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Public Statements

Department of Homeland Security Appropriations Act, 2014

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. CASSIDY. Mr. Chairman, the Biggert-Waters Flood Insurance Reform Act was passed in order to make the flood insurance program both actuarially sound and functionally sound. And we hope that it is on track to make it actuarially sound, but it is not functionally sound, so this attempts to address this.

What this bill would do is that section 207--and only 207--would not allow it to be implemented for 1 year. After that, it would begin to be implemented.

Let me first say that the CBO has scored this as zero, and it has no impact upon the Federal Treasury.

The reason to do this, though, is that FEMA does not yet have the methodology by which to implement this program. Indeed, there was a GAO report from 2008 which shows that FEMA's rate-setting process warrants attention. As it turns out, they haven't updated it since 2008. So their over 20-year methodology still does not apply.

As it turns out, families are being terribly affected. There's one family in Louisiana which has never flooded and yet has a 6,000 percent increase in their premium. Clearly, this has grave implications for this family, but, as it turns out, it has turned their whole real estate market upside down. People can't build and people can't sell. There is an uncertainty there created by the implementation of this particular section.

Let me emphasize that this is only section 207. All other sections continue, and the CBO score is zero.

Knowing that others would like to comment upon this, I yield back the balance of my time.

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Mr. CASSIDY. I thank you for yielding the time, and I'll be very short.

Let me say to my colleagues who oppose this bill that this does not repeal the entire law. This just repeals that portion which is not actuarially sound. We did vote for an insurance program, but we voted for one that was functional and, again, actuarially sound.

I'll make it clear: this does not repeal section 205. Those that built below code or in flood zones, knowingly violating local code, will still pay the penalty. This is for 207 for folks who have never flooded, who've done it right, who've built behind flood protection, to code, and yet in some cases, because of actuarially flawed methodology, they will be paying up to $20,000.

By the way, I did vote for this bill, but not to force an inaccurate, dysfunctional system which the GAO has criticized homeowners that are trying to live their life. There should be sanity and fairness. But that sanity and fairness should be addressed to having something which is actuarially sound.

One of my colleagues said, Wait a second, some will pay less and some will pay more. Actually, some may pay less, next year pay more, and then pay less again. Because they're being judged by systems which, again, are not sound.

We speak so often here of bringing certainty to business. Let's allow business to know what is going on. Why not have that same principle with homeowners? Let's get the actuarial process in which we judge their risk sound and then we can tell them their premium is high, their premium is low. Right now we're telling them it's going to fluctuate up and down because the method by which we judge them is so poorly designed.

So I do urge passage of this amendment, both for the sake of proving we can have functional government, as well as for the sake of these homeowners who are going to be terribly affected if we do not do so.

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