House panel passes bill on government flood insurance program

As waters rose on the Mississippi River, a House committee approved legislation Friday intended to save a government flood insurance program that is nearly $18 billion in debt.

The bill, which includes provisions that could make it more difficult to develop in flood-prone areas, has bipartisan support, and sponsors said they hoped to have it on President Obama’s desk before the current program expires Sept. 30.

“Floodwaters across the South and Midwest are on the rise, and so is the debt owed by this program,” said Rep. Judy Biggert (R-Ill.), a member of the House Financial Services Committee, which approved the bill 54 to 0. “We need to put the National Flood Insurance Program back on stable financial footing so that it can provide homeowners with reliable coverage without putting taxpayers on the line for billions in losses.”

The legislation would extend the program for five years, reduce subsidies and phase in insurance premium increases. It also encourages private insurance companies to participate, which lawmakers hope will lead to price increases that should discourage people from living on the flood plain, said Joshua Saks, a legislative representative for water resources at the National Wildlife Federation.


“We’re going to send a market signal to people that, because of cost, they should build their homes somewhere else, which will ultimately lead to less development of the flood plain,” Saks said.

The bill creates a council to develop new standards for mapping at-risk areas, which supporters hope will lead to risk-based insurance, with premiums rising for homes built close to danger zones.

“Right now, the flood insurance program relies on basically drawing a line in the sand — you’re either in or out of the flood plain,” said Shana Udvardy, director of flood management policy for American Rivers, a nonprofit conservation organization. “What we want to do is have a gradation of risk so that it gets beyond being inside or outside of the flood-risk area.”

Insurance companies have welcomed the legislation.

“It is our sincere hope that the full House will vote on this bill soon and the Senate will do the same,” said Leigh Ann Pusey, president of the American Insurance Assn.

Meanwhile, in Louisiana, Gov. Bobby Jindal asked everyone living in the Morganza Spillway area to evacuate, saying it was “extremely likely” the floodgates would be opened Saturday.

The opening of the spillway, north of Baton Rouge, would send water levels of up to 25 feet into the lower Atchafalaya Basin, affecting about 2,500 people in the towns of Springs, Butte La Rose and Morgan City. An additional 22,500 people could be affected by backwater flooding.

Opening the spillway would reduce the likelihood of flooding in more populated cities such as New Orleans and Baton Rouge.

“If you live in the spillway, now is the time to activate your evacuation plan,” Jindal said. “Don’t delay. Don’t hope that something will change.”

Times staff writer Stephen Ceasar in Los Angeles contributed to this report.