Order Code RL33129
CRS Report for Congress
Received through the CRS Web
Flood Risk Management:
Federal Role in Infrastructure
October 26, 2005
Nicole T. Carter
Analyst in Environmental Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Flood Risk Management: Federal Role in Infrastructure
Summary
Local governments are responsible for land use and zoning decisions that direct
floodplain and coastal development; however, state and federal governments
influences community and individual decisions on managing flood risk. The federal
government constructs flood control infrastructure, offers flood insurance, and
provides disaster aid. Hurricanes Katrina and Rita sparked once again a national
debate on managing flood hazards.
The 109th Congress, like many earlier Congresses confronted with major flood
events, is faced with numerous flood control issues, including interest in changing
federal policies. Current federal programs and flood control projects generally target
on reducing property damage and vulnerability to a 100-year flood. Post-Katrina
discussions include whether current flood protection is sufficient, whether loss of life
and economic and social disruption should be more prominent considerations in
federal policy, and what are the advantages and disadvantages of a more risk-based
approach to federal policy and spending.
This report discusses federal investment decisions on flood control
infrastructure, such as levees, floodwalls, and dams. The report also analyzes flood
risk as a composite of flood threat, consequence, and vulnerability. The report
illustrates that federal policy focuses attention on only some aspects of flood risk and
summarizes the options being discussed for addressing other aspects of flood risk in
the aftermath of Hurricanes Katrina and Rita. This report will be updated as needed
to track significant developments.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Federal Flood Control Policy and Infrastructure . . . . . . . . . . . . . . . . . . . . . . 2
Federal Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Flood Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Flood Control Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Reducing Vulnerability to the 100-Year Flood — Minimum Standard
Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reducing Property Damage Vulnerability — Benefit-Cost Analyses . . . . . . 5
Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Reducing Flood Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Flood Control Issues in the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . 8

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Flood Risk Management:
Federal Role in Infrastructure
Introduction
Local governments are responsible for land use and zoning decisions that direct
floodplain and coastal development; however, numerous federal and state flood
policies and programs influence local, and individual decision-making. The federal
government funds flood control structures and projects, manages a flood insurance
program,1 and provides disaster assistance,2 and it generates essential data through
mapping and other efforts. This report discusses investment decisions on flood
control infrastructure (such as levees, floodwalls, and dams), and how federal
policies, programs, and practices that focus on reducing property damage and
vulnerability to a 100-year flood influence these decisions.3 The report also describes
how Hurricanes Katrina and Rita sparked once again a national debate on whether
the current flood protection is sufficient and whether a more comprehensive approach
to managing flood risk and federal investments is desirable.
The hurricanes demonstrated that not only property damage but also other
flooding impacts (e.g., loss of life and economic disruption) may be a national
concern. This report analyzes flood risk as a composite of three factors:
! threat of an event (e.g., probability of a Category 5 hurricane storm
surge or a 200-year flood affecting a particular location);
! consequence of an event (e.g., loss of life, economic loss,
environmental damage, reduced health and safety); and
! vulnerability that allows a threat to cause consequences (e.g., level
of protection provided by levees and dams, and their reliability).4
1 For information on federal flood insurance, see CRS Report RL32972, Federal Flood
Insurance: The Repetitive Loss Problem, by Rawle O. King.
2 For information on the evolution of federal disaster aid, see U.S. Senate Task Force on
Funding Disaster Relief, Federal Disaster Assistance, S.Doc. 104-4 (1995).
3 The term 100-year flood is the flood elevation that has a 1% chance of being equaled or
exceeded annually. It is not the flood that will occur once every 100 years; 100-year floods
can occur more than once in a relatively short period of time.
4 For more information on this three-part hazard risk framework, see CRS Report RL32561,
Risk Management and Critical Infrastructure Protection: Assessing, Integrating, and
(continued...)

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CRS-2
The remainder of this report is divided into five sections. The first is a primer
on federal flood control policy and infrastructure. The next two sections describe
two aspects of federal policies and practices — the 100-year flood standard, and
benefit-cost analyses — that guide infrastructure investment decisions and how these
federal policies and practices focus attention on only some aspects of flood risk. The
fourth section summarizes how addressing other elements of flood risk are being
discussed in the aftermath of Hurricanes Katrina and Rita. The fifth section
concludes the report by presenting a primer on the range of flood control issues
before the 109th Congress. This report is not a comprehensive treatment of the topics
of flood risk and flood control;5 rather, it is an introduction to the current debate on
flood policy and focuses primarily on the U.S. Army Corps of Engineers as a
principal federal agency for flood control infrastructure.
Federal Flood Control Policy and Infrastructure
Federal Interest. The federal role in flood control began in the late 19th
century. Prompted by devastating floods in the Mississippi River basin, Congress
created a commission to oversee the development of a levee system to control the
river's flow. The Mississippi River Flood of 19276 and floods in the mid-1930s,
ushered in a modern era of federal flood control investment. The Flood Control Act
of 1936 (19 Stat. 1570) declared flood control a “proper” federal activity in the
national interest.7 Section 1 of the act established the following policy:
It is hereby recognized that destructive floods upon the rivers of the United
States, upsetting orderly processes and causing loss of life and property,
including the erosion of lands and impairing and obstructing navigation,
highways, railroads, and other channels of commerce between the States,
constitute a menace to national welfare; that it is the sense of Congress that flood
control on navigational waters or their tributaries is a proper activity of the
Federal Government in cooperation with States, their political sub-divisions and
localities thereof; that investigations and improvements of rivers and other
waterways, including watersheds thereof, for flood-control purposes are in the
interest of the general welfare; that the Federal Government should improve or
participate in the improvement of navigable waters or their tributaries including
watersheds thereof, for flood-control purposes if the benefits to whomsoever they
4 (...continued)
Managing Threats, Vulnerabilities, and Consequence, by John Moteff.
5 This report also address neither the wind damage from hurricanes nor the special flood
problems of coastal areas.
6 For more information on the response to the Mississippi River Flood of 1927, see CRS
Report RL33126, Disaster Recovery and Appointment of Recovery Czar: The Executive
Branch’s Response to the Flood of 1927, by Kevin R. Kosar.
7 The Beach Nourishment Act of 1965 (P.L. 84-826) expanded the federal role in
constructing projects for hurricane, storm and shoreline protection, such as seawalls and the
periodic placement of sand on beaches to control erosion. The Flood Control Act of 1950
(64 Stat. 170) began the Corps’ emergency operations by authorizing flood preparedness and
emergency operations.

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CRS-3
may accrue are in excess of the estimated costs, and if the lives and social
security of people are otherwise adversely affected.
State and local governments are responsible for sharing the construction cost of
federally-funded flood control infrastructure and for its operation and maintenance.
State and local entities may construct flood control infrastructure independently from
the federal government, and are responsible for land use and zoning decisions
guiding development in floodplains and coastal areas.
Flood Insurance. By the 1950s, it had become clear to Congress that the
federal response to flood risk through structural flood controls and post-disaster
assistance for flood victims left much to be desired. Public works could not protect
all areas, control all floods, and be completely reliable; meanwhile, private
construction continued in flood-prone areas. Furthermore, relief payments were
problematic because they were unpredictable and necessitated bargaining after each
major flood. Pre-disaster funding via insurance began to look like an attractive
alternative to flood control structures or disaster assistance. Flood insurance
coverage was virtually unavailable from the private insurance markets because
insurers could not profitably sell coverage at an affordable price; attempts at private
flood insurance had been hampered by the catastrophic nature of flooding and
insurers' inability to develop actuarial rates that reflected the flood hazard risk.
Attempts to create a federal flood insurance program eventually came to fruition
with the National Flood Insurance Act of 1968 (NFIP, P.L. 90-448; 42 U.S.C.
§4012), which authorized the creation of the National Flood Insurance Program
(NFIP). Coverage is available to all owners and occupants of insurable property in
a participating community. Managing flood risk through insurance was expected to
greatly reduce the reliance on federal disaster relief assistance because participating
communities were expected to adopt and enforce building and other standards that
could greatly reduce losses from a 100-year flood. For information on issues with
federal flood insurance, see CRS Report RL32972, Federal Flood Insurance: The
Repetitive Loss Problem, by Rawle O. King. An on-going issue with flood insurance
are the accuracy of the maps used defining “special flood hazard areas” which are the
triggers for NFIP’s flood insurance requirements; for information on this topics, see
CRS Report RL31691, FEMA’s Flood Hazard Map Modernization Initiative, by
Wayne A. Morrissey.
Flood Control Infrastructure. The U.S. Army Corps of Engineers is
responsible for much of the federal investment in flood control and storm protection
infrastructure.8 Corps involvement in flood control construction is predicated on the
project being in the national interest, which is determined by the likelihood of
widespread and general benefits, a shortfall in the local ability to solve the water
resources problem, the national savings achieved, and precedent and law.9
8 Other federal agencies are involved with flood control projects, including the U.S.
Department of Agriculture’s Natural Resources Conservation Service, the Department of
the Interior’s Bureau of Reclamation, and the Tennessee Valley Authority.
9 This is described in the Corps’ Digest of Water Resources Policies and Authorities
(continued...)

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CRS-4
Over the last century, many of the communities most prone to riverine flooding
have been protected by significant investments in flood control infrastructure. Many
of the current questions and concerns revolve around the following topics:
! whether the level of protection is sufficient if all consequences are
considered (e.g., intensity and spread of urbanization, concentration
of oil processing and distribution infrastructure);
! whether flood threat and vulnerability have changed (e.g., as the
result of increases in ocean temperature, coastal wetlands losses; and
the reliability of aging levees and dams); and
! how sufficient is the hurricane and storm protection for the nation’s
coastal communities.
Reducing Vulnerability to the 100-Year Flood —
Minimum Standard Approach
In the United States, the 1% annual chance flood, more commonly known as the
100-year flood, is a standard often used as a basis for identifying, mapping, and
managing flood hazards. For example, the NFIP and most state and local
governments use being located in the 100-year floodplain as a trigger for various
requirements. The 100-year flood standard was established at the recommendation
of a group of experts in the late 1960s. “It was selected because it was already being
used by some agencies, and it was thought that a flood of that magnitude and
frequency represented a reasonable probability of occurrence and loss worth
protecting against and an intermediate level that would alert planners and property
owners to the effects of even greater floods.”10 The adoption of the 100-year flood
standard in many respects guides perceptions of what is an acceptable level of
vulnerability. The 100-year flood standard is a vulnerability standard, and not a risk
standard. Thus, the question of does the 100-year flood standard combined with
threat and consequence information result in an acceptable level of risk remains
largely unaddressed; this question is especially relevant for low probability, high
consequence events such as a Category 4 hurricane hitting a major urban center.
Attempting to provide at least 100-year flood protection largely drives local
floodplain management and infrastructure investments, resulting in a measure of
equity within and across communities. That equity in vulnerability, however, results
in uneven levels of risk because flooding of different communities has different
consequences, such as differences in the potential loss of life, social disruption,
structures damaged, and economic impact because of variations in land use and
development patterns.
9 (...continued)
Engineering Pamphlet EP 1165-21-1 (1999), visited on Oct. 19, 2005, available at:
[http://www.usace.army.mil/inet/functions/cw/cecwp/digest/c01cwag.doc].
10 Association of State Flood Plain Managers, Reducing Flood Losses: Is the 1% Chance
(100-year) Flood Standard Sufficient?(Washington, DC: 2004).

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CRS-5

The National Flood Insurance Program does not differentiate between 100-year
flood protection provided by a flood control structure and flood protection resulting
from natural topography and hydrology. As a result, development behind levees and
downstream of dams providing 100-year flood protection is not designated as located
in a “special flood hazard area,” thus freeing occupants from flood insurance
requirements as demonstrated in New Orleans. While the NFIP largely presumes that
levees, dams, and other flood control structures will not fail, their presence does not
entirely eliminate an area’s vulnerability to flooding.
The residual flood risk behind levees or downstream of dams remains largely
unaccounted for in the NFIP and often is not incorporated into individual, local, and
state decision-making. Residual risk is the portion of risk that remains after flood
control structures have been built. Risk remains because of the likelihood of the
measures’ design being surpassed by floods’ intensity and of structural failure of the
measures. Often when the designs of flood control structures are surpassed or when
structures fail for other reasons, the resulting flood is catastrophic, as shown by the
floodwall breaches in New Orleans (LA) with Hurricane Katrina. The consequences
of floods increase as development occurs behind levees and below dams; ironically,
this development may occur because of the flood protection provided. The nation’s
risk of low-probability events (e.g., 150-year flood, or Category 4 hurricane) having
high-consequences in terms of lives lost, economic disruption, and property damage
is increased by overconfidence in the level and reliability of structural flood
protection for events that are less probably than the 100-year flood.
Reducing Property Damage Vulnerability —
Benefit-Cost Analyses
The risk posed by low-probability events may be underestimated by the current
methods for analyzing flood control investments. The benefit-cost analyses
compiled to support federal decision-making for water resources projects focus on
the “national economic development benefits” of investments; regional, social, and
environmental benefits may be analyzed but often are largely excluded from the
decision-making.11 Moreover, the Corps generally limits its benefit-cost analyses of
the consequences of flooding to damages.12 That is, estimated benefits from flood
control infrastructure investments are primarily the avoided losses to existing
structures and land uses.
Authorization. The evaluation and recommendation of a flood control project
by the Corps involves multiple steps. After an initial reconnaissance study that is
11 This approach to benefit-cost analysis was developed following the Principles and
Guidelines for Water and Related Resources Implementation Studies (P&G), prepared by
the Water Resources Council in 1983 to guide federal water resources development projects.
12 Some consideration is given to business income losses and emergency response costs.
More information on the agency’s benefit-cost analysis is addressed in the its Planning
Guidance Notebook, Engineering Regulation ER1105-2-100 (2000), at
[http://www.usace.army.mil/inet/usace-docs/eng-regs/er1105-2-100/entire.pdf], visited on
Oct. 19, 2005.

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CRS-6
funded by the federal government, current policy is for the cost of the follow-on
feasibility study to be split 50% federal - 50% nonfederal; flood control and storm
protection construction generally is split 65% federal - 35% nonfederal.13 When
Congress authorizes the Corps to construct a project, the authorization generally is
based on a Chief’s Report. In that report the Corps’ Chief of Engineers typically
recommends the building of one of the alternative plans studied in the agency’s
feasibility report, consisting of an evaluation of alternative plans, benefit-cost
analysis, engineering analyses, and environmental impact assessments.
The Corps’ benefit-cost analysis of a project may result in a recommended plan
for flood control infrastructure providing for protection greater than or less than the
100-year flood. Local project sponsors can request that a “locally preferred
alternative” be built, instead of the plan identified by the benefit-cost analysis. The
NFIP creates incentives for communities to support flood control alternatives
providing at least the 100-year level of protection, but the program provides few
incentives for more protection. For some local leaders and communities, the
financial capital required to cost-share a Corps flood control project may represent
a barrier to pursuing greater protection.
The Corps’ benefit-cost analysis does not constitute a comprehensive risk
analysis, because the consequences considered are largely limited to property
damage, leaving out other potential consequences, such as loss of life, public health
problems, and economic and social disruption. The Water Resources Development
Act of 1986 (WRDA; P.L. 99-662) required the Corps to address the prevention of
loss of life in the formulation and evaluation of flood control projects. Section 904
(emphasis added) of the act stated:
Enhancing national economic development (including benefits to particular
regions of the Nation not involving the transfer of economic activity to such
regions from other regions), the quality of the total environment, the well-being
of the people of the United States, the prevention of loss of life, and the
preservation of cultural and historical values shall be addressed in the
formulation and evaluation of water resources projects to be carried out by the
Secretary, and associated benefits and costs, both quantifiable and
unquantifiable, shall be displayed in the benefits and costs of such projects.
Although potential loss of life is noted in Corps feasibility reports, there are no Corps
regulations or guidelines for how to incorporate loss of life into the agency’s benefit-
cost analyses. Part of the reason for that reluctance to quantifying the value of human
life is that its use in Corps project evaluation is unclear. Many projects have benefits
that exceed costs without including the benefit from lives saved. Therefore, although
preventing loss of life is a goal of federal flood control policy, current practice results
in property damage being the primary consequence metric used for making Corps
flood control investment decisions. A related benefit-cost analysis issue commonly
debated is whether there is a bias toward lower levels of flood protection for low-
income communities due to their lower property values. Another commonly debated
13 The construction cost share for periodic beach replenishment as part of a storm protection
project is 50% federal - 50 % nonfederal.

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CRS-7
issue is whether there is a bias toward structural flood control measures over
nonstructural options (e.g., buyouts of structures in flood-prone areas).
Appropriations. Congress and the Administration have used benefit-cost
analyses primarily in making authorization decisions. For Corps appropriations, the
Administration typically formulates the agency’s budget based on its priorities and
policies and input from the Corps. Congress reviews the Administration’s request
and modifies the agency’s budget to reflect congressional interest and priorities. The
Administration’s FY2006 budget differs from prior requests; in an attempt to cope
with the growing backlog of authorized Corps activities by concentrating federal
funds on fewer projects, the Administration prioritized construction funding for most
Corps projects based on projects’ remaining benefits to remaining costs (RB/RC).
This approach has been both supported and criticized, as discussed in CRS Report
RL32852, Energy and Water Development: FY2006 Appropriations, coordinated by
Carl Behrens.
Because the Corps’ benefit-cost analyses are focused on damages, the Corps
projects funded in the Administration’s FY2006 request are those that reduce the
most damages per dollar spent, which may not be the projects most efficient at
reducing risk more broadly. Also the RB/RC metric is used for multiple types of
Corps water resources projects — navigation, flood control, and storm protection.
Because the Corps benefit-cost procedures vary by project type, comparisons of the
RB/RC ratio of navigation projects, flood control, and storm protection projects may
be misleading, especially if significant benefits derived from projects, such as the
potential benefits of lives saved, are not quantified. In other words, benefit-cost
analyses as applied by the Corps are tools for informing decisions on individual
projects but were not performed with the intent to determine the most cost-effective
projects. Metrics that include consequences in addition to damages could be
combined and weighted to produce a risk-ranking for flood control projects;
however, attempts to prioritize the Corps budget across multiple types of water
resources projects continues to be a challenge because of the varying and inter-related
types of benefits and costs of ecosystem restoration, flood control, navigation, and
multi-purpose projects.
Reducing Flood Risk
A fundamental question being raised in the aftermath of Hurricanes Katrina and
Rita is: do current federal policy, programs, practices result in an acceptable level of
aggregate risk for the nation? Risk management is being increasingly viewed as a
method for setting priorities for managing some hazards in the United States.
Because floodplain and coastal development are largely managed by local
governments, some aspects of national flood risk management likely would be
unwelcome and infeasible, and could be perceived as resulting in an inequitable
distribution of flood protection. For example, if floods in large urban concentrations
are perceived as representing a greater risk for the nation, federal resources may be
directed away from protecting smaller communities and less-populated states. Two
of the concerns raised in discussions of greater emphasis on risk analysis in the
development and design of specific projects are that risk analysis may result in lower
levels of protection being implemented in some areas, and that information and
knowledge are insufficient to perform an adequate analysis. However, an argument

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CRS-8
can be made that the federal government has an interest in reducing risks resulting
in national consequences, and in prioritizing federal involvement and appropriations
accordingly.
Factors complicating the determination of the nation’s flood risk include
changing conditions and incomplete information. For example, many flood control
projects were built decades ago using the available data and scientific knowledge of
the period that may have underestimated flood hazards for particular areas.
Similarly, there are issues with changes in risk over time due to processes such as
land loss, subsidence, sea-level rise, reduced natural buffers, urban development, and
infrastructure aging. For existing dams, there is some information on consequences
of failure as measured by loss of life, economic loss, environmental loss, and
disruption of lifeline infrastructure (such as bridges and power grids); however, the
database with this information only tracks the amount and type of losses, not the
likelihood of failure.14
A risk-reduction approach for organizing federal flood-related investments
likely would incorporate many structural and nonstructural flood management
measures already being considered and implemented, but change their priority and
mix. Options considered in a risk-centered approach may include shifting federal
policy toward wise use of flood-prone areas (e.g., rules or incentives to limit some
types of development in floodplains), incorporating residual risk and differences in
riverine and coastal flood risk into federal programs (e.g., residual risk premiums as
part of the National Flood Insurance Program), creating a national inventory and
inspection program for levees, promoting greater flood mitigation and damage
mitigation investments, re-evaluating operations of flood control reservoirs for
climate variability and uncertainty, and investing in technology and science for
improved understanding of the flooding threats.
Flood Control Issues in the 109th Congress
Hurricanes Katrina and Rita have focused the nation’s attention once again on
issues that flood experts have debated for decades. The disasters have renewed
public concerns about reliability of the nation’s aging flood control levees and dams.
The debate over what is an acceptable level of risk — especially for low-probability,
high-consequence events — and who should bear that risk is taking place not only
in the states affected by the hurricanes, but nationally. The concerns being raised
range widely, including interest in providing more protection for concentrated urban
populations, risk to the nation’s public and private economic infrastructure, support
for reducing vulnerability by investing in natural buffers, and equity in protection for
low-income and minority populations.
The response to Hurricanes Katrina and Rita have included discussions of
expanding mitigation activities (such as floodproofing structures and buyouts of
structures on the most flood-prone lands), investing in efforts to restore natural flood
and storm surge attenuation, and assuring vigilant maintenance of existing flood
14 For information on dam safety, see CRS Report RL33108, Aging Infrastructure: Dam
Safety, by Kyna Powers.

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CRS-9
control structures, as well as interest in new and augmented structural flood
protection measures. Although major flood events, such as the Midwest Flood of
1993, generally spur these discussions, the policy changes implemented often are
incremental.15 The 109th Congress, like previous Congresses, faces a challenge in
reaching consensus on how to proceed on anything other than incremental change
because of the wealth of constituencies and communities affected by federal flood
policy. Another practical challenge is the division of congressional committee
jurisdictions over the federal agencies and programs involved in flood mitigation,
protection, and response.16
There are many questions that remain about how events unfolded in the
aftermath of Hurricanes Katrina and Rita, and much information that is still needed
to understand how to apply and communicate the lessons learned to the rest of the
country. Although there is no way to protect against all flood risk, it is clear that
more information is needed to evaluate flood risk, to understand the reliability and
residual risk of structural flood protection, and to incorporate the full range of flood
consequences into local, state, and federal decision-making.
15 After the Midwest Flood of 1993, the Interagency Floodplain Management Review
Committee was directed to evaluate the performance of floodplain management and make
recommendations in current policies and programs of the federal government. The resulting
1994 report, titled Sharing the Challenge: Floodplain Management in the 21st Century, often
called the “Galloway Report” for the Committee’s chair, includes the Committee’s
recommendations; the report, visited on Oct. 19, 2005, is available at
[http://eros.usgs.gov/sast/2P-00526.PDF].
16 For example, Senate Committees that would likely have jurisdiction over elements of any
comprehensive change in federal flood policy would include Banking, Housing, and Urban
Affairs; Environment and Public Works; and Homeland Security and Government Affairs.
For a discussion of the jurisdictional issues, see CRS Report RS21643, House Committee
System: Jurisdiction and Referral Reform Options, by Judy Schneider and Paul Rundquist
and CRS Report RL32112, Reorganization of the Senate: Modern Reform Efforts, by Judy
Schneider et al.

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