Flood Insurance Reform: Analysis and Comparison of 109th Congress Bills (H.R. 4973 and S. 3589) Page: 4 of 31
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Flood Insurance Reform: Analysis and
Comparison of 109th Congress Bills (H.R.
4973 and S. 3589)
The 2005 Gulf Coast hurricanes were catastrophic disasters that required
substantial federal disaster relief and unusually large claims payouts under the
National Flood Insurance Program (NFIP). Federal allocations) for post-disaster
assistance now total $109 billion, plus more than $8 billion in tax relief.2 This $109
billion amount includes $89.6 billion in post-disaster assistance and $19.3 billion in
insurance claim payments under the NFIP. As of August 31, 2006, the NFIP had
borrowed $16.75 billion from the U.S. Treasury - an amount that far exceeds the
aggregate amount of claims paid in the history of the program.3 The $89.6 billion
appropriated by Congress includes $11.5 billion in U.S. Department of Housing and
Urban Development (HUD) Community Development Block Grant (CDBG) funds
for five states (Alabama, Florida, Louisiana, Mississippi, and Texas) affected by
Hurricanes Katrina, Rita, and Wilma.4 The majority of the CDBG funds will be used
to compensate homeowners in Louisiana and Mississippi for the value of their
homes, up to their insured value or $150,000, whichever is less.5 Grants are now
available to thousands of homeowners outside of Special Flood Hazard Areas,
1 The term federal allocation is used rather than spending to refer to the fact that this is
federal intent or spending priorities for the hurricane recovery effort. These figures as
current as of August 31, 2006.
2 Matt Fellowes and Amy Liu, "Federal Allocations in Response to Katrina, Rita and Wilma:
An Update," The Brookings Institutions, located at [http://www.brookings.edu/metro/pubs/
3 U.S. Government Accountability Office, Hurricane Katrina: GAO's Preliminary
Observations Regarding Preparedness, Response, and Recovery, GAO-06-442T,
(Washington: Mar. 8, 2006), p. 38.
4 The CDBG funds were allocated as follows among the Gulf states: Alabama, $74.4
million; Florida, $82.9 million; Louisiana, $6.2 billion; Mississippi, $5.1 billion; and Texas,
$74.5 million. For more information, see CRS Report RL33330, Community Development
Block Grant Funds in Disaster Relief and Recovery, by Eugene Boyd.
s On June 15, 2006, President Bush signed into law the fourth emergency supplemental, for
$19.8 billion, in support of short- and longer-term needs of the Gulf Coast. The $19.8
billion includes $5.2 billion in additional CDBG funds, with $4.2 billion intended for
Louisiana and the remaining $1 billion to support the renovation and construction of
affordable rental housing in the affected states.
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Flood Insurance Reform: Analysis and Comparison of 109th Congress Bills (H.R. 4973 and S. 3589), report, October 12, 2006; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc817367/m1/4/: accessed January 20, 2019), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.