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PURPOSE

BACKGROUND

The Subcommittee will meet on Thursday, November 3, 2005 at 10 a.m. in room 2167 Rayburn House Office Building for a hearing on “Legislative Proposals in Response to Hurricane Katrina.”

On August 23rd, the National Weather Service began tracking a tropical depression centered in the Southeastern Bahamas. On August 24th, Tropical Depression #12 became Tropical Storm Katrina, with sustained winds above 40 miles per hour. On August 25th, Hurricane Katrina (Katrina), a Category 1 storm, with sustained winds over 75 mph, made landfall between Hallandale Beach and North Miami Beach, Florida. It took 7 hours for the storm to cross Florida, dropping as much as 15 inches of rain in some parts of South Florida, causing some home damage and extensive power outages in Miami-Dade and Broward Counties.

Once the storm reached the Gulf of Mexico, it intensified and sped up, achieving Category 3 status (sustained wind speeds exceeding 111mph) on August 26th. On August 28th, one day before landfall, Katrina became a Category 5 hurricane, with wind speeds in excess of 150 mph. However, as the storm moved into shallower waters closer to land, wind speeds decreased such that Katrina was downgraded to a Category 4 hurricane.

Katrina eventually made landfall in Southeastern Louisiana with sustained winds over 140 mph at the eye of the storm, and wind gusts over 100 mph in the city of New Orleans, just west of the eye of the storm. Katrina also brought with it rainfall exceeding 8-10 inches over much of the storm’s path. Damage directly from the storm was felt in Louisiana, Mississippi, Alabama, Georgia, Florida, and Tennessee, though Louisiana and Mississippi received the brunt of the storm.

When Hurricane Katrina finally stalled out and died over Tennessee, it left in its wake devastation never before seen in either size or type in the United States. Covering an area estimated to be near 90,000 square miles, the storm ravaged four states, caused damage in surrounding states, and impacted the entire country.

While neither the most powerful, nor most deadly storm to hit the United States, its combined wind speed, storm surge, flooding effect, and deadliness make it one of the worst natural disasters in American history. Exact estimates are still unclear, and may never be fully known, but what is known is that the impact of Katrina on human life was immense. The storm caused the deaths of over 1200 people, the overwhelming majority of whom were in Louisiana and Mississippi, with known deaths also in Florida, Alabama, Georgia and Tennessee.

Katrina caused flooding in 6 states, mostly from storm surge and the high rate of rainfall. However, in Louisiana, the worst flooding was in the New Orleans area, caused by the failure of a number of levees. At least 80% of the City of New Orleans was at some point underwater, though the flooding from Lake Pontchartrain ranged from as little as a foot or two in areas such as the French Quarter to over 20 feet in the Lower Ninth Ward. Mississippi and Mobile, Alabama were underwater as a result of a 20-30 foot storm surge from the Gulf of Mexico and Mobile Bay. While just three weeks after Katrina, many of the breaks in the levees surrounding New Orleans had been repaired and much of the city had been drained, several of the temporary repairs were damaged or destroyed by Hurricane Rita, again causing flooding in New Orleans.

The economic impact on the gulf region has also been substantial. With the displacement of hundreds of thousands of people, many parishes, counties, cities, and towns have seen their resident tax base evaporate, especially property and sales taxes, which are typically the primary source of revenue for local governments. While some State and local governments had maintained emergency reserves, these funds have largely been depleted, forcing layoffs of municipal employees.

FEMA’s Structure

The Federal Emergency Management Agency (FEMA) was created in 1979 by President Carter as an independent, cabinet level agency to consolidate and coordinate the federal effort of preparing for and responding to disasters. FEMA is responsible for carrying out the authorities contained in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. §5121 et. seq., as amended) (Stafford Act), which is an incorporation of previous disaster acts. This act contains broad authorities to help communities prepare for, respond to, recover from, and mitigate against disasters of all types. In 2002, FEMA was made a part of the Department of Homeland Security (DHS), and now comprises the bulk of the Emergency Preparedness and Response Directorate.

When FEMA was slated to become a part of DHS, many concerns were raised that FEMA’s inclusion in DHS would compromise its capacity to help the nation prepare for, respond to, mitigate against, and recover from disasters of all types. Since Hurricane Katrina, there have been renewed calls for FEMA’s separation from the rest of DHS.

Oversight of Disaster Relief and Recovery Spending

The response and recovery associated with Hurricane Katrina is expected to cost billions of dollars. Congress provided disaster relief to DHS, which included funds for DHS’s Office of Inspector General to oversee the management and expenditure of disaster funds. To further ensure that this money is being efficiently and effectively spent, Inspectors General (IG’s) from a number of government agencies have dispatched staff to the disaster zone to focus on the agencies’ response and recovery efforts and related disaster assistance spending.

In addition, on September 8, 2005, the Attorney General established the Hurricane Katrina Fraud Task Force. The mission of the task force is to coordinate federal and state resources, including agency IG’s and U.S. Attorney’s Offices, to combat and deter fraud, waste and abuse in federal programs. While the Department of Justice is overseeing coordination of the task force, the IG’s remain, by and large, managed by their respective agencies.

While the task force and agency IG’s have experienced early success, charging numerous individuals with a variety of crimes, there remain concerns that the IG’s are not capable of providing adequate oversight given current staffing levels, disparate authorities and areas of responsibility.

Public Assistance and Individual and Household Assistance Programs

The provisions of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) and its implementing regulations control much of the funds that will be used to redevelop and reconstruct the Gulf region, particularly funds provided through the Public Assistance Program. Under current law and regulation, all publicly owned facilities are eligible to receive funding for repairs and reconstruction. The Stafford Act also allows certain private, non-profit institutions to receive assistance, such as cooperatively owned utilities and private non-profit hospitals and schools.

The Stafford Act also permits individual and household assistance, by providing money and services to people in the disaster area when losses are not covered by insurance. This includes financial assistance for temporary housing and home repair or replacement. Under current law individuals and households are limited to $26,200 in total assistance, which only applies to primary residences.

Legislative proposals will include program recipient modifications as well as revisions of fund purposes.

Flood Insurance

In 1968, Congress created the National Flood Insurance Program (NFIP) in response to the rising cost of taxpayer funded disaster relief for flood victims and the increasing amount of damage caused by floods. The Mitigation Division of FEMA manages the NFIP, and oversees the floodplain management and mapping components of the NFIP. The NFIP generally requires homeowners living within floodplains to hold and maintain a flood insurance policy. As a part of this program, any area that has received a payout from the program must have and maintain a building code that requires the first floor of a home be built above the 100-year flood level.

In addition to large amounts of rain that fell during Hurricane Katrina, the hurricane also resulted in the failure of levees as well as storm surges that exceeded 15 feet in some places. This inland flooding impacted thousands of homes that were outside of mapped floodplains, including those in New Orleans. As a result, tens of thousands of homes were damaged or destroyed that were not eligible to participate in the NFIP and are not covered by existing homeowners’ insurance policies.

Local jurisdictions have expressed concern with issuing building permits for new construction in areas that may be later included in floodplain maps. FEMA is currently reviewing new floodplain maps for Louisiana and Mississippi, but these new maps are not finalized. As a result, new construction permitted prior to the release of these new floodplain maps could potentially be below revised FEMA 100 year levels.

Recovery/rebuild proposals

In addition to its devastating impact on the residents of the Gulf region, Hurricane Katrina devastated infrastructure, including roads, rail lines, utility lines, and public buildings; resulting in billions of dollars worth of damage. While much of these costs will be covered by private insurance, it will also take a large influx of federal spending to rebuild these communities. How these funds are spent now will determine the cost of future disasters. By incorporating such measures as improved planning and building codes, governments at all levels can reduce the cost of future disasters.

Cash Flow Problems

Hurricane Katrina destroyed the tax base of the state and local communities. Without tax revenue, these communities are unable to fund salaries and basic government services, including the salaries of staff essential to recovery operations. Through the Stafford Act, FEMA can provide assistance to State and local governments to cover the over-time costs associated with the hurricane, however, it cannot cover “straight-time” costs, such as basic pay and benefits for municipal employees. This includes the cost of employing public works officials, emergency managers, urban planners, and police and firefighters.