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Small Business Jobs and Tax Relief Act--Motion to Proceed

Floor Speech

Location: Washington, DC


Mr. HOEVEN. Madam President, I rise to discuss national flood insurance today.

Flood insurance is vitally important to our Nation. It is vitally important to my home State of North Dakota, and I know it is vitally important to our sister State of Minnesota, which the Presiding Officer represents.

Last year, in 2011, flooding in North Dakota included flooding in the Red River Valley, which is the Red River of the north. That included both sides of the border, North Dakota and Minnesota as well.

We also had flooding in the James River Valley, in the Cheyenne River Valley, and in the Missouri River Valley. Also, the Little Missouri River flooded in the very western part of our State. We had ongoing flooding in Devil's Lake, and we had flooding in the Souris River Valley.

In fact, when the Souris River flooded, one of the communities that was flooded was Minot and the surrounding area. Minot is a community of about 40,000 people. It is growing rapidly. I think it is the eighth fastest growing community under 50,000 in the country now. So it is a rapidly growing, dynamic community of 45,000 people, and last year we had to evacuate 12,000 people from their homes. More than 4,000 homes were destroyed or severely damaged. FEMA, of course, has been in there helping. It is FEMA's third largest housing effort in its history. The largest housing effort was after Hurricane Katrina. The second largest housing effort was after Hurricane Ike. And the third largest housing effort for FEMA in history is in response to the flooding in Minot, ND.

So in my State we understand flooding, we understand the challenge, and we strongly support reauthorizing the national flood insurance legislation. There is no question. However, we need to get it right. We need to get it right, and there are some important policy implications in the bill that are being put forward in the package that we likely will be voting on, along with the highway bill, as well as student loans.

So we are looking at a package that includes reauthorization of national flood insurance, a package that addresses the interest rate on student loans--something I absolutely believe we need to do--and also a package that includes the highway legislation.

But there is policy that is being inserted into the flood insurance bill that involves something called residual risk. It is a new policy, and we haven't carefully considered it. We haven't voted on it, and we need to. We need to vote on this policy provision.

In fact, the flood insurance bill that was passed in the House did not include this residual risk provision. It was not included in the House package, but now we are looking at a package including all three of these large pieces of legislation--the highway bill, student loans, and national flood reauthorization--and we have this new residual risk policy in there. That is not the approach we should take, and that is what I am here to address along with my esteemed colleague Senator Pryor from Arkansas.

I want to thank him for his leadership on this issue. In fact, Senator Pryor and myself have an amendment which would specifically address this issue. This issue is in section 107 of the national flood insurance legislation, and that is exactly what we address, and I think we address it the right way. So it is very important that we have an opportunity to vote on this important issue.

So let me talk about it in just basic, straightforward, commonsense terms.

The concept is residual risk. What we are saying is we need to have a separate vote on residual risk. That needs to be struck from the flood insurance reauthorization. We can study it and evaluate it. Then once we have had an opportunity to adequately both understand it and debate it, we can make a determination about how best to proceed. But it should not be included as part of this comprehensive legislation along with the other legislation in the package.

So residual risk. Let's say we have two individual homeowners: one who lives just outside the 100-year flood plain, thanks to natural geography, and a second individual who lives within the flood plain but behind dikes, levees, or other infrastructure that is federally certified and constructed to protect residents against a 100-year flood event. Let me repeat that: That is federally certified by the court and constructed to protect residents against a 100-year flood event.

Under the flood insurance legislation as it is currently written, the resident behind the certified flood protection will be required by Federal law to buy flood insurance. But the one living outside the 100-year flood plain would not, even though they have essentially identical risk. So in short form the individual behind the certified dike or levee is required to buy flood insurance. The other individual, who is in essentially the same situation but by natural topography or natural geography rather than certified protection, that individual is not required to purchase flood insurance. One is protected by the natural landscape, the other is protected by good, solid engineering and an understanding of the risk involved and what it takes to protect against flooding, but only one of them has to buy flood insurance. That is not fair.

Homeowners and businesses are already paying for flood protection through the infrastructure they have elected to build to protect themselves and their property. So they are already paying for it when they build that certified infrastructure. Nobody is more aware of their flood risk than individuals in those situations, whether it is their home or their business.

Communities that have already invested in flood protection infrastructure now in essence are going to be in a situation where they are paying twice for flood protection. Yet the Johnson-Shelby substitute would force those communities to pay essentially every year for that flood protection. They would first pay for the infrastructure they have already paid for through their local taxes and again, then, each year through a government-mandated insurance purchase of flood insurance.

Further, Federal, State, and local governments invest billions of dollars nationwide in flood protection infrastructure. In my home State of North Dakota, communities such as Minot, Fargo, Bismarck, Mandan, Jamestown, and others are all working with the local, State, and Federal Government to build and/or fortify literally hundreds of millions of dollars' worth of flood protection. This substitute amendment will ignore that. In essence, this is not a good return on investment for the American taxpayer.

The mandatory flood insurance purchase will have a harmful effect economically on communities already contending with flood risk or, worse, communities already in a flood recovery mode. A mandate to buy flood insurance will discourage businesses from building or rebuilding in an area certifiably protected with flood protection. That will reduce a community's revenue base and impede new opportunities to create jobs and economic activity often in a community already struggling to recover its economic base.

Additionally, the substitute amendment requires both mandatory insurance purchased for people behind certified flood control infrastructure and, at the same time, a study on the very same policy it intends to implement. We shouldn't be enacting a provision into law until we understand its implications and its consequences.

The Pryor-Hoeven amendment allows the study to move forward, but it removes the mandatory insurance purchase requirement. We should determine more about how it impacts individuals and communities before this new mandate is considered. We have to keep in mind that we are talking about a policy change that affects millions of people across the country.

If we look at this chart, all these dark green areas represent counties throughout this country with levees. So we are talking about millions of people who are currently protected with levees. In the case that they have certified levees right now, they are not required to purchase flood insurance. But with this vote on the whole package, if we don't address residual risk in the way that I have put forward, that changes. All of them then become subject to purchasing flood insurance.

I submit that there are a lot of mayors, city council members, and county commission members who would like to know if there is going to be a policy change where they are now going to be required to purchase flood insurance before that happens. Keep in mind, working with the Federal Government at the State and local level, they have built flood protection. That flood protection has been certified. Whether they made special assessments to do it or whether they have a tax base to do it or however they do it, they have gone out and told the people in their communities: Look, we are going to build this flood protection. You are going to pay to build that flood protection. And we are going to do that so once constructed, you are, A, protected, and, B, you will not have to buy flood insurance along with your home mortgage.

That is what people expected. That is what is in place. My simple point is, before we change that, we better go out and talk to them. We better go out and tell them. We better go out and say: You know the way flood insurance works? It is going to change. When you were told that if you built that flood protection, you would not have to buy flood policies, that is now going to change; in fact, you will have to buy a policy under this residual risk, under this new approach.

My point is that we have to make sure people understand that, and we have to understand the ramifications and how it is going to work before we make this change. That is why it is so important that we get a chance to vote on this amendment and address it. Again, as I have said, our amendment makes sure we study the issue. We make sure that FEMA and the Corps are in a position to actually do the analysis and determine whether it works or what the ramifications are, at least, of putting it into place before we put a mandate like that into effect.

Again, as we go forward with this package that will include national flood insurance, that will include the highway bill, that will include reducing the rate on student loans, we have to make sure we have an opportunity to address this issue. It is not only basic fairness in terms of how the Senate works, but it is also a fundamental issue of making sure we are letting our constituents know--the mayors out there, the county commissioners, the city commissioners, and the citizens themselves who have counted on flood insurance working a certain way and who have built flood protection, certified flood protection, paid to build certified flood protection--that there may be a change coming and give them a chance to weigh in.

We have to make sure what we do is not only something we have communicated to the citizens we represent but that it is absolutely fair, that it makes sense, and that it is consistent, that it treats individual who are in like circumstances, whether it is true natural topography or whether through certified flood protection--if they are in a similar or same circumstance, they need to be treated consistently in order for the legislation to be fair.

I urge my colleagues to support our effort to get a vote on the Pryor-Hoeven amendment so we can properly address this issue.

I yield the floor. I note that my colleague from the great State of Pennsylvania, Senator Toomey, is here. I yield the floor.


Mr. HOEVEN. Madam President, I would like to join with Senator Pryor in this objection. He clearly laid out a path to resolve the situation, and that is to have a vote on the amendment we put forward. There are other ways to resolve it as well. We have made that very clear.

Look, this is a clear case where, in order to make a policy change of that magnitude, it needs to be properly discussed, properly debated, and certainly voted on.

This is a situation where we clearly laid out any number of ways to resolve the issue, but this legislation, section 107 that Senator Pryor referred to, should not be included in this legislation. If it is, then I will seek to join Senator Pryor in his objection.

I yield the floor and suggest the absence of a quorum.


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