Phase-in of actuarial rates for nonresidential properties and 
              non-primary residences.
Sec. 5. Exception to waiting period for effective date of policies.
Sec. 6. Enforcement.
Sec. 7. Multiperil coverage for flood and windstorm.
Sec. 8. Maximum coverage limits.
Sec. 9. Coverage for additional living expenses, basement improvements, 
              business interruption, and replacement cost of contents.
Sec. 10. Notification to tenants of availability of contents insurance.
Sec. 11. Increase in annual limitation on premium increases.
Sec. 12. Report regarding borrowing authority.
Sec. 13. FEMA participation in State disaster claims mediation 
              programs.
Sec. 14. FEMA annual report on insurance program.
Sec. 15. Flood insurance outreach.
Sec. 16. Grants for direct funding of mitigation activities for 
              individual repetitive claims properties.
Sec. 17. Extension of pilot program for mitigation of severe repetitive 
              loss properties.
Sec. 18. Flood mitigation assistance program.
Sec. 19. GAO study of methods to increase flood insurance program 
              participation by low-income families.
Sec. 20. Notice of availability of flood insurance and escrow in RESPA 
              good faith estimate.
Sec. 21. Reiteration of FEMA responsibilities under 2004 Reform Act.
Sec. 22. Ongoing modernization of flood maps and elevation standards.
Sec. 23. Notification and appeal of map changes; notification of 
              establishment of flood elevations.
Sec. 24. Clarification of replacement cost provisions, forms, and 
              policy language.
Sec. 25. Authorization of additional FEMA staff.
Sec. 26. Extension of deadline for filing proof of loss.
Sec. 27. 5-year extension of program.
Sec. 28. Report on inclusion of building codes in floodplain management 
              criteria.
Sec. 29. Study of economic effects of charging actuarially-based 
              premium rates for pre-firm structures.

     SEC. 2. FINDINGS AND PURPOSES.

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

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

       (a) In General.--The Comptroller General shall conduct a 
     study as follows:
       (1) Pre-firm properties.--The study shall determine the 
     status of the national flood insurance program, as of the 
     date of the enactment of this Act, with respect to the 
     provision of flood insurance coverage for pre-FIRM properties 
     (as such term is defined in section 578(b) of the National 
     Flood Insurance Reform Act of 1994 (42 U.S.C. 4014 note)), 
     which shall include determinations of--
       (A) the number of pre-FIRM properties for which coverage is 
     provided and the extent of such coverage;
       (B) the cost of providing coverage for such pre-FIRM 
     properties to the national flood insurance program;
       (C) the anticipated rate at which such pre-FIRM properties 
     will cease to be covered under the program; and
       (D) the effects that implementation of the Bunning-
     Bereuter-Blumenauer Flood Insurance Reform Act of 2004 will 
     have on the national flood insurance program generally and on 
     coverage of pre-FIRM properties under the program.
       (2) Mandatory purchase requirement for natural 100-year 
     floodplain.--The study shall assess the impact, 
     effectiveness, and feasibility of amending the provisions of 
     the Flood Disaster Protection Act of 1973 regarding the 
     properties that are subject to the mandatory flood insurance 
     coverage purchase requirements under such Act to extend such 
     requirements to properties located in any area that would be 
     designated as an area having special flood hazards but for 
     the existence of a structural flood protection system, and 
     shall determine--
       (A) the regulatory, financial and economic impacts of 
     extending such mandatory purchase requirements on the costs 
     of homeownership, the actuarial soundness of the national 
     flood insurance program, the Federal Emergency Management 
     Agency, local communities, insurance companies, and local 
     land use;
       (B) the effectiveness of extending such mandatory purchase 
     requirements in protecting homeowners from financial loss and 
     in protecting the financial soundness of the national flood 
     insurance program; and
       (C) any impact on lenders of complying with or enforcing 
     such extended mandatory requirements.
       (3) Mandatory purchase requirement for non-federally 
     related loans.--The study shall assess the impact, 
     effectiveness, and feasibility of, and basis under the 
     Constitution of the United States for, amending the 
     provisions of

[[Page 25745]]

     the Flood Disaster Protection Act of 1973 regarding the 
     properties that are subject to the mandatory flood insurance 
     coverage purchase requirements under such Act to extend such 
     requirements to any property that is located in any area 
     having special flood hazards and which secures the repayment 
     of a loan that is not described in paragraph (1), (2), or (3) 
     of section 102(b) of such Act, and shall determine how best 
     to administer and enforce such a requirement, taking into 
     consideration other insurance purchase requirements under 
     Federal and State law.
       (b) Report.--The Comptroller General shall submit a report 
     to the Congress regarding the results and conclusions of the 
     study under this subsection not later than the expiration of 
     the 6-month period beginning on the date of the enactment of 
     this Act.

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

       (a) In General.--Section 1308(c) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4015(c)) is amended--
       (1) by redesignating paragraph (2) as paragraph (4); and
       (2) by inserting after paragraph (1) the following new 
     paragraphs:
       ``(2) Nonresidential properties.--Any nonresidential 
     property, which term shall not include any multifamily rental 
     property that consists of four or more dwelling units.
       ``(3) Non-primary residences.--Any residential property 
     that is not the primary residence of any individual, 
     including the owner of the property or any other individual 
     who resides in the property as a tenant.''.
       (b) Technical Amendments.--Section 1308 of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4015) is amended--
       (1) in subsection (c)--
       (A) in the matter preceding paragraph (1), by striking 
     ``the limitations provided under paragraphs (1) and (2)'' and 
     inserting ``subsection (e)''; and
       (B) in paragraph (1), by striking ``, except'' and all that 
     follows through ``subsection (e)''; and
       (2) in subsection (e), by striking ``paragraph (2) or (3)'' 
     and inserting ``paragraph (4)''.
       (c) Effective Date and Transition.--
       (1) Effective date.--The amendments made by subsections (a) 
     and (b) shall apply beginning on January 1, 2011, except as 
     provided in paragraph (2) of this subsection.
       (2) Transition for properties covered by flood insurance 
     upon effective date.--
       (A) Increase of rates over time.--In the case of any 
     property described in paragraph (2) or (3) of section 1308(c) 
     of the National Flood Insurance Act of 1968, as amended by 
     subsection (a) of this section, that, as of the effective 
     date under paragraph (1) of this subsection, is covered under 
     a policy for flood insurance made available under the 
     national flood insurance program for which the chargeable 
     premium rates are less than the applicable estimated risk 
     premium rate under section 1307(a)(1) for the area in which 
     the property is located, the Director of the Federal 
     Emergency Management Agency shall increase the chargeable 
     premium rates for such property over time to such applicable 
     estimated risk premium rate under section 1307(a)(1).
       (B) Annual increase.--Such increase shall be made by 
     increasing the chargeable premium rates for the property 
     (after application of any increase in the premium rates 
     otherwise applicable to such property), once during the 12-
     month period that begins upon the effective date under 
     paragraph (1) of this subsection and once every 12 months 
     thereafter until such increase is accomplished, by 15 percent 
     (or such lesser amount as may be necessary so that the 
     chargeable rate does not exceed such applicable estimated 
     risk premium rate or to comply with subparagraph (C)). Any 
     increase in chargeable premium rates for a property pursuant 
     to this paragraph shall not be considered for purposes of the 
     limitation under section 1308(e) of such Act.
       (C) Properties subject to phase-in and annual increases.--
     In the case of any pre-FIRM property (as such term is defined 
     in section 578(b) of the National Flood Insurance Reform Act 
     of 1974), the aggregate increase, during any 12-month period, 
     in the chargeable premium rate for the property that is 
     attributable to this paragraph or to an increase described in 
     section 1308(e) of the National Flood Insurance Act of 1968 
     may not exceed the following percentage:
       (i) Nonresidential properties.--In the case of any property 
     described in such section 1308(c)(2), 20 percent.
       (ii) Non-primary residences.--In the case of any property 
     described in such section 1308(c)(3), 25 percent.
       (D) Full actuarial rates.--The provisions of paragraphs (2) 
     and (3) of such section 1308(c) shall apply to such a 
     property upon the accomplishment of the increase under this 
     paragraph and thereafter.

     SEC. 5. EXCEPTION TO WAITING PERIOD FOR EFFECTIVE DATE OF 
                   POLICIES.

       Section 1306(c)(2)(A) of the National Flood Insurance Act 
     of 1968 (42 U.S.C. 4013(c)(2)(A)) is amended by inserting 
     before the semicolon the following: ``or is in connection 
     with the purchase or other transfer of the property for which 
     the coverage is provided (regardless of whether a loan is 
     involved in the purchase or transfer transaction), but only 
     when such initial purchase of coverage is made not later 30 
     days after such making, increasing, extension, or renewal of 
     the loan or not later than 30 days after such purchase or 
     other transfer of the property, as applicable''.

     SEC. 6. ENFORCEMENT.

       Section 102(f) of the Flood Disaster Protection Act of 1973 
     (42 U.S.C. 4012a(f)) is amended--
       (1) in paragraph (5)--
       (A) in the first sentence, by striking ``$350'' and 
     inserting ``$2,000''; and
       (B) in the last sentence, by striking ``$100,000'' and 
     inserting ``$1,000,000; except that such limitation shall not 
     apply to a regulated lending institution or enterprise for a 
     calendar year if, in any three (or more) of the five calendar 
     years immediately preceding such calendar year, the total 
     amount of penalties assessed under this subsection against 
     such lending institution or enterprise was $1,000,000''; and
       (2) in paragraph (6), by adding after the period at the end 
     the following: ``No penalty may be imposed under this 
     subsection on a regulated lending institution or enterprise 
     that has made a good faith effort to comply with the 
     requirements of the provisions referred to in paragraph (2) 
     or for any non-material violation of such requirements.''.

     SEC. 7. MULTIPERIL COVERAGE FOR FLOOD AND WINDSTORM.

       (a) In General.--Section 1304 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4011) is amended--
       (1) by redesignating subsection (c) as subsection (d); and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Multiperil Coverage for Damage From Flood or 
     Windstorm.--
       ``(1) In general.--Subject to paragraph (8), the national 
     flood insurance program established pursuant to subsection 
     (a) shall enable the purchase of optional insurance against 
     loss resulting from physical damage to or loss of real 
     property or personal property related thereto located in the 
     United States arising from any flood or windstorm, subject to 
     the limitations in this subsection and section 1306(b).
       ``(2) Community participation requirement.--Multiperil 
     coverage pursuant to this subsection may not be provided in 
     any area (or subdivision thereof) unless an appropriate 
     public body shall have adopted adequate land use and control 
     measures (with effective enforcement provisions) which the 
     Director finds are consistent with the comprehensive criteria 
     for land management and use relating to windstorms establish 
     pursuant to section 1361(d)(2).
       ``(3) Prohibition against duplicative coverage.--Multiperil 
     coverage pursuant to this subsection may not be provided with 
     respect to any structure (or the personal property related 
     thereto) for any period during which such structure is 
     covered, at any time, by flood insurance coverage made 
     available under this title.
       ``(4) Nature of coverage.--Multiperil coverage pursuant to 
     this subsection shall--
       ``(A) cover losses only from physical damage resulting from 
     flooding or windstorm; and
       ``(B) provide for approval and payment of claims under such 
     coverage upon proof that such loss must have resulted from 
     either windstorm or flooding, but shall not require for 
     approval and payment of a claim that the specific cause of 
     the loss, whether windstorm or flooding, be distinguished or 
     identified.
       ``(5) Actuarial rates.--Multiperil coverage pursuant to 
     this subsection shall be made available for purchase for a 
     property only at chargeable risk premium rates that, based on 
     consideration of the risks involved and accepted actuarial 
     principles, and including operating costs and allowance and 
     administrative expenses, are required in order to make such 
     coverage available on an actuarial basis for the type and 
     class of properties covered.
       ``(6) Terms of coverage.--The Director shall, after 
     consultation with persons and entities referred to in section 
     1306(a), provide by regulation for the general terms and 
     conditions of insurability which shall be applicable to 
     properties eligible for multiperil coverage under this 
     subsection, subject to the provisions of this subsection, 
     including--
       ``(A) the types, classes, and locations of any such 
     properties which shall be eligible for such coverage, which 
     shall include residential and nonresidential properties;
       ``(B) subject to paragraph (7), the nature and limits of 
     loss or damage in any areas (or subdivisions thereof) which 
     may be covered by such coverage;
       ``(C) the classification, limitation, and rejection of any 
     risks which may be advisable;
       ``(D) appropriate minimum premiums;
       ``(E) appropriate loss deductibles; and
       ``(F) any other terms and conditions relating to insurance 
     coverage or exclusion that may be necessary to carry out this 
     subsection.
       ``(7) Limitations on amount of coverage.--The regulations 
     issued pursuant to paragraph (6) shall provide that the 
     aggregate liability under multiperil coverage made available 
     under this subsection shall not exceed the lesser of the 
     replacement cost for covered losses or the following amounts, 
     as applicable:
       ``(A) Residential structures.--In the case of residential 
     properties--
       ``(i) for any single-family dwelling, $500,000;
       ``(ii) for any structure containing more than one dwelling 
     unit, $500,000 for each separate dwelling unit in the 
     structure; and
       ``(iii) $150,000 per dwelling unit for--

       ``(I) any contents related to such unit; and
       ``(II) any necessary increases in living expenses incurred 
     by the insured when losses from flooding or windstorm make 
     the residence unfit to live in.

       ``(B) Nonresidential properties.--In the case of 
     nonresidential properties (including church properties)--

[[Page 25746]]

       ``(i) $1,000,000 for any single structure; and
       ``(ii) $750,000 for--

       ``(I) any contents related to such structure;
       ``(II) in the case of any nonresidential property that is a 
     business property, any losses resulting from any partial or 
     total interruption of the insured's business caused by damage 
     to, or loss of, such property from flooding or windstorm, 
     except that for purposes of such coverage, losses shall be 
     determined based on the profits the covered business would 
     have earned, based on previous financial records, had the 
     flood or windstorm not occurred.

       ``(8) Requirement to cease offering coverage if borrowing 
     to pay claims.--If at any time the Director utilizes the 
     borrowing authority under section 1309(a) for the purpose of 
     obtaining amounts to pay claims under multiperil coverage 
     made available under this subsection, the Director may not, 
     during the period beginning upon the initial such use of such 
     borrowing authority and ending upon repayment to the 
     Secretary of the Treasury of the full amount of all 
     outstanding notes and obligations issued by the Director for 
     such purpose, together with all interest owed on such notes 
     and obligations, enter into any new policy, or renew any 
     existing policy, for coverage made available under this 
     subsection.
       ``(9) Effective date.--This subsection shall take effect 
     on, and shall apply beginning on, June 30, 2008.''.
       (b) Prohibition Against Duplicative Coverage.--The National 
     Flood Insurance Act of 1968 is amended by inserting after 
     section 1313 (42 U.S.C. 4020) the following new section:


               ``PROHIBITION AGAINST DUPLICATIVE COVERAGE

       ``Sec. 1314.  Flood insurance under this title may not be 
     provided with respect to any structure (or the personal 
     property related thereto) for any period during which such 
     structure is covered, at any time, by multiperil insurance 
     coverage made available pursuant to section 1304(c).''.
       (c) Compliance With State and Local Law.--Section 1316 of 
     the National Flood Insurance Act of 1968 (42 U.S.C. 4023) is 
     amended--
       (1) by inserting ``(a) Flood Protection Measures.--'' 
     before ``No new''; and
       (2) by adding at the end the following new subsection:
       ``(b) Windstorm Protection Measures.--No new multiperil 
     coverage shall be provided under section 1304(c) for any 
     property that the Director finds has been declared by a duly 
     constituted State or local zoning authority, or other 
     authorized public body to be in violation of State or local 
     laws, regulations, or ordinances, which are intended to 
     reduce damage caused by windstorms.''.
       (d) Criteria for Land Management and Use.--Section 1361 of 
     the National Flood Insurance Act of 1968 (42 U.S.C. 4102) is 
     amended by adding at the end the following new subsection:
       ``(d) Windstorms.--
       ``(1) Studies and investigations.--The Director shall carry 
     out studies and investigations under this section to 
     determine appropriate measures in windstorm-prone areas as to 
     land management and use, windstorm zoning, and windstorm 
     damage prevention, and may enter into contracts, agreements, 
     and other appropriate arrangements to carry out such 
     activities. Such studies and investigations shall include 
     laws, regulations, and ordinance relating to the orderly 
     development and use of areas subject to damage from windstorm 
     risks, and zoning building codes, building permits, and 
     subdivision and other building restrictions for such areas.
       ``(2) Criteria.--On the basis of the studies and 
     investigations pursuant to paragraph (1) and such other 
     information as may be appropriate, the Direct shall establish 
     comprehensive criteria designed to encourage, where 
     necessary, the adoption of adequate State and local measures 
     which, to the maximum extent feasible, will assist in 
     reducing damage caused by windstorms.
       ``(3) Coordination with state and local governments.--The 
     Director shall work closely with and provide any necessary 
     technical assistance to State, interstate, and local 
     governmental agencies, to encourage the application of 
     criteria established under paragraph (2) and the adoption and 
     enforcement of measures referred to in such paragraph.''.
       (e) Definitions.--Section 1370 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4121) is amended--
       (1) in paragraph (14), by striking ``and'' at the end;
       (2) in paragraph (15) by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(16) the term `windstorm' means any hurricane, tornado, 
     cyclone, typhoon, or other wind event.''.

     SEC. 8. MAXIMUM COVERAGE LIMITS.

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

     SEC. 9. COVERAGE FOR ADDITIONAL LIVING EXPENSES, BASEMENT 
                   IMPROVEMENTS, BUSINESS INTERRUPTION, AND 
                   REPLACEMENT COST OF CONTENTS.

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

     SEC. 10. NOTIFICATION TO TENANTS OF AVAILABILITY OF CONTENTS 
                   INSURANCE.

       The National Flood Insurance Act of 1968 is amended by 
     inserting after section 1308 (42 U.S.C. 4015) the following 
     new section:

     ``SEC. 1308A. NOTIFICATION TO TENANTS OF AVAILABILITY OF 
                   CONTENTS INSURANCE.

       ``(a) In General.--The Director shall, upon entering into a 
     contract for flood insurance coverage under this title for 
     any property located in an area having special flood 
     hazards--
       ``(1) provide to the insured sufficient copies of the 
     notice developed pursuant to subsection (b); and
       ``(2) strongly encourage the insured to provide a copy of 
     the notice, or otherwise provide notification of the 
     information under subsection (b) in the manner that the 
     manager or landlord deems most appropriate, to each such 
     tenant and to each new tenant upon commencement of such a 
     tenancy.
       ``(b) Notice.--Notice to a tenant of a property in 
     accordance with this subsection is written notice that 
     clearly informs a tenant--
       ``(1) that the property is located in an area having 
     special flood hazards;
       ``(2) that flood insurance coverage is available under the 
     national flood insurance program under this title for 
     contents of the unit or structure leased by the tenant;
       ``(3) of the maximum amount of such coverage for contents 
     available under this title at that time; and
       ``(4) of where to obtain information regarding how to 
     obtain such coverage, including a telephone number, mailing 
     address, and location on the World Wide Web of the Director 
     where such information is available.''.

     SEC. 11. INCREASE IN ANNUAL LIMITATION ON PREMIUM INCREASES.

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

     SEC. 12. REPORT REGARDING BORROWING AUTHORITY.

       Not later than the expiration of the 6-month period 
     beginning on the date of the enactment of this Act, the 
     Director of the Federal Emergency Management Agency shall 
     submit a report to the Congress setting forth a plan for 
     repaying within 10 years all amounts, that, as of

[[Page 25747]]

     the expiration of such period, have been borrowed under the 
     authority of section 1309(a) of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4016(a)) and not yet repaid as of such 
     date.

     SEC. 13. FEMA PARTICIPATION IN STATE DISASTER CLAIMS 
                   MEDIATION PROGRAMS.

       Chapter I of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4011 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 1325. FEMA PARTICIPATION IN STATE DISASTER CLAIMS 
                   MEDIATION PROGRAMS.

       ``(a) Requirement To Participate.--In the case of the 
     occurrence of a natural catastrophe that may have resulted in 
     flood damage covered by insurance made available under the 
     national flood insurance program and a loss covered by 
     personal lines residential property insurance policy, upon 
     request made by the insurance commissioner of a State (or 
     such other official responsible for regulating the business 
     of insurance in the State) for the participation of 
     representatives of the Director in a program sponsored by 
     such State for nonbinding mediation of insurance claims 
     resulting from a natural catastrophe, the Director shall 
     cause such representatives to participate in such State 
     program, when claims under the national flood insurance 
     program are involved, to expedite settlement of flood damage 
     claims resulting from such catastrophe.
       ``(b) Extent of Participation.--Participation by 
     representatives of the Director required under subsection (a) 
     with respect to flood damage claims resulting from a natural 
     catastrophe shall include--
       ``(1) providing adjusters certified for purposes of the 
     national flood insurance program who are authorized to settle 
     claims against such program resulting from such catastrophe 
     in amounts up to the limits of policies under such program;
       ``(2) requiring such adjusters to attend State-sponsored 
     mediation meetings regarding flood insurance claims resulting 
     from such catastrophe at times and places as may be arranged 
     by the State;
       ``(3) participating in good-faith negotiations toward the 
     settlement of such claims with policyholders of coverage made 
     available under the national flood insurance program; and
       ``(4) finalizing the settlement of such claims on behalf of 
     the national flood insurance program with such policyholders.
       ``(c) Coordination.--Representatives of the Director who 
     participate pursuant to this section in a State-sponsored 
     mediation program with respect to a natural catastrophe shall 
     at all times coordinate their activities with insurance 
     officials of the State and representatives of insurers for 
     the purpose of consolidating and expediting the settlement of 
     claims under the national flood insurance program resulting 
     from such catastrophe at the earliest possible time.
       ``(d) Mediation Proceedings and Privileged Documents.--As a 
     condition of the participation of Representatives of the 
     Director pursuant to this section in State-sponsored 
     mediation, all statements made and documents produced 
     pursuant to such mediation involving representatives of the 
     Director shall be deemed privileged and confidential 
     settlement negotiations made in anticipation of litigation.
       ``(e) Effect of Participation on Liability, Right, and 
     Obligations.--Participation of Representatives of the 
     Director pursuant to this section in State-sponsored 
     mediation shall not affect or expand the liability of any 
     party in contract or in tort, nor shall it affect the rights 
     or obligations of the parties as provided in the Standard 
     Flood Insurance Policy under the national flood insurance 
     program, regulations of the Federal Emergency Management 
     Agency, this Act, or Federal common law.
       ``(f) Exclusive Federal Jurisdiction.--Participation of 
     Representatives of the Director pursuant to this section in 
     State-sponsored mediation shall not alter, change or modify 
     the original exclusive jurisdiction of United States courts 
     as provided in this Act.
       ``(g) Cost Limitation.--Nothing in this section shall be 
     construed to require the Director or representatives of the 
     Director to pay additional mediation fees relating to flood 
     claims associated with a State-sponsored mediation program in 
     which representatives of the Director participate.
       ``(h) Exception.--In the case of the occurrence of a 
     natural catastrophe that results in flood damage claims under 
     the national flood insurance program and does not result in 
     any loss covered by a personal lines residential property 
     insurance policy--
       ``(1) this section shall not apply; and
       ``(2) the provisions of the Standard Flood Insurance Policy 
     under the national flood insurance program and the appeals 
     process established pursuant to section 205 of the Bunning-
     Bereueter-Blumenauer Flood Insurance Reform Act of 2004 
     (Public Law 108-264; 118 Stat. 726) and regulations issued 
     pursuant to such section shall apply exclusively.
       ``(i) Representatives of Director.--For purposes of this 
     section, the term `representatives of the Director' means 
     representatives of the national flood insurance program who 
     participate in the appeals process established pursuant to 
     section 205 of the Bunning-Bereueter-Blumenauer Flood 
     Insurance Reform Act of 2004 (Public Law 108-264; 118 Stat. 
     726) and regulations issued pursuant to such section.''.

     SEC. 14. FEMA ANNUAL REPORT ON INSURANCE PROGRAM.

       Section 1320 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4027) is amended--
       (1) in the section heading, by striking ``report to the 
     president'' and inserting ``annual report to congress'';
       (2) in subsection (a)--
       (A) by striking ``biennially'';
       (B) by striking ``the President for submission to''; and
       (C) by inserting ``not later than June 30 of each year'' 
     before the period at the end;
       (3) in subsection (b), by striking ``biennial'' and 
     inserting ``annual''; and
       (4) by adding at the end the following new subsection:
       ``(c) Financial Status of Program.--The report under this 
     section for each year shall include information regarding the 
     financial status of the national flood insurance program 
     under this title, including a description of the financial 
     status of the National Flood Insurance Fund and current and 
     projected levels of claims, premium receipts, expenses, and 
     borrowing under the program.''.

     SEC. 15. FLOOD INSURANCE OUTREACH.

       (a) Grants.--Chapter I of the National Flood Insurance Act 
     of 1968 (42 U.S.C. 4011 et seq.), as amended by the preceding 
     provisions of this Act, is further amended by adding at the 
     end the following new section:

     ``SEC. 1326. GRANTS FOR OUTREACH TO PROPERTY OWNERS AND 
                   RENTERS.

       ``(a) In General.--The Director may, to the extent amounts 
     are made available pursuant to subsection (h), make grants to 
     local governmental agencies responsible for floodplain 
     management activities (including such agencies of Indians 
     tribes, as such term is defined in section 4 of the Native 
     American Housing Assistance and Self-Determination Act of 
     1996 (25 U.S.C. 4103)) in communities that participate in the 
     national flood insurance program under this title, for use by 
     such agencies to carry out outreach activities to encourage 
     and facilitate the purchase of flood insurance protection 
     under this Act by owners and renters of properties in such 
     communities and to promote educational activities that 
     increase awareness of flood risk reduction.
       ``(b) Outreach Activities.--Amounts from a grant under this 
     section shall be used only for activities designed to--
       ``(1) identify owners and renters of properties in 
     communities that participate in the national flood insurance 
     program, including owners of residential and commercial 
     properties;
       ``(2) notify such owners and renters when their properties 
     become included in, or when they are excluded from, an area 
     having special flood hazards and the effect of such inclusion 
     or exclusion on the applicability of the mandatory flood 
     insurance purchase requirement under section 102 of the Flood 
     Disaster Protection Act of 1973 (42 U.S.C. 4012a) to such 
     properties;
       ``(3) educate such owners and renters regarding the flood 
     risk and reduction of this risk in their community, including 
     the continued flood risks to areas that are no longer subject 
     to the flood insurance mandatory purchase requirement;
       ``(4) educate such owners and renters regarding the 
     benefits and costs of maintaining or acquiring flood 
     insurance, including, where applicable, lower-cost preferred 
     risk policies under this title for such properties and the 
     contents of such properties; and
       ``(5) encouraging such owners and renters to maintain or 
     acquire such coverage.
       ``(c) Cost Sharing Requirement.--
       ``(1) In general.--In any fiscal year, the Director may not 
     provide a grant under this section to a local governmental 
     agency in an amount exceeding 3 times the amount that the 
     agency certifies, as the Director shall require, that the 
     agency will contribute from non-Federal funds to be used with 
     grant amounts only for carrying out activities described in 
     subsection (b).
       ``(2) Non-federal funds.--For purposes of this subsection, 
     the term `non-Federal funds' includes State or local 
     government agency amounts, in-kind contributions, any salary 
     paid to staff to carry out the eligible activities of the 
     grant recipient, the value of the time and services 
     contributed by volunteers to carry out such services (at a 
     rate determined by the Director), and the value of any 
     donated material or building and the value of any lease on a 
     building.
       ``(d) Administrative Cost Limitation.--Notwithstanding 
     subsection (b), the Director may use not more than 5 percent 
     of amounts made available under subsection (g) to cover 
     salaries, expenses, and other administrative costs incurred 
     by the Director in making grants and provide assistance under 
     this section.
       ``(e) Application and Selection.--
       ``(1) In general.--The Director shall provide for local 
     governmental agencies described in subsection (a) to submit 
     applications for grants under this section and for 
     competitive selection, based on criteria established by the 
     Director, of agencies submitting such applications to receive 
     such grants.
       ``(2) Selection considerations.--In selecting applications 
     of local government agencies to receive grants under 
     paragraph (1), the Director shall consider--
       ``(A) the existence of a cooperative technical partner 
     agreement between the local governmental agency and the 
     Federal Emergency Management Agency;
       ``(B) the history of flood losses in the relevant area that 
     have occurred to properties, both inside and outside the 
     special flood hazards zones, which are not covered by flood 
     insurance coverage;
       ``(C) the estimated percentage of high-risk properties 
     located in the relevant area that are not covered by flood 
     insurance;

[[Page 25748]]

       ``(D) demonstrated success of the local governmental agency 
     in generating voluntary purchase of flood insurance; and
       ``(E) demonstrated technical capacity of the local 
     governmental agency for outreach to individual property 
     owners.
       ``(f) Direct Outreach by FEMA.--In each fiscal year that 
     amounts for grants are made available pursuant to subsection 
     (h), the Director may use not more than 50 percent of such 
     amounts to carry out, and to enter into contracts with other 
     entities to carry out, activities described in subsection (b) 
     in areas that the Director determines have the most immediate 
     need for such activities.
       ``(g) Reporting.--Each local government agency that 
     receives a grant under this section, and each entity that 
     receives amounts pursuant to subsection (f), shall submit a 
     report to the Director, not later than 12 months after such 
     amounts are first received, which shall include such 
     information as the Director considers appropriate to describe 
     the activities conducted using such amounts and the effect of 
     such activities on the retention or acquisition of flood 
     insurance coverage.
       ``(h) Authorization of Appropriations.--There is authorized 
     to be appropriated for grants under this section $50,000,000 
     for each of fiscal years 2008 through 2012.''.
       (b) Report on Current Efforts.--Not later than the 
     expiration of the 60-day period beginning on the date of the 
     enactment of this Act, the Director of the Federal Emergency 
     Management Agency shall submit a report to the Congress 
     identifying and describing the marketing and outreach efforts 
     then currently being undertaken to educate consumers 
     regarding the benefits of obtaining coverage under the 
     national flood insurance program.

     SEC. 16. GRANTS FOR DIRECT FUNDING OF MITIGATION ACTIVITIES 
                   FOR INDIVIDUAL REPETITIVE CLAIMS PROPERTIES.

       (a) Direct Grants to Owners.--Section 1323 of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4030) is amended--
       (1) in the section heading, by inserting ``DIRECT'' before 
     ``GRANTS''; and
       (2) in the matter in subsection (a) that precedes paragraph 
     (1)--
       (A) by inserting ``, to owners of such properties,'' before 
     ``for mitigation actions''; and
       (B) by striking ``1'' and inserting ``two''.
       (b) Availability of Funds.--Paragraph (9) of section 
     1310(a) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4017(a)) is amended by inserting ``which shall remain 
     available until expended,'' after ``any fiscal year,''.

     SEC. 17. EXTENSION OF PILOT PROGRAM FOR MITIGATION OF SEVERE 
                   REPETITIVE LOSS PROPERTIES.

       Section 1361A of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4102a) is amended--
       (1) in subsection (k)(1), by striking ``2005, 2006, 2007, 
     2008, and 2009'' and inserting ``2008, 2009, 2010, 2011, and 
     2012''; and
       (2) by striking subsection (l).

     SEC. 18. FLOOD MITIGATION ASSISTANCE PROGRAM.

       (a) Eligibility of Property Demolition and Rebuilding.--
     Section 1366(e)(5)(B) of the National Flood Insurance Act of 
     1968 (42 U.S.C. 4104c(e)(5)(B)) is amended by striking ``or 
     floodproofing'' and inserting ``floodproofing, or demolition 
     and rebuilding''.
       (b) Elimination of Limitations on Aggregate Amount of 
     Assistance.--Section 1366 of the National Flood Insurance Act 
     of 1968 is amended by striking subsection (f).
       (c) Source of Funds.--Subsection (a) of section 1367 of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4104d(a)) is 
     amended by adding at the end the following new sentence: 
     ``Notwithstanding any other provision of this title, amounts 
     made available pursuant to this subsection shall not be 
     subject to offsetting collections through premium rates for 
     flood insurance coverage under this title.''.
       (d) Technical Amendments.--Section 1366 of the National 
     Flood Insurance Act of 1968 is amended--
       (1) by striking ``subsection (g)'' each place such term 
     appears in subsections (h) and (i)(2) and inserting 
     ``subsection (f)'';
       (2) by redesignating subsections (g) through (k) as 
     subsections (f) through (j), respectively; and
       (3) by redesignating subsection (m) as subsection (k).

     SEC. 19. GAO STUDY OF METHODS TO INCREASE FLOOD INSURANCE 
                   PROGRAM PARTICIPATION BY LOW-INCOME FAMILIES.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study to identify and analyze 
     potential methods, practices, and incentives that would 
     increase the extent to which low-income families (as such 
     term is defined in section 3(b) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437a(b))) that own residential 
     properties located within areas having special flood hazards 
     purchase flood insurance coverage for such properties under 
     the national flood insurance program. In conducting the 
     study, the Comptroller General shall analyze the 
     effectiveness and costs of the various methods, practices, 
     and incentives identified, including their effects on the 
     national flood insurance program.
       (b) Report.--The Comptroller General shall submit to the 
     Congress a report setting forth the conclusions of the study 
     under this section not later than 12 months after the date of 
     the enactment of this Act.

     SEC. 20. NOTICE OF AVAILABILITY OF FLOOD INSURANCE AND ESCROW 
                   IN RESPA GOOD FAITH ESTIMATE.

       Subsection (c) of section 5 of the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2604(c)) is amended by 
     adding at the end the following new sentence: ``Each such 
     good faith estimate shall include the following conspicuous 
     statements and information: (1) that flood insurance coverage 
     for residential real estate is generally available under the 
     national flood insurance program whether or not the real 
     estate is located in an area having special flood hazards and 
     that, to obtain such coverage, a home owner or purchaser 
     should contact the national flood insurance program; (2) a 
     telephone number and a location on the World Wide Web by 
     which a home owner or purchaser can contact the national 
     flood insurance program; and (3) that the escrowing of flood 
     insurance payments is required for many loans under section 
     102(d) of the Flood Disaster Protection Act of 1973, and may 
     be a convenient and available option with respect to other 
     loans.''.

     SEC. 21. REITERATION OF FEMA RESPONSIBILITIES UNDER 2004 
                   REFORM ACT.

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

     SEC. 22. ONGOING MODERNIZATION OF FLOOD MAPS AND ELEVATION 
                   STANDARDS.

       (a) Ongoing Flood Mapping Program.--Section 1360 of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4101) is 
     amended by adding at the end the following new subsection:
       ``(k) Ongoing Program To Review, Update, and Maintain Flood 
     Insurance Program Maps.--
       ``(1) In general.--The Director, in coordination with the 
     Technical Mapping Advisory Council established pursuant to 
     section 576 of the National Flood Insurance Reform Act of 
     1994 (42 U.S.C. 4101 note) and section 22(b) of the Flood 
     Insurance Reform and Modernization Act of 2007, shall 
     establish an ongoing program under which the Director shall 
     review, update, and maintain national flood insurance program 
     rate maps in accordance with this subsection.
       ``(2) Inclusions.--
       ``(A) Covered areas.--Each map updated under this 
     subsection shall include a depiction of--
       ``(i) the 500-year floodplain;
       ``(ii) areas that could be inundated as a result of the 
     failure of a levee, as determined by the Director; and
       ``(iii) areas that could be inundated as a result of the 
     failure of a dam, as identified under the National Dam Safety 
     Program Act (33 U.S.C. 467 et seq.).
       ``(B) Other inclusions.--In updating maps under this 
     subsection, the Director may include--
       ``(i) any relevant information on coastal inundation from--

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

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

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

       ``(3) Standards.--In updating and maintaining maps under 
     this subsection, the Director shall establish standards to--
       ``(A) ensure that maps are adequate for--
       ``(i) flood risk determinations; and
       ``(ii) use by State and local governments in managing 
     development to reduce the risk of flooding;

[[Page 25749]]

       ``(B) facilitate the Director, in conjunction with State 
     and local governments, to identify and use consistent methods 
     of data collection and analysis in developing maps for 
     communities with similar flood risks, as determined by the 
     Director; and
       ``(C) ensure that emerging weather forecasting technology 
     is used, where practicable, in flood map evaluations and the 
     identification of potential risk areas.
       ``(4) Hurricanes katrina and rita mapping priority.--In 
     updating and maintaining maps under this subsection, the 
     Director shall--
       ``(A) give priority to the updating and maintenance of maps 
     of coastal areas affected by Hurricane Katrina or Hurricane 
     Rita to provide guidance with respect to hurricane recovery 
     efforts; and
       ``(B) use the process of updating and maintaining maps 
     under subparagraph (A) as a model for updating and 
     maintaining other maps.
       ``(5) Preventing delay of 100-year maps.--In carrying out 
     this section and this subsection, the Director shall take 
     such actions as may be necessary to ensure that updating and 
     publication of national flood insurance program rate maps to 
     include a depiction of the 500-year floodplain does not in 
     any manner delay the completion or publication of the program 
     rate maps for the 100-year floodplain.
       ``(6) Education program.--The Director shall, after each 
     update to a flood insurance program rate map, in consultation 
     with the chief executive officer of each community affected 
     by the update, conduct a program to educate each such 
     community about the update to the flood insurance program 
     rate map and the effects of the update.
       ``(7) Annual report.--Not later than June 30 of each year, 
     the Director shall submit a report to the Congress 
     describing, for the preceding 12-month period, the activities 
     of the Director under the program under this section and the 
     reviews and updates of flood insurance program rate maps 
     conducted under the program. Each such annual report shall 
     contain the most recent report of the Technical Mapping 
     Advisory Council pursuant to section 576(c)(3) of the 
     National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
     note).
       ``(8) Authorization of appropriations.--There is authorized 
     to be appropriated to the Director to carry out this 
     subsection $400,000,000 for each of fiscal years 2008 through 
     2013.''.
       (b) Reestablishment of Technical Mapping Advisory Council 
     for Ongoing Mapping Program.--
       (1) Reestablishment.--There is reestablished the Technical 
     Mapping Advisory Council, in accordance with this subsection 
     and section 576 of the National Flood Insurance Reform Act of 
     1994 (42 U.S.C. 4101 note).
       (2) Membership.--Paragraph (1) of section 576(b) of the 
     National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
     note) is amended--
       (A) in the matter preceding subparagraph (A), by striking 
     ``10'' and inserting ``14'';
       (B) by redesignating subparagraphs (E), (F), (G), (H), (I), 
     and (J) as subparagraphs (F), (G), (H), (K), (N), and (O), 
     respectively;
       (C) by inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) a representative of the Corps of Engineers of the 
     United States Army;'';
       (D) by inserting after subparagraph (H) (as so redesignated 
     by subparagraph (B) of this paragraph) the following new 
     subparagraphs:
       ``(I) a representative of local or regional flood and 
     stormwater agencies;
       ``(J) a representative of State geographic information 
     coordinators;''; and
       (E) by inserting after subparagraph (K) (as so redesignated 
     by subparagraph (B) of this paragraph) the following new 
     subparagraphs:
       ``(L) a representative of flood insurance servicing 
     companies;
       ``(M) a real estate professional;''.
       (3) Terms of members and appointment.--Section 576(b) of 
     the National Flood Insurance Reform Act of 1994 (42 U.S.C. 
     4101 note) is amended by adding at the end the following new 
     paragraph:
       ``(3) Terms of members.--
       ``(A) In general.--Each member of the Council pursuant to 
     any of subparagraphs (B) through (N) of paragraph (1) shall 
     be appointed for a term of 5 years, except as provided in 
     subparagraphs (B) and (C).
       ``(B) Terms of initial appointees.--As designated by the 
     Director (or the designee of the Director) at the time of 
     appointment, of the members of the Council first appointed 
     pursuant to subparagraph (D)--
       ``(i) 4 shall be appointed for a term of 1 year;
       ``(ii) 4 shall be appointed for a term of 3 years; and
       ``(iii) 5 shall be appointed for a term of 5 years.
       ``(C) Vacancies.--Any member of the Council appointed to 
     fill a vacancy occurring before the expiration of the term 
     for which the member's predecessor was appointed shall be 
     appointed only for the remainder of that term. A member may 
     serve after the expiration of that member's term until a 
     successor has taken office. A vacancy in the Council shall be 
     filled in the manner in which the original appointment was 
     made.
       ``(D) Initial appointment.--The Director, or the Director's 
     designee, shall take action as soon as possible after the 
     date of the enactment of the Flood Insurance Reform and 
     Modernization Act of 2007 to appoint the members of the 
     Council pursuant to this subsection.''.
       (4) Duties.--Subsection (c) of section 576 of the National 
     Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 note) is 
     amended to read as follows:
       ``(c) Duties.--The Council shall--
       ``(1) make recommendations to the Director for improvements 
     to the flood map modernization program under section 1360(k) 
     of the National Flood Insurance Act of 1968 (42 U.S.C. 
     41010(k));
       ``(2) make recommendations to the Director for maintaining 
     a modernized inventory of flood hazard maps and information; 
     and
       ``(3) submit an annual report to the Director that contains 
     a description of the activities and recommendations of the 
     Council.''.
       (5) Elimination of termination.--Section 576 of the 
     National Flood Insurance Reform Act of 1994 (42 U.S.C. 4101 
     note) is amended by striking subsection (k) and inserting the 
     following new subsection:
       ``(k) Continued Existence.--Section 14(a)(2)(B) of the 
     Federal Advisory Committee Act (5 U.S.C. App.; relating to 
     termination of advisory committees) shall not apply to the 
     Council.''.
       (c) Post-Disaster Flood Elevation Determinations.--Section 
     1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 
     4101), as amended by the preceding provisions of this Act, is 
     further amended by adding at the end the following new 
     subsection:
       ``(l) Interim Post-Disaster Flood Elevations.--
       ``(1) Authority.--Notwithstanding any other provision of 
     this section or section 1363, the Director may, after any 
     flood-related disaster, establish by order interim flood 
     elevation requirements for purposes of the national flood 
     insurance program for any areas affected by such flood-
     related disaster.
       ``(2) Effectiveness.--Such interim elevation requirements 
     for such an area shall take effect immediately upon issuance 
     and may remain in effect until the Director establishes new 
     flood elevations for such area in accordance with section 
     1363 or the Director provides otherwise.''.
       (d) Updating Upon Request of Community.--Paragraph (2) of 
     section 1360(f) of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4101(f)(2)) is amended by inserting before the 
     period at the end the following: ``, except that such a 
     revision or update shall be made at no cost to the unit of 
     government making the request if the request is being made to 
     reflect repairs and upgrades to dams, levees, or other flood 
     control projects under the jurisdiction and responsibility of 
     the Federal Government''.

     SEC. 23. NOTIFICATION AND APPEAL OF MAP CHANGES; NOTIFICATION 
                   OF ESTABLISHMENT OF FLOOD ELEVATIONS.

       Section 1363 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4104) is amended by striking the section 
     designation and all that follows through the end of 
     subsection (a) and inserting the following:
       ``Sec. 1363. (a) In establishing projected flood elevations 
     for land use purposes with respect to any community pursuant 
     to section 1361, the Director shall first propose such 
     determinations--
       ``(1) by providing the chief executive officer of each 
     community affected by the proposed elevations, by certified 
     mail, with a return receipt requested, notice of the 
     elevations, including a copy of the maps for the elevations 
     for such community and a statement explaining the process 
     under this section to appeal for changes in such elevations;
       ``(2) by causing notice of such elevations to be published 
     in the Federal Register, which notice shall include 
     information sufficient to identify the elevation 
     determinations and the communities affected, information 
     explaining how to obtain copies of the elevations, and a 
     statement explaining the process under this section to appeal 
     for changes in the elevations; and
       ``(3) by publishing in a prominent local newspaper the 
     elevations, a description of the appeals process for flood 
     determinations, and the mailing address and telephone number 
     of a person the owner may contact for more information or to 
     initiate an appeal.''.

     SEC. 24. CLARIFICATION OF REPLACEMENT COST PROVISIONS, FORMS, 
                   AND POLICY LANGUAGE.

       Not later than the expiration of the 3-month period 
     beginning on the date of the enactment of this Act, the 
     Director of the Federal Emergency Management Agency shall--
       (1) in plain language using easy to understand terms and 
     concepts, issue regulations, and revise any materials made 
     available by such Agency, to clarify the applicability of 
     replacement cost coverage under the national flood insurance 
     program;
       (2) in plain language using easy to understand terms and 
     concepts, revise any regulations, forms, notices, guidance, 
     and publications relating to the full cost of repair or 
     replacement under the replacement cost coverage to more 
     clearly describe such coverage to flood insurance 
     policyholders and information to be provided by such 
     policyholders relating to such coverage, and to avoid 
     providing misleading information to such policyholders;
       (3) revise the language in standard flood insurance 
     policies under such program regarding rating and coverage 
     descriptions in a manner that is consistent with language 
     used widely in other homeowners and property and casualty 
     insurance policies, including such language regarding 
     classification of buildings, basements, crawl spaces, 
     detached garages, enclosures below elevated buildings, and 
     replacement costs; and
       (4) require the use, in connection with flood insurance 
     policies, of the supplemental forms developed pursuant to 
     section 202 of the Bunning-Bereuter-Blumenauer Flood 
     Insurance

[[Page 25750]]

     Reform Act of 2004 (Public Law 108-264; 118 Stat. 725).

     SEC. 25. AUTHORIZATION OF ADDITIONAL FEMA STAFF.

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

     SEC. 26. EXTENSION OF DEADLINE FOR FILING PROOF OF LOSS.

       (a) In General.--Section 1312 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4019) is amended--
       (1) by inserting ``(a) Payment.--'' before ``The 
     Director''; and
       (2) by adding at the end the following new subsection:
       ``(b) Filing Deadline for Proof of Loss.--
       ``(1) In general.--In establishing any requirements 
     regarding notification, proof, or approval of claims for 
     damage to or loss of property which is covered by flood 
     insurance made available under this title, the Director may 
     not require an insured to notify the Director of such damage 
     or loss, submit a claim for such damage or loss, or certify 
     to or submit proof of such damage or loss, before the 
     expiration of the 180-day period that begins on the date that 
     such damage or loss occurred.
       ``(2) Exceptions.--Notwithstanding any deadline established 
     in accordance with paragraph (1), the Director may not deny a 
     claim for damage or loss described in such paragraph solely 
     for failure to meet such deadline if the insured demonstrates 
     any good cause for such failure.''.
       (b) Applicability.--Subsection (b) of section 1312 of the 
     National Flood Insurance Act of 1968, as added by subsection 
     (a)(2) of this section, shall apply with respect to any claim 
     under which the damage to or loss of property occurred on or 
     after the date of the enactment of this Act.

     SEC. 27. 5-YEAR EXTENSION OF PROGRAM.

       Section 1319 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4026) is amended by striking ``September 30, 
     2008'' and inserting ``September 30, 2013''.

     SEC. 28. REPORT ON INCLUSION OF BUILDING CODES IN FLOODPLAIN 
                   MANAGEMENT CRITERIA.

       Not later than the expiration of the 6-month period 
     beginning on the date of the enactment of this Act, the 
     Director of the Federal Emergency Management Agency shall 
     conduct a study and submit a report to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing and Urban Affairs of the Senate 
     regarding the impact, effectiveness, and feasibility of 
     amending section 1361 of the National Flood Insurance Act of 
     1968 (42 U.S.C. 4102) to include widely used and nationally 
     recognized building codes as part of the floodplain 
     management criteria developed under such section, and shall 
     determine--
       (1) the regulatory, financial, and economic impacts of such 
     a building code requirement on homeowners, States and local 
     communities, local land use policies, and the Federal 
     Emergency Management Agency;
       (2) the resources required of State and local communities 
     to administer and enforce such a building code requirement;
       (3) the effectiveness of such a building code requirement 
     in reducing flood-related damage to buildings and contents;
       (4) the impact of such a building code requirement on the 
     actuarial soundness of the National Flood Insurance Program;
       (5) the effectiveness of nationally recognized codes in 
     allowing innovative materials and systems for flood-resistant 
     construction; and
       (6) the feasibility and effectiveness of providing an 
     incentive in lower premium rates for flood insurance coverage 
     under such Act for structures meeting whichever of such 
     widely used and nationally recognized building code or any 
     applicable local building code provides greater protection 
     from flood damage.

     SEC. 29. STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY-
                   BASED PREMIUM RATES FOR PRE-FIRM STRUCTURES.

       (a) Study.--The Director of the Federal Emergency 
     Management Agency (in this section referred to as the 
     ``Director'') shall conduct a study of the economic effects 
     that would result from increasing premium rates for flood 
     insurance coverage made available under the national flood 
     insurance program for non-primary residences and non-
     residential pre-FIRM structures (as such term is defined in 
     section 578(b) of the National Flood Insurance Reform Act of 
     1994 (42 U.S.C. 4014 note) to the full actuarial risk based 
     premium rate determined under section 1307(a)(1) of the 
     National Flood Insurance Act of 1968 for the area in which 
     the property is located. In conducting the study, the 
     Director shall--
       (1) determine each area that would be subject to such 
     increased premium rates; and
       (2) for each such area, determine--
       (A) the amount by which premium rates would be increased;
       (B) the number and types of properties affected and the 
     number and types of properties covered by flood insurance 
     under this title likely to cancel such insurance if the rate 
     increases were made;
       (C) the effects that the increased premium rates would have 
     on land values and property taxes; and
       (D) any other effects that the increased premium rates 
     would have on the economy, homeowners, and renters of non-
     primary residences.
       (b) Report.--The Director shall submit a report to the 
     Congress describing and explaining the findings of the study 
     conducted under this section. The report shall be submitted 
     not later than 12 months after the date of the enactment of 
     this Act.

  The CHAIRMAN. No further amendment to the bill, as amended, is in 
order except those printed in part B of the report. Each further 
amendment may be offered only in the order printed in the report, by a 
Member designated in the report, shall be read considered read, shall 
be debatable for the time specified in the report, equally divided and 
controlled by the proponent and an opponent, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.


         Amendment No. 1 Offered by Mr. Frank of Massachusetts

  The CHAIRMAN. It is now in order to consider amendment No. 1 printed 
in part B of House Report 110-351.
  Mr. FRANK of Massachusetts. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Frank of Massachusetts:
       In the matter proposed to be inserted by section 7(a)(2) of 
     the bill, amend paragraph (2) of subsection (c) to read as 
     follows:
       ``(2) Community participation requirement.--Multiperil 
     coverage pursuant to this subsection may not be provided in 
     any area (or subdivision thereof) unless an appropriate 
     public body shall have adopted adequate mitigation measures 
     (with effective enforcement provisions) which the Director 
     finds are consistent with the criteria for construction 
     described in the International Code Council building codes 
     relating to wind mitigation.''.
       In the matter proposed to be inserted by section 7(d) of 
     the bill, in paragraph (1) of subsection (d) strike 
     ``windstorm-prone areas as to land management and use, 
     windstorm zoning, and windstorm damage prevention'' and 
     inserting ``wind events as to wind hazard prevention''.
       In the matter proposed to be inserted by the amendment made 
     by section 22(a) of the bill, in subsection (k), redesignate 
     paragraphs (4) through (8) as paragraphs (5) through (9), 
     respectively.
       In the matter proposed to be inserted by the amendment made 
     by section 22(a) of the bill, after subsection (k)(3) insert 
     the following new paragraph:
       ``(4) Mapping elements.--Each map updated under this 
     section shall meet the following requirements:
       ``(A) Ground elevation data.--The maps shall assess the 
     accuracy of current ground elevation data used for hydrologic 
     and hydraulic modeling of flooding sources and mapping of the 
     flood hazard and wherever necessary acquire new ground 
     elevation data utilizing the most up-to-date geospatial 
     technologies in accordance with the existing guidelines and 
     specifications of the Federal Emergency Management Agency.
       ``(B) Data on a watershed basis.--The maps shall develop 
     national flood insurance program flood data on a watershed 
     basis--
       ``(i) to provide the most technically effective and 
     efficient studies and hydrologic and hydraulic modeling; and
       ``(ii) to eliminate, to the maximum extent possible, 
     discrepancies in base flood elevations between adjacent 
     political subdivisions.
       ``(C) Other data.--The maps shall include any other 
     relevant information as may be recommended by the Technical 
     Mapping Advisory Council reestablished by section 22(b) of 
     the Flood Insurance Reform and Modernization Act of 2007.''.
       In section 22(b)(2)(A), strike ``14'' and insert ``15''.
       In section 22(b)(2)(B), strike ``(N), and (O)'' and insert 
     ``(O), and (P)''.
       In the matter proposed to be inserted by the amendment made 
     by section 22(b)(2)(E) of the bill, after subparagraph (M) 
     insert the following new subparagraph:
       ``(N) a member of a professional mapping association or 
     organization;''.
       At the end of the bill add the following new sections:

     SEC. 30. PROHIBITION ON ENFORCEMENT OF PENALTY ASSESSED ON 
                   CONDOMINIUM ASSOCIATIONS.

       Notwithstanding any other provision of law, the Director of 
     the Federal Emergency Management Agency shall not apply or 
     enforce any penalty relating to the national flood insurance 
     program assessed, during 2005 or thereafter, on condominium 
     associations that are underinsured under such program.

     SEC. 31. REPORT OF ADMINISTRATIVE EXPENSES OF WRITE-YOUR-OWN 
                   INSURERS; INDEPENDENT AUDITS.

       Section 1348 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4084) is amended

[[Page 25751]]

     by adding at the end the following new subsections:
       ``(c) Any insurance company or other private organization 
     executing any contract, agreement, or other appropriate 
     arrangement with the Director under this part shall--
       ``(1) annually submit to the Director a record of all 
     administrative and operating costs of the program undertaken; 
     and
       ``(2) biennially submit to the Director an independent 
     audit of the program undertaken that is conducted by a 
     certified public accountant to ensure that payments made are 
     proper and in accordance with this Act.
       ``(d) The Director shall review the records and audits 
     submitted under paragraphs (1) and (2) of subsection (c) to 
     determine if such payments are reasonable and if the system 
     by which the Director makes payments to an insurance company 
     or other private organization under this part should be 
     revised.

     ``SEC. 32. PLAN TO VERIFY MAINTENANCE OF FLOOD INSURANCE ON 
                   MISSISSIPPI AND LOUISIANA PROPERTIES RECEIVING 
                   EMERGENCY SUPPLEMENTAL FUNDS.

       ``The Director of the Federal Emergency Management Agency 
     shall develop and implement a plan to verify that persons 
     receiving funds under the Homeowner Grant Assistance Program 
     of the State of Mississippi or the Road Home Program of the 
     State of Louisiana from amounts allocated to the State of 
     Mississippi or the State of Louisiana, respectively, from the 
     Community development fund under the Emergency Supplemental 
     Appropriations Act to Address Hurricanes in the Gulf of 
     Mexico and Pandemic Influenza, 2006 (Public Law 109-148) are 
     maintaining flood insurance on the property for which such 
     persons receive such funds as required by each such 
     Program.''.

  The CHAIRMAN. Pursuant to House Resolution 683, the gentleman from 
Massachusetts (Mr. Frank) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Massachusetts.

                              {time}  1400

  Mr. FRANK of Massachusetts. Mr. Chairman, this is an amendment 
unanimously supported, I believe, certainly strongly supported by both 
majority and minority committee leadership and staffs. It incorporates 
a number of other amendments, and I am pleased to be able to say that 
at least here we were able to get some bipartisanship, because one of 
the amendments of the gentleman from Ohio (Mr. LaTourette), it improves 
the program in terms of mapping and other technical ways, and I believe 
that there is general agreement that this improves it.
  I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I rise to claim time in opposition, 
although I am not opposed to the amendment.
  The CHAIRMAN. Without objection, the gentlewoman from West Virginia 
is recognized for 5 minutes.
  There was no objection.
  Mrs. CAPITO. Mr. Chairman, I would like to thank the chairman for 
working with the manager's amendment with Members of our side. I 
appreciate his efforts as always.
  I yield 2 minutes in particular to
the gentleman from Ohio (Mr. LaTourette).
  Mr. LaTOURETTE. Mr. Chairman, I thank the gentlelady for yielding, 
and I rise today to support the manager's amendment and to offer my 
thanks to the chairman of the full committee, Chairman Frank.
  About a year ago in Ohio we had a 500-year event, and a lot of places 
that had never flooded, flooded. And what we found was that the current 
structure of the National Flood Insurance Program indicates that if the 
primary insurance, if there is a finding that it is underinsured, there 
is a penalty that attaches to it. It further goes on to say that if the 
penalty attaches and you don't pay out the limits on the first policy, 
you can't reach the secondary insurance.
  We had people in our hometown that basically did what they were 
supposed to do; they bought the secondary insurance, they were fully 
insured. The condominium owners association, however, was underinsured, 
and therefore we didn't reach the policies.
  The chairman joined with me in August in writing to FEMA to see if we 
could administratively reach some resolution. Sadly, we were unable to 
do that, and my thanks to Chairman Frank for including in his manager's 
amendment today something that not only reaches my constituents, 
because apparently that would be some kind of illegal earmark, but it 
reaches all people in the country that find themselves so afflicted. So 
my thanks to the chairman.
  Mr. FRANK of Massachusetts. Mr. Chairman, the gentleman is welcome. I 
reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Culberson).
  Mr. CULBERSON. Mr. Chairman, of all the irresponsible, bad ideas 
cooked up by the liberal leadership of the House, this has to be the 
blue ribbon boondoggle champion of bad ideas. This exposes the U.S. 
Treasury and the American taxpayers to a potential liability of up to 
$19 trillion of property from Maine to the Gulf Coast States. The flood 
insurance program is already, as we have heard, about, I believe, $20 
billion in debt already, the flood insurance is already underfunded, 
and yet we are going through this legislation, if it passes, expose the 
American taxpayers to untold billion dollars worth of liability every 
year. And this is a public-private partnership. As my friend Randy 
Neugebauer of Texas pointed out, the insurance companies on the private 
sector's part are going to collect the premiums and the American 
taxpayers are going to pay the bill.
  This is, I believe, one of the most dangerous and fiscally 
irresponsible pieces of legislation ever brought to the floor of the 
House probably in history, and certainly sets a blue ribbon record for 
the liberal leadership of this House.
  We need to all remember as guardians of the Treasury that the 
American taxpayers are already facing individually, according to the 
Government Accountability Office, every living American would have to 
buy $170,000 worth of Treasury bills today just to pay off the existing 
liabilities of the Federal Government, both direct and indirect. And it 
is unconscionable, it is absolutely intolerable that this Congress, 
this liberal leadership of this House would attempt to pass on to my 
daughter and our kids a potential liability reaching $19 trillion. It 
is unacceptable, it is outrageous, and I hope this House will soundly 
defeat this utterly irresponsible piece of legislation.
  Mr. FRANK of Massachusetts. Mr. Chairman, it might be superfluous, 
but I would want to point out that the speech we just heard has no 
bearing whatsoever to the amendment that is pending.
  Mr. CULBERSON. It is on the bill.
  Mr. FRANK of Massachusetts. The gentleman, I hope, would wait to be 
recognized. But in case anybody is trying to follow the debate and the 
rules, I would want to point out that we are debating a manager's 
amendment. And while the gentleman didn't know, what he was so 
expansively saying is, of course, unrelated to this particular 
amendment.
  Mrs. CAPITO. I yield my remaining time to the gentleman from Georgia 
(Mr. Kingston).
  Mr. KINGSTON. I thank the gentlewoman for yielding and I thank my 
friend from Massachusetts for generously yielding time, and I want to 
speak about the manager's amendment. Now that I have done that, I want 
to talk about Public Law 15.
  Public Law 15, or the McCarran-Ferguson Act, says that the States 
will be in charge of insurance, not the Federal Government.
  Therefore, when a company comes into a State or tries to leave a 
State, the State insurance commissioner actually has the opportunity to 
twist an arm and say, if you are going to come into my State, you have 
to write a certain amount of coastal property, a certain mix of teenage 
drivers, a certain mix of elderly people for health care or whatever. 
State insurance commissioners by Public Law 15, the McCarran-Ferguson 
Act, are very powerful in the insurance business.
  So I want to say that is where my philosophy comes from is that I do 
strongly believe that the States can twist arms and get a lot more 
done.
  But I just want to say that Federal flood fund insurance companies 
did not start until 1968; yet, we have historic properties all over the 
coast of America because the private sector was

[[Page 25752]]

there. And, again, having sold flood insurance through a private 
insurance company, I know that it is possible. And I don't know if the 
gentleman needs some time. I will be happy to yield, because it is your 
amendment.
  Mr. FRANK of Massachusetts. First of all, I agree. I thought he was 
talking about the Federal Government when he said ``we.'' And he is 
right, States have some power; the Federal Government does not. But 
even there, I believe he overstates the States' powers. And in fact, 
particularly in the Graham-Leach-Bliley bill, we gave some insurance 
companies the power to leave States, which we shouldn't have done. But 
States can be required, if they are going to do something, to do other 
things. But they can leave altogether, and the State insurance 
commissioners generally don't have the power to do that.
  Mr. KINGSTON. Reclaiming the time. I do believe that you have set a 
great message, and Mr. Taylor is a tireless advocate for coastal 
property. But at the same time, I do think that the McCarran-Ferguson 
Act gives the State insurance commissioners a pretty big hammer here 
which they ought to be using on the head of certain insurance company 
executives.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield back the balance of 
my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Massachusetts (Mr. Frank).
  The amendment was agreed to.


                 Amendment No. 2 Offered by Mr. Cardoza

  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in part B of House Report 110-351.
  Mr. CARDOZA. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Cardoza:
       At the end of section 22 of the bill, add the following new 
     subsection:
       (e) 5-Year Discount of Flood Insurance Rates for Formerly 
     Protected Areas.--Section 1308 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4015), as amended by the 
     preceding provisions of this Act, is further amended--
       (1) in subsection (c), by inserting ``and subsection (g)'' 
     before the first comma; and
       (2) by adding at the end the following new subsection:
       ``(g) 5-Year Discount of Flood Insurance Rates for Formerly 
     Protected Areas.--Notwithstanding any other provision of law 
     relating to chargeable risk premium rates for flood insurance 
     coverage under this title, in the case of any area that 
     previously was not designated as an area having special flood 
     hazards because the area was protected by a flood protection 
     system and that, pursuant to remapping under section 1360(k), 
     becomes designated as such an area as a result of the 
     decertification of such flood protection system, during the 
     5-year period that begins upon the initial such designation 
     of the area, the chargeable premium rate for flood insurance 
     under this title with respect to any property that is located 
     within such area shall be equal to 50 percent of the 
     chargeable risk premium rate otherwise applicable under this 
     title to the property.''.

  The CHAIRMAN. Pursuant to House Resolution 683, the gentleman from 
California (Mr. Cardoza) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from California.
  Mr. CARDOZA. Mr. Chairman, I yield myself 3\1/2\ minutes.
  I rise today in strong support of this amendment to H.R. 3121, the 
Flood Insurance Reform and Modernization Act of 2007. I thank the 
chairman of the committee, Mr. Frank, for his leadership on this issue. 
I would also be remiss if I did not mention that Congressman Hinojosa 
was very instrumental in helping me bring this amendment to the floor 
today, and his name was left off the list of coauthors although he was 
certainly instrumental, as well as Mrs. Lois Capps, our colleague from 
California who has a problem in the Santa Maria area and is also a 
supporter of this bill.
  I fully understand, Mr. Chairman, and appreciate the need to reform 
and modernize the National Flood Insurance Program. As we all know, the 
recent devastating hurricanes, Katrina, Rita and Wilma, not only ruined 
thousands of people's lives, but displaced tens of thousands of people 
and laid waste to millions of homes, causing billions of dollars in 
property damage, and they were exposed to the fragility of the National 
Flood Insurance Program. Mr. Taylor will speak later to that problem.
  At the same time, FEMA began a remapping of flood plains across the 
country. And while I agree that people should know whether they live in 
a protected area or not, FEMA's process has been terribly flawed from 
the beginning, and my constituents stand to suffer as a result.
  As we make the necessary reforms to the system, we must be cognizant 
of the impact this legislation could have on unsuspecting residents. 
FEMA's current plans to update the floodplain maps will force many 
people in my district and across the country to have to purchase flood 
insurance who are currently not required to purchase it. To add insult 
to injury, many of these people are low-income earners, and have no 
idea that this expense is looming.
  I commend the bill for recognizing this problem and taking some steps 
to address it; however, we must do more to help low-income people who 
will be affected. Our amendment addresses these concerns and blunts the 
impact the remapping process will have on low-income residents.
  This amendment says that people forced to purchase flood insurance as 
a result of a new map who live in an area that was previously certified 
and now have been decertified under the new FEMA process will have a 
grace period of 5 years in which they will be entitled to a 50 percent 
reduction in their flood insurance premium. The goal is that, during 
those 5 years, necessary upgrades will be made to the levees to bring 
them into compliance, thereby eliminating the mandatory requirement to 
purchase flood insurance.
  This amendment will have a huge impact on my district and many other 
parts of the country as well. It is simply unfair to, while requiring 
communities to upgrade their levees, also require them to purchase 
flood insurance at the same time. Many of these people are still paying 
on the levees that had initially protected them in the first place.
  By giving those who most need assistance a grace period, we are 
acknowledging the plight of these communities and taking action. This 
is the right thing to do. Moreover, given the volatile housing markets, 
we need to do everything possible to ensure people on the precipice 
remain in their homes. In my district, we have nearly 20,000 people who 
are currently facing foreclosure due to the subprime loan problem. 
Saddling these same people with more expenses when they can least 
afford it is counterproductive and contrary to the shared goal of 
promoting ownership. Let's help these people bring some balance to the 
flood insurance program and FEMA's remapping process. I urge my 
colleagues to support this amendment.
  I reserve the balance of my time.
  Ms. CAPITO. Mr. Chairman, I rise to claim time in opposition, 
although I am not opposed to the amendment.
  The CHAIRMAN. Without objection, the gentlewoman from West Virginia 
is recognized for 5 minutes.
  There was no objection.
  Ms. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Culberson).
  Mr. CULBERSON. Mr. Chairman, I wanted to ask the author of the 
amendment and the author of the legislation, if they are here, if they 
could identify, please, for the Record, other than Social Security and 
Medicare, can you all identify any piece of legislation that has ever 
exposed the American taxpayer to greater potential liability than this 
bill before the House today? Can you all identify a bigger boondoggle 
than this one? And you can have some of my time. I will yield. Can 
anyone on that side identify a bigger boondoggle than this that will 
expose the taxpayers to greater liability?
  Mr. CARDOZA. I would say there are several Republican boondoggles 
that we have seen in the last few years.
  Mr. CULBERSON. Please name one.
  Mr. CARDOZA. The drug program. The unheard of tax cuts that were not 
paid for. There have been several things that have exposed the American

[[Page 25753]]

Treasury to boondoggles, and they have been authored by the gentleman's 
party.
  Mr. CULBERSON. Tax cuts pay for themselves by growth in the economy.
  Mr. CARDOZA. That is not what the Congressional Budget Office says.
  Mr. CULBERSON. Reclaiming my time. When people have more of their own 
money to spend, the economy grows because they invest and we are 
rewarding people for hard work and productive behavior.
  Other than Social Security and Medicare, which are noble, good 
programs that have helped this Nation, other than those two, has there 
ever been a piece of legislation exposing the American taxpayer to 
greater potential liability than this boondoggle that you are putting 
before the House today? And I gladly yield some of my time, Mr. Taylor. 
Can you identify a bigger boondoggle than this one?
  Mr. TAYLOR. Sure. No more than I challenge the question as to whether 
or not this is a boondoggle. We have recognized a problem; we are 
addressing it in a means that pays for itself.
  On the other hand, when the Republican majority controlled this 
House, they brought a prescription drug benefit to the floor.
  Mr. CULBERSON. Which I voted against.
  Mr. TAYLOR. Which increased the liability of the taxpayers for over 
$1 trillion and had no funding mechanism. And then they held the vote 
open for 3 hours to twist arms to pass it. So, sir, that is it.
  Mr. CULBERSON. Reclaiming my time. The Republican leadership might 
have bent the rules to give American seniors a drug benefit; but we 
didn't break the rules and steal a vote, as you all did, to give 
illegal aliens access to Federal benefits. And that shows the 
difference in priorities, I would point out.

                              {time}  1415

  Mr. CARDOZA. Mr. Chairman, I recognize my colleague from Texas (Mr. 
Reyes) for 1 minute.
  Mr. REYES. Thank you, Congressman Cardoza and Congressman Ross, for 
your valuable assistance in crafting this important amendment.
  I also want to thank our friend, as Congressman Cardoza mentioned, 
Ruben Hinojosa, who could not join us here this afternoon.
  Our amendment stands both for fairness and the integrity of the 
National Flood Insurance Program.
  In El Paso, which is my district, FEMA is currently in the process of 
issuing new floodplain maps. Initially, the community didn't think much 
of this exercise because, simply, many didn't know that they had ever 
lived in a floodplain and didn't expect any problems with this issue.
  However, when FEMA asked the Federal agency in charge of flood 
control, the International Boundary and Water Commission, about the 
condition of our levees, the answer came back that they were 
unsatisfactory. The levees were missing a few feet of free board, which 
is supplemental height and therefore could not be certified, which 
meant that now members of our community in El Paso were now subject to 
flood insurance.
  That is why this amendment is necessary. That's why we're trying to 
correct an issue and a problem that everyday people need to wrestle 
with.
  Mrs. CAPITO. Mr. Chairman, I would like to yield my remaining time to 
the gentleman from Georgia (Mr. Kingston).
  Mr. KINGSTON. Mr. Chairman, maybe somebody in the majority party 
could clarify something for me. Does this apply to the wind coverage? 
Does the gentleman, author of the legislation, know? Does this apply to 
the wind storm coverage? Does this amendment apply to wind storm?
  Mr. CARDOZA. This amendment applies to levees.
  Mr. KINGSTON. Does it apply to the wind storm policy? And here's why 
I'm asking: as I understand it, we're talking about a multi-peril 
policy that would have flood and wind. And a mortgagee, or a bank, the 
lender is going to require you to carry flood insurance. Therefore, you 
go out in the market, well, it won't be the market. You go to Uncle 
Sugar, I mean Uncle Sam, and you say, I want to get this policy and 
you're going to get the flood care, but they're also going to sell you 
the wind storm as part of it.
  So is it your intent for people who are in this floodplain area to 
also get a discount on their wind storm coverage?
  Mr. CARDOZA. This amendment's intent is to cover folks who are in 
flood areas now that are currently covered by levees that, through no 
fault of their own, FEMA's come in and decertified. They had 
regulations 2 years ago that said they were fine. They've changed 
regulations on these folks.
  So it's not my intent to affect in any way the wind portion of the 
policy.
  Mr. KINGSTON. Well, if the gentleman will let me ask, and I'll yield 
back to you, but where in your policy does it say they won't get the 
discount on the wind coverage? Because I understand what you're doing 
on the flood. But it appears that wind is going to be in this package. 
I don't see how we divide it out.
  Mr. CARDOZA. My amendment is silent to the wind coverage, sir. It 
doesn't speak to that.
  Mr. KINGSTON. But am I correct that when my lender requires me to 
carry the flood insurance, then I'm also going to FEMA for the wind 
storm insurance?
  Mr. FRANK of Massachusetts. If the gentleman would yield.
  Mr. CARDOZA. I would yield.
  Mr. FRANK of Massachusetts. I just double-checked with the staff, and 
there is no discount available for wind. It's in the bill.
  Mr. KINGSTON. Would they have to be in the amendment?
  Mr. FRANK of Massachusetts. The language is, in the case of any area 
that previously was not designated as an area having special flood 
hazards because the area was protected, it becomes designated as such 
an area, and it's all about flood. Here it is: the chargeable premium 
rate for flood insurance under this title shall be, et cetera. So if 
the gentleman would look at the bottom of the amendment, I'm trying to 
answer the question.
  Mr. KINGSTON. Mr. Cardoza said it was silent on it, which it sounds 
like. From what you just read, that's correct. Wouldn't it have to 
proactively exclude the discount for wind? I'm just asking.
  Mr. FRANK of Massachusetts. If the gentleman would yield to me one 
second, lines 18 and 19, the chargeable premium rate for flood 
insurance under this title shall be 50 percent.
  The CHAIRMAN. The gentleman from Georgia's time has expired. The 
gentleman from California has 30 seconds remaining on his side.
  Mr. KINGSTON. Maybe if Mr. Frank could finish that sentence.
  Mr. CARDOZA. I yield my remaining time to the chairman of the 
committee, Mr. Frank.
  Mr. FRANK of Massachusetts. The law is the law. The amendment would 
change things. In that sense the gentleman is right: it is silent. It's 
silent on the wind part, which means it doesn't change it. It 
explicitly changes the flood part only. And look at lines 18, 19 and 
pages 1, 2 and 3, and it specifically restricted the flood.
  Mr. KINGSTON. But in a multi-peril policy, you're only getting one 
premium.
  Mr. FRANK of Massachusetts. Oh, no. The gentleman is wrong. The 
gentleman should yield to the gentleman from Mississippi.
  Mr. TAYLOR. Since you were in the business, you know that if you have 
a federally backed mortgage and you live in a floodplain, you have to 
buy flood insurance. The wind policy will be totally voluntary. It is 
an option to those people who wish to purchase. There is nothing in the 
law to require people to buy the wind policy.
  The CHAIRMAN. The gentleman from California's time has expired.
  The question is on the amendment offered by the gentleman from 
California (Mr. Cardoza).
  The amendment was agreed to.


                 Amendment No. 3 Offered by Ms. Castor

  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in part B of House Report 110-351.
  Ms. CASTOR. Mr. Chairman, I offer an amendment.

[[Page 25754]]

  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Ms. Castor:
       At the end of the bill add the following new section:

     SEC. __. GAO STUDY OF FACTORS AFFECTING ENROLLMENT IN 
                   MULTIPERIL INSURANCE PROGRAM.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study to identify and analyze factors 
     affecting enrollment in the multiperil insurance program. 
     Such study shall include a study of the effects of the 
     multiperil insurance program on enrollment and pricing of 
     State residual property and casualty markets or plans and 
     State catastrophe plans.
       (b) Report.--Not later than 270 days after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to Congress a report containing the conclusions of the study 
     conducted under subsection (a).

  The CHAIRMAN. Pursuant to House Resolution 683, the gentlewoman from 
Florida (Ms. Castor) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentlewoman from Florida.
  Ms. CASTOR. Mr. Chairman, I yield myself as much time as I might 
consume.
  This amendment commissions a GAO study to examine the effect of the 
new multi-peril coverage option which is established as an option in 
this bill on State insurers and catastrophe funds like those in my 
State of Florida. This amendment works very well with the initiative of 
Chairman Frank and my colleague from Florida, Ms. Brown-Waite, and 
their very thoughtful initiatives. But it builds upon it.
  And the particular problem in my State of Florida is that the State 
insurance company, Citizens, now holds 1.3 million policies. Citizens 
is supposed to be an insurer of last resort; but because private 
insurance companies have left the State, they've withdrawn from the 
market, Citizens has ballooned to over 40 percent of the property wind 
insurance market. Citizens, however, does not have the reserves, the 
sufficient financial reserves, we believe, to pay the level of claims 
that would result from a catastrophic hurricane. In the event of a 
serious storm, Citizens may be forced to turn to public funds again.
  The new multi-peril option, I know it's in dispute now, but however 
you feel about it, we need to get to the bottom of the effect it will 
have on our State insurers and catastrophic funds. It could offer new 
fiscally sound choices for those in high-risk areas. It has the 
potential to help address wind insurance availability so that the 
public is not on the hook for claims when the next storm hits.
  If the new option is successful in making insurance available to 
areas where private insurers refuse to go, multi-peril and this wind 
storm option could relieve the pressure on State insurers like Citizens 
in Florida. But serious questions remain to be answered about how these 
State and Federal programs will interact.
  Will State insurers leave room in the market for an actuarially based 
Federal program to achieve high enough enrollment to make a difference?
  Will State policies change to help their citizens take advantage of 
the Federal multi-peril program?
  How will enrollment rates of State plans change to reflect the new 
Federal entrant into the market?
  These are important questions for both Congress and States to ask. 
There will also undoubtedly be interaction between State and Federal 
programs that will affect enrollment in ways that we cannot anticipate.
  So, Mr. Chairman, the study commissioned in this bill will provide 
vital information to help officials at all levels of government work 
together to better understand and administer the new multi-peril and 
wind storm option.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I rise to claim the time in opposition, 
although I am not opposed to the amendment.
  The Acting CHAIRMAN (Mr. Ross). Without objection, the gentlewoman 
from West Virginia is recognized for 5 minutes.
  There was no objection.
  Mrs. CAPITO. Mr. Chairman, I would like to yield 2 minutes to the 
gentleman from Illinois (Mr. Roskam).
  Mr. ROSKAM. Mr. Chairman, I find it ironic, actually, that this 
amendment, which has its merits, is being advanced, but that other 
amendments that are sort of similarly situated weren't placed in order. 
For example, this amendment says that in 9 months the GAO is going to 
be charged with the responsibility, essentially, of looking back for 
the past 9 months and looking at the impact on State insurance 
programs. Great. Really no argument there.
  But if looking back is a good idea, isn't looking forward a good idea 
too? Isn't a prospective look forward at the possibility something that 
we ought to be doing?
  I just find it concerning that we're willing to put a potential 
program, put the brakes on a potential program and be reflective, when 
we, at this very moment in time, as we sit here today, as we stand here 
today, we have the opportunity to accomplish this task by asking the 
GAO to look forward and look at the impact of this. This is part of the 
amendments that were, unfortunately, ruled out of order and were not 
allowed to be brought to the House and we're going to be denied an 
opportunity to have an up or down vote on the wind program, as Mr. 
Hensarling had suggested in his amendment. And yet we're being told, 
well, you know what, take a glance back after 9 months and let's sort 
of see how we're doing. And, oh, by the way, we tend to ignore what the 
GAO says anyway since they've put the National Flood Insurance Program 
on a high-risk watch list, essentially; and without any managerial 
changes we're entrusting that group that is on a watch with this great 
responsibility.
  And I think this amendment really brings that real concern to mind, 
that those of us on this side of the aisle were not being given the 
opportunity to really debate this in totality.
  Ms. CASTOR. Mr. Chairman, I appreciate the comments of my colleague 
from Illinois, and there certainly is a prospective, forward-looking 
request of the GAO, and it builds upon the very thoughtful initiative 
by my colleague from Florida, Ms. Brown-Waite, and the chairman of the 
committee, Mr. Frank.
  I yield 1 minute to the gentleman from Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Chairman, at a meeting of the 
committee, I thought the gentleman was present, the gentlewoman from 
Florida (Ms. Ginny Brown-Waite) asked if I would join in a letter to 
the GAO asking very many of the questions he asked. I have the letter, 
dated August 9, 2007. And earlier in the general debate, Ms. Brown-
Waite asked me to engage in a colloquy and commit to taking seriously 
the recommendations. So we have already asked the GAO for a study, and 
I believe that study will be going forward.
  And if it hasn't already been done, at the appropriate time I will 
place the letter that the gentlewoman from Florida (Ms. Ginny Brown-
Waite) and I sent to the GAO into the Record.

                                         House of Representatives,


                              Committee on Financial Services,

                                   Washington, DC, August 9, 2007.
     Hon. David M. Walker,
     Comptroller General of the United States, Government 
         Accountability Office, Washington, DC.
       Dear Mr. Walker: We request that the Government 
     Accountability Office (GAO) initiate a review into a variety 
     of questions regarding the expansion of the National Flood 
     Insurance Program (NFIP) to include an optional wind 
     insurance program. The results of your review will assist 
     congressional understanding of how such a program could be 
     implemented and to what extent it would affect the private 
     market.
       As background, Section 7 of H.R. 3121, the Flood Insurance 
     Reform and Modernization Act of 2007 creates a new program at 
     the NFIP designed to enable NFIP participants to purchase 
     both wind and flood coverage in a single policy, A key 
     provision of Section 7 requires that rates charged for this 
     new, optional, wind coverage be risk-based and actuarially 
     sound, so that the program collects premiums sufficient to 
     pay all reasonably anticipated claims. In so stating, H.R. 
     3121 specificaI1y departs from the method of determining 
     actuarial rates currently used by the NFIP.
       Under H.R. 3121 the NFIP would provide optional wind 
     coverage in communities that already participate in the NFIP 
     and that

[[Page 25755]]

     agree to adopt and enforce building codes and standards 
     designed to minimize wind damage. In order for you to better 
     understand the details of the new wind insurance program we 
     have enclosed a copy of H.R. 3121, Section 7 with this 
     request.
       In addition to any issues you deem appropriate, we would 
     like the GAO to initiate a comprehensive analysis and 
     determination of the following:
       1. The ability of the Federal Emergency Management Agency 
     (FEMA) and the NFIP to implement an actuarially-sound (i.e., 
     with rates priced according to risk, or as defined by 
     standards and methods generally accepted by the actuary 
     industry, incorporating up-to-date modeling technology, and 
     taking into consideration administrative expenses) wind 
     insurance program, including: whether FEMA's current staff 
     and resources enable it to efficiently and effectively expand 
     the NFIP to offer optional wind coverage; how actuarial rates 
     for such coverage could be determined; the likelihood that 
     consumers would purchase coverage at these rates; how this 
     new coverage would be underwritten and sold; how claims 
     arising from this new coverage would be adjusted and paid; 
     whether FEMA's staff and resources are sufficient to be 
     prepared to implement this new wind insurance program on or 
     before June 30, 2008; what additional staff and 
     administrative costs are necessary in order for FEMA to 
     effectively implement and administer this new wind insurance 
     program; and how the availability of optional wind insurance 
     through the NFIP could affect the enforcement of the NFIP's 
     mandatory purchase requirement for flood insurance.
       2. The effects, if any, this program could have on existing 
     State wind pools, including capitalization of, and 
     participation in, the wind pools.
       3. Whether expanding the NFIP to provide optional wind 
     coverage could: affect the availability and affordability, 
     over the long-term, of wind coverage nationwide; influence 
     the development in private sector markets, including the 
     surplus and non-admitted markets, for multiple peril 
     insurance, or alternatives; result in adverse selection, 
     whereby the wind insurance program could be under diversified 
     and particularly vulnerable to large events; and lead to the 
     development of lower, yet actuarially sound rates for wind 
     coverage similar to wind coverage offered by the private 
     sector, in the same geographic area.
       4. To what extent, if any, the new wind insurance program 
     could expose U.S. taxpayers to loss, including but not 
     limited to the case of program deficit.
       5. Are alternative methods available to provide NFIP 
     participants with better wind coverage options.
       6. To what extent, if any, gaps in coverage may still 
     exist, between the coverage included under most homeowners 
     policies, and the flood and wind coverage provided by the 
     NFIP.
       As referenced above, H.R. 3121 requires the NFIP to 
     implement the new wind insurance program by June 30, 2008. 
     For this reason, it is our strong hope that you complete your 
     study provide us with your findings no later than April 1, 
     2008.
       Thank you very much for your assistance as we attempt to 
     further our understanding of these important issues related 
     to the NFIP. If you have any questions regarding this 
     request, please contact Tom Glassic or Arnie Woeber.
           Sincerely,
     Barney Frank.
     Ginny Brown-Waite.

  Mrs. CAPITO. Mr. Chairman, I yield myself such time as I may consume.
  In listening to the debate over this amendment, my question becomes, 
if we move forward and make wind part of one of the insurable events 
under this program, and then we study, through the gentlelady's 
amendment, the effect this has on State insurance, and we find out, 
after it's already been put into effect, that it's too costly or it's 
damaging the insurability at the State level and other issues, what are 
we going to do then?
  This is where it goes to my argument in the beginning that we're 
really entering into this prematurely, because we have so many 
unanswered questions.
  Mr. Chairman, I reserve the balance of my time.
  Ms. CASTOR. Mr. Chairman, I will reserve the balance of my time until 
it is time to close.
  Mrs. CAPITO. Mr. Chairman, I yield 1 minute to the gentleman from 
Texas (Mr. Culberson).
  Mr. CULBERSON. Mr. Chairman, I'd like to ask the author of the 
amendment if she'd be willing to accept an amendment that we also ask 
the GAO to examine the effects on the taxpayers of the United States of 
all the perils created by this legislation and the financial risk this 
exposes the taxpayers too, because, again I think it's vitally 
important for this House to recognize that the potential liability this 
legislation exposes the taxpayer to, as Mr. Baker said earlier, there's 
about $19 trillion worth of insurable property around the coast of the 
United States. The flood insurance program's already $20 billion in 
debt, and the United States, according to the GAO, already faces 
potential liabilities, direct and indirect, not potential, direct and 
indirect liabilities of $50 trillion.

                              {time}  1430

  That works out to $170,000 per person. Every household in the United 
States would have to buy $440,000 worth of T bills today just to pay 
for the explicit and implicit liabilities of the United States.
  And, finally, I would just remind the majority of something that my 
hero Thomas Jefferson said in his first inaugural address because of 
repeated attempts, this majority has shut out all amendments by the 
minority. Thomas Jefferson said that although the rule of the majority 
is in all cases to prevail, that rule to be rightful must be reasonable 
and must always protect the rights of the minority, which this majority 
has not done.
  Ms. CASTOR. Mr. Chairman, I yield 30 seconds to the chairman of the 
committee.
  Mr. FRANK of Massachusetts. First, Mr. Chairman, I hope the gentleman 
from Texas will remember this problem about spending when we again 
debate the proposal to spend hundreds of billions of dollars sending a 
manned spaceship to Mars, which I have been opposed to, and I hope he 
will join me in that unnecessary expenditure and oppose it.
  Secondly, CBO says he is wrong. The wind part is written, unlike the 
flood part, to require actuarially sound policy premiums to break even, 
and CBO certified that it's there. So the notion that this is adding 
trillions or even billions to our debt is simply wrong, according to 
CBO.
  Mrs. CAPITO. Mr. Chairman, I have no further requests for time, and I 
yield back the balance of my time.
  Ms. CASTOR. Mr. Chairman, just to close, rather than any attention 
placed on Mars, I am glad that here in the Congress we are able to 
place some attention on our coastal areas in this country that are at 
risk from catastrophic loss.
  I urge approval of my amendment.
  Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Florida (Ms. Castor).
  The amendment was agreed to.


                 Amendment No. 4 Offered by Ms. Castor

  The Acting CHAIRMAN. It is now in order to consider amendment No. 4 
printed in part B of House Report 110-351.
  Ms. CASTOR. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Ms. Castor:
       In the matter proposed to be inserted by section 7(d) of 
     the bill, in paragraph (2) of subsection (d) strike 
     ``windstorms'' and insert ``windstorms, discourage density 
     and intensity or range of use increases in locations subject 
     to windstorm damage, and enforce restrictions on the 
     alteration of wetlands coastal dunes and vegetation and other 
     natural features that are known to prevent or reduce such 
     damage''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the 
gentlewoman from Florida (Ms. Castor) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from Florida.
  Ms. CASTOR. Mr. Chairman, I yield myself such time as I may consume.
  This amendment will help protect homeowners in coastal areas from 
windstorms by ensuring that natural wind barriers remain intact. It 
instructs the Director of FEMA to consider natural protective sand 
dunes and wetlands when developing criteria for the multi-peril 
insurance. No matter how you feel about the multi-peril option in this 
bill, I think everyone will agree that it is in our country's best 
interest to discourage any investment of public dollars in those areas.

[[Page 25756]]

  One of the most sensible features of the National Flood Insurance 
Program is the requirement that in order to remain eligible, 
communities must enact strong growth management laws, flood mitigation 
strategies that will help prevent catastrophic losses rather than just 
responding to them when they occur. The bill we are considering today 
expands the national flood insurance with an optional wind component. 
Just like flood policies, wind policies will be contingent on 
prevention and mitigation activities developed by FEMA.
  While it's absolutely imperative that homeowners themselves take the 
initiative to prepare their properties for windstorms, some of the best 
mitigation and prevention measures naturally exist along the coast. So 
no matter what your opinion is of the multi-peril option, if government 
is going to offer a multi-peril option for windstorm damage, our 
interest should be in doing all we can do to reduce the risk side of 
the equation. In the event of a hurricane, wetlands and coastal dunes 
act as shock absorbers, and these natural environmental features bear 
the brunt of the monumental pounding of wind so that homes, businesses, 
and schools don't have to.
  I am also going to recognize another colleague, but at this time I 
urge approval of the amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I would like to claim time in opposition, 
although I am not opposed to the gentlewoman's amendment.
  The Acting CHAIRMAN. Without objection, the gentlewoman from West 
Virginia is recognized for 5 minutes.
  There was no objection.
  Mrs. CAPITO. I would like to yield 2 minutes to the gentleman from 
Georgia (Mr. Kingston).
  Mr. KINGSTON. Mr. Chairman, I just want to say I'm confused here. 
This is opening up the floodgates for coastal development. Whom are we 
fooling here? As a matter of fact, I just understood that U.S. PIRG and 
a lot of pro-environmental groups are opposing this. It puts me on an 
odd side of things. But whom are we kidding? This is all about coastal 
development. And don't say, when you're knocking over the marshland, 
don't touch that sand dune. If you're serious about sand dunes, if 
you're serious about the wetlands, if you're serious about the 
environment, the fragile coastal environment, you will oppose this 
bill. This is the best thing in the world for developers. In fact, I'm 
a little bit surprised that developers aren't knocking down the doors 
and saying to fiscal conservatives who are opposing the bill for that, 
what are you doing? This is the best thing.
  The great State of Florida, where I have vacationed and so many other 
people do, we all love the State of Florida and its natural 
environment. But, goodness gracious, Carl Hiaasen wrote the book 
``Strip Tease.'' I mean, there's book after book about overdevelopment 
in Florida.
  That is all this whole bill does is allow continued overdevelopment 
in the coastal area of Florida and other environmental areas. So to 
have a fig leaf here to say, well, don't worry, FEMA is going to worry 
about that sand dune and those sea oats in the coastal area, that's a 
very mixed signal.
  Let me yield to my friend from Massachusetts, who I am sure has some 
great wisdom for this confused guy.
  Mr. FRANK of Massachusetts. As the gentleman knows, I was opposed to 
the Rules Committee's decision to keep out several Republican 
amendments. I now regret that even more because if the gentleman had a 
real amendment to argue for, he wouldn't be making these badly strained 
irrelevant arguments on this particular poor little amendment. It 
really doesn't deserve all the rhetoric it's getting.
  Mr. KINGSTON. Mr. Chairman, I reclaim my time.
  I want to say to Mr. Frank, do you not agree with me that this is the 
greatest development bill there is?
  The Acting CHAIRMAN. The time of the gentleman from Georgia has 
expired.
  Ms. CASTOR. Mr. Chairman, I yield 30 seconds to the chairman.
  Mr. FRANK of Massachusetts. Mr. Chairman, to answer the direct 
question by the gentleman, no, I would not say this is the greatest 
development bill. But I would also say he says he was puzzled. Not as 
puzzled as I am in trying to figure out what in the world this had to 
do with the amendment we are dealing with. Maybe it is considered, I 
don't know, stuffy to deal with the amendment under consideration. I 
always prefer it as a method of debate.
  Mrs. CAPITO. Mr. Chairman, I yield 2 minutes to the gentleman from 
Georgia (Mr. Kingston).
  Mr. KINGSTON. Let me restate. Right now it is a fact homeowners and 
lenders are having trouble getting flood insurance and windstorm 
insurance in the areas where there are lots of floods and lots of 
windstorms, coastal areas. This allows them to get it at an economic 
price that is a lot lower than the private sector because it's a 
government subsidy. Therefore, America, being great entrepreneurs, this 
is a very pro-growth, pro-development amendment. I cannot understand 
how you would not agree with that.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. KINGSTON. I yield to the gentleman.
  Mr. FRANK of Massachusetts. In the first place, the flood part 
environmentalists strongly support because it restricts where people 
can go and raises the fee. As to the wind part, it's not a subsidy.
  Mr. KINGSTON. Let me reclaim my time just to bite on that piece of 
the apple.
  Mr. FRANK of Massachusetts. If you don't like the answer, don't ask 
the question.
  Mr. KINGSTON. Reclaiming my time, Mr. Chairman, let me say this. We 
just passed an amendment for people who have to buy insurance. They 
don't have to buy insurance. They can move. If they are living in areas 
that are susceptible to flood, this is still a free America. They can 
move on. So we are encouraging them to move into flood areas and 
windstorm areas that are critical environmental areas.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. KINGSTON. Yes.
  Mr. FRANK of Massachusetts. The amendment that you are talking about 
specifically did not encourage anybody to move. It dealt with people 
who are already there, having moved there previously, found 
subsequently they were in a flood area. But the general thrust of the 
bill on flood, strongly supported by environmentalists, is to increase 
the amount that's charged in many cases and to restrict the building.
  As to wind, there is no subsidy. It is required to be actuarially 
soundly financed. So, yes, it's a government program, but one without 
any subsidy to the homeowner on the wind part.
  Mr. KINGSTON. Reclaiming my time, Mr. Chairman, just to emphasize 
this point. This creates a stable predictability in the insurance 
premium by the homeowner and developer. Therefore, it makes it easier 
to develop in a coastal area.
  Listen, I understand what you are doing, but I just think this fig 
leaf of an amendment saying let's protect the environment is a little 
bit silly because the entire point of the bill disregards the 
environment.
  Ms. CASTOR. Mr. Chairman, I yield 1 minute to my colleague from 
Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Chairman, I am actually encouraged by some of the 
common expression that is here. I share some of my friend from 
Georgia's reservations about where we are getting into with wind 
coverage. The chairman is right when he noted the focus on restrictions 
for flood insurance to reduce the problems you are talking about is in 
the underlying bill. What my good friend from Florida is offering is if 
you are going to be in this area dealing with wind peril that there is 
a requirement to discourage elements in the land uses that will not 
make it worse.
  So you are both on the same side. You may want to go further with the 
wind peril. I am open to that. We are not done with this legislation 
yet.

[[Page 25757]]

There are unanswered questions. I agree with you. But in the meantime, 
acknowledging what the committee has done to narrow the scope with 
flood insurance peril, which is, I think, extraordinarily positive, and 
the gentlewoman is speaking out for solid land use, having the natural 
barriers protected, that will save all of us money.
  I am optimistic. If we can talk this through, there are enough 
elements here that will be good for the environment, good for the 
taxpayer, and under the leadership of Chairman Frank, I am convinced we 
can get there before we're done.
  Mrs. CAPITO. Mr. Chairman, I have no further requests for time, and I 
yield back the balance of my time.
  Ms. CASTOR. Mr. Chairman, the Federal multi-peril option must not be 
an invitation to develop on our sensitive natural coasts, and we must 
protect the natural windbreaks like the coastal dune areas. That is why 
it is important to instruct FEMA, as they develop the eligibility 
criteria for the multi-peril program, that they must take into account 
the natural protective features.
  Mr. Chairman, I urge my colleagues to adopt this amendment and 
protect the natural wind barriers that will make damage mitigation 
efforts more manageable.
  Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Florida (Ms. Castor).
  The amendment was agreed to.


               Amendment No. 5 Offered by Mr. Blumenauer

  The Acting CHAIRMAN. It is now in order to consider amendment No. 5 
printed in part B of House Report 110-351.
  Mr. BLUMENAUER. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Blumenauer:
       Subsection (k)(2) of section 1360 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4101), as added by section 
     22(a) of the bill, is amended by adding at the end the 
     following new subparagraph:
       ``(C) Effects of global warming.--In updating and 
     maintaining maps under this section, the Director shall--
       ``(i) take into consideration and account for the impacts 
     of global climate change on flood, storm, and drought risks 
     in the United States;
       ``(ii) take into consideration and account for the 
     potential future impact of global climate change-related 
     weather events, such as increased hurricane activity, 
     intensity, storm surge, sea level rise, and associated 
     flooding; and
       ``(iii) use the best available climate science in assessing 
     flood and storm risks to determine flood risks and develop 
     such maps.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Oregon (Mr. Blumenauer) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Oregon.
  Mr. BLUMENAUER. Mr. Chairman, I am, in fact, encouraged with some of 
the discussion that is here today. If we sort of cut through some of 
the areas where people are cranky, as I understand it, I think we are 
looking at some broad areas of agreement that, at the end of the day, 
we are going to have a stronger flood insurance program that will be 
able to answer some of these questions. I have an amendment that I 
think will further strengthen this because, as we learned during 
Katrina, there is more work to be done to make sure that the flood 
insurance program is able to fulfill its mission of providing flood 
insurance and helping communities reduce that flood risk.
  Now, I am pleased that the underlying legislation makes some very 
important reforms to the program that I have been involved with for the 
last 6 years.

                              {time}  1445

  What I propose in this amendment is an adjustment to the legislation 
to help ensure that FEMA is better prepared for current and future 
risks and that people have the information that they need to reduce 
their own risk. The amendment simply requires FEMA to take into 
consideration the impacts of global warming, current and future, when 
updating and maintaining flood insurance program rate maps.
  The flood insurance maps are significantly outdated; over 75 percent 
of them are at least 10 years old. Not only are they outdated, but they 
estimate risk by extrapolating solely from historic loss, as my friend 
from Louisiana (Mr. Baker) pointed out earlier.
  Unfortunately, it looks like the future will bring new weather 
patterns. A recent report from the Intergovernmental Commission on 
Climate Change, the leading group of climate scientists from around the 
world, indicated that, with climate change, future hurricanes will 
become more intense, with larger peak wind speeds and heavier 
precipitation. Changes in snow pack and sea level rise will also have a 
significant impact on flood risk. These impacts are not currently 
considered in the floodplain map modernization effort.
  My amendment will improve upon this mapping program by ensuring that 
FEMA is prepared to improve the mapping accuracy. It will require the 
Director to take into consideration the impacts of global warming on 
flood, storm and drought risk; and take into consideration the 
potential future impacts of local climate change, weather-related 
events; and use the best available climate science in assessing flood 
risks and updating FEMA maps.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I rise in opposition to the amendment.
  The Acting CHAIRMAN. The gentlewoman from West Virginia is recognized 
for 5 minutes.
  Mrs. CAPITO. I would like to ask the author of this amendment a 
couple of questions just for my own clarification, if I could.
  First of all, when you're directing FEMA to use the most up-to-date 
science on global climate change and weather-related issues, does FEMA 
currently have this technology available? Where does this technology 
exist for FEMA? And with what type of accuracy can you predict that 
FEMA will be able to predict? I know FEMA is in the business of 
declaring where floodplains are; it has a lot of science connected with 
this. Where is this technology coming from? What sophistication of the 
equipment exists, and how do you think these will be arrived at?
  I yield to the gentleman from Oregon.
  Mr. BLUMENAUER. Excellent question. Around the world, scientists are 
a part of this consensus, and we are refining tools. One of the 
problems with this administration is they've been trying to stifle, as 
you know, scientists within the administration speaking out on this, 
and we have undercut investment in these resources.
  The fact is that there is better information now for climate change. 
I have no problem whatsoever of our being able to invest to increase it 
further, but there is a global scientific consensus, there is 
investment in NASA, there are already resources within the Federal 
Government. They are not currently used now by FEMA, the stuff that 
we've got now, let alone what we're going to have in the future.
  Mrs. CAPITO. Well, my question would be, if that's available to FEMA 
now to be able to more accurately predict the ebb and flow of water 
across the United States and the coastal regions, why isn't that being 
used by FEMA right now, if that's available? Is it statutorial?
  Mr. BLUMENAUER. As my friend, Mr. Baker, pointed out when he was 
arguing a few moments ago, they use a different pattern, a different 
model right now. What we're doing with this legislation is we are 
requiring them to change the model, use the information that's 
available right now by the Federal Government, hopefully the Bush 
administration won't try and stifle it, and use that for forecasting 
current and prospective. Right now they don't do it in their modeling, 
and there's no reason why they can't. This legislation would require 
it.
  Mrs. CAPITO. Then going further from what you're saying, is what 
you're really saying changing the entire FEMA modeling perspective, or

[[Page 25758]]

putting this on top of what is already existing at FEMA?
  Mr. BLUMENAUER. What we're saying now is that we are in a world that 
everybody else acknowledges is rapidly changing. It looks like climate 
change, global warming is a reality, and just using straight-line 
extrapolation for FEMA to determine 100-year flood
plains or 500-year floodplains doesn't work because it is changing much 
more rapidly than past patterns would expect.
  So we ought to use the best available science here and around the 
world to look at what's likely to happen in the future. FEMA doesn't 
currently do that. They look at flat-line projections of past activity, 
not looking at using the best available science for what's going to 
happen in the future.
  Mrs. CAPITO. Thank you. I have a lot of questions about the answer to 
the question I just asked; but at this point, I will yield 1 minute to 
the gentleman from Georgia (Mr. Kingston).
  Mr. KINGSTON. I want to say to my friend, I actually think that 
you're feeling around the right part of the woods on this stuff. This 
is actually an important amendment; but I, like the gentlewoman from 
West Virginia, really doubt FEMA's expertise in solving this problem. 
And I hope that during the legislative process of this you can maybe 
shore up the language to say that they ought to have somebody with a 
lot better scientific and organizational mind than they would be in 
this. I mean, I keep thinking FEMA-Katrina, not a good idea to let them 
study anything. In fact, there are a whole slew of amendments here that 
probably won't be speaking of, but it gives FEMA instructions and 
directions to do this and that. I don't have the faith in FEMA which 
your side apparently does. I think this is like asking the post office 
to do an efficiency study; it's just not a good idea.
  But I do believe that you should put in there something about rising 
tides because you don't have anything about tidal levels. In the State 
of Georgia, we have a 7-foot tide, Florida has about a 1- or 2-foot 
tide. That stuff all makes a difference.
  Mr. BLUMENAUER. Mr. Chairman, may I inquire as to the time remaining.
  The Acting CHAIRMAN. The gentleman from Oregon has 2\1/2\ minutes 
remaining; the gentlewoman from West Virginia has 1 minute remaining.
  Mr. BLUMENAUER. Let me just take 30 seconds here.
  This is something that isn't unknown. GAO found that 11 out of 11 
insurance companies that they surveyed already incorporate this into 
their risk models. FEMA can do this using the private sector, and it 
can use government data that the Bush administration has been 
suppressing now in other areas, open it up, let these climate 
scientists that work in other parts of the government advise FEMA, or 
contract with the private sector. It's not hard to find the 
information.
  Mrs. CAPITO. I yield 30 seconds to the gentleman from Georgia.
  Mr. KINGSTON. I want to say to my friend, again, I support what 
you're after; I think this is a serious amendment. But when you say 
this information is out there, FEMA can get it, it was also well known 
that people were in the Superdome, but FEMA had trouble figuring that 
out and what to do about it. So just keep in mind who you're giving 
this authority to. But I do want to say to the gentleman, I understand 
what you're after, and I think it's important.
  Mrs. CAPITO. I think the gentleman's amendment has great merit, but I 
question the fact that he's already mentioned that the data that we're 
using in the future, the data that we're using to come about insurance 
rates in this flood bill, how can we then add on wind as another peril 
when we're not sure that the data that we're using to predict future 
weather forces is accurate at all?
  Mr. Chairman, I yield back the balance of my time.
  Mr. BLUMENAUER. In conclusion, Mr. Chairman, I understand the 
reticence that my good friend from Georgia would have giving the 
current administration of FEMA more tools. I'm sorry he's beating up on 
the administration, but I understand it. They haven't shown that 
they're very adept. But think of this as longer-term legislation. There 
will be a new administration; there will be professionals who are 
there. The point is that, whoever is there, they need to use the most 
up-to-date, modern information to think about what's going on in the 
future.
  The science is already available in parts of the Federal Government 
right now that could be used. The information is available that the 
private sector is already using. All this amendment says, 
notwithstanding that I share your concern about who's running it now, 
but that will change, I guarantee you, that when it changes, and even 
until it changes, we can give them a mandate to look at the bigger 
picture and factor climate change in. And I am open to working with the 
gentleman in terms of whether it's contracted, or it's Federal 
information, or it's from other international sources. The point is 
they currently do not do it; we haven't instructed them to do it. This 
is one thing we can't blame on the inept FEMA administration; it's 
something that Congress needs to change. And with your help, we can 
approve this amendment, we'll change their marching orders, we will 
have the big picture, and it's one of these things we can agree on, 
work on together, and we will all be better off.
  I urge approval of the amendment.
  Mr. WELCH of Vermont. Mr. Chairman, first, I want to thank the 
gentleman from Massachusetts, Mr. Frank and the gentlewoman from 
California, Ms. Waters, for their hard work in preparing H.R. 3121, the 
Flood Insurance Reform and Modernization Act of 2007. I have received 
positive feedback from the Regional Planning Commissioners and 
emergency managers in support of this bill. The Planning Commissioners 
and emergency managers serve on the front-line of declared disasters 
and work with both towns and FEMA. In fact, Vermont has recently dealt 
with several significant flooding events and this legislation will go a 
long I way to improving our response in the aftermath. This bill also 
provides much needed reform of the National Flood Insurance Program, 
NFIP.
  I also want to thank the gentleman from Oregon, Mr. Blumenauer, for 
his thoughtful amendment and working with me and Representative 
Gilchrest as co-sponsors. This bi-partisan amendment requires FEMA to 
consider modern climate science when mapping floodplains. Current flood 
maps do not take into account critical information beyond past flooding 
history. Accurate floodplain maps incorporating scientific global 
warming impact predictions will ensure that citizens are aware of the 
future flood risks in their communities and help prevent the loss of 
human life, property, and important wildlife habitat. Communities will 
be able to use these maps in considering their own land use planning 
and development projects.
  I believe that the focus on global warming adaptation planning is 
critical while Congress also moves forward to aggressively address 
climate change through legislation. Adaptation includes addressing the 
occurrence and likelihood of more frequent, intense, and severe storms 
bringing our rivers and streams beyond flood stage; sea-level rise 
flooding coastal and tidal communities that may even be hundreds of 
miles inland; reduced snow-pack that is changing annual runoff and 
water collection; and of course the impact of hurricanes; all of which 
are resulting in significantly greater flooding across the nation.
  Vermont communities like Barre or, our capitol of Montpelier are 
finding that surrounding rivers and streams are more unpredictable--
large rain events have resulted in dramatic river and stream bank 
erosion that promotes flooding in nearby towns. Rivers and streams are 
overflowing in areas that were not typically flooded. We are finding 
flooding events both in and out of current flood plains where people 
have lost property due to sudden and unexpected river and stream rise. 
Many of these families are low-income and their homeowners insurance, 
if they have it, does not cover their claims. And of course, they don't 
qualify for SBA disaster assistance loans.
  We believe that changing weather patterns require the tools for smart 
land use and development decision-making. Updated climate science flood 
mapping will help all citizens make informed decisions on flood risks 
and the need to purchase flood insurance. Updated flood maps will also 
aid communities in smart growth planning to minimize the risk of 
flooding to their cities and towns.
  This amendment has received strong support by the National Wildlife 
Federation, U.S.

[[Page 25759]]

Public Interest Group, Sierra Club, League of Conservation Voters, 
Natural Resource Defense Council, Friends of the Earth, Audubon, 
Earthjustice, American Rivers, Republicans for Environmental 
Protection, and the Union of Concerned Scientists.
  I strongly urge my colleagues to support this amendment.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Oregon (Mr. Blumenauer).
  The amendment was agreed to.


    Amendment No. 6 offered by Mr. Patrick J. Murphy of Pennsylvania

  The Acting CHAIRMAN. It is now in order to consider amendment No. 6 
printed in part B of House Report 110-351.
  Mr. PATRICK J. MURPHY of Pennsylvania. Mr. Chairman, I offer an 
amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mr. Patrick J. Murphy of 
     Pennsylvania:
       At the end of the bill, add the following new section:

     SEC. 30. NATIONAL FLOOD INSURANCE ADVOCATE; REPORTS.

       Chapter II of the National Flood Insurance Act of 1968 is 
     amended by inserting after section 1330 (42 U.S.C. 4041) the 
     following new section:

     ``SEC. 1330A. NATIONAL FLOOD INSURANCE ADVOCATE.

       ``(a) Establishment of Position.--
       ``(1) In general.--There shall be in the Federal Emergency 
     Management Agency a National Flood Insurance Advocate. The 
     National Flood Insurance Advocate shall report directly to 
     the Director and shall, to the extent amounts are provided 
     pursuant to subsection (c), be compensated at the same rate 
     as the highest rate of basic pay established for the Senior 
     Executive Service under section 5382 of title 5, United 
     States Code, or, if the Director so determines, at a rate 
     fixed under section 9503 of such title.
       ``(2) Appointment.--The National Flood Insurance Advocate 
     shall be appointed by the Director and the flood insurance 
     advisory committee established pursuant to section 1318 (42 
     U.S.C. 4025) and without regard to the provisions of title 5, 
     United States Code, relating to appointments in the 
     competitive service or the Senior Executive Service.
       ``(3) Qualifications.--An individual appointed under 
     paragraph (2) shall have--
       ``(A) a background in customer service as well as 
     insurance; and
       ``(B) experience in representing individual insureds.
       ``(4) Restriction on employment.--An individual may be 
     appointed as the National Flood Insurance Advocate only if 
     such individual was not an officer or employee of the Federal 
     Emergency Management Agency with duties relating to the 
     national flood insurance program during the 2-year period 
     ending with such appointment and such individual agrees not 
     to accept any employment with the Federal Emergency 
     Management Agency for at least 5 years after ceasing to be 
     the National Flood Insurance Advocate. Service as an employee 
     of the National Flood Insurance Advocate shall not be taken 
     into account in applying this paragraph.
       ``(5) Staff.--To the extent amounts are provided pursuant 
     to subsection (c), the National Flood Insurance Advocate may 
     employ such personnel as may be necessary to carry out the 
     duties of the Advocate.
       ``(b) Duties.--The duties of the National Flood Insurance 
     Advocate shall be to conduct studies with respect to, and 
     submit, the following reports:
       ``(1) Report on problems of insureds under national flood 
     insurance program.--Not later than the expiration of the 12-
     month period beginning on the date of the enactment of the 
     Flood Insurance Reform and Modernization Act of 2007, the 
     National Flood Insurance Advocate shall submit a report to 
     the Congress regarding the national flood insurance program, 
     which shall--
       ``(A) identify areas in which insureds under such program 
     have problems in dealings with the Federal Emergency 
     Management Agency relating to such program, and shall contain 
     a summary of at least 20 of the most serious problems 
     encountered by such insureds, including a description of the 
     nature of such problems;
       ``(B) identify areas of the law relating to the flood 
     insurance that impose significant compliance burdens on such 
     insureds or the Federal Emergency Management Agency, 
     including specific recommendations for remedying such 
     problems;
       ``(C) identify the 10 most litigated issues for each 
     category of such insureds, including recommendations for 
     mitigating such disputes;
       ``(D) identify the initiatives of the Agency to improve 
     services for insureds under the national flood insurance 
     program and actions taken by the Agency with respect to such 
     program;
       ``(E) contain recommendations for such administrative and 
     legislative action as may be appropriate to mitigate or 
     resolve problems encountered by such insureds; and
       ``(F) include such other information as the National Flood 
     Insurance Advocate considers appropriate.
       ``(2) Report on establishment of an office of the flood 
     insurance advocate.--Not later than the expiration of the 6-
     month period beginning on the date of the initial appointment 
     of a National Flood Insurance Advocate under this section, 
     the Advocate shall submit a report to the Congress regarding 
     the feasibility and effectiveness of establishing an Office 
     of the Flood Insurance Advocate, headed by the National Flood 
     Insurance Advocate, to assist insureds under the national 
     flood insurance program in resolving problems with the 
     Federal Emergency Management Agency relating to such program. 
     Such report shall examine and analyze, and include 
     recommendations regarding--
       ``(A) an appropriate structure in which to establish such 
     an Office, and appropriate levels of personnel for such 
     Office;
       ``(B) other appropriate functions for such an Office, which 
     may include--
       ``(i) identifying areas in which such insureds have 
     problems in dealing with the Agency relating to such program;
       ``(ii) proposing changes in the administrative practices of 
     the Agency to resolve or mitigate problems encountered by 
     such insureds; and
       ``(iii) identifying potential legislative changes which may 
     be appropriate to resolve or mitigate such problems;
       ``(C) appropriate procedures for formal response by the 
     Director to recommendations submitted to the Director by the 
     National Flood Insurance Advocate;
       ``(D) the feasibility and effectiveness of authorizing the 
     National Flood Insurance Advocate to issue flood insurance 
     assistance orders in cases in which the Advocate determines 
     that a qualified insured is suffering or about to suffer a 
     significant hardship as a result of the manner in which the 
     flood insurance laws are being administered or meets such 
     other requirements may be appropriate, including examining 
     and analyzing--
       ``(i) appropriate limitations on the scope and effect of 
     such orders;
       ``(ii) an appropriate standard for determining such a 
     significant hardship;
       ``(iii) appropriate terms of flood insurance assistance 
     orders; and
       ``(iv) appropriate procedures for modifying or rescinding 
     such orders;
       ``(E) the feasibility and effectiveness of establishing 
     offices of flood insurance advocates who report to the 
     National Flood Insurance Advocate, including examining and 
     analyzing--
       ``(i) the appropriate coverage and geographic allocation of 
     such offices;
       ``(ii) appropriate procedures and criteria for referral of 
     inquiries by insureds under such program to such offices;
       ``(iii) allowing such advocates to consult with appropriate 
     supervisory personnel of the Agency regarding the daily 
     operation of the offices; and
       ``(iv) providing authority for such advocates not disclose 
     to the Director contact with, or information provided by, 
     such an insured;
       ``(F) appropriate methods for developing career paths for 
     flood insurance advocates referred to in subparagraph (E) who 
     may choose to make a career in the Office of the Flood 
     Insurance Advocate; and
       ``(G) such other issues regarding the establishment of an 
     Office of the Flood Insurance Advocate as the National Flood 
     Insurance Advocate considers appropriate.
       ``(3) Direct submission of reports.--Each report required 
     under paragraph (2) shall be provided directly to the 
     Congress by the National Flood Insurance Advocate without any 
     prior review or comment from the Director, the Secretary of 
     Homeland Security, or any other officer or employee of the 
     Federal Emergency Management Agency or the Department of 
     Homeland Security, or the Office of Management and Budget.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated for fiscal year 2008 and each 
     fiscal year thereafter such sums as may be necessary to carry 
     out this section.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Pennsylvania (Mr. Patrick J. Murphy) and a Member opposed each 
will control 5 minutes.
  The Chair recognizes the gentleman from Pennsylvania.
  Mr. PATRICK J. MURPHY of Pennsylvania. Mr. Chairman, I yield myself 2 
minutes.
  I come before you today, Mr. Chairman, on behalf of Anne Beck of 
Erwinna, Pennsylvania; Tony Plescha of Yardley, Pennsylvania; Nancy 
Rees of Yardley, Pennsylvania; and thousands of families across my 
district of Bucks County who have been hit by three floods in 3 years.
  Mr. Chairman, I ask my colleagues to picture a family distraught, a 
home in tatters, and rain that just won't stop. If that family asked 
for help, either from their insurance company or from

[[Page 25760]]

FEMA, they would face a maze of bureaucracy instead of relief. As of 
right now, there is no one who will fight for families or business 
owners who seek assistance in rebuilding after a catastrophic storm.
  We are trying to change that here today. With this amendment, we are 
looking to create the Office of the Flood Insurance Advocate, someone 
to fight for all of us when we need help the most.
  Modeled after the successful Taxpayer Advocate Service at the IRS, 
this office would fight the battles for weary, rain-soaked families and 
businesses looking to rebuild.
  In creating the Flood Insurance Advocate, our measure would help cut 
through the red tape. The National Flood Insurance Advocate would do 
two major things: the first, report to Congress about problems facing 
the flood insurance program; and, second, determine the most effective 
way to create the Office of the Flood Insurance Advocate nationwide.
  Mr. Chairman, families and businesses back home need our help.
  I now yield 3 minutes to the distinguished gentleman from New York, a 
colleague in the Blue Dog Coalition, Mr. Mike Arcuri.
  Mr. ARCURI. Mr. Chairman, I rise to join my good friend from 
Pennsylvania (Mr. Patrick J. Murphy) in strong support of this 
amendment and the underlying legislation.
  I would like to thank the distinguished chairman of the Financial 
Services Committee for producing a bill that updates the National 
Federal Insurance Program to meet the needs of the 21st century. It 
improves flood mapping; increases financial accountability; and is 
comprehensive, responsible public policy that will benefit thousands of 
Americans in the highest risk areas.
  Mr. Chairman, across my district in upstate New York, the increasing 
frequency and destructive power of rainstorms and snow melts in recent 
years has caused flooding disasters which have seriously damaged homes 
and businesses in a number of communities.
  Some of these communities in the Susquehanna River Basin, like the 
city of Oneonta, suffered a fate last year similar to the areas in 
Pennsylvania situated in the Delaware River Basin. The city of Oneonta 
experienced very damaging flooding in June of 2006 caused by severe 
rainstorms. However, it is now September of 2007, and there are local 
homeowners and businesses still wrestling with FEMA's burdensome claims 
process waiting on settlements they were assured as National Flood 
Insurance Program policyholders.
  Mr. Chairman, the same is true for the local city government in 
Oneonta. It took almost 1 whole year after the disaster for FEMA to 
fully reimburse the city for repairs to public infrastructure severely 
damaged during the floods. Even after many months of persistence at the 
regional FEMA office, the city was left with no recourse and had to 
seek the assistance of my office for intervention.
  Finally, after encountering hurdle after hurdle for a year, the city 
received their reimbursement from FEMA. We should ask ourselves, should 
we not strive to create more efficiency in an agency that is still 
learning lessons in the aftermath of Katrina and Rita?

                              {time}  1500

  Mr. Chairman, the amendment Mr. Murphy and I are offering today will 
study the feasibility of creating an independent office within FEMA. 
Its primary task will be to help local homeowners and business owners 
in Upstate New York and across the U.S. to navigate the often tedious 
and complicated Federal flood insurance claims system within the 
National Flood Insurance Program.
  The amendment establishes a National Flood Insurance Advocate, which 
would be tasked with providing insurance policyholders across the U.S. 
with a type of ombudsman to represent the public interest by 
investigating and addressing complaints. The amendment also requires 
that the National Flood Insurance Advocate report to Congress with 
analysis of the major problems facing the National Flood Insurance 
Program. This National Flood Insurance Advocate is based on the 
successful model of the Taxpayer Advocate Service, which has helped 
countless constituents navigate the Internal Revenue Services.
  Mr. Chairman, I urge my colleagues to support the adoption of this 
amendment, and I urge support for passage of the bill.
  Mrs. CAPITO. Mr. Chairman, I would like to claim time in opposition 
to the amendment, but I am not necessarily opposed to it.
  The Acting CHAIRMAN. Without objection, the gentlewoman from West 
Virginia is recognized for 5 minutes.
  There was no objection.
  Mrs. CAPITO. Mr. Chairman, I would like to yield 2 minutes to the 
gentleman from Texas (Mr. Culberson).
  Mr. CULBERSON. I am glad we are considering this amendment to have 
FEMA give us a comprehensive report of the problems facing the flood 
insurance program. We already established that this legislation, in 
essence, is going to create a public-private partnership in which the 
insurance companies are going to collect the premium and the taxpayers 
are going to pay the bill. We have already established, as Mr. Baker 
pointed out earlier, that there is potentially $19 trillion worth of 
valuation of property out there along the coastlines that are, again, a 
risk that the taxpayers are assuming. The TRIA legislation, Terrorism 
Risk Insurance legislation that the liberal leadership of this House 
pushed through last week puts taxpayers potentially on the hook for 
$100 billion.
  I wanted, if I could, to just get an answer to my question in the 
time that I have got. Other than Social Security and Medicare and not 
counting the Mars program that the chairman mentioned, because there is 
no such program, can the chairman or anyone else on that side identify 
a single piece of legislation that has created a bigger potential risk 
to the taxpayers than this bill? This, I won't say boondoggle, but this 
piece of legislation creates potentially trillions of dollars worth of 
liability. Is there any piece of legislation you can identify other 
than Social Security or Medicare that creates potentially trillions of 
dollars worth of liability to the taxpayers?
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. CULBERSON. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Virtually every piece of legislation we 
deal with, because this legislation has two parts, one part which will 
reduce an existing liability, that is, there is already out there a 
flood insurance liability. This bill, unanimously agreed to by all in 
the committee who worked on it, will reduce that in the flood part.
  With regard to water, this will raise premiums and restrict 
placement. With regard to the new part, the wind part, it will create 
no liability, because as I have said several times, the bill strictly 
says that premiums will have to be actuarially sound. And CBO has 
certified that that is accurate. So CBO has certified this will, over 
time, produce no new liability on wind and save money on water.
  Mr. PATRICK J. MURPHY of Pennsylvania. Mr. Chairman, I yield myself 
the balance of my time.
  Mr. Chairman, in closing, I want to tell you about Nancy Rees of 
Yardley, Pennsylvania. Over the last 3 years, Yardley was hit with 
three floods. Mrs. Rees came to our office because her insurance policy 
was rated with the wrong formulas. This seemingly simple mistake cost 
her an extra $10,000 per year in insurance premiums. $10,000 more a 
year. Thankfully for Mrs. Rees, after countless hours of working with 
our staff, she was successful. But in this case, a flood insurance 
advocate could have stood up for her in the wake of a major flood. That 
is why we need to pass this amendment.
  Mrs. CAPITO. Mr. Chairman, I yield my remaining time to the gentleman 
from Texas (Mr. Culberson).
  Mr. CULBERSON. In response to the distinguished chairman's point that 
the legislation requires that the program be actuarially sound, that is 
true

[[Page 25761]]

that is in the bill that you produced here. However, the law also 
requires that the flood insurance program be actuarially sound. It is 
$20 billion in debt. The legislation before the House asked the Federal 
Government, the taxpayers, to assume a potential liability for the $19 
trillion worth of insured property, a valuation of property just along 
the coastline. It is important to remember that the taxpayers of the 
United States are already facing liability of $50.5 trillion according 
to the Government Accountability Office. It is just irresponsible. It 
is dangerous to pass legislation like this, creating a massive new 
expansion of an existing program that is already $20 billion in debt at 
a time when the country faces massive debt and massive deficits. It is 
just irresponsible and dangerous.
  I wanted to point out to the House and to the people out there 
listening, Mr. Chairman, that this legislation is fiscally 
irresponsible. It is dangerous.
  Mr. Chairman, I urge the House to defeat it. It is a bad idea to pass 
on the liability like this to the taxpayers.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. CULBERSON. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. The mistakes the gentleman makes are 
these; the basis on which the flood insurance policies are set is 
different. The one in this bill, the wind policy, it is a much tougher 
requirement to be actuarially sound. And CBO, unlike the gentleman from 
Texas, can read the bill.
  Mr. CULBERSON. This is a brand new liability that we are passing on 
to my daughter and to the children of America, to the people of the 
United States who are already saddled with $15.5 trillion worth of 
liability, and it is just irresponsible. It is unacceptable. It is 
outrageous to create a massive new program like this that if it passes 
that could create, potentially, liability in the trillions of dollars. 
That is my point. There has never been a more expensive nor more 
massive creation of potential liability to the taxpayers than this 
legislation before the House today. That is my point.
  Mr. Chairman, I urge every Member who cares about the fiscal solvency 
of the United States to vote ``no'' against this legislation.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Pennsylvania (Mr. Patrick J. Murphy).
  The amendment was agreed to.


                 Amendment No. 7 Offered by Mr. Taylor

  The Acting CHAIRMAN. It is now in order to consider amendment No. 7 
printed in part B of House Report 110-351.
  Mr. TAYLOR. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Mr. Taylor:
       In the matter proposed to be inserted by the amendment made 
     by section 7(a)(2) of the bill, in subsection (c)(7)(A), 
     after ``residential properties'' insert the following: ``, 
     which shall include structures containing multiple dwelling 
     units that are made available for occupancy by rental 
     (notwithstanding any treatment or classification of such 
     properties for purposes of section 1306(b))''.
       In the matter proposed to be inserted by the amendment made 
     by section 7(a)(2) of the bill, in subsection (c)(7)(A)(ii), 
     before the semicolon insert the following: ``, which limit, 
     in the case of such a structure containing multiple dwelling 
     units that are made available for occupancy by rental, shall 
     be applied so as to enable any insured or applicant for 
     insurance to receive coverage for the structure up to a total 
     amount that is equal to the product of the total number of 
     such rental dwelling units in such property and the maximum 
     coverage limit per dwelling unit specified in this clause''.
       In section 8 of the bill, strike paragraph (3) and insert 
     the following:
       (2) in paragraph (4)--
       (A) by striking ``$500,000'' each place such term appears 
     and inserting ``$670,000''; and
       (B) by inserting before ``; and'' the following: ``; except 
     that, in the case of any nonresidential property that is a 
     structure containing more than one dwelling unit that is made 
     available for occupancy by rental (notwithstanding the 
     provisions applicable to the determination of the risk 
     premium rate for such property), additional flood insurance 
     in excess of such limits shall be made available to every 
     insured upon renewal and every applicant for insurance so as 
     to enable any such insured or applicant to receive coverage 
     up to a total amount that is equal to the product of the 
     total number of such rental dwelling units in such property 
     and the maximum coverage limit per dwelling unit specified in 
     paragraph (2); except that in the case of any such multi-
     unit, nonresidential rental property that is a pre-FIRM 
     structure (as such term is defined in section 578(b) of the 
     National Flood Insurance Reform Act of 1994 (42 U.S.C. 4014 
     note)), the risk premium rate for the first $500,000 of 
     coverage shall be determined in accordance with section 
     1307(a)(2) and the risk premium rate for any coverage in 
     excess of such amount shall be determined in accordance with 
     section 1307(a)(1)''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Mississippi (Mr. Taylor) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Mississippi.
  Mr. TAYLOR. Mr. Chairman, I thank the chairman of the committee for 
allowing this amendment to be considered and hopefully for his help on 
it.
  Mr. Chairman, anyone who has traveled to south Mississippi or south 
Louisiana after the wakes of Hurricanes Rita and Katrina know we have 
an incredible housing shortage. Today, 19,000 Mississippi families are 
still living in FEMA trailers. They are grateful for the trailers. They 
would rather be someplace else. Part of that problem is, in particular, 
for renters. In addition to homes being destroyed, a heck of a lot of 
rental properties were destroyed.
  Prior to this amendment, if you are a condo owner or building a 
condo, you can build a condo with as many number of units as you would 
like, and each one of those units can be insured up to the value of the 
Federal flood insurance program. If it is 100 units, each one of them 
can be insured up to $250,000. On the other hand, if you are 
considering building rental property, you have two strikes against you. 
Number one, in the wakes of Hurricanes Katrina and Rita, this private 
sector that so many people are saying are being so good to us have now 
said that just for wind insurance it is going to be $300 per unit per 
month even for a modest apartment.
  Secondly, if you are considering building a building, you can insure 
that building for only $500,000. Whether it is one unit or 1,000 units, 
you can only get $500,000 worth of coverage for that entire building. 
It is a disincentive for the private sector to rebuild and to build the 
sort of housing that we need.
  This amendment is all about parity. If we, as a Nation, can insure 
condominiums for folks who can afford to buy them, then we, as a 
Nation, ought to be making available insurance for folks who can't 
afford a condo but who need to rent a place to live.
  Like every amendment that I have offered and every amendment that has 
been made in order, it has been judged by the Congressional Budget 
Office that this amendment will pay for itself. It has no impact on the 
Treasury.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. CAPITO. Mr. Chairman, I rise in opposition to the amendment.
  The Acting CHAIRMAN. The gentlewoman from West Virginia is recognized 
for 5 minutes.
  Mrs. CAPITO. Mr. Chairman, I rise today in opposition to this 
amendment offered by the gentleman from Mississippi. The bill we are 
debating today is troubled, I think, because of the deeply in-debt 
flood insurance program, and now we are not debating, because we were 
unable to debate on the full floor of the House whether we should 
include wind in this. Wind is in this bill as a peril. But what this 
amendment does is further expand that coverage that is very debatable, 
I think premature, has been unstudied, and I believe this would be very 
unwise to include this amendment as a coverage expansion.
  We have talked about the fact that the flood insurance program owes 
the U.S. Treasury $18 billion. We have talked about the fact that at a 
hearing in July on whether we should add wind to the NFIP, that the 
National Association of Insurance Commissioners,

[[Page 25762]]

insurance experts, environmental groups, floodplain management groups, 
Treasury and FEMA all opposed the initial expansion. And suffice it to 
say they would certainly oppose, or they could certainly oppose, an 
even further expansion of this that this amendment represents.
  I think that the wind insurance premiums are supposed to be 
actuarially sound, and the chairman of the full committee has made that 
point several times. The majority of the NFIP policies are supposed to 
be actuarially sound. And yet, the nonpartisan GAO says that they are 
not actuarially sound. We know that very few government insurance 
programs are ever actuarially sound.
  Mr. Chairman, I urge my colleagues to oppose this amendment and to 
avoid a further expansion that this new mandate in this amendment 
represents.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TAYLOR. First, Mr. Chairman, I would like to encourage the 
gentlewoman, let's deal with the facts. If you have an organization 
that is opposed to this amendment, name the organization. But let's 
don't suppose for anyone whether they are for it or against.
  Secondly, Mr. Chairman, I yield the remainder of my time to the 
chairman of the committee.
  Mr. FRANK of Massachusetts. Mr. Chairman, I thank the gentleman, and 
I regret to say the entertainment value of what was not an exciting 
subject from the beginning appears to have gone down because the 
gentleman from Texas (Mr. Culberson) has left the floor. I thought his 
method of argument, which is the frequent repetition of error at 
increasing volume, added a certain panache to the proceedings. But 
since the last time he reiterated those errors, I thought it would be 
useful to correct them.
  First of all, this bill and this amendment not only doesn't add to 
the Federal Government's liability, it diminishes existing liability. 
The flood program was allowed to get deeply in debt. This bill with 
respect to flood says that there will be higher premiums and there will 
be fewer buildings in the floodplain areas. So it clearly reduces. It 
is supported in that respect by environmentalists and taxpayers.
  The wind part does add a new program. It adds a new program subject 
to the PAYGO rules, and it requires that it be strictly actuarially 
sound. Now, the gentleman from Texas could not seem to understand the 
basic distinction. He said, ``Well, the flood program was supposed to 
be actuarially sound and it isn't.'' True. That is why when we did the 
wind program, we wrote a much more specific and binding set of 
instructions that it be actuarially sound.
  The fact is that the flaws that led the water program to be in debt 
are corrected in this bill. That is not simply the opinion of the 
author, the gentleman from Mississippi, or this committee. It is CBO, 
the Congressional Budget Office's certification. So the notion that 
this adds to liability is simply wrong. It will reduce the outgo with 
regard to the water program. With regard to the wind program, it is 
actuarially sound, and in this bill, if it begins to run into deficit, 
the program cuts off.
  So an analogy between the wind funding and the water funding is 
flatly wrong. They are written differently. We have learned from our 
mistakes. And that is true of this amendment, too. The gentleman has 
offered an amendment that would increase coverage subject, again, to 
the very strict rules that say we will be actuarially sound.
  Now, I have no particular hope that this is going to sink in 
everywhere, but it does seem to me to be useful to have the fundamental 
facts out there on the record.

                              {time}  1515

  Mrs. CAPITO. Mr. Chairman, I take heed to the gentleman's words from 
Michigan, and I tried to sort of recorrect my initial assumption that 
they would oppose the amendment. So I apologize for that.
  Mr. Chairman, I would like to place in the Record letters from folks 
who do oppose the bill in general because of the wind addition. That 
would be: Friends of the Earth, National Wildlife Federation, U.S. 
Public Interest Group, America Insurance Association, Property Casualty 
Insurers, Financial Services Roundtable, Consumer Federation of 
America, Reinsurance Association of America.

                                               September 26, 2007.
     Re: Support For the Blumenauer-Gilchrest Global Warming 
         Amendment to H.R. 3121 and opposition to provisions 
         expanding the National Flood Insurance Program (NFIP) to 
         include wind coverage
       Dear Representative: We write to express our support for 
     the Blumenauer-Gilchrest Global Warming Amendment to the 
     Flood Insurance Reform and Modernization Act, H.R. 3121. This 
     amendment would require that the Federal Emergency Management 
     Agency, FEMA, consider the impacts of global warming on flood 
     risks as it administers the National Flood Insurance Program, 
     NFIP, Map Modernization Program. To adjust to the reality of 
     global warming, Congress must require that the NFIP 
     floodplain maps incorporate the best available climate 
     science. Accurate floodplain maps will ensure that citizens 
     are aware of the flood risks in their community and help 
     prevent the loss of human life, property, and important 
     wildlife habitat as we face more global warming-powered 
     weather events.
       Section 22 of H.R. 3121 provides much needed guidelines and 
     ongoing mapping support for FEMA's map modernization effort. 
     Flood insurance maps are the basic planning documents for the 
     NFIP and provide a foundation for planning in developing 
     communities. According to the Congressional Research Service, 
     however, over 75 percent of the nation's 100,000 flood maps 
     are at least 10 years old. Currently, H.R. 3121 fails to 
     require FEMA to consider modern climate science when mapping 
     floodplains. Under current methodologies, many of FEMA' s 
     maps are already out of date and inaccurate when they are 
     certified because they fail to take into account both 
     critical new information beyond past flooding history, 
     including the impacts of global warming. These outdated maps 
     have resulted in more instances of storms with significantly 
     greater flooding than predicted and give citizens a false 
     sense of security that they will not be subject to flooding. 
     This false sense of security is especially troubling as 
     global warming's impacts become evident. Global warming will 
     result in more flooding of coastal and riverine communities 
     through intense hurricanes, reduced snow pack, and sea level 
     rise.
       The Blumenauer-Gilchrest Amendment would ensure that the 
     FEMA Director consider impacts of global warming on our 
     nation's flood risks and the potential future impact of 
     global warming on the intensity of storms, storm surge 
     modeling, sea level rise, and increased hurricane activity. 
     Considerable experience exists in these areas, and the 
     Blumenauer Amendment would ensure that FEMA incorporates the 
     best available climate science into its mapping effort. We 
     strongly support this amendment.
       We urge Congress to oppose the multiperil, wind and 
     flooding, insurance program in H.R. 3121, because it could 
     overwhelm the NFIP, cost the taxpayers' billions, increase 
     incentives to develop in hazard-prone and ecologically-
     sensitive coastal areas and floodplains, and place more 
     lives, properties, and wildlife habitat at risk. We applaud 
     Representative Taylor and other Members for raising the 
     nation's awareness of the increasing risks associated with 
     global warming-powered coastal storms. We are also 
     sympathetic to citizens' desires to remove wind damage and 
     flooding damage distinctions in homeowner's insurance 
     policies in the aftermath of Hurricanes Katrina, Rita, and 
     Wilma. Yet, we oppose adding a wind peril dimension to the 
     NFIP because it would substantially undermine the program's 
     already precarious financial position, would add greater risk 
     and uncertainty especially for the taxpayers and the public, 
     and would distract from the critical missions of the NFIP. 
     Essentially, we must fix the NFIP before we expand it.
       Hurricanes Katrina and Wilma have already driven the NFIP 
     into the most dire financial condition in its history, now 
     with a virtually insurmountable U.S. Treasury debt of 
     approximately $18 billion. H.R. 3121 would mandate that FEMA 
     begin the sale of a new federal wind insurance (multiple 
     peril including wind and flood) beginning on June 30, 2008, 
     right before the 2008 Hurricane Season and almost immediately 
     increasing the exposure of the U.S. taxpayers to potentially 
     billions of dollars in new claims. The chances of exposure of 
     a catastrophic storm could swamp the national flood insurance 
     program and leave it crippled forever. The rates of coverage 
     are also significantly greater than those provided by current 
     flood insurance alone: $650,000 for residential structures 
     and contents and $1.75 million for commercial properties and 
     contents. These coverage caps expose the taxpayers to 
     considerable liability. In fact, recent insurance industry 
     estimates show that costs of storms like Hurricane Katrina 
     that were in the $15 to $20 billion range for the NFIP 
     currently, could be three to five times or more, if wind 
     perils were also included. Such costs could

[[Page 25763]]

     potentially overwhelm the program and the costs to taxpayers 
     could balloon to staggering levels.
       For these reasons, again, we support the Blumenauer-
     Gilchrest Global Warming Amendment, which will ensure that 
     FEMA address the realities of global warming in its map 
     modernization effort. We oppose the provisions within H.R. 
     3121 that expand the NFIP to include wind. These provisions 
     threaten to overwhelm an already failing National Flood 
     Insurance Program that needs substantial reforms to turn the 
     corner on expanding flood risk and to accomplish its other 
     purposes. Although many of the reforms contained within H.R. 
     3121 represent steps in the right direction, the proposed 
     legislation will not go far enough in fixing the essentially 
     bankrupt NFIP. Congress will have missed an historic 
     opportunity to strengthen the NFIP if it passes this bill in 
     its current form.
       Please see the attached overview of our additional concerns 
     with the bill.
       Thank you for you attention to this matter.
           Sincerely,
     Erich Pica,
       Director of Domestic Programs, Friends of the Earth.
     Adam Kolton,
       Senior Director, Congressional & Federal Affairs, National 
     Wildlife Federation.
     David Jenkins,
       Government Affairs Director, Republicans for Environmental 
     Protection.
     Emily Figdor,
       Federal Global Warming Program Director, U.S. Public 
     Interest Research Group (PIRG).
                                  ____

                                               September 26, 2007.
     Hon. Nancy Pelosi, Speaker,
     Hon. John Boehner, Minority Leader,
     House of Representatives,
     Washington, DC.
       Dear Madam Speaker and Minority Leader Boehner: On behalf 
     of the undersigned associations, we are writing to express 
     our opposition to House passage of H.R. 3121, ``The Flood 
     Insurance Reform and Modernization Act of 2007.'' While we 
     are supportive of the reforms to the National Flood Insurance 
     Program (NFIP) contained in the legislation, we strongly 
     object to the provisions that would add the peril of 
     windstorm to the NFIP.
       The addition of wind coverage to the NFIP has the potential 
     to dramatically increase the exposure of the NFIP and the 
     federal government to catastrophic losses. The states along 
     the Gulf coast and eastern seaboard contain more than $19 
     trillion in insured property values. The majority of these 
     risks are currently insured in the private marketplace or in 
     state residual market programs where the private insurance 
     industry shares the potential losses. Writing a significant 
     number of these properties in the NFIP would markedly 
     increase the federal government's exposure to loss and, 
     despite the provision that calls for ``actuarially sound'' 
     rates for the windstorm portion of this coverage, the 
     potential for a significant taxpayer subsidy. The bill also 
     calls for the NFIP to stop writing and renewing multiple-
     peril coverage for these policyholders if it is required to 
     borrow federal funds to pay its losses. This has already 
     occurred at the state level, following the events of 2005, 
     several state windstorm residual market plans, which are 
     statutorily required to use ``actuarially sound'' rates, 
     exhausted all of their available assets and had to fund these 
     shortfalls by assessing the insurance industry and/or 
     policyholders.
       The policyholders most likely to buy this new federal 
     coverage would be those living in areas that are highly 
     exposed to wind damage, creating adverse selection, as 
     happens with state residual market wind pools today. The 
     amount of ``multiple-peril'' insurance that the NFIP would 
     sell cannot accurately be determined at this time; thus, 
     determining the unsubsidized premium for such coverage would 
     be, even using the best actuarial science, a guess. Although 
     the ``pay as you go'' (PAY-GO) rules require that the costs 
     of the insurance program be unsubsidized by taxpayers, there 
     is a real possibility that the program will not be self-
     sustaining, particularly in early years when the accumulation 
     of premiums could be vastly exceeded by losses in the event 
     of a hurricane of any significance.
       Finally, nationalizing wind coverage under the NFIP, as 
     proposed by this bill, will not resolve ``wind versus water'' 
     disputes following a hurricane, and would do little to 
     facilitate the resolution of these claims because many 
     homeowners, even in flood-prone regions, do not purchase 
     flood insurance--for example, fewer than 20 percent in 
     coastal Mississippi prior to Hurricane Katrina. H.R. 3121 
     does not mandate the purchase of flood insurance and will not 
     facilitate the resolution of claims for policyholders who do 
     not purchase this coverage.
       For these reasons, we strongly urge members to vote no on 
     passage of H.R. 3121.
           Respectfully,
     American Insurance Association.
     National Association of Mutual Insurance Companies.
     Property Casualty Insurers Association of America.
     The Financial Services Roundtable.
                                  ____



                           Reinsurance Association of America,

                                    Washington, DC, July 25, 2007.
     Chairman Barney Frank,
     Ranking Member Spencer Bachus,
     House Financial Services Committee, House of Representatives, 
         Washington, DC.
       Dear Chairman Frank and Ranking Member Bachus: The 
     Reinsurance Association of America (RAA) strongly opposes the 
     inclusion of the Multiple Peril Insurance Act of 2007 to the 
     flood insurance reform bill (H.R. 3121). The legislation 
     would unnecessarily expand the scope of the National Flood 
     Insurance Program (NFIP) to offer windstorm coverage that is 
     currently being provided by private sector insurers, 
     reinsurers, capital market participants and residual market 
     programs.
       The RAA, headquartered in Washington, D.C., is a non-profit 
     trade association of property and casualty reinsurers and 
     reinsurance intermediaries. RAA underwriting members and 
     their affiliates write more than two-thirds of the gross 
     reinsurance coverage provided by U.S. professional 
     reinsurance companies.


        A Robust Private Market for Wind Coverage Already Exists

       This legislation fundamentally alters who bears the risk of 
     loss from wind. Instead of spreading this risk throughout the 
     worldwide private insurance marketplace, this legislation 
     puts the entire burden of deficits on the U.S. taxpayer. This 
     fundamental shift is unnecessary. There is adequate wind 
     capacity being provided by direct insurers and/or state 
     residual markets. Moreover, there is a very robust global 
     private reinsurance market for wind to help insurance 
     companies manage their risk of loss. Over $35 billion of new 
     capital has entered the private reinsurance capital markets 
     to cover wind risk since Hurricane Katrina. RAA questions why 
     Congress would want to shift the risk of loss to the U.S. 
     taxpayers, rather than spreading this risk throughout the 
     private insurance marketplace.


           Federal Taxpayers Will Subsidize Coastal Insured's

       The RAA also has serious concerns that the NFIP will 
     recklessly attract policyholders into buying wind coverage by 
     suppressing the federal insurance rates. This has occurred in 
     most state property insurance residual markets, which are 
     under intense political pressure to maintain rates that are 
     not sufficient to pay losses. Suppressing rates and loosening 
     underwriting standards only places the U.S. taxpayer at 
     further risk and encourages more development in high-risk 
     areas.


            The NFIP Is Not Equipped to Offer Wind Insurance

       The underwriting and pricing of flood and wind risk are 
     fundamentally different. The Federal government has no 
     institutional knowledge in these areas and it would be a 
     daunting undertaking for them to develop such technical 
     expertise. In addition to updating flood maps, FEMA would 
     also have to develop wind maps for the entire United States. 
     These tasks will only result in the creation of greater 
     federal bureaucracy.


    All State And Federal Disaster Insurance Programs Operate At An 
                             Expected Loss

       The NFIP is already $17 billion in the red. What if the 
     NFIP had borne the wind loss associated with the 2004 and 
     2005 storms? The private marketplace paid $16.5 billion of 
     wind insured losses in 2004 and over $60 billion of insured 
     losses for the 2005 season. If this legislation were in place 
     when these storms hit, the U.S. taxpayer would be paying 
     greater deficits for these losses, rather than the private 
     global insurance and reinsurance marketplace.
       We urge you to oppose the inclusion of the Multiple Peril 
     Insurance Act into H.R 3121 and support the Rep. Brown-Waite, 
     Feeney and Putnam amendment to have the GAO conduct a study 
     of this issue.
           Sincerely,
                                               Franklin W. Nutter,
                                                        President.

  Mr. TAYLOR. Mr. Chairman, I very much appreciate the gentlewoman's 
remarks. I would like to mention to the gentlewoman, and add for the 
Record, the support for this bill, including the wind language, from 
the National Association of Realtors, National Association of 
Homebuilders, National Association of Bankers.

                             National Association of Realtors,

                               Washington, DC, September 26, 2007.
     House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the more than 1.3 million 
     members of the National Association of REALTORS' 
     (NAR), I ask for your vote in favor of H.R. 3121, the

[[Page 25764]]

     Flood Insurance Reform and Modernization Act of 2007, when it 
     is considered by the House of Representatives on Thursday, 
     September 27.
       The National Flood Insurance Program (NFIP) offers 
     essential flood loss protection to homeowners and commercial 
     property owners in more than 20,000 communities nationwide. 
     The bill, as written, will help protect homeowners, renters 
     and commercial property owners from losses sustained from 
     flooding. NAR strongly supports the following changes to the 
     NFIP contained in the bill including:
       Extending the NFIP for five years;
       Ensuring that the 100-year flood maps are updated as 
     expeditiously as possible;
       Increasing coverage limits to $335,000 for residential and 
     $670,000 for commercial properties;
       Supporting education of tenants about the availability of 
     flood insurance while providing flexibility to property 
     owners and managers in the manner of providing such notice;
       Adding coverage for living expenses, business interruption, 
     and basement improvements;
       Extending the pilot program for mitigation of severe 
     repetitive loss properties; and
       Studying the impacts of eliminating subsidies on 
     homeowners, renters and local economies.
       It is critical that flood insurance remain accessible for 
     all individuals who own or rent property in a floodplain. I 
     urge you to vote in favor of H.R. 3121, the Flood Insurance 
     Reform and Modernization Act of 2007, on Thursday.
           Sincerely,

                                                 Pat V. Combs,

                                                   2007 President,
     National Association of Realtors.'
                                  ____

                                              National Association


                                             of Home Builders,

                               Washington, DC, September 26, 2007.
     House of Representatives,
     Washington, DC.
       Dear Representatives: On behalf of the 235,000 members of 
     the National Association of Home Builders (NAHB), I am 
     writing to express our support for H.R. 3121, the Flood 
     Insurance Reform and Modernization Act of 2007 as amended by 
     the Manager's Amendment, which includes much-needed technical 
     improvements to the underlying bill.
       As you know, Hurricanes Katrina, Rita and Wilma radically 
     disrupted the lives of those living on the Gulf Coast. After 
     the storms' passing, many homeowners found themselves in 
     dispute with their property insurance companies over whether 
     water or wind was the primary cause of damage to their homes. 
     After much debate, one proposed solution which has emerged to 
     address this conflict is to expand the authority of the 
     National Flood Insurance Program (NFIP) to include wind 
     coverage.
       NAHB is pleased that the bill incorporates new language to 
     provide wind insurance coverage for home owners. H.R. 3121, 
     as amended by the Manager's Amendment, would provide a needed 
     addition in expanding the availability and affordability of 
     property insurance in high hazard areas. Additionally, it 
     references the mitigation requirements of consensus-based 
     building codes as a measure to lessen the potential damage 
     caused by a natural disaster and thus further ensure the 
     financial stability of the NFIP.
       NAHB remains concerned about the overall solvency of the 
     NFIP, but we also view this program as not simply about flood 
     insurance premiums and payouts. The NFIP is a comprehensive 
     tool to guide the development of growing communities while 
     simultaneously balancing the need for reasonable protection 
     of life and property. The specific method Congress uses to 
     achieve this balance could potentially impact housing 
     affordability as well as the control local communities have 
     over their growth and development. NAHB believes that H.R. 
     3121 strikes the proper balance in protecting the NFIP's 
     long-term financial stability while ensuring that federally-
     backed flood insurance remains available and affordable.
       As this new NFIP expansion moves forward, NAHB encourages 
     Congress to limit the amount of the program's fiscal exposure 
     to ensure its financial sustainability and to require 
     premiums for the new multi-peril coverage to be risk-based 
     and actuarially sound. NAHB commends the work of the House 
     Financial Services Committee in crafting legislation to 
     preserve and enhance this important federal program, and we 
     urge your support for H.R. 3121, as amended by the Manager's 
     Amendment, when it comes to the House floor this week.
       Thank you for your attention to our views.
           Sincerely,
     Joseph M. Stanton.
                                  ____

                                               September 26, 2007.
     To: Members of the U.S. House of Representatives.
     From: Floyd Stoner, Executive Director, Congressional 
         Relations & Public Policy, ABA.
     Re: Support for H.R. 3121, the Flood Insurance Reform and 
         Modernization Act of 2007.

       I am writing on behalf of the members of the American 
     Bankers Association (ABA) to express our support for H.R. 
     3121, the Flood Insurance Reform and Modernization Act of 
     2007, scheduled to be considered by the full House later this 
     week.
       Since 1968, nearly 20,000 communities across the United 
     States and its territories have participated in the National 
     Flood Insurance Program (NFIP) by adopting and enforcing 
     floodplain management ordinances to reduce future flood 
     damage. In exchange, the NFIP makes federally backed flood 
     insurance available to homeowners, renters, and business 
     owners in these communities.
       Losses from three large hurricanes (Katrina, Rita, and 
     Wilma) in 2005 have left the NFIP more than $23 billion in 
     debt to the Treasury. There is no way that the NFIP can 
     reasonably repay this debt and provide payment for future 
     losses under the current rate structure. The likelihood of 
     additional flood events and resulting claims against the 
     program make reforms vital.
       This legislation would require the Federal Emergency 
     Management Agency (FEMA) to update the flood maps, and it 
     would provide a phase-in of actuarial rates for commercial 
     properties and non-primary residences. ABA supports these 
     efforts as being necessary to sustain the program over the 
     long term.
       H.R. 3121 also would increase the penalties for non-
     compliance in placing flood insurance, from $350 per 
     violation to $2000 per violation. We are pleased that the 
     legislation would provide a ``safe harbor'' for an 
     institution which is in non-compliance due to circumstances 
     beyond its control (such as outdated mapping by FEMA). We 
     also are pleased that the legislation would provide 
     institutions with an opportunity to correct non-compliance 
     before a penalty is assessed and place a reasonable limit for 
     total penalties per institution/per year.
       We urge you to support this important legislation.

  Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Mississippi (Mr. Taylor).
  The question was taken; and the Acting Chairman announced that the 
ayes appeared to have it.
  Mrs. CAPITO. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Mississippi 
will be postponed.


                 Amendment No. 8 Offered by Mr. Taylor

  The Acting CHAIRMAN. It is now in order to consider amendment No. 8 
printed in part B of House Report 110-351.
  Mr. TAYLOR. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 8 offered by Mr. Taylor:
       At the end of the bill, add the following new section:

     SEC. 30. REQUIREMENTS RELATING TO WINDSTORM AND FLOOD.

       Section 1345 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4081) is amended by adding at the end the 
     following new subsection:
       ``(d) Requirements for Write-Your-Own Insurers Relating to 
     Windstorm and Flood.--The Director may not utilize the 
     facilities or services of any insurance company or other 
     insurer to offer flood insurance coverage under this title 
     unless such company or insurer enters into a written 
     agreement with the Director that provides as follows:
       ``(1) Prohibition on exclusion of wind damage coverage.--
     The agreement shall prohibit the company or insurer from 
     including, in any policy provided by the company or insurer 
     for homeowners' insurance coverage or coverage for damage 
     from windstorms, any provision that excludes coverage for 
     wind or other damage solely because flooding also contributed 
     to damage to the insured property.
       ``(2) Fiduciary responsibility.--The agreement shall 
     provide that the company or insurer--
       ``(A) has a fiduciary duty with respect to the Federal 
     taxpayers;
       ``(B) in selling and servicing policies for flood insurance 
     coverage under this title and adjusting claims under such 
     coverage, will act in the best interests the national flood 
     insurance program rather than in the interests of the company 
     or insurer; and
       ``(C) will provide written guidance to each insurance agent 
     and claims adjuster for the company or insurer setting forth 
     the terms of the agreement pursuant to subparagraphs (A) and 
     (B).''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Mississippi (Mr. Taylor) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Mississippi.

[[Page 25765]]


  Mr. TAYLOR. Mr. Chairman, in the course of today's debate, a lot of 
Members are learning a lot about insurance that they kind of wish they 
didn't know. Unfortunately, a lot of folks in my district learned a lot 
in the wake of that storm that they wish they knew.
  As I have told you before, the United States Navy has modeled 
Hurricane Katrina. According to the United States Navy, there were four 
to five hours of hurricane force winds that hit south Mississippi 
before the water ever got there. Now, that is a fact from the United 
States Navy.
  We have a policy under the National Write Your Own Program where we 
as a Nation allow the private sector to sell that policy, even though 
we back it. That is not a problem. It cuts down on administrative 
costs. We also have a line in that contract, though, with those private 
firms that says you will do a fair adjustment of the claim.
  Think about it. I can't think of any other person that can send a 
bill to the Federal Government, up to $250,000, plus another $100,000 
for contents, and no one ever questions it. And yet we gave the 
insurance industry this incredible responsibility, and I can tell you, 
they misused it. But it says there has to be a fair adjustment. That is 
the law.
  Unfortunately, in the policies that they wrote for people, that were 
multiple pages thick, buried in that policy is something called 
``concurrent causation,'' which says, in effect, that after those 4 to 
5 hours of hurricane force winds hit south Mississippi, if on a 
residence there's a single two-by-four left standing, the roof is gone, 
the windows have been blown in, the curtains are gone, the house is 
gone, if there's 1 two-by-four left standing, then there is a 
concurrent causation of wind and water, and they don't have to pay. 
It's in their policies.
  Under oath there have been insurance agents who admitted they didn't 
even know it was in the policy. If the insurance agents didn't know, do 
you think an individual has a chance?
  There is an extremely influential Senator on the other end of the 
building, a law degree from the University of Mississippi; he didn't 
know it was in there. Federal Judge Lou Garrolla, a Federal judge, he 
didn't know it was in there. If an extremely influential U.S. Senator, 
if a Federal judge doesn't know, what chance does a corrugated box 
salesman have? What chance does a shrimper have, a housewife, a school 
teacher?
  The fact of the matter is that's wrong. The taxpayers ended up paying 
the bill that the insurance company should have paid because they stuck 
it to the taxpayers through the flood insurance policy every time.
  This amendment would tell the insurance companies that if they want 
to do business with our Nation through the Federal flood insurance 
program, that they can no longer have a concurrent causation clause in 
their contract because it's completely contrary to the contract they 
have with our Nation that says it's going to be a fair adjustment of 
the claim.
  If after 4 hours of hurricane force winds the house is almost gone, 
but there's 1 board left, and a wave comes along and knocks that last 
board down, under their rules, the taxpayers pay. Under what is fair 
and right, they ought to pay for what the wind did and let the 
taxpayers pay for what the water did.
  We recognize there's a problem, we are addressing that problem, and 
only a shill for the insurance industry can turn around and say that 
this is right. If you really are concerned about the Treasury, then you 
ought to be concerned about the Treasury being ripped off by insurance 
companies by letting their agents be the sole determining factor of 
who's going to pay and sticking our Nation with the bill. This is an 
opportunity to close that loophole and to right an egregious wrong.
  Mr. Chairman, I reserve the balance of my time.
  The Acting CHAIRMAN. Does any Member claim the time in opposition?
  The Chair recognizes the gentleman from Mississippi.
  Mr. TAYLOR. I yield the remainder of my time to the chairman of the 
committee.
  The Acting CHAIRMAN. The gentleman from Massachusetts is recognized 
for 1 minute.
  Mr. FRANK of Massachusetts. Mr. Chairman, this is actually a very 
conciliatory amendment by the gentleman from Mississippi because 
previously, and I know the gentleman has left the floor, he's been here 
very diligently, I don't mean anything critical, but the gentleman from 
Georgia (Mr. Kingston) said why don't we try to make the private 
companies live up to their responsibilities and stop them from walking 
away.
  This amendment is the first chance we get to do that, because what 
this amendment does is not extend Federal coverage, but try to hold 
those companies which are voluntarily participating with the Federal 
Government to a reasonable standard with regard to their own coverage. 
So this is a chance to hold the private companies to their social 
responsibility.
  Mr. TAYLOR. I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Mississippi (Mr. Taylor).
  The amendment was agreed to.


                Amendment No. 9 Offered by Mr. Costello

  The Acting CHAIRMAN. It is now in order to consider amendment No. 9 
printed in part B of House Report 110-351.
  Mr. COSTELLO. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 9 offered by Mr. Costello:
       Subsection (k) of section 1360 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4101), as added by section 
     22(a) of the bill, is amended by redesignating paragraph (8) 
     as paragraph (9).
       Subsection (k) of section 1360 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4101), as added by section 
     22(a) of the bill, is amended by inserting after paragraph 
     (7) the following new paragraph:
       ``(8) Use of maps for rates.--The Director shall not adjust 
     the chargeable premium rate for flood insurance under this 
     title based on an updated national flood insurance program 
     rate map or require the purchase of flood insurance for a 
     property not subject to such a requirement of purchase prior 
     to the updating of such national flood insurance program rate 
     map until an updated national flood insurance program rate 
     map is completed for the entire district of the Corps of 
     Engineers affected by the map, as determined by the district 
     engineer for such district.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Illinois (Mr. Costello) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Illinois.
  Mr. COSTELLO. Mr. Chairman, I yield myself as much time as I may 
consume.
  I thank the Rules Committee for making this amendment in order and 
thank Chairman Frank as well. My amendment is a commonsense, simple 
amendment that will bring fairness to FEMA's remapping process. If my 
amendment is adopted, FEMA would not be able to adjust premium rates or 
require the purchase of flood insurance until all remapping has been 
completed for an entire district of the Corps of Engineers affected by 
the remapping.
  Under the current system, one geographic area of a floodplain or 
watershed can be updated, while another geographic area of the same 
floodplain or watershed may not be remapped for a few years.
  If you look at the St. Louis area, preliminary maps will be available 
for review in December of this year for the Illinois side of the 
Mississippi River, but will not be available for the Missouri side of 
the river for 2 to 3 years. The remapping process should not be 
stopped, but remapping should be implemented for the entire floodplain 
or watershed together, as opposed to the current piecemeal approach.
  Mr. Chairman, I urge my colleagues to support this amendment.
  Mr. Chairman, I reserve the balance of my time.
  The Acting CHAIRMAN. Does anyone seek time in opposition to this 
amendment?
  The Chair recognizes the gentleman from Illinois.

[[Page 25766]]


  Mr. COSTELLO. Mr. Chairman, I yield 2 minutes to my friend from 
Illinois (Mr. Shimkus).
  Mr. SHIMKUS. Mr. Chairman, I want to commend my colleague, 
Congressman Costello, for his great work. It is a pretty simple premise 
that if we are going to do the FEMA floodplain analysis, it ought to be 
in a watershed. As he so aptly put, when floods come across rivers, 
they will flow across banks on both sides. So as we have to address how 
to do the compensation, it only makes sense that they do it that way.
  So I appreciate him bringing this forward, and I appreciate Chairman 
Frank's effort in this aspect.
  Mr. COSTELLO. Mr. Chairman, I urge adoption of my amendment, and I 
yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Illinois (Mr. Costello).
  The amendment was agreed to.


          Amendment No. 10 Offered by Mr. Gene Green of Texas

  The Acting CHAIRMAN. It is now in order to consider amendment No. 10 
printed in part B of House Report 110-351.
  Mr. GENE GREEN of Texas. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 10 offered by Mr. Gene Green of Texas:
       At the end of section 22 of the bill, add the following new 
     subsection:
       (e) Phase-In of Flood Insurance Premiums for Low-Cost 
     Properties.--Section 1308 of the National Flood Insurance Act 
     of 1968 (42 U.S.C. 4015), as amended by the preceding 
     provisions of this Act, is further amended--
       (1) in subsection (c), by inserting ``and subsection (g)'' 
     before the first comma; and
       (2) by adding at the end the following new subsection:
       ``(g) 5-Year Phase-In of Premiums for Newly Covered Low-
     Cost Properties.--
       ``(1) In general.--In the case of any area not previously 
     designated as an area having special flood hazards that 
     becomes designated as such an area as a result of remapping 
     pursuant to section 1360(k), during the 5-year period that 
     begins upon the initial such designation of the area, the 
     chargeable premium rate for flood insurance under this title 
     with respect to any low-cost property that is located within 
     such area shall be--
       ``(A) for the first year of such 5-year period, 20 percent 
     of the chargeable risk premium rate otherwise applicable 
     under this title to the property;
       ``(B) for the second year of such 5-year period, 40 percent 
     of the chargeable risk premium rate otherwise applicable 
     under this title to the property;
       ``(C) for the third year of such 5-year period, 60 percent 
     of the chargeable risk premium rate otherwise applicable 
     under this title to the property;
       ``(D) for the fourth year of such 5-year period, 80 percent 
     of the chargeable risk premium rate otherwise applicable 
     under this title to the property; and
       ``(E) for the fifth year of such 5-year period, 100 percent 
     of the chargeable risk premium rate otherwise applicable 
     under this title to the property.
       ``(2) Low-cost property.--For purposes of this subsection, 
     the term ``low-cost property'' means a single-family 
     dwelling, or a dwelling unit in a residential structure 
     containing more than one dwelling unit, that--
       ``(A) is the principal residence of the owner or renter 
     occupying the dwelling or unit; and
       ``(B) has a value, at the time of the initial designation 
     of the area having special flood hazards, that does not 
     exceed 75 percent of median home value for the State in which 
     the property is located.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Texas (Mr. Gene Green) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. GENE GREEN of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I rise in strong support of H.R. 3121, the Flood 
Insurance Reform and Modernization Act, that will help bring national 
flood insurance programs into the 21st century. I particularly want to 
thank the chairman of the committee, Barney Frank, as well as the 
sponsor of the bill and subcommittee Chair Maxine Waters for her hard 
work in bringing this bipartisan bill to the floor today.
  Mr. Chairman, in June of 2001, Texas and other States witnessed 
damage wrought by Tropical Storm Allison after it swept through Texas 
and up the east coast causing substantial flood damage to thousands of 
my constituents, along with everyone else, both homes and businesses.
  The good news was that some of these losses were protected by the 
National Flood Insurance Program. The bad news was that many of my 
constituents who needed flood insurance could not afford to purchase 
the policy. We all know that the flood insurance program plays a 
critical role in lessening the impact of major flooding disasters; but 
to make the program more effective, we need greater participation from 
Americans of all incomes.
  H.R. 3121 requires FEMA to conduct a survey to review the Nation's 
flood maps. Inevitably, these updates will identify undesignated homes 
as being located in flood-prone areas. For many low-income families, 
such designation of their homes means having to purchase flood 
insurance that is either unaffordable or difficult to immediately 
budget for on modest means. Our amendment seeks to bridge that 
insurance gap between those who can afford a flood policy and those who 
cannot, and still be able to expand the people paying into the system.
  The amendment is simple: it would provide a limited 5-year phase-in 
of flood insurance premiums for low-income homeowners or renters whose 
primary residence is placed within the floodplain through an updating 
of the flood insurance program maps. These homes can be valued at no 
more than 75 percent of the median home value for the State in which 
the property is located.
  This amendment would make the National Flood Insurance Program more 
affordable for low-income homeowners, increase participation in the 
program and decrease the likelihood of an a taxpayer bailout in the 
event of a flood. I believe the amendment will bring security and peace 
of mind to many hardworking families who don't live in mansions, but 
live in their basic homes and that need help in obtaining protection 
that their homes deserve.
  Mr. Chairman, I urge support for the amendment.
  Mr. Chairman, I reserve the balance of my time.
  The Acting CHAIRMAN. Does any Member seek recognition in opposition 
to the amendment?
  The Chair recognizes the gentleman from Texas.
  Mr. GENE GREEN of Texas. I yield to the Chair of the committee.
  Mr. FRANK of Massachusetts. Mr. Chairman, I just want to thank the 
gentleman for taking this up. I want to stress what we are doing.
  People have said, well, you are giving people breaks. No. The 
amendment that the gentleman from California (Mr. Cardoza) offered 
earlier and this one deal with people who having lived somewhere, now 
will find themselves in a floodplain not because they moved, but 
because the designation is different.
  This does not exempt them from having to pay the insurance. It does 
in certain cases, the gentleman from California's case. And this one 
that has to do with remapping, new maps or updating maps, it allows 
them to phase in. The result will be more people paying in and more 
people living in a floodplain who will be having to pay flood 
insurance. The remapping means there will be more restrictions on 
future building there.
  I did want to stress that we did not in this bill and not in any of 
the amendments give any reductions to people already covered. But we 
have said, again, where people did not move in but found themselves 
where they had previously been living now included in the zone, we give 
people some leeway in the phasing in of the policy charge.
  Mr. GENE GREEN of Texas. Mr. Chairman, I yield back the balance of my 
time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Texas (Mr. Gene Green).
  The amendment was agreed to.

                              {time}  1530


                 Amendment No. 11 Offered by Mr. Berry

  The Acting CHAIRMAN (Mr. Gene Green of Texas). It is now in order to

[[Page 25767]]

consider amendment No. 11 printed in part B of House Report 110-351.
  Mr. BERRY. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 11 offered by Mr. Berry:
       At the end of the bill add the following new section:

     SEC. __. NOTATIONS ON FLOOD INSURANCE RATE MAPS FOR AREAS 
                   PROTECTED AGAINST 100-YEAR AND 500-YEAR FLOODS 
                   BY CERTIFIED FLOOD CONTROL STRUCTURE.

       The National Flood Insurance Act of 1968 is amended by 
     inserting after section 1361A (42 U.S.C. 4102a) the following 
     new section:

     ``SEC. 1362. NOTATIONS ON FLOOD INSURANCE RATE MAPS FOR AREAS 
                   PROTECTED AGAINST 100-YEAR AND 500-YEAR FLOODS 
                   BY CERTIFIED FLOOD CONTROL STRUCTURE.

       ``(a) 100-Year Floodplain.--The Director may publish, 
     through the publication of a national flood insurance program 
     rate map, a note to designate areas protected against at 
     least the 100-year flood by a certified flood control 
     structure which shall read as follows: `NOTE: This area is 
     shown as being protected from at least the 1-percent-annual-
     chance flood hazard by levee, dike, or other structure. 
     Overtopping or failure of any flood control structure is 
     possible. Property owners are encouraged to evaluate their 
     flood risk, based on full and accurate information, and to 
     consider flood insurance coverage as appropriate.'.
       ``(b) 500-Year Floodplain.--The Director may publish, 
     through the issuance of a national flood insurance program 
     rate map, a note to designate areas protected against at 
     least the 500-year flood by a certified flood control 
     structure which shall read as follows: `NOTE: This area is 
     shown as being protected from at least the 0.2-percent-
     annual-chance flood hazard by levee, dike, or other 
     structure. Overtopping or failure of any flood control 
     structure is possible. Property owners are encouraged to 
     evaluate their flood risk, based on full and accurate 
     information, and to consider flood insurance coverage as 
     appropriate.'.
       ``(c) Effect of Notes.--The publication of a note under 
     subsection (a) or (b) shall not be considered a requirement 
     of participation in the national flood insurance program.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Arkansas (Mr. Berry) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Arkansas.
  Mr. BERRY. Mr. Chairman, first of all, I want to thank the 
distinguished chairman of the Committee on Financial Services for his 
magnificent leadership on this issue of modernizing and reforming 
FEMA's flood insurance program.
  I rise to offer this amendment along with my colleagues, Mrs. Emerson 
and Mr. Hulshof from Missouri, Mr. Costello and Mr. Hare of Illinois, 
and Mr. Ross of Arkansas.
  This amendment addresses concerns that we have heard from property 
owners, local governments, small businesses, Realtors, lenders, and 
others regarding FEMA's flood maps and the uncertainty they have caused 
in our local communities. The arbitrary and technically deficient 
blanket warning note that FEMA currently uses has caused confusion as 
to whether or not some areas are in a floodplain or not, whether flood 
insurance is needed or not. This has placed an unnecessary burden on 
property owners and threatens economic development in some of the most 
impoverished areas of the Nation.
  This amendment dramatically improves FEMA's current policy, requiring 
any note placed on flood maps to more fully and accurately inform the 
property owners about the protection value of their levees. This 
amendment will continue the objective of educating property owners and 
reminding them of the importance of honestly assessing their risk, 
reminding them that they may consider optional purchase of flood 
insurance, even if they are not in a special flood hazard area.
  I believe this is a reasonable amendment which maintains the 
important objectives of providing accurate information about the safety 
of the levees, encouraging honest assessments of flood risks, while 
eliminating the uncertainty that FEMA has created. I urge my colleagues 
to adopt this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. EMERSON. Mr. Chairman, I claim the time in opposition, although 
I am not opposed to the amendment.
  The Acting CHAIRMAN. Without objection, the gentlewoman from Missouri 
is recognized for 5 minutes.
  There was no objection.
  Mrs. EMERSON. Mr. Chairman, I want to thank the gentleman from 
Arkansas (Mr. Berry) for his leadership, and my colleagues on the 
Financial Services Committee for their efforts to improve the National 
Flood Insurance Program.
  The Berry amendment is a commonsense approach towards both increased 
risk awareness and sound decisionmaking. The lack of preparedness on 
the Federal, State and local level exposed by Hurricane Katrina 
certainly suggests a real lack of awareness of the risks posed by 
living in the shadow of levees. Appropriately, this amendment 
recognizes the important role that Congress and the administration must 
play in increasing risk awareness.
  However, I would be negligent if I did not relay my concern regarding 
the direction in which I sense the National Flood Insurance Program is 
drifting. The decision to participate in the National Flood Insurance 
Program should be entered into deliberately and after careful 
consideration, not, and I stress ``not,'' based on blanket warnings 
from FEMA.
  As a Nation, taxpayers have contributed billions to build up our 
levee and flood protection systems. At the same time, our local 
communities have taken on the added burden of meeting local cost-share 
requirements. These substantial investments were based in part on the 
savings from removing the need to purchase flood insurance.
  Mandatory requirements to purchase flood insurance should be 
carefully studied. Blanket, one-size-fits-all warnings from an 
organization, even an organization like FEMA, should be entered into 
only after thoughtful consideration and ample review.
  In my view, the Berry amendment would bring these principles to bear 
on at least one bureaucratic decision, and I urge its adoption.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BERRY. Mr. Chairman, I yield 2 minutes to my colleague from south 
Arkansas (Mr. Ross).
  Mr. ROSS. Mr. Chairman, I thank Mr. Berry for offering this 
amendment. It is a bipartisan amendment. It is what I would call a 
commonsense amendment.
  I don't have to tell you, Mr. Chairman, that the Federal Emergency 
Management Agency, they need help in trying to figure this program out. 
This is the same Federal agency that has 8,000 brand new, fully 
furnished mobile homes sitting in a cow pasture in Hope, Arkansas 
several years after Hurricane Katrina, mobile homes that never got to 
the victims. And when we had a tornado on the Mississippi River in 
Dumas, Arkansas, it took FEMA 3 weeks to figure out how to move 30 of 
them 2\1/2\ hours down the road, and now FEMA is trying to wreak havoc 
on our National Flood Insurance Program.
  The gentlewoman from Missouri is absolutely correct; it seems to me 
what FEMA is trying to do here is pay for their flood insurance program 
by forcing people to buy insurance who they know are never going to 
have a claim. This is a step in the right direction in trying to 
provide a commonsense fix to another mess that has been created by 
FEMA, and I am pleased to stand here with my colleagues from Arkansas 
and Missouri in support of it.
  Mrs. EMERSON. Mr. Chairman, I yield 2 minutes to the gentleman from 
central Missouri (Mr. Hulshof).
  Mr. HULSHOF. Mr. Chairman, I appreciate my colleague from the Show Me 
State for yielding, and I rise in support of the Berry-Ross-Hare-
Emerson-Hulshof-Costello amendment.
  We have tasked the Federal Emergency Management Agency with educating 
the public of the flood risks to their homes and businesses. I think we 
agree and support their continued efforts in the education campaign so 
long as it is done based upon the best modeling and sound science 
available.
  But I do not support FEMA pushing homeowners into purchasing flood 
insurance when they don't need it. This is exactly what FEMA seems to 
be

[[Page 25768]]

doing with the zone X shaded floodplain note. Zone X shaded is the area 
behind a certified 100-year or 500-year levee but still within the 100-
year floodplain. Within these zones, FEMA attaches a note, the purpose 
of which I believe seems to intimidate homeowners into purchasing flood 
insurance through a very strongly worded suggestion.
  Now, if you talk to FEMA, they will tell you those notes don't 
require individuals to purchase flood insurance; and I guess I can say 
my beautiful wife, Renee, doesn't require me to buy an anniversary 
present, but there are some things that just seem to be understood.
  Of particular concern, as has been expressed, is that when you have 
certain lenders or others who see this warning, this stark warning, 
that they may in fact require homeowners when in fact the law does not.
  Again, I acknowledge what my colleague and friend from Cape Giradeau 
has said. I am for floor insurance. It should be, for instance, 
mandatory in special flood hazard areas. But we have areas in this 
country where tremendous resources have been used to create a very 
adequate flood protection system. Mrs. Emerson's district is one of 
those, systems that are constructed and maintained and certified by the 
Federal Government.
  So individuals that live behind these certified levees, whether they 
have been constructed by the Federal Government or constructed under 
the supervision of the Federal Government, they pay their due, they pay 
Federal taxes, and often they have participated in the levee districts 
themselves. I think this is a commonsense amendment, and I am proud to 
support it.
  Mr. BERRY. Mr. Chairman, I appreciate very much the bipartisan way 
this amendment has been developed and I think it demonstrates that we 
can work together on both sides of the aisle to do commonsense things.
  It is unfortunate that we have been put in the position by a Federal 
agency because of severe mismanagement to where we have to become 
involved in such matters. But I thank everyone for their approach to 
this, and particularly thank the committee.
  Mr. Chairman, I yield back the balance of my time.
  Mrs. EMERSON. Mr. Chairman, I too want to thank Mr. Berry and the 
other sponsors, thank the committee chairman and ranking member, and 
hope that everyone will be in support of this very commonsense 
amendment. There is no excuse for FEMA putting at risk the economic 
development up and down the Mississippi River or around any other area 
that is protected by a 100-year or 500-year levee, and that would 
happen if we do not take this action.
  Mr. COSTELLO. Mr. Chairman, I am offering an amendment with my 
colleagues that would replace the current note FEMA uses which does not 
distinguish levees according to their structural integrity or 
protection value and replaces it with one that is more accurate to 
clarify the protection level of flood control structures and the legal 
requirements of flood Insurance coverage.
  I strongly believe all property owners should be properly educated 
about their flood risks and encouraged to assess their need for flood 
insurance. However, no local governments, lenders, and the general 
public should have uncertainty with regard to flood risks and whether 
there is a requirement to participate in the Federal flood insurance 
program.
  Alexander County in my Congressional district and other areas 
throughout the State of Illinois will be affected by these ``warning 
labels'' and this amendment ensures that we are being clear in our 
intent.
  This amendment is important to my district and to the Nation and has 
bipartisan support.
  I urge my colleagues to support this amendment.
  Mrs. EMERSON. Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Arkansas (Mr. Berry).
  The amendment was agreed to.


           Amendment No. 12 Offered by Mr. Walz of Minnesota

  The Acting CHAIRMAN (Mr. Ross). It is now in order to consider 
amendment No. 12 printed in part B of House Report 110-351.
  Mr. WALZ of Minnesota. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 12 offered by Mr. Walz of Minnesota:
       Subsection (k)(2)(A)(ii) of section 1360 of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4101), as added by 
     section 22(a) of the bill, is amended by striking ``and''.
       Subsection (k)(2)(A)(iii) of section 1360 of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4101), as added by 
     section 22(a) of the bill, is amended by striking the final 
     period and inserting ``; and''.
       Subsection (k)(2)(A) of section 1360 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4101), as added by section 
     22(a) of the bill, is amended by adding at the end the 
     following new clause:
       ``(iv) the 100-year floodplain, including any area that 
     would be in the 100-year floodplain if not protected by a 
     levee, dam, or other man-made structure.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from Minnesota (Mr. Walz) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Minnesota.
  Mr. WALZ of Minnesota. Mr. Chairman, I thank the chairman of the 
committee and the ranking member for offering this incredibly important 
piece of legislation modernizing the National Flood Insurance Program.
  On the evening of August 18 into the morning of August 19, 
devastating storms swept across the Midwest. Seven of the 22 counties 
in my congressional district are now Federal disaster areas as up to 18 
inches of rain fell in a 24-hour period. Seven individuals in my 
district lost their lives, and countless others were injured. Thousands 
of homes were destroyed. Millions of dollars in damage to roads and 
bridges which were washed away literally overnight.
  Subsequently, many Minnesotans found out how quickly they needed to 
become experts in the National Flood Insurance Program, so I 
congratulate the committee for taking up this legislation.
  One of the improvements that you are hearing about is the 
improvements to the mapping of the 100-year and 500-year floodplains.
  What my amendment does, we are getting the 500-year floodplains, and 
they are dealing with areas that could be flooded if a levee or dam 
fails. But they do not require FEMA at this time to map areas in the 
100-year floodplain that, if not for a flood-control measure other than 
a dam or levee, could flood, and my amendment simply asks for those 
areas to be mapped.
  When a flood-control measure fails, it is obvious that it is 
catastrophic. Whether it be a flood wall or a levee in New Orleans, or 
as we found out in Minnesota, a culvert in St. Charles, Minnesota, or a 
storm sewer in Hokah, Minnesota, the impact is devastating.
  This amendment is very simple. It adds one sentence to this bill 
requiring FEMA to map ``areas in the 100-year floodplain, including any 
area that would be in the floodplain if not protected by a dam, levee, 
or other man-made structure.''
  This does not put any new requirements on residents living in those 
areas, or put any additional burden on residents who live near dams or 
levees. The amendment simply requires FEMA to make information 
available about the risk of flooding that might occur if a flood 
control measure other than a dam or levee would fail. Some of the 
structures we are talking about: culverts, storm sewers, certain 
bridges and certain elevated rural roadways.
  The recent floods in Minnesota showed the need for communities to 
have a comprehensive information plan on the risks that they face. This 
amendment would help do exactly that, and I urge my colleagues to adopt 
this small change that could make a big difference in how people adjust 
to the circumstances based on the potential of flooding.
  Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Minnesota (Mr. Walz).
  The amendment was agreed to.

[[Page 25769]]




                 Amendment No. 13 Offered by Mr. Stark

  The Acting CHAIRMAN. It is now in order to consider amendment No. 13 
printed in part B of House Report 110-351.
  Mr. STARK. Mr. Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 13 offered by Mr. Stark:
       In the matter proposed to be inserted by the amendment made 
     by section 23 of the bill, in section 1363(a)(2), strike 
     ``and'' at the end.
       In the matter proposed to be inserted by the amendment made 
     by section 23 of the bill, in section 1363(a)(3), strike the 
     period at the end and insert ``; and''.
       In the matter proposed to be inserted by the amendment made 
     by section 23 of the bill, after paragraph (3) of section 
     1363(a) insert the following new paragraph:
       ``(4) by providing written notification, by first class 
     mail, to each owner of real property affected by the proposed 
     elevations of--
       ``(A) the status of such property, both prior to and after 
     the effective date of the proposed determination, with 
     respect to flood zone and flood insurance requirements under 
     this Act and the Flood Disaster Protection Act of 1973;
       ``(B) the process under this section to appeal a flood 
     elevation determination; and
       ``(C) the mailing address and phone number of a person the 
     owner may contact for more information or to initiate an 
     appeal.''.

  The Acting CHAIRMAN. Pursuant to House Resolution 683, the gentleman 
from California (Mr. Stark) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from California.
  Mr. STARK. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, this is a simple amendment. The gentleman from Indiana 
(Mr. Burton) and I are offering this jointly. Very quickly, it makes it 
mandatory for FEMA to send a first-class mail notification to affected 
property owners under the flood insurance sections.
  The notification that they send must include an explanation of the 
appeal process and contact information for responsible officials with 
whom they should deal.

                              {time}  1545

  It's needed because ordinary citizens don't read the Federal 
Register, and often the announcements are printed in the legal page of 
newspapers. The first that my constituents have heard about this is 
from the mortgage lender who tells them they have got 45 days to buy 
insurance, and they are then precluded from an appeals process, which 
if they find out at least 90 days beforehand, they have a right to 
utilize a community appeals process which is far less cumbersome and 
expensive.
  I can only suggest in support of the amendment that my good friend 
Chairman Frank at one point stated when Burton and Stark get together, 
you may not like the amendment, but you should save one of the puppies. 
It is a bill that I think will help make this process simpler for all 
of our constituents, and I urge the adoption.
  Mr. BURTON of Indiana. Mr. Chairman, I rise in strong support of the 
Stark-Burton amendment to H.R. 3121 the ``Flood Insurance Reform and 
Modernization Act of 2007.'' This amendment is nearly identical to an 
amendment we offered last year which passed this House unanimously. I 
want to thank my colleague from California, Mr. Stark for once again 
cosponsoring this amendment. I would also like to thank Chairman Frank 
and Ranking Member Bachus for including parts of our original amendment 
in this years legislation which will ensure that FEMA notifications of 
elevation changes are published in the Federal Register, published in 
the most widely circulated local newspapers and provided to the chief 
executive officer of each affected community by certified mail.
  Unfortunately, while extending notifications of changes in flood 
elevations to newspapers and local officials is helpful, H.R. 3121 
misses the bull's eye by ignoring the most important part of the 
Burton/Stark amendment from last year; namely the requirement that FEMA 
provide written notification by first class mail to each property owner 
affected by a proposed change in flood elevations. Last year in my 
district we had about 300 or 400 people who had no idea that FEMA was 
redrawing the flood map in their area until they suddenly received 
notice from their insurance companies and mortgage lenders saying that 
they now lived in a flood plain and they needed to spend an extra 
thousand or $2,000 a year for flood insurance. There hadn't been a 
flood in that area of Johnson County, Indiana for over 100 years. In 
fact, no one had ever heard of having a flood in this area.
  Once these flood maps have been finalized the only way to remove a 
property from the flood plan is to file an individual appeal complete 
with extensive survey work paid for entirely at the property owner's 
expense. The process is expensive and time-consuming and homeowners 
must still buy and retain flood insurance throughout the process. 
However, if homeowners can find out while the maps are still 
preliminary, they have time to utilize an automatic 90-day appeal 
process to have the remaps reevaluated, and potentially remove blocks 
of homes from the flood plain, at little to no expense to the owners.
  What the Stark-Burton amendment does is very simple:
  Requires FEMA to provide written notification by first-class mail to 
each property owner affected by a proposed change in flood elevations;
  Requires the notifications be sent after the preliminary maps are 
released but before the required 90-day appeal period; and,
  Requires the notification include an explanation of the appeal 
process and contact information for responsible officials.
  Mail notices to each property owner affected by projected flood 
elevation remapping would be a simple and effective way to notify 
residents of changes. Such a process is direct and ensures that all 
affected parties are able to take full advantage of FEMA's community 
appeals process. The cost to the Federal Government of these mail 
notifications would be small compared to the millions of dollars 
homeowners would otherwise have to pay in last-minute flood insurance 
or to challenge FEMA's flood elevation determinations.
  As Chairman Frank said last year when we debated this issue, and my 
colleague Mr. Stark just said so briefly and eloquently, anytime a 
conservative from Indiana and liberal from California can come together 
on an issue it is truly bipartisan. In fact this is a nonpartisan issue 
that affects nearly everyone in the 20,000 communities nationwide that 
participate in the National Flood Insurance Program. To ensure that all 
property owners are fully aware of any changes in flood plain area 
maps, and consequently their property values, is simply the right and 
fair thing to do. I urge my colleagues to support the Stark/Burton 
amendment to H.R. 3121.
  Mr. STARK. Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from California (Mr. Stark).
  The amendment was agreed to.


                  Announcement by the Acting Chairman

  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, proceedings 
will now resume on the amendment on which further proceedings were 
postponed.


                 Amendment No. 7 Offered by Mr. Taylor

  The Acting CHAIRMAN. The unfinished business is the demand for a 
recorded vote on the amendment offered by the gentleman from 
Mississippi (Mr. Taylor) on which further proceedings were postponed 
and on which the ayes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The Acting CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 268, 
noes 143, not voting 26, as follows:

                             [Roll No. 919]

                               AYES--268

     Abercrombie
     Ackerman
     Alexander
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baker
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bonner
     Bordallo
     Boren
     Boswell
     Boucher
     Boustany
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Butterfield
     Buyer
     Cannon
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     Davis, Tom
     Deal (GA)
     DeFazio

[[Page 25770]]


     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Ferguson
     Filner
     Fortenberry
     Frank (MA)
     Franks (AZ)
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gonzalez
     Gordon
     Graves
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hall (TX)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hirono
     Hobson
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Hulshof
     Hunter
     Inslee
     Israel
     Jackson (IL)
     Jefferson
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McCrery
     McDermott
     McGovern
     McHugh
     McIntyre
     McNerney
     McNulty
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Peterson (MN)
     Pickering
     Platts
     Poe
     Pomeroy
     Price (NC)
     Rahall
     Ramstad
     Rangel
     Renzi
     Reyes
     Richardson
     Rodriguez
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Terry
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Weller
     Wexler
     Wicker
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (AK)
     Young (FL)

                               NOES--143

     Aderholt
     Akin
     Bachmann
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bono
     Boozman
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Burton (IN)
     Calvert
     Camp (MI)
     Campbell (CA)
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Fallin
     Feeney
     Flake
     Forbes
     Fossella
     Foxx
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Hastert
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Hoekstra
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jordan
     King (IA)
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kuhl (NY)
     Lamborn
     Latham
     LaTourette
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McHenry
     McKeon
     McMorris Rodgers
     Miller (MI)
     Miller, Gary
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pitts
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Regula
     Rehberg
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Stearns
     Sullivan
     Tancredo
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Westmoreland
     Whitfield
     Wilson (NM)
     Wilson (SC)
     Wolf

                             NOT VOTING--26

     Bachus
     Carson
     Christensen
     Conyers
     Cubin
     Davis, Jo Ann
     Doyle
     Everett
     Faleomavaega
     Fortuno
     Herger
     Hinojosa
     Jackson-Lee (TX)
     Jindal
     Johnson (GA)
     Johnson, E. B.
     Kennedy
     Kline (MN)
     LaHood
     Lewis (CA)
     Meek (FL)
     Meeks (NY)
     Moran (KS)
     Norton
     Perlmutter
     Reichert

                              {time}  1613

  Mr. PEARCE changed his vote from ``aye'' to ``no.''
  Ms. GINNY BROWN-WAITE of Florida and Mr. BONNER changed their vote 
from ``no'' to ``aye.''
  So the amendment was agreed to.
  The result of the vote was announced as above recorded.
  The Acting CHAIRMAN. There being no further amendments, the Committee 
rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Tierney) having assumed the chair, Mr. Ross, Acting Chairman of the 
Committee of the Whole House on the state of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 3121) to 
restore the financial solvency of the national flood insurance program 
and to provide for such program to make available multiperil coverage 
for damage resulting from windstorms and floods, and for other 
purposes, pursuant to House Resolution 683, he reported the bill, as 
amended by that resolution, back to the House with sundry further 
amendments adopted by the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on any further amendment reported from 
the Committee of the Whole? If not, the Chair will put them en gros.
  The amendments were agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


              Motion to Recommit Offered by Mrs. Bachmann

  Mrs. BACHMANN. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
  Mrs. BACHMANN. In its current form, I am.
  Mr. FRANK of Massachusetts. Mr. Speaker, I reserve a point of order.
  The SPEAKER pro tempore. The gentleman reserves a point of order.
  The Clerk will report the motion to recommit.
  The Clerk read as follows:

       Mrs. Bachmann moves to recommit the bill H.R. 3121 to the 
     Committee on Financial Services with instructions to report 
     the same back to the House forthwith with the following 
     amendments:
       In the matter proposed to be inserted by the amendment made 
     by section 7(a)(2) of the bill, in subsection (c)(1), strike 
     ``paragraph (8)'' and insert ``paragraphs (8) and (9)''.
       In the matter proposed to be inserted by the amendment made 
     by section 7(a)(2) of the bill, redesignate paragraphs (8) 
     and (9) of subsection (c) as paragraphs (9) and (10), 
     respectively.
       In the matter proposed to be inserted by the amendment made 
     by section 7(a)(2) of the bill, after paragraph (7) of 
     subsection (c), insert the following new paragraph:
       ``(8) DHS certification requirements for coverage 
     availability.--
       ``(A) Requirement.--The Director may not make any 
     multiperil coverage available under this subsection unless 
     the Secretary of Homeland Security, in consultation with 
     Comptroller General of the United States and the Director of 
     the Congressional Budget Office, has certified to the 
     Congress that--
       ``(i) the national flood insurance program is actuarially 
     sound;
       ``(ii) chargeable premium rates for flood insurance 
     coverage under such program will not be increased as a result 
     of the implementation of the program under this subsection 
     for multiperil coverage; and
       ``(iii) if the program under this subsection for multiple 
     peril coverage is implemented, it will be operated in an 
     actuarially sound manner.
       ``(B) Determination.--The Director shall make a 
     determination of whether the national flood insurance program 
     meets the conditions specified in clauses (i) and (ii) of 
     subparagraph (A) not later than the expiration of the 6-month 
     period beginning on the date of the enactment of the Flood 
     Insurance Reform and Modernization Act of 2007.
       ``(C) Actuarially sound.--For purposes of this paragraph, 
     the term `actuarially sound' means, with respect to the 
     national flood insurance program that premiums under such 
     program are priced according to risk, or by such standards 
     and methods as a generally accepted by the actuary industry, 
     incorporating up-to-date modeling technology, and taking into 
     consideration administrative expenses, including potential 
     debt service, in the case of a deficit.''.

  The SPEAKER pro tempore. The gentlewoman from Minnesota is recognized 
for 5 minutes.
  Mrs. BACHMANN. Mr. Speaker, today, over 5 million Americans rely on 
the National Flood Insurance Program to protect their homes and 
businesses in the event of a flood.

[[Page 25771]]

  But since January of last year, there have been over 77 declared 
disasters involving flooding. And just this August, in our home State 
of southeastern Minnesota, we experienced severe flooding that caused 
distress to over 1,500 homes.
  According to FEMA, and according to the Minnesota Homeland Security 
and the Emergency Management, the Federal Government has disbursed at 
this point nearly $31 million in Federal recovery funds to over 4,200 
people. And currently, there are over 8,000 people, specifically, there 
are 8,434 national flood insurance policies in effect in my home State 
of Minnesota.
  But, unfortunately, as floods continue to occur across our great 
Nation, the National Flood Insurance Program is in trouble. It's not 
good news. It's bad news. And the program today, unfortunately, is $18 
billion in debt. That's today, as it stands, and it's required to pay 
that debt back with interest over time. This debt will be paid back 
with the premiums that are charged to those families who are relying on 
this flood insurance program.
  The base bill that's before us is a good one because it attempts to 
help solve some of the fiscal problems today that are facing the 
National Flood Insurance Program. We agree with that, Mr. Speaker.
  But, yet, there is one provision in this bill that has the potential 
to undo the very positive reform that is before us, and that is to send 
the flood insurance program into even further fiscal disarray and 
result in premium increases for homeowners all across America, 
something that no one in this body would want to do.
  The proposal, Mr. Speaker, that's included in this bill is to expand 
the National Flood Insurance Program by creating a brand-new insurance 
program for wind damage. That's something that has never existed 
before, and it's akin to a homeowner who, upon discovering that his 
foundation is rotting, decides to ignore that problem and instead adds 
a second story on to that rotting house. And he shouldn't be surprised 
then when the whole house collapses around him.
  I have a very simple amendment, Mr. Speaker, and it says this: it 
does not strike the brand-new wind insurance program. What it does is 
this: it stipulates that before the program can go into effect, three 
things have to occur. This is something that we can all agree on:
  Number one, there has to be a certification that the existing 
National Flood Insurance Program, in fact, is actuarially sound, and 
this certification would provide all of us with the assurance that this 
program is correctly pricing its policies and has adequate reserves on 
hand to handle large flood events. We've seen that there's been a 
problem with this in some of the State reserve accounts.
  Today, right now, both the Government Accountability Office and the 
Congressional Budget Office have reported that the National Flood 
Insurance Program is likely to not be actuarially sound.
  Second, there has to be a certification that premiums for people in 
the existing flood insurance program will not be increased to subsidize 
this brand-new insurance program. People all over America are wondering 
if that's going to happen to them as well as the insurance companies.
  And then third, of this simple amendment, it says there has to be a 
certification that the new wind insurance program will, itself, be 
fiscally sound. Who can argue with that?
  So, Mr. Speaker, the 8,434 people of the State of Minnesota and the 5 
million Americans who today rely on our National Flood Insurance 
Program, they need to serve as a lifeline in the event of a major 
storm, that they would not have that program in endangered, that their 
premiums would not, in fact, be increased in order to help create, in 
fact, this new expansion of an expansion of a wind program.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Does the gentleman from Massachusetts 
continue to reserve his point of order?
  Mr. FRANK of Massachusetts. No, Mr. Speaker, I do not press the point 
of order.
  The SPEAKER pro tempore. The point of order is withdrawn.
  Is the gentleman from Massachusetts opposed to the motion?
  Mr. FRANK of Massachusetts. I am opposed to the motion. I would 
press, instead, a point of logic, more appropriate here.
  The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
  Mr. FRANK of Massachusetts. And the logic is this: we have a proposal 
that came forward, brought forward by the gentleman from Mississippi to 
add a program to the National Flood Insurance Program that says that if 
you have national water insurance, you can, at your option, add wind 
insurance. Remember, no new insured are eligible here. You have to have 
water and then you can get wind.
  The argument that the gentleman from Mississippi has made irrefutably 
on this House floor is that you simply cannot, days after a storm has 
damaged, try to sort out what was wind and what was water.
  Now, unlike the flood program, the gentlewoman from Minnesota is 
right, the flood program is in deep debt. We inherited, from our 
Republican colleagues, a flood insurance program that is hurting. They 
had control of that program, House, Senate and President; and it went 
into debt.
  As the gentlewoman says, we have a bill, and we had it last year in 
the House too, but not in the Senate, that makes it better. Everyone 
agrees that our bill, everyone who has read it agrees that our bill 
reduces the financial problems with flood, but it doesn't wipe them 
out. There's a large problem there. Billions of dollars.
  Here's the illogic. The gentleman from Mississippi has put forward a 
proposal for optional wind insurance which will have to be actuarially 
sound. When the flood insurance program was passed, there was no PAYGO. 
Flood insurance is hurting. They're supposed to be actuarially sound, 
but it's very loose.
  We have written into this bill, with regard to wind, requirements 
that it be actuarially sound, that it break even for the Federal 
Government, that the Congressional Budget Office certifies as perfectly 
good. So there is no argument possible that the wind program will add 
to the danger. CBO has certified that it is sound. So we have a new 
wind program that will be actuarially sound; CBO certifies that. And 
the bill says that if the program starts to run into a deficit, it cuts 
off. Automatic.
  We then have the water program, which the Republicans left us as 
their inheritance, which is deeply in debt. They are saying that the 
fiscally sound wind program that's in this bill, certified by CBO, 
cannot go into effect until we've solved the problem they left us in 
the water program. They are saying that. They don't have anything to 
say bad about the wind program. They're saying that you can't do the 
wind program until you've solved the water problem. And the water 
problem is billions.
  How would you solve it?
  Well, you'd substantially raise people's premiums.
  I should note, Mr. Speaker, that no one on the Republican side has 
proposed to try to make it actuarially sound. We are trying to get in 
that direction. But no one on the Republican side thinks it's 
reasonable to immediately wipe out that huge debt.
  They don't like the wind program. They don't want to take it on head 
on, so they have come up with this scheme which says, the fiscally 
sound, CBO-certified, actuarially-legitimate wind program can't go 
forward until we clean up the $19 billion problem they left us in the 
flood program. I do not think that is very logical.
  The gentleman from Mississippi, as I said, made the case for the wind 
program. So this becomes a case for the wind program.
  Here's the deal: you're told to leave your house because a 
hurricane's coming. You come back a few days later and there's 
devastation, and you have to figure out what was caused by wind and 
what was caused by water because if you have a wind policy from a 
private company, they will argue, in

[[Page 25772]]

many cases, that water caused all the damage, and you are very hard 
pressed to find it out.
  If you then, instead, have a combined wind and water policy from the 
Federal Government, you then don't have to go through this metaphysical 
exercise. You simply get the payment for your damages.
  Now, that's the logical point that the gentleman from Mississippi put 
forward. And it is going to be, as CBO said, break even for the Federal 
Government.
  So here's the recommit: the Federal Government cannot go to the aid 
of people facing that dilemma of trying to decide wind versus water, 
which has been certified as fiscally neutral by CBO, until we solve the 
problem that we got in the water issue.
  It really is not a logical thing to do. It is simply a way to try to 
kill the wind program. A more straightforward way would have been to 
simply kill the wind program. I'm sorry they didn't get an amendment to 
do that. But they could have done that straightforwardly in the 
recommit.
  So I hope that Members will vote ``no.'' The only issue here is 
should we initiate a voluntary program whereby people who have Federal 
water insurance can also get wind insurance in a manner that is 
certified by CBO to add nothing to the deficit, to do nothing to hurt 
the Federal flood insurance program, but to be actuarially sound.
  I hope the motion is defeated.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mrs. BACHMANN. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of passage.
  The vote was taken by electronic device, and there were--ayes 179, 
noes 232, not voting 21, as follows:

                             [Roll No. 920]

                               AYES--179

     Aderholt
     Akin
     Alexander
     Bachmann
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blumenauer
     Blunt
     Boehner
     Bono
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Dent
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Fallin
     Feeney
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gilchrest
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kuhl (NY)
     Lamborn
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Murphy (CT)
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pitts
     Poe
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Tancredo
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NOES--232

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Bonner
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Ferguson
     Filner
     Frank (MA)
     Gerlach
     Giffords
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jefferson
     Johnson (GA)
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Peterson (MN)
     Pickering
     Platts
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wicker
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                             NOT VOTING--21

     Bachus
     Carson
     Conyers
     Cubin
     Davis, Jo Ann
     Doyle
     Everett
     Hastert
     Herger
     Hinojosa
     Jackson-Lee (TX)
     Jindal
     Johnson, E. B.
     Kennedy
     Kline (MN)
     LaHood
     Markey
     Moran (KS)
     Moran (VA)
     Perlmutter
     Reichert

                              {time}  1646

  Messrs. SPACE, HODES, and FERGUSON changed their vote from ``aye'' to 
``no.''
  Mr. TOM DAVIS of Virginia changed his vote from ``no'' to ``aye.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. FRANK of Massachusetts. Mr. Speaker, on that I demand the yeas 
and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 263, 
nays 146, not voting 23, as follows:

                             [Roll No. 921]

                               YEAS--263

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blumenauer
     Bonner
     Boren
     Boswell
     Boucher
     Boustany
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Brady (TX)
     Braley (IA)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Butterfield
     Camp (MI)
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     Davis, Tom
     DeFazio
     DeGette
     Delahunt

[[Page 25773]]


     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Doggett
     Donnelly
     Drake
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Ferguson
     Filner
     Forbes
     Frank (MA)
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gonzalez
     Gordon
     Graves
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Hill
     Hinchey
     Hirono
     Hobson
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Hulshof
     Inslee
     Israel
     Jackson (IL)
     Jefferson
     Johnson (GA)
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kildee
     Kilpatrick
     Kind
     Kirk
     Klein (FL)
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McHugh
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Peterson (MN)
     Pickering
     Platts
     Poe
     Pomeroy
     Price (NC)
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Richardson
     Rodriguez
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tiahrt
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Weldon (FL)
     Weller
     Wexler
     Whitfield
     Wicker
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (FL)

                               NAYS--146

     Aderholt
     Akin
     Alexander
     Bachmann
     Baker
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Blackburn
     Blunt
     Boehner
     Bono
     Boozman
     Broun (GA)
     Burton (IN)
     Buyer
     Calvert
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Deal (GA)
     Doolittle
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Fallin
     Feeney
     Flake
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Hall (TX)
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Higgins
     Hoekstra
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jordan
     King (IA)
     King (NY)
     Kingston
     Knollenberg
     Kuhl (NY)
     Lamborn
     Latham
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McKeon
     McMorris Rodgers
     Miller (MI)
     Miller, Gary
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pitts
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Tancredo
     Terry
     Thornberry
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Westmoreland
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)

                             NOT VOTING--23

     Bachus
     Carson
     Conyers
     Cubin
     Davis, Jo Ann
     Dingell
     Doyle
     Everett
     Green, Al
     Hastert
     Herger
     Hinojosa
     Jackson-Lee (TX)
     Jindal
     Johnson, E. B.
     Kennedy
     Kline (MN)
     LaHood
     Marshall
     Moran (KS)
     Moran (VA)
     Perlmutter
     Reichert

                              {time}  1655

  Mr. CONAWAY changed his vote from ``yea'' to ``nay.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________