Last week, I was pleased to work with House Financial Services Committee Chairman Barney Frank to draft legislation that will make important reforms to the National Flood Insurance Program (NFIP). The Garrett-Frank bill will help make the program more equitable for homeowners, while easing the burden on national taxpayers.
About a month ago, the House of Representatives passed legislation to modernize the NFIP. Since its creation in 1968, the NFIP has been largely self-sufficient, bringing in as much in premiums as it paid out in claims. But the massive hurricanes of 2005 left the program with insufficient funds. The NFIP actually had to borrow more than $24 billion to meet its contractual obligations to affected policy holders.
Many concluded that the program would have to be updated if was to remain solvent and useful to the 5.2 million policyholders and if it was to remain fair to the American taxpayers. The legislation passed by the House of Representatives phased out subsidized premiums for certain homes, replacing them with actuarially-based premiums. Those new premiums applied to non-residential and non-primary homes.
The Garrett-Frank bill, H.R. 3959, would build on these reforms, requiring any new purchaser of a home costing more than $600,000 when knowingly bought in a flood zone to also pay phased-in actuarially-based subsidies. Before the NFIP was established and comprehensive flood maps were created, many people built their homes unwittingly in flood prone areas. Congress didn't want to penalize the owners of these "pre-FIRM" properties, so they were allowed to purchase flood insurance through the NFIP at subsidized rates. The Garrett-Frank bill would ensure that the subsidy that applied to a home when it was unwittingly built in a flood zone would not be passed on to someone who knowingly bought a $600,000 home in a flood zone.
The House Financial Services Committee unanimously approved the Garrett-Frank bill last week, and I am hopeful that it will soon come to the House floor for consideration as well.
Member of Congress
ISSUE OF THE WEEK: GOVERNMENT ASSISTANCE PROGRAMS SEMINAR ON NOVEMBER 16TH
I wanted to bring to your attention a seminar that the U.S. Department of Commerce is holding in conjunction with Fairleigh Dickinson University on Friday, November 16th. Titled, "Export Growth Through Government Assistance Programs," the seminar will highlight the many support programs provided by the government. The Director for the U.S. Commercial Service at the Department of Commerce, Carmela Mammas, as well as the Senior Business Development Officer at the Export-Import Bank of the U.S., Sharyn Koenig, and others will be on hand to share information with local businesses and answer your questions.
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