the national association of realtors represents more than a million members, as you've mentioned, involved in all aspects of the real estate industry. long-term reauthorization and reform of the national flood insurance program is a key priority to our members. as a matter of fact, on may 17th here in washington, d.c. we will have over 15,000 realtors at the washington monument and one of the five key issues that we will be speaking to the folks on the hill about is just this issue. ensuring access to affordable flood insurance is critical. it creates certainty in the real estate market and certainty is required for this real estate market to recover. home prices are still enormously fragile across the united states and more than a quarter of a million of existing home sales are distress properties. tight lending standard remain a problem and we don't want to give a lender another excuse not

to approve a loan. stoppages or shutdowns exacerbate this market uncertainty. there have been 17 stoppages since 2008, twice failured act led to programs shut down and the latest is set to expire, of course, as you know on may 31st of this year. the national flood insurance stoppages and shutdowns have broader implications for the u.s. economy. nfip is essential for 500,000 home sales annually, 13,000 sales nationally can be delayed per day if we don't have this bill in progress, in tact. more than 47,000 real estate transactions were stalled in june 2010 for the 33 days that this act was not in service. over 16,000 homes and houses are in the flood plains in montana.

over 660,000 are in the flood plains in laws laws but more than the homes are impacted by this, the commercial, multi-family, refinancing, all are impacted by the lack of or insurgency in the national flood insurance programs. it offers broad advantages. one is the important bipartisan win for congress, which is my humble explanation is so much needed right now. two, this has passed unanimously out of commit and the house has passed this bill by over 400 votes. crucial reforms are lost if the five-year bill is not adopted. enhancing fema communications with communities, greater notification of flood plain mapping, reimbursinreimbursing,

streamlining of the mapping appeals process, additional time for the resolution of appeals and review of flood mapping standard and procedures. the number of states that are affected enormous. this is no long alabama, vermont, kansas, utah, minnesota, wyoming, north and south dakota all have related press p presidential disaster declarations and there's more. every time we slow this down, every time we create an uncertainty in this particular bill and this particular offering, we slow down the process of a healthy real estate recovery in this country. if there's one thing that's enormously important to this country's economic and social and cultural background, it's the resurgence of a strong and

healthy shousing market and peripherpri peripheral industry. thank you very much. >> i couldn't agree more, the real estate recovery is critically important to get our entire economy back on track. >> next is sarah murdock. she handles risk reduction policy and works for senator john kerrey. welcome and you may have proceed with your testimony. >> thank you for the opportunity

to present the nature conservancy views. i am a senior policy adviser for the conservancy. it's an international nonprofit conservation organization working around the world to protect ecologically important lands for waters, nature and people. the nature conservancy sins to -- we ask that this legislation be brought before the full senate for debate and consideration at the earlier opportunity. the nature conservancy is a member of the smarter, safer coalition, a coalition of taxpayer advocates, insurance industry representatives and housing groups. it also supports the flood

reform. with this much political support, it seems like passage of flood reform represents a win for all. contrary to congressional intend, the program as it currently functions is increasing risks from storms and floods to people, property and ecosystems and the important services that those ecosystems provide to people. enactment of the flood insurance reform legislation will phase out subsidies that have undermined the financial stability of the program, will require fema to ensure that maps are updated and accurate so that people can to decrease flood risk and better protect communities, homes and business. i would like to focus the remainder of my testimony in our interest in this final provision, our support for strengthening the mitigation programs. in 2011 alone there were 58

federal flood disaster declarations covering 33 different states and costing $8 billion and causing 113 deaths. beau the costs and the number of deaths exceeded the 30-year averages and results from scientific studies indicate that changing climate as exacerbated and continue who intense fly extreme weather events, including flooding and coastal storm. the proposed resolution is the most important step we can take toward mitigating these risks. a dangerous feedback loop is in place. the traditional approach to flood protection and river flood

plain systems has been to rely on dams and levees to contain floodwaters, in coastal areas to build sea walls, bulkheads and infrastructure. while infrastructure play as role in securing communities, it requires substantial investment for both initial construction and ongoing maintenance. instead of relying solely on gray infrastructure, an alternative is green infrastructure with built infrastructure. this in addition to flood control benefits provided, these ecosystems provide many services that support and protect humans and nature, such as filtering

pollutants, erosion protection and continued agriculture production. we're working with diverse partners across the country to implement flood plain restoration projects and around the east coast, we're building oyster res as a way to protect against floods. due to our standing of investments and mitigating circumstances. thank you for the opportunity to present our recommendations on the need to pass the senate's five-year reauthorization of the flood insurance program. >> thank you, miss murdock. i appreciate your testimony as i do with the whole panel. we'll start with the questions now. i want to before i start thank each one of you for a long-term

reauthorization. i think the clerk put on seven minutes. we'll probably have more than one round. i'm going to start with the most pressing issue that's faying us right now and that's the danger of lapse in the program. i understand, it may be different today senator vitter but the short-term extense has cleared my side of the aisle. i don't know if it's cleared yours yet or not but we're working to the to try to get this done. in some cases i would rather just see us again get this done rather than deal with the extension. i want to drill down on a point of the lapse because the clock is ticking. in your testimony you all spoke of consequences which can be pretty severe if this program does lapse again. so what i'd like to do from each one of your different perspectives, and at what point

do homeowners need to start preparing for a potential lapse sp. >> while the cost of the lapse are hard to kwantify, they are very real. insurers are already in the process now that we're this close to the expiration of beginning to mail out those notices of the imminent lapse of the program and the only one who wins by that may be the u.s. postal service because they get revenue and i know you've been dealing with those those are embedded friction costs. i think it the embedded. >> i mean, we're down to 835 ak tir participants in the program from 150 just a few years ago. that's giving you the indication

that the frustration and friction cost of these very complicated bridging transactions are making it. >>ion, would look to respond to that? >> yes. we have 3,000 flood insurance policies. that means we'll get 6,000 calls from folks that say what's happening, what's going on? i would also emphasize that it is truly to the consumers. tho this morning on a cab ride oaf i was forced to share a cab with five other people due to transportation issues. one woman from south carolina federal me what i was doing here. she said this is may 3 is and

this lapses june 1. she said my name is angie davis. she said would you please ask the panel to do good work. we can't be without flood insurance. >> we know that every two houses sold generate one job. even in the worst of times we're generating about 2 plus million jobs a year when the housing market is on track. without national flood insurance, we affect so many homes, not just coastal states but interior states today. and even those that have existing homes, not potential homeowners, not folks that are looking to either go out and sell their home and by them --

if there's lapse in insurance, the loan is at risk of being called. this is a fledgling real estate market, as important as any other as elt, at important is from an economic and social and cultural standpoint. when up do anything, anything to affect that fledgling real estate recovery, you are literally affecting the economic recovery and social and kalt rahal aspects. i can't tell you how important this piece of legislation and how important your efforts are are to get it extended for the fire years. >> just a real quick follow-up. you may not know this on a national basis but you may know it from a southern florida basis. if this thing were too expire, what kind of impact as far as percentage of homes would it

have, say, in southern florida? >> well, i can't be certainly about that, although i'll get you those numbers. >> i just want to get an idea. >> nationally we were about 1,300 a day, about 47,000 across the board but in florida where we would be specifically impacted because the entire state for all intents and purposes is a flood plain, it would impact every one of those sales and even the existing mortgages. percentage-wise i'm going to guess at least one out of every two. >> thank you very much. from roar perspective, if it is to expire, how does that impact the mitigation efforts? >> clearly we're seeing more and more increased storms and storm damage, which is causing more and more damage. and the mitigation efforts are long-term efforts.

they're not something that can happen overnight. soap you need that long-term certainty of the program, the backing of the program and the grants that they provide in order to really plan for and implement some of these mitigation efforts. >> thank you. senator vitter? >> thank you, mr. chairman. and i certainly strongly support a short-term extension if we need it, if we can't do anything else before may 31st. in fact, i think technically it's my bim so i'll certainly be trying to clear that if it's necessary. i'm just concerned about two things. number one, patience is running really thin among some members about doing all these short-term extensions so we may not be able to clear it, meaning getting unanimous consent. of senator has to agree. the more of the band-aids we

have to do, the less patience that they have, secondly, a short-term extension avoids a lot of negatives but doesn't fully accomplish the reauthorization points. so i'm for it if we can can only do what before now and may 31st but i'm also trying as jon and others are for the full reauthorization. may 31st is three weeks and a day away. when do you concrete negative actions, notices, letters, other things start going out compared to that date? is it now, dr. sampson? >> they've already started. >> why don't you describe some of that and when that starts. >> 60 days out from the expiration of the program

insurers are required to notify holders of policies that the coverage is going to be ending. and then, as i said, it has a cascading -- lawyer the lapse, there is this whole cascading series of very complicated brejing tlans actions that add no value. but onlies could and uncertainty to the -- >> you have the national flood insurance program actively advertising the nfip on television, to increase the takeup rate, which is the socially responsible thing to do, yet everyone who has a policy knows the number of disruptions that we've experienced over the last several years. and so we're really sending cross signals here and these

lapses are causing companies to exit the program and i'm convinced that these continual lapses create such uncertainty in the policyholder that it reduces and suppresses the takeup rate and the renewal rate. >> i seem part of what air you're saying a near lapse is also act the day before. >> well, we are within the period where negative activities are already occurring from the company's perspective. but i would say if you can get the short-term extension without letting it lapse, we're talking about here the least of the bad alternatives. so certainly we are in the cone of negative activity, but it's not as negative as it will be if we get to may 31st and the program lapses for the 13th time. >> right. right.

okay. let's all i have. thank you, mr. chairman. >> senator moran. >> thank you. i'm not a member of the full c. i appreciate the opportunity to join you today really only for the purposes to lend my support to the two of you to see that we get this accomplished and to hear from the witnesses today so that i can have my arguments reinforced. i still remain baffled by at least i'm unaware of a response to the letter that the two of you led to our leaders asking that the five-year reauthorization be considered by the senate. i just don't understand why this is something that can't be accomplished based upon the nature of this legislation, its importance, its value to the country and its bipartisan support. and so every once in a while, when we have to admit how dysfunctional this place is, this seems to me to be the perfect example of dysfunction.

and if there's something i can do, senator vitter, senator tester, to get the five-ye reauthorization bill to the senate floor, i'm your ally. i appreciate the testimony that i read and heard expressing the value and importance of accomplishing that. and what mr. sampson just said, i'd not thought about but does make sense to me that the ability to continue to write these policies in this uncertain environment diminishes as congress fails to act on so many occasions. so i appreciate you having this hearing to highlight the importance of this legislation and pleased that you would allow me to join you for this brief period of time. >> i've got another question here. there are some that have suggested that a two-year straight extension would be better than the reform of the existing insurance program.

i think -- and i think both senator vitter and senator moran alluded to it. i think we have the opportunity to reform this program and put it in with a long-term extension. i would just like -- and this is basically dr. sampson or mr. jensen or more or either the of the two of you or all three of you can talk to this. can you discuss some areas will reform on this bill are important to the constituencies that you represent, what else does it provide? >> thank you, senator. in addition to the reform, as you mentioned, there are some issues, increase the maximum coverage limits. currently the coverage limit on a home for flood loss is $250,000 is the maximum indemnity limit. that is increasingly becoming a problem and an issue as we see

higher values in homes again. as well we are looking at business interruption. it's important to note that there is a study called for in the bill that talks about business interruption coverage within the commercial sector. we think that's very valuable as well. >> in addition, you heard testimony on the previous panel of folks that were placed in areas that, in fact, were not in a flood plain. some of the things that might happen would be in the streamlining would be the ability for folks who are not in flood plain areas but were charged for those areas would have an opportunity to come back and get reimbursed because of the flood plain appeal on an expense basis to the nfip. that would help us for the folks who have either been misrepresented initially or just don't know what they're doing at the present. >> thank you. >> mr. chairman, i would say

that from the company perspective, the number one concern is the -- is the fiscal reforms and i would not underestimate that at all. i think the bill also, though, does address the repetitive loss properties. i think it's absolutely essential, as the previous panelist talked about, the repetitive loss properties where you have 1% of the properties that account for 30% of all of the claim in the nfip. the reform bill does address that, and i would say that that is a critical component. the increase in the amount that fema can increase premiums to an actuarially sound rate is important, but what's more important than that is that fema has been unable to raise the premium prices even by the amount they're currently authorized, which is 10% a year.

even more important than raising the cap in legislation of what they could raise prices i think is a signal to the marketplace that they will actually do that in incremental steps. the longer you artificially suppress these rates, the greater the impact is going to be on the consumer down the road. so in addition to what's in the legislation, this committee and other committees of jurisdiction encouragement of fema to use the authority that they currently have is critically important. >> thank you. ms. murdoch, in your testimony you cite an interesting statistic, that for every dollar spent on flood mitigation, $5 are saved. in your testimony you make the distinction between gray and green flood-related infrastructure investments. could you just elaborate on the distinction between gray and green infrastructure investment and the relative costs of both.

>> sure. when we're talking about gray, we're talking about hard systems like levees and dams, bulkheads, sea walls. what we're more focused on is implementing projects where we allow natural systems, flood plains, coastal wetlands, barrier beaches, oysteries to also perform flood mitigation services. so we're doing a lot of projects like that both in the mid part of the country, a lot of flood plain restoration. some of that involves just setting back levees far enough from the river to allow flood plains to perform their natural function. and then along the gulf coast, we have a goal of building 100 miles of oyster reefs along the alabama coast. the cost comparison compared to gray infrastructure is very new, and we're actually starting to

work on partnership with some insurance companies to really measure those out. we have some preliminary figures on the oyster reef, but it's very new, and i don't think it accurately yet reflects what the true cost benefit of the green versus gray would be. >> thank you very much. senator wicker is coming here in just a second, and i want to make sure to get his perspective for his questions in. in lieu of that, i just want to say this, first of all, and he will be here momentarily, i would just like to say thank you, guys, for your testimony. yep, we got you. we're waiting for you, roger, you're good to go. go ahead get organized while i talk for a second. i want to thank you for your testimony. i want to tell you that senator vitter and myself and senator moran and others want to make

sure we get this thing considered and moved forward. i think, as you do, mo, this is a critically important piece of our economic recovery, and i think the longer we put this off i think is just a missed opportunity. so the coalition that has formed here and the work that you're doing on the hill, don't underestimate it. it is critically important to put pressure on everybody who serve in the senate to allow us to put pressure on leadership to take this bill up sooner rather than later. and with that, senator wicker, you have comments, questions, have at it. >> right. and thank you, mr. chairman. i have been back in my office watching the hearing while trying to get my desk cleared. i wouldn't be surprised if some other members of the committee also were availing themselves of this opportunity, but i just had

to rush down and add my support for what you're trying to do, mr. chairman. and to thank all of these members of the panel for their excellent remarks. and i guess it was the representative from the realtors who i'm not sure but someone made a very cogent point. you know, mr. chairman, we need a bipartisan accomplishment in this senate, and we have it within our grasp to do this on a very important issue. the american people are looking at us. they're looking to you. they expect us to go into washington and actually engage in accomplishments, and this is an opportunity for us to do that. a good vote in the house, strong support in this commi