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<br />Amount Paid for NFIP Losses,
<br />1980-1989
<br />
<br />Total Paid == $2.27 Billion
<br />
<br />~ Repe""," Losses
<br />
<br />
<br />.~
<br />
<br />(33%)
<br />
<br />
<br />Nonrepetitive Losses (67%)
<br />SO/me: FE!\.IA/FIA
<br />
<br />ACCEPTING THE NFIP
<br />
<br />During the first 15 )'ears if tk .Nalionnl Flood
<br />[nJUrana Program, communities iften challenged it
<br />and resisted adopting the required regulations. lVOW,
<br />because communities have seen the regulations sup-
<br />ported in the courts, because there has been intensive
<br />media coverage of flood disasurs, and because con-
<br />cems about localliabilit)' jor flood da17U!ges have
<br />been heighte1U'd, there is increased awareness oj the
<br />program's benefits. As a result, NFl? regulntions
<br />and other fWodplo.in management activities /uwe
<br />become institutionalized and general!;' accepted as
<br />a community responsibility.
<br />
<br />TAX POLICIES TO MODIFY THE
<br />IMPACTS OF FLOODING
<br />
<br />. In 1987, Des Plaines, Illinois, began a permit
<br />surchnrge of $200 jar flnodplain tkvelnpmeni projects
<br />to help finanre cifJ'Jlnod protection actilJities.
<br />
<br />. TIu city of Starriford, Connecticut, has required
<br />developers 0/ certain projects constructed in the fWod-
<br />plain to contribute funds for the operation and rrw.in-
<br />te7lllnce qf their automated flnod warning sptem.
<br />
<br />. After disastrous flooding in 1982, the state if
<br />C01l7lf.ctu:ut enacted special flood relief legislation
<br />thnt included a provZswn for tax abatemenls for those
<br />WMse propert;' was damnged more tlw.n 10 % of its
<br />valut. 10wns were authorized to abate up to one-
<br />third if the taxes due, and the state would reimburse
<br />them.for 90 % if tlu taxes lost. Eighteen towns
<br />qfftred some tax abatement to property owners, and
<br />the state reimbursed the wwns a wtal oj $49,504.
<br />
<br />-
<br />42
<br />
<br />Top 20 Repetitive Loss Communities
<br />by Number of Losses
<br />l1~~~"" January 1980-December 1989
<br />
<br />//" _......... I ( --------------- r -~ ~7- ,.. r-\')
<br />,\ I I I"'" ~.."".. ..-cf, r
<br />I,. / \ ( I '--. -~~ /- \ "\l
<br />' '''-...f' ----j ------., ) '-/, I""~ , ) ',,1'
<br />,-- : " ~,!' ,- -- \ -_/"
<br />(' " ----...._________, i I _..~ II', V ':: /~: qty bf-!{eW YorK,
<br />,I ,/ 1:-;-,' 1-----____1,).::: ~-- Ne~-?lOl1<. 1,256
<br />12.Sonpma.County,,' \:0 l____ I \ ~'~j---r-- ~ ~. TownstllpofWayne,
<br />~hfortl!a. 604 " I -----L, 'L-.!!-.:- P~or!a',County, iL-~~e:rsey - 742
<br />\ \ / i ~------l. 1lhnolsr51j$ / _J-:>-......~\W
<br />, \,' I 6. SaintlCharles County,\"'~<, / ~'\,'
<br />\ ;--- I I Missouri - 2,O~ i-~-~ .. _--' /=3,.
<br />, . ,.-) I ---------_ _JS._S':lintLo.ui_S C~,___~.----- 'i,1j
<br />'>'~\ / /-1 Mlssoun-= 4j_ _'_[~~~~'yl/
<br />----_~ " ,"\ I ,,1 \. C't J
<br />'~, 3~'City 01 Houston, Tex-as"-2;596 13. City 01 Mobile, \/....-'
<br />. _ 4.Ha~ris County, Texas. 2,379~ Alabama\- 549 i
<br />14.-G~.tv.eston Cou,:!ty, Texas - 544 f j ____--'.___--.J--\
<br />16. CIty o.f Texas City, Texas - 5~4 ~ -- "..;..-----\---tS>City'-()f Saint Petersburg,
<br />20. Montgomery County, Texa&'"""450,_.),~) Florida _ 533
<br />\,.-,/ '.f/ "
<br />\ ;;"/ 1. Jefferson Parish, LouJ$am:r- 7,871
<br />I..;( 2. Orleans Parish, Louisiana, -.15,153
<br />"<:; 8. S1. Bernard Parish, Louislliha - 987
<br />10. City of Gretna, Louisiana - 674
<br />11. City of Kenner, Louisiana - 605
<br />Source: FEI\.IA/FIA 19. East Baton Rouge Parish, Louisiana. 483
<br />5. Puerto Rico - 2,348
<br />
<br />Today, flood insurance is largely unavailable except under the National
<br />Flood Insurance Program. An exception is a Lloyds of London-based policy
<br />which has as many policyholders in Utah as does the National Flood Insur-
<br />ance Program. Some private policies or riders are available for basement
<br />flooding; these ".'ere initiated after the N ationa! Flood Insurance Program
<br />limited its coverage for basements and subsurface flows. Flood insurance is
<br />included as part of a comprehensive flood insurance policy for some large
<br />businesses with offices and land holdings in many locations, in and out of the
<br />floodplain. Crop insurance available under the U.S. Department of Agricul-
<br />ture's Federal Crop Insurance Corporation provides protection to agricultural
<br />producers from losses caused by insects, disease, fire, hail, drought, floods,
<br />freeze, and wind.
<br />
<br />Tax Adjustments
<br />
<br />t\.10st provisions of federal, state, and local tax codes are designed to
<br />encourage development without regard to whether it might take place in a
<br />floodprone area, while relatively few provisions provide incentives to leave
<br />land in its natural state. Some tax-based incentives for development are
<br />reductions in property taxes, abatement or deferral of taxes to entice or retain
<br />businesses in an area, and the establishment of encerprise zones or other spe-
<br />cial business zones to promote development and employment in economically
<br />depressed areas. These make locating businesses, homes, and other develop-
<br />ment in some floodprone areas financially feasible and even attractive. On top
<br />of this, the federal Internal Revenue Code and many state codes also provide
<br />casualty loss deductions on income taxes to those suffering flood losses. After
<br />disastrous floods, many states and localities provide additional types of tax
<br />relief, reducing or temporarily suspending real estate taxes or business taxes
<br />for those affected by flooding, for example.
<br />Still, more integration of tax policies and floodplain management is
<br />occurring. The Tax Reform Act of 1986, for example, made major changes
<br />in the Internal Revenue Code, some of which have an impact on floodplain
<br />management. Individual casualty loss deductions under $100 are now pro-
<br />hibited, and the deduction is limited to the portion of the loss that exceeds
<br />10% of the adjusted gross income. The new rule does not apply to business
<br />property. The Act also eliminated or restricted many of the tax deductions
<br />and credits that had been used as incentives to build in floodplains, on barrier
<br />islands, and at other hazardous locations.
<br />
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