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SEC. 305. The Act of September 30, 1950 (64 Stat. 1109) is hereby amended as follows:

(a) By striking out the word “President” each time it appears therein and inserting in lieu thereof the words "Federal Disaster Administrator”;

(b) By striking out the words "assurance of expenditure of a reasonable amount of the funds of the government of such State, local government of such State, local governments therein, or other agencies, for the same or similiar purposes with respect to such catastrophe" in paragraph (a) of section 2 and inserting in lieu thereof the words “(1) evidence of the existence of a State fund, available solely for disaster relief, equal at the time of the first gubernatorial certification of need during any twelve-month period, to at least $100,000, together with a commitment to apply all or so much of such fund as proves necessary within each twelve-month period toward reimbursing the Federal Government for moneys advanced on the basis of such certification of need, or (2) evidence of consent to allow the Federal Government, in such manner as the Administrator deems advisable, to offset against any moneys otherwise due or to become due to the State from any Federal program, $100,000 or so much thereof as proves necessary toward reimbursing the Federal Government for moneys advanced on the basis of such certification of need ; and shall give evidence satisfactory to the Administrator that maximum use is being made of available State and local personnel and facilities to assist in meeting the onslaught of disaster and that complete supervisory control of all such personnel and facilities will be vested in the Administrator, upon his request, for the duration of the emergency caused by the catastrophe" ;

(c) By striking out "$5,000,000” and inserting in lieu thereof “$10,000,000" in section 8, and by inserting a period after the word “discretion” and striking out the words following that word in the third sentence of said section; and

(d) By adding the following new section at the end of said Act:

SEC. 9. Any provision of law to the contrary notwithstanding, in any major lisaster, it shall be lawful for the Administrator to assume supervisory control of State and local personnel engaged in disaster relief work and to call forth such additional numbers of State and local government personnel (including members of civil defense organizations) as he may deem necessary to perform disaster relief functions, and to issue his orders for such purposes through the governor of the respective State or Territory, or the Board of Commissioners of the District of ('olumbia, from which such personnel come, to those among such personnel as he deems appropriate. Such control shall continue for the period determined by the Administrator. No personnel so utilized shall become an employee of the Federal Government by virtue of such exercise of power by the Administrator."

Sec. 306. The Administrator shall, not later than August 1, 1956, and annually thereafter, submit to the Congress a report on activities under this Act, including therein such recommendations as may be deemed advisable.

SEC. 307. If any provision of this Act or the application of such provision to any person or circumstances shall be held invalid, the remainder of the Act and the application of such provision to any person or circumstance other than those as to which it is held invalid shall not be affected thereby.

SECTIONAL ANALYSIS OF DISASTER INSURANCE ACT OF 1956 (PROPOSED LEHMAN

BILL) Short title

Disaster Insurance Act of 1956. Section 2. Declaration of purpose

To authorize Federal insurance program against risks of natural and manmade disasters. Single Federal agency with ample authority will administer program.

TITLE I-NATURAL DISASTER INSURANCE AND REINSURANCE

Sretion 101

Authorizes Federal Disaster Administrator (new title for Federal Civil Defense Administrator) to provide insurance and reinsurance against natural disaster risks for real and personal property in United States, Territories and [vssessions.

Section 102

Administrator to fix premium rates by type of insurance or reinsurance and fix other terms and conditions and areas covered. Rates based on risks; to strike balance between self-supporting program and rates attractive to prospective buyers. Section 103

Administrator to set types and location of property eligible, nature and limits of loss covered, and other necessary matters. Section 104

Administrator may exclude risks impracticable to cover and may regulate classification and limits of risks assumed by him. Section 105

Limit to 1 person or State or local government-$300,000. Approval of claim limited to lesser of (1) actual value or (2) replacement cost, less depreciation. $200 loss deductible from each claim is mandatory. Section 106

Administrator may sell insurance to public body for benefit of its inhabitants. Liability not to exceed $300,000 per inhabitant. This program to be self-supporting. Administrator to satisfy himself of public body's authority to buy insurance and pay premium from taxation or otherwise. Section 107

(a) Administrator may issue reinsurance regulations.

(b) Rates, terms, and conditions of policy reinsured under this title are subject to Administrator's approval.

(c) Administrator may offer a reinsurance program on portfolio basis under which he pays excess loss to ceding company for any single disaster. Create catastrophe excess loss reinsurance fund. Program to be self-supporting. Section 108

(a) No insurance or reinsurance to be offered if available on reasonable terms from other public or private source, except may cover all natural disasters in a blanket policy.

(b) No insurance or reinsurance to be offered on property not conforming to flood zoning laws. Section 109

(a) Administrator to use private insurance organizations to maximum, and may pay reasonable compensation.

(b) Administrator may make underwriting participation agreements with private insurance companies to share in profits or losses and premiums.

(c) Administrator may use public agencies and pay reasonable compensation.

(d) Administrator may receive and exchange information with public agencies and private insurance organizations. Section 110

Property to be acquired with Federal aid may be required to carry natural disaster insurance. Section 111

(a) Administrator to arrange prompt adjustment and payment of claims, collecting required amounts from private companies participating in underwriting.

(b) Disallowed claims or insatisfactory allowances are subject to suit in United States district court where major value of property is located, if brought within 1 year. Section 112.

(a) Administrator may establish (1) disaster insurance fund, (2) disaster reinsurance reserve fund, and (3) catastrophe excess loss reinsurance fund.

(b) Insurance premiums go to disaster insurance fund. Reinsurance fees go to disaster reinsurance reserve fund, except if portfolio excess loss coverage is offered, fees for it go into catastrophe excess loss reinsurance fund.

(c) Fund moneys may be invested and reinvested in United States obligations.

(d) Salvage proceeds go to the appropriate fund of the three above, depending on program in which they were realized.

(e) Administrator may borrow up to $1 billion from Secretary of Treasury. President may increase that limit. Notes evidencing borrowing to bear interest fixed by Secretary, considering going rate. Secretary to treat this as public debt transaction. Funds borrowed go to such of three funds as Administrator decides.

(f) Three funds may be used to (1) pay operating and administrative expense of programs, (2) and (3) pay claims out of proper fund, and (4) repay Treasury borrowings. Section 113

Defines "natural disaster”-flood, tidal wave, hurricane, torando, blizzard, duststorm, hailstorm or other severe storm, earthquake explosion, landslide, snowslide, severe freeze, drought smog, radioactive contamination or other air pollution, or volcanic eruption.

TITLE II—MANMADE DISASTER INSURANCE AND REINSURANCE Section 201

(a) Administrator authorized to provide reasonable indemnity for war damage to persons or real or personal property. (b) He may do so by insurance, reinsurance or otherwise granting

(1) reasonable protection against damage to real or personal property ;

(2) reasonable protection against workmen's compensation (or occupational disease) liability;

(3) reasonable compensation for personal injury or death of civil defense worker;

(4) reasonable compensation for personal or property damage in course of performing duties of civil defense nature;

(5) reasonable compensation for personal injury; disease or death from war perils. (c) Administrator may make general exceptions for classes of property or persons covered. Section 202

(a) Premium or other charge to be made for such indemnity, except that to civil defense workers or persons in civil defense duties. Latter two groups must show injury or damage sustained under conditions making him eligible for indemnity.

(b) Administrator to fix uniform rates for (1) each type of property, (2) workmen's compensation liability coverage, and (3) personal injury, disease or death, according to legal residence (since amount of insurance benefits will vary with legal residence).

(c) As basis for rates, Administrator shall estimate average risk involved for each class of coverage. Section 203

(a) Indemnify only for (1) property or persons in United States, district, Territory or possession, (2) property in transit between any points in foregoing, and (3) transportation facilities touching any such point, at time of damage or injury.

(b) With President's approval, Administrator may suspend protection in areas where United States loses control. Section 204

In measuring reasonableness of protection or compensation under this title, Administrator shall consider property value, its relative importance to national security, and State or local workmen's compensation or occupational disease laws (using Federal law if no similar law applies in any area). Section 205

(a) $10 billion limit set on property coverage under this title.
(b) Claims limited to 75 percent of declared value of property.

(c) Administrator reserves right to pay 10 percent or claim 2 months after approval and balance within following year, if advisable for Federal credit or stability of national economy.

(d) Otherwise Administrator to pay claims promptly. Section 206

(a) Administrator to set up four insurance funds (1. Property indemnity fund. 2. Workmen's compensation reserve fund. 3. Civil defense indemnity fund. 4. Personal risk fund) and may create three reinsurance funds (1. Property indemnity reinsurance fund. 2. Workmen's compensation reinsurance reserve fund. 3. Personal risk reinsurance fund).

(b) Premiums and fees collected go to appropriate fund, depending on program. (c) Fund moneys may be invested and reinvested in United States obligations. (d) Salvage proceeds go to appropriate fund.

(e) Administrator may borrow up to $10 billion from Secretary of Treasury, or more with President's approval. Notes bear interest at going rate as de termined by Secretary of Treasury, who handles this as public debt transaction. Administrator may deposit moneys borrowed in above funds. (f) Fund moneys may be used to

(1) Pay operating and administrative expenses under title, drawing from fund that matches program where feasible;

(2) Pay claims (civil defense claims from any of funds);

(3) Repay borrowings to Secretary of Treasury. Section 207

No insurance or reinsurance shall be offered for risks eligible under other Federal programs or to extent available from other public or private sources. Section 208

Administrator shall use to maximum private insurance organizations; may pay reasonable compensation. Section 209

Property to be acquired with Federal aid may be required to carry war damage insurance. Section 210

Disallowed claims or unsatisfactory allowances are subject to suit in United States district court where major value of property is located (property claims) or where insured resides (personal claims). Action to be brought within 1 year. Section 211 Defines

(a) “War damage” and “perils of war"-resulting from (A) hostile or warlike action by government, power or authority using military force, or agent of foregoing, or (B) action by government agency in United States to defend against hostile or warlike action, or (C) disorder accompanying collapse of civil authority resulting from (A) or (B) above or enemy control.

(b) “Hostile or warlike action”-attack by United States enemy in any manner (includes nuclear and biological means).

TITLE III-GENERAL PROVISIONS Section 301

(a) Administrator shall name advisory committee of 3 to 15 familiar with insurance problems.

(b) If United States employees, member receives no added compensation. If not, may receive up to $50 per diem plus travel expense. Section 302

Administrator granted power to hire 5 extra supergrade employees and 50 parttime or temporary employees. Section 303

Amends Federal Civil Defense Act of 1950 as follows:

(a) Changes name of Federal Civil Defense Administration to Federal Dis. aster Administration and adds declaration of policy to cover natural disaster relief.

(b) Defines "natural disaster" as in section 113 of this bill.

(c) Makes definition of “organizational equipment” and “materials" include those used for disaster relief.

(d) Changes titles-Federal Civil Defense Administration to Federal Disaster Administration; Federal Civil Defense Administrator to Federal Disaster Administrator.

(e) Changes name of Civil Defense Advisory Council to Disaster Advisory Council; expands scope of its duties to include disaster relief.

(f) Broadens scope to include disaster relief in planning, delegation of power, providing warning service, training programs, information service, encouragement of interstate compacts, acquisition and stockpiling of materials, financial aid to States, and disposal of surplus property.

(g) Requires Administrator, through State Department, to arrange mutual disaster aid between States and neighboring countries.

(h) Protects distinctive insignia for disaster relief workers.

(i) Repeals provision relieving Federal Government of liability for property damage or personal injury resulting directly or indirectly from performance of civil defense duty by Federal agency or employee (saving rights of those entitled to Federal employees' compensation). (Note: This exemption from liability appears inconsistent with provisions of title II of this bill.)

(j) Changes short title of Federal Civil Defense Act of 1950 to Federal Disaster Act. Section 304

Amends Third Supplemental Appropriation Act, 1951, to increase by $1 million (to $6 million) the procurement fund to be used in acquiring equipment and materials, and includes disaster relief within its permissible use. Section 305

Amends Disaster Relief Act (Public Law 875, 82d Cong., approved September 30, 1950) as follows:

(a) Substitutes Federal Disaster Administrator (bill's new title for Federal Civil Defense Administrator) for President as administrator of disaster relief program.

(b) As basis for finding a “major disaster" exists, changes requirements State must meet. Instead of assuring reasonable expenditure of State funds, State must either (1) show it has a special $100,000 disaster relief fund which it commits to use to repay Federal disaster relief advances in any 12-month period or (2) consent to allow Federal Government to offset an equal amount against Federal funds due State in the future, and State must satisfy Administrator maximum use is being made of available State and local personnel and facilities for disaster relief and agree to place their control in Administrator upon request for the duration of the disaster emergency.

(c) Doubles authorized appropriation for relief purposes (to $10 million) and deletes statutory requirement that reports to Congress go to Appropriations and Public Works Committee, leaving committee referral of reports to discretion of the House and the Senate.

(d) Permits Administrator to assume control of State and local disaster relief personnel and call forth additional State and local government employees (including civil defense personnel), in manner comparable to that by which Federal Government calls the National Guard to Federal service. Orders go via governor to proper personnel. Administrator decides when he surrenders control (on end of emergency). Employees thus controlled by Administrator remain State and local government (not Federal) employees. Section 306

Administrator to file annual reports to Congress on activities under act and his recommendations; first due by August 1, 1956. Section 307

Separability provision.

.

(Committee print, October 25, 1955, intended to be proposed by Mr. Kennedy and Mr.

Saltonstall]

[S. 84th Cong., 2d sess.) A BILL To provide for national flood insurance and reinsurance, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "National Flood Insurance Act of 1956".

DECLARATION OF PURPOSE SEC. 2. It is the purpose of this Act to promote the national welfare by alleviating the widespread economic distress suffered from time to time within the United States, its Territories and possessions, as a result of floods, and the attendant impairment of the free flow of interstate and foreign trade and com

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