NU Online News Service, July 21, 2:01 p.m. EDT
An intense effort is underway to have the Senate Banking Committee drop a provision in flood-insurance legislation that would require homeowners and businesses to purchase federal flood insurance even if their properties are protected by levees.
A letter from the 13 senators of both parties contends that a mandatory purchase requirement for those protected by healthy flood-control infrastructure inequitably targets only particular types of flood risk.
“Areas protected by properly constructed and maintained levees, dams, and other flood control infrastructure should not be arbitrarily declared areas of special flood hazard,” the letter says.
Some outside observers, however, disagree. Ray Lehmann, a vice president of the Heartland Institute, which consults with the insurance industry on catastrophe issues, says levees and other mitigation structures sometimes fail, and it is irresponsible public policy not to recognize this reality.
“We saw the devastating consequence of doing so most acutely in the wake of Hurricane Katrina, when scores of homeowners found they were inadequately insured because they faced no requirement to purchase flood protection,” Lehmann says.
“While we are sympathetic to the senators' concerns, the reform legislation already includes creation of a public commission to assess the strength and viability of mitigation structures, and that information should be used to set rates commensurate with the residual risks faced by those who live behind such structures,” he adds.
The senators' letter asks Senate Banking Committee leadership to remove the provision in the Senate's version of a long-term NFIP extension, “The Flood Insurance Reform and Modernization Act.”
The bill passed the committee Sept. 8, but floor action has been held up because the Senate leadership of both parties are using the bill as an engine to attach unrelated provisions.
The problem with that, according to industry lobbyists, is that the unrelated provisions are controversial, or at least opposed by either Democrats or Republicans.
Both the Senate bill, and the House bill, H.R. 1309, the Flood Insurance Reform Act of 2011, would extend the NFIP until Sept. 30, 2016.
The letter was sent to Senators Tim Johnson, D-S.D. and Richard Shelby, R-Ala., the chairman and ranking member, respectively, of the Senate Banking Committee.
The lead signers are Sen. Thad Cochran, R-Miss., and Mark Pryor, D-Ark. Others who signed include Senators Roy Blunt, R-Mo., John Boozman, R-Ark., Kent Conrad, D-N.D., John Cornyn, R-Texas, Mike Enzi, R-Wyo., Al Franken, D-Minn., Kay Bailey Hutchison, R-Texas, Amy Klobuchar, D-Minn., Claire McCaskill, D-Mo., Pat Roberts, R-Kan. and Ron Wyden, D-Ore.
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