[House Report 110-466]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-466




December 4, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4050]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4050) to require the Administrator of the 
Federal Emergency Management Agency to issue guidance providing 
a process for consideration of the flood protections afforded 
by certain structures for purposes of the national flood 
insurance program, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.


Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Performance Goals and Objectives.................................     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Constitutional Authority Statement...............................     5
Applicability to Legislative Branch..............................     6
Earmark Identification...........................................     6
Section-by-Section Analysis of the Legislation...................     6

                          PURPOSE AND SUMMARY

    H.R. 4050, the Levee-Like Structure Consideration Act of 
2007, provides for equity in the flood mapping process under 
the National Flood Insurance Program (``NFIP''), administered 
by the Federal Emergency Management Administration (``FEMA''), 
by requiring FEMA to issue guidelines on levee-like structures 
similar to the guidelines it has issued on levees.


    FEMA and the NFIP are currently engaged in a multi-year 
flood map modernization. Instituted by Presidential initiative 
and subsequently funded by Congress, the NFIP Flood Map 
Modernization (``Map Mod'') initiative contributes to better 
floodplain management, flood risk reduction, and improved 
public safety. Before the Map Mod initiative, many of the flood 
maps in use in the United States dated to the NFIP's inception 
more than 30 years ago. As a result of changes in climate, 
topography, watershed development, and technology many of the 
existing flood maps do not accurately reflect the flood risk 
both to properties required to participate in the NFIP and to 
properties not currently required to participate in the NFIP. 
The five-year, $1 billion dollar Map Mod initiative is intended 
to update and reissue flood maps that more accurately identify 
the risk of flood to properties that previously participated in 
the NFIP, as well as to properties not previously required to 
participate in the NFIP.
    During the NFIP's history, some flood insurance rate maps 
(``FIRMs'') have identified natural or manmade structures 
including non-levee structures, expected to impact the 
retention or flow of water during a flood. In 2005, after 
questioning the protective value of non-levee structures, FEMA 
decided to include only accredited levees on the updated, 
digital FIRMs (``DFIRMs'') issued through the Map Mod process. 
Consequently, there are levee-like structures that appear on 
current FIRMs that are not included on updated DFIRMs, even 
though those structures may have the effect of restraining or 
diverting floodwaters.
    To be an accredited levee, the levee owner must certify 
that the structure meets certain levee-specific criteria. In 
guidelines issued mid-way through the Map Mod initiative, FEMA 
created a process for provisionally accrediting levees that 
were previously recognized on FIRMs as having an impact on 
flood risk and were likely to meet criteria deemed equivalent 
to accreditation by the Corps of Engineers. Under this process, 
called the Provisionally Accredited Levee (``PAL'') process, a 
community can be granted up to 24 months to produce the 
documentation necessary to certify a levee. During the 24-month 
review period, a levee under review is designated as a PAL on 
any DFIRM issued through the Map Mod process and affected areas 
are not required to purchase flood insurance. In the meantime, 
the rest of the community risk map, except for the PAL area, 
becomes effective and is used to guide new development and is 
used as a basis for flood insurance rates.
    While the PAL guidelines provide a process by which 
communities can be granted time to document that a levee has 
been designed, built, operated, and maintained to provide an 
adequate level of protection, the guidelines do not establish a 
similar process to allow communities to provide documentation 
for levee-like structures, even if those structures were shown 
on previous FIRMs as having an impact on flood risk. Examples 
of levee-like structures previously identified on FIRMs include 
railroad berms, highway berms, and irrigation canals. 
Currently, FEMA does not have a process to allow communities 
with levee-like structures to offer evidence that previously-
recognized levee-like structures continue to impact flood risk. 
Recently, FEMA acknowledged the inequity in its treatment of 
levees and levee-like structures and began negotiations with 
officials of a community with levee-like structures to allow 
that community to present evidence of the levee-like 
structures' protective value.
    H.R. 4050 requires FEMA to issue guidelines that afford 
communities with flood risk affected in whole or in part by a 
levee-like structure that was previously recognized on a FIRM, 
the opportunity to demonstrate the actual effect of that 
structure on flood risk, and for such data to be incorporated 
into DFIRMs issued through the Map Mod process. A community can 
demonstrate the nature and extent of the flood protection 
afforded by the structure or feature through scientific and 
technical information compiled and submitted to FEMA at the 
community's expense, consistent with the PAL process. The 
Committee on Financial Services recognizes that in the course 
of its remapping initiative, FEMA may wish to take into 
consideration the ability of a community to finance scientific 
and technical studies and provide financial assistance where 
    During the community's appeal, a two-year moratorium would 
apply to prevent rate increases or an extension of the 
mandatory purchase requirement based on the updated DFIRMs. The 
purpose of H.R. 4050 is to ensure that DFIRMs portray the true 
flood risk in a community with the greatest possible accuracy. 
In so doing, H.R. 4050 contributes to the overall effort to 
provide better risk identification data for flood risk 
reduction and public safety.


    No hearings were held on this legislation in the 110th 

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
November 7, 2007, and ordered H.R. 4050, the Levee-Like 
Structure Consideration Act of 2007, favorably reported to the 
House by a voice vote.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken in conjunction with the consideration 
of this legislation. A motion by Mr. Frank to report the bill 
to the House with a favorable recommendation was agreed to by a 
voice vote.


    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
made findings that are reflected in this report.


    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
    H.R. 4050, the Levee-Like Structure Consideration Act of 
2007, requires FEMA to issue guidelines on levee-like 
structures with the goal of providing a more accurate flood 
mapping process and more accurate flood insurance rates paid by 


    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.


    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                                 November 20, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4050, the Levee-
Like Structure Consideration Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
                                                   Peter R. Orszag.

H.R. 4050--Levee-Like Structure Consideration Act of 2007

    H.R. 4050 would direct the Federal Emergency Management 
Agency (FEMA) to create a process to include certain levee-like 
structures (including any natural or man-made structures that 
provide some mitigating effect on flood risk but do not meet 
the definition of a levee set forth by the agency) on updated 
Flood Insurance Rate Maps (FIRMS). As a part of its current map 
modernization efforts, FEMA only includes levees on updated 
FIRMs. Because FEMA uses the maps to determine the premium 
rates for flood insurance, including levee-like structures 
could affect direct spending; however, CBO estimates that the 
net effect would be insignificant over the next 10 years. 
Enacting the bill would not affect revenues.
    H.R. 4050 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    Under the process established by the bill, a community 
participating in the National Flood Insurance Program (NFIP) 
could request that an updated flood map include a levee-like 
structure if the corresponding map in effect on January 2003 
also included the structure. Following such a request, the bill 
would require that FEMA grant provisional accreditation to the 
structure for a two-year period and issue an updated flood map 
recognizing the designation. During this time period, the NFIP 
would charge its policyholders in the affected area a premium 
for flood insurance that takes into account the amount of flood 
protection previously attributed to the levee-like structure. 
Depending on the final determination of FEMA, such structure 
may or may not be included on any final flood map issued after 
the two-year period.
    CBO estimates that this legislation would likely reduce net 
income to the flood insurance program. Including levee-like 
structures on flood maps would lower premium rates for owners 
of property located near those structures due to a lower 
estimate of flood risk. Lower rates would decrease receipts to 
the program, while actual claims would be unaffected--resulting 
in a net loss to the flood insurance program relative to 
current law. CBO does not have sufficient information to 
estimate the number of levee-like structures that would be 
included in updated FIRMs, and thus cannot estimate the 
possible magnitude of such premium losses.
    However, CBO estimates that the net effect of any such 
changes on net outlays of the NFIP would be insignificant over 
the 2008-2017 period because of the current financial 
conditions of the flood insurance program. The NFIP may only 
use premium income and borrowing authority to cover its 
expenses. The borrowing authority will probably be exhausted in 
the next few years, and the premium income is not sufficient to 
cover all likely new claims. Thus, any net loss to the program 
over the next 10 years would result in a larger backlog of 
claims relative to current law but would have no net effect on 
spending over this period.
    The CBO staff contact for this estimate is Daniel Hoople. 
This estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 


    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 


    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).


    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    H.R. 4050 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.


Section 1. Short title

    This section establishes the short title of the bill, the 
``Levee-Like Structure Consideration Act of 2007.''

Section 2. Consideration of structures not certifiable as levees in 
        flood insurance mapping

    This section requires FEMA to issue and make effective 
notice of guidelines on levee-like structures within 90 days of 
enactment of the bill. This section also provides that 
insurance requirements and rates shall remain unchanged for 24 
months while the flood risk impact of a levee-like structure is