[Congressional Record (Bound Edition), Volume 151 (2005), Part 12]
[Senate]
[Page 16094]
[From the U.S. Government Publishing Office, www.gpo.gov]




           GRANTS UNDER THE NATIONAL FLOOD INSURANCE PROGRAM

  Mr. NELSON of Florida. Mr. President, on Sunday afternoon, Hurricane 
Dennis made landfall on Florida's Gulf Coast, causing billions of 
dollars in damage, taking four lives and bringing back terrible 
memories of last summer's four hurricanes. Some people in north Florida 
were still recovering from Hurricane Ivan when Dennis struck.
  I was down in Pensacola on Monday and saw the damage wrought by 
Dennis. People are still without power in the summer heat. Food, clean 
water and ice are absolutely vital right now. Many coastal areas, like 
the small village of St. Mark's, were deluged by water from the ten 
foot storm surge. Mitigation helps us to better prepare for future 
storms, lessens their impact and saves lives.
  Last summer, when the Internal Revenue Service ruled that FEMA 
mitigation grants must be reported as taxable income, I worked to 
advance a bill ensuring they were exempt from Federal taxes. This bill 
was signed into law by the President on April 15. Each year, hundreds 
of Floridians use mitigation grants to protect their lives and property 
from future natural disasters. Now they know for sure that accepting a 
mitigation grant to flood proof their home won't result in higher 
taxes.
  Yet even with this relief, another IRS ruling is causing problems 
with the flood insurance program. That's because according to the IRS, 
a National Flood Insurance Program, NFIP, grant must be included as 
income. This could make some recipients ineligible for crucial Federal 
assistance programs like Food Stamps, aid to dependent children and 
Medicaid. No one should have to choose between making their home safe 
from flooding and food or medicine. No other kind of emergency 
assistance granted by FEMA counts toward income and neither should 
flood mitigation grants.
  I'm pleased to sign onto legislation introduced by my colleague from 
Florida which would prevent Federal agencies administering means-tested 
benefits from counting NFIP grants as income. I hope the Senate will 
consider this legislation quickly and provide peace of mind to 
Floridians and other Americans living in disaster prone areas of the 
country.

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