U.S. Sen. Bill Nelson (D-FL) announced today at the National Hurricane Center in Miami that he's again filing legislation in the Senate to create a national catastrophe fund that would spread the risk and cost of major disasters among all the states. The announcement came at a news conference the day before the official start of the 2013 hurricane season, which experts predict will be an active one.
From the devastating tornadoes that recently hit Oklahoma and before that Alabama to the 5.8 magnitude earthquake that rattled Washington D.C. two years ago, Americans in all parts of the country have faced the threat, fear, pain and loss associated with natural disasters. And, there are times when disasters can threaten not specific states or areas but entire regions, like with Hurricane Sandy.
"It's important we have the flexibility and resources to deal with these unpredictable events," Nelson, a Florida Democrat, said. "A catastrophe fund would let us quickly get help to people when they need it most."
Nelson, who knows something about storm coverage from his time serving as state treasurer and insurance commissioner, said his plan will call for creating either a national catastrophe fund or various regional risk-sharing pools as a means of helping everybody cope with natural disasters, and of lowering property insurance rates.
In the past few sessions of Congress, Nelson has introduced separate bills, one that would increase funding for hurricane research and another to create a national catastrophe fund. He plans to re-introduce both bills next week when the Senate reconvenes following the Memorial Day recess. And he's exploring combining the catastrophe fund measure and the hurricane research bill into one piece of legislation, with the intention of having it referred to the Senate Commerce Committee on which he sits.
In the past, his CAT Fund bill has been sent first to the Banking Committee.
The CAT fund bill, Nelson said, is designed to help strengthen the solvency of existing state disaster funds and encourage the development of new state and regional funds. The legislation would allow the federal government to step in with low-interest loans to states. And, the proposal creates a framework for states to pool their resources to help pay for each other's disaster costs.
Six years ago, the House passed a companion piece of the legislation. But no action on the bill has ever been taken in the Senate. Nelson's hopeful this may finally be the year.
"Florida established a model for how to do this with its Hurricane Catastrophe Fund," Nelson said. "I don't know what else it will take before Congress realizes we need something covering all the states."
Following are summaries of Nelson's two bills and a recent Palm Beach Post editorial supporting the plan for a national disaster fund:
Homeowners' Defense Act of 2013
Establishes the National Catastrophe Risk Consortium as a nonprofit, nonfederal entity to:
-maintain an inventory of catastrophe risk obligations held by state reinsurance funds and state residual insurance market entities
-act as a centralized repository of state risk information accessible by certain private-market participants
-use a database to perform research and analysis that encourages standardization of the risk-linked securities market.
The legislation instructs Treasury to implement a national homeowners' insurance stabilization program to make liquidity loans and catastrophic loans to qualified reinsurance programs to:
-ensure their solvency
-improve the availability and affordability of homeowners' insurance
-provide incentive for risk transfer to the private capital and reinsurance markets
-spread the risk of catastrophic financial loss resulting from natural disasters and catastrophic events.
The National Hurricane Research Initiative Act
National Hurricane Research Initiative Act creates a coordinated hurricane research program focusing on high priority scientific, engineering, and behavioral studies; and effectively applying the research results to mitigate the impacts of hurricanes on society.
Specifically, the National Hurricane Research Initiative will:
-Improve understanding and prediction of hurricanes and other tropical cyclones, including, among other things, storm tracking and prediction, storm surge modeling, inland flood modeling;
-Expand understanding of the impacts of hurricanes on and response of society;
-Develop infrastructure that is resilient to the forces associated with hurricanes and other tropical cyclones; and,
-Mitigate the impacts of hurricanes on coastal populations, the coastal built environment, and natural resources.
The National Hurricane Research Initiative designates both the National Science Foundation (NSF) and NOAA as lead agencies.
Palm Beach Post
Editorial: Oklahoma tornado should cause Congress to debate national catastrophic disaster insurance
May 22, 2013
Sunday in Oklahoma was a bad day for tornadoes. Even as it ended, though, forecasters remained on alert for the Oklahoma City area.
"We may be dealing with more of this tomorrow," National Weather Service meteorologist Rick Smith told The Oklahoman Sunday night. "Monday is going to be another round of severe weather. A lot of the key ingredients we had today haven't gone anywhere ... Certainly, we hope we don't see anything like this again, but we're going to be ready for it."
Mr. Smith is based in the southeast suburb of Norman. Between Norman and Oklahoma City lies Moore.
On Monday afternoon, a tornado blasted Moore with a force locals compared to that from a devastating twister in 1999. And so began the sadly familiar drill. Crews searching the debris for survivors. A call from the president pledging federal aid.
When Hurricane Sandy scoured the shorelines of New Jersey and New York last fall, some members of Congress huffed and puffed that the $51 billion in assistance should be offset by spending cuts elsewhere. They lost. The bill for Monday's tornado will be far less, though the level of destruction is just as profound, but we predict that this time there will be no such silly debate. In its place we would suggest -- as we have for a decade -- that Congress debate the idea of catastrophic disaster insurance.
With such a program, responses to natural disasters wouldn't be a drain on the treasury, however compassionate the assistance is. The government would underwrite private bonds to cover damage from worst-case scenarios.When Ron Klein and Tim Mahoney represented Palm Beach County, they actually got such a plan through the U.S. House. It never got a vote in the Senate, and it remains misunderstood by many opponents.
U.S. Rep. Tom Cole, R-Okla., represents Moore. Speaking Tuesday on NPR, he praised President Barack Obama for his quick offer of help. Rep. Cole noted that he had voted for the Sandy aid, saying of his district, "We're just one tornado away from being Joplin," referring to the Missouri city where a tornado last year killed 158 people.
In 2007, though, Rep. Cole was one of the votes against what then-Reps. Klein and Mahoney called the "Homeowners Defense Act." Some lawmakers see the plan as too Florida-centric. Given what scientists have concluded is more frequent catastrophic events, driven by climate change, Washington should consider this a national problem. We will be dealing with more of this, in many places.
Randy Schultz for The Post Editorial Board