To require a study of voluntary community-based flood insurance options and how such options could be incorporated into the national flood insurance program, and for other purposes.

Mr. Speaker, I rise in support of H.R. 1035, a bill ``To require a study of voluntary community-based flood insurance option and how such options could be incorporated into the national flood insurance program, and for other purposes.''

More specifically, this bill directs FEMA to study options, methods, and strategies for making voluntary community-based flood insurance policies available through the National Flood Insurance Program. Moreover, this study would include a strategy to implement options that would encourage communities to undertake flood mitigation activities.

Flooding is the most common and costly natural disaster in the United States. 90 percent of all presidential-declared U.S. natural disasters involve flooding. Flooding occurs in all 50 states and chronically impacts many communities, including my constituents in the 18th district of Texas.

In Houston, there are a number of areas which are frequently flooded from excessive rainwater in bayous. These areas include the Buffalo Bayou, the Greens Bayou, and the Halls Bayou. These areas, and others across this nation, could greatly benefit greatly from this study.

In 1968, the U.S. Congress established the National Flood Insurance Program, NFIP, to address the nation's flood hazard exposure and challenges inherent in financing and managing flood risks in the private sector.

The program has played a central role in U.S. flood risk management policy; that is, the prevention and recovery from flooding disasters. Under the NFIP, the federal government (1) identifies areas of flood risk; (2) encourages communities to implement measures to mitigate against the risk of flood loss; and (3) provides financial assistance, through contracts of insurance, to help individuals and small businesses recover rapidly from flood disasters.

Until 1986, the NFIP was financially self-supporting from policy premium revenue and fees that covered all expenses and claim payments.

However, because of its below-market insurance rates and catastrophic hurricane-related floods in recent years, the NFIP has accrued a substantial debt that as of September 30, 2011, stands at $17.75 billion. Under current law, the funds borrowed from the U.S. Treasury must be repaid with interest.

Because the NFIP cannot charge risk-based premiums for all of its policies, hold loss reserve funds to offset unusually catastrophic losses, or purchase reinsurance, the program faces a constant risk of financial insolvency.

The NFIP currently covers approximately 5.6 million households and businesses across the country for a total of $1.25 trillion in exposure.

The National Flood Insurance Program, NFIP, was established in response to increasing Federal Government spending for disaster relief.

Standard homeowners insurance does not cover flooding and therefore offers no protection from floods associated with hurricanes, tropical storms, heavy rains and other conditions. The NFIP mandates that federally regulated or insured lenders require flood insurance on properties that are located in areas that have a high risk of flooding.

Unlike private insurance programs, the NFIP is not actuarially sound; it is not designed to ensure that its premiums will cover the average claims and expenses expected over the long run. By law, some NFIP policyholders receive insurance at rates that are subsidized. Such subsidies are mainly granted to property owners whose properties were built before their communities joined the program and are intended to encourage communities to participate in the program and thus mitigate potential losses.

H.R. 1035 would study the means by which communities can enhance their own ability to recover from flooding. Giving communities the opportunity to effectively become the policyholder of a flood insurance program, rather than individual property owners, renters, or businesses, would potentially yield several benefits.

The study produced by H.R. 1035 would explore the policy of community-based flood insurance to find ways to incentivize communities to mitigate future flood losses, as well as to provide them with a greater role in determining flood risk assessment, mapping, and insurance pricing.

Furthermore, the study would allow communities to implement mandatory flood insurance purchase requirements tailored to a community's individual needs.

Moreover, the study would reveal the extent to which community-based flood insurance may produce economies of scale for a community, streamlined underwriting, as well as reduced administrative costs for the insurer.

Community-based flood insurance programs have the potential for the development of synergies between local communities and the National Flood Insurance Program.

For these reasons, I urge my colleagues to support the H.R. 1035, which directs FEMA to study how to improve our national system of disaster insurance with respect to community-based flood insurance. This bill is a timely response to recent flooding disasters wrought by Hurricane Sandy, as well as sensible way to address future floods that occur in communities across our country.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1035) to require a study of voluntary community-based flood insurance options and how such options could be incorporated into the national flood insurance program, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and submit extraneous materials for the Record on H.R. 1035.

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

I rise today in support of H.R. 1035, legislation introduced by my Financial Services Committee colleague, Congresswoman Gwen Moore, and chairman emeritus, Spencer Bachus.

H.R. 1035 would require the Federal Emergency Management Agency, the agency which administers the National Flood Insurance Program, or NFIP, to conduct a study on the advantages and disadvantages of providing voluntary community-based flood insurance through the NFIP and report its recommendations for implementation to Congress within 18 months.

Additionally, H.R. 1035 requires the Government Accountability Office to analyze FEMA's report and submit its comments or recommendations to Congress within 6 months.

Community-based flood insurance is an insurance technique where a risk assessment is made for all the buildings in the community, and then premiums to cover that risk are paid collectively by that community, rather than the current practice of assessing each building individually and having each individual owner pay a premium.

This innovative tool may represent a new and better way for some communities at risk of flooding to take the necessary steps to protect their citizens. In fact, FEMA has stated in congressional testimony that voluntary community-based flood insurance could help NFIP better account for the full cost of flood risk, as well as provide incentives to encourage communities to implement greater flood mitigation measures.

Thus, we think that it is appropriate to commission this study of the community-based flood insurance concept so that FEMA can understand how it could be put to its greatest benefit.

Congresswoman Moore's community-based flood insurance study provision was originally included as part of H.R. 1309, the Flood Insurance Reform Act of 2011, the bipartisan, long-term NFIP reauthorization that passed the House with over 400 votes in 2011. It was also included as part of the long-term NFIP reauthorization efforts that passed the House three other times in different bills in 2012.

An identical bill passed as a stand-alone on September 10, 2012, by a vote of 346-11, so I think you can see that we've had this issue before us many times. It's always been supported. I urge the support for H.R. 1035.

I reserve the balance of my time.

I want to again congratulate and thank the gentlelady from Wisconsin for her hard work on this issue. I know that it's something near and dear to her heart, and I think it's absolutely something that is a good way to approach this issue from the standpoint of let's get a study done to see if this is a viable option. If it is, it can be a really beneficial tool to a lot of our communities that are in some difficult positions because of the flood situations they may be in.

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

Mr. Speaker, on that I demand the yeas and nays.

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

I would love to express my appreciation to my original cosponsors of this bill, chair emeritus, House Financial Service Committee Representative Spencer Bachus, for his support, and my other cosponsor and friend on the committee, Representative Hinojosa.

I believe that a community-based flood insurance option may eventually provide a cost-saving option for communities within the larger framework of the overall National Flood Insurance Program. The potential for savings and community empowerment certainly merits a study.

Now, as Mr. Luetkemeyer has indicated, this bipartisan bill has passed in various forms, the latest being in the 112th Congress, as H.R. 6186 last September, 364-11, so this is nothing new; and I would submit that we should support it here today.

This approach has merit because its potential lower rates are due to the streamlined underwriting, increased participation, the critical mass of citizens that are involved, and incentives for the community to mitigate future flood risk. There's also an option of providing lower- income households the use of vouchers to purchase flood insurance as part of the group.

An analogy for the concept applied is group or employee health insurance coverage versus individual coverage. We all understand that group coverage is less expensive than individual coverage due to many advantages of economies of scale.

Now, in this case, a community, rather than an individual, would be the policyholder. This brings me to another very important potential benefit of this approach, the increased incentives for communities to take preemptive action to mitigate future financial threats from floods in the community. Whereas an individual flood insurance holder has no incentive, nor means to build stronger levees or dikes, a community policyholder would have the means and incentives to take those kinds of precautions.

In theory, the homeowner would pay insurance, like a utility bill, on a monthly or quarterly basis, which also makes it easy to administer. This bill only asks FEMA to examine the costs and benefits of using this approach on an ongoing basis as an option for communities.

We need to continue to seek creative, market-based solutions to problems; and this study is the first good step toward new tools to strengthen the National Flood Insurance Program.

Seeing no other Democratic Members wishing to speak, I urge my colleagues to support H.R. 1035; I yield back the balance of my time.