Garrett's Speech About His Bill

Mr. GARRETT of New Jersey. Mr. Speaker, I yield myself such time as I may consume.

First of all, I begin by saying thanks to the chairman of the committee for his help in working through this piece of legislation, and also for the ranking member for her working alongside the Chair as to facilitate the moving along of this legislation to the floor today. As the chairman indicates, we had the opportunity to discuss it in committee, which is, I think, and I think he will concur with me, is always the best way to deal with all legislation as opposed to bringing them up later on. It's best to get out there so we can have full and adequate disclosure and discussion on the issues. We were able to do that; we just weren't able to get it through the next hoop. But now we're able to jump through that hoop today, and, again, I appreciate the chairman's work on that.

What this is all about, very simply, is this. Back in 1968, that is when NFIP was created, the National Flood Insurance Program, and that was done, as the chairman indicated, way back then three or four decades ago, as I guess more and more people were building homes in places maybe they shouldn't be, along coastal lines and what have you, it was just next to impossible to buy flood insurance.

[Time: 13:30]

So Congress stepped in and created NFIP, and that allowed folks the opportunity to buy flood insurance for the first time. When they did that, however, they realized that here again we're talking about two sets of houses, those that were already in existence at the time and those that would come afterwards, called pre-FIRM and post-FIRM homes. They thought Congress back then, probably in its wisdom, realized that it wouldn't be right to tell those folks who were already in the floodplains that this new program was going to come along, that they were going to impose upon them a mandate of buying flood insurance when they bought and sold their houses; so what they did was instead to provide a subsidy for those pre-FIRM homes, and that subsidy has existed up until today.

Unfortunately, we know that the flood program has had some problems in the last couple of years, most notably because of Hurricane Katrina and Hurricane Rita. All the money that they have had to borrow to pay out for those huge flood losses, they are now $18 billion in debt. And that's the reason why the committee is now coming back to relook at the flood program, and that's why we have done that.

The legislation that the chairman talks about that we have already done I appreciate that we've moved through the House. I am a little bit disappointed, though, in that legislation in one regard, in that it increased the exposure to wind damage in the flood program. But despite that what I call an error in direction on that legislation, the underlying bill did make some substantial improvements to the overlying program. It updated the flood maps, increased the phase-in of actuarial rates on vacation homes and also second homes and on nonresidential properties that have been subsidized by the program since its inception.

The one area, though, that was not addressed was these pre-FIRM homes and the fact that the subsidies continue to exist. So to that effort, we have tried to get a compromise between those who said let's not do anything and those who said let's have those pre-FIRM homes immediately put in on the higher rates that would occur without the subsidization. Through the committee efforts, through the work with the ranking member and the chairman, we were able to come through with a compromise. In essence it says this: If you're a pre-FIRM home, your rates will still be subsidized until that home is basically phased in, sold and phased in on the same rate schedule as the underlying bill, and only for those homes that are sold for over $600,000. A movement in the right direction with regard to the subsidization, the problems of the underlying program, and for that reason I think we are moving appropriately, and I look forward to those deliberations that we may have sometime with the Senate on this legislation.