Louisiana Lawmaker Floats New KatrinaBailout Plan

WASHINGTON - (10/21/05) -- Legislation introduced in the HouseThursday would create a new tax-exempt agency that would buy upflood-damaged property in and around New Orleans and financereconstruction of the hurricane-wrecked city. The bill, introducedby New Orleans Congressman Richard Baker, would create a LouisianaRecovery Corp. that would be charged with buying up damagedproperty for renovation, repairing the Mississippi River levees andcleaning up pollution in the flood-damaged city. Creation of thenew agency would come at a time when bond ratings for New Orleansand Louisiana have plummeted to near junk-bond status as debtsrelated to Hurricane Katrina have overburdened the governments andmade it difficult to borrow funds for the massive renovation of NewOrleans, Baker said Thursday during a hearing before the HouseFinancial Services Committee. The new agency would have the backingof the federal government, so would be able to float tax-free bondsto finance the work, Baker said. "This relief plan will not beabout making the rich people richer, but the rehabilitation of NewOrleans," said Baker.