Flood Insurance Reform Priorities Act of 2010

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Mr. BLUMENAUER. Mr. Chair, I rise in support of this legislation to reauthorize the National Flood Insurance Program (NFIP), which is essential for people who live in hazardous areas. The bill makes a number of important reforms that will help increase the fiscal soundness and stability of the Program.

First, I am especially pleased that the bill extends the successful Severe Repetitive Loss Pilot Program, which was created in the Flood Insurance Reform Act of 2004. This program provides resources to communities to mitigate properties that have flooded repeatedly.

Repetitive loss properties cost the NFIP about $400 million annually. While they comprise approximately 2 percent of the program, they account for more than 25 percent of the claims paid.

By extending the Pilot Program, this legislation will help reduce the cost burden of these properties on the Program and will release homeowners from the cycle of flood, rebuild, and flood again. I appreciate that Chairwoman WATERS included a provision in the manager's amendment making a technical fix to ensure that FEMA is implementing the Pilot Program as Congress intended.

I also support language in this bill that will phase in actuarial rates for non-residential properties and non-primary residences. Many houses in hazardous areas were built before the NFIP was put in place and those hazards was identified. For too long, these properties have enjoyed subsidized rates that drive up costs for everyone else in the program and send the wrong signals to property-owners about their risks. By setting rates based on risk, this legislation bolsters the stability of the NFIP and may result in lower costs for all policy-holders.

I am disappointed, however, that the bill includes provisions that I believe will result in consumers not understanding the flood risks they face and will potentially harm both policyholders and taxpayers.

Under direction from Congress, FEMA has undertaken a map modernization process around the country. The purpose is to identify areas at risk, as flooding patterns have changed over time.

Section 6 of this bill essentially says that even if the new maps find that a property is at risk, property owner will not have to purchase flood insurance for 5 years. This undermines the mandatory purchase requirement of the Program. If there's a flood in the next five years, taxpayers will be on the hook to bail these property owners out.

Section 7 of the bill takes this denial of risk even further, saying that after the five year delay, a property owner newly identified as living in a flood hazard area will enjoy subsidized rates for another 4 years.

Finally, I'm concerned about Section 10, which automatically deems safe properties ``protected'' by a levee or other flood protection system, effectively removing the mandatory purchase requirement even if the flood protection system no longer works. As my friends from New Orleans know, levees can break. With this provision, we send a signal to homeowners that they do not need to mitigate their risks.

While the bill includes some important reforms, it doesn't go far enough to address the structural problems that have cost taxpayers money, harmed the environment, and kept people in harm's way.

The challenges for the program will only increase with time, as increased development and climate change put more people at risk. Already, over the past thirty years, the number of billion dollar US weather disasters has increased. From 1980-1989, there were 10 disasters that resulted in over $1 billion in damage. From 2000-2009 there were 44. If we don't take steps now to reform the system, this number will only continue to increase exponentially.

For this reason, I would have preferred that this bill extend the program for less than five years. I understand that FEMA is undertaking a comprehensive review of the program, long overdue, and will come to Congress in two years to make administrative and legislative recommendations to strengthen the Program for the future. I hope that as this bill moves forward through the process we can better coordinate the extension with this review so that Congress can keep the focus on reform.

In the interest of moving this legislation forward and ending the short-term extensions that the NFIP has been facing this year, I urge passage of H.R. 5114. But I look forward to working with my colleagues to make further forms to protect taxpayers, policyholders, and the environment.

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