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All-Hazards Insurance Proposal in lieu of FEMA Disaster Aid has been tabled

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"State wins reprieve on disaster insurance"
> By Stephen Green
> August 6, 1999
> WASHINGTON-California has won a reprieve-at least temporarily- from a
> plan that would require the state and local governments to spend tens
> of millions of dollars a year insuring public buildings against
> earthquakes and other natural disasters.
> The House Appropriations Committee has blocked the proposal until its
> financial implications are studied. The insurance plan, proposed by
> the Clinton administration, is aimed at reducing the cost of federal
> aid to areas suffering natural disasters.
> The "proposal could place an enormous financial burden on states,
> local governments, school districts, private nonprofit hospitals and
> universities," warned a report from the committee.
> The report specifically directed the Federal Emergency Management
> Agency not to issue the pending insurance regulations.
> Although the committee report, which accompanied a bill providing
> FEMA's annual operating funds, does not have the force of law,
> agencies generally obey such instructions.
> FEMA will comply with the committee's directive, said Mary Margaret
> Walker, a spokeswoman for the agency. "We will continue our internal
> review of the regulations but will not publish them," she said.
> California Gov. Gray Davis, as well as Democratic and Republican
> members of Congress from California, previously had asked FEMA to
> reconsider the proposed insurance demands. The new rules would require
> the insurance as a condition of eligibility for federal disaster aid.
> Davis said the proposed regulations would be financially devastating
> to the state. Just the cost to Los Angeles County and the University
> of California would be an estimated $25 million a year and $12 million
> a year, respectively.
> FEMA officials, under pressure to reduce costs, have complained the
> present system of disaster aid rewards those who don't bother to
> obtain sufficient insurance and then expect the federal government to
> pick up the costs of reconstruction and other relief.
> California has received more than a third of all U.S. disaster aid in
> the past decade, getting some $9 billion of the $25.4 billion
> distributed by FEMA.
> In 1994 alone, the year of the Northridge earthquake, California
> received more than $5 billion, according to Walker.
> "We've got to get a handle on disaster costs," she said.
> Under instructions issued by the committee, the study of the proposed
> regulations' impact will be undertaken by the General Accounting
> Office, an investigating arm of Congress.
> FEMA must "withhold its proposed disaster insurance regulations until
> the GAO report has been submitted and reviewed by the House and
> Senate," the report said.