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<br />, <br />,I <br />" <br />ili <br />.1 <br />I' <br />i' <br /> <br />1 i <br /> <br />{, <br />, . <br />, <br /> <br /> <br />, <br />i" <br />Ii <br />II <br />if <br />'I <br />'I <br />! <br /> <br />, I <br />H: <br /> <br />i" <br /> <br />h <br /> <br />,I <br /> <br />i <br />" <br />1: <br /> <br />'" <br />!l <br /> <br />I <br /> <br />THE FLOOD OF 1993 <br /> <br /> <br />Table 1.7 NFIP Flood Insurance Losses for the Period From April I Through September 30, 1993 by State for <br />the 1993 Midwest Floods. <br /> <br />Slate Policies Loss Count Total Average Losses Payments <br /> 1/31/94 Payments ($) Payment ($) (%) (%) <br />Illinois 36,844 3,624 61,389.123 16,939,60 22 21 <br />Iowa 8,689 1,690 23,378,415 13,833,38 10 8 <br />Kansas 11,065 1,071 10,702,780 9,993.26 7 4 <br />Minnesota 3,472 372 1,712,960 4,604.73 2 >1 <br />Missouri 20.981 8,271 192,296,740 23,249.52 5 65 <br />Nebraska 6,652 503 4,833,133 9,608.61 3 2 <br />North Dakota 3,008 198 285.572 1,442,28 1 >1 <br />South Dakota 1,313 115 745,309 6,480,95 2 >1 <br />Wisconsin 7,096 323 1,999,654 6,190,88 2 >1 <br />Total 99,120 16,167 297,343,686,00 18,392,01 <br /> <br />.> <br /> <br />Source: Federal Emergency Management Agency, Federal Insurance Administration, Computer prinl-out, March 16, 1994. <br /> <br />< <br /> <br />wheat is the principal crop. The largest claims were in <br />the prairie pothole region (as were the bulk of the crop <br />disaster payments) rather than in the floodplains. The <br />probability of participation in the crop insurance <br />program is lower for floodplain farmers than for those <br />in the upland because flood damage is, in general, more <br />localized than droughl which is the primary hazard iu <br />the Midwest. <br /> <br />Loans. Federal agencies have approved $623 million <br />in loans to individuals. businesses. and communities <br />impacted by the Midwest flood. These loans, which <br />must be repaid, are a federal expenditure only to the <br />degree that interest rareS are subsidized, borrowers <br />default on loans, and administrative costs are iucurred <br />(See Table 1.9). The primary source of Ihe loans is the <br />Small Business Administration (SBA) Disaster Loan <br />Program which provided $597 million in loans to flood- <br />affected homeowners and renters, businesses of all <br />sizes, and non-profit organizations. Interest subsidies, <br />defaults, and administrative costs amount to <br />approximately 30 perceuI of the loans," Fanners <br />Home Administration (FmHA) is the source of <br />agricultural loans because SBA is prohibited from <br /> <br />28 <br /> <br />making loans to farmers. <br /> <br />Federal income tax deductions. Uninsured and <br />otherwise umeimbursed losses resulting from casualties <br />such as a flood are deductible for Federal Income Tax <br />purposes to the extent that they exceed IO percent of <br />Federal Adjusted Gross Income plus $100. This <br />deduction results in decreased tax revenue to the federal <br />govenunent. The Internal Revenue Service provides <br />tax counseling to disaster victims to assist them in <br />applying for refuods by amending their previous years <br />tax return when a major disasrer is declared. The loss <br />of tax revenue has not been quantified for the Midwest <br />flood. Due to the amount of insurance and disaster <br />assistance payments. the income levels of many of the <br />flood victims, and Ibe requirement that the loss exceed <br />10 percent of adjusted gross income, the loss may not <br />be substaotial. The casualty loss deduction, however, <br />does acl as an additioual mechanism for transferring the <br />costs of flood damage from the private sector to the <br />federal goverrunem. <br /> <br />~ <br />1 <br />, <br /> <br />j <br />