Providing for 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.

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.

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.

Mr. Chairman, I yield such time as he may consume to the gentleman from Mississippi (Mr. Taylor).

Mr. Chairman, I yield 4 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. Chairman, I yield an additional minute to the gentlewoman from Florida.

Mr. Chairman, will the gentlewoman yield?

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.

Mr. Chairman, I have no further requests for time, and so I reserve the balance of my time.

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.

I yield to the gentleman from Georgia.

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.

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.

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.

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 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. Chairman, will the gentleman yield?

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.

But not according to CBO, I would say to the gentleman.

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'

Mr. Chairman, I offer an amendment.

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.

Mr. Chairman, the gentleman is welcome. I reserve the balance of my time.

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.

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.

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. Chairman, I yield back the balance of my time.

If the gentleman would yield.

I just double-checked with the staff, and there is no discount available for wind. It's in the bill.

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.

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 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.

Oh, no. The gentleman is wrong. The gentleman should yield to the gentleman from Mississippi.

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 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

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

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. 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.

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.

If you don't like the answer, don't ask the question.

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.

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 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 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.

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.

I yield to the gentleman from Georgia.

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.

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.

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.

Mr. Speaker, I rise again today in strong opposition to this unnecessarily restrictive rule that completely closes down the legislative process to every single Republican amendment that was offered in hopes of bettering this bill before the Rules Committee. This modified closed rule is being offered by the broken-promise Democrat majority, is wrong on both process and on policy.

Yesterday evening, in the Rules Committee, the place where democracy goes to die in the House of Representatives, the chairman of the Financial Services Committee, the gentleman from Massachusetts (Mr. Frank) stated that he welcomed debating any substantive amendment so long as the committee did not make in order multiple amendments with similar goals. Despite the chairman's wishes to allow for a fair and open debate on substantive amendments to this bill, Rules Committee Democrats, once again, instead chose to further solidify our committee's growing reputation as ``the graveyard of good ideas'' in the House of Representatives by rejecting five times each time, along straight party lines, attempts to improve this rule by including substantive amendments offered by Republicans.

Chairman Frank also testified that no amendment had been offered to the legislation that reflected the administration's opposition to this legislation, an inaccurate statement that I would like to clear up. First, my good friend from Georgia, the gentleman, Dr. Tom Price, electronically submitted a timely amendment to this bill that dealt with the substantive concerns raised by the administration. Dr. Price was then turned away from the Rules Committee and denied the opportunity to even offer this amendment when the paper copies reached the Rules Committee door 5 minutes after the arbitrary deadline that was set by the Rules Committee staff.

Next, Mr. Speaker, when it became obvious that the Rules Committee was going to silence Dr. Price, my good friend and Texas colleague, Congressman Jeb Hensarling, modified one of his amendments to address the substantive concerns over the addition of wind coverage to the National Flood Insurance Program that he shared in common with Dr. Price and President Bush. Unfortunately, Mr. Hensarling, too, has been shut out by this rule.

Despite numerous campaign promises by the highest-ranking Democrats in the House to run the most transparent, open and honest House in history, this Democrat majority has once again provided the House with the rule where none of this would be available.

Out of 26 amendments offered to this legislation, not one of the seven Republican amendments offered is made in order under the rule. It can't be for lack of time. There is simply no good reason to rush reauthorization for this legislation which doesn't even expire until next year. And the Democrats certainly found time enough to provide 13 Democrat amendment sponsors enough time to come to the floor to try

and change this legislation. It can't be because these Republican amendments are not substantive. The Hensarling and Price amendments would have addressed the most substantive and contentious part of this legislation: the inclusions of wind coverage into a flood insurance program. However, the Democrat majority, once again, decided that political expediency is more important than allowing the representatives of half of this country to be heard. I wish I could say that I was surprised by the Democrat leadership allowing politics to triumph over policy or fair procedure. Unfortunately, this is precisely what we have come to expect from the new broken-promise Democrat majority.

What is worse, Mr. Speaker, is that this bill's real-world impact is as bad or worse as the process that brings us here to the floor today. It would expand the flood program to include a new risk before the effects of this policy have even been studied. Both the GAO, the Government Accountability Office, and the Congressional Budget Office, the CBO, have reported to us that the program is already not financially sound. That means that, as the program exists that the new Democrat majority wants to put in place, we already know that it is not financially sound. And the addition of this new and untested liability threats to derail much of the much-needed reforms of this program, while vastly increasing taxpayer exposure for losses from natural disasters unrelated to flooding.

Mr. Speaker, I oppose this rule. I oppose its exclusion of every single Republican amendment that was offered to improve it in the Rules Committee. I oppose the raw, political gain represented by the ill- conceived underlying legislation that puts our National Flood Insurance Program in jeopardy. Most of all, Mr. Speaker, I oppose the new earmark loophole, uncovered last night, that provides the broken-promise Democrat majority with yet another opportunity to waive their already loose earmark rules on every bill as they see fit.

While this new development made here to the strict letter of the smoke-and-mirrors earmark rule the Democrats rushed sloppily through the House at the beginning of the Congress, it certainly does not meet the spirit of that rule either. I encourage all of my colleagues to join me in opposing this rule, particularly Chairman Frank, who argued so eloquently for the inclusion of substantive amendments so that the new rule can be passed that would finally keep the Democrat promise of openness and inclusion alive.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, at this time I would like to yield 3 minutes to the distinguished gentlewoman from Michigan (Mrs. Miller).

Mr. Speaker, once again, in line with what we have stated earlier, that the 13 Republican amendments, which were presented to the Rules Committee, of course, there were others that were rejected because they were 1 or 2 minutes late, need to be discussed. The Rules Committee voted on a party line not to let them be on the floor today. But our Members represent important not only States, but important districts and important ideas. Another one of the persons who was denied the opportunity to have his amendment to be made in order is here with us today.

Mr. Speaker, I yield 5 minutes to the gentleman from New Jersey (Mr. Garrett) for that purpose.

Mr. Speaker, if the gentleman will yield, I heard the gentleman say that he had spent time working with the chairman of the committee on this inequity to make sure that if you brought forward that amendment, that he would not oppose it.

Mr. Speaker, once again the Republican team that is on the floor today wishes to continue our voice of representation of millions of Americans for better ideas, to be included not only on this floor but in the Rules Committee for consideration and agreement to debate and vote on these good ideas.

We know that last night that there were 13 amendments that were made in order, all Democrat amendments, no Republican amendments. We know that several Republican amendments were rejected based upon being just minutes late, even though they had been electronically submitted.

So as a result of that, we are here on the floor today doing appropriately, properly, what we should be doing; we are talking about the good ideas that we have. You heard already a good idea from the gentleman from New Jersey. You heard already a good idea from the gentlewoman from Michigan.

At this time I would like to yield 4 minutes to the gentlewoman from Illinois (Mrs. Biggert).

Mr. Speaker, part of what our last three colleagues who have been to the floor spoke about was that as members of the Committee on Financial Services they worked very diligently, not only in their States, not only within their delegation, not only within the committee, but also with the chairman on trying to make sure that these good ideas might be included.

Now, the Rules Committee, which I have only served on for 9 years, always finds itself in a difficult position. Always. That is part of the dilemma of being on the committee, in particular when a committee chairman and a member show up before the Rules Committee and they talk about working together, finding a bit of compromise, working together to get a bill and thoughts and ideas to where they are not only germane, but to where they better the bill. The Rules Committee just sits back and we say, boy, that is such a wonderful thing. We are so happy and so pleased, Republicans and Democrats.

Something has happened, something has happened since January that has poisoned that well. Not only time after time after time did we see yesterday when Republicans showed up and said to the committee, oh, I have worked very carefully with my Governor, or I have worked very carefully with people back home, I've worked with the administration, I have put in a lot of time, this is a thoughtful amendment, I've tried to gain the concurrence of working through the committee; and, oh, by the way, I have even worked with my committee chairman, which says something also about the committee chairman, the gentleman from Massachusetts (Mr. Frank), who yesterday on his own standing said, by and large, look, I understand every issue that is related to this. I don't mind if any amendment, as long as they are not duplicative, and as long as they have substance, I think they ought to be made in order. Once again, one of those times when the members of the committee, Republicans and Democrats, say, boy, that is great. Thank you so much, Chairman Frank.

Something's happened, however, where people who were from the committee working with the committee chairman come and agree, and all of a sudden every single Republican amendment was rejected. It wasn't because they were duplicative; it wasn't because they didn't have substance. I don't know what it is.

We have tried this morning to have several people who have come to the floor to say I'd like to engage the new Democrat majority, Rules Committee members, to find out--what is it--Why was every single Republican amendment rejected while 13 Democrat amendments were made in order? What is it?

There's a change. I don't think it's open, I don't think it's transparent, and I question some other things behind the decisionmaking that is being made.

Mr. Speaker, the gentleman from Texas (Mr. Hensarling) also took time to not only have thoughtful amendments, he not only sits on the committee, but also came to the Rules Committee, is here today also, because he believes, we believe, as Republicans we may get shut out, as we were in the Rules Committee; but we are still going to come to the floor and stand for the things which we believe in that would better the bill.

I would like to yield 4 minutes to the gentleman from Texas (Mr. Hensarling).

Mr. Speaker, I will be asking Members to oppose the previous question to give the Democrats yet another opportunity to live up to their broken promises and amend the rule to allow for consideration of H.

Res. 479, a resolution that I like to call the ``earmark accountability rule.''

Mr. Speaker, this Congress continues to see nondisclosed earmarks appearing in all sorts of bills. These rule changes would simply allow the House to openly debate and be honest about the validity and accuracy of earmarks contained in all bills, not just appropriation bills. If we defeat the previous question, we can address that problem today and restore this Congress's nonexistent credibility when it comes to the enforcement of its own rules.

Mr. Speaker, I ask unanimous consent to have the text of the amendment and extraneous material appear in the Record just before the vote on the previous question.

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. Chairman, will the gentleman yield?

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.

Keep in mind, we did not even have a flood program until recent times. The underwriter will take care of it.

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.

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.

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.

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 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.

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. 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?

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?

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.

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?

Would they have to be in the amendment?

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.

Maybe if Mr. Frank could finish that sentence.

But in a multi-peril policy, you're only getting one premium.

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. 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?

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.

I yield to the gentleman.

Let me reclaim my time just to bite on that piece of the apple.

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.

Yes.

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.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 683 and ask for its immediate consideration.

Mr. Speaker, for purposes of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Sessions). All time yielded during consideration of the rule is for debate only.

I yield myself such time as I may consume. I also ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 683.

Mr. Speaker, House Resolution 683 provides for consideration of H.R. 3121, the Flood Insurance Reform and Modernization Act of 2007, under a structured rule. As the Clerk reported, the rule provides 1 hour of general debate controlled by the Committee on Financial Services.

The rule waives all points of order against consideration of the bill, except clauses 9 and 10 of rule XXI. The rule also makes in order a substitute reported by the Committee on Financial Services modified by the amendment in part A of the Rules Committee report as an original bill for the purpose of amendment. The self-executing amendment in part A would ensure that the bill complies with the new PAYGO requirements.

The rule makes in order the 13 amendments printed in the Rules Committee report, with each amendment debatable for 10 minutes.

As yesterday's debate in the Rules Committee demonstrated, Members on both sides of the aisle are focused on getting this bill to conference and onto the President's desk, and this bill reflects that consensus.

As a Representative of a district in a floodplain, I understand the need for a healthy flood insurance program. My hometown of Sacramento is the most at-risk river city in the Nation. Whenever I talk about our efforts to improve Sacramento's level of flood protection, I also mention the importance of flood insurance. If you live behind a levee, you should have flood insurance. And the Federal Government has the responsibility to promote this kind of coverage.

I also recognize that to accomplish this, we need a healthy and robust national flood insurance program. That is why legislation we debate today, the Flood Insurance Reform and Modernization Act, is so significant. Through this legislation, we will meet our responsibilities, we will ensure coverage is available to those at risk, and we will educate those same individuals as to the benefits of flood insurance. This bill, which was reported out of the Financial Services Committee by a bipartisan majority of 38-29, takes us in that positive direction.

In the aftermath of Hurricane Katrina, the deficiencies in the program were laid bare. What remained was a program $25 million in debt with a questionable future. It is imperative that we rebuild and reform the Federal flood insurance program.

For many Americans, owning insurance to protect against a flood is more valuable than coverage in case of fire. That is because homes in a designated special flood hazard area are almost three times as likely to be destroyed by a flood as by fire, and this is a case for almost three-fourths of all homes in Sacramento. This is an important program that must be reformed to ensure its long-term stability and solvency.

The bill we are considering today makes reasonable reforms and lays the foundation for a stronger and improved flood insurance program, and for that I would like to thank Chairman Barney Frank and Chairwoman Waters for their leadership on the bill.

This bill takes important steps to modernize the flood insurance program. It raises maximum coverage limits to keep up with inflation. It provides new coverage for living expenses if you have to vacate your home. And it also provides optional coverage for basements and business interruption coverage for commercial properties. These are all positive steps that will allow the program to continue to provide peace of mind to those impacted when a flood occurs.

In moving forward, Congress is also making the flood insurance program sustainable. The bill tightens enforcement of purchase requirements and adds subsidies on vacation homes, second homes, and businesses. While these actions may not be popular, this will help invigorate the program in the long run.

In addition to helping homeowners, this measure will also benefit taxpayers nationwide by preventing insurance companies from putting their liability on the Federal Government at the expense of the American public.

By identifying flood hazards, managing floodplains via land use controls and building requirements, and providing insurance protections, this essential program reduces flood loss expenses to the Federal Government, saving taxpayers an estimated $1 billion a year.

This measure provides much-needed reforms to restore solvency to a program that has faced unprecedented financial strain in the wake of the 2005 hurricanes. This bill increases accountability of federally regulated lenders by imposing stricter penalties on those lenders that fail to enforce mandatory flood insurance purchase requirements on mortgage holders. This takes our country in the right direction by encouraging individuals to purchase flood insurance, while also addressing the needs of the program.

I would also like to express my sincere thanks for Chairman Frank for working with me this past year on issues that I believe make this a stronger overall bill. I appreciate the chairman including my legislation, the Flood Insurance Community Outreach Grant Program Act of 2007, in this bill.

This grant program works. A little over two years ago, with the support of a $162,000 FEMA grant, my local flood protection body, the Sacramento Area Flood Control Agency, conducted just a flood insurance outreach initiative. SAFCA reached out to more than 45,000 NFIP policyholders in the American River floodplain with impressive results. After a year, 74 percent maintained their flood insurance policies. Of this group, 43 percent now carry preferred risk flood insurance. Preferred risk policies provide property owners who are protected by a levee or other flood mitigation method with full flood insurance at a reduced price. Because of their lower price, these preferred-risk policies have a higher level of policy retention.

To put this success in perspective, FEMA more than recouped its investment. SAFCA exceeded its target for policies retained more than 20 times over, adding millions to the flood insurance program's bottom line.

Extending these grants to other floodplains will only strengthen and build the solvency of the National Flood Insurance Program.

In short, I truly believe we must encourage greater participation in NFIP rather than providing loopholes for people not to participate. On that note, I would also like to thank the chairman for including language that authorizes a study for future participation of low-income individuals who live in a floodplain. We have an obligation to make sure that everyone has an opportunity to be insured and has access to affordable flood insurance. This is an important issue that I look forward to working on with the chairman, the committee, and many of my colleagues in further addressing this policy issue.

I think it is important that we continue to modernize our flood insurance program. I am pleased that the committee kept the amendment from last Congress' flood insurance bill, language that simply asks that FEMA utilize emerging weather forecasting technology as they update our national flood maps. Moving forward, we must make the investment in weather forecasting technology so that we have the tools to adjust to the changing climate. FEMA needs to be prepared to utilize this technology as it becomes available to us. We must ensure that FEMA has the highest quality information when it works to determine the level of risk for vulnerable geographies. This policy initiative takes us in a positive direction.

Finally, the bill we are debating today is a vital tool to be used after a flooding incident occurs. We need this bill; however, I want to close by saying that flood insurance is one piece of what should be a national comprehensive flood protection approach. Congress must continue to provide the tools and policy for prevention. We must continue to provide the funding for our flood protection infrastructure projects, and we must continue to provide the authorization for the projects that provide the protection for our communities.

With these policies of prevention in place, it will make communities safer and reduce the likelihood of our communities having to utilize their flood insurance policies.

Mr. Speaker, I strongly urge my colleagues to support this rule and final passage of the underlying Flood Insurance Reform and Modernization Act of 2007.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I just want to point out that the Rules Committee made 13 amendments in order that we believe will benefit the discussion and debate on this very important issue. I would like to point out that three of these amendments were, in fact, bipartisan amendments.

Mr. Speaker, I reserve my time.

I would just like to comment that we had a discussion yesterday. I must say that the Rules Committee is different this year than it was last year. I was in the minority last year. We have vigorous discussions in our committee. We have made in order 13 amendments.

Mr. Speaker, we made amendments in order last night, and I stand by the Rules Committee product. It might be that later on down the road you may want to work with the Financial Services Committee; but at this point in time, we did make 13 amendments in order.

Mr. Speaker, I just want to make clear that of these 13 amendments, three are bipartisan amendments.

With that, I reserve the balance of my time.