Wednesday, May 9, 2012

National Flood Insurance Program Extension and Reform Take Center Stage In Senate Hearing

The Senate Banking, Housing and Urban Affairs Committee's Economic Policy Subcommittee held a hearing on May 9 focused on the reauthorization and reform of the National Flood Insurance Program (NFIP), when panel members were told by a series of insurance, real estate, and environmental representatives that the debt-laden program was in dire need of reform and extension before its current authority expires on May 31.

Witnesses at the hearing included representatives from the Missoula County, Montana, North Lafourche Conservation Levee and Drainage District, Raceland, Louisiana, Property and Casualty Insurers Association of America, Correll Insurance Group, National Association of Realtors, and The Nature Conservancy. Real estate and insurance representatives in particular stressed the need for long-term extension to help provide market planning and insurance certainty, thus avoiding what they view as disruptions in real estate markets. While also supporting the five year NFIP reauthorization currently being considered by the Senate (the Flood Insurance Reform and Modernization Act of 2011; S. 1940), The Nature Conservancy's Sarah Murdock also stressed that subsidized insurance rates facilitate development and rebuilding (following catastrophes) in coastal zones and in freshwater floodplains, putting people and property at risk. Murdock noted that there are "cost-effective solutions to protect people from the impacts of increased extreme precipitation and coastal storm intensity," including the preservation, enhancement and restoration "of the natural systems that already deliver critical protection from sea level rise, storm surge, and coastal and inland flooding." Copies of all of the witnesses' written testimony are available on the Committee hearing web site.

Short-term extension likely
Subcommittee Chair and Ranking Members Sens. Jon Tester (D-MT) and David Vitter (R-LA), respectively, said they empathized with the long-term extension desires of all of those testifying at the hearing. Vitter noted, "Unfortunately, we have been on a path the last few years of just barely hobbling along, using a band-aid approach to extend this necessary program just a little bit at a time." In his opening statement, however, Tester conceded that while "we cannot take our focus away from passing a long-term reauthorization and reform bill, it is also clear that we will need a short-term extension in order to continue our work in getting a long-term reauthorization and reform bill across the finish line." Tester and Vitter have co-sponsored a short-term NFIP extension bill (S. 2344) that would extend the program through the end of 2012, providing Congress with room to work on a long-term reauthorization bill.  No action has been scheduled on that bill in the Senate.

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