First (Again) on LBReport.com
Homeowners & Comm'l Property Owners In Large Parts of LB & SE L.A. County w/ Federally-Backed Loans/Mortgages Could Be Forced (Again) To Buy Annual FEMA "Flood Insurance"
U.S. Senate Will Take Up Bill On Monday Creating Mandatory "Residual Risk Zone" (So-Called "500 Year/0.002 Annual Flood Risk")
|(June 22, 2012, updated June 25, 3:15 a.m.) -- A bill that would require tens of thousands of homeowners in much of Long Beach and southeast Los Angeles County to again buy annual FEMA-mandated "flood insurance" -- imposing annual
Annual out-of-pocket costs for many homeowners aren't certain from the legislation text but could ending up being several hundred dollars per year. The legislation says the price of flood insurance policies in so-called "500 year residual risk" zones must "accurately: reflect the flood protection level provided by levees, dams the flood control system...and leaves that process to FEMA (which stands to collect the premium revenue).
The Senate session is scheduled to begin at 11:00 a.m. Pacific Time; LBReport.com plans to carry LIVE video of the U.S. Senate on our front page: www.LBReport.com.
Gray portions on City of LB map show areas within Long Beach that in the 1990s FEMA declared at "100 year" flood risk (which was eliminated by upgrading the L.A. river levees). The bill would direct FEMA to collect flood insurance premiums from areas it now calls at "residual risk" of flooding, a supposed "500 year" or 0.002 annual risk,
The map below unofficially shows FEMA's formerly decreed "100-year" flood zone that was abated by L.A. river levee and bridge improvements. At the time, officials estimated roughly 400,000 local residents and 125,000 structures were required to pay FEMA's costly annual flood insurance premiums until the levee upgrades were completed. These areas would vecome subject to mandatory annual flood insurance under the "500 year residual risk" section of the now pending Senate bill.
The legislation to reauthorize/fund the National Flood Insurance Program through 2016 had been dormant for months until yesterday (June 21) when a Senate cloture vote (96-2) put a time limit ongoing debate of a different bill and cleared the way for a Senate floor proceedings on the flood insurance bill.
As previously reported by LBReport.com, the Senate Banking Committee approved S. 1940 last September but it never made it to the Senate floor despite the urging of 41 senators in February; that is now scheduled to take place on Monday.
As LBReport.com detailed last year, the House version of the FEMA reauthorization doesn't include the problematic "residual risk" language, which was removed at the
Section 107 of the Senate bill would -- for the first time -- require FEMA to collect flood insurance premiums from areas at "500 year" flood risk (0.002 annual risk), portrayed as a "residual risk" grounds the levees or dams (built to end the 100 year risk) might somehow to fail.
The Senate language states:
UPDATE: June 25 subsequent development: See "Compromise" Text Offered By Four Southern Senators On "Residual Flood Risk" From Levees Triggering Mandatory Fed'l Flood Insurance which if accepted by the Senate would replace the earlier text below.
SEC. 107. MANDATORY COVERAGE AREAS.
The language applies nationwide but would have an especially severe impact locally. In the 1990s, FEMA and the Corps of Engineers extrapolated/hypothesized a "100 year" risk if levees along the L.A. and Rio Hondo rivers overtopped and went on to fail. Although the area had never had any flooding from the L.A. River since it was channelized, FEMA bureaucratically designated much of the area as its highest flood risk category -- a "special flood hazard area -- an action that enabled it to could collect annual flood insurance premiums. The Long Beach areas included much of Wrigley, large parts of NLB and a big swath of ELB, and also included large parts of southeastern L.A. County..
Homeowners whose properties carried federally backed mortgages were required to pay hundreds of dollars a year until a federally funded project (expedited by then-Congressman Stephen Horn (R, LB)) upgraded the levees and reconfigured some bridges. That ended the 100 year flood risk and removed the annual flood insurance mandate.
In contrast, the now-pending Senate bill's "residual risk zone" (0.002 annual risk") would empower FEMA to resume collecting flood insurance premiums from the same areas basically indefinitely. The annual premium cost for consumers isn't specified in the bill; it directs FEMA to impose risk based rates that are "accurate" but leaves that process to FEMA (which stands to collect the premium revenue).
The bill is supported by the Obama administration but also has bipartisan support. FEMA faces huge payouts from events like Hurricane Katrina and other flooding, and the legislation spares Congress the need to cover those losses by shifting the costs to homeowners. Anyone previously in an area deemed at 100 year flood risk by FEMA, even if protected by levees and dams, will now be deemed at 500 year "residual risk" and required to pay flood insurance premiums to FEMA basically indefinitely.
In August 2011, Long Beach Mayor Bob Foster sent a two page letter to Senators Barbara Boxer and Dianne Feinstein, asking them to urge their Senate Banking Committee colleagues to delete the residual risk language. That either didn't happen or was unsuccessful...since the "residual risk" language in the bill is now headed to the Senate floor.
Mayor Foster's letter stated in pertinent part:
...I would like to bring your attention to a specific provision...that would adversely impact our residents. While increasing premium rates and ensuring greater participation in the program are essential goals for program reauthorization, the provision related to "residual risk areas" would unnecessarily damage our local and state economies and could actually discourage support for flood protection projects...
If the "residual risk" language isn't removed on the Senate floor and the bill passes the Senate with that language included, it will go to the House-Senate conference committee (comprised of a handful of members chosen by the House-Senate leadership) who will decide whether the Senate or House language remains in the final bill.
If the Conference committee agrees on a final bill without the "residual risk" language, home and commercial property owners outside the former 100 year flood zone won't be required to buy FEMA flood insurance. BUT if the Conference Committee agrees to a final bill that includes the "residual risk" language, the House and Senate will then have a single up-or-down vote on the final bill...and if it passes, it will go to the White House where President Obama will likely sign it into law...and FEMA will begin the process of extracting mandatory flood insurance premiums for those with federally backed mortgages within the former 100 year flood zone.
Belmont Shore areas which have for years been designated at 100 year flood risk aren't affected by these developments; they've been required to pay annual flood insurance for years based on flood risk from the ocean, not from the L.A. river.
As previously reported by LBReport.com FEMA is also separately moving to designate a NW portion of Long Beach at 100-year flood risk (mandatory flood insurance premiums) alleging deficiencies in Compton Creek's levees (structures belonging to the L.A. County Dept. of Public Works).
Developing...with further to follow, including the U.S. Senate proceedings LIVE on our front page on Monday at 11 a.m. -- on LBReport.com.
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