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Landrieu: We Need to Repeal, Amend or Delay Biggert-Waters To Make Flood Insurance Affordable

September 18, 2013

WASHINGTON - Today, U.S. Senator Mary L. Landrieu, D-La., testified before the Senate Banking Committee on the flawed Biggert-Waters Flood Insurance Reform Act of 2012 and the negative impacts it is having on American families and businesses. Sen. Landrieu has been working with her colleagues from both sides of the aisle to fix flood insurance so that it is affordable, accessible and self-sustainable. She called on the Senate Banking Committee and Congress to take action to fix flood insurance "reform," not just for people in Louisiana, but for millions of Americans across the country. Senators David Vitter, R-La., Charles Schumer D-N.Y., Robert Menendez, D-N.Y., Dean Heller, R-Nev., Jon Tester, D-Mont., Heidi Heitkamp, D-N.D., and others all spoke about the impacts on their constituents, demonstrating the national scope of the problem. 

"We have got to fix Biggert-Waters and I'm calling on Congress to repeal it, radically amend it, or delay it because we need help, not only in Louisiana but throughout the country. This isn't just about what's happening on the coast; but about the tragedy that's unfolding right now in Colorado, and what recently happened in New York, New Jersey and along the East Coast with the devastation of Hurricane Sandy. This is an issue that affects our entire nation and it must be addressed," Sen. Landrieu said.  

"Biggert-Waters, in my view, was built backwards and upside down. It authorized immediate rate increases on homeowners and businesses that played by the rules and did everything asked of them, before even beginning to study the impacts these rate increases would have on affordability. This was major legislation that passed without the information necessary to implement it with either compassion or common sense. It was premature, it was not well thought out and it must be fixed." 

Sen. Landrieu went on to lament that the only reference to affordability in Biggert-Waters was a requirement that FEMA complete a study that was to take 9-months, cost $750,000 and be delivered to Congress in April of this year. Instead, FEMA did not even sign a contract to begin the study until last month - four months after it was due - and the agency has reported that it will take two more years and two-to-three times as much money to finish.  This legislation put the cart before the horse by requiring steep rate increases before even assessing the impacts they will have on homeowners' and businesses' ability to afford the new premiums.

"We have got to focus on affordability and to fix this law so that it works for our communities. I think we made some real progress towards a solution with this hearing, working with the Louisiana delegation and our colleagues from around the country whose constituents are suffering because of this legislation," Sen. Landrieu said. 

Sen. Landrieu also discussed the problem of the home sale trigger, which is the requirement that any property purchased after July 6, 2012 will immediately lose its entire subsidy upon sale, penalizing new homeowners who had no way of knowing their premiums would double or triple the following year.  This will impact over half-a-million properties in the coming year, shrink the value of many homes, and bring the real estate market to its knees in communities along our nation's coasts and waterways.  The National Association of Homebuilders estimates that the home sale trigger will reduce annual real estate sales in the United States by 1.9 million homes.  

Sen. Landrieu also called on FEMA to use the very best science available to develop accurate flood maps; improve its communications with local officials and policyholders; expand the levee analysis pilot project and give communities full credit for their flood control investments; and examine the flood insurance program's administrative costs for possible efficiencies that could save money to be passed along to ratepayers. 

Read Sen. Landrieu's full testimony here. 

Download a photo of Sen. Landrieu testifying here. 

Listen to Sen. Landrieu's testimony here.

Listen to Sen. Landrieu question FEMA Administrator Craig Fugate here.

Watch Sen. Landrieu's testimony here. 

Watch Sen. Landrieu question FEMA Administrator Craig Fugate here. 

As part of her continued leadership on flood insurance reform, Sen. Landrieu recently sent a letter to Senate and House leaders urging them to include language from her FY14 Homeland Appropriations bill that prevents FEMA from raising flood insurance rates on as many as 230,000 "grandfathered" properties in Louisiana in whatever legislative vehicle is used to fund the federal government for FY14.

In July, the Senate Appropriations Committee passed Sen. Landrieu's legislation to prevent FEMA from raising rates on "grandfathered" National Flood Insurance Program (NFIP) properties and directs FEMA to give communities credit for non-accredited levees in their flood maps.

At Sen. Landrieu's invitation, David Miller, the head of NFIP, visited Louisiana communities last month affected by NFIP rate increases.   

In May, Sen. Landrieu introduced the Strengthen, Modernize and Reform The National Flood Insurance Program (SMART NFIP) Act to correct major flaws in the Biggert-Waters Flood Insurance Reform Act of 2012. The SMART NFIP Act would delay premium increases, repeal provisions preventing new owners of sold homes to maintain subsidized rates, and allow the rebuilding of key community facilities destroyed in a disaster that lie in high-velocity zones (v-zones).
 
The rate increases come as part of the flood insurance reauthorization that Congress passed last summer. At the time, Sen. Landrieu repeatedly expressed her concerns about the affordability of flood insurance for Louisiana's middle class families. Unfortunately, no amendments were allowed during the debate, including one authored by Sen. Landrieu that would have created a pilot program to provide means-tested assistance to working and middle class households to help purchase flood insurance. Sen. Landrieu's amendment would have helped many Louisiana homeowners now facing possible premium increases.

Had the Biggert-Waters Act been brought for an up-or-down vote, Sen. Landrieu would have voted against it, as she stated on the Senate floor. Instead, it was part of the transportation bill, which also included Sen. Landrieu's RESTORE Act.
 
Shortly after the legislation was signed into law in July 2012, Sens. Landrieu and Frank Lautenberg, D-N.J., sent a letter to FEMA expressing their concerns, writing: "It is troubling that many families who continue to suffer from flooding of their homes will now be forced to pay more for flood insurance even though many of them may not be able to afford to do so. Therefore, we respectfully request that you establish a plan to help residents cope with increased costs as a result of the law."
 
In March, Sen. Landrieu chaired a Small Business Committee roundtable which included an extended discussion on the importance of affordable flood insurance for those living along the United States' coasts.
 
Read Sen. Landrieu's complete letter to FEMA requesting a delay in the premium increases.
 
Read Sen. Landrieu's complete letter to FEMA expressing her concerns after the passage of the flood insurance reauthorization.

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