At 7 00 a. M. Eastern. Chair brown the committee will come to order. Thank you to the witnesses for joining us. This hearing is a continuation of our efforts to enact longterm reauthorization of the Flood Insurance program and fip programs. It has been extended 28 times since december 2017. The latest extension will expire march 8 of this year. We will disclose we will discuss local leader perspectives and the challenge of potential solutions to the risks that flooding poses to committees across the country. So many issues, transportation, housing, each of these is a priority for this committee. These leaders know all too well, flooding is the most costly Natural Disaster facing the country. It is devastating to communities in every state. That is one good reason that mayor patterson is here from my state. Landuse patterns play a role in whether people want to and whether people want to admit it or not, Climate Change is only making it worse. It is making extreme weather events more frequent, less predictable and more extreme across the country. This month, streams overflown in senator reids home state of rhode island, torrential rains in san diego neighborhoods, flash floods threatening communities across louisiana, which is well represented by two colleagues in the room. That is just this month. Flooding is not confined to communities on the coast or even near major bodies of water. In 2022, the same mountains and streams that make our appalachian towns in ohio and elsewhere beautiful also made family homes and local economies vulnerable to flooding. The only available land for development in appalachia is near floodplains. Disasters also often fall hardest on the families and communities that have fewer resources to prepare and respond to them, often because of where they live. Smaller Rural Communities dont have easy access to resources to respond to the immediate effects of disasters, nor do they have access to the resources they need for longterm recovery and to prevent disasters in the first place. We need to ensure our families and communities can adapt and become more resilient, both to the flooding we face into the increases we know are coming in the next several decades. Whenever possible, we want to help communities avoid extreme flooding altogether through predisaster flood medication and fip is critical to that effort. Nfip does not just provide insurance, its job is to prevent and minimize flood damage in the first place, not just help with a very expensive recovery. Nfip combats the overall threat of flooding through four components. Flood insurance covering 4. 7 million homes and businesses. Floodplain management, mapping and mitigation. We must reauthorize and strengthen nfip and invest in mitigation and floodplain management before disasters happen in communities. Recent hearings, we heard from a wide range of stakeholders who discussed the need for a longterm reauthorization to help communities and stakeholders plan. The importance of helping Property Owners understand the risk by improving mapping and other Risk Communications and through disclosure of flood hazards to prospective owners and tenants. The importance of building state local capacity to carry out our floodplain management and mitigation programs, especially rural and small communities. Weve heard femas recommendations for strengthening the program, including giving the overhang of debt and providing means to i am interested in hearing todays witnesses recommendations on how we can strengthen nfip so we can help local communities meet these needs. I am pleased to welcome mayor Steve Patterson of the city of athens, ohio to discuss some of the unique challenges faced by cities and towns in appalachia. Nfip is a complex program with multiple goals and implications for many things people care about most, homes and communities, Small Businesses. I believe it is possible for us to come together to reauthorize and improve this program. Todays hearings will help inform this effort, and this committee, while sometimes partisan, often senator scott and i will Work Together on major pieces of legislation as we have for Holding Banks accountable, medicinal marijuana, and the like. This committee, particularly on Flood Insurance is more regional in outlook than partisan and that should help us sooner rather than later, come to some agreement on nfip. Ranking member scott. Ranking member scott thank you mr. Chairman. I would like to take the time to welcome a charleston native, mr. Kaniewski. I cant think of a more helpful perspective in tackling the issues that are local in perspective. Although i now live in minnesota, i have never met someone who lived in charleston fulltime. We need smart thinking individuals back in charleston, South Carolina. We thank you for being here today. National Flood InsuranceProgram Comes into play when we start thinking about how to mitigate the risks that are so impactful and negative to communities across the country. As we consider potential reforms to the nfip, we must keep in mind local perspectives and not just those from washington bureaucrats. We all know that the most effective policymaking typically happens closer to the problem, not further away from the problem. Our program should foster local innovative solutions, not regulatory red tape. You have heard me say this before, that is a lifelong charlestonian, as well as an insurance professional for more than 20 years, having Flood Insurance policies, it is really important for us to understand and appreciate the devastation caused by flooding. There is no doubt that if you were around 1989 in charleston, the hurricane devastated our communities in a way that very few Natural Disasters have before or frankly since. The storm surge was so bad and so high that it literally left boats in the middle of downtown streets in charleston. Hurricanes matthew and florence devastated towns throughout my state and left some towns submerged. As a matter of fact, the town of nichols, South Carolina, a very small town, was hit by both storms so badly that more than half of the houses in that Small Community were underwater. The devastation of trying to rebuild, 24 months later, again was undeniably and frankly impossible. When you are surrounded by friends and family, the impossible becomes possible. They worked really hard to start the process of rebuilding very quickly, and frankly very successfully. This type of repeated flooding makes recovery harder and can even cause some residents to lose hope and certainly part of the town, those residents left. That is why i have her introduced my repeatedly flooded communities preparation act which would help communities suffering from frequent flooding plan for the next storm and hopefully lower the risk. It is my hope that by encouraging flood prone areas to reduce the impact of future storms, residents will be able to focus on longterm recovery. Long after the storm surge recedes, recovery does not simply mean rebuilding. It also includes uplifting communities. It includes making sure that families and neighbors learn to Work Together, that the synergy in the aftermath of a disaster is for really reveals itself. South carolinians who have lived through repeated flooding know this. My home state has taken action to prevent this outcome. South carolinas recent dedication of resources and strategic mitigation efforts are second to none. In 2023, the state budget included significant funding for mitigation efforts that would reduce flood damage from future storms. Backing up that investment, the offense of office of resilience releasing a plan identifying communities most wonderful to floods and targeting mitigation resources to protect those residents. These are local solutions to local challenges and they will make a huge difference in the lives of south carolyn ians. While i reckitt South Carolinans. While i realize it may not work in places like louisiana or ohio, im confident that similar locally based solutions and approaches can make a huge difference not only in those communities but to the national Flood Insurance program itself. To support these levels, we must have substantial reform to the nfip. The program is financially insolvent with over 20 billion, 20 billion in debt. Instead of educating communities and homeowners on the risks they face, the programs outdated flood maps and lack of transparent data often obscures the risks. Without a wellfunctioning and financially solvent insurance system, the nfip will fail to provide cities and towns with the tools they need to be resilient. And the nfip is unable to revive local communities within crew improved mapping and mitigation resources, the Financial Health of the Insurance Program will continue to deteriorate. When i say that, we have to recognize that the nfip pays out 30 of its resources to about 1 of the properties that consistently and repeatedly are flood victims again and again and again. 1 of the exposure absorbs 30 of the resources. That is an opportunity for us to look to the local communities to create strategies to perhaps not rebuild their. That will take local engagement to mitigate that risk for the nation and for the program and the communities where they happen. Comprehensive reform of the program is essential. One point before i close. Congress cannot allow the nfip to lapse. Most often we think about states like florida or South Carolina or louisiana, where they pay a disproportionate share of the premiums that go into the nfip. The truth is, that whether you are in ohio or california, whether you are in new jersey, new york, hurricane sandy, 8. 8 billion. Harvey, 9 billion. The number of Flood Insurance policies in place was certain was essentially nonexistent. Not only do we need a comprehensive reform of the program, we need to have a better education that floods dont simply happen when you live near the water. Senator cassidy, we welcome. Senator cassidy will introduce his friend from louisiana. Sen. Cassidy i appreciate you having this hearing and allowing me to introduce i appreciate your staff. We have done some fantastic work and we thank you for that. Today i have the privilege of introducing greater new orleans inc. President and ceo, michael hecht. Michael moved to new orleans after Hurricane Katrina with the goal of helping the city rebuild. Previously after 9 11, he had worked in new york in the mayors office, running a Small Business recovery program. Devastating tens of thousands of people and businesses, mr. Hecht took action by running a similar quarter of a billion dollar katrina Small Business recovery program. He helps when communities have been struck. There are many lingering effects of Hurricane Katrina that he will speak of but one of the most obvious is the method to assess flood risk. If i may add. They identified a new risk policy that has made Flood Insurance simply impossible to afford and in some case policies rising over 1000 . In some cases, Flood Insurance premiums are higher than a persons mortgage. At this point, we know that we are in an actuarial death spiral where people are dropping insurance so they cannot afford it, therefore more expensive premiums and more people drop. Mr. Hecht will address this and the impact it is having on families and businesses. I thank you for having this hearing because of the solution that senator menendez and i and others have proposed. We would love your input which we think could address this. I thank you very much are having me here. Chair brown thank you senator cassidy. I cant improve the introduction offered by our friend. Mr. Hecht, welcome. Mr. Kaniewski is the managing director of marsh mclennan. He worked for fema during the trump administration. Steve patterson, the mayor of athens, ohio, the largest city in appalachia. He serves as the second Vice President of the National League of cities. I meet with him and other mayors frequently. First elected in 2015 after two terms as city council, he is a former associate professor at Ohio University, former air force pilot serving as a major from the ash tittered to columbia air national guard. From the district of columbia air national guard. Mr. Hecht, you may begin. Mr. Hecht thank you so much, chairman brown and Ranking Member scott and senator cassidy. I want to thank him for his leadership on this issue and many others. My name is michael hecht. I am president and ceo of greater new orleans inc. For the past decade we have let the coalition for sustainable Flood Insurance, and National Alliance of approximately 250 organizations across 35 states. Today i will discuss the need to reauthorize nfip, given its benefits to the country, the need to reform the program that has been discussed and particularly giving femas administration a risk rating of 2. 0, its associated impacts. First and foremost, the coalition for sustainable Flood Insurance absolutely supports a longterm multiyear reauthorization of nfip, to ensure Program Stability and to minimize the negative impacts across the american economy. As senator scott mentioned, a lapse is something that we cannot allow to happen. This is destabilizing to the National Housing market. We know for example that during a june 2010 lapse, about 1400 home sale closings were delayed or canceled each day. Furthermore, the benefit that nfip provides to our nation is great and significant. It is 5 million policyholders. Two points i need to make here is that they are often mischaracterized as being wealthy homeowners who are subsidizing their beachfront homes. This is just empirically not the case. A study that we ran found that 98. 5 of all nfip policies are in counties with a median household below 100,000 and 52 are in counties below the national average. The reality is that the nfip program is about allowing the working coast and river parts of america to keep working. This is a very important point. We talk about the debt of the program and the cost of the program, estimated to be 36 billion over the past 50 years but on the other that, femas own analysis, the floodplain standards that have been implement it because of nfip have saved the country implemented because of nfip have saved the country a net benefit of about 85 billion. In terms of risk rating 2. 0, there are some dramatic impacts. On average, an nfip policy will be 1808, a 104 percent increase over legacy rates and rates will increase over 50 in 41 states. To the point that has been made by the senator about the death spiral, this is a major concern about affordability. Participation peaked at about 5. 7 million in 2009. The risk rating in october 2021, there were 4. 9 million policies. Since then, nfip has lost over 215 thousand policyholders and ultimately, fema through their own projections projects losses of 900,000, 20 because of risk rating 2. 0. This is not going to be good for the program or america. There is also regional impacts. Our region in greater new orleans is essential for the National Economy and global food and energy security. Nfip and risk rating does not take this into account. 50 of all u. S. Grain exports go through the port of south louisiana which is in our region. The average increase is going to be 239 in that region. If our workers cannot live there, this is going to have impact on our ability to supply america and the world with food. In conclusion, we do believe that nfip should be reauthorized but also reformed. Congress did not pause the risk rating 2. 0 problem because the risk rating 2. 0 problem but has the opportunity to make it better. Some of our priorities, many of which are reflected in the national Flood Insurance program reform act, include a review of 2. 0 methodology and Economic Impacts, mandating femas transparency through the release of a usable public facing risk calculator and also a rating appeals process. We need to lower annual premiums from we need to enact a means tested assistance program. Looking at housing burden which is even more subtle than looking at percentage of ami. Finally, the debt and Interest Payments should be frozen and redirected into mitigation because ultimately mitigation is how as a nation we are going to work our way out of this challenge. These policies would resolve affordability, transparency and accuracy concerns which looks to stabilize participation in the program and support communities across the country. Thank you for the opportunity to speak today and thank you for your service. I look forward to taking your questions. Chair brown thank you mr. Hecht. Dr. Kaniewski. Dr. Kaniewski my name is daniel kaniewski, and i focus on Public Sector challenges and solutions at marsh mclennan, the worlds leading professional Services Program in the areas of risk, strategy and people. We have 5000 colleagues worldwide advising clients in 130 countries. With years of experience, we help individuals, businesses, communities and governments address the financial impacts of disasters through insurance and other riskmanagement tools. Before coming to marsh mclennan, i was the second ranking official at the federal Emerge