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A key House subcommittee plans to mark up its final version of legislation to reauthorize and reform the federal flood insurance program this Wednesday.
Rep. Judy Biggert, R-Ill., who chairs the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, launched hearings on the the National Flood Insurance Program (NFIP) last month. Last Friday, Biggert unveiled a revised version of her legislation to reform the NFIP after hearing testimony from Craig Fugate, the Federal Emergency Management Agency administrator, who oversees the program.
Biggert’s bill, H.R. 1309, the Flood Insurance Reform Act of 2011, provides for a five-year reauthorization of the NFIP and includes reforms meant to improve the program’s finances, move rates towards actual costs, reduce the burden on taxpayers, and increase private sector participation in the flood insurance market.
H.R. 1309 reflects changes made to the draft that Biggert released last month. Among the changes are clarifications regarding risk mapping standards and FEMA’s authority to consider the demolition or rebuilding of certain properties as an eligible activity for mitigation assistance. Also, new language was added to the bill to clarify FEMA’s authority to utilize private reinsurance, as well as a requirement that the agency seek and report on proposals from the private market for assuming risk within the program.
The NFIP is more than $17.75 billion debt; much of the debt is attributable to the 2004 and 2005 hurricanes.
“NFIP is deeply in debt, and its current structure simply cannot provide the reliable protection that homes and businesses need without putting taxpayers at extraordinary risk,” said Biggert. “By putting the program on sound financial footing and encouraging private sector participation within the market, our bill addresses the concerns of homeowners, businesses, industry experts, and taxpayers.”
Last reformed in 2004, the program has been widely criticized for under-pricing risk and promoting development in flood-prone areas that are more suitable for conservation.
“We need to restore the financial integrity of NFIP, and that requires better flood maps, actuarially sound pricing, and direction for FEMA to better manage risk,” said Biggert.
The measure is co-sponsored by subcommittee members Maxine Waters, D-Calif., Scott Garrett, R-N.J., Robert Dold, R-Ill., Shelley Moore Capito, R–W.Va., and Steve Stivers, R-Oh.
Lawmakers hope to pass the bill before the current authorization for the program expires this September.