Mr. President, last year we were all transfixed by the non-stop news coverage of Hurricanes Gustav and Ike as they grew into monster storms, crossing the Caribbean and Gulf of Mexico and leaving a…
Mr. President, last year we were all transfixed by the non-stop news coverage of Hurricanes Gustav and Ike as they grew into monster storms, crossing the Caribbean and Gulf of Mexico and leaving a trail of misery in their wake. Ike, the third most destructive storm in the history of the U.S., made landfall in Galveston, Texas, and then tracked through Arkansas, Illinois, Indiana, Missouri, Ohio, and Pennsylvania, killing 112 people and causing more than $24 billion in damage.
Since 2003, hurricanes and other tropical cyclones have caused more than 2,000 deaths in the U.S. Forty percent of all hurricanes that make landfall in the U.S. hit Florida.
Insured losses from hurricanes average more than $5.2 billion per year. A recent study of hurricane-related damages over the last century suggests that economic losses will double every 10 years. With more than 50 percent of the U.S. population living within 50 miles of the coast, and with 180 million people visiting the coast annually, the risks to life and property are growing.
Hurricanes, however, do not just impact the coasts. These extreme events also have national consequences, such as increased fuel prices, displaced populations, and severe inland flooding.
The American public is increasingly aware of the potential for high recovery costs and financing of natural disaster losses. I cannot overstate the importance of prior preparation and insurance coverage for large catastrophic risks--including natural disasters such as hurricanes and earthquakes--as well as efforts to promote a stable, affordable catastrophic insurance market.
This is why today Senator Martinez and I are introducing four bills: the Commission on Catastrophic Disaster Risk and Insurance Act of 2009, S. 1487, the Policyholder Disaster Protection Act of 2009, S. 1486, the Catastrophe Savings Accounts Act of 2009, S. 1484, and the National Hurricane Research Initiative Act of 2009, 1485. These bills take a pro-active approach in addressing these natural catastrophe concerns.
The National Hurricane Research Initiative Act of 2009 will expand the scope of fundamental research on hurricanes. The bill is aimed at improving hurricane forecasting and tracking and helping us find better ways to mitigate their impact. The Act will establish a National Science Foundation (NSF) grant program for hurricane and tropical cyclone research and bring together a task force, jointly chaired by the National Oceanic and Atmospheric Administration, NOAA, the National Institute of Standards and Technology, NIST, and NSF.
The second bill, the Commission on Catastrophic Disaster Risk and Insurance Act of 2009, establishes the bipartisan Commission on Catastrophic Disaster Risk and Insurance. This commission will assess the condition of the property and casualty insurance and reinsurance markets in the aftermath of Hurricanes Katrina, Rita, and Wilma in 2005, as well as the four major hurricanes that struck the U.S. in 2004. It will also evaluate the country's ongoing exposure to earthquakes, volcanic eruptions, tsunamis, and floods. Finally, the commission will recommend and report legislative and regulatory changes that will improve the domestic and international financial health and competitiveness of property and casualty insurance markets, assuring the availability of adequate insurance when an insured event occurs, as well as the best possible range of insurance products at competitive prices.
The Policyholder Disaster Protection Act of 2009 amends the Internal Revenue Code to allow property and casualty insurance companies to create tax-exempt disaster protection funds and to make tax deductible contributions to those funds for the payment of policyholders' claims arising from certain catastrophic events, such as windstorms, earthquakes, fires, and floods.
Finally, the Catastrophe Savings Accounts Act of 2009 amends the Internal Revenue Code to create tax-exempt catastrophe savings accounts. Individuals could take tax-free distributions from these accounts to pay expenses resulting from a presidentially declared major disaster. The bill limits catastrophe savings account balances to $2,000 for individuals with homeowner insurance deductibles of not more than $1,000, and the lesser of $15,000 or twice the homeowner's insurance deductible for individuals with deductibles of more than $1,000.
As I mentioned at the beginning of my remarks, the entire country experiences financial losses when hurricanes hit. It is time for us to take the bull by the horns and pass legislation that plans in advance for these and other natural disasters.
As we are in the hurricane season, it will become painfully apparent just
how precarious a lot of the construction is, how precarious building codes are not being fairly and judiciously administered, and it will become evident what an economic disaster even a mild hurricane can cause when it hits the coast. And Lord knows, if the big one hits an urbanized part of the coast--and the big one is a category 4 or a category 5 hurricane--it is going to create economic chaos. It is going to cause the insurance industry to be on the brink of total collapse. And it will ultimately, just like Katrina, end up having the U.S. Government pay a major part of the economic bailout consequences of a natural disaster, such as a hurricane or an earthquake hitting the United States. We ought to get ahead of it and we ought to plan for it, and that is what this package of four bills Senator Martinez and I are offering will do.
Mr. President, I ask unanimous consent that the text of the bills be printed in the Record.