WASHINGTON, D.C. – Today, the House passed H.R. 2874, the 21st Century Flood Reform Act, which incorporates a number of reforms authored by Rep. Royce including language aimed at decreasing the number of repeatedly flooded properties and a provision mandating better disclosures to consumers about flood risk before the sale of a house.
Rep. Royce gave the following remarks (as prepared for delivery) in favor of the bill’s passage:
“I rise in strong support of the 21st Century Flood Reform Act. I would like to congratulate Chairman Hensarling and Chairman Duffy on putting forward a bill that has brought together the Montagues and Capulets. A bill supported by the environmental community, taxpayer advocates, conservative think tanks, affordable housing groups, reinsurers, and insurers.
“I set two priorities as we looked to reauthorize the National Flood Insurance Program: To provide better disclosure to consumers about flood risk and decrease the number of repeatedly flooded properties. This bill accomplishes both.
“Section 108 of the bill includes language I authored, which will provide information to homebuyers about past flood events, damage, insurance claims, and any obligation to carry flood insurance. The National Association of Realtors supports this common-sense approach.
“Section 402 of the bill includes the bipartisan Repeatedly Flooded Communities Preparation Act, sponsored by Rep. Earl Blumenauer and myself. Repeatedly flooded properties comprise less than two percent of NFIP policies, while accounting for one third of all claims. Responsible, community driven mitigation is a win-win proposal; one which will help make our neighborhoods stronger and address the fiscal footing of the overall program.
“Finally, Mr. Speaker, I would particularly like to thank the Pew Charitable Trusts’ flood-prepared communities initiative’ for their support of our reform efforts. I urge passage of the underlying bill, and I yield back.”
Video of Rep. Royce’s remarks can be found HERE.
Specific Royce Legislative Proposals included in the 21st Century Flood Reform Act:
Repeatedly Flooded Communities Preparation Act: The bill requires communities participating in the NFIP with a significant number (50 or more) of repeatedly flooded properties to reduce flood risk rather than continually rebuilding. Communities would be required to map repeatedly flooded areas and create a unique plan to lower flood risk, including identifying areas that need drainage improvements, and areas that could be part of a voluntary buyout program or other mitigation efforts. The bill also sets deadlines for FEMA to develop criteria to govern these plans and determine any appropriate sanctions for failure to act.
The Homeowners’ Flood Risk Disclosure and Transparency Act: The bill requires those who sell or lease a property to disclose available information to consumers about past flood events, known flood risks, and obligations to carry flood insurance. This will provide current and potential homeowners with the information necessary to accurately assess flood hazards and history, foster interest in flood insurance, and promote investments in mitigation against future events.
In June of this year, the House Financial Services Committee passed legislation sponsored by Rep. Royce, H.R. 1558, the Repeatedly Flooded Communities Preparation Act. The original press release can be found HERE.
The taxpayer-backed National Flood Insurance Program (NFIP) was created in 1968 to provide government insurance protection against flood risks for both homeowners and commercial businesses. 50 years
later, the federal program has a monopoly, has borrowed over $30 billion from taxpayers, operates a $1.4 billion annual deficit and lacks the innovation expected of a company with $1.2 trillion of insurance coverage. The NFIP’s 5 million policies represent 4% of U.S. households at an annual average cost of $884. Over 94% of NFIP residential policyholders paid less than $2,000 in annual premiums for NFIP coverage.
The House Financial Services Committee’s revised package of reforms is supported by: the National Association of Realtors (NAR), the National Association of Home Builders (NAHB), the Property Casualty Insurers Association of America (PCI), the Mortgage Bankers Association (MBA), the National Association of Mutual Insurance Companies (NAMIC), and many other industry stakeholders.