sion management plans and should not depend upon NFIP policyholder grants to develop land management programs. Expensive and extensive coastal erosion surveys are most effective when coupled with actuarially-rated erosion insurance for which an insurance premium is paid. Contrary to professional insurance principles, S. 1405 requires flood insurance reserves to pay claims for erosion damage which is a separate insurance risk. Under S. 1405, actuarially-unsound Upton-Jones benefits, would be applied to all insureds protected with flood insurance. The benefits are three to six times greater than the national average flood insurance claim and would rapidly deplete the NFIP policyholder funds. As the Congress considers floodplain policy in light of the recent flooding in the Midwest, there are several things that I hope you will keep in mind. The entire floodplain management scheme devised by the federal government was intended to discourage development in the ficodplain areas and to decrease the number of people living in those areas that are subject to flooding. As we know from the national media's coverage of the flood, there are actually more people now living in floodplain areas than at the time the program went into effect. Like many federal programs, though well intentioned, it has had some unforeseen impacts and consequences. Before the federal government got into floodplain management, there were three groups of people in the floodplain. The first of these were people living in old, established towns such as Portage des Sioux, West Alton, and Orchard Farm. These communities were built during the period when the flooding was not nearly 25 frequent, nor as severe, as we have experienced in the last 50 years. Portage des Sioux is the best example of such a town. It was founded in the late 18th century, built on the highest ground in the area. It never flooced until the flood of 1993. The second group in the floodplain was the farmers who found it necessary to have their farm buildings and homes close to their fields in order to make a decent living upon the fertile land of the floodplain. The third group in the St. Charles County floodplain was private individuals who built club houses along Alton Lake after the Alton Dam was completed in the early 1940's. The farmers built their homes on ridges and assumed from the beginning that they would encounter floods, but only every 40 cz 50 years. The people who built the club houses knew that they would be flooded often and, therefore, built the houses of cheap materials and often elevated them so as to minimize flood damages. When the federal government decided to insure these club house structures, people quit using them as club houses. To be eligible for flood insurance, these structures had Lu be occupied as a fulltime residence. Therefore, they were abandoned as club houses, rented out, and became low income housing. The net result was to have additional people moving into the floodplain areas. With regard to the farmers, while they never asked for the federal intervention in the first place, they were now faced with extensive land use regulations which greatly devalued their property and hampered their ability to farm their property. The most recent example of this was the doing away with the "agricultural exemption" by the Missouri General Assembly in 1990. This change, at the insistence of the Federal Emergency Management Agency, meant that farmers now would have to elevate not only their homes, but also their farm structures in the event that they were more than 50 percent destroyed by any flood. The overall result is that the flood insurance program has failed to achieve its purposes and has, in the process, created a great deal of animosity against the federal government's intervention in land use decisions for St. Charles County. Given the above facts, it is not surprising that people would object to the fact that the flood insurance program treats all the various groups listed above in the same way. This means that the farmer or townspeople who had his house flooded for the very first time in 1993 are treated the same as the person whose home is subject to flooding damage every four or five years. While the latter is collecting frequent checks from the federal government, the former feel the brunt of the regulation. This was never more apparent that under the present flood conditions when people who have never had flooding in their home before, are now being forced out, or forced to rebuild their nome above the 100-year floodplain. The result of the existing policy will mean that agriculture will be greatly hindered in this area and historic towns like Portage des Sioux may be severely depopulated to the extent that any sense of "community" will be totally destroyed and institutions that have been in place for over a hundred years will no longer function. For this reason, we are asking that the policy be changed to take into consideration repetitive loss as a factor in determining whether structures will be rebuilt or torn down. Structures that have made numerous claims already, and which the federal government has subsidized for years, obviously should not continue to be rebuilt and become a further burden on the federal treasury. However, the people who have a good reason to live in the floodplain, or who have made few claims until the flood of 1993, should not be penalized because the 500-year flood happened to come during their lifetime. As elected officials whose districts are more than 50 percent floudplain, we implore you to reconsider the present policy and grant some relief to those of our constituents whose lives and livelihood depend upon them being able to return to their homes in the floodplain. Sincerely yours, Stive Ellman Steve Ehlmann Joe Ostwertt Joe Ortwerth State Representative SEE/Vh RE: Housing and Banking Sub-Committee Clyde P. Angle 802 Southern Air Drive Jefferson City, Missouri 65109 (314) 635-2755 (home) National Flood Insurance Reform Act of 1993 (S. 1405) Dear Committee Members: I wish to express my support for S. 1405 and any other attempts to strengthen and expand the current mandatory flood insurance requirements. I strongly believe the lenders are in the best position to alert the consumer that he or she is in a flood plain and thus required to purchase insurance prior to obtaining a mortgage loan. I believe that local communities must be made to institute and enforce local ordinances that prohibit the building in a flood plain without obtaining a "variance." If properly enacted and enforced I believe these ordinances will ensure future loss can be avoided or mitigated. If a "variance" cannot be obtained then most likely the home or business should not be built in that location. I also agree with the requirement for escrowing the flood insurance payments. This would certainly solve the problem of the consumer terminating coverage. I would also urge a "notica" provision so that as the mortgage debt is paid down the borrower is put on notice to continue insurance. The failure of which would prevent that person from receiving state or federal aid, grants, and or assistance in the future. I strongly believe if the consumer does not want to buy insurance to protect themselves then the federal government and the taxpayer should not have to bear the financial burden. I know there may be some hardship cases, i.e., "lack of notice" etc. and I am sure there would be ways to handle them. Additionally, I would recommend that all communities participating in the programs be required to give written notice to all homeowners currently in the flood plain, both 100 year and 500 I have been very surprised at how many people are in those year. flood plains and do not or did not know they were. It appears that many of the insurance agents selling "flood" insurance do not have the knowledge or experience as to either the coverage amounts, types and/or the program. A lot of problems could be avoided if there were some standardization of information. |