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Levee agreement helps clear path for flood insurance reauthorization

Levee agreement helps clear path for flood insurance reauthorization

Southern lawmakers have announced an agreement on the treatment of levees under the National Flood Insurance Program. They hope pact will allow the Senate to move closer to passage of long-term legislation to reauthorize the NFIP.

Mississippi Sen. Thad Cochran, Louisiana Senators David Vitter and Mary Landrieu, and Texas Sen. Kay Bailey Hutchison have announced an agreement on the treatment of levees under the National Flood Insurance Program that they hope will allow the Senate to move closer to passage of long-term legislation to reauthorize the National Flood Insurance Program (NFIP).

The lawmakers worked with South Dakota Sen. Tim Johnson, Banking Committee Chairman, and Alabama Sen. Richard Shelby, Ranking Member, to address the treatment of levees in the Flood Insurance Reauthorization Bill (S.1940). Serious concerns over the Banking Committee’s initial treatment of levees, first raised by Cochran and Arkansas Sen. Mark Pryor last fall, were considered a major impediment to Senate passage of a long-term reauthorization measure. The original bill failed to give proper credit to federal, state, and local investments in levees and other flood control infrastructure.

The underlying measure that the Senate is expected to consider this week will include the agreement on Areas of Residual Risk (Section 107) to more fairly recognize the protection offered by levees and other flood control structures, eliminating the one-size-fits-all approach taken by the original proposal.

“Our nation has made serious investments in levees and flood control infrastructure, and my goal has been to ensure that these investments and the protection they provide are fully recognized. This agreement does that and offers more certainty and fairness to homeowners, businesses, communities and floodplain managers,” Cochran said. “I credit Senator Pryor for his strong leadership on this issue. He is largely responsible for how far we’ve come. I also thank Senators Johnson and Shelby for working with us in a reasonable and collegial manner to improve this legislation. This agreement increases our chances for passing a long-term reauthorization of the National Flood Insurance Program, which is a national priority.”

“This compromise on residual risk is a huge step towards getting a five year reauthorization bill done. This compromise language ensures that no one affected by this provision will have to immediately purchase inaccurately priced flood insurance until FEMA certifies it can accurately price the risk behind levees and ensure that the price will reflect that protection,” Vitter said.

“This compromise helps us get over a significant hurdle in the way of a final agreement. It removes some concerning requirements that would have put a huge burden on communities whose property owners, developers and others have taken the initiative to mitigate their risk of flooding. I look forward to passage by the full Senate,” Hutchisonsaid.

“The citizens of Louisiana learned a painful lesson about the importance of maintaining sound levees and flood protection structures as a result of the federal levee failures that resulted in catastrophic flooding after Hurricane Katrina. Since that time, Louisiana communities have invested millions of dollars into levee maintenance and upgrades to mitigate the risk of future floods. The citizens who helped finance those projects deserve a federal system for evaluating risk that accurately reflects the level of protection within their communities, instead of being unfairly forced to pay exorbitant and arbitrary insurance premiums that neglect those considerable infrastructure investments,” Landrieu said.

The original proposal approved by the Banking Committee would have unintentionally imposed burdensome land-use restrictions and mandated the purchase of insurance for all areas protected by a levee, including areas in the 500-year floodplain for a 500-year levee. Communities, homebuilders, realtors, floodplain managers and economic developers had raised serious concerns about the proposal’s effect on local economies and job creation.

The new provision largely addresses such concerns by:

  • Limiting the scope of risk to the natural 100-year floodplain.
  • Doing away with land-use restrictions in areas protected by healthy levees.
  • Delaying mandated flood insurance in areas protected by healthy levees until FEMA can develop tools to provide full credit for levee protection.
  • Waiving mandated flood insurance in areas with minimal flood risk.
  • Ensuring that prices in areas protected by healthy levees fully reflect investments made in local flood control infrastructure.
  • Allowing FEMA’s internal reforms to the treatment of unaccredited levees to continue.

FEMA is working with the National Academies of Sciences to develop analytical tools to accurately assess risk and set premiums for properties behind sound flood control structures.

The seeds of this agreement were sown last fall by Cochran and Pryor, who led a bipartisan effort to raise concerns that Section 107 of the Banking Committee’s legislation could unfairly place within Special Flood Hazard Areas all properties in a 500-year floodplain that are protected by a perfectly healthy 500-year levee.

Cochran, Pryor, and many others argued that the Banking Committee’s original Section 107 would have forced communities to pay multiple times for flood protection -- once for constructing and maintaining flood control structures, twice for mandated flood insurance and a third time for mitigation and land-use restrictions.

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