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HomeMy WebLinkAboutfeinsteint]IANNE FEINSTEIN CALIFORNIA ~a°..b ,,: . asi - V f r' ~ a` , . ~~~teb ~r~.re~ ~Se~ate WASHINGTON, DC 20510-050~k http://feinstein.senate.gov July 12, 2012 The Honorable Steve Lambert Chairman Butte County Board of Supervisors 2S County Drive, Suite 200 Oroville, CA 959b5 Dear Chairman Lambert: SELECT COMMITTEE RHE INTELLIGENCE - CHAIflMAN COMMITTEE ON APPROPRIATIONS COMMITTEE ON THE JUDICIARY COMMITTEE ON RllLES AND ADMINISTRATION BQq~p ~ `~~~++W ~u~ ~-zoiz ~A Thank you for writing in regards to Section 107 of the Senate National Flood Insurance Program Reauthorization bill commonly referred to as "residual risk." I am pleased to report that with the Leadership of Senator Mark Pryor {D- AR}, the residual risk purchase requirement was removed from the National Flood Insurance Program Reauthorization bill. Moreover, on June 29, 2012, the Senate passed the national flood insurance reauthorization as a part of the surface transportation reauthorization bill {known as MAP-21) with a vote of 74 to 19. Attached, please find a copy of the floor statement I made on June 29, 2012 commending the decision to remove residual risk from the bill. The President signed MAP-21 into law on July 6, 2012. As you know, Section 107 identified all areas behind levees as "Special Flood Hazard Areas," which would have resulted in the mandatory purchase of flood insurance for homeowners in these areas. I heard concerns from all across the state regarding the negative impacts of the residual risk provision. The potential effects of this provision were significant: • In San Joaquin County, this provision would have meant 280,000 additional residents had to purchase flood insurance; • The purchase requirement would have covered most of the City of Stockton, a city that suffered the second highest foreclosure rate in the nation last year; ~u: ~~5, ~o~ Puff, S~~ • In Palo Alto this provision would have required another 5,500 homeowners to buy insurance; • In Sutter County, an estimated 28,000 of the 34,308 parcels would have been affected; • In Butte County, 14,000 parcels would have been affected; and, • In Los .Angeles County, at least 200,000 properties and 800,000 residents would have been impacted. Thank you again for writing on this issue. Flood insurance and risk mitigation are critically important issues in our state and I appreciate knowing how this provision would have impacted your constituents. Should you have any questions, please do not hesitate to contact me or have your staff contact Devin Rhinerson at (202) 224-2004. Sincerely, ~ ~ .~~~4 ~~ Dianne Feinstein United States Senator DF:dr:km encl: June 29, 2012 floor statement Statement of Senator Dianne Feinstein In Support of Pryor Amendment June 29, 2012 Mr. President, I rise today to thank my colleagues on the Transportation Conference for including the IVationai Flood Insurance Program Reauthorization and for removing the controversial residual risk provision. That provision was a real concern~to me and -more than a dozen cities and counties in California. It would have required nearly 1 million residents in my state to purchase flood insurance, even though they live behind fully functioning levees that meet or exceed federal safety standards. Thai provision alone ~could~ have quadrupled the number of homeoti+vners in my state who have to buy flood insurance~.~ ~ ~ . . ~ .. ~- The flood insurance bill called this low-level risk behind levees `;residual risk." It's the risk left over after a levee has been built-~--,the risk of levee failure, in essence. These are levees that homeowners funded. with. their own tax.dollars, and the provision would have forced them to spend, even more money. That's just not good policy, Mr. President. And I was proud to add my voice to that of the Senator from ~~ Arkansas in strong opposition to including it in the bill. The bottom line is this: Until the residual risk provision was removed, the ~lational f=lood Insurance Program Reauthorization would have had a devastating effect on communities in California and across the nation. Even homeowners iri communities who maintain their levees to federal safety standards with their o~~n tax dollars ~rvould have-been forced to pay for federal fl~~d insurance. 2 I simply could not support such an unfair policy. It sent the message to homeowners.and local communities that regardless of their investments in flood protection, it was is simply not goad enough. that's not the message we should be sendi~~g when this country needs to invest more in flood control infrastructure. - Not when homeowners are struggling to pay their mortgages. Not when housing starts are~near ail-tune I©ws. .rid not when our economy is still struggling to~g~t back ~n tack. l was not alone in my opposition to the residual risk provision. l received letters from elected officia~is across, the state--Oceanside, Long Beach, Lakewood, Los Angeles, Santa Maria, Stockton, Sacramento, Yuba City. Del Norte, Sutter, Yolo and Butfe counties were .opposed, as well as San Joaquin County. This viaas not a regional issue.. The letters camp in, . from Southern California, the Central Coast, Northern California and the Central /alley. :~ ~~ In San~Joaquin County,~in the middle of.my state, this provision would have meant 280,Q~0 additional residents had to purchase flo~oc~~ insurance. This is a county where 1 in every 194 homes is in foreclosure--3.3 times the national average. At even a dollar a day, this added expense could jeopardize the county's already shaky housing market. The purchase requirement would have covered most of the,City of Stockton, with a population of :.. _ _. --.nearly 300;000.:Th~s _would have further .. ~ devastated a city that suffered the second highest foreclosure rate in the nation last year. • In Palo Alto this provision would have required another 5,500 homeowners to buy insurance. • In Sutter County, an estir~iated ~5;0~}0~ of the 34,308 parcels would have been affected. That's 81.6 percent of all parcels in the county }~ .: ~ • In Butte County, 14,000 parcels would have been affected. • Arid in ~.os Angeles. County, Supervisors Mark Ridley Thomas and Don l~Cnabe tell me that at -least 200,000 praperties and 800;~00~r~sidents would have been impacted.-These~~h~~~eowh~~rs ire currently prot~dted by 130~miles~ of levees and 18 dams in LA County. :. . ,~ ~ . . s Many of the affected homeowners live -along the Los Angeles Riper, which isn't really a riper at all~it'~ ~~ concrete channel. ~ ~ ~ ~ ~~ ~~ And it's. very hard to irr~ag~ine a flood ever occurring there. More than $200 million has been invested to minimize the risk. The federally authorized Los Angeles bounty Drainage Area I~roject reinforced levees along the Los Angeles River to protect against floods well beyond a ~ ~10- year evert. Local taxpayers contributed $55 rr~illio~ to ~d~~plete this praject~-federal contributinn~ to~aled~anofher $~ 5~ n~iillion.~ This investment was made so that residents could avoid $32 million in yearly flood insurance premiums, ~- Ilvith the inclusion of the residual risk ~r~vision; homeowners in the area would have once agair~~ l~a~~~t~ pay flood insurance bills every year. 6 ~, I appreciate the efforts of Senators Cochran and the Chairman and Ranking Member to address Phis problem, But changes they made to the original draft did not go far enough. Even with their changes, the provision could have further depressed home prices by driving up ownership costs in .many areas. Let me be clear: this policy wasn't proposed because homeowners lived behind unsafe levees. These were safe levees that meet federal standards. Mr. President, some believe this provision was added to the origins! bill to restore the fiscal solvency of the program. By bringing in new, low-risk properties, it's true that the fiscal health of the flood insurance program would have unproved. But 1, for one, oppose propping up the flood insurance program on.the.backs of constituents who played by the rules. if the goal is to ensure that people are informed about the risks they face, I continue to be willing to work with my colleagues to accomplish that. In fact, California already offers a model for achieving that very goal. The bottom line is this: even with the changes made to the residual risk provision, the bill would have still required homeowners and businesses protected by certified levees to purchase mandatory flood insurance. Candidly, I was shocked that we even considered adding this provision without a full floor debate. Because it was r~dt a~ trivial extension, Mr. I'residen~. The bill would have i,mpnsed substantial new costs to nearly ~ million homeowners in California alflne. s Again, !thank my colleagues on the Conference Committee for removing this provision. This conferenp~ rep®rt was not the time or place for it to be considered. ~1nd now, ~rvith the five year reauthorization of the National Flood Insurance Program in place, we will be taking an important step to stabilize our ho~sin~ market. vVe've also taken some very responsible steps to put the program back on the path to fiscal solvency. . .. :. , . ~~ ~` ~o I ~ornmend my~colieag~aes~for putting tac~~other this {~: ~~ pa~~ca~e of~ bills. ~I khvw they had a tr~rr~~end~i~~~~h~l~lenc~e, and !think they've done an exceptional job. ~"h~nk yo~~ IVIr. P~re~ident, I yield the ~fioor. ~ . . ~ .