Providing for Consideration of H.R. 4973, Flood Insurance Reform and Modernization Act of 2006

PROVIDING FOR CONSIDERATION OF H.R. 4973, FLOOD INSURANCE REFORM AND MODERNIZATION ACT OF 2006 -- (House of Representatives - June 27, 2006)

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Ms. MATSUI. Madam Speaker, as the representative of a district in a floodplain, I understand the need for a healthy flood insurance program. My hometown of Sacramento is the most at-risk river city in the Nation. Whenever I talk about our efforts to improve Sacramento's level of flood protection, I also mention the importance of flood insurance. If you live behind a levee, you should have flood insurance.

I also recognize that to accomplish this we need a healthy and robust National Flood Insurance Program. That is why the legislation we debate today, the Flood Insurance Reform and Modernization Act, is so significant.

Through this legislation, we will meet our responsibilities. We will ensure coverage is available to those at risk, and we will educate those same individuals as to the benefits of flood insurance. This bill takes us in that positive direction.

In the aftermath of Hurricane Katrina, the deficiencies in the program were laid bare. What remained was a program $25 billion in debt with a questionable future. It is imperative that we rebuild the flood insurance program.

For many Americans, owning insurance that protects against a flood is more valuable than in case of a fire. That is because homes in a federally designated special flood hazard area are three times as likely to be destroyed by flood as a fire. This is the case for almost three-fourths of all homes in Sacramento. This is an important program that must be reformed to ensure its long-term stability and solvency.

The bill we are considering today makes reasonable reforms. It will lay the foundation for a stronger and improved flood insurance program. For that, I would like to thank Chairman Oxley, subcommittee Chairman RICHARD BAKER and Ranking Member BARNEY FRANK for their work on this bill, as well as the minority staff of the Financial Services Committee, particularly Jeff Riley, for all their tireless work.

This bill takes important steps to modernize the flood insurance program. It raises maximum coverage limits to keep up with inflation. It provides new coverage for living expenses if you have to vacate your home, and it also provides optional coverage for basements and business interruption coverage for commercial properties.

These are all positive steps that will allow the program to continue to provide peace of mind to those impacted when a flood event occurs.

Moving forward, Congress is also making the flood insurance program sustainable in the long run. It tightens enforcement of purchase requirements and ends subsidies on vacation homes, second homes and businesses. These steps may not be popular, but the program needs this kind of tough medicine.

Additionally, it directs FEMA to provide Congress with information that will allow us to evaluate whether we should modify the program's mandatory purchase requirements. This is an issue that demands serious consideration, and I know that we will hear further debate on it once this bill reaches conference.

As I conclude, I would like to express my disappointment that an important amendment I offered was not adopted. It would have created an educational outreach grant program to ensure homeowners in high-risk flood areas retain their flood insurance. This grant program works.

Last year, the Sacramento Area Flood Control Agency, with a FEMA grant, conducted just such a campaign, SAFCA, and reached out to more than 45,000 NFIP policyholders in the American River floodplain with impressive results.

Of this group, 43 percent now carry preferred risk flood insurance. Preferred risk policies provide policy owners who are protected by a levee or other flood mitigation method with full flood insurance at a reduced price. Because of the lower price, the preferred risk policies have a higher level of policy retention.

To put the success in perspective, FEMA more than recouped its investment. SAFCA exceeded its target for policies, retained more than 20 times over, adding millions to the flood insurance program's bottom line.

Extending these grants to other flood plains will only strengthen the National Flood Insurance Program. I will continue to move this program idea forward; and I look forward to working with Chairman Oxley, Chairman Baker and Ranking Member Frank on this grant program.

Ensuring the long-term stability and solvency of this nearly 40-year-old program is critical. The Flood Insurance Reform and Modernization Act is an excellent step in the right direction. As my grant program demonstrates, there is still more to do.

Having said that, this is a good bill and a much-needed start. I urge my colleagues to support the rule so that we can enact this important legislation.

Madam Speaker, I reserve the balance of my time.

Mr. SESSIONS. Madam Speaker, at this time, I yield such time as she chooses to consume to the gentlewoman from Florida (Ms. Ginny Brown-Waite).

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