[Congressional Record (Bound Edition), Volume 160 (2014), Part 1]
[House]
[Pages 154-160]
[From the U.S. Government Publishing Office, www.gpo.gov]




              HOMEOWNER FLOOD INSURANCE AFFORDABILITY ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2013, the gentleman from Pennsylvania (Mr. Marino) is 
recognized for 60 minutes as the designee of the majority leader.


                             General Leave

  Mr. MARINO. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on the subject of my Special Order.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  Mr. MARINO. Mr. Speaker, I rise today to continue to bring attention 
to an issue that is devastating the people of Pennsylvania--across the 
10th District and other districts in Pennsylvania--and across this 
country. It is the implementation of the Biggert-Waters Flood Insurance 
Reform Act of 2012.
  It has unintentionally burdened lower- and middle class homeowners 
and small businesses. Rates have increased astronomically. Biggert-
Waters had the best of intentions. However, FEMA's methodology is 
severely flawed, and FEMA failed to warn Congress.
  This afternoon, I am joined by a bipartisan group of my colleagues 
from across the country; and while the details of a proposed solution 
may vary, I believe we are unified behind the goal of protecting the 
livelihoods and investments of hardworking Americans.
  Our homes are often our most valuable assets in that they allow us to 
retire; they allow us to send our children to college; they allow us to 
leave something behind for our children and our grandchildren for a 
better life. These homes form the backbone of riverside and coastal 
working-class communities. The downfall of these residential real 
estate markets will be catastrophic. Homeowners will lose their total 
investments in their properties. Small businesses will lose their 
customers, not to mention their real estate. Small banks will go out of 
business because people are not able to pay the insurance that the 
mortgages call for. The communities left behind will no longer have an 
adequate tax base to fund basic services.
  I believe the best solution right now is to repeal Biggert-Waters in 
its entirety and to start again from square one. Authors of the law on 
the House Financial Services Committee intended to stabilize the 
National Flood Insurance Program, but this law has disproportionately 
affected low- and middle class homeowners who cannot afford these 
premiums.
  Although we here in Congress tend to think in abstract terms, I want 
to share some of the stories I have heard from my neighbors back home 
in the 10th Congressional District of Pennsylvania.
  Jeff and Erica Waldman purchased a house in Muncy, Pennsylvania. 
Their flood insurance premium was initially $900 per year. Now they are 
being told to pay by the end of last year--the 31st, a few days ago--
$9,000 a year for flood insurance--up front. Jeff and Erica are 
frustrated about the lack of information they were given and are days 
away from losing their home as we speak. We cannot solely place this 
burden on people like Jeff and Erica.
  Laurie and Michael Portanova purchased three historic properties in 
Jersey Shore, Pennsylvania, last year, hoping that their new business 
would rejuvenate the Main Street feel for the borough. Their flood 
insurance premium per year was $2,800. They received a notice that they 
had to pay $40,000 by the end of the year for flood insurance, by the 
end of 2013. They are close to walking away from their investments and 
taking a huge loss. This would also have devastating consequences on 
other property owners in Jersey Shore, who will have an additional tax 
burden if homeowners in the area are not able to keep their homes 
because they are not able to pay the flood insurance.
  Mr. Speaker, at this time, I yield to the gentleman from 
Pennsylvania, Congressman Thompson.
  Mr. THOMPSON of Pennsylvania. Mr. Speaker, I appreciate the gentleman 
for yielding, and I appreciate my good friend from Pennsylvania for 
hosting this Special Order on a very serious issue.
  Biggert-Waters, I think, was a piece of legislation that we all had 
great hopes for in terms of the National Flood Insurance Program. As 
the commercial insurance industry really exited the insuring of flood 
risk, it was left to the Federal Government; and with the recent 
flooding, obviously, over the past number of years, that fund has been 
decimated. Last year, on a bipartisan basis, Congress passed the Flood 
Insurance Reform Act of 2012. The measure included some long overdue 
reforms that strengthened the financial solvency and administrative 
efficiency of the National Flood Insurance Program.
  The rationale for the 2012 law was the need for the National Flood 
Insurance Program to more accurately reflect flood risk. Historically, 
most low-risk States have subsidized higher risk States, mostly 
coastal. Similarly, low-risk areas within the States have tended to 
subsidize those areas with a higher risk, more prone to flooding. The 
linchpin of the 2012 law, however, was to use true actuarial rates in 
order to prevent very low-risk areas from subsidizing moderate to high-
risk areas. The unintended consequences have been drastic premium 
increases for those plans that were traditionally subsidized by the 
National Flood Insurance Program.
  Under the law, Congress mandated that the Federal Emergency 
Management Agency complete an affordability study to further evaluate 
any unintended consequences as a result of the changes. The study was 
to be completed before the rate increase went into effect. I want to 
repeat that. The law that was passed in 2012 had a safeguard in there 
that the administration, through the agency FEMA, was to do 
affordability studies before rates went up. That is not what happened, 
Mr. Speaker. That would have been critical to understanding the full 
scope of the new risk model. FEMA has failed to complete the 
affordability study that was required under the law. Additionally, 
there remains a huge concern that FEMA does not have the data that it 
needs to accurately determine risk under this new policy regime and 
that it is incapable of creating a new mapping system that truly 
reflects true actuarial rates.
  Now, while 80 percent of the policyholders in this country will not 
see an increase as a result of the new policy, a small portion of the 
properties in this country--actually, I think it is a significant 
portion of properties--are

[[Page 155]]

being hit with staggering increases. This is a serious concern for 
communities and individuals across the country, including many from the 
Fifth District of Pennsylvania.
  Just recently, I have heard from counties, communities and homeowners 
from Cameron County and Erie County--Clinton, McKean, Crawford, Potter, 
Huntington, and Centre--and that is just in recent days. I think we are 
at risk of creating ghost towns as homes have lost so much value. You 
may be able to afford the mortgage, but you can't afford the flood 
insurance. As my good friend said, the number one assets that 
individuals have in their lives are their properties--their homes, 
their real estate. When it comes time to be able to sell them, they are 
not able to liquidate them because there is no one out there who is 
able to buy. So we are really at risk of creating these ghost towns 
unless we make the necessary changes, I think, to have the 
administration comply with the law as it was passed in 2012 in terms of 
affordability rates.
  Colleagues on both sides of the aisle have come together to correct 
this critically important issue. I am an original cosponsor of the 
Homeowner Flood Insurance Affordability Act, H.R. 3370. I know my good 
friend Mr. Marino has introduced another bill that would completely 
repeal Biggert-Waters, most recently introduced within the past couple 
of days.
  H.R. 3370 is a bill to terminate the rate increase under the Flood 
Insurance Reform Act of 2012 until 2 years after the Federal Emergency 
Management completes the rate affordability study originally mandated 
under the law. The bill also makes structural changes to FEMA to ensure 
that there are advocates for homeowners when flood maps are drawn or 
adjusted.
  Mr. Speaker, improving the financial viability of the Nation's flood 
insurance program while ensuring that program protects those it was 
designed to support is something every Member of this body should 
support.
  I encourage my colleagues to join in this commonsense effort to 
protect and improve our Nation's flood insurance program but also to 
make sure that our real estate market remains strong and viable and 
that that important asset that individuals have remains able to be 
bought and sold.
  I thank the gentleman for hosting this Special Order.

                              {time}  1730

  Mr. MARINO. Thank you, Congressman Thompson.
  I would like to add a true story happening right now in my district 
due to these increases in rates. Nikki Burrows met her husband, bought 
their home in Muncy in 2006. Insurance premiums more than doubled from 
$862 to $1,750; but because the Burrows had suffered flood damage from 
Tropical Storm Lee in 2011, they are subject to an additional 20 
percent on their premiums until they max out. Add an annual fee of 
$4,000 annually. So, in essence, they went from $862 a year to $4,000 a 
year because they were hit in one of the floods.
  These Burrows are trapped. These townships and small towns along the 
rivers are trapped into a situation where the average mean income is 
about $37,000. That's before taxes. That's before mortgage payment. 
That's before food for the kids. That's before other insurances. Yet 
these people are to come up with $4,000, $6,000, $8,000 and $10,000 up 
front, per year, for flood insurance because of the unintended 
consequences of Biggert-Waters.
  At this time, I yield to the gentleman from Massachusetts, 
Congressman Keating, my colleague across the aisle and a former 
prosecutor.
  Mr. KEATING. I thank the gentleman for yielding.
  In an all-too-common occurrence in this Nation today, the Murphy 
family in Wareham, Massachusetts, has seen flood insurance premiums 
rise dramatically, from $500 annually in their instance to $5,000, a 
10-time amount of an increase.
  Anthony Frangie who is a Realtor at the South Shore portion of 
Massachusetts has seen multiple home sales fall through specifically 
because the flood insurance premiums were too high. This is a real 
estate industry, not just in my home State, but across the country, 
that has been reeling as a result of the worst downturn in the housing 
industry in recent years that our country has ever experienced.
  They are beginning to come forward, sales are occurring. One of our 
most important industries, our housing industry is beginning to drive 
our economy forward, yet this is going to drive us back. The lending 
institutions that support this in States like Florida, where the 
inventory was so high, where they had houses that people walked away 
from because they couldn't afford and they couldn't sell themselves, 
now they have experienced improvement. But this is going to set them 
back, and it is going hurt our economy in the process, not just 
regionally, but nationally.
  Last year, the owners of Haddad's Ocean Cafe in the community I 
represent of Marshfield renovated their restaurant to reflect the 
current flood requirements, and they went further. They even went 
higher when they made these kind of very expensive renovations, going 
above what was needed. Today, with the new flood maps, they must pay 
millions of dollars in additional renovations to further raise the 
building even higher or pay flood insurance premiums far in excess of 
$30,000 annually, something that endangers their ability to conduct 
basic business.
  These are just a few of the numerous examples and challenges facing 
homeowners and businesses that have arisen through the implementation 
of the new flood insurance changes. FEMA, at hearings that we have had 
here in answering to this issue about the implementation, has said they 
perceive their job to overestimate the impact of this. Clearly, there's 
something wrong with the implementation of this law.
  Our office has had individual after individual come forward to us 
with things that affect their own person and their own homes looking 
for help. Some of them that can afford it have moved forward with 
appeals. Many of those appeals have been successful. Yet they have had 
to invest and risk thousands of dollars in elevation studies in terms 
of site reviews just to bring their case forward.
  Communities have gone together and brought forth appeals for the 
entire community. One of those communities in my district went forward; 
and they were so detailed, I looked at what they said and decided to 
bring it to the attention and to ask the advice and expertise of one of 
the Nation's top coastal expert groups. That's the University of 
Massachusetts School of Marine Science and Technology in Dartmouth, 
Massachusetts.
  What they determined with their review was that the methodology used 
to determine these maps was faulty. In fact, one of the things they 
found was the wave structure that results in flooding is the result of 
storm surges and violent storms in the east and Atlantic coast and 
responsible for the floods. That wasn't used as the methodology to 
determine what the impact would be on the maps and what the cost would 
be for flood insurance on all these homeowners. Indeed, they used the 
methodology based on the Pacific Ocean, with a longer, slower wave 
structure; and the scientists and coastal engineers that reviewed this 
for us said what they did, determined to be the maps, was based on 
faulty science.
  Now individuals are facing enormous burdens, as my colleagues have so 
aptly demonstrated. In terms of annual payments, that could be the 
difference between being able to stay in your own home, live in your 
own home, or not; annual payments that affect many people on fixed 
income who had never, ever budgeted for this and are throwing them into 
the most difficult decisions of how they are going to heat their home, 
how they are going to afford to live, what they are going to do. Even 
younger people who are using or hoping to use the equity on their home 
to pay for their kids' college education are finding that, instead of 
having this go towards that important goal in their life, it is going 
to pay for flood insurance.
  Now, this is an important thing, not only how it affects people on 
annual

[[Page 156]]

payments, but what this also does, this affects and can affect the 
entire value of their home. In fact, real estate people are finding as 
they are going to sell the homes, that the homes that were valued one 
way are now dramatically being reduced because of the cost of annual 
flood insurance attached to that home.
  So what we have really is a taking, as a result of the 
implementation, a taking of people's assets, of their savings, of the 
roof over their head, of the number one financial asset they have in 
their lives. Clearly, this is not the role of government to effectuate 
this kind of taking, because maybe the math is totally wrong and they 
shouldn't be included at all or maybe it is off just 1 foot and it has 
this kind of devastating financial and personal impact. That's why I 
have joined my colleagues in being one of the original sponsors of the 
Homeowner Flood Insurance Affordability Act
  Now this is done in a House that is often challenged in terms of 
working across the aisle, in terms of working in a bipartisan manner. 
But in this instance, it is a sterling example of how we have worked 
together across the aisle in a common interest, realizing how important 
this is to the people we represent, realizing how important this is to 
the real estate industry nationally, realizing how important this is to 
the lending institutions nationally and making sure that government 
isn't acting in a way that is actually seizing their personal assets 
and their life savings.
  We have an obligation, having worked together so hard and, in my 
opinion, achieving a very significant majority of the Members of this 
House of Representatives to pass this kind of delay, to get it right 
and make sure we are treating people fairly, that it is inherent that 
this bill be brought to the floor for a vote and be brought to the 
floor quickly for a vote. We were expecting Senate action in this just 
in the next few weeks.
  It is my hope, it is my plea, it is our obligation as the court of 
last resort representing these people who have so much in jeopardy 
right now, to bring it to the floor, to get a vote, to pass it, to get 
a delay to be able to make sure we go to FEMA and say, You are dealing 
with people's livelihoods. You have an obligation to get it right and 
get it done. And when they do, this bill will also allow us here in 
Congress to review it and make sure the implementation is continued in 
the correct manner.
  Let's move forward on this very important issue as soon as possible. 
Let's show this as one more example, during these very challenging 
times politically, of what happens when this House listens to the 
people in their district and around the country, works together to get 
something done and does the right thing. It is my fervent hope that we 
can do this quickly.
  Mr. MARINO. Thank you, Congressman Keating.
  I would like to reiterate the devastating effects that these premiums 
are having on the values of homes, affecting retirement plans, 
retirement plans for a lot of our seniors in the district. Tom Rishel, 
Tom is out of a pension. He does not have a retirement plan, so he 
invested in several properties in Muncy, Pennsylvania, hoping to one 
day resell the properties. His premium, on just one property, has 
jumped from $600 a year to over $9,500 a year. Tom, who is 70 years 
old, fears his properties are worthless and his dreams of retirement 
have been destroyed.
  Mr. Speaker, at this time, I yield to the gentleman from Mississippi, 
Congressman Palazzo.
  Mr. PALAZZO. Thank you, Congressman, and thank you so much for 
putting this Special Order together this evening for us to talk about 
the devastating effects the Biggert-Waters Act is going to have on 
flood insurance premiums just not along coastal areas, but all across 
America.
  For more than 40 years, residents who have lived in flood-prone areas 
have paid into the National Flood Insurance Program because virtually 
no private flood insurance market existed. The issues I and my 
colleagues have spent so much time addressing over the last year affect 
these 5 million NFIP policyholders.
  What many Americans do not realize is that they could be the next 
flood victim, and they could be the next victim of these drastic flood 
insurance hikes and flawed FEMA policies.
  According to FEMA Director Craig Fugate, 40 percent of the U.S. 
population lives in counties that border the ocean or the Great Lakes 
and are directly or indirectly affected by flood risk, and most U.S. 
counties contain rivers and streams that present flood hazards. Forty 
percent of the U.S. population--that's more than 126 million 
Americans--could be affected by these issues in the coming years.
  This map shows exactly where you can find NFIP policyholders. We are 
not just talking about a few people living in coastal areas. This isn't 
just Mississippi, Louisiana, New York, New Jersey, or Florida's 
problem. This map hasn't even been updated to include those affected by 
the recent flooding in Colorado. We are talking about millions of 
people across America in every single State and just about every single 
congressional district who will be impacted by these drastic rate 
increases.
  The Biggert-Waters Act of 2012 was passed with the intention of 
insuring that the program remained solvent for these policyholders to 
ensure that it is there for the people who have paid into the system 
when a disaster strikes. It was never intended to make rates so 
unaffordable that flood insurance is no longer attainable for these 
policyholders. Yet when you look at what is happening now and the way 
FEMA is implementing the law, that's exactly what we are seeing.
  There are those who have said these people are just a bunch of 
wealthy waterfront homeowners. That is simply not true. I can tell you 
that's not the case in my district. I am hearing from teachers, 
veterans, fishermen, people who work at the shipyards in support of our 
Navy. These are everyday Americans, some of whom live 50 or 100 miles 
or more inland. These are folks who have been responsible in 
maintaining flood insurance policies for years and sunken untold 
thousands of dollars of their own funds into their community's recovery 
from Hurricane Katrina.
  They built back to higher FEMA standards, many of them invested in 
mitigation against future risk. They used every tool at their disposal 
and went to great lengths and great costs to comply with the law and do 
their part. Now they are being punished for doing that. They are being 
hit with astronomical rate increases overnight, or worse, they are 
unable to get straight answers from FEMA or from their flood insurance 
agents who are looking to FEMA for answers.
  Many are retirement age. One bank in my district has estimated that 
at least 400 elderly homeowners are facing rate increases that are so 
drastic that it could force them into foreclose.
  Take Cheryl, a retired special education teacher married to Gerald, a 
retired aluminum plant worker and a Navy veteran. She says:

       Please don't think that we live in a waterfront home. We 
     live in an older neighborhood, miles inland.

  She tells me that for 11 months they lived in a camper while working 
to rebuild, taking ``extra precautions'' and meeting the demands of 
inspectors and permits throughout the process.
  ``We felt proud to be part of the rebuilding of the Mississippi Gulf 
Coast'' she says. But she also tells me, ``A large increase could bury 
us.''
  Another military retiree couple on fixed incomes writes that their 
flood insurance rates have been estimated to rise from $400 a year to 
at least $4,000 a year. He says: ``Despite doing our `homework' prior 
to purchase, putting a considerable down payment on the home, doing due 
diligence following the storm by repairing our home'' that flood map 
changes and increasing flood insurance rates have put them in the 
position to possibly lose their home with no fallback.
  Linda, a 65-year old single woman, tells me she hopes to retire after 
40 years working as a teacher. She says:

       Like so many others, I rebuilt my home after Katrina 
     following the guidelines of

[[Page 157]]

     then current flood maps. If the flood rates go to the 
     proposed levels there's no way I can afford to keep my home. 
     I have worked all of my life, contributed to the community I 
     live in, followed the rules, paid my debts. Now I am faced 
     with losing my home, my retirement, and my sense of security.

                              {time}  1745

  These are just a few examples of how these rate increases are 
affecting everyday Mississippians. Millions more like them are all 
across the Nation, and some don't even realize the storm that is 
coming.
  We are not just talking about a few folks along the coast. We are not 
talking about wealthy, waterfront homeowners looking for a taxpayer 
handout. Anyone who says otherwise is incredibly misinformed or 
blatantly misleading the American people.
  These people, they are the reason we are here today. They are the 
reason that Republicans and Democrats from every corner of the country 
are supporting our efforts. We all share the same goal of ensuring 
flood insurance remains affordable and available to those who need it.
  In this body, we have acted to make compassionate reforms, while 
keeping this program fiscally sound. We have worked to halt rate 
increases, address unintended consequences, and hold FEMA accountable 
for questionable methods and flawed implementation.
  We will continue this fight for those who have been caught in the 
cracks through no fault of their own, for hardworking, everyday 
Americans who have followed all the rules and tried to do everything 
right. Now, we have a responsibility to make this right, and we will 
not stop until the job is finished.
  Mr. MARINO. Thank you, Congressman Palazzo. Your map says it all.
  After speaking with many constituents during the recess, including 
five town halls that I held, I believe that many homeowners who have 
seen their rates increase were not even aware that the National Flood 
Insurance Program rates were partially subsidized by the Federal 
Government.
  As the Congressman just said, please do not think that this pertains 
to California coast and the Pacific alone, or New Jersey or New York 
coastal. This affects people all across the United States.
  Just in the State of Pennsylvania alone, we are not on a coast, we 
are in by several hundred miles, there are several thousand miles of 
waterways, rivers, creeks, streams.
  Just to give you an example, in one of the town meetings, I asked 
Jeff and his wife--Jeff is from Muncie. Jeff and his wife bought a 
house, paid it off early, paid their taxes, kept their insurance up. 
Again, their insurance is going up from about $600 a year to $11,000 a 
year.
  I said to Jeff, when you were at your closing, and the realtor is 
sitting with you, and the lawyer is sitting with you, and the bank is 
sitting with you, they came out to you and said, okay, now we need a 
check for the flood insurance because you have a federally-backed loan 
and you are in a flood area. So he wrote out a check for 6 or 700 
bucks.
  But I said, at that point, did anyone say to you that two-thirds of 
the cost of the flood insurance is subsidized by the Federal 
Government? He said, never.
  I said, did anyone say to you that that subsidy could go away some 
day? Never.
  Did anyone tell you that the rates were going up because of that 
subsidy? Never.
  So it is not fair to the American people who are not told ahead of 
time--this is before recent closings--and they have the rug pulled out 
from under them.
  So we are saying, in essence--and again, this is an unintended 
consequence of Biggert-Waters--FEMA did not give us the right 
information. I believe they held information back.
  We are saying to the American people who are on $35,000 a year or 
$40,000 a year annual income, who have to pay $10,000 up front, you 
know something? We had a subsidy for you yesterday, but guess what? It 
is not there today, and it is too bad that you may lose your house.
  We cannot let that happen.
  Now, it gives me great pleasure to yield to the gentleman from New 
York, Congressman Grimm.
  Mr. GRIMM. Mr. Speaker, I thank my colleague for the opportunity to 
speak today, and for his hard work on this important issue.
  I rise today to discuss this urgent need for Congress to act as 
quickly as possible to delay these skyrocketing flood insurance 
premiums that right now are absolutely crippling homeowners in my 
district of Staten Island and Brooklyn, as well as across this entire 
great Nation.
  In 2012 we all know that Congress passed the Biggert-Waters Flood 
Insurance Reform Act, and that was an attempt to stabilize the National 
Flood Insurance Program. That program does have problems. It finds 
itself in about $30 billion of debt.
  While well-intentioned, this law has had absolutely devastating 
effects on homeowners across the country. They are seeing their 
premiums increased not just by hundreds, but in many cases, by 
thousands of percent each year, with more increases to come into the 
future.
  In my district alone, I met with hundreds of concerned citizens, 
homeowners. I have a senior who came to me with her bill for the new 
flood insurance and her old bill. The premium was $2,200 a year, and 
the new bill was $28,000. She is on a fixed income. She is not in a 
position to pay $28,000 a year.
  Unfortunately for her, she can't sell the property because the 
property's value doesn't warrant such an extravagant flood insurance 
premium, so no one will buy it, so she is trapped.
  I had a working-class family come to me and show me a bill for 
$37,000. This is a working-class family. That was their flood insurance 
premium.
  Again, what does that mean?
  It means they are trapped because they can't sell the house. No one's 
going to buy a modest home for 2 or $300,000 with flood insurance of 
$37,000 a year.
  So this situation cannot be allowed to continue, and it cannot be 
unaddressed.
  Last year, my district and the entire Northeast was devastated by 
Superstorm Sandy. Tens of thousands of my constituents found themselves 
actually homeless for the first time in their lives. Their lives were 
completely turned upside down. They were wondering whether they would 
rebuild at all, how they were going to move forward.
  Many of them literally lost everything they have ever known. Every 
worldly possession was gone. They knew then, as we do now, it would be 
years before their lives would return to any form of normalcy.
  Many of these people, unfortunately, still have not moved back into 
their homes. Many of them are struggling to rebuild, as we speak right 
now.
  So to ask these victims of a natural disaster, who find themselves in 
a absolutely horrible position, through no fault of their own, to pay 
upwards of $15,000 a year or more in flood insurance premiums so soon 
after a natural disaster took everything from them, amounts to nothing 
more than them being victimized again.
  If these premiums continue to go into effect, many of my constituents 
will find themselves unable to pay both their mortgage and their flood 
insurance. Their property will, in best case scenario, lose 
considerable value, but in the worst case scenario, become completely 
worthless.
  This is unacceptable. To many Americans, their home is the largest 
asset they can ever own in their lifetime. To essentially destroy the 
value of those assets through flood insurance premium increases amounts 
to one of the largest takings of private property in U.S. history.
  Thankfully, there is a solution. There is a solution that has been 
proposed in both Houses of Congress, and which I am very proud to say, 
I am one of the lead sponsors of, H.R. 3370, the Homeowner Flood 
Insurance Affordability Act, which would halt these draconian rate 
increases.
  As of today, I can report that this commonsense legislation has over 
170 bipartisan cosponsors, and that support is growing every single 
day.

[[Page 158]]

  This legislation simply would delay these rate increases for up to 4 
years, giving FEMA time to both complete the affordability study 
mandated under Biggert-Waters and to propose a framework to Congress to 
maintain the long-term affordability of flood insurance. That will give 
Congress the time to consider their proposals.
  If long-term affordability of flood insurance is not taken into 
account when setting future premiums, many Americans are simply going 
to stop paying for this important coverage. They are just not going to 
be able to do it.
  This will only serve to damage the fiscal soundness of the National 
Flood Insurance Program over the long term. An expansion in the number 
of uninsured homes will only increase the direct cost to the Federal 
Government for future natural disasters.
  It is common sense. It is mathematics. If people don't pay in to the 
program, the cost to the Federal Government will go up the next time 
there is a natural disaster. It is that simple.
  So, in closing, I would like to urge my colleagues to join us in 
supporting this vital legislation. The sooner that we act to delay 
these flood insurance rate increases, the sooner we can bring 
stability, not only to the real estate market, but to our fragile 
economy, and we will be bringing much-needed relief to extremely 
nervous homeowners across this entire great Nation.
  I thank my friend from Pennsylvania.
  Mr. MARINO. Mr. Speaker, how much time do I have remaining?
  The SPEAKER pro tempore (Mr. Yoho). The gentleman has 25 minutes 
remaining.
  Mr. MARINO. Mr. Speaker, I hold in my hand here a report, a statement 
from the National Association of Realtors.
  Now, a moment ago I quoted realtors being at a closing and lawyers 
being at a closing and banks being at a closing, small banks. These 
people are informing me they never were told about these increases. I 
want to read a small section here from their statement dated November 
19, 2013.
  There is a subtitle of, Home buyers were not warned. I quote:

       Because FEMA delayed, then retroactively applied, the 
     purchase provisions in section 205, many home buyers, 
     specifically, those who bought between the enactment of 
     Biggert-Waters and March 12 of 2013, were not warned of rate 
     increases before purchasing their properties. Flood insurance 
     policies were not labeled as subsidies.

  It is not their fault.
  Mr. Speaker, at this time it gives me pleasure to yield to the 
gentleman from Louisiana, Congressman Cassidy.
  Mr. CASSIDY. Mr. Speaker, I rise in support of the reform the 
Biggert-Waters Act. Let's first point out that the flood insurance 
program was reformed under Biggert-Waters with the goal to make it both 
affordable and accessible. It did indeed make flood insurance 
accessible, but it is being implemented in such a way as to make it 
unaffordable.
  Now, the question is: Is this, as some people called it, a bailout 
for vacation homes for the rich people?
  Is it going to improve the solvency of the program?
  Yet, somehow do we have to see how these reforms play out before we 
reform once more?
  Let's address each of these. This will do absolutely nothing for the 
solvency of the National Flood Insurance Program. Indeed, it is 
guaranteed to make it insolvent.
  FEMA estimates that for every 10 percent increase in a premium, you 
have a 1 percent decrease in the number of people purchasing that 
policy. Do the math. Somebody whose policy is now $700, if it rises to 
$7,000, they have a basically 100 percent chance of dropping their 
policy.
  When that happens, FEMA still has to cover their fixed costs. Those 
fixed costs are concentrated under fewer and fewer subscribers to the 
insurance policy, which means that even more people get to the point 
where they can no longer afford this policy, which means, that, again, 
that fixed cost is concentrated further. You have entered the death 
spiral of a program, so the National Flood Insurance Program dies. That 
will happen, under the assumptions used by CBO for these estimates.
  Now, some would say, wait a second. FEMA actually had some good 
reforms to work with. That is true, but they are not really 
implementing them.
  FEMA is doing their few flood maps with what is called a no levee 
analysis. If the Army Corps of Engineers has not certified a flood 
control structure, FEMA pretends it is not there.
  Now, Lafourche Parish in south Louisiana has a levee they built 
themselves, and they have pictures; on the one side they have 
floodwaters, and on the other side they have dry land with flowers. 
Those levees clearly work, but because they are not Army Corps of 
Engineers certified, Lafourche Parish gets no credit.
  Jefferson Parish, a suburb of New Orleans, has big pumps to help 
reduce floodwaters, and yet FEMA does not include the efficacy of these 
in their flood maps.
  This no levee analysis was not supposed to be part of Biggert-Waters, 
but that is how the program is being implemented.

                              {time}  1800

  Now, is this a bailout for rich people? The people in Louisiana who 
will benefit from reforming our current process, which is to say suffer 
under Biggert-Waters, as currently crafted, are working people. They 
work in the refineries that provide the gasoline for the rest of the 
Nation. Their homes are $120,000 to $220,000. These are not rich people 
insuring vacation homes. These are folks in their primary residences--
in many cases, homes that have never flooded but, in many cases, homes 
that would suffer under this program.
  And that leads me to the harm to the economy that will occur. The 
uncertainty of the cost of flood insurance is freezing real estate 
markets. Homebuilders have no market for the homes that they wish to 
build. There is a cratering of the bank lending. Indeed, there are 
reports of people taking their keys into the bank, dropping those keys 
on a desk, unable to afford the flood insurance, therefore unable to 
keep their mortgage so walking away from the home that they are 
attempting to purchase.
  The impact upon the rest of the country? Most of the refined gasoline 
in the rest of the country is refined on the gulf coast, Louisiana, and 
in Texas. Those workers cannot afford to keep the homes that allow them 
to work in these refineries. There is an economic impact both locally 
in the State but it, indeed, goes nationwide. Flood insurance should be 
accessible. It should be affordable. Biggert-Waters needs to be further 
reformed in order to allow both.
  Mr. MARINO. Thank you, Congressman Cassidy.
  Mr. Speaker, I represent 15 counties in the State of Pennsylvania; 
and I hold in my hand here a petition signed by over 1,000 people just 
from my county, Wyoming County, who are faced with this disaster. And 
most of these people have a combined income--before taxes--of less than 
$40,000 a year.
  Mr. Speaker, at this time, it is my pleasure to introduce the 
gentleman from Pennsylvania, Congressman Fitzpatrick.
  Mr. FITZPATRICK. I thank my colleague from the Commonwealth of 
Pennsylvania (Mr. Marino) for organizing this Special Order here this 
evening.
  And I know that Representative Marino, like myself, is hearing from 
our constituents back home in Pennsylvania. They live, many of them, in 
areas that are surrounded by properties that are habitually and 
repetitively flooded. They pay their flood insurance premiums 
faithfully each and every year, and they are being negatively impacted 
by FEMA's implementation of the flood insurance reforms that occurred.
  Last year, the reforms to the flood insurance program were passed 
because, since 2006, the Government Accountability Office has warned 
that the program was putting taxpayers at a high risk because of losses 
from Katrina back in 2005 and subsequent disasters. And since then, the 
program has been subsidized by the taxpayers and currently owes the 
Treasury--we

[[Page 159]]

heard earlier this evening perhaps as much as $30 billion. And as the 
GAO stated, these risks are the result of structural weaknesses and how 
the rate structure provides funding to the program itself. As a result 
of this, the House and the Senate came together, and they reformed the 
program in some very important ways.
  However, just because the National Flood Insurance Program was in 
desperate need of reform does not mean that we should just simply walk 
away and consider our jobs to be done. There are families across the 
country and in my district who are suffering from what they refer to as 
rate shock. I have heard from homeowners; I have heard from senior 
citizens who have lived in their homes for decades, trying to sell 
their homes in retirement. I have heard from young couples, newly 
married, first-time home buyers who have encountered significant 
challenges while trying to either sell their homes or purchase their 
first home. Some families are facing increases of up to 500 percent or 
more, and we heard about some of those examples tonight.
  My office is working with many constituents, including one senior 
citizen from the section of Bristol Township, a beautiful section, a 
working-class neighborhood called Croydon, subject to some flooding. 
This homeowner raised her family, lived in the home for decades and now 
in her retirement wants to sell the asset she has in retirement, her 
home. And because the rates have been significantly increased and 
increased sort of going over a cliff--not over time but all at once--
many potential buyers have walked away from her property and just said 
that they simply can't afford to purchase the property. She can't 
afford to sell the property. In her senior years, that dream of 
retirement, she has been trapped in her home that she wanted to sell 
and move on into her retirement.
  One possible solution is to more gently phase in the rate 
adjustments. Another would be to just freeze them outright while we 
work on a longer-term solution. Either way, I look forward to working 
with my colleagues, including those speaking here this evening. We can 
find a way to move forward with crucial reforms to a very important 
program while still protecting the families that we represent from 
reductions in the values of the homes that may very well be the only 
asset that they have or were counting on in their retirement.
  So with that, Mr. Marino, I thank you for your interest and concern 
for our mutual constituents back home in Pennsylvania on this issue.
  Mr. MARINO. Thank you, Congressman Fitzpatrick.
  Mr. Speaker, I now have the honor of introducing the gentlelady from 
Florida, Congresswoman Ros-Lehtinen.
  Ms. ROS-LEHTINEN. Mr. Speaker, I thank the gentleman from 
Pennsylvania (Mr. Marino) for an incredible job of leading this effort.
  Flooding is the Nation's number one disaster. Most insurance 
companies do not offer their own flood insurance, and standard 
homeowners' insurance policies do not cover flooding. Yet, Mr. Speaker, 
flood insurance is required to purchase a home in a flood plain in 
order to receive a federally backed mortgage.
  The National Flood Insurance Program, NFIP, was created to help 
alleviate this dilemma. However, the program is over $25 billion in 
debt. While a substantial portion of that debt is directly due to 
Hurricane Katrina, many elected officials and our constituents from 
places less familiar with flooding believe the problem is insolvent 
because of artificially low premiums. However, in my home State of 
Florida, Mr. Speaker, where nearly 40 percent of all NFIP policies are 
held, we have learned from devastating disasters, like Hurricane 
Andrew, and have effective building codes and flood mitigation projects 
in place. These policies have made our State, Florida, a net donor 
State to the program, where we pay far more in premiums than we ever 
receive back in payouts. Nevertheless, when the NFIP was last 
reauthorized, it contained provisions that would raise rates on all 
policyholders, sometimes by astronomical amounts.
  And while the reauthorization program was vital because there had 
been a series of devastating program lapses that made it impossible to 
close on the purchase of a house, FEMA--the agency that administers the 
NFIP--testified that the rate increases would be nominal to most 
homeowners. Nominal? That, obviously, was far from the truth, and a 
mandated affordability study that was supposed to precede any increase 
was never completed.
  These rate hikes are unwarranted. They are unfeasible. For that 
reason, I have cosponsored different measures that would work to keep 
flood insurance rates affordable for my constituents in south Florida.
  I have also signed on to a letter to House leadership opposing flood 
insurance hikes to encourage relief for the millions of homeowners, for 
the millions of small businesses susceptible to steep rate increases 
across the country. And I sent a letter to FEMA, asking this agency to 
use its authority to keep flood insurance rates affordable. I also 
voted to shield flood insurance policyholders from excessive rate hikes 
in this year's fiscal year '14 Homeland Security Appropriations Act.
  Mr. Speaker, the National Flood Insurance Program is vital for our 
community; and without affordable rates, south Florida is in grave 
danger. Halting rate increases will ensure that families and businesses 
are able to thrive, rather than succumb to this inexcusable 
bureaucratic storm.
  I thank Mr. Marino of Pennsylvania for yielding and for his 
leadership on this important issue.
  Mr. MARINO. At this time, I yield to the gentleman from Louisiana, 
Congressman Scalise.
  Mr. SCALISE. I thank the gentleman from Pennsylvania for his 
leadership and for yielding time.
  Clearly, when you look at the problems with the National Flood 
Insurance Program, what brought us to this point were a number of 
things. One was that the program continued to lapse over and over 
again. Multiple times, Congress had passed many patches and Band-Aids. 
And ultimately, we would like to see a private marketplace where people 
could go buy flood insurance. In fact, the Federal Government requires 
that people in many areas purchase flood insurance, and yet the only 
place you can go right now is NFIP. You can only go there to buy this, 
which is a requirement for people purchasing a home in many places.
  So if you look at how the implementation by FEMA is adversely 
affecting millions of people across the country--specifically, some 
examples we have seen in southeast Louisiana, in my district, point out 
these glaring inequalities that have to be fixed by this Congress for 
this program to work properly. In fact, many of the things that we all 
want to see to get to an actuarially sound program will be undermined 
if the FEMA implementation goes forward without the reforms that we 
have been building a bipartisan coalition to implement.
  And if you look at this--I will give you a couple of examples, Mr. 
Speaker, in south Louisiana. In Terrebonne and Lafourche Parishes, 
right on the front lines of the Gulf of Mexico, we are not talking 
about people who have multimillion dollar vacation homes or anything 
like that. These are hardworking taxpayers, people that work in the oil 
field, helping produce American energy, people that are middle class 
families that are being faced now with this rate shock. In many cases, 
these are people who never flooded.
  We have got a levee district that we went and brought some of the 
FEMA officials out to just a few months ago, the Larose to Golden 
Meadow Hurricane Protection System in Lafourche Parish. We went out 
there. This is a levee protection system that was built by local people 
with local money, not Federal money. This wasn't a levee protection 
system that was built by the Corps of Engineers which, by the way, the 
Corps' levees failed during Katrina. These folks down in Lafourche 
Parish, they built their own levees, and they never flooded in 
Hurricane Katrina. They never flooded in Hurricanes Rita or Isaac. In 
fact, this levee protection system was so successful that many of these 
people never even filed a flood insurance claim. And yet

[[Page 160]]

FEMA completely ignores that that levee protection system exists. And 
some of these people are going to be faced with $25,000-a-year flood 
insurance premiums.
  Now, some people might say that is an actuarially sound rate, but 
that is going to be a death sentence to those families. Everybody 
recognizes if you own a $200,000 house and then FEMA comes and says, 
Okay, your annual premium for flood insurance is going to be $25,000 a 
year, you are literally forcing that person to walk away from their 
home. So you are going to lose the money they are already paying into 
the system; and, again, in many cases, we are talking about people who 
never even flooded, people who paid their own tax dollars--not Federal 
money but local money to build a flood protection system that works.
  It has worked for all of these storms, and yet FEMA is ignoring the 
fact that that flood protection system even exists. And ironically, 
FEMA certified the Corps flood protection systems that failed.
  So these are the things that we are trying to address and fix, again, 
working in a bipartisan way because ultimately we want to see a 
competitive system. We want to see a system that is actuarially sound. 
But anybody who thinks that these massive rate increases you would be 
sending to people who played by the rules and never filed a claim in 
many cases can pay a $15,000, $20,000 a year premium just for flood 
insurance when it is much more than they are even paying for their own 
home note, it is just fantasy. So we are going to continue working to 
get this fixed, to put in place a system that is actuarially sound in a 
way where people can continue to play by the rules and continue to keep 
their homes and continue to be good, productive taxpayers and 
contribute to our society like they are today. So that is what we are 
going to continue working on.
  Again, I thank the gentleman from Pennsylvania for his leadership.
  Mr. MARINO. Thank you, Congressman Scalise.
  Mr. Speaker, you heard the devastating stories tonight about what the 
American people are faced with. I have had over the past several weeks 
numerous conversations with people involved in this legislation, people 
involved in the agencies, people involved in committees. And to put it 
quite bluntly, FEMA's methodology is extremely, extremely flawed.
  And I asked--I knew the answer to this, but I wanted to hear it from 
people with whom I spoke--So how many people is this affecting? Well, 
it is only affecting not quite 3 million people in the United States.

                              {time}  1815

  And I said, What do you mean, ``only?'' Well, we have indications 
that FEMA knew that there would be a small percentage, a small number 
of people who would get hit with extremely large bills. And I asked on 
the telephone when I was talking to several of these people, Are you 
one of the less than 3 million people? And there was dead silence. I 
said, Well, you have answered the question. You are not. So obviously 
this is just being taken for granted.
  We have two places to go here. Do we want to create a myriad of ghost 
towns across this country or do we want to continue to improve cities 
and towns? I think the latter. I think we need to improve the quality 
of life for American people. We work, Congress works for the American 
people. I work for the people of the 10th Congressional District, and 
we have a responsibility here. We bail out the banks and we bail out 
the auto industry. And do you know something? My people in the 10th 
Congressional District--and I'm sure across this country--they do not 
want to be bailed out. They just want a level playing field.
  So, in conclusion, I believe that we need to bring all the available 
options to the table for a bipartisan solution to the flood insurance 
rate increase. The colleagues that joined me this evening show how 
important it is to a wide range of districts throughout the country. We 
have to continue to be diligent in our work to assist these 
constituents, and I look forward to participating, along with my 
colleagues on the Committee on Financial Services, on crafting a 
solution.
  Remember, Mr. Speaker, this is a nationwide problem. And I keep 
reiterating that many of the people in my district have a combined 
income of $40,000 a year before taxes. They simply cannot afford 
$10,000 and $15,000 bills of which they had no anticipation it was 
coming.
  I promise, and as my colleagues, I'm speaking for them, we will do 
everything in our power to make this right and to make this fair and to 
put our constituents on a level playing field.
  I yield back the balance of my time.

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