Providing for consideration of the bill (H.R. 1309) to extend the authorization of the national flood insurance program, to achieve reforms to improve the financial integrity and stability of the program, and to increase the role of private markets in the management of flood insurance risk, and for other purposes.

Mr. Speaker, I have a motion to recommit at the desk.

In its current form, I am.

Thank you, Mr. Speaker.

At the outset, let me say this amendment does not--repeat, does not-- kill the underlying bill.

Mr. Speaker, our Nation has been hit by devastating and unprecedented flooding this past spring that has displaced and damaged homes in 29 States and nearly 700 counties. That is right. Nearly three-fifths of the States in this country, 60 percent, have counties that have been declared emergency areas by the President. I would like to insert into the Record the list of States and counties that have been hit by the floods of 2011.

In my home State of Iowa, right as we stand here in this Chamber, we are seeing flooding as the Missouri River rises on the western border. Just last week, the Department of Agriculture declared Fremont, Harrison, Mills, Monona, Pottawattamie, and Woodbury Counties in Iowa as agriculture disaster areas. Farmers, homeowners, and small business owners are seeing their lives and their very livelihoods quite literally being washed away. As I talk to mayors, county supervisors, and my friends across the State who are being affected, they want to know if their government, this Congress, will stand with them in their time of dire need. We need to step up to the plate and help these flood victims rebuild their lives and repair the damage, and they should not be subjected to premium increases as they struggle to get back on their feet.

This final amendment helps flood victims in three important ways:

First, this amendment builds on a bipartisan program that was established in 1994 following the devastating Midwestern floods by reimbursing a flood policyholder for the cost of rebuilding a flood- damaged structure as needed to comply with State and local floodplain management laws.

Second, this amendment provides a new important tool to aid victims of the 2011 floods by giving the agency discretion to provide grants to homeowners to repair flood damage.

Third, this amendment provides a temporary reprieve from any increases in flood insurance premiums for policyholders as they struggle to rebuild their homes and their lives. It does so by suspending any increases in flood insurance premiums for a period of 36 months--we're talking about increases--for policyholders located in areas designated by the President as a major disaster or emergency.

Importantly, this amendment accomplishes this in a responsible way by limiting such assistance to homeowners with existing flood policies. It rewards those who have obtained flood insurance and have paid into the Flood Insurance Fund. This amendment is consistent with the underlying policy of this bill by encouraging homeowners to obtain flood insurance, and by placing the program on stronger financial footing through a responsible phase-in of risk premium rates to full actuarial rates.

In past years, Congress has stepped up to the plate and provided assistance to victims of natural disasters. That is what epitomizes our great country and its spirit. Yet this Congress has shown a disregard for flood victims at a time when we are struggling to recover from the worst financial crisis since the Great Depression. Yes, we are a country marked by individual initiative, but we are also a country of compassion.

This final amendment is not a handout. It provides immediate assistance and relief to those homeowners who have paid into the Flood Insurance Fund. The Flood Insurance Fund is paid through premiums and fees paid by policyholders, not the taxpayer.

I urge my colleagues to read the list of 29 States and 696 counties that have been hit by these devastating floods and join me in providing swift and immediate assistance to your constituents. These are your friends, your neighbors; and they are asking for your help. So I ask you to stand with them, and I ask my colleagues to do the same.

Vote ``yes'' on this final amendment; and, remember, it does not kill the underlying bill.

Statement of Rep. Leonard L. Boswell To Accompany The Motion To

Recommit the Bill, H.R. 1309 with Instructions

According to the Federal Emergency Management Agency, there

have been a total of 696 counties in 29 states for which a

Major Disaster or Emergency has been declared. There is some

overlap of states for which a major disaster and emergency

have been declared and some overlap of counties for which a

major disaster and emergency have been declared. Below is a

breakdown of the affected counties and states by major

disaster and by emergency.

26 States for Which a Major Disaster has been Declared in 2011 for

flooding*

Alabama, Alaska, Arkansas, California, Georgia, Hawaii,

Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Minnesota,

Mississippi, Missouri, Montana, New York, North Carolina,

North Dakota, Oklahoma, Oregon, South Dakota, Tennessee,

Utah, Vermont, Washington

696 Counties in 26 States Covered by a Major Disaster Declaration in

2011 for flooding*

Alabama Counties

Autauga County, Baldwin County, Barbour County, Bibb

County, Blount County, Bullock County, Butler County, Calhoun

County, Chambers County, Cherokee County,

Chilton County, Choctaw County, Clarke County, Clay County,

Cleburne County, Coffee County, Colbert County, Conecuh

County, Coosa County, Covington County, Crenshaw County,

Cullman County, Dale County, Dallas County, DeKalb County,

Elmore County, Escambia County, Etowah County, Fayette

County, Franklin County, Geneva County, Greene County, Hale

County, Henry County, Houston County, Jackson County,

Jefferson County, Lamar County, Lauderdale County, Lawrence

County, Lee County, Limestone County, Lowndes County, Macon

County, Madison County, Marengo County, Marion County,

Marshall County, Mobile County, Monroe County, Montgomery

County, Morgan County, Perry County, Pickens County, Pike

County, Randolph County, Russell County, Saint Clair County,

Shelby County, Sumter County, Talladega County, Tallapoosa

County, Tuscaloosa County, Walker County, Washington County,

Wilcox County, and Winston County.

Alaska Counties

Crooked Creek (ANV/ANVSA), Kuspuk Regional Educational

Attendance Area, and Red Devil (ANV/ANVSA).

Arkansas Counties

Arkansas County, Baxter County, Benton County, Boone

County, Bradley County, Calhoun County, Carroll County,

Chicot County, Clark County, Clay County, Cleburne County,

Cleveland County, Conway County, Craighead County, Crawford

County, Crittenden County, Dallas County, Faulkner County,

Franklin County, Fulton County, Garland County, Greene

County, Hot Spring County, Howard County, Independence

County, Izard County, Jackson County, Johnson County,

Lawrence County, Lee County, Lincoln County, Lonoke County,

Madison County, Marion County, Mississippi County, Monroe

County, Montgomery County, Nevada County, Newton County,

Perry County, Phillips County, Pike County, Poinsett County,

Polk County, Prairie County, Pulaski County, Randolph County,

Saint Francis County, Saline County, Searcy County, Sharp

County, Stone County, Van Buren County, Washington County,

White County, Woodruff County, and Yell County.

California Counties

Del Norte County, Inyo County, Kern County, Kings County,

Monterey County, Orange County, Riverside County, San

Bernardino County, San Diego County, San Luis Obispo County,

Santa Barbara County, Santa Cruz County, and Tulare County.

Georgia Counties

Bartow County, Catoosa County, Cherokee County, Coweta

County, Dade County, Floyd County, Gordon County, Greene

County, Harris County, Heard County, Jasper County, Lamar

County, Lumpkin County, Meriwether County, Monroe County,

Morgan County, Newton County, Pickens County, Rabun County,

Spalding County, Troup County, Walker County, and White

County.

Hawaii Counties

Hawaii County, Honolulu County, and Maui County.

Idaho Counties and Indian Reservations

Bonner County, Clearwater County, Idaho County, Nez Perce

County, Nez Perce Indian Reservation, and Shoshone County.

Illinois Counties

Alexander County, Franklin County, Gallatin County,

Hamilton County, Hardin County, Jackson County, Jefferson

County, Lawrence County, Marion County, Massac County, Perry

County, Pope County, Pulaski County, Randolph County, Saline

County, Union County, Wabash County, Washington County, Wayne

County, White County, and Williamson County.

Indiana Counties

Benton County, Clark County, Crawford County, Daviess

County, Dearborn County, Dubois County, Floyd County,

Franklin County, Gibson County, Harrison County, Jackson

County, Jefferson County, Jennings County, Knox County,

Martin County, Monroe County, Ohio County, Orange County,

Parke County, Perry County, Pike County, Posey County, Putnam

County, Ripley County, Scott County, Spencer County, Starke

County, Sullivan County, Switzerland County, Vanderburgh

County, Warrick County, and Washington County.

Iowa Counties

Fremont County, Harrison County, Mills County, Monona

County, Pottawattamie County, and Woodbury County.

Kentucky Counties

Anderson County, Ballard County, Bath County, Boone County,

Boyd County, Bracken County, Breathitt County, Breckinridge

County, Butler County, Caldwell County, Calloway County,

Campbell County, Carlisle County, Carroll County, Carter

County, Christian County, Clay County, Crittenden County,

Daviess County, Edmonson County, Elliott County, Estill

County, Fleming County, Floyd County, Franklin County, Fulton

County, Gallatin County, Grant County, Graves County, Grayson

County, Green County, Greenup County, Hancock County, Harlan

County, Henderson County, Henry County, Hickman County,

Hopkins County, Johnson County, Kenton County, Knott County,

Lawrence County, Lee County, Lewis County, Livingston County,

Logan County, Lyon County, Magoffin County, Marion County,

Marshall County, Martin County, Mason County, McCracken

County, McLean County, Meade County, Menifee County, Mercer

County, Monroe County, Morgan County, Nelson County, Nicholas

County, Oldham County, Owen County, Owsley County, Pendleton

County, Perry County, Robertson County, Rowan County, Spencer

County, Todd County, Trigg County, Trimble County, Union

County, Washington County, Webster County, and Wolfe County.

Maine Counties

Aroostook County, Piscataquis County, and Washington

County.

Minnesota Counties

Becker County, Beltrami County, Big Stone County, Blue

Earth County, Brown County, Carver County, Chippewa County,

Clay County, Grant County, Kittson County, Lac qui Parle

County, Le Sueur County, Lyon County, Marshall County, McLeod

County, Nicollet County, Norman County, Otter Tail County,

Polk County, Ramsey County, Red Lake County, Red Lake Indian

Reservation, Redwood County, Renville County, Roseau County,

Scott County, Sibley County, Stevens County, Swift County,

Traverse County, Washington County, Wilkin County, Wright

County, and Yellow Medicine County.

Mississippi Counties

Adams County, Alcorn County, Attala County, Benton County,

Bolivar County, Calhoun County, Carroll County, Chickasaw

County, Choctaw County, Claiborne County, Clarke County, Clay

County, Coahoma County, DeSoto County, Greene County, Hinds

County, Holmes County, Humphreys County, Issaquena County,

Itawamba County, Jasper County, Jefferson County, Kemper

County, Lafayette County, Lee County, Marshall County, Monroe

County, Montgomery County, Neshoba County, Newton County,

Noxubee County, Panola County, Prentiss County, Quitman

County, Scott County, Sharkey County, Smith County, Tate

County, Tippah County, Tishomingo County, Tunica County,

Union County, Warren County, Washington County, Webster

County, Wilkinson County, Winston County, and Yazoo County.

Missouri Counties

Barry County, Bollinger County, Butler County, Cape

Girardeau County, Carter County, Christian County, Douglas

County, Dunklin County, Howell County, Iron County, Jasper

County, Madison County, McDonald County, Miller County,

Mississippi County, New Madrid County, Newton County, Oregon

County, Ozark County, Pemiscot County, Perry County, Pettis

County, Polk County, Reynolds County, Ripley County, Saint

Francois County, Saint Louis County, Sainte Genevieve County,

Scott County, Shannon County, Stoddard County, Stone County,

Taney County, Texas County, Washington County, Wayne County,

Webster County, and Wright County.

Montana Counties and Indian Reservations

Big Horn County, Blaine County, Broadwater County, Carbon

County, Carter County, Cascade County, Chouteau County, Crow

Indian Reservation, Custer County, Dawson County, Fallon

County, Fergus County, Fort Belknap Indian Reservation,

Garfield County, Golden Valley County, Hill County, Judith

Basin County, McCone County, Meagher County, Musselshell

County, Petroleum County, Phillips County, Powder River

County, Prairie County, Rocky Boy's Indian Reservation,

Roosevelt County, Rosebud County, Stillwater County, Sweet

Grass County, Treasure County, Valley County, Wheatland

County, Wibaux County, and Yellowstone County.

New York Counties

Allegany County, Broome County, Chemung County, Chenango

County, Clinton County, Delaware County, Essex County,

Franklin County, Hamilton County, Herkimer County, Lewis

County, Livingston County, Madison County, Niagara County,

Oneida County, Onondaga County, Ontario County, Steuben

County, Tioga County, Ulster County, Warren County, Wyoming

County, and Yates County.

North Carolina Counties

Alamance County, Bertie County, Bladen County, Craven

County, Cumberland County, Currituck County, Greene County,

Halifax County, Harnett County, Hertford County, Hoke County,

Johnston County, Lee County, Onslow County, Pitt County,

Robeson County, Sampson County, Tyrrell County, Wake

County, and Wilson County.

North Dakota Counties and Indian Reservations

Barnes County, Benson County, Billings County, Bottineau

County, Burke County, Burleigh County, Cass County, Cavalier

County, Dickey County, Divide County, Eddy County, Fort

Berthold Indian Reservation, Foster County, Grand Forks

County, Grant County, Griggs County, Kidder County, LaMoure

County, Logan County, McHenry County, McIntosh County,

McKenzie County, McLean County, Mercer County, Morton County,

Mountrail County, Nelson County, Pembina County, Pierce

County, Ramsey County, Ransom County, Renville County,

Richland County, Rolette County, Sargent County, Sheridan

County, Spirit Lake Reservation, Steele County, Stutsman

County, Towner County, Traill County, Turtle Mountain Indian

Reservation, Walsh County, Ward County, Wells County, and

Williams County.

Oklahoma Counties

Adair County, Caddo County, Canadian County, Cherokee

County, Delaware County, Grady County, Haskell County,

Kingfisher County, Le Fiore County, Logan County, McClain

County, McIntosh County,

Muskogee County, Okmulgee County, Pittsburg County, and

Sequoyah County.

Oregon Counties

Clackamas County, Clatsop County, Coos County, Crook

County, Curry County, Douglas County, Lincoln County, and

Tillamook County.

South Dakota Counties

Aurora County, Beadle County, Brookings County, Brown

County, Buffalo County, Butte County, Charles Mix County,

Clark County, Clay County, Codington County, Day County,

Deuel County, Edmunds County, Faulk County, Grant County,

Hamlin County, Hand County, Hanson County, Hughes County,

Hutchinson County, Hyde County, Jackson County, Jerauld

County, Kingsbury County, Lake County, Marshall County, Miner

County, Moody County, Perkins County, Potter County, Roberts

County, Sanborn County, Spink County, Stanley County, Sully

County, Union County, and Yankton County.

Tennessee Counties

Benton County, Bledsoe County, Blount County, Bradley

County, Campbell County, Carroll County, Chester County,

Cocke County, Crockett County, Davidson County, Decatur

County, Dickson County, Dyer County, Fayette County, Fentress

County, Franklin County, Gibson County, Giles County,

Grainger County, Greene County, Hamilton County, Hardeman

County, Hardin County, Henderson County, Henry County,

Hickman County, Houston County, Humphreys County, Jackson

County, Jefferson County, Johnson County, Knox County, Lake

County, Lauderdale County, Lawrence County, Lewis County,

Lincoln County, Loudon County, Madison County, Marion County,

Marshall County, McMinn County, McNairy County, Monroe

County, Montgomery County, Moore County, Morgan County, Obion

County, Perry County, Pickett County, Polk County, Rhea

County, Scott County, Sequatchie County, Shelby County, Smith

County, Stewart County, Sullivan County, Sumner County,

Tipton County, Union County, Washington County, Wayne County,

and Weakley County.

Utah Counties

Garfield County, Kane County, and Washington County.

Vermont Counties

Addison County, Chittenden County, Essex County, Franklin

County, Grand Isle County, Lamoille County, and Orleans

County.

Washington Counties

King County, Kittitas County, Klickitat County, Lewis

County, Skagit County, Skamania County, and Wahkiakum County.

7 States For Which an Emergency has been Declared in 2011 for flooding*

Kansas, Louisiana, Mississippi, Missouri, Nebraska, North

Dakota, Tennessee

116 Counties in 7 States Covered by Emergency Declaration in 2011 for

flooding*

Kansas Counties

Atchison County, Doniphan County, Leavenworth County, and

Wyandotte County.

Louisiana Counties

Ascension Parish, Assumption Parish, Avoyelles Parish,

Catahoula Parish, Concordia Parish, East Baton Rouge Parish,

East Carroll Parish, East Feliciana Parish, Franklin Parish,

Iberia Parish, lberville Parish, La Salle Parish, Lafourche

Parish, Madison Parish, Pointe Coupee Parish, Richland

Parish, Saint Charles Parish, Saint James Parish, Saint John

the Baptist Parish, Saint Landry Parish, Saint Martin Parish,

Saint Mary Parish, Tensas Parish, Terrebonne Parish, West

Baton Rouge Parish, and West Feliciana Parish.

Mississippi Counties

Adams County, Bolivar County, Claiborne County, Coahoma

County, DeSoto County, Humphreys County, Issaquena County,

Jefferson County, Sharkey County, Tunica County, Warren

County, Washington County, Wilkinson County, and Yazoo

County.

Missouri Counties

Andrew County, Atchison County, Boone County, Buchanan

County, Callaway County, Carroll County, Chariton County,

Clark County, Clay County, Cole County, Cooper County,

Franklin County, Gasconade County, Holt County, Howard

County, Jackson County, Lafayette County, Lewis County,

Moniteau County, Montgomery County, Osage County, Platte

County, Ray County, Saint Charles County, Saint Louis, Saint

Louis County, Saline County, and Warren County.

Nebraska Counties

Boyd County, Burt County, Cass County, Cedar County, Dakota

County, Dixon County, Douglas County, Garden County, Knox

County, Lincoln County, Morrill County, Nemaha County, Otoe

County, Richardson County, Sarpy County, Scotts Bluff County,

Thurston County, and Washington County.

North Dakota Counties

Barnes County, Benson County, Burleigh County, Cass County,

Eddy County, Emmons County, Grand Forks County, McLean

County, Mercer County, Morton County, Nelson County, Oliver

County, Pembina County, Ramsey County, Ransom County,

Richland County, Sioux County, Standing Rock Indian

Reservation (also SD), Towner County, Traill County, Walsh

County, and Ward County.

Tennessee Counties

Dyer County, Lake County, Shelby County, and Stewart

County.

* Data is based on information publicly available on the

Federal Agency Management Association (FEMA) website at:

http://www.fema.govinews/disasters.fema.

I yield back the balance of my time.

Mr. Chair, I rise today in opposition to the amendment offered by Mr. Sherman and would like to make a few points.

First, I would like to point out that I fully understand and support the goal of encouraging private sector involvement in offering flood insurance and exploring ways to diminish unnecessary reliance on government programs.

However, I am not convinced that this amendment gets us any closer to achieve this goal. In fact, this Amendment may actually put Congress in the position of picking winners and losers in the market place, interfering with private contracts, and creating millions of dollars in new federal spending.

I would like to make the following points:

Regardless of whether a flood insurance policy is provided through NFIP Direct or through a WYO insurer, the federal government is responsible for all losses covered under the policy. Regardless of whether a policy is issued by NFIP Direct of a WYO insurer, a private company will handle all aspects of policy issuance and claims administration and these services will be paid for through the federal government.

FEMA has informed Congress that private contractors handling NFIP Direct policies can manage the recently transferred policies for $50 million less each year than WYO carriers. This is a savings of $250 million for the life of the bill.

Redistribution of these policies destroys consumer choice and dictates to consumers the company and agent they are required to use for flood insurance while taking property from the agents who produce the business. This redistribution affects flood insurance policy holders and insurance agents in every Congressional District across the country.

The only thing this amendment accomplishes is the forcible transfer of polices from one group to another, with absolutely no cost savings and no improvement in customer service.

There are many questions to answer, and I believe the Committee took the right step in requesting a study before acting on the issue. Unfortunately, we seem to be acting today before we have these answers.

I would like to submit the following statements: (1) A summary of the issue provided to the Senate Banking Committee in connection with their hearings on NFIP authorization; and (2) A letter from FEMA to House Financial Services and Oversight and Investigations Subcommittee Chairman Neugebauer answering questions about the redistribution amendment and highlighting the increased cost to taxpayers of this amendment.

State Farm Insurance--June 30, 2011

State Farm Fire and Casualty Company (State Farm) Views on Efforts to

Redistribute NFIP Direct Policies to Write Your Own Insurers

State Farm supports reauthorizing the National Flood

Insurance Program (NFIP) and would like to take this

opportunity to clear up any confusion surrounding State

Farm's and its agents' participation in the NFIP and the

operational differences between flood insurance policies

distributed through the Write Your Own (WYO) program and NFIP

Direct.

I. The Proposed Redistribution of NFIP Policies Will Not

Decrease the Federal Government's Risk

Unfortunately, under the guise of NFIP ``reform,'' the

attributes of the WYO and NFIP Direct distribution channels

have been mischaracterized in order to pursue an ill-advised

scheme to enlist the federal government's powers to take

insurance business marketed, solicited, and sold by one group

of private insurance agents and redistribute those policies

to other agents and companies who had no role in generating

these policies in the first instance. There are proprietary

rights of insurance agents at stake in this matter.

Characterized as NFIP ``depopulation,'' this scheme hijacks

familiar terminology relating to programs used in several

states that transfer insurance policies out of state-run

insurance pools into the private sector. However, unlike

``depopulation'' at the state level, where the entire risk of

a policy is shifted to the private insurer, the scheme as

advocated for NFIP merely redistributes customers, policies,

and revenues associated with administering those policies

from private businesses connected with NFIP Direct to

selected WYO insurers. No changes are made in the risk

bearing of companies in the

WYO distribution channel. The federal government retains 100%

responsibility for paying all covered flood losses.

Far from being an effort towards privatization reform, the

true nature of WYO participation is captured best in the U.S.

Securities and Exchange Commission filing of a firm that is

the largest WYO insurer--Fidelity National Financial, Inc. As

described in the firm's most recent Form 10-K for calendar

year 2010:

``We earn fees under [the NFIP] program for settling flood

claims and administering the program. We serve as

administrator and processor in our flood insurance business,

and bear none of the underwriting or claims risk. The U.S.

federal government is guarantor of flood insurance coverage

written under the NFIP and bears the underwriting risk.

Revenues from our flood insurance business are impacted by

the volume and magnitude of claims processed as well as the

volume and rates for policies written. For example, when a

large number of claims are processed as a result of a natural

disaster, such as a hurricane, we experience an increase in

the fees that we receive for settling the claims.''

The suggestion that this confiscatory redistribution scheme

would shrink the public sector while growing the private

sector is wrong. It also completely ignores the fact that,

just like the WYO program, NFIP Direct fully utilizes the

private sector in handling flood insurance policies.

To be clear:

(1) Regardless of whether a flood insurance policy is

provided through NFIP Direct or through a WYO insurer, the

policy provides federal insurance coverage and the federal

government is responsible for all losses covered under the

policy;

(2) NFIP redistribution is a confiscatory scheme that does

not diminish federal obligations on a flood insurance policy

placed with a WYO insurer;

(3) Whether a policy is issued by NFIP Direct or a WYO

insurer, a private company will handle all aspects of policy

issuance and claims administration and these services will be

paid for through the federal government;

(4) Since NFIP costs are funded entirely with federal

monies and FEMA utilizes private parties for handling

policies under both the WYO program and NFIP Direct, there

are no demonstrated federal savings from redistributing

federal flood insurance policies from NFIP Direct to WYO

insurers;

(5) Redistribution of NFIP Direct policies to WYO insurers

does nothing to increase consumer participation rates which

are critical to program solvency; redistribution actually

creates disincentives for more than 17,000 agents to increase

such participation rates; and

(6) Redistribution destroys consumer choice and dictates to

consumers the company and/or agent they are required to use

for flood insurance while taking property from the agents who

produced the business.

Following is more detailed background information.

II. Background on NFIP

a. The WYO Program and State Farm's Participation

The NFIP program has been in place since 1968. The NFIP's

WYO program began in 1983 through statute and federal rule as

a financial arrangement between participating property and

casualty insurers and the Federal Emergency Management Agency

(FEMA). The WYO program permits participating property and

casualty insurers to sell and service the NFIP's standard

flood insurance policies in their own names. Although

participating insurance companies receive an expense

allowance for policies written and claims processed, the

federal government retains full responsibility for

underwriting losses and all premiums paid by purchasers of

flood insurance go into the US. Treasury. Currently, about 88

insurance companies participate in the WYO arrangement with

FEMA; this is a decrease from previous years.

Insurers participate in the program through a WYO

Arrangement. FEMA publishes the WYO Arrangement, which is a

federal rule, in the Federal Register before the end

of August every year. Each WYO insurer considers annually

whether or not to sign the WYO arrangement.

State Farm began its WYO participation in 1985. Following

its entry in the program, each year State Farm carefully

evaluated its continuing participation in the WYO

Arrangement. In recent years, NFIP has presented a more

challenging landscape of changing requirements and directives

which requires the expenditure of resources with varying

degrees of notice and clarity of instruction. In addition,

the WYO program's continuing existence became more uncertain

with each gap in authorizations and there were numerous

occasions when the program was allowed to lapse. These

situations complicated our ability to serve our customers'

needs. Subsequently, State Farm made a very difficult

business decision to no longer participate in the WYO

Arrangement.

b. Transition to NFIP Direct and Meeting Customer Needs:

Based on existing regulations, State Farm's orderly

transfer plan was structured in a way that permitted State

Farm agents to continue servicing their customers' needs

through NFIP Direct, regardless of whether State Farm itself

participated as a WYO insurer. For example, under the

Arrangement, a WYO company has the option to sell its book of

business to another WYO insurer (subject to FEMA approval) or

to transfer policies to the NFIP Direct program. State Farm

exercised the option to transfer the policies to the NFIP

Direct Program, which avoided the potential for substantial

customer confusion and disrupting the relationship customers

have with their State Farm agent. More specifically, in

utilizing NFIP Direct, the State Farm agent remains the agent

of record on transferred policies. This means that State

Farm's decision to discontinue participation in the WYO

Arrangement did nothing to undermine our exclusive

independent contractor agents' ability to continue servicing

the needs of their flood insurance customers who maintained

or sought federal flood insurance protection in the future.

From a consumer perspective, this seamless transition of the

policies was effortless; renewal of flood insurance coverage

did not require any additional steps by policyholders. The

customer placed their coverage as they did previously--

through their State Farm agent, an individual who was a

familiar face to the customer and had an existing

understanding of the customer's property and needs.

State Farm did not receive any compensation for its orderly

transfer of policies to NFIP Direct. Of approximately 800,000

policies, State Farm has transferred to date over 550,000

policies. Each State Farm WYO policyholder has already

received a notice regarding the transfer plan. Each

policyholder has also received or will receive a second

notice prior to the policy transfer.

c. The Critical Role of State Farm Agents

Perhaps more important to the functioning of NFIP, active

agent participation in the marketing and selling flood

insurance is a significant issue of concern to FEMA. It is

widely recognized that one major shortcoming of the NFIP is

that the purchase of flood insurance is often limited to only

those who need coverage or are mandated to purchase coverage

in connection with the purchase of a home. This limited

demand impedes the ability of the NFIP to broaden its

insurance base to satisfy a fundamental tenet of insurance

underwriting--spreading the risk of loss among a larger and

more diverse pool of policyholders who are unlikely to

experience losses at the same time. Consequently, an agent

workforce actively engaged in marketing and soliciting NFIP

policies is a critical component of making the program more

actuarially sound.

Indeed, FEMA recognized that having State Farm agents

actively market and sell NFIP Direct policies is a major

benefit to the program. However, if the federal government

were to redistribute policies brought into NFIP by an agent

to another company or agent (which includes commissions), the

incentive for agents to originate policies in NFIP Direct

would be removed without any commensurate benefit, which

would undermine the entire program. Equally pernicious, it

would be tantamount to a government taking of business

property from individual businessmen and businesswomen solely

for the benefit of another private party.

III. Proposed Redistribution Scheme Offers No Cost Advantage:

Private Parties Handle the Servicing of all NFIP Policies

Regardless of Who Distributes Them

Contrary to the assertions made by supporters of NFIP

``depopulation,'' the confiscatory redistribution of NFIP

Direct policies to WYO insurers will not create smaller

government, increase the role of the private sector, or

diminish the government's risk of loss on flood insurance

policies. All NFIP policies have an agent of record that

handles the sales and some aspects of servicing. These agents

may or may not be associated with a WYO company, but they are

paid a commission through NFIP, regardless of whether they

are affiliated with a WYO company or not. A similar pattern

is followed for claims handling where private sector parties

service all NFIP claims regardless of how they are

distributed.

Claims handling for NFIP Direct policies is done by a

private contractor, Computer Sciences Corporation (CSC),

through a competitively bid contract. Furthermore, as

described in its own marketing materials, CSC provides

identical services to several WYO carriers, including some of

the largest. As a result, there is a strong probability that

the so-called ``reforms'' achieved through confiscatory

redistribution would do nothing more than transfer the

handling of flood insurance policies from CSC under its NFIP

Direct hat to CSC wearing its WYO hat. Significantly, the

proponents of confiscatory redistribution have not produced

any evidence suggesting that their servicing will save the

NFIP money. Indeed, the only difference for policies so

redistributed would be that insurance agents--primarily small

businesspeople who sold the flood policy in the first

instance, would see their book of business confiscated by the

federal government and simply handed over to another company.

This is not reform and is not about ``making the government

smaller.''

IV. Proposed Redistribution Scheme Destroys Consumer Choice

Another insidious result of NFIP confiscatory

redistribution is the elimination of consumer choice and

engaging the federal government to forcibly require consumers

to accept companies and/or agents with whom they have no

prior relationship, or, even worse, whom they have

affirmatively rejected in the past. Far from creating a

seamless transition for consumers, redistribution

generates several problems. For example, if a consumer has

chosen to work with an agent and has been with an agent for

many years, should the federal government overrule the

consumer's choice through redistribution? What if a policy

has been redistributed to a company with whom the consumer

does not want to do business? Does the consumer have any

control? Does the federal government really want to be

involved in this type of decision?

V. Conclusion

``Depopulation'' of NFIP is a myth. Current efforts along

these lines are nothing more than a scheme to use the federal

government's authority to redistribute existing policies from

one group of private insurance agents and give that business

to other private entities. This confiscatory redistribution

scheme makes no changes in the federal government's risk

exposure under NFIP, fails to increase participation rates in

purchasing flood insurance, provides no demonstrated savings

to the federal government, and destroys consumer choice. Such

measures should be opposed.

I thank the distinguished sponsor and would preface my comments by saying I am strongly in support of Congresswoman Biggert's superb piece of legislation.

However, I rise today in opposition to this amendment offered by Representative Sherman. I would like to point out first that I fully understand and support the goal of encouraging private sector involvement and exploring ways to diminish unnecessary reliance on government programs. However, I am not convinced, in fact I am unconvinced, this amendment gets us any

closer to achieving that goal. In fact, this amendment may put Congress in the position of choosing winners and losers in the marketplace, interfering with private contracts, and creating millions of dollars in new Federal spending.

I would like to make the following points: regardless of whether a flood insurance policy is provided through NFIP Direct or WIO, the Federal Government's responsible for all the losses incurred under the policy. FEMA has informed Congress that private contractors handling NFIP Direct policies can manage the recently transferred policies for $50 million less, which is a saving of $250 million over the life of the bill. I don't have to tell any individuals in today's world what that means.

Redistribution of these policies destroys, in my judgment, consumer choice, dictates to consumers the company and agent they are required to use for flood insurance, while taking property from the agents who produce the business. This redistribution affects flood insurance policyholders and insurance agents in every district in the country.

Really, the only thing this amendment does is the forcible transfer of policies from one group to the other with not only no cost savings, with significant costs to the Federal Government. A lot of questions to answer.

I believe the committee and Representative Biggert took the right approach in requesting a study before acting on the issue. Unfortunately, today, we seem to be acting contrary-wise before we have these answers. With all due respect again to the sponsor of the amendment, and certainly in concert with the sponsor of the bill, I urge a ``no'' vote on this amendment.

Mr. Chairman, pursuant to House Resolution 340, I offer amendments en bloc.

Mr. Chairman, I ask unanimous consent that amendment No. 8 be modified in the form I have placed at the desk.

Mr. Chairman, this is a bipartisan package of amendments that we are accepting. I urge my colleagues to support the amendments en bloc.

I reserve the balance of my time.

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

I urge support for the amendments en bloc.

I have no further requests for time, and I yield back the balance of my time.

I claim time in opposition to the amendment.

Thank you, Mr. Chairman.

This amendment would impose penalties against lenders who require borrowers to maintain flood insurance in an amount greater than the outstanding principal balance of the loan.

Limiting the amount of coverage to the unpaid principal balance leaves consumers at risk of having to incur the costs of repair on their own and, additionally, is not reflective of the current state of industry practices. In fact, with the exception of VA loans, limiting insurance to the unpaid principal balance is not recommended under existing law.

Consumers, not lenders, will bear the financial brunt of a disaster. Limiting flood insurance to the unpaid principal balance may protect the lender's financial interest in the property; however, it doesn't protect the consumer's equity and investment in the property.

NFIP establishes the minimum amount of coverage required at the lesser of the outstanding balance of the loan or the maximum available NFIP coverage, which today is $250,000 for residential and $500,000 for commercial properties.

The standard NFIP dwelling flood policy requires that one to two family owner-occupied dwellings be insured for the replacement value in order for losses to be paid for the cost to repair or replace the property. If these properties are not insured for at least 80 percent of the replacement value at the time of loss, the policyholder cannot obtain the full benefits of the policy and may not receive sufficient funds to repair or replace the property damaged by flood.

Guidelines issued by Federal regulators encourage and authorize lenders to require flood insurance at replacement cost, not to exceed NFIP maximum available coverage. The guidelines also urge lenders to follow the same rules in calculating flood coverage as they do in calculating hazard coverage, where standard industry practice is to require coverage at replacement cost.

In the case of condominiums, the guidelines issued by Federal regulators require lenders to ensure that flood protection has been obtained for the replacement value of the property improvements, not to exceed the NFIP maximum limits.

I would request a ``no'' vote on the Speier amendment.

I yield back the balance of my time.

I demand a recorded vote.

Mr. Chairman, I rise in opposition to the amendment.

Congresswoman Ros-Lehtinen's amendment, while well intentioned, would prevent the National Flood Insurance Program from moving toward a more actuarially sound basis for calculating premiums in as quick a manner as possible.

The underlying bill provides that FEMA, at the discretion of the administrator, can increase the chargeable premiums for flood policyholders by up to 20 percent once every 12 months until the premium being paid properly reflects the risk associated with the property.

The amendment is intended to save policyholders from the ``sticker shock'' premium increases potentially pose, but the underlying bill addresses this concern by allowing for a gradual phase-in of the actuarial rates instead of an abrupt adjustment.

One of the core goals of this bill is to move the NFIP towards a more actuarially sound, properly functioning

program, and any amendment to slow down that effort must be opposed.

The amendment would strike part of section 5 that would increase annual limits on premium rates. It increases from 10 to 20 percent. The sponsors of the amendment have stated that their objective is to prevent a 100 percent increase in possible premium hikes, but what it's doing is really going to delay our being able to have a more actuarially sound basis for calculating the premiums in as quick a manner as possible.

Section 5 really addresses this concern by phasing in all of the non pre-FIRM properties to full actuarial rates over time to eliminate the subsidy and to allow the premiums paid for policies to reflect the risk covered by those policies. So I would oppose this amendment.

Under H.R. 1309, FEMA is required to update its flood maps according to the Technical Mapping Advisory Council's recommendations within 6 months or report to Congress why it has rejected them. As part of the new standard for the flood insurance rate maps, FEMA must include in any rate map areas of residual risk, including areas behind levees, dams and other manmade structures. I'm afraid that the Cardoza amendment would fail to provide homeowners with a real assessment of their risks, thereby impairing their ability to prepare for such natural disasters.

And to address concerns about the mapping process, H.R. 1309 reinstates the Technical Mapping Advisory Council to bring in the expertise and perspectives of other stakeholders in FEMA's process for setting new mapping standards. The amendment I think would weaken these new mapping standards that are designed to give homeowners and the NFIP an accurate portrait of flood risk, and I would oppose the amendment.

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

Mr. Chairman, I support the amendment.

Mr. Chairman, I claim time in opposition to the amendment, even though I support the amendment.

Mr. Chairman, I rise in support of this amendment.

I think that proper and effective notification by FEMA allows the protection provided by the NFIP to reach out to those who need it. And the amendment also includes provisions designed to benefit communities that believe that they have been incorrectly mapped in the flood program, further enhancing the validity of the maps by providing an appeal for newly mapped areas. I support it.

I reserve the balance of my time.

Mr. Chairman, I yield 1 minute to the gentleman from Alabama (Mr. Bachus).

I now yield 2 minutes to the gentleman from Illinois (Mr. Johnson).

I yield such time as he may consume to the gentleman from Alabama (Mr. Bachus).

Thank you, Mr. Chairman.

This amendment, which would direct the GAO to conduct a study on all- peril insurance policies for residential properties, to me really expands beyond the scope of this bill.

Fundamental reform of the National Flood Insurance Program should be the priority of this Congress, including the removal of subsidies over time to improve the long-term solvency of the program. In contrast, the Scott amendment would dramatically increase the scope at a time when government insurance programs, such as the NFIP, are essentially insolvent and remain grossly underfunded.

If the gentleman would like to have an all-peril study, he has the option to write a letter to the GAO and request such a study, and that will be done, but to tie it into the flood insurance makes it seem like we're going to expand the flood insurance when we're really trying to decrease the expansion and really to bring in the private sector to do this. I really think that this is way beyond what we should be doing.

His amendment would pave the way to expand the Federal Government's role in the private insurance market by creating a massive new program to offer government-provided coverage backed by taxpayer dollars against property losses. If the gentleman is really interested in the drywall particularly, this is something that he can ask for a study on that, and it really should not be within the scope of this bill.

I would urge opposition to this amendment.

I reserve the balance of my time.

I yield back the balance of my time and request a ``no'' vote.

Mr. Chairman, I demand a recorded vote.

I thank the gentlewoman for yielding.

I know we have had quite a bit of discussion about this already, but maybe we will bring this to a close with this amendment, for a while anyway.

Let me just say that the underlying bill really doesn't ask for additional borrowing authority. In fact, the reforms in the underlying bill will accelerate the ability of NFIP to pay down its debt. This bill is a revenue raiser and will bring in $4.2 billion to the program.

We have addressed the fact that there have been some problems with NFIP. I think there was some mismanagement, and there was a need for reform. That is why we have spent so much time on this bill to talk to all of the different groups, to talk to all of the Members who have had concerns.

I have got here a list. According to a broad coalition of industry experts and trade associations who all support this, more than 5.6 million policyholders depend on the NFIP as their only source of protection against economic devastation from a flood. In fact, I could read all of those who asked for a ``no'' vote on this amendment. We have the American Insurance Association, American Land Title Association, Building Owners and Management Association, CCIM Institute, Chamber SWLA, Council of Insurer Agents and Brokers, The Financial Services Roundtable, Independent Insurance Agents and Brokers of America, Institute of Real Estate Management, International Council of Shopping Centers, Manufactured Housing Institute, Mortgage Bankers Association, National Association of Home Builders, National Association of Mutual Insurance Companies, National Association of REALTORS, National Ready Mix Concrete Association, Society of Industrial and Office Realtors, Property and Casualty Insurance Association of America, The Risk and Insurance Management Society, and the U.S. Chamber of Commerce.

You know, if 5.6 million property owners can't rely on this, what is going to happen? What is going to happen is we wouldn't have flood insurance. And on May 13, the Financial Services Committee favorably reported the Flood Insurance Reform Act by a unanimous vote of 54-0. Anybody who doesn't think that is something on how much time we put into this and how much people care about it, 54-0 in this Congress, I don't think that has happened for a bill that is this important for a long, long time. It really reflects the hard work and the bipartisan support of the Financial Services Committee.

Again, it has a series of reforms that are going to make this a much better program. It improves the financial stability of the NFIP. It reduces the burden on taxpayers. It restores integrity to the FEMA mapping system and explores ways to increase private market participation. It helps to bring certainty to the housing market. I would oppose this amendment strongly.

I reserve the balance of my time.

Mr. Chairman, I yield myself the balance of my time.

If this bill were not to pass and if this amendment were to be agreed to, it would be devastating to at least 20,000 communities if there was no flood insurance. Congress would inevitably have to bail out flood disaster victims, as it did prior to 1968; and it would cost so much more money. And the President would have to sign on to any devastation that might be made, as is what happened in Louisiana after Katrina. I oppose this amendment and support the underlying bill.

I yield back the balance of my time.

Mr. Chairman, I offer an amendment.

Mr. Chairman, today I am offering an amendment that would end TV and radio ads that I believe to be a total waste of taxpayers' dollars. Over the past 2 years FEMA has actually spent over half a million dollars on the production of what they called ``Home Personified flood insurance commercials.'' These slick commercials sort of depict actors with roofs hovering over their heads talking about the need to

obtain flood insurance, and about the fact that one in four homes are in a high-risk flood zone, and they pitch to contact FEMA for a free brochure about the program.

These commercials between April of 2010 and April of 2011 cost over $7 million in airtime to broadcast all across the 50 States, and they are slated to be aired for an additional year at least. Seven million dollars spent on promoting the National Flood Insurance Program, which is a federally mandated flood program, which has been mentioned all across the day here, is already almost $18 billion in debt. I would say, why not spend that $7 million to pay back the American taxpayers? Or better yet, to begin paying off the program's $18 billion in debt?

Mr. Chairman, last year in the election in the fall, the American people sent a very clear message to Washington. And I don't think the message to Congress here was urging us to spend millions of dollars of taxpayers' money on TV commercials asking them to put money into a failing, bloated, and completely unnecessary government program. No, they were demanding that we get a grip on government spending, on out- of-control government spending, and they were asking us to end programs where the government is trying to fill a role best done by the private sector.

Shortly, Mr. Chairman, all of us in this House, in the Congress, in both Chambers, are going to be asked to raise the national debt limit because we have not been able to get our fiscal house in order. And this week, here we are being asked to renew a Federal program that is over $17 billion in debt currently, all of which falls on the backs of the American taxpayers, and we need to raise the debt ceiling of the flood insurance program, as well, to almost $25 billion. Who cares? I guess it's just taxpayers' money.

If we want to stop adding to our national debt, we should not continue the Federal flood insurance program--and I'm going to be offering an amendment to that in a moment--nor should we continue to spend millions each year on TV commercials for a program that constituents in many, many States, most of the States across the Nation, are wondering about, at a minimum, and many of them are outraged. I certainly hear from my constituents back in Michigan who are looking for some relief. These hard-pressed taxpayers from my State are asking for less spending, for less government, for lower taxes and less government intrusion into their lives. They're certainly not asking us for wasteful government programs to be shoved down their throats on television with television ads.

My amendment today, Mr. Chairman, to end unnecessary spending on TV commercials for the National Flood Insurance Program will be a downpayment on the relief that we owe to the American taxpayers who are concerned about these commercials that seem to be on repeat all across the airwaves in all of the States across our Nation.

Mr. Chairman, I would ask that my colleagues support this amendment today and vote in favor of saving money, taxpayers' money, for the American taxpayers.

I reserve the balance of my time.

Mr. Chairman, I would simply observe that, for the most part, the reason that folks, property owners, get national flood insurance is because the Federal Government holds a gun to their heads and says that you cannot get a federally backed mortgage unless you buy Federal national flood insurance through the National Flood Insurance Program. So I don't think we have to spend millions and millions of dollars to convince them to do something that, in my mind, I question whether it is even constitutional that we are forcing people to do this kind of a thing; but I certainly don't think we need to spend millions of dollars to notify them of something that we are mandating for them.

Certainly if you live in a flood-prone area, you probably know it. And with everything going on in the Nation, I just can't believe we're wasting money like this. And I would certainly urge my colleagues to support this amendment.

I yield back the balance of my time.

Mr. Chairman, I demand a recorded vote.

Mr. Chairman, I have an amendment at the desk made in order under the rule.

I yield myself such time as I may consume.

I would begin by asking a very fundamental question: Why in the world is the Federal Government in the flood insurance business? Really, I do not understand it.

I don't think anyone should be surprised to learn that the Federal Government is not a very good insurance agent, that they run a terrible insurance program, as evidenced by the $18 billion in debt that the NFIP, the National Flood Insurance Program, has racked up over the years and will probably never repay. I don't think they'll ever repay it. If you don't believe me, you can consider the testimony that the administrator of FEMA made before the Financial Services Committee. In congressional testimony, he said the program will likely always be in debt, massive debt.

Congress set up the NFIP to ostensibly be an insurance company, but it is not held to the same standards as private insurance companies. Instead of holding cash reserves, the NFIP has a bottomless pit of money that it shamelessly taps into. That money pit is also known as the U.S. Treasury, or the American taxpayers. If the NFIP were a private insurance company, it would have gone bankrupt years ago, or it would have been in need of a Federal bailout. In other words, when this government-authorized Ponzi scheme runs out of money, it simply gets more by dipping into the pockets of taxpayers. Mr. Chairman, I would say that this is a program that would make Bernie Madoff blush.

The American people are fed up with bailouts, and this bill is just that: another bailout for another broken program. If we want to stop adding to our national debt, we should not continue the Federal flood insurance program.

My home State of Michigan is just one of a majority of States that is actually disadvantaged by this Ponzi scheme. The State House of Representatives has recently passed a resolution condemning the NFIP as fundamentally flawed and unfair, and I would expect the State Senate to follow suit shortly. So there is an entire State. I don't think that's radical.

My amendment would actually end the program at the end of this year and allow States to work together to form a regional coalition to shape insurance policies that meet the needs of their particular State. There is no way that a one-size-fits-all insurance program that dramatically subsidizes rates in some of the most flood-prone areas of our Nation while at the same time forcing those in less flood-prone areas to pay much higher rates can be sustained. States like mine will simply become fed up and opt out, which is what's going to happen, so that they can better protect their citizens. Then, of course, it would force this program even deeper into debt. It is time to end this program now.

My amendment would also, and perhaps more importantly, allow the private market to get into the flood insurance business without the Federal Government's unfair competition of politically based premiums, which would allow premiums to be set based on actual risk.

If you want to get a handle on out-of-control Federal spending and start eliminating government programs that do nothing except enforce bad policy and recklessly spend the taxpayers' money, I would ask my colleagues to support my amendment.

A Resolution To Memorialize the Congress of the United States To Make

Significant Reforms to the National Flood Insurance Program

Whereas, Under the National Flood Insurance Program, most

property owners must purchase flood insurance if their

property is located within a mapped floodplain; and

Whereas, The Federal Emergency Management Agency (FEMA) has

recently revised existing floodplain maps in Michigan that,

in many cases, have increased the amount of land within the

floodplain without adequate explanation of perceived

additional flood risk. Flood insurance for buildings within

redrawn areas is a significant added expense. These revisions

amount to a penalty that will be felt far into the future,

especially as the market value of impacted properties suffers

needlessly; and

Whereas, The revised maps exacerbate disparities between

the premiums paid by Michigan residents relative to claims

received. Michigan residents have paid nearly five times as

much in flood insurance premiums than they have received back

in claims over the last 30 years. The remaining funds from

these premiums goes to subsidize flood insurance claims in

higher risk areas of the country; and

Whereas, The National Flood Insurance Program is operated

without transparency to the public in rate-setting methods.

Rebuilding within a floodplain has continued in higher risk

areas of the country where multiple recent flood events have

occurred, contributing to the $20 billion in debt of the

National Flood Insurance Program. Rebuilding in very high

risk areas would be avoided if flood insurance was set at

actuarially sound rates; and

Whereas, The National Flood Insurance Program is

fundamentally flawed and unfair. Year after year, the program

takes money from property owners in most states and uses that

money to rebuild in only a few states. Congresswoman Candice

Miller has introduced legislation (H.R. 435) to eliminate the

National Flood Insurance Program in 2013 and to authorize

states to work together to provide flood insurance as they

deem appropriate; and

Whereas, Congresswoman Judy Biggert has introduced

legislation, the Flood Insurance Reform Act of 2011 (H.R.

1309), to begin the process of modernizing and reforming the

National Flood Insurance Program; now, therefore, be it

Resolved by the House of Representatives, That we

memorialize the Congress of the United States to make

significant reforms to the National Flood Insurance Program;

and be it further

Resolved, That copies of this resolution be transmitted to

the President of the United States Senate, the Speaker of the

United States House of Representatives, and the members of

the Michigan congressional delegation.

Adopted by the House of Representatives, June 21, 2011.

I reserve the balance of my time.

Mr. Chairman, I yield 1 minute to the gentleman from New York (Mr. Higgins).

Mr. Chairman, I would simply reiterate that I don't think this is something that the Federal Government should be involved in. If you are truly a friend of the taxpayers, and believe me, I appreciate the bipartisanship and the hard work about reforming this program. I understand the need to reform programs, but I also understand the need to get a handle on the Federal debt and deficit; and one way to do that is to eliminate unnecessary programs, not just nibble around the edges, which is what I think we are doing here today.

I certainly urge my colleagues to support this amendment.

I yield back the balance of my time.

Madam Chairman, I yield myself such time as I may consume.

Madam Chairman, I rise in support of H.R. 1309, the Flood Insurance Reform Act of 2011. I'd like to thank Ms. Waters and all the Members from both sides of the aisle who helped to craft this bill.

On May 13, the Financial Services Committee favorably reported the Flood Insurance Reform Act by a unanimous vote of 54-0. This bill is important and reflects the hard work and bipartisan support of the Financial Services Committee.

It would reauthorize for 5 years the National Flood Insurance Program, NFIP. The bill would enact a series of reforms designed to, number one, improve NFIP's financial stability; two, to reduce the burden on taxpayers; three, restore integrity to the FEMA mapping system; four, to explore ways to increase private market participation; and, five, to help bring certainty to the housing market.

For over 40 years, taxpayers have subsidized flood insurance premiums for policyholders. To improve NFIP's financial stability, H.R. 1309 phases in actuarially sound rates for policyholders and phases out taxpayer-subsidized rates. As a result, the Congressional Budget Office stated that the bill generates $4.2 billion; and absent a Katrina-like catastrophe, the bill will actually accelerate NFIP's payments on its $17.75 billion debt to the taxpayer. As it stands, NFIP has already paid back taxpayers about $1.8 billion.

But perhaps most importantly, H.R. 1309 eliminates a barrier to the development of a private flood insurance market and puts us on a path towards a responsible, long-term plan that eliminates taxpayer risk.

For the first time, policyholders can choose private flood insurance over government flood insurance without the risk of lender rejection; and the bill eliminates taxpayer-subsidized rates so that the private sector can offer consumers increasingly competitive rates as compared to the NFIP. Second, FEMA is required to solicit bids to determine the cost to the private sector, not to the taxpayer, bearing the risk of flood insurance.

Third, it requires that GAO and FEMA evaluate the feasibility of voluntary, community-based flood insurance. And, fourth, the bill reiterates FEMA's existing authority to purchase reinsurance from the private sector as an alternative to the U.S. Treasury and taxpayers serving as a backstop to NFIP.

Finally, the bill addresses many of the concerns that Members have raised with us about new maps, especially as they relate to the dam and levee decertifications. It allows communities to suspend the requirement to purchase flood insurance while they work to construct or fix their flood protection systems.

Madam Chairman, when Congress created NFIP, there was no viable private-sector flood insurance market. Taxpayers were providing increasing amounts of direct assistance through disaster relief to flood victims. Without reforms contained in this bill, taxpayers will never be paid back the debt they are owed; homeowners and businesses will have limited or no access to flood insurance; and Congress will inevitably have to bail out flood disaster victims, as it did prior to 1968. We cannot allow this to happen.

This bill is the first significant reform to the program in nearly a decade. The NFIP is too important to let lapse and too in debt to continue without reform. I look forward to today's amendment debate and urge my colleagues to support the underlying bill.

House of Representatives,

Committee on the Judiciary,

Washington, DC, June 2, 2011.

Hon. Spencer Bachus,

Chairman, Committee on Financial Services, Rayburn House

Office Building, Washington, DC.

Dear Chairman Bachus: I am writing concerning H.R. 1309,

the ``Flood Insurance Reform Act of 2011,'' which is

scheduled for floor consideration soon. As a result of your

having consulted with us on provisions in H.R. 1309 that fall

within the Rule X jurisdiction of the Committee on the

Judiciary, we are able to agree to forego action on this bill

in order that it may proceed expeditiously to the House floor

for consideration.

The Judiciary Committee takes this action with our mutual

understanding that by foregoing consideration of H.R. 1309 at

this time, we do not waive any jurisdiction over subject

matter contained in this or similar legislation, and that our

Committee will be appropriately consulted and involved as the

bill or similar legislation moves forward so that we may

address any remaining issues in our jurisdiction. Our

Committee also reserves the right to seek appointment of an

appropriate number of conferees to any House-Senate

conference involving this or similar legislation, and

requests your support for any such request.

I would appreciate your response to this letter confirming

this understanding with respect to H.R. 1309, and would ask

that a copy of our exchange of letters on this matter be

included in the Congressional Record during floor

consideration.

Sincerely,

Lamar Smith,

Chairman.

I yield 2 minutes to the gentlelady from West Virginia (Mrs. Capito).

Madam Chair, I yield 1\1/2\ minutes to the gentleman from Tennessee (Mr. Fincher), a member of the Financial Services Committee.

Madam Chairman, I yield 2\1/2\ minutes to the gentleman from Texas (Mr. Canseco), another great member of the Financial Services Committee.

Madam Chairman, may I inquire of the Chair how much time both sides have remaining?

I yield 2 minutes to the gentlewoman from Michigan, Candice Miller.

I yield 1\1/2\ minutes to the gentleman from North Dakota (Mr. Berg).

Madam Chair, I yield 2 minutes to the gentleman from Nebraska (Mr. Terry).

Madam Chairman, I yield 1\1/2\ minutes to the gentleman from Missouri (Mr. Luetkemeyer).

Madam Chairman, I yield myself such time as I may consume.

With the NFIP's authorization set to expire on September 30, it's really critical that the House pass the bill and work with the Senate to shape a final commonsense reform measure. We have to avoid a recurrence of what happened in the last Congress when the program lapsed and caused turmoil in a recovering housing market. Houses couldn't be closed if they didn't have insurance and if they had a mortgage. At that time, it was simply extended without any reforms. So if there is no viable private insurance market, we're going to have to pay more. So I would suggest that we really look forward to passing this bill.

Madam Chair, I now yield 2 minutes to the gentlewoman from Florida (Ms. Ros-Lehtinen).

Madam Chairman, I yield 9 minutes to our distinguished chairman of the Financial Services Committee, the gentleman from Alabama (Mr. Bachus).

Madam Chairman, I urge my colleagues to support H.R. 1309. It's a bill to reform and reauthorize the National Flood Insurance Program. I think that we have had a great debate, and it certainly is a pleasure to have a bill that has such bipartisan support. I think it's such an important bill.

It's going to enact a series of reforms designed to improve NFIP's financial stability, reduce the burden on taxpayers, restore integrity to the FEMA mapping system, and explore ways to increase the private market participation and help bring certainty to the housing market. It's a $4.2 billion revenue raiser. And I think that that's very important too, that we will really be able to change the scope of this. If we go back to 1968 when this started, there was no private insurance, and this is why this happened. And we have to keep it that way, or we will pay so much more for disaster relief when this happens to so many people who live in floodplains.

I urge my colleagues to support the bill, and I really thank the members of the Financial Services Committee, particularly Ms. Waters and Mr. Frank, and on our side Mr. Bachus, the chairman.

SmarterSafer.org,

Washington, DC, June 30, 2011.

Hon. John A. Boehner,

Speaker of the House of Representatives, U.S. Capitol,

Washington, DC.

Hon. Nancy Pelosi,

Minority Leader, U.S. House of Representatives, U.S. Capitol,

Washington, DC.

Dear Speaker Boehner and Minority Leader Pelosi:

SmarterSafer.org, a diverse coalition of taxpayer advocates,

environmental organizations and insurance interests, urges

you to quickly take up comprehensive flood insurance reform,

like H.R. 1309, a bill that extends the program for five

years and makes meaningful reform to the program.

Congress must act quickly to reauthorize the program before

it expires in September, and must couple any reauthorization

with meaningful reforms. The flood program is almost $18

billion in debt to the U.S. Treasury, and that amount will

likely grow as a result of recent flooding. To ensure the

viability of the program so that those at risk can rebuild

after a disaster, to protect taxpayers, and to protect

environmentally sensitive areas, Congress must make

significant reforms to the flood insurance program.

A comprehensive bill, like H.R. 1309, which was the subject

of significant hearings and debate, is needed. When you

consider this bill, we ask that you look at adopting changes

to do the following: phase out all subsidies, extend and

streamline the mitigation grants program including making

permanent the severe repetitive loss mitigation program;

ensure the program is not expanded to additional coverages;

and allow for no mapping or mandatory purchase delays. Though

we believe that H.R. 1309 is a step in the right direction,

with these changes you will be putting the flood program on a

sustainable path. Under H.R. 1309 flood maps will be up to

date and accurate; subsidies in the program will be phased

out; and FEMA is authorized to purchase reinsurance to cover

losses and protect taxpayers. We urge you to schedule this

bill for consideration.

Sincerely,

Environmental Organizations--American Rivers, Ceres,

Defenders of Wildlife, Environmental Defense Fund, National

Wildlife Federation, Republicans for Environmental

Protection, Sierra Club, The Nature Conservancy; Consumer and

Taxpayer Advocates--American Conservative Union, Americans

for Prosperity, Americans for Tax Reform, Center on Risk,

Regulation, and Markets--The Heartland Institute, Competitive

Enterprise Institute.

Insurer Interests--Allianz of America, Association of

Bermuda Insurers and Reinsurers, Chubb, Liberty Mutual Group,

National Association of Mutual Insurance Companies, National

Flood Determination Association, Reinsurance Association of

America, Swiss Re, USAA; Housing--National Low Income Housing

Coalition, National Leased Housing Association; Allied

Organizations--American Consumer Institute, Friends of the

Earth, International Code Council, National Fire Protection

Association, Taxpayers for Common Sense, Zurich.

Madam Chairman, I move that the Committee do now rise.