National Flood Insurance Program Extension Act of 2010

I thank the gentleman for yielding.

Mr. Speaker, I rise today to express my very serious concerns about this program and to remind my colleagues that this program is actually a very bad deal for my constituents in the State of Michigan and many other States in the Great Lakes Basin as well.

For the past few years, FEMA has been engaged doing what Congress did direct them to do, and that is updating and modernizing our flood maps across the entire Nation. We all recognize that with technology we can and we should update the maps to reflect our best science and to convert our existing outdated maps into user-friendly digital format. Let me just make clear, I totally support that effort and those objectives.

However, property owners in the Great Lakes are being treated very unfairly by these new maps which have taken effect in my district and all through the basin during the past several years, and the net effect is that we can show how these property owners whose properties very rarely flood, nor have the potential to flood, are being treated badly because, in fact, they are being abused by the National Flood Insurance Program.

My constituents, many of them on the water, are paying very, very high flood insurance premiums, and yet we very rarely even claim on this or receive any money for our claims. Essentially, Michigan and other States in the Great Lakes Basin are being forced to subsidize those in other States who are prone to severe weather events. If that's what we are going to do, we should just call it what it is and have a national catastrophic fund as opposed to this national flood insurance fund. In other words, let everybody pay. Why should the people in the Great Lakes Basin have to subsidize this particular program?

A GAO report on this program that was published in April found that nearly one in four property owners pay subsidized rates for their flood insurance that do not reflect the full risk of flooding. You have to ask, no wonder this program is $19 billion in debt, and to add insult to injury, this program keeps paying claims year after year so some Americans can continue to live in flood-prone areas. That's fine if they want to live there, but I don't know why those people in the Great Lakes have to keep paying for these repetitive claims year after year. It's only 1 percent of the policy, but it is 25 percent of all of the claims.

I think it is well past time that this program either be scrapped entirely or reformed. My constituents in Michigan, with little risk of flooding, again who have experienced little or no flooding, are funding the National Flood Insurance Program at astronomical rates. States that we see flooded year after year and, again, allow people to keep building and rebuilding in a floodplain, or who keep experiencing hurricanes, are essentially using this FEMA fund as an ATM machine, and I don't think it's fair. Really, if we're going to have a National Flood Insurance Program, I think everybody should be paying fairly. Again, I think a national catastrophic fund would be the most fair approach to this.

I think, if this situation continues, that Michigan and other States should consider opting out of this national plan and self-insuring. I've written a letter to our Governor, and I hope that she considers that.

In Michigan, I would say this: We look down at the water.

I thank the gentleman for yielding me another 30 seconds.

In Michigan, we look down at the water. We don't look up at the water, and we just think it is very unfair that we have to keep subsidizing all of the other areas just because we live on the water as well. I think this program needs to be revamped, and I would say again, we should have a national catastrophic fund.

We have great empathy and sympathy for those who want to live in a flood-prone area, but I don't know why those of us on the shores of the Great Lakes have to be the only ones in the Nation to subsidize this. I think it is very unfair.

House of Representatives,

Washington, DC, April 3, 2008.

Hon. Jennifer Granholm,

Lansing, MI.

Dear Governor Granholm: I write to bring to your attention

an issue of great importance to the economic health and well-

being of the State of Michigan.

The Federal Emergency Management Agency (FEMA) is in the

process of updating

and modernizing flood maps across the entire nation. This

process is necessary to account for property development and

growth over the past several decades as well as changes in

topography. If done properly, this process would bring more

fairness for those who live in flood plains and are required

to purchase flood insurance.

Unfortunately, property owners in Michigan are being

treated unfairly by these new maps, which have recently taken

effect in my district and other parts of the state. These

property owners, whose properties very rarely flood --nor

have the potential to flood--are paying very high flood

insurance premiums and yet they very rarely receive claims.

In regards to FEMA's proposal for remapping in the Great

Lakes region, they are raising the base flood elevation an

additional 14 inches--they say to accurately reflect the risk

of flooding. This is predicated on data from 1988, 2 years

after the absolute highest recorded levels for the Great

Lakes. However, in Lake St. Clair alone, the lake levels have

dropped over 3 feet since then and are now 5\1/2\ feet below

the old base flood elevation. In spite of this, FEMA's new

base flood elevation is now 6\1/2\ feet above the current

lake level.

I have been trying to stop FEMA from implementing their new

flood maps until the International Joint Commission's Upper

Great Lakes study has been completed. This study will be the

most comprehensive study of this region ever undertaken.

Nevertheless, my constituents are currently paying much

higher premiums for an insurance plan that they will likely

not ever file a claim on. These new maps will cost my

constituents literally millions of dollars at a time when

lake levels are at historic all time lows. This means that

they are not going to be making claims, but they will be

subsidizing other parts of the country through the National

Flood Insurance Program.

What is happening is that many states and their property

owners, with little risk of flooding, who have experienced

little or no flooding, are funding the National Flood

Insurance Program at astronomical rates. Between 1978, the

year the National Flood Insurance Program began, and 2002,

there were 10 states that received more in claims than what

they paid in policies. In fact over $1.5 billion dollars

more--and the average premium for policyholders in those

states was only $223.

Michigan, on the other hand, paid almost $120 million more

into the program than it received back in claims, yet the

average premium for Michigan policyholders was $257 dollars.

As you can see, this program is draining millions of dollars

from Michigan and dispensing it throughout other areas of the

country.

As you know, the residents of our state are already

experiencing tremendous economic strain due to rising

gasoline costs, the high unemployment rate, and the housing

crisis. They do not need to spend an additional several

hundred dollars each year on insurance they will likely never

need. And they should not be mandated to sacrifice for

residents of other states much more prone to severe weather

events.

One of the potential solutions to this disparity is for the

State of Michigan to take action to opt out of the National

Flood Insurance Program and self insure. While I realize that

some will consider this a rather drastic measure, this

problem is having such a negative impact on our constituents

that I believe it must be considered,

If Michigan were to opt out of this program, it would

undoubtedly save our constituents millions of dollars each

year which could then be used to further stimulate our

state's economy. I urge you to work with the state

legislature and the Commissioner of Financial and Insurance

Services to explore this option to see if it could result in

significant savings to Michigan taxpayers.

Thank you for your attention to this issue. I look forward

to working with you on this important matter.

Sincerely,

Candice S. Miller,

Member of Congress.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5569) to extend the National Flood Insurance Program until September 30, 2010.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

Mr. Speaker, I yield myself such time as I may consume.

I thank the gentleman from Texas who earlier spoke on this particular issue.

Mr. Speaker, I rise today to speak about this crucial bill, H.R. 5569, the National Flood Insurance Program Extension Act of 2010, which would extend

the National Flood Insurance Program through the end of September this year.

The flood insurance program provides valuable protection for approximately 5.5 million homeowners. Unfortunately, the lack of a long-term authorization has placed this program at risk. The program has lapsed three times now since the beginning of this year: for 2 days in March, for 18 days in April, and again since June 1.

These lapses meant that FEMA was not able to write new policies, renew expiring policies, or increase coverage limits. This also means that each day 1,400 home buyers who wanted to purchase homes located in flood plains are unable to close on their homes. Given the current crisis in the housing market, this instability in the flood insurance program is hampering the market's recovery, and it must be addressed.

This bill would simply extend the current program through September 30, 2010, to address the immediate issue of individuals being able to close on their homes.

Soon I will be able to support Ms. Waters in bringing comprehensive flood insurance reform to the floor. This bill passed out of the Financial Services Committee on a simple voice vote in April. Ms. Waters' bill would restore stability to the flood insurance program by reauthorizing the program for 5 years and would address the impact of new flood maps by delaying the mandatory purchase requirement for 5 years and then phasing in actuarial rates for another 5 years.

Ms. Waters' bill also makes other improvements to the program by phasing in actuarial rates for pre-FIRM properties, raising maximum coverage limits, providing notice to renters about contents insurance, and establishing a flood insurance advocate similar to the taxpayer advocate at the Internal Revenue Service.

In the meantime, we must extend the current National Flood Insurance Program. This country is reeling from major floods in Tennessee, Arkansas, and Oklahoma. And we are now officially in hurricane season. I urge my colleagues to stand with me in support of this important extension, and I thank Ms. Waters and Chairman Frank, and urge my colleagues to vote in favor of this bill.

I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Hinojosa).

Mr. Speaker, I yield myself 1 minute to make a comment.

I want to suggest how important I think this legislation is and to also say as a member of the National Association of Realtors myself for over 30 years, and having been an active member of the realty community assisting friends and neighbors in my community to achieve the American Dream of

homeownership, I am pleased to offer a letter of support from the NAR and include it for the Record.

National Association of

Mr. Speaker, I have no further requests for time, and I continue to reserve the balance of my time.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise to speak on another temporary short-term extension of the National Flood Insurance Program, NFIP, which expired more than 3 weeks ago on May 31, 2010. This is the third time this year that the flood insurance program has expired, causing disruption in the housing market in cases where individuals are trying to purchase a home located in a floodplain which requires them to buy flood insurance to close on a federally backed mortgage.

It is unfortunate that the fate of the National Flood Insurance Program has to be authorized on a temporary basis because of other unrelated issues. The result has created uncertainty and instability in the market at a time when this country can least afford it. Immediate action is needed to support homeowners and small businesses owners who depend on flood insurance for an important measure of financial security, especially during the June to November storm season.

This bill provides for a temporary extension through the end of the current fiscal year, September 30, 2010. The bill would also make the reauthorization retroactive to May 31, 2010, and offset the cost by reducing the NFIP's borrowing authority by $50 million from $20.775 billion to $20.725 billion. As a result, according to consultations with CBO, this bill would have no net impact on the Federal budget.

Congress also needs to move forward this year with serious long-term reforms of the flood insurance program. The NFIP carries a debt of more than $18 billion and continues to subsidize premium rates of nearly 25 percent of all insured properties. The program cannot continue on this path with a built-in shortfall.

On April 27, 2010, the Financial Services Committee reported this bill, the Flood Insurance Reform Priority Act, to reauthorize and reform the NFIP for 5 years. This bill includes several important provisions that represent a good first step toward repairing the financial soundness of the NFIP, but more reforms are urgently needed. I support the extension of the NFIP program and encourage my colleagues to vote for it today.

I reserve the balance of my time.

Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman from Florida (Ms. Ros-Lehtinen).

Mr. Speaker, I yield 4 minutes to the gentleman from Louisiana (Mr. CAO).

I yield 3 minutes to the gentlelady from Michigan, Mrs. Candice Miller.

I yield the gentlewoman an additional 30 seconds.

I yield myself the balance of my time.

It is very unfortunate that the fate of the National Flood Insurance Program has to be authorized on a temporary basis because of unrelated issues. What the marketplace needs today is certainty and stability, and we should do whatever we can to create that.

I ask for an ``aye'' vote.

I yield back the balance of my time.

Mr. Speaker, I rise today in support of keeping promises to the American people. To speak plainly about it, I do not support the federal government's growing role in the private sector.

But for reasons known to all of my colleagues, the federal government has, for some time, been the primary provider of flood insurance to America's homeowners. Because of Congress' inaction, that insurance is no longer available.

Simply put, as a matter of principle and responsible public policy, when the government makes commitments to the American people, and families and businesses come to rely on the fulfillment of those commitments, it is flat out wrong to fail to live up to them. That is where we are right now.

Mr. Speaker, the Democrats have control over every lever of government and your majorities in both chambers are significant. So to allow the National Flood Insurance Program, the ``SGR'', the state sales tax deduction, and others to expire demonstrates a complete lack of responsibility and an inability to govern.

This is hurting my constituents. My district, like many in Florida, has been pummeled by the housing crisis. And while the President may believe that press conferences touting his foreclosure initiatives are sufficient to addressing the problem, my constituents know that the only thing that will turn their situation around is a recovery in demand.

I am sure that Members on both sides of the aisle can understand my frustration when I get calls from realtors in my district explaining that three of their clients can't close on houses because the Flood Insurance program has lapsed.

There is nothing they can do about it and they want answers. They want to know when the government is going to get the situation fixed. And frankly, I don't know what to tell them. To me, the idea that a single-party government can't pass must-pass legislation is incomprehensible.

So I would like to thank the gentlelady from California, Ms. Waters, for stepping up to the plate and bringing this legislation to the floor. And while I support the bill and will be the first of my colleagues to vote for it, my constituents also want assurances from the Speaker and Majority Leader that this isn't just ``pat ourselves on the back'' legislation--that it isn't just ``pass it to say we did'' legislation. My constituents want real results and that means actually getting the Flood Insurance program, the tax cuts, and other commitments that this government have made extended quickly. It is simply the right thing to do.

I thank the gentleman from California for yielding me this time.

Mr. Speaker, I rise today in support of H.R. 5569 to focus attention on an important issue that has left our constituents financially and economically vulnerable. The National Flood Insurance Program, NFIP, has lapsed for the third time this year, meaning that life decisions have to be put on hold, leaving our constituents to wait out congressional action.

When I was in New Orleans over the weekend, a constituent came up to me and sadly stated: I could not sell my home because the buyer could not purchase flood insurance.

Today, I also read in the U.S. News and World Report that home sales have slipped 2 percent in May, even though Federal stimulus efforts kept real estate transactions artificially elevated. One of the contributing elements is the lapse in the NFIP. Many potential sales are being delayed by an interruption in the National Flood Insurance Program, according to the National Association of Realtors.

Mr. Speaker, the most recent NFIP lapse couldn't have come at a worse time. As we deal with the worst oil spill in history, we are facing what is predicted to be an active hurricane season along the gulf coast. Now, more than ever, we need to be supporting our constituents during these difficult times.

Many of the fishermen and others who have had their livelihoods turned upside down because of the oil spill also live in flood-prone areas. Therefore, we must act not only to extend this program in the short term but ensure that in the future communities devastated by the oilspill will have affordable access to insurance.

That is why on Thursday I introduced H.R. 5553 that would extend the NFIP for 3 years and would include a sense of Congress that the program should not expire again. This extension would remove uncertainty and would show our desire to see real reform to an inefficient program.

I appreciate the gentlelady from California's, Maxine Waters, attention to this important issue, and I hope that we can work together in reforming this critical program for both of our people in the future.

I urge my colleagues to support H.R. 5569.