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Week Ending September 9, 2005
H.R.3669 To temporarily increase the borrowing authority of the Federal Emergency Management Agency for carrying out the national flood insurance program.
BRIEF
The Federal Emergency Management Administration Director must, from time to time, borrow money from the US Treasury when special needs come up to make good on claims against the National Flood Insurance Program (NFIP). Currently FEMA can borrow up to $1.5 billion. This bill would raise that limit to $3.5 billion.
Private insurance companies refused to offer flood insurance resulting in the creation of the NFIP in 1960. Under current law, flood victims must have already purchased NFIP coverage in order to receive help.
Sponsor: Representative Robert W. Ney (R-OH-18th)
Vote: Passed House 416 to 0 (RC 461) (September 8, 2005) Passed Senate by Unanimous Consent (September 14, 2005)
Cost to the taxpayers: The taxpayers are on the hook for the amount of money borrowed up to $3.5 billion.
CBO reported September 23, 2005, "Current law requires FEMA to repay any borrowed funds (with interest) as it collects premiums, provided that the program’s costs are fully covered; however, CBO expects that the agency would be unlikely to repay funds borrowed under H.R. 3669 within the next 10 years. Assuming that NFIP premiums total about $2 billion a year and that losses in future years will be in line with the historical average (excluding losses from Hurricane Katrina),
"CBO expects that repayments of borrowed funds to the Treasury would total about $400 million annually, once claims from Hurricane Katrina are fully paid. At this time, CBO does not have sufficient information to estimate the total amount of those claims, but we expect that they will exceed the total resources that will be available to FEMA under H.R. 3669. We also expect that it would take FEMA several years to finance outstanding
claims for Hurricane Katrina using annual income from premiums and that repayments of borrowed funds would not occur until after 2015"
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MORE INFORMATION
109th CONGRESS
1st Session
H. R. 3669
To temporarily increase the borrowing authority of the Federal Emergency Management Agency for carrying out the national flood insurance program.
IN THE HOUSE OF REPRESENTATIVES
Mr. NEY (for himself, Mr. BAKER, Ms. WATERS, Ms. GINNY BROWN-WAITE of Florida, and Mr. DAVIS of Alabama) introduced the following bill; which was referred to the Committee on Financial Services
A BILL
To temporarily increase the borrowing authority of the Federal Emergency Management Agency for carrying out the national flood insurance program.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the `National Flood Insurance Program Enhanced Borrowing Authority Act of 2005'.
The first sentence of subsection (a) of section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016(a)) is amended by inserting before the period at the end the following: `; except that, through September 30, 2008, clause (2) of this sentence shall be applied by substituting `$3,500,000,000' for `$1,500,000,000'.
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No reproduction or distribution without written permission from TheWeekInCongress.com.