I just read the whole text of H.R. 4100 (pdf at House committee on Financial Services) Its Purpose:
•HR 4100 IH SEC. 5. MISSION, PURPOSE, AND DUTIES OF THE CORPORATION.
(a) MISSION.—The primary mission and purpose of the Corporation(Louisiana Recovery Corporation hereafter in this Act referred to as the ‘‘Corporation’’) shall be the economic stabilization and re- development of areas within Louisiana that were dev- astated or significantly distressed by Hurricane Katrina or Hurricane Rita.
(b) ECONOMIC STABILIZATION.—In executing its economic stabilization mandate, the Corporation shall, after consultation with State and local officials and pursuant to agreement that eligible properties are not likely to be redeveloped without Corporation assistance, locate and acquire real property (commercial and residential) in such a manner and subject to such conditions that, upon the consummation of any acquisition of real property securing a mortgage loan—
(1) the mortgagee’s debt shall be considered paid in full by the mortgagor; and
2) all title and interest in the real property securing such mortgage loan passes to the Corporation.
(c) REDEVELOPMENT.—In executing its redevelopment mandate, the Corporation shall, after consultation with State and local officials, carry out the following activities:
(1) Package for sale acquired real property in substantial tracts of land.
(2) Make improvements to such tracts of land so as to make the land suitable for sale and development, including such basic improvements as the following: (A) Construction and reconstruction of neighborhood roads.
(B) Repair or replacement of water and wastewater infrastructure.
(C) Similar activities necessary to maximize the return on acquired real property.
(3) Through a competitive bidding process, dispose of such acquired properties in a profitable manner.
(4) In consultation with State and local officials, provide for the protection and preservation of historical and other sites of cultural significance in such a manner that promotes local heritage and interest.
The risk is the Corporation could improve the properties it purchases and then find the fair market value is lower than the cost of improvements. Taxpayers get stuck with the balance.
Also, is my math wrong here (my calculator doesn't take billions), Baker says he is willing to compromise. He should be. Louisiana is asking the nation to take a huge risk by borrowing up to $30 billion. If I divide 30 Billion by 200,000 homes, thats $150,000.00 per home. I wonder what the median price of these homes were before the hurricane.
If this passes, I hope its not a boondoggle.
Mississippi is paying their homeowners $150,000. I guess it's okay because Hailey Barbour is a big pubbie. Where's the outrage over the feds bailing out the homeowners in MS who were flooded out without flood insurance? It is the same issue. It just happens to be that a major US city was destroyed instead of the smaller communities that usually get wiped out during hurricane season.