[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
 DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, 

                                  AND 

             INDEPENDENT AGENCIES APPROPRIATIONS FOR 2001   

                                

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS
                             SECOND SESSION

                                ________

            SUBCOMMITTEE ON VA, HUD, AND INDEPENDENT AGENCIES
                   JAMES T. WALSH, New York, Chairman

 TOM DeLAY, Texas                      ALAN B. MOLLOHAN, West Virginia
 DAVID L. HOBSON, Ohio                 MARCY KAPTUR, Ohio
 JOE KNOLLENBERG, Michigan             CARRIE P. MEEK, Florida
 RODNEY P. FRELINGHUYSEN, New Jersey   DAVID E. PRICE, North Carolina
 ANNE M. NORTHUP, Kentucky             ROBERT E. ``BUD'' CRAMER, Jr.,
 JOHN E. SUNUNU, New Hampshire          Alabama
 VIRGIL H. GOODE, Jr., Virginia     
                                    
                                    

 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
       Frank M. Cushing, Timothy L. Peterson, Valerie L. Baldwin,
          Dena L. Baron, and Jennifer Whitson, Staff Assistants
                                ________

                                 PART 4
                                                                   Page
 Corporation for National and Community Service...................    1
 Federal Emergency Management Agency..............................  455

                              

                                ________
         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE

 64-294 O                   WASHINGTON : 2000


                 COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                    DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California               JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois          NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky               MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico                 JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia               STENY H. HOYER, Maryland
 TOM DeLAY, Texas                      ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                    MARCY KAPTUR, Ohio
 RON PACKARD, California               NANCY PELOSI, California
 SONNY CALLAHAN, Alabama               PETER J. VISCLOSKY, Indiana
 JAMES T. WALSH, New York              NITA M. LOWEY, New York
 CHARLES H. TAYLOR, North Carolina     JOSE E. SERRANO, New York
 DAVID L. HOBSON, Ohio                 ROSA L. DeLAURO, Connecticut
 ERNEST J. ISTOOK, Jr., Oklahoma       JAMES P. MORAN, Virginia
 HENRY BONILLA, Texas                  JOHN W. OLVER, Massachusetts
 JOE KNOLLENBERG, Michigan             ED PASTOR, Arizona
 DAN MILLER, Florida                   CARRIE P. MEEK, Florida
 JAY DICKEY, Arkansas                  DAVID E. PRICE, North Carolina
 JACK KINGSTON, Georgia                MICHAEL P. FORBES, New York
 RODNEY P. FRELINGHUYSEN, New Jersey   CHET EDWARDS, Texas
 ROGER F. WICKER, Mississippi          ROBERT E. ``BUD'' CRAMER, Jr., 
 GEORGE R. NETHERCUTT, Jr.,            Alabama
Washington                             MAURICE D. HINCHEY, New York
 RANDY ``DUKE'' CUNNINGHAM,            LUCILLE ROYBAL-ALLARD, California
California                             SAM FARR, California
 TODD TIAHRT, Kansas                   JESSE L. JACKSON, Jr., Illinois
 ZACH WAMP, Tennessee                  CAROLYN C. KILPATRICK, Michigan
 TOM LATHAM, Iowa                      ALLEN BOYD, Florida               
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama
 JO ANN EMERSON, Missouri
 JOHN E. SUNUNU, New Hampshire
 KAY GRANGER, Texas
 JOHN E. PETERSON, Pennsylvania
 VIRGIL H. GOODE, Jr., Virginia     

                 James W. Dyer, Clerk and Staff Director

                                  (ii)


DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
              INDEPENDENT AGENCIES APPROPRIATIONS FOR 2001

                              ----------                              

                                        Tuesday, February 29, 2000.

             CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

                               WITNESSES

HARRIS WOFFORD, CHIEF EXECUTIVE OFFICER, AMERICORPS
WENDY ZENKER, CHIEF OPERATING OFFICER
ANTHONY MUSICK, CHIEF FINANCIAL OFFICER
    Mr. Walsh. I think we are ready. At least, we have the two 
principals of the subcommittee, and hopefully we will be joined 
by others.
    Welcome back.
    Mr. Wofford. Thank you, Mr. Chairman.
    Mr. Walsh. I do not see a gavel anywhere, so please assume 
that I have made a gavel-like noise and we will begin.
    This is the first of many hearings for the VA-HUD 
Subcommittee on Appropriations. We begin this morning with 
Senator Wofford. We would like to welcome you back, as well as 
your staff and supporters. With that we will begin our hearing 
for the 2001 budget.
    The budget request for the Corporation for National and 
Community Service this year, for the portion under the 
jurisdiction of this subcommittee, is $538,700,000, an increase 
of $101 million over the fiscal year 2000 appropriation of 
$437,138,000.
    I am joined by my colleague, the distinguished gentleman 
from West Virginia, Mr. Mollohan, who is the ranking Democrat 
on the subcommittee. At this time, I will offer Mr. Mollohan 
the opportunity to make any opening statement he might wish to 
make.
    Mr. Mollohan. Thank you, Mr. Chairman.
    I look forward to this hearing and join you in welcoming 
the witness this morning. I will have some questions after you 
are finished.
    Thank you.
    Mr. Walsh. Thank you.
    Senator Wofford, we will include your entire statement as 
part of the record. If you would like to provide us with a 
summary, we can then move on to our questions about your 
program and your budget request.
    Please begin.


                             oral statement


    Mr. Wofford. Thank you very much, Mr. Chairman, and 
Congressman Mollohan and Representative Meek.
    Mr. Walsh. I am sorry--I did not see you come in, Carrie. 
Welcome.
    Mr. Wofford. I would like to introduce Wendy Zenker, the 
Corporation's Chief Operating Officer, and Tony Musick, our 
Chief Financial Officer, at my right and left. And I would like 
to introduce two special colleagues who are here today--Bob 
Goodwin, President and CEO of the Points of Light Foundation, 
and Peter Gallagher, the President and CEO of America's 
Promise, and his colleague Page Cassidy. Their organizations 
were also launched by Presidents of the United States and are 
two of our key partners in the world of national service and 
community volunteering.
    Mr. Chairman, let me begin by thanking you for your 
interest and support. You are a leader in national service at 
home and abroad, beginning long before AmeriCorps existed. And 
Congressman Mollohan and Representative Meek and your 
colleagues on the committee, I very much appreciate your 
support and interest.
    Mr. Walsh. I will note that Congressman Goode from Virginia 
is also present.
    Mr. Wofford. Good to see you.
    I am delighted to present the President's request, which 
calls for increases in all of the Corporation's service 
programs and in the funds used to support the Corporation's 
operations. I want to use these opening minutes to bring you 
up-to-date on our top priorities of the Corporation.
    Four and a half years ago, when the President asked me to 
head the Corporation, he gave me a very specific charge--to 
make national service a nonpartisan enterprise in which all 
Americans can take pride as they do with the Peace Corps and 
our armed forces.
    As soon as I was confirmed, I was confronted with a second 
challenge--to strengthen the management practices of the 
Corporation.
    These two imperatives have been my focus, and they are what 
I will report on briefly today.
    As you know, the Corporation reports regularly to this 
subcommittee on progress in implementing our detailed action 
plan to strengthen management practices. Let me describe five 
key accomplishments.
    First, we now have a strong and deep management team in 
place to lead our business operations. Since our meeting last 
year, we have added an exceptionally gifted Chief Financial 
Officer, Tony Musick; we have also appointed a Deputy CFO and a 
new Chief Information Officer. This team, along with our 
outstanding Chief Operating Officer, Wendy Zenker, has brought 
rigor and discipline to the Corporation's business operations.
    Second, we have installed and implemented a new core 
financial management system that dramatically improves the 
Corporation's financial accountability.
    Third, our computer systems made the transition to the year 
2000 smoothly and successfully.
    Fourth, all documents in the National Service Trust, which 
now number nearly one million pages, have been digitally 
imaged, making it easy, fast, and accurate to retrieve records.
    Fifth, AmeriCorps grantees are now submitting information 
on members' enrollment, service hours and term completion to a 
secure Web-Based Reporting System.
    On the program front, National Service is stronger, more 
vital, and more effective. The programs we administer help to 
make possible opportunities for more than one million 
Americans, young and old alike, to engage in service.
    Through the Learn and Serve America Program, young people 
in school are being challenged to take personal responsibility 
for the needs of their communities. Service-learning is taking 
root in schools throughout the country. A Department of 
Education study released last fall shows that one-third of 
America's schools now organize service learning for their 
students. Evaluations show that students who participate in 
service learning improve their academic performance, develop 
problem-solving skills, and learn the habits of good 
citizenship. I urge your support for this catalytic Federal 
investment.
    In AmeriCorps over the past 5 years, people across the 
country have experienced the power of more than 150,000 
AmeriCorps members getting things done. They have seen 
AmeriCorps members tackling problems in hard-pressed 
communities, helping organizations of the civic sector, while 
at the same time becoming future leaders of this country.
    Let me emphasize that AmeriCorps serves as the junior 
partner supporting the important work of nonprofit educational 
and faith-based organizations. Some 900 such local, State, and 
national organizations select and administer AmeriCorps 
members, more than 40,000 strong this year. These AmeriCorps 
members are helping nonprofit organizations do their work 
better, smarter, and on a larger scale.
    Let me quote what Tom Jones, Senior Vice President of 
Habitat for Humanity, recently said. ``Just in terms of the 
AmeriCorps Program, we now have about 775 service corps members 
involved. We are heading toward the 2 millionth service hour. 
We can count 1,372 Habitat houses that have been built as a 
direct result just of AmeriCorps. We know and can count over 
177,000 Habitat volunteers who have been supervised by 
AmeriCorps volunteers.''
    Habitat is one good example, but it is just that--one of 
many. That is why it is not surprising that after studying 
survey data and examining 60 programs, Aguirre International 
concluded that AmeriCorps effectively prepares young Americans 
for the future, strengthens communities, and builds the civic 
sector by providing people power to nonprofit organizations.
    National service is challenging our citizens, especially 
young people, to take responsibility for something greater than 
their own self-interest, to become the new patriots of the home 
front.
    Mr. Chairman and members of the committee, this is the 
fifth and I believe the last time I will have the honor of 
appearing before this committee. It has been a great privilege 
to head the Corporation, to work with you, and to see national 
service win more and more bipartisan support in Congress and 
around the country. I believe more than ever today, and I 
believe it with what Martin Luther King called ``the great 
urgency of now,'' that national service is at the vital center, 
at the core, of what we need to do to make the promise of 
America a reality for all Americans.
    Thank you.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Walsh. Thank you very much for your opening statement.
    Let me just say that I think the President chose wisely 
when he asked you to come and take this responsibility on. I 
think you have given it tremendous energy. Your idealism comes 
through loud and clear, and I think it is important that the 
program recognize the idealism in all of us. I--prematurely, I 
suppose--thank you for your years of service. We will see what 
happens but in any event, I think you have made some real 
strides in the administration. Of course, there will be some 
questions about that, but I think that that needs to be 
recognized. So I thank you for that.
    Mr. Wofford. I appreciate it.

               Program Administration And New Initiatives

    Mr. Walsh. I will ask a few questions, and we do not have 
the 5-minute rule, but we will try to keep it within reason. 
There are only four of us here now, but I suspect others will 
come, so we will just alternate back and forth and proceed at 
pace. Hopefully, this will not take too long.
    First of all, the budget request of $100 million is a real 
vote of confidence on the part of the administration, and I 
congratulate you for that. I do not know if we will be able to 
meet that request, as we have many priorities in this budget, 
but we will give it a serious look.
    The budget request for fiscal year 2001 includes a $35 
million increase for program administration, which is almost a 
25 percent increase. In your justification material, you said: 
``If Congress provides the additional funding requested, the 
Corporation will still have to make difficult cuts to operating 
costs in order to implement more critical initiatives.''
    If you get a 25 percent increase, and that will still cause 
the Corporation to cut, why are you proposing new initiatives--
for example, Youth Empowerment Grants, Community Coaches, and 
America's Promise?
    Mr. Wofford. First, I would like to note that half of that 
increase in administrative funds that you have just cited is to 
support and strengthen and give special assistance at this 
point to the State Commission network, which is so crucial to 
the effective operation of the programs and the support of the 
900-some different organizations that are using AmeriCorps 
members. Forty percent of the base--I will turn to our Chief 
Operating Officer.
    Ms. Zenker. If I could just put the $35 million in context, 
within that program administration account, we also support in 
its base the State Commissions; so 40 percent of the $35 
million goes to State Commissions, and 60 percent stays within 
the Corporation for our own program administration needs. When 
we are looking at the increase of $7.7 million above our base, 
again, a portion of that goes to State Commissions, and a 
portion stays with the Corporation. So our own increase for 
program administration--running the Corporation--is about $4.1 
million.
    Mr. Wofford. In response to the other part of your 
question, the President's Summit which launched the America's 
Promise Campaign to mobilize forces for children and youth is, 
like the Points of Light Foundation, a key part of what I would 
call the effective delivery system of national and community 
service, just as the Points of Light volunteer centers around 
the country are increasingly agencies that use AmeriCorps 
members and are key to the organizations that AmeriCorps works 
in. America's Promise has developed an extraordinary network. 
They do not control, and they do not run it, but they supply 
tremendous new resources to organizations that AmeriCorps 
members are in, so that as AmeriCorps grows, with two-thirds of 
our assignments related to the five goals of America's 
Promise--our Board of Directors before the President's Summit 
had chosen children and youth as the special focus we would 
urge on State Commissions, and our special focus for the 
national grants that we give--and America's Promise is in that 
business related to the key problems of children and youth.
    So they go together, Mr. Chairman, on the America's Promise 
point, and I can elaborate on that.
    [The material follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Wofford. The other two initiatives we think are very 
promising initiatives which themselves are going to be 
essentially contracted out, so they will not substantially 
increase our administrative costs--the tapping of the service 
of former AmeriCorps members, the AmeriCorps Reserves idea, and 
the Empowerment Grants and the Community Coaches--we anticipate 
that in most cases, that is going to be by competitive bid with 
some of the great partnership organizations that have been 
working with us.
    On the continuing service by AmeriCorps members, we have 
already created a partnership with Boys and Girls Clubs, Big 
Brothers/Big Sisters, the American Red Cross, the YMCA, and 
three or four other major organizations which are tremendously 
interested in finding out how to tap the continuing service of 
AmeriCorps members. And on the reserve, for work in disaster 
areas, the American Red Cross has had one of the most 
successful programs of AmeriCorps members called the Rapid 
Response Program, which started in Los Angeles and has spread 
around the country, where they have trained with the National 
Civilian Community Corps many, many teams of AmeriCorps members 
for disaster work, and we would expect they would play a key 
role in how we would operate such a reserve for times of 
national disaster.
    Mr. Walsh. I have a number of questions. What I will try to 
do is keep my questions brief and if you can keep your answers 
brief, we will be able to get a lot more information out.
    Mr. Wofford. I will try. I will do my best, and you can 
reproach me as we go along.

                   increased state commission funding

    Mr. Walsh. I want to be polite, but at the same time, there 
is lots of information that needs to get out.
    In the proposed increase in the budget, you propose and you 
mentioned that 40 percent of that goes for the State 
Commissions, which will not require a State match. ``The 
purpose of this special classification of funding is to relieve 
the burdens on States, which have problems finding funding for 
the match.''
    Why should we establish the precedent of waiving the match, 
when this whole system was based on a match, for this 
additional increment? Why should we be changing this?
    Mr. Wofford. Well, my quick answer to that is that the 
greatest part of this system is based on the State Commissions 
working well and accepting their monitoring and grant-making 
responsibilities seriously. You could require a match for this 
extra money, but I would not recommend it, because in some 
cases, it is the very Commissions that for one reason or 
another in the State system cannot get increased money, but 
tremendously need it to do their jobs well, that would benefit 
most by this extra money.
    Mr. Walsh. If the idea is to work cooperatively and support 
what the States are trying to do, it would seem to me that 
States that are willing to put up the money should get the 
match, and the ones that are not should not. If you are going 
to waive this portion of it, the next thing you are going to do 
is come back and ask us to waive the whole thing.
    Mr. Wofford. Do you want to respond, Wendy?
    Ms. Zenker. Yes. If I may, first let me assure you that we 
are not going to and we have no intention of asking you to 
waive the base portion of the match. We are concerned, though, 
that some State Commissions do need some additional support to 
help them do the basic monitoring and other recordkeeping 
requirements that we are imposing on them. Much like we needed 
some additional money to help us fix the management problems 
that have challenged us over the past couple of years, we think 
that an infusion of some cash into the State Commissions can 
help them fix some of the problems that are being highlighted 
in some of the reviews and reports that are being done, both by 
the Corporation and by other reviewers.

                              procurement

    Mr. Walsh. Okay. On the fiscal management issues, the 
fiscal year 2000 budget submission indicates that the 
Corporation will eliminate or has eliminated four of eight 
material weaknesses in fiscal year 2000. Congratulations on 
that. However, the Inspector General has previously testified 
about nine material weaknesses. The ninth material weakness was 
procurement. How did the Corporation decide to omit procurement 
as a material weakness?
    Ms. Zenker. Again, if I could just step back for a minute, 
when the Inspector General did her audit of our financial 
statement last year, within the financial statement audit, she 
indeed identified eight material weaknesses, and in other 
reports identified a ninth weakness--procurement.
    Our expectation and hope is that we will be able to 
eliminate some of those. We are not telling you right now that 
we have been able to eliminate four of them; we are hopeful 
that when we see the results of the audit this year, we will 
see some of those weaknesses eliminated. We believe we have 
made some good progress.
    Internally within the Corporation, we do think that 
procurement is a weakness, and we are addressing it and trying 
to train the staff that we have to do a better job, bring in 
one or two additional people with special skills, and to 
strengthen it in other ways through better written policies and 
procedures.

                     contractor performance report

    Mr. Walsh. I will just ask one more question this round. 
The Office of Inspector General recently reported on the 
contractor which administered between $5 and $6 million a year 
in health care benefits to cover participants in the programs. 
The first report found the Corporation's oversight of the 
contractor to be seriously flawed. The second review covered 
the contractor's performance under the contract and questioned 
over $7 million in unsupported costs.
    What is the Corporation doing to resolve the findings in 
this report, and what has the Corporation done to prevent a 
recurrence?
    Ms. Zenker. Again, we have seen both of those reports in 
final. In terms of the Corporation's oversight of that 
contract, there are some areas in which we disagree with the 
Inspector General in terms of the weaknesses that exist, and 
other recommendations that we agree with.
    With respect to the contract itself, that is entered into 
the audit resolution process. We are looking for documentation 
or other response from the contractor. We will take a look at 
that and through the process, resolve and disallow appropriate 
costs and try to strengthen the internal controls on that 
contract in the future.
    Mr. Walsh. Does it strike you as unusual that there were $7 
million of unsupported costs found by the Inspector General?
    Ms. Zenker. I have to say not necessarily. When the 
auditors go out, they look to see if documentation exists. If a 
contractor cannot necessarily put their hands on that 
documentation, or the documentation is not adequate, an auditor 
is going to question it. Through the then 6-month audit 
resolution process, they have an opportunity to present 
additional information to us. If we find that acceptable, we 
might allow the cost. If we find it not acceptable, if they do 
not have documentation, we will disallow the cost and have them 
pay us back whatever they owe us.
    Mr. Walsh. Thank you. Mr. Mollohan.

                   increase in americorps membership

    Mr. Mollohan. Senator, you are requesting increased funding 
to allow you to bring AmeriCorps up to 62,000 members, as I 
understand--a 25 percent increase. That seems like a large 
increase. Are you confident, in times of a good economy and a 
tight labor market, that you can expand the AmeriCorps that 
quickly and maintain quality?
    Mr. Wofford. Well, it has been extraordinary that we, in 
this good economy, have had such a good response to AmeriCorps. 
The National Civilian Community Corps has over 3,400 
applications this year for 850 spots, and a number of our 
programs report the same thing. I am confident that the 
response of young people particularly, but of all ages, for 
AmeriCorps would fill those positions, and I think we have the 
new structures, including the Education-only Award System, that 
can permit that growth in a way that could be administered 
effectively.

                member demographics and attrition rates

    Mr. Mollohan. Please describe your volunteer corps for us, 
and where they come from predominantly?
    Mr. Wofford. The nature of the whole of AmeriCorps----
    Mr. Mollohan. Just demographically--who is the average 
volunteer.
    Mr. Wofford. Well, let me see--about 40 percent of the 
40,000 presently have completed college. Let me give the 
education first. Twenty-one percent have finished high school. 
Nine percent have had less than a high school education. Six 
percent have graduate degrees. Another 36 percent have had some 
college and then joined AmeriCorps. The ages range--32 percent 
of the main AmeriCorps programs are between the ages of 18 and 
21; 29 percent are between 22 and 25; and 30 percent are over 
30. In terms of background, approximately half are white; 27 
percent are African American; 3 percent are Asian, and 16 
percent are Hispanic.
    Remember that the selection of those members, except for 
our National Civilian Community Corps, is made by these 900-
some organizations that use AmeriCorps members. Habitat often 
recruits from its outstanding college volunteers. So it is an 
extraordinarily decentralized system.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Mollohan. Do you think the dropout rate, which I 
understand is around 30 percent, those who do not finish their 
year of service, is an acceptable number? Is that the rate that 
will be experienced as the program moves forward.
    Mr. Wofford. I'll ask Ms. Zenker to get me the statistics. 
It is not quite--we would not agree with your statement. 
Seventy-five percent of those who start earn an Education 
Award, and 78 percent of those who earn the award appear to be 
using it. They have 7 years in which to use the Education 
Award.
    The difference between the figure--the reasons for the 
discrepancy between what you drew as a 30 percent dropout rate 
are twofold. One, there are some people who--``drop out'' is no 
description for it--they had compelling personal reasons.
    Mr. Mollohan. Give me a better term. I am sorry I used it.
    Mr. Wofford. Well, the figures I gave you are solid figures 
which we think are very reasonable compared to the non-
completion rate of community college or public college 
students, or the Army, or the Peace Corps now--I think our 
record is probably ahead of that of the Peace Corps--but 
because of this decentralization, you have teaching projects of 
several thousand AmeriCorps members. The University of Notre 
Dame runs one where they teach for 2 years in Catholic schools. 
In their first 2 years of operation, they lost one person out 
of 150--he went to become a priest. On the other hand, 
YouthBuild, an extraordinarily important and successful 
organization that has had several thousand AmeriCorps members--
almost entirely high school dropouts--and it views as a success 
somebody who in the middle of the year gets a job. They do the 
building of Habitat or other homes; they learn building skills. 
So they do not consider it a ``dropout'' if sometime during the 
year, the member gets a job.
    So to get an average out of all that is difficult; it is 
difficult to get one that is clear. But we think the present 
record of 75 percent of those who start earning an award--some 
of those who earn the award had a compelling personal reason, 
such as illness, to leave before the end of the year, and they 
received a pro rata award--we do not consider that a 
``dropout.'' And then, some of those whom we do not give the 
award to because they leave, for example, to take a job in many 
cases--most cases--I would not call those ``dropouts'' either 
if they are in that category of disadvantaged young people who 
then go on either to a job or to education.
    Mr. Mollohan. So you consider the retention rate and the 
reasons volunteers come in and go out to be a success and not a 
problem?
    Mr. Wofford. It is not a problem as to the overall rate. 
There will be certain programs that would have problems 
recruiting. Sometimes it is because those programs are not as 
attractive, and sometimes it is because their recruiting 
technique is not as attractive. And if one particular program 
has a very high rate of people not finishing, that is a reason 
to look, and the State Commissions look to see if there is 
something wrong with that program. It needs to be done program 
by program, rather than overall average. The performance goal 
that we have reported in the performance standards that are 
incorporated in our performance plan sets the goal at 75 
percent.

                               GAO Report

    Mr. Mollohan. I appreciate that discussion and 
clarification. It seemed like a high number to me, but with 
that explanation, I think I understand it better.
    I want to give you an opportunity to respond to a GAO 
report that was commissioned by the Senate Small Business 
Committee. I understand the Committee issued a press release 
based on the report which presented some criticism, and I want 
to give you an opportunity to comment on the findings of the 
report and give us your response to those findings and to the 
Senate press release.
    Mr. Wofford. First, I recommend that members of the 
committee read the report if you have not. It is a useful 
report.
    Mr. Mollohan. I will get right on it. [Laughter.]
    Mr. Wofford. We view it as, with certain qualifications, an 
accurate report. It describes our system well. It found one of 
the most important things which that press release did not 
note, which was a primary reason as we understood for the study 
in the first place, to see whether we were on track to fulfill 
our agreement with Congress and to bring our costs down from 
the Corporation's cost to an average budgeted cost of $15,000 
per AmeriCorps member, and they found that we did. The report 
shows that we have fulfilled our commitment in that regard to 
Members of Congress.
    Second, the press release said that private sector report 
was dwindling. The report notes that there is a proportional 
decrease of, they say, 2.3 percent in the proportion of the 
costs carried by the independent or other sources than the 
Corporation. They call it ``a slight decrease.'' They do not--
and this is the main, not criticism of the report, because they 
make it very clear that they did not include the biggest way 
that we have increased private sector support, a major way, 
which is the Education-only Award Program, which Senator 
Grassley urged us on to, and we like. It is a tremendous new 
front of AmeriCorps. They did not include that. They included 
the State and national grant programs.
    The Education Award Program was designed in significant 
part to increase private sector support--namely, in that 
program, except for a $500-per-member assistance for the 
organizations, we give the Education Award of full-time 
service, a $4,725 a year voucher to go to college or pay off 
your college loan. That is all we give. All the other costs of 
that program are carried by the organizations. Boys and Girls 
Clubs have 1,000 of these Education-only Award AmeriCorps 
members. We have had 30,000 members in the 3 years that this 
has gone on in the Education-only Award Program. If the private 
sector supports there were studied and reported, we will have 
had a very substantial increase in the private and independent 
sector carrying a major part of AmeriCorps now.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    I would like to welcome to the subcommittee Congressman 
Goode. We are glad to have you with us and will give you the 
opportunity now to ask some questions.

                            funding history

    Mr. Goode. Thank you, Mr. Chairman. It is a pleasure and an 
honor to be on your subcommittee.
    Mr. Walsh. It is great to have you here.
    Mr. Goode. Since I am new, I want to just ask you some 
short-answer questions. When was the first fiscal year in which 
funds were allocated and spent by AmeriCorps?
    Mr. Wofford. Nineteen ninety-four; I arrived in October of 
1995.
    Mr. Goode. And how much was spent in 1994, just ball park?
    Ms. Zenker. I think we are all going to turn to that chart, 
if you can give us one second.
    Mr. Wofford. Just one minute.
    Mr. Goode. And since you are looking at the chart, just 
tell me for 1994, 1995, 1996, 1997, 1998, and 1999.
    Mr. Wofford. The total in 1994 was $365 million.
    Mr. Goode. Okay. And in 1995?
    Mr. Wofford. In 1995, $570 million, and then a recision 
that settled for $468 million.
    Mr. Goode. And then, 1996?
    Mr. Wofford. Four hundred thousand.
    Ms. Zenker. Four hundred million.
    Mr. Wofford. You would wish that I was right. Four hundred 
million. In 1997, the same; in 1998, $425 million; in 1999, 
$435 million.
    Mr. Goode. Okay. And what is the total number of employees 
that you now have for AmeriCorps?
    Ms. Zenker. For the Corporation as a whole, we have about 
600 people. I think only about 40 percent are funded out of our 
NCSA appropriation. We have support from two committees----
    Mr. Goode. How much are funded out of this subcommittee?
    Ms. Zenker. I'm sorry--I think it is about 40 percent, but 
we would have to get that figure officially for you for the 
record.

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    Mr. Goode. So about 240. Nationally, how many persons do 
you have in AmeriCorps--paid volunteers?
    Ms. Zenker. AmeriCorps members, we have about 40,000 
serving now, but over the course of the period of time that you 
ask about, we have had about 175,000 Education Awards that have 
been earned.
    Mr. Wofford. No. We have had enrollments of 175,000.
    Ms. Zenker. People who have enrolled--I am sorry.
    Mr. Wofford. One hundred fifty-five thousand Americans have 
served in AmeriCorps. Some have served for 2 years.
    Mr. Goode. Of the 40,000, just ball park, what do they 
generally get in a year--average.
    Mr. Wofford. Well, it is pretty clear. They get from us 85 
percent of, this year, $8,700, which is the VISTA standard 
pegged to the poverty level, and then they get an Education 
Award of $4,725, and they get health care benefits of something 
less than $1,000, and if they have children, they may get some 
child care support. That is what they get from us. In most 
cases, the programs using them stay at the standard $8,700, 
which will go up to about $9,000 this year.
    Mr. Goode. The health care benefit, they get--you mentioned 
the dollar figure, but what is it?
    Mr. Wofford. It is a minimal health care plan for a young 
person for one year of health insurance.
    Mr. Goode. And then they get an educational benefit that is 
good for 7 years.
    Mr. Wofford. Seven years; a voucher, either to pay off 
their college loan or to pay the college. It does not go to 
them, but they have a voucher that they give either to the bank 
or to the college.
    Mr. Goode. Let me ask you about your grant program. What is 
the entity in Virginia that handles your grants?
    Mr. Wofford. It is the Virginia Commission on National 
Community Service, and States can name it different things. I 
am not sure if Virginia has a director or--if anyone from the 
AmeriCorps team knows the Virginia Commissioner's name. Most of 
the Commissions are called the Commission on National and 
Community Service. It is appointed by the Governor.
    Mr. Goode. Okay. And what types of direct grants do you 
make?
    Mr. Wofford. We make grants to national nonprofits or to 
multi-State organizations. The statement attached at the end of 
my written testimony in the appendix is related to a national 
grant to Habitat, where they have had some 775 AmeriCorps 
Members in these last few years. Also, through State 
Commissions, in many cases, local Habitat units get AmeriCorps 
members, and they also have VISTAs. But the national grant that 
Tom Jones is referring to in that statement is a national 
grant. The American Red Cross is an example of a national 
grant.
    About 40 national multi-State organizations compete; they 
send in proposals for how they would use AmeriCorps members and 
the peer review--
    Mr. Goode. Do these people who work for Habitat through 
AmeriCorps state that up front? I know I have worked on 
probably seven or eight different Habitat Houses, and my wife 
was on the board of the local Habitat for Humanity, and they 
had never heard, nor have I, of anyone with AmeriCorps in any 
of those associations. Maybe I just missed it.
    Mr. Wofford. Well, I think Speaker Gingrich had not heard 
of it, either, until he went down to build the houses that 
Congress built here in Washington, two houses with a bipartisan 
team. That site has had an AmeriCorps team for at least 2, if 
not 3 years, and has played the key organizing part in building 
20 houses--I think I worked on it in previous years--and they 
were the team that was running the site and telling Speaker 
Gingrich how to do what he did on the scaffolding and--
    Mr. Goode. I have been to Keene, Virginia, Charlottesville, 
Franklin County, Danville, and Halifax County, and I have not 
seen one yet.
    Mr. Wofford. Well, Habitat has something like 2,000 units, 
and more than two-thirds of them--or more than half--have no 
paid staff. The head of Habitat, Millard Fuller, has wanted to 
have an AmeriCorps person, especially a second-year trained 
one, able to go to every one of those Habitat units without 
paid staff. The units would not get Habitat members in those 
counties if they had not applied either to the State Commission 
or to Habitat nationally. But Habitat distributes the 600-some 
current people working in Habitat to those units that most want 
them and particularly to help organize ``blitz builds.''
    So we would be delighted to know that they were there in 
those counties, but that will be up to Habitat.
    Mr. Goode. It is possible that they were, but none have 
told me that.
    Mr. Wofford. Lynchburg has been a very active center of 
AmeriCorps members serving, particularly--
    Mr. Goode. Lynchburg is not in my District.
    Mr. Wofford. It has had a college spring break ``blitz 
build'' that AmeriCorps members have organized now for at least 
2 years, with hundreds if not thousands of college students.
    Ms. Zenker. Mr. Goode, may I correct the number that I gave 
you earlier; I have found it in our book. There are 319 staff 
persons who are paid for out of our NCSA appropriation for this 
year--so not the 240 that I had estimated, but 319.
    Mr. Goode. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mr. Mollohan. Mr. Chairman, why don't we appropriate a 
little more money here and make sure we get some volunteers 
down in Virgil's District. [Laughter.]

                    Lifting Cap on National Directs

    Mr. Wofford. Mr. Chairman, one of the things before you is 
the question of the cap. Even though the Act calls for one-
third to go to national nonprofits, Congress put a cap of $40 
million on the national direct grants, and Habitat is one of 
many that would like many, many more AmeriCorps members if we 
can get that cap lifted. We have asked for a financial increase 
in the amount for the national direct in this budget 
presentation. Last year, you did not put the cap on here, and 
that was a step that would have been very valuable, but it did 
not go through the Congress in the end. That would enable Boys 
and Girls Clubs, Habitat for Humanity, the American Red Cross, 
if they have good proposals, to get more AmeriCorps members.
    Mr. Walsh. Ms. Meek.

              Private Sector and Faith Based Partnerships

    Ms. Meek. Thank you, Mr. Chairman, and welcome, Mr. Goode, 
to the committee.
    I am pleased to say, Senator, that because of the help that 
Congress has given you, you have improved and made steps toward 
improving the management of AmeriCorps, and it is significant 
in your findings here that it is going to have an improved 
value.
    As decentralized as your program is, I can imagine how 
difficult it is to pull all this into one focus. It will 
continue to be a challenge, and I am sure you and your staff 
will continue to work on it.
    In the Congress, there has been quite a bit of 
bipartisanship regarding AmeriCorps in that many times, many of 
the Democrats supported you, and Republicans did not--that is 
not all of them--and we would always have to fight for 
AmeriCorps. I see that that is changing, and there is more 
support from both sides now than there was in the beginning.
    I am sure that one of the things that has helped in that is 
the types of partnerships you have entered into and the kinds 
of contacts you have had. How has this manifested itself in 
your program? Are you really developing those partnerships with 
bipartisan groups to show that you really mean to do this kind 
of thing?
    Mr. Wofford. It is growing very fast, both with us 
nationally and with the State Commissions. You know, the first 
partnership is with Governors, and three-fifths of them are 
Republican, which is one source of bipartisan support. At the 
White House Dinner for Governors on Sunday night, I cannot tell 
you how many Republican Governors came to me to tell me how 
important the work was in their States. Governor Leavitt, head 
of the Governors Association, came and paid tribute to 
AmeriCorps members on the fifth anniversary.
    Second, the State Commissions have been extraordinarily 
successful in developing local partnerships. Bill Bentley, who 
is here, was executive director of the Florida Commission, and 
his successor is doing the same thing in Florida, creating 
local partnerships in communities to make the maximum use of 
AmeriCorps members.
    We have an extraordinary partnership that we can write to 
you about with the Boys and Girls Clubs. They have put 
substantial resources, and they are among the largest users of 
AmeriCorps in the country.
    If I could give you a report in writing on the partnerships 
across the board, I would appreciate being able to send it to 
you for the record.
    [The information follows:]

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    Ms. Meek. So they are participating more in service and in 
volunteerism; that is what you are saying?
    Mr. Wofford. Yes, yes.
    Ms. Meek. So that does help.
    I am concerned also about the role of private organizations 
and faith-based organizations in AmeriCorps. We talk about that 
a lot. Would you mind commenting about that in terms of how 
much benefit that is going to be to AmeriCorps?
    Mr. Wofford. Well, it is another major front, and they are 
a part of this Education-only Award development. The faith-
based organizations have responded enthusiastically to that, 
where they get only the Education Award, and they put up the 
other resources.
    Ms. Meek. Are you working with them?
    Mr. Wofford. Of the 40,000 AmeriCorps members this year, 
6,000 are in faith-based organizations. Catholic Network of 
Volunteer Services has nearly 1,400, and it goes up and down 
from there. But since 1994, 13,000 AmeriCorps members, or 13 
percent, have been serving with faith-based organizations. It 
is a growing dimension of AmeriCorps.
    Congress specifically gave the authority in the Act for 
AmeriCorps members to serve with faith-based organizations if 
the members do not build churches and if they do not 
proselytize, and the faith-based organizations are getting 
AmeriCorps members to help give full-time service--and 
sometimes half-time, but mostly full-time service--to usually 
ecumenical programs or community programs, after-school 
programs, tutoring, homeless work that the faith-based 
organizations are engaged in.
    We are very proud of that, and it is a major part of 
AmeriCorps. And one reason you do not know that this is going 
on is that the AmeriCorps members tend to wear an ``A'' on 
their t-shirts when they are doing hard work, but they are 
serving those organizations, and when they are on a Habitat 
team, their heart and soul is with Habitat, and so it is with 
all of these programs, so you do not necessarily--I do not want 
to say it is people power of a ``stealth'' nature, but it is 
under the surface.
    The Peace Corps chairman was in, and it was one clear 
thing, where Sargeant Shriver and the Peace Corps selected the 
members, recruited, selected, deployed, sent them overseas, 
sent them home if they were behaving badly--it was closer to 
the Marine Corps. This is the most decentralized investment by 
the Federal Government in the independent sector that I know 
of, and it is working--with challenge, with plenty of 
challenge. The challenge for these organizations is to be 
responsible, to report the service hours accurately. This new 
Web-Based Reporting System is enabling them much more easily to 
report on how many hours have been served by their members than 
we had a year ago.
    Ms. Meek. That sounds good, and I know what you are doing 
in my area and all around the country, and I want to commend 
you on it. Hopefully, you will continue to get both private and 
public support.
    Mr. Wofford. Thank you.
    Ms. Meek. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you very much, Ms. Meek.
    Ms. Northup.
    Ms. Northup. Thank you.
    Welcome. I would like to pursue some of the earlier 
questions if I may. I am interested in following up on the 
faith-based organizations being able to participate in the 
program. Would their participation come through the State 
Commission, which would then--you said earlier they choose what 
organizations can participate.
    Mr. Wofford. They would come through three different 
sources--one, the State Commissions, which they can apply to, 
and the Commissions make the decision; second, they could put 
in a grant, as the Catholic volunteer agency's proposal and the 
National Council of Churches----
    Ms. Northup. As a direct?
    Mr. Wofford. --For a national direct grant; and third, 
similar to that, they can ask to have an Education Award, which 
is just the Education Award plus the $500. Many of them have 
chosen to do that, and that goes nationally to us.
    Ms. Northup. Okay. And the Education Award--what do those 
volunteers get? They just get the Education Award----
    Mr. Wofford. No, no. The faith-based or other organizations 
may give them the same as an AmeriCorps allowance; they may 
give them less----
    Ms. Northup. Right, but AmeriCorps does not pay them.
    Mr. Wofford. AmeriCorps--the Corporation does not pay them.
    Ms. Northup. What would you do if a State Commission did 
not choose any faith-based organizations as people who could 
draw on the State AmeriCorps base?
    Mr. Wofford. Well, the State Commissions under the Act have 
to give grants in the areas of education, the environment, 
public safety, health and other human needs; and second, they 
have to have a peer review system so that it is a fair 
competition. We would be concerned if we found that a State 
Commission had a procedure that was unfair or illegal. It would 
be illegal for a Commission to say, ``We refuse to give any 
support to faith-based organizations,'' but the autonomy of 
State Commissions is very considerable.
    Ms. Northup. I am not saying that they would say that in 
their by-laws, but if, for example, education systems--as they 
are prone to do around this country--want to direct all 
supplemental services through the education system--for 
example, our public school systems in many of our districts 
choose to use all of the social service money that is supposed 
to support services--they do not choose any faith-based 
organizations to make awards to. They want to keep it channeled 
within the school system, within the public social service 
system. So it would not be surprising if the school systems 
would not say to the Commissions: We would like all the 
volunteers who are interested in volunteering in the area of 
education to volunteer within the public school system, or in 
public services, rather than faith-based. So they acquiesce to 
that, and that keeps the same system going that has always been 
in place.
    Do you all provide any direction or incentivize any of the 
State Commissions to provide services through a more diverse 
network?
    Mr. Wofford. Well, I and my team have been very 
enthusiastic about the growth of assignments in faith-based 
organizations, and we have done a lot of evangelizing for that, 
but----
    Ms. Northup. Let me ask you specifically if I may, then, 
does that mean that you have actually looked at--I know that 
you track what your direct grants are, the educational grants, 
but I am talking about what State Commissions direct. Have you 
looked to see how many thousands actually serve in faith-based 
organizations?
    Mr. Wofford. We have the overall report of how many and by 
which organization, and I do not know without reading the fine 
print as to whether it distinguishes among which of the grants 
they received. We will send it to you for the record. But I 
know of no case--and because we have pressed this; I have 
trumpeted it--I know of no case where a State Commission has 
shown reluctance to entertain grant proposals from faith-based 
organizations, and we nationally are very proud of the Alliance 
for Catholic Education Program, which supplies teachers--Notre 
Dame gets five applicants for every position for these teaching 
jobs at an AmeriCorps standard of $8,700 or less.
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    Ms. Northup. Well, let me just point out to you that Notre 
Dame was almost cut out until the language was deleted from the 
Senate--almost cut out of continuing that program. So I think 
there was----
    Mr. Wofford. I do not know about that.
    Ms. Northup. There was language that came out that said the 
service must be performed in a public school.
    Mr. Wofford. Not as far as I know related to our programs. 
I have never heard of that. I have never heard of it.
    Ms. Northup. Well, we will go back and look at that.
    Mr. Wofford. Maybe at the time the bill was originally 
passed.
    Ms. Northup. At the time the bill was originally passed.
    Mr. Wofford. I was managing the bill in the Senate, and I 
do not remember any such amendment.
    Ms. Northup. We will go back and look at it.
    Mr. Wofford. Congress has specifically put in our Act the 
provision that AmeriCorps members may serve with faith-based 
organizations.
    Ms. Northup. Well, if I asked for a printout by State of 
the organizations in which AmeriCorps volunteers, would that be 
available sort of instantaneously?
    Mr. Wofford. Pretty fast, yes.
    Ms. Northup. Okay. I think that that is what I will do, 
then, because I am concerned about the increasing number of 
faith-based organizations in my urban district that are 
providing the educational support necessary for kids to succeed 
in school. I have never been aware, ever, of an AmeriCorps 
volunteer. I would like to know and give you credit for the 
volunteers who would be there, and if they are not there, I 
would like to speak up in behalf of those organizations.
    Mr. Wofford. Good.
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    Ms. Northup. Let me ask you a couple of other questions 
about the total budget for your programs. You said specifically 
300-plus individuals in administration are paid for out of this 
budget. As I remember--I am on Labor, HHS, and Education--they 
are paid for out of HHS senior volunteers--is that right?
    Mr. Wofford. Yes--from 30 years of the Action Agency.
    Ms. Northup. That is right.
    Mr. Wofford. Those programs--Senior Companions, Foster 
Grandparents--
    Ms. Northup. So is that where all the other money for 
administration comes from--from those programs?
    Mr. Wofford. I am not sure I am getting your question.
    Ms. Northup. Foster Grandparents----
    Mr. Wofford. That other committee has Senior Companions, 
Foster Grandparents, R.S.V.P., which is 450,000 volunteers 
strong of over-55 volunteers, and VISTA. And to make it 
complicated, VISTA is a part of AmeriCorps, but it is funded in 
the other committee.
    Ms. Northup. Will you be testifying for an additional fund 
for administration from that committee, too?
    Mr. Wofford. Yes.
    Ms. Northup. And have you targeted what you want that 
increase to be?
    Mr. Wofford. Yes.
    Ms. Zenker. Yes. It is about $3 million from that committee 
also, in terms of----
    Ms. Northup. And percentage-wise, what is it?
    Ms. Zenker. If you could give me a second to find it--since 
I did so poorly on the last percentage question, I would like 
to find it if I could.

                            literacy program

    Ms. Northup. Yes.
    I have been concerned about the quality of teaching in the 
area of literacy, how we approach the area of literacy for 
youngsters, preschool and also first, second, and third 
graders. There is a great deal of research about the type of 
intervention that is very effective with those children, and 
NIH has done this research for years, but when I joined the 
committee 3 years ago, the Department of Education was almost 
unaware of it. Since then, they have become more participatory, 
and it is being applied in nine grade schools here in 
Washington, D.C., with profound success.
    When Foster Grandparents, for example, came before the 
other subcommittee, their support in helping children learn to 
read was almost unknowing, with very little training, about how 
to help these children who are most at risk to fail learn to 
read.
    Would you give me an idea of what level of professional 
training and how well you have coordinated with the most recent 
research on how children learn to read, and what sort of 
intervention is the most effective for children who are at risk 
to fail?
    Mr. Wofford. Could I respond fully to you on Foster 
Grandparents in connection with the other committee and with a 
report to you on Foster Grandparents? Our largest literacy 
programs are in AmeriCorps through this committee, and we have 
just had completed a descriptive study of all the literacy 
programs of AmeriCorps, which we can provide to the committee, 
describing where they are, through what organizations they are 
working, and in many cases if not most, the methods that they 
are using.
    The next stage of that study is not only to say that they 
are in programs that are using effective practices, but to try 
to measure whether they are actually succeeding in literacy 
work.
    By and large, we do not supply teachers in the schools, but 
a major proportion of our assignments are in after-school 
programs, non-school-hour programs, weekend and summer 
programs. The competition for those AmeriCorps positions is 
among literacy programs that come from the community, in some 
cases from the school district, in some cases from faith-based 
organizations, and we will be very interested in your input in 
this.
    We worked very closely with the Department of Education on 
what are the effective practices. We do not control what a 
local literacy program--Barbara Bush was the organizer of the 
Houston Reads Program, and I spent a couple of days there when 
they launched that program, and they were going at which of the 
methods should we use in this program. That was a joint 
partnership of AmeriCorps and universities and the literacy 
programs, and it is different than--most cities now have a 
Reads effort. I would love to talk to you more about it. I know 
I should not take any more time here on it. But it is something 
that we are evaluating very carefully at the national level, 
and we want to be plugged into the most effective practices.
    [The information follows:]

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    Ms. Northup. I know my time is up, but let me just say that 
if many of your organizations are not using the correct 
techniques, you would not be alone in this. You can find it in 
schools of education that train our teachers. But there is 
quite a body of evidence that gives very good guidance in this 
area, and it is a shame that children who are 6 years old and 
are falling behind right now are in ineffective programs, when 
we have really good evidence--both evidence and application--of 
what really does work well.
    Mr. Wofford. Let me come and learn something from you on 
this.
    Ms. Northup. Okay. Thank you.
    Thank you, Mr. Chairman.
    Mr. Walsh. Mr. Frelinghuysen.
    Mr. Frelinghuysen. I am a little late, Mr. Chairman. Maybe 
I should yield my time.
    Mr. Walsh. You are so late that it is your turn.
    Mr. Frelinghuysen. It is still ``Good morning.''
    Let me know if I cover some of the same territory, Mr. 
Wofford. First of all, good morning. It is nice to see you 
again.
    Mr. Wofford. Good morning.

                      financial management system

    Mr. Frelinghuysen. You have addressed the issue of whether 
you have a reliable cost accounting system. You have one in 
place this year. Last year--I was reviewing some of the minutes 
from this meeting--you did not have a reliable financial 
accounting system in place. Do you have one in place this year?
    Mr. Wofford. I would like our Chief Financial Officer to 
answer that.
    Mr. Frelinghuysen. In other words, I would like to start 
and get the answers that I did not feel were sufficient last 
year.
    Mr. Musick. The short answer is no, there is no cost 
accounting system in place this year if you call a cost 
accounting system a system where people put their time in and 
identify every hour of what they are doing and how they are 
doing it.
    The reasons for that are threefold. Number one, we just put 
up a new financial system. If you were to look at the old 
financial system, I am not quite sure it would have been 
capable of supporting a cost accounting system that you could 
have fed into that. We took a look at that, and we evaluated 
that.
    Second, the other part of it is that in putting up the new 
financial system, there has been criticism about the 
organization and its ability to get its financial act together. 
It was very difficult, very complicated, and it took a lot of 
time to get the financial system up and in place.
    Third, I think what we need to look at is do we want a cost 
accounting system, or do we want to determine cost accounting, 
what something costs. There are other ways of doing that 
without an elaborate system.
    So again, the short answer is no, but for the reasons I 
have given, that really, the effort has been toward getting a 
new financial system in place.
    Mr. Frelinghuysen. So we do not have a cost accounting 
system, but last year--are you Mr. Zenker----
    Mr. Musick. No.
    Mr. Frelinghuysen. You are Ms. Zenker?
    Ms. Zenker. Yes.
    Mr. Frelinghuysen. Maybe I should address this to you.
    Mr. Wofford. This is Mr. Musick, the Chief Financial 
Officer, who is in place since last year.
    Mr. Frelinghuysen. All right.
    Ms. Zenker, last year, you said in response to a question I 
asked, ``We do not have a cost accounting system, and we do not 
have plans in place right now to create a cost accounting 
system. We have identified what our most serious weaknesses 
are, and we are trying to fix those significant weaknesses. We 
are putting in a new core accounting system''--is that what you 
are referring to----
    Mr. Musick. That is right.
    Mr. Wofford. And it is in place and functioning well.
    Mr. Frelinghuysen [continuing]. ``So that we will have 
better financial information that we can share with you.''
    Is everybody satisfied with what we have in place?
    Mr. Wofford. We have made tremendous progress, and we will 
see where our auditors think we have arrived in a month or so. 
But satisfied, no. As long as we have any material weaknesses 
or other weaknesses, you would not want me to be satisfied; but 
I am pleased that we have made tremendous progress this year.
    Mr. Frelinghuysen. Do you anticipate that the Corporation 
will receive a clean opinion when the currently pending audit 
of fiscal year 1999's financial statements are submitted at the 
end of March?
    Mr. Wofford. We know how much progress we have made from 
our point of view; we want to see their assessment. We hope we 
will. I am optimistic. But it would be completely out of line 
for me to predict what the auditors are going to report at this 
point. They are busily at work right now completing their audit 
in the next few weeks.

                                 census

    Mr. Frelinghuysen. Maybe we will move on to some less 
controversial issues. Relative to the Census, last year, we had 
a discussion about whether AmeriCorps had a role to play in the 
2000 Census. Census Subcommittee Chair Dan Miller of Florida 
had proposed using some of your volunteers to go into hard-to-
count areas, rural areas, inner-city areas. I think you were 
hesitant at that time to have any of your people be Census 
enumerators, but you were somewhat open to the idea that they 
could help with outreach programs in some communities.
    Did you meet with Congressman Miller, and did you meet with 
any of the Census people in this regard?
    Mr. Wofford. I had a brief talk with Congressman Miller. As 
far as I know, he did not press that proposal for actually 
asking for the assignment of AmeriCorps members to the Census 
as Census workers. I do not believe the Census itself 
considered that. We have a partnership agreement with the 
Census that they are very pleased with. We have 40,000 
AmeriCorps members, we have many thousands more involved in 
service learning in schools, and we have our Senior Volunteers, 
and we have tried to get our whole system to become champions 
of the Census, and the Census has been very pleased with the 
degree to which our network has responded.
    I have been around the country this season, and there is 
tremendous interest in trying to get the people working with 
us, whether AmeriCorps members or service learning people in 
the schools, to go back and tell their parents, to get a full 
count. We are enthusiastic about what we have done to publicize 
and to cooperate, but of the 300,000 part-time workers the 
Census is hiring, I do not think they were interested in 
engaging AmeriCorps members in that, and it would have had to 
come through the State Commissions, because we do not control 
where they suddenly go.
    Mr. Frelinghuysen. You are helping the Census, then, with 
its objectives.
    Mr. Wofford. Very much, and enthusiastically, yes--and 
actively.

                          disability set-aside

    Mr. Frelinghuysen. Relative to individuals with 
disabilities, the Corporation has a mandatory set-aside to 
foster placement of individuals with disabilities in national 
service. Further, the Corporation had a conference, I believe, 
in the summer, a couple of summers ago, and a follow-up 
conference on disability, which I presume occurred last month.
    Mr. Wofford. Which I attended, yes.
    Mr. Frelinghuysen. Yes. Can you tell the committee briefly 
the sorts of recommendations that have come out of these 
conferences, and the extent to which you have implemented 
either the 1998 recommendations or those that came out of the 
more recent conference?
    Mr. Wofford. Some of the disability organizations were key 
in planning that conference. The UCP, United Cerebral Palsy 
Organization, actually organized and ran the conference. It 
brought together our network of commissions and programs with 
some of the major disability organizations, and everybody to 
whom I have spoken has felt that it was a tremendously 
successful conference in two respects--one, making clear to the 
disability organizations that programs of national service all 
around the country are actively interested in increasing the 
proportion of people with disabilities in their programs; and 
second, it put our network of State Commissions in this 
decentralized system in close touch with those organizations to 
increase the number of people with disabilities whom they use.
    I would like to give you a further report on the results of 
that conference, but we are very committed to expanding our 
effort in that beyond the set-aside.
    [The information follows:]


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    Mr. Frelinghuysen. Has the set-aside been met?
    Mr. Wofford. The set-aside has not ever been fully met, but 
that conference was committed to going well beyond the set-
aside in terms of the number of AmeriCorps members--there are 
two things. The set-aside was specific money to disabilities 
programs. The other half of this is getting this large, 900-
organization network using AmeriCorps members themselves to 
seek people with disabilities, which would not be registered in 
the set-aside.
    Mr. Frelinghuysen. So the organization is having some 
problem using the expenditure specifically for the disability--
--
    Mr. Wofford. I am going to have to ask my colleagues to say 
what the present state of the expenditures are on the 
disability set-aside.
    Ms. Zenker. Our concern right now is that the set-aside as 
it is described in the statute is too limited, and in our 
reauthorization proposal, we are suggesting some changes so 
that we can indeed get that money out into the community.
    Mr. Frelinghuysen. How is it limited? Is it limited because 
people cannot get organized enough to use it, or are there some 
real restrictions that make it difficult?
    Ms. Zenker. It is limited in the uses that can be made of 
that money, and we would like to be able to expand it so we can 
indeed get it out into the community. We can give you some more 
information.
    [The information follows:]


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    Mr. Frelinghuysen. On both sides of the aisle here, there 
was a reason for putting in that mandatory set-aside. I think 
all of us know that there are a lot of organizations that are 
very strong advocates, and we would obviously like there to be 
some compliance with the law.
    Ms. Zenker. We will have a proceedings of the conference 
that was just held printed up, and some materials that we can 
distribute both to our community, and we will also share them 
directly with you, and we will make ourselves available to 
answer any more questions.
    Mr. Wofford. The purpose of this conference in part was to 
get a whole range of organizations that could put in 
applications to put in applications. We have been ready, 
willing, able and eager to get more applications, and we think 
this conference is going to produce that.

                          dc reads evaluation

    Mr. Frelinghuysen. Would you briefly comment--your 
statement mentions a major literacy initiative in the District 
of Columbia. What does this program entail?
    Mr. Wofford. It is not some separate program that we 
organize. It is the District of Columbia increasingly all-out 
efforts on----
    Mr. Frelinghuysen. Mentoring and tutoring?
    Mr. Wofford [continuing]. After-school programs, literacy. 
And we helped to organize the coalition of all the colleges and 
universities in the city. We have had VISTA and AmeriCorps 
members in substantial numbers in 16 elementary schools who 
have been organizers of the literacy programs; they organize 
the volunteers coming from law firms and others in the 
District's literacy programs.
    We have an evaluation study of that program, and I would 
like to send that to you if I may. It has been a big investment 
on our part of time and of AmeriCorps, and our senior programs 
have been participating as well.
    Mr. Frelinghuysen. So you judge the efforts to date a 
success?
    Mr. Wofford. Well, I would like the District of Columbia to 
be a city where we really take the challenge of the young 
people in this city and apply all of our resources with effect, 
and the District of Columbia is so far from what needs to be 
done in terms of assembling the resources that I do not like to 
use the word ``success.'' Our limited programs have been 
successful in those elementary schools, but there is so much 
more to be done, and I am personally pressing for more emphasis 
on that.
    Mr. Frelinghuysen. And just briefly, how many people are 
being used in this effort?
    Mr. Wofford. In the District of Columbia?
    Mr. Frelinghuysen. Yes.
    Mr. Wofford. I will have to give you a report on that. 
There are about 18 programs in the District of Columbia. I met 
with the program directors of those programs about a week ago, 
and most of them are engaged in it, and I will get you a 
report. I do not think I can give you a ball park number right 
now.
    [The information follows:]


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    Mr. Frelinghuysen. I am sure we are supportive, but it 
might be good to know how many people are involved.
    Mr. Wofford. Yes.
    Mr. Frelinghuysen. Thank you very much.
    Mr. Wofford. They range from an R.S.V.P. senior who gives 3 
hours a week to full-time VISTAs and full-time AmeriCorps 
members, to half-time George Washington University AmeriCorps 
members.
    Ms. Zenker. We have 340 tutors who operate under the D.C. 
Reads Program.
    Mr. Frelinghuysen. Well, those are wonderful figures, and 
you ought to celebrate. If R.S.V.P. and other programs are part 
of the overall success story, those are the kinds of statistics 
that should be on the record.
    Thank you very much.
    Mr. Wofford. We will send that to you for the record. This 
is the evaluation of 2 years of that program.
    Mr. Frelinghuysen. Thank you.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    Senator Wofford, it is a pleasure to have you and your 
colleagues here today.
    Mr. Wofford. Thank you, Mr. Price.
    Mr. Price. I am sorry to hear that this might be the last 
time that you testify before us in this capacity.
    Mr. Wofford. Well, I will be with you for the rest of this 
session, Mr. Price. [Laughter.]
    Mr. Price. All right. We will count on that.
    Mr. Wofford. An administration is coming to an end. I was 
the author in part of the 5-year Peace Corps rule, and that 
would be my 5 years.
    Mr. Price. All right. We will count on these months ahead 
to be very productive ones, and I hope we can do as well as 
possible by your request. And I am glad to have you start off 
our hearings this year. This is the subcommittee's first day of 
hearings, and it is entirely fitting that you lead off.

                            disaster relief

    Mr. Wofford. I am delighted that you have the right 
priorities.
    Mr. Price. It probably will not surprise you to learn that 
I am going to talk briefly this morning about disaster relief, 
and I want to talk about that partly because North Carolina 
seems to have become a magnet for all sorts of natural 
disasters, especially this last year with the drought, and then 
Hurricane Floyd and the ensuing floods, and then an ice storm 
and a snow storm, perhaps the only benefit of which was that it 
kept me snowed-in from the State of the Union Message, which I 
watched in the comfort of my home.
    The other reason, of course, that I want to bring that up 
here is that AmeriCorps has played an important part in 
disaster relief, particularly in the aftermath of Hurricane 
Floyd and the floods. I am speaking here of the National 
Civilian Community Corps in particular. Of course, this is not 
all that the NCCC does, but as I understand it, disaster relief 
is an important part of their mandate, and you have 
strengthened that component of your program considerably in 
recent years.
    I also noted in the full text of your testimony that you 
describe the way NCCC works and how it is deployed, and we will 
consult that. You also note that FEMA and the Red Cross sought 
four teams for every one that could be provided for the relief 
of flood victims in North Carolina, which leads me naturally to 
ask if you could give us in a little more detail, both here, 
orally, and anything that you would like to supply for the 
record, the part that the National Civilian Community Corps 
played in helping victims of Hurricane Floyd, to what extent 
there is an ongoing presence, and how long you plan to have 
AmeriCorps workers in North Carolina to help in the relief 
effort, which of course goes on and on. Also, given this 
shortfall that you testified to in terms of the response you 
were able to make to the request from FEMA, how would 
additional resources help you improve on this relief effort? I 
believe you are requesting an increase in this account from $18 
million to $21 million?
    Mr. Wofford. Yes.
    Mr. Price. How would that be deployed, and what might that 
kind of increase allow you to accomplish in situations that you 
are responding to around the country?
    Mr. Wofford. Thank you.
    General Andrew Chambers is here, who is in charge of the 
National Civilian Community Corps, which some of you may know 
was established by Congress the year before AmeriCorps was 
supported and signed by President Bush.
    The additional $3 million would enable us to grow--which 
there is a tremendous demand for--from 850-some to 1,100-some 
members. The demand is tremendous. The cap on the NCCC, which 
has not had an increase in at least 3 years, if not 4 years, is 
a tremendous limit on what we can do.
    James Lee Witt of FEMA has testified in Congress on the 
value and the tremendous need that he sees for more NCCC and 
more AmeriCorps members, and the Red Cross has said so, too.
    As to North Carolina, South Carolina, and Virginia 
hurricanes--I will put in for the record more detail--but FEMA 
called up 17 team leaders and unit leaders and deployed them to 
Raleigh, North Carolina; Charleston, South Carolina had 16 from 
the Southeast Region; 15 and two teams from the Capital Region 
in Washington responded to the FEMA call in Franklin and 
Emporia in Southern Virginia--I seem to be going toward 
Virginia right now. As the corps members began their year of 
service in 1999, two teams from the base here in Washington and 
one from the Southeast continued to assist--a total of 39 team 
members--victims in North Carolina.
    Mr. Price. I have run across some of these team members in 
the course of my visiting affected communities. I am not sure I 
have an overview, though, of all the activities they have been 
engaged in. What kind of range----
    Mr. Wofford. What James Lee Witt and the Red Cross would 
both say--and I have seen lots of disasters, from North Dakota 
to Pennsylvania to others--the AmeriCorps teams are trained in 
disaster relief before they go in. They are in teams of 10 with 
a team leader. They move in fast and stay until they are no 
longer needed. They help organize the volunteers. When the 
Susquehanna overflowed its banks and knocked out 1,000 houses, 
the AmeriCorps team there was running the bank of volunteers. 
They had a databank on how many people and families were 
displaced from their homes, how many volunteers would work. 
They have become organizers of volunteers. They roll up their 
sleeves, and they do actual delivery of the food and 
assistance. But they work fast; they work night and day.
    I have personally heard so many testimonies to the 
dedication, effectiveness and skill, and I am especially proud 
of what the NCCC has been able to do in disaster after disaster 
around the country. The Governor of Puerto Rico was just 
telling me a while ago what they had done down there during the 
hurricane and storm in Puerto Rico a year ago.
    Mr. Price. I think you referred to 17 teams deployed to 
North Carolina----
    Mr. Wofford. Team leaders.
    Mr. Chambers. We went down with about five teams. The 
problem was we were out of session, and we were just getting 
them pulled back together for this year. So there were 17 team 
leaders, and we followed that with teams as soon as they came 
on board.
    Mr. Price. And the teams are, did you say, about 10 members 
each; is that right?
    Mr. Chambers. That is right.
    Mr. Price. Do you have figures on the number of people who 
were deployed, and also on what the continuing presence is?
    Mr. Wofford. We have overall figures of 83,000 disaster 
victims assisted by NCCC teams in the last few years; 40,000 
meals distributed; 780,000----
    Mr. Price. In the last how many years--excuse me.
    Mr. Chambers. That would be in the last 5 years.
    Mr. Wofford. The last 5 years.
    Mr. Price. All right. I would appreciate those specifics.
    [The information follows:]


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    Mr. Wofford. We will get you a further report and, as you 
said, some details are in the written testimony.
    Mr. Price. Yes, and whatever you can give us in terms of 
the kinds of requests that came from FEMA or other sources and 
the extent to which you were able with your existing resources 
to respond to those requests and the extent to which you were 
not--just an honest assessment of how your resources measured 
up to this series of requests. And if you could also give some 
information about the ongoing presence--this is a clean-up 
effort that goes on and on in terms of what it is requiring of 
all of us. You do not have that at the tip of your tongue, 
though?
    Mr. Wofford. I have at the tip of my tongue that they have 
reached just about 50 disasters that they have served in these 
5 years, and that FEMA and the Red Cross sought four teams for 
every one that we were able to provide for the flooding in 
North Carolina.
    Mr. Price. All right.
    Mr. Wofford. And similar requests have been made for most 
of the other national disasters.
    Mr. Price. And if we could have some information on the 
continuing presence there and what that amounts to at the 
present, the number of people who are still working with these 
hurricane victims.
    Let me ask you another question that picks up on some 
discussion that we had last year about how the Corporation is 
leveraging volunteers in the community. You told us last year 
that you were preparing a report on this matter, and of course, 
one of the things that most of us have witnessed about 
AmeriCorps in our communities is the extent to which these 
volunteers can make organizations work more smoothly and bring 
in volunteer resources--the AmeriCorps people are catalysts for 
much wider kinds of volunteer activities.
    Do you have any numbers on the leveraging potential of 
AmeriCorps--the number of volunteers leveraged per AmeriCorps 
member, or some other way of getting a handle on what your 
effect is in this regard?
    Mr. Wofford. Yes. For example, we have studies that have 
ranged from every AmeriCorps member on average leverages, 
recruits, organizes, helps administer 12 unpaid volunteers for 
every full-time AmeriCorps member. One study that looked at 
specific programs in 1997-1998 brought that up to 17 volunteers 
for every AmeriCorps member. Each of the different programs 
using AmeriCorps members is asked, and there is a priority put 
on it, to report how many volunteers of the unpaid, traditional 
kind are leveraged by AmeriCorps members.
    In the Habitat for Humanity statement which is in the 
record for you, attached to my written statement, they list 
their count on just one of their programs. They have the full 
count, which would be even greater than what is reported by Tom 
Jones, the Senior Vice President of Habitat.
    We have had a number of studies since then. Habitat, for 
just their national project, from the national direct grant 
over 3 or 4 years, says ``We know of and can count over 177,000 
Habitat volunteers who have been supervised by AmeriCorps 
volunteers.'' We have a lot of information on that, and if we 
could present a separate summary of that for the record, I 
would appreciate it.
    [The information follows:]

         AmeriCorps Members Promote and Expand Volunteer Action

    One of the goals of the Corporation for National Service 
and the AmeriCorps program is to increase the number of 
citizens who volunteer in service programs at the local level. 
AmeriCorps is meeting this goal. For the last year for which 
data are complete, 1997-1998, programs reported that 
approximately 26,000 AmeriCorps members recruited, trained, or 
supervised more than 456,000 nonmember volunteers
    In tutoring programs alone, AmeriCorps members directly 
recruited over 100,000 volunteer tutors, and recruited and or 
trained nearly 80,000 students as peer tutors. A study to be 
undertaken by the Office of Evaluation this year will provide a 
detailed analysis of volunteer leveraging in AmeriCorps.

    Mr. Price. I would appreciate that.
    Mr. Wofford. I would call special attention to the emphasis 
on that point in the statement of 60 nonprofit organizations 
including the Red Cross, Big Brothers, Catholic Network, Girl 
Scouts, YMCA.
    Federal funds constitute a small but strategic portion of 
the total resources which support national service. It is on 
page 2 of my written testimony, and I would call your attention 
to that. The full statement is in the appendix as to what those 
organizations feel in terms of how they have used AmeriCorps 
full-time members to expand their programs using unpaid 
volunteers.
    Mr. Price. Yes, I think we have all observed that, and to 
the extent you can put some further precision on those numbers, 
we would appreciate it.
    Finally, let me ask you about your ongoing emphasis on 
literacy training. I know that has been a major AmeriCorps 
activity from the start. One of the most visible impacts in my 
district was in working with some of the university-based 
literacy organizations which were able to expand their reach a 
great deal by becoming a part of AmeriCorps.
    To what extent is that a continuing emphasis, and is there 
anything we should know about this budget request that pertains 
to literacy training?
    Mr. Wofford. To not only literacy training but the 
involvement of all parts of the national service effort in 
literacy efforts. The America Reads effort is a truly 
bipartisan effort of mayors, Governors, the President, 
Congress, and great nonprofit organizations.
    I have to stress that we, in our grant guidelines, have 
told both the State Commissions and our national direct 
grantees that that is a very special priority. Congress gave us 
some special money to expand what we were doing with the 
America Reads efforts, and I think we have used that extra 
money very effectively--but we do not run the literacy 
programs, and we do not run the training programs. What the 
States Commissions do, and what we do with our national grants, 
is try to get all the information possible among competing 
grantees for AmeriCorps positions as to which ones are the most 
successful, which you have the most confidence in.
    We are interested in studying how effective they are, and 
the first stage of a major study has been completed which 
describes what AmeriCorps members are doing in hundreds and 
hundreds of programs--I think 400 of our 900 grantees are 
engaged in some form of literacy effort and using AmeriCorps 
members for that. Depending on the school district or the 
literacy organization, they have different techniques, and some 
are probably more successful than others, and the State 
Commissions and we need to know which are the most effective. 
And the next stage of this study is to look at the most 
effective practices, as if we were sort of an R and D operation 
in which, with these 900 different programs, 400 of them in 
literacy, what can we report and distill as to what works and 
what does not work. I hope we will increasingly play that R and 
D role of reporting to this whole decentralized field the 
evaluation to let you know what to invest more in and what to 
stop investing in.
    Mr. Price. Presumably, that would help you deploy your 
members more strategically, and then perhaps others involved in 
this war against illiteracy as well.
    Mr. Wofford. Yes.
    Mr. Price. Thank you very much.
    Mr. Walsh. Mr. Hobson.
    Mr. Hobson. Very briefly--nice to see you, Senator.
    Mr. Wofford. Nice to see you.
    Mr. Hobson. I have run into you in a number of places over 
the years----
    Mr. Wofford. Flying here and there.

                            literacy program

    Mr. Hobson [continuing]. Yes--and I want to thank you for 
your service to this country. You have had a distinguished 
career.
    This question has been asked before but I would like to 
ask, again. On Saturday--this is just a little story--I went 
into the shoe repair guy to pick up my shoes, and there was a 
teacher in the shop from one of the high schools. She thanked 
me for a Marine Corps ROTC program that I had gotten into the 
high school in a more economically challenged part of my 
district in my hometown. She said it has already changed--in 
the short time that it has been there, she said she has seen a 
number of young people, both men and women, who have changed 
just by being involved in the ROTC program. But she said one of 
the problems she sees in dealing with young people in this 
school is their ability to read. She said they have students at 
the high school level who are only reading at the grade school 
level. These people are not going to be able to compete in the 
world. If the area you live in is a very high-tech area, and if 
these kids cannot read and write, they cannot compete. They 
cannot use a computer. They cannot make change at McDonald's 
without looking at a picture, because many of them cannot read 
or make change if you give them the extra penny and they have 
already rung it up on their register.
    I worry about what young people are going to be able to do 
in this society in the future if they cannot read and they 
cannot deal with the basic parts of life as it is going to be 
in the future.
    So first, I would like to know--especially in Ohio--and I 
am being parochial now--what we are doing about literacy and 
how are you monitoring these programs in the States? But first, 
how do we monitor it, and what should we be doing more of, from 
your perspective in America?
    Mr. Wofford. My perspective and yours on this appear to be 
exactly the same. I cannot think of a goal that should be more 
galvanizing than the goal to see that every young person reads 
well and independently by the end of the third grade so that 
they can then read to learn.
    Your Governor, Governor Taft, has called for 20,000 reading 
tutors and mentors in Ohio--I believe his figures was 20,000. I 
will send you a letter that he just sent me asking for more 
AmeriCorps members as part of his Governor's initiative to help 
organize those volunteers.
    [The letter follows:]


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    I think that great goals galvanize, and the real case for 
national service is when it can help meet a real, critical 
need. Here you have not only the President of the United States 
saying what I just said, but even before that, George W. Bush 
in his State of the Union, or State of the State, said: The 
prime goal of my administration is to see that every child 
learns to read by the end of grade 3 and then reads to learn.
    I think there is a tremendous consensus on this. In his 
case, in Texas, that spirit spread down to the State 
Commission, and a very significant proportion of the large 
number of AmeriCorps members in Texas are engaged in literacy 
programs, some of them led by Barbara Bush. That is going on in 
State after State. Mayors are asking for VISTA and AmeriCorps 
members to help organize their Reads program in Philadelphia, 
and when it looked like they might not get their full-time 
AmeriCorps members, you should have heard what the Mayor said 
about his literacy program, which is a consortium of colleges 
and literacy programs.
    So we are committed to this being a major thrust of 
AmeriCorps, and related to it is, as you said, computer 
literacy. A major new commitment of ours related to it, which 
is also related to the goals of America's Promise, which Mr. 
Gallagher is representing here today, is to close the digital 
divide that is developing between the haves and the have-nots, 
particularly among young people, between those who have no 
support and no access to the internet and to the computer 
world, no coaching, and those who have it all.
    I would predict that an increasing proportion of AmeriCorps 
assignments, from our State Commissions, from VISTA and from 
national grants, is going to be in that field. We are part of 
the partnership with America's Promise and AOL and Big 
Brothers/Big Sisters and YMCA to open computer PowerUP centers 
in this year; 250 communities is the plan, and they want 
AmeriCorps members, VISTA AmeriCorps members in this case, to 
be computer coaches, PowerUP coaches in each of those centers.
    Ms. Zenker. If I could add one piece of information, we 
were able this past year, through what we refer to as the 
Governor's Initiative, to provide support in Ohio for about 60 
AmeriCorps volunteers whose purpose was to recruit, localize, 
and leverage about 20,000 volunteers to go into the schools at 
the K through 4 level and tutor about 100,000 children. This 
was an initiative that the Governor submitted to the 
Corporation for funding, and we were pleased to be able to fund 
it. He is matching it with about $140,000 of his own, and we 
are putting in about $750,000 to $800,000 for these AmeriCorps 
members who are, as I said, 60 people leveraging 20,000 
volunteers to get out and tutor 100,000 students.
    Mr. Hobson. I think this is a good program. As you know, I 
voted for the AmeriCorps bill. And there has been some 
criticism over the years of AmeriCorps, but I think one area 
where you can gain commonality, gain people who might have in 
the past not been supportive, is to show this literacy program.
    I will also tell you that we had a Speaker here not too 
long ago who wanted to give computers to every child in this 
country. He was very active in talking about giving computers 
to people. And people ridiculed him at the time. There were a 
lot of snickers from the media about his thinking about giving 
computers to people who were disadvantaged, asking, well, what 
are they going to do with them? And now I find that that has a 
certain social acceptance in the community. But at the time 
when that was suggested, it was met with a certain amount of 
snickering and----
    Mr. Wofford. Not by me. I thought it was one of his best 
ideas.
    Mr. Hobson. No. But if you go back and read, I remember 
that, because I even asked ``what is he doing?'' But now, I 
think the President has endorsed this idea, and there appears 
to be social acceptance.
    But I do think that literacy is critical to the future of 
this country, and I think it helps you gain credibility with 
those who would sometimes question what you are doing if this 
is a successful program.
    Again, I want to thank you for your service over the years.
    Thank you, Mr. Chairman.
    Mr. Wofford. Thank you.
    Mr. Walsh. That concludes our first round. I have just one 
question, but I will save it until last, and if anyone else has 
a question that they would like to ask at this point, let us 
know, and we will give you a chance.
    Alan.
    Mr. Mollohan. Mr. Chairman, I have some questions that I am 
going to submit for the record.
    Mr. Walsh. All right.
    Rodney or Virgil?
    Mr. Frelinghuysen. No questions.
    Mr. Goode. I have some, but I will submit three questions 
for the record.
    Mr. Walsh. All right.
    Everyone will submit questions for the record. I just have 
one last one, and I may submit also for the record. The 
question is in last year's bill, there was around $9 million in 
set-asides for U.S. Territories and Tribal programs. This year, 
the request is for only $5.4 million. Why the reduction?
    Mr. Wofford. I will have to ask for some help on that. We 
have a real commitment to expanding work in Indian country.
    Mr. Walsh. It seems like there is a substantial need there.
    Mr. Wofford. There is a tremendous need. In terms of 
literacy, Governor Racicot of Montana is coming on our Board. 
Their Statewide literacy rate is better than the Nation's; 22 
percent of the kids in Montana do not read effectively at 
fourth grade, but in Indian country in Montana, 85 to 90 
percent cannot read in the fourth grade. In every challenge, we 
want to play a larger role in Indian country, and we have had a 
planning conference on just how to do that in the last 2 
months. And I have been spending a fair amount of time in 
different initiatives that we have in Indian country.
    Can you explain the amount?
    Ms. Zenker. No. I think we cannot explain the amount 
adequately, and we would like to be able to get back to you.
    Mr. Walsh. I think you need to, because I think if it were 
made fairly public that there was a 50 percent reduction in 
that effort, you would be criticized.
    Mr. Wofford. Indeed; I understand that. I would note, 
though, that as with anything else that I have talked about so 
far, the State Commissions have a tremendous role to play, and 
in Montana, for example, the State Commission is very 
interested in an increasing proportion of AmeriCorps in Indian 
country, and it would not necessarily draw on that special 
money; it would be just regular money that the State 
Commission--in a number of States--is putting priority on.
    Ms. Zenker. We have developed a working group with Indian 
tribes and actually have consulted with tribes over the last 
year--they have come to Washington two or three times. So we do 
have some strong proposals for increasing our support to Indian 
tribes.
    Mr. Walsh. If you would get back to us on that, it would be 
very helpful.
    Ms. Zenker. Yes, we will.
    [Clerk's Note.--Please refer to agency response on page 
311.]
    Mr. Wofford. Thank you.
    Mr. Walsh. We will also submit other questions for the 
record.
    I thank you for your testimony and thank all of you for 
coming this morning.
    Mr. Wofford. Thank you very much.
    Mr. Walsh. That concludes today's hearing.


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                                            Thursday, April 6, 2000

                  FEDERAL EMERGENCY MANAGEMENT AGENCY

                               WITNESSES

JAMES L. WITT, DIRECTOR
JOANN HOWARD, ADMINISTRATOR, FEDERAL INSURANCE ADMINISTRATION
GARY D. JOHNSON, CHIEF FINANCIAL OFFICER
MICHAEL ARMSTRONG, ASSOCIATE DIRECTOR, MITIGATION
KAY GOSS, ASSOCIATE DIRECTOR, PREPAREDNESS, TRAINING, AND EXERCISES
LACY SUITER, EXECUTIVE ASSOCIATE DIRECTOR, RESPONSE AND RECOVERY
CARRYE BROWN, ADMINISTRATOR, U.S. FIRE ADMINISTRATION
KEN BURRIS, CHIEF OPERATING OFFICER, U.S. FIRE ADMINISTRATION
JOHN MAGAW, SPECIAL ASSISTANT TO THE DIRECTOR FOR TERRORISM 
    PREPAREDNESS

                     Subcommittee's Opening Remarks

    Mr. Walsh. The Subcommittee hearing will come to order.
    This morning, I would like to welcome James Lee Witt, the 
Director of the Federal Emergency Management Agency, to our 
hearing on the agency's budget request for fiscal year 2001.
    The budget request for fiscal year 2001 is $971.3 million 
for regular appropriations plus $2.6 billion for the emergency 
contingency fund for disaster relief. The amount requested for 
regular appropriations is an increase of about $98.5 million 
over the fiscal year 2000 appropriation.
    Proposed funding for fiscal year 2001 includes new fire 
initiatives, expansion of the flood map modernization effort, 
and a buyout of repetitive flood loss properties. While most of 
your proposals are sound and worthwhile, I am not sure we will 
be able to accommodate such a large increase in this fiscal 
year. We will be working with you to identify your most 
pressing needs as we progress toward passage of the fiscal year 
2001 bill.
    Your entire statement will be included in the record, and 
after Mr. Mollohan makes an opening statement, you can proceed 
with your statement.
    Mr. Mollohan.
    Mr. Mollohan. Mr. Chairman, I would just like to welcome 
Director Witt to the subcommittee. This marks the seventh 
anniversary of Mr. Witt as Director of FEMA, and I think in 
that 7-year period he has done such an outstanding job of 
organizing our emergency relief efforts and putting in place 
procedures and tools making us able to be effective and 
responsive in the face of disasters, and that has been apparent 
as he has approached each one of them. I would like to join you 
in complimenting him on his job, and in welcoming him to the 
hearing.
    Thank you.
    Mr. Walsh. Thank you. I would associate myself with all 
those remarks. I think the rest of members of the subcommittee 
would also.

                       Director's Opening Remarks

    Mr. Witt. Thank you, Mr. Chairman.
    Good morning, Mr. Chairman, Congressman Mollohan, and other 
members of the subcommittee. I appreciate the opportunity to 
appear before the subcommittee today to present our budget 
proposal for fiscal year 2001 on what is my seventh anniversary 
as Director of FEMA. I want to thank the members of the 
subcommittee for the support they have given FEMA and its 
programs over the past 7 years.
    With your continued assistance on the fiscal year 2001 
budget, we should be able to institutionalize many of the 
things that we have been working on to this point.
    This morning I am accompanied by many senior officials from 
FEMA. Sitting next to me is Gary Johnson, our Chief Financial 
Officer. I just want to share with this committee that Gary 
deserves much of the credit for putting FEMA's financial house 
in order. Through his own and his staff's hard work and 
dedication that they have shown, FEMA's books have been 
straightened out. Last year for the first time, the fiscal year 
1998 consolidated financial statements were given a clean bill 
of health by the Inspector General. And just last month, I was 
pleased the IG gave us an unqualified opinion for our 1999 
statements. I am very proud of Gary and his staff for what they 
have done to put our financial situation in order.
    I also want to take the opportunity to introduce a person 
who is a relatively new face at FEMA, although he is certainly 
not a new face to many of you. We are excited to have John 
Magaw with us now. As you know, John was formerly the Director 
of both the United States Secret Service and the Bureau of 
Alcohol, Tobacco and Firearms. He joins us at FEMA, as a well-
known and respected law enforcement official in the community, 
to help us with interagency coordination of the terrorism-
related efforts that we are putting together. We are very 
excited about having him at the agency.
    Many of you know that this very likely will be my last 
House appropriations hearing. This is not only my seventh year 
but the end of the term for this administration. As I reflect 
on my career at FEMA, I think about what the agency should 
strive for in the future. and I keep coming back to the 
principle of responsibility. Today I hope that we can talk a 
little bit about responsibility--not only the responsibility of 
FEMA, but the responsibility of our partners at the State and 
local levels and within the fire service as well.
    I want to tell you how important this budget is for 
continuing to move us down the path initiated with our 2000 
legislative initiatives for the future of not only FEMA but for 
the country and the customers we serve.
    I also want to thank the subcommittee staff members with 
whom we have had the privilege of working for the last 7 years. 
I am sure you know the level of professionalism and commitment 
to public service that they bring to their jobs every single 
day. FEMA has benefited from their professional attitude and 
what they have done.
    I want to personally thank Tim Peterson, Frank Cushing, Del 
Davis and the other staff, including Valerie, for that great 
cup of coffee she gave me this morning. [Laughter.]
    Seriously, they have worked very closely with us, and they 
have always been very honest and forthright on everything, and 
we thank them for that.
    Mr. Chairman, we will be happy to answer your questions.
    [The information follows:]


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                     grants for burn care research

    Mr. Walsh. Thank you. I am sure, as someone who has visited 
disasters across the country and all over the globe, a good cup 
of coffee at the right time makes a big difference in your day. 
I think it says something about you that you would recognize 
our staff for the work that they do. I don't think any of us do 
that enough, and we appreciate your recognition of their 
efforts.
    Let me begin with some questions about burn research and 
fire safety. Congressman Weldon, who is as dedicated as anyone 
in the Congress to fire safety and to the men and women who 
fight fires in this country, proposed an initiative in the 
supplemental that is certainly worthy of discussion in this 
Subcommittee.
    The fiscal year 2000 supplemental which passed the House 
last week includes an appropriation of $10 million for grants 
to safety organizations in conducting burn safety programs and 
to hospitals to conduct acute burn care research. What 
expertise does FEMA have which would enable you to conduct a 
peer-reviewed grant program for the purposes outlined in the 
legislation passed last week?
    Mr. Witt. Mr. Chairman, the U.S. Fire Administrator, Carrye 
Brown, is here as is our Chief Operating Officer for the U.S. 
Fire Administration. I will be happy to have them follow on to 
my response. The expertise that we have in the U.S. Fire 
Administration, I believe, comes from working with firefighters 
throughout the country every day. I think this will facilitate 
the successful implementation of the grant program.
    The long-term goals that we have set are related to 
reducing firefighter fatalities and injuries. In 1999 alone, 
more than 100 firefighters lost their lives while on duty. 
Approximately 90,000 firefighters are injured on the job every 
year. While I was in Hawaii at a conference, a high-rise 
building caught on fire. Eleven firefighters were seriously 
injured in that one fire. We have seen quite a few fire 
injuries this year.
    Grant programs along with research are important to 
protecting our firefighters. Our son, Michael, is a volunteer 
firefighter in our home county. He called me and asked if I 
could tell him the price of a turnout suit to fight wildfires. 
I asked, ``Doesn't your department have a turnout suit to fight 
wildfires?'' He said ``no.'' So, my wife and I are going to 
give him a birthday gift of a turnout suit to fight wildfires.
    Also, when we were at home, I responded to a fire call with 
their fire department one day. I was really concerned that 
don't have the proper breathing apparatus to fight different 
types of fires. They don't have the ``bulletproof vest'' that 
they need to do their job and meet the challenges that them 
face out there every day. I think that any type of grant 
program that has well established criteria in order to be 
accountable, and provides protection for firefighters and 
emergency medical personnel would be helpful.

            blue ribbon panel recommendations on burn safety

    Mr. Walsh. Was the type of grant program that has been 
proposed included in the recommendation of the blue ribbon 
panel's review of the United States Fire Administration, which 
was concluded last year?
    Mr. Witt. There are recommendations in the panel report 
that address such things as establishing a wellness program for 
firefighter personnel, modifying fire stations and fire 
training facilities, and acquiring resources for training, new 
technology, and specialized safety equipment.
    Mr. Walsh. They didn't specifically address burn safety?
    Mr. Witt. No, I don't believe so. Did the panel address 
burn safety programs specifically, Ken?
    Mr. Burris. No, sir, they didn't specifically address it, 
but the very issue strikes at the core of all the 
recommendations, which is making a positive impact on the burn, 
death, and injury rate in this country. Part of that is 
treatment of the burn injuries after the fact.
    The Fire Administration for many years has had programs in 
that particular area, such as our partnership with the National 
Safe Kids Campaign, and the Children's Hospital Burn Center 
here in Washington, D.C. We even have some ongoing programs and 
cooperative agreements with the University of Virginia on the 
psychological impact of burns.
    Mr. Walsh. Is the correct repository for that program at 
FEMA, or would it be another Federal agency?
    Mr. Witt. I think FEMA and the USFA would be the correct 
place for it to be, yes.

               community participation in project impact

    Mr. Walsh. Project Impact is your major pre-disaster 
mitigation program, and for fiscal year 2001 you are requesting 
$30 million. How has funding provided in prior years been 
leveraged? Do all communities who received grants in the past 
still actively participate in the program, or has there been a 
drop-off in participation once Federal funding has ended?
    Mr. Witt. All the communities are still participating. They 
have done a great job, and they are very enthusiastic about 
this initiative. We have approximately 185 communities, and we 
are hoping to add 50 additional communities this year. We have 
close to 1,000 corporate partners, and have been able to 
leverage $4.50 for every dollar that we've given a community.
    We are sure that the savings in future disaster costs in 
these communities is going to be very significant. We had over 
2,000 people at our conference in December, including mayors, 
city managers, and city council members. Because of the 
enthusiasm generated from this, some communities want to join 
whether or not they get any money, and go forward with their 
own prevention programs The excitement is really there, and we 
are seeing some fantastic things.
    Tillamook County, Oregon, as an example, is elevating 69 
homes out of a floodplain as part of their project.
    Mr. Walsh. In Oregon?
    Mr. Witt. Yes, Tillamook County. It is on the coastal 
highway, and in 1996 they had a terrible flood out there. They 
are literally lowering Highway 101 to use it as a floodway, 
rather than elevating their businesses. They are overlaying 
flood maps with land-use planning maps to help design their 
future development. It is all being done as part of Project 
Impact.

                        Headquarters Relocation

    Mr. Walsh. The last question from me, at least for this 
round, is in regards to your headquarters relocation. Included 
in the budget is $23,628,000 for relocation. What is the 
timetable for relocation of your offices?
    Mr. Witt. I wish it was this year. [Laughter.]
    Mr. Walsh. You are not going to see it, I guess.
    Mr. Witt. Probably not. The current timetable is sometime 
in 2002.
    Mr. Johnson. Mr. Chairman, our lease expires at our 
headquarters location in August of 2001. The expectation is, 
assuming the funding is made available by Congress, that we 
would be able to effect a signed lease in fiscal year 2001. It 
is approximately a 20-month process, so we are looking at 
actually relocating around the June 2002 time frame.
    Mr. Witt. Let me add to that. We have talked about this a 
bit, but I need to re-emphasize the importance of relocating 
from the current location with the public parking garage 
underneath for the safety of the employees of FEMA. It is also 
very important for the continuing operation of the agency. You 
know, under the Federal Response Plan, we coordinated disaster 
activities for 26 Federal agencies and the American Red Cross. 
When we have a major disaster, we have representatives from all 
27 agencies in our emergency operation center, which is very 
small. It is very difficult to work efficiently in it, but we 
cannot expand it. We cannot do anything to improve it because 
we do not have the space. In order to have an operation center 
that will allow us to fulfill our disaster responsibilities and 
our coordinating role, we need that changed. That is part of 
the overall justification for the move.
    Mr. Walsh. What do you expect the total cost for relocation 
to be?
    Mr. Johnson. Mr. Chairman, the total cost for the 
relocation is estimated to be $32,460,000, but we also 
anticipate an increase in rent at the new location. If you add 
that rent increase of approximately $6.3 million, we are 
looking at a total figure of $39 million.
    Mr. Walsh. And where do you anticipate settling?
    Mr. Witt. We hope within the D.C. metropolitan area.
    Mr. Walsh. You are in the city now, right?
    Mr. Witt. Yes.
    Mr. Walsh. You would not necessarily be in the city?
    Mr. Witt. Yes. We need to be.
    Mr. Walsh. All right. Thank you.
    Mr. Mollohan.
    Mr. Mollohan. Thank you, Mr. Chairman.

                   Contingent Emergency Appropriation

    Mr. Witt, your budget requests roughly $2.6 billion in 
contingent emergency appropriations for the disaster relief 
fund in addition to $300 million in non-emergency 
appropriations.
    I would first like to ask you: How are these amounts 
determined?
    Mr. Witt. We used a 5-year average of obligations for 
disaster-specific costs, less Northridge, plus expected 
obligations through 2001, plus disaster support costs. That 5-
year average has been pretty consistent, unless we have a 
catastrophic disaster.

            Emergency Versus Non-Emergency Disaster Request

    Mr. Mollohan. How do you distinguish between the emergency 
request and the non-emergency request and determine your 
amounts under those two categories? And is that similar to how 
the Congress has been dealing with this in the last several 
years?
    Mr. Johnson. Mr. Mollohan, the administration, has 
continued this year, as in prior years, to abide by statutory 
language in the Dire Emergency Supplemental Approprations Act 
of 1992--Public Law 102-229--which provided disaster 
supplemental assistance to FEMA. That language states, and I 
will quote: ``Beginning in 1993 and each year thereafter, all 
amounts appropriated for Stafford Act disaster assistance, over 
$320 million, or the President's request, whichever is less, 
are to be considered emergency requirements.'' So we have 
continued with this course of action, going forward with a 
direct appropriation--our budget request is $300 million--with 
an accompanying emergency contingency requirement. I believe 
the Congress has reacted in varying ways. Last year you did 
appropriate a significant contingency fund with the President's 
request.
    Mr. Mollohan. What would be the result if Congress just 
responded to your non-emergency request at this time and dealt 
with the emergency funding on an as-needed basis.
    Mr. Witt. Well, I think it is smart to go ahead and budget 
for what we would need based on the 5-year average. It gives 
Congress a better idea of what they are going to be spending, 
and also if we do not need the contingency fund, then we do not 
spend it. We were very pleased with the way Congress did it 
last year.
    Mr. Mollohan. I know that it works well because it is in 
place, but I would just like to hear you talk about how this is 
a superior way of doing it.
    Mr. Witt. It seems as though every time the Congress has to 
pass a supplemental for a particular disaster declaration, 
everything in the world gets added to the supplemental besides 
just the disaster money. I know it makes it difficult for you 
all.
    Mr. Mollohan. You think that is a bad thing?
    Mr. Witt. Not necessarily, but it depends on what is added 
on. [Laughter.]
    I think it does make it more difficult. I was talking about 
responsibility earlier. I think we should be responsible and 
have funding in place and ready to go when we need it.

                       Grants To Fire Departments

    Mr. Mollohan. If I might, go over a little bit some of the 
territory that the chairman covered, your budget proposes a new 
$25 million demonstration program of grants to fire departments 
to purchase safety equipment for firefighters. I would like for 
you to talk about this proposal, its rationale, and how it 
would work. I understand that this is a demonstration proposal. 
I would like to know how you would envision that demonstration 
being carried forward, and then get some sense of scale here.
    I can understand the way it was brought to you personally 
through your son, but if the Federal Government gets into this, 
which I would support, if it came down to it--there are going 
to be large numbers associated with this. I would like to hear 
you talk about that and how you would do the demonstration 
program. How would you envision the grant program if it were 
scaled up and how much do you think the subcommittee would be 
looking at funding each year?
    Mr. Witt. Ken Burris has been working on the criteria for 
the program. I think we have a good concept developed as to how 
we can implement this program to impact the most critical areas 
of need.
    As I said earlier, the concern that we all have, and that 
Carrye Brown has been advocating on the front line is for the 
health and safety of firefighters. This is exactly what this 
program would focus on.
    I would like Ken to tell you about the criteria we have 
been working on.
    Mr. Burris. The program, as it relates to the $25 million, 
is for needy and distressed communities, which we are defining 
as those communities where 51 percent of the population served 
earn less than the median income. We plan to offer a 
competitive grant modeling program in those particular areas to 
encourage fire departments to innovatively address firefighter 
health and safety. This will allow us to take advantage of some 
modeling that can be replicated in departments across the 
country to address firefighter health and safety needs. There 
has not been a particular cap placed on each grant, rather it 
will depend on available funding.
    The very basic firefighter health and safety issue concerns 
personal protective equipment for people in the performance of 
their duties. That at a minimum includes bumper gear, helmets, 
and things. But health and safety stretches beyond that to 
include inoculation programs for hepatitis and other 
communicable diseases which would affect the emergency response 
population.
    Mr. Mollohan. So at the first level, you would expect it to 
be a direct grant program from the Federal Government to some 
municipality or unincorporated area for its fire department. If 
you are talking about communities with less than 51 percent of 
the median income, you are talking about a lot of rural, 
unincorporated areas. These are grants directly to those fire 
departments for personal protective equipment.
    Mr. Burris. Correct.
    Mr. Mollohan. Okay. After the demonstration phase, you 
would anticipate it to be a direct grant program applicable 
across the country based on that criteria.
    Mr. Burris. Yes.
    Mr. Mollohan. Do you have a sense of how much money would 
be involved at the peak of this program? And does the program 
peak and wane? Or would that be a part of some information that 
you begin developing in your demonstration program?
    Mr. Burris. That is part and parcel of the development of 
the program because with $25 million you can design one type of 
program, and with a larger appropriation you could expand it 
and design an entirely different program.
    Mr. Mollohan. So part of the demonstration program is to 
answer some of these questions?
    Mr. Burris. That is correct.
    Mr. Mollohan. And you don't anticipate it being a formula 
program to the States and some sort of a competitive program 
from the State to the communities? You anticipate it as being a 
direct grant----
    Mr. Burris. It would be a direct grant program to the local 
departments.
    Mr. Mollohan. Would you have answers to these questions by 
the end of fiscal year 2001?
    Mr. Burris. Which questions?
    Mr. Mollohan. All the questions I have just asked that you 
couldn't yet answer.
    I mean, how long do you think this demonstration program 
would last?
    Mr. Witt. Do you mean will we have the program 
specifications completed by the end of fiscal year 2001?
    Mr. Mollohan. Yes.
    Mr. Witt. Yes, we should have a report to the appropriators 
on exactly what the $25 million in funding accomplished, and 
what it would cost to continue the program.
    Mr. Mollohan. Well, depending on how far you go with this, 
I can just imagine it is costing huge amounts of money. Fire 
departments are insatiable, and they have these real needs, 
too.
    Mr. Mollohan. I have one more question.
    Let me ask you how your proposal differs from Congressman 
Weldon's proposal, if you will. Could you comment, either of 
you?
    Mr. Witt. Well, Congressman Weldon talked to me about his 
proposal, which focuses quite a bit on research. I haven't seen 
all the details on his proposal, but while it is related to 
public health and safety similar to what we are proposing, 
there is quite a bit of money for research, which is absolutely 
needed as well.
    Mr. Mollohan. Would you be able to administer his program 
with the staff that you have?
    Mr. Witt. No, sir. There is no way.
    Mr. Mollohan. Have you looked at it and estimated what kind 
of an increase in staff you would require if his proposal 
became law?
    Mr. Witt. I think there is a $3.6 million administrative 
cost related to his proposal. Isn't that right, Gary?
    Mr. Johnson. Correct.

                              COST SHARING

    Mr. Mollohan. Do you have any thoughts that you would like 
to give the committee or elaborate on any aspects of that 
legislation as the Congress considers it and as this committee 
has to react to it?
    Mr. Witt. As I said, I think any dollars that we can 
provide for fire prevention and fire safety are important. 
Carrye has been out there working with communities on these 
issues for a long time now. I think, too, that there should be 
some cost share, at least 75/25, whether it is a soft match or 
whatever, that is part of Congressman Weldon's proposals. I 
don't think there is any reflection of that in his amendment.
    Mr. Mollohan. I would just like to react to that. Coming 
from or representing rural areas that typically don't have any 
ability to cost share, and coming from a State that, for 
whatever reason, tends not to have programs that assist local 
communities in these cost-share programs, that becomes very 
difficult. One could argue that the State ought to get with it 
and have those kinds of programs, but some States have more 
money than other States. So cost sharing, while I can 
understand it and appreciate it, becomes very difficult when 
you actually get down to working with communities with the 
grants. You are always filing requests for waivers of the cost-
sharing requirement.
    Mr. Witt. Yes, that is true.
    Mr. Mollohan. That should be looked at very closely as you 
work this demonstration program.
    Mr. Witt. I think the one thing that helps a community to 
focus more and be more accountable--and I have been there at 
the local and State level--is the fact that if you have to cost 
share, whether as an in-kind service or a soft match, you buy 
into the responsibility for that program.
    Mr. Mollohan. I do agree with that.
    Mr. Witt. Yes, it can be an in-kind service to help make 
that match.
    Mr. Mollohan. They need some ownership.
    Mr. Witt. Yes, sir.
    Mr. Mollohan. They need to care enough about it.
    Mr. Witt. Absolutely.
    Mr. Mollohan. I agree.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mr. Frelinghuysen.

            RESPONSIBLE DEVELOPMENT IN EMERGENCY MANAGEMENT

    Mr. Frelinghuysen. Thank you.
    Director Witt, thank you for the work you do and your 
colleagues. I think of FEMA every morning because I run, and as 
I head over from Washington over to Virginia, there is an older 
gentleman who wears a FEMA hat who runs the other way, and God 
only knows if I fell on my face whether he would be there to 
pick me up. [Laughter.]
    I don't know whether he is a retiree or what. He may be 
even in this room. But whoever runs wearing a FEMA hat, I think 
of you each and every day.
    Mr. Witt. We can get you one.
    Mr. Frelinghuysen. No, I am not sure I need a FEMA hat. I 
might be called upon to do something for which I wouldn't be 
prepared or trained to do. [Laughter.]
    You have a huge portfolio of responsibilities dealing with 
floods, hurricanes, potential earthquakes, potential terrorist 
acts, catastrophic fires, emergency food delivery. Just a 
simple question: If you were to leave a note on your desk as 
you depart, what frank advice would you give your successor? 
Because as you fly around the country, you have an overview 
which is unique and I am not sure you would be willing to say 
it here, you have seen, I assume, high levels of competency and 
high levels of total idiocy. And I was just wondering whether 
you have such a list.
    I found it interesting in your comments that you say, 
``Despite all our work''--and I quote from your remarks--``the 
real measure of our success won't be realized for many more 
years. If ten years from now all State and local governments 
take full responsibility,'' then you say ``If twenty years from 
now we are all working even harder to protect our emergency 
management responders,'' and then you say, and I quote, ``If 
thirty years from now, all citizens,'' I don't want to be too 
more rhetorical than I am. I don't think we have that long to 
wait. I assume you have seen some things out there and that 
there must be a list somewhere in FEMA. Would you give us the 
short list of things that we ought to be doing? And then I have 
some general questions that relate to New Jersey.
    Mr. Witt. Over the last 7 years, what I have found across 
our country, in community after community, is that we really 
haven't accepted the responsibility from the local level all 
the way up to prepare our citizens by influencing where they 
build, how they develop, and how they are protecting our 
resources.
    One thing that is clear is the fact that if we protect our 
natural resources, they are going to protect us, whether it is 
from hurricanes, floods, tornadoes, everything.
    I have seen a huge turnaround in some communities that are 
putting in place better building codes, better building 
standards, and better methods of enforcement. In our 
floodplains, where 75 percent of all disasters occur, some 
local governments are passing ordinances that they will not 
issue any building permits in the 100-year floodplain, This is 
a good thing, except one thing that concerns me more than 
anything is the fact that we now use a 100-year base flood 
elevation, and we need to identify the true base flood 
elevation in light of the intensity of events we are 
experiencing today versus 10 years ago. We are working with the 
Association of State Floodplain Managers and with the 
environmental groups to come up with the true base flood 
elevation. We have to build better and safer communities, 
because if we don't and these events continue, and the 
population and development continue around high-risk areas, we 
are going to pay a high price, not only in lost lives but the 
economy as well.

                  REBUILDING IN NEW JERSEY AFTER FLOYD

    Mr. Frelinghuysen. Obviously, you dispense assistance and, 
I assume, a full dose of compassion, but I hope as you go 
around you put out a few markers that issues that are highly 
repetitive. You know, the local communities and States, and I 
include even my own, bear some responsibility for forecasting 
and looking ahead. Some States, maybe not all, do have 
surpluses, and I hope some of those surpluses are directed in 
these areas.
    Let me thank you, first of all, for your assistance to New 
Jersey as we rebuild after Hurricane Floyd. In meetings with 
our delegation--and you were good enough to do that last week--
you indicated that FEMA could provide some funds to New Jersey 
immediately. I understand this amount to be 50 percent of what 
FEMA estimates New Jersey will ultimately receive. April 1st 
was the target date for this disbursement. Did it occur?
    Mr. Witt. Yes.
    Mr. Frelinghuysen. It did.
    Mr. Witt. The other allocation that we anticipate providing 
to New Jersey is to come out of the $215 million received for 
the buyout relocation program. Mike Armstrong has been working 
on the allocation for New Jersey.
    Mr. Frelinghuysen. Well, there is money in the 
supplemental.
    Mr. Witt. Yes, we are working on the first half of 
allocations of the money already received.

                        SUPPLEMENTAL FOR BUYOUTS

    Mr. Frelinghuysen. How long can FEMA hold out without the 
additional disaster relief funds that have been put in the 
supplemental?
    Mr. Witt. The $77 million?
    Mr. Frelinghuysen. Yes.
    Mr. Witt. Well, we are okay for now, but if this continues 
to carry out over several months, there is a point where the 
local communities lose the interest of the local people to even 
accept a buyout or offer. New Jersey is like Louisiana, in a 
sense. You don't really have a lot of places to build; 
therefore buyout relocation sometimes doesn't fit real well in 
New Jersey. Sometimes elevation works better in New Jersey than 
buyout relocation. In Louisiana, which is 6 feet below sea 
level, elevation is an option that works well there. New Jersey 
is the same way.

                      PURCHASE OF FLOOD INSURANCE

    Mr. Frelinghuysen. Our State is the fourth in the country 
in the number of flood-prone properties, as you alluded to, 
insured under the National Flood Insurance Program. A 
particular problem for people joining that program, as you are 
aware, is the requirement that flood insurance must be first 
purchased before one can get a disaster loan. It is not that 
people are against buying flood insurance. It is just that they 
are strapped for cash at that time.
    Could part of a disaster loan be applied to the cost of the 
flood insurance, or can you suggest some other way to attack 
this type of problem?
    Mr. Witt. As in New Jersey we found this problem in West 
Virginia where we had the floods a few years ago. In situations 
where people are qualified for the individual and family grant, 
but are very low income, and can't afford to buy flood 
insurance, we will purchase a 3-year policy for those 
individuals out of the amount of the individual and family 
grant. And it has worked extremely well.
    Mr. Frelinghuysen. Individuals can receive loans and 
grants.
    Mr. Witt. Yes.

                      GRANTS FOR SMALL BUSINESSES

    Mr. Frelinghuysen. But small businesses can only receive 
loans. Should small businesses be able to receive grants as 
well?
    Mr. Witt. Like farmers, who can only receive loans through 
the Department of Agriculture under their disaster loan 
program, small businesses can receive loans from SBA. Meeting 
the needs of individuals is FEMA's priority, rather than making 
grants to individual businesses. Businesses are there to make a 
profit. We're not trying to take anything away from businesses, 
but our goal is to help protect and enhance the quality of life 
for individuals and families. The SBA has a very attractive 4 
percent loan program for small businesses, including those that 
may have an existing loan or mortgage that could be reworked 
and refinanced into that 4 percent loan, which helps them to 
not only rebuild their business but also incorporate prevention 
and make it much safer. I do not think we need a grant program 
for small businesses.

                   USE OF OTHER AGENCIES' TECHNOLOGY

    Mr. Frelinghuysen. And, lastly--my time is up--getting back 
to some of my initial remarks, this committee has jurisdiction 
over the National Science Foundation and other Federal 
agencies. There is a lot on the drawing boards there that we 
are investing in in terms of new technology that I assume that 
FEMA accesses so you can do a better job. Is that something 
which is occurring?
    Mr. Witt. Yes.
    Mr. Frelinghuysen. They are doing new investment in 
earthquake research and things of that nature. You are part of 
a collaborative effort.
    Mr. Witt. Yes.
    Mr. Frelinghuysen. And you access those types of projects.
    Mr. Witt. Yes, sir, as well as initiatives being conducted 
by NASA. NASA has been very good to work with. If we could 
reduce the administrative cost due to NASA for things we ask 
them to do, that would help us a great deal.
    Mr. Frelinghuysen. Thank you.
    Mr. Walsh. Thank you.
    Let's see. Mr. Price.

                          FEMA Buyout Program

    Mr. Price. Thank you, Mr. Chairman.
    Welcome once again to the subcommittee. I have enjoyed 
working with you over these many years, over the various 
disasters we have experienced in North Carolina. I have seen a 
lot more of you this last year than I would have wished, 
though.
    Mr. Witt. Yes.
    Mr. Price. We do appreciate what FEMA has done and what you 
have done personally. I am going to follow up on the line of 
questioning Mr. Frelinghuysen was pursuing. I was pleased to 
work with him to include in FEMA Appropriation bills going 
through at the end of the session last year and also in the 
FY00 supplemental bill additional money from HUD and USDA to 
help with the housing needs, and I would like to talk to you 
about where we are with the FEMA effort, in particular, and in 
North Carolina and other affected States from Hurricane Floyd.
    I have been very impressed with the way you have worked in 
North Carolina as we continue to clean up. I have visited the 
various flood sites, but also your command center in Raleigh, 
which is truly an impressive conversion of an unused strip mall 
area into a disaster relief nerve center. And I don't know what 
the size of that was at the height of your operation, but it 
certainly was an impressive operation, and they have been very 
accommodating in letting me and other representatives know of 
the progress of the operations there.
    I would like to spend a few minutes talking about this 
supplemental appropriations bill, where we are now, how the 
supplemental fits in. It is being held up in the Senate, we 
hope not permanently. There is, as I said, additional housing 
money for HUD and USDA. There is also $77 million in additional 
disaster relief money for FEMA, a large portion of that 
funding, of course, designed for North Carolina to assist with 
the current buyout program.
    It is important to note, I think, that the State of North 
Carolina is providing significant resources for this effort, 
more than $800 million in State funds to assist in the buyouts.
    Can you describe for us briefly how the FEMA buyout program 
works, what kind of gap it has filled? What kind of program 
existed before the FEMA program to assist in the relocation of 
families out of floodplains?
    Mr. Witt. Really, the mitigation programs--for buyouts and 
prevention--have been in place at FEMA for a number of years, 
but beginning with the flooding we had on the Mississippi River 
in 1993, we have really focused on them. Just after that, 
Congress amended the legislation to raise the percentage of 
money that could be used for prevention from 10 percent to 15 
percent of the total cost of the disaster, which helped a great 
deal.
    Since 1993, we have been really pushing to buyout, 
relocate, or elevate properties in the 100-year floodplain. We 
have bought out close to 20,000 pieces of property since then. 
That will save disaster dollars in the future, but more than 
that, it has enhanced the quality of life in communities. It 
has helped the environment and protected it. But mainly it took 
people out of a bad situation.
    The buyout relocation in North Carolina is extremely 
important because of the devastation there, and the homes that 
were affected in the 100-year floodplain, and even outside that 
floodplain. When you have close to 4,000 homes totally 
destroyed--I mean, totally destroyed--and over 12,340 homes 
with 2 feet or more of water in them, it is pretty devastating. 
But the buyout program has been very successful.
    Mr. Price. What was available before was just sporadic 
kinds of assistance through community development funding and 
other programs, so this really did fill a gap or met a need 
that was not being addressed by any other program.
    Mr. Witt. Absolutely.
    Mr. Price. What kind of structures are you buying? Do you 
have any demographic data on the type of families who are 
eligible for this program and who is being helped, any income-
level figures?
    Mr. Witt. We don't have a means test on this program.
    Mr. Price. I know you don't. But who usually gets the help?
    Mr. Witt. It addresses properties within the 100-year 
floodplain that have had 50 percent or more damage. I would 
say, a high percentage of the properties that we have bought 
out have been owned by low-income persons because a high 
percentage of property that is located in the 100-year 
floodplain is the cheapest property.
    It is not to say that there has not been a $300,000 or 
$400,000 home that has been bought on occasion, as the 
overarching goal is to get as much property out of the 
floodplain as we can in order to keep the flooding from 
happening again, but as we have seen in North Carolina, a very 
high percentage is low-income housing.
    Mr. Price. Well, if you could furnish for the record 
whatever kind of mean figures you have or median figures you 
have on the kinds of families that are actually being helped 
and the kinds of properties to which this program is mainly 
applying----
    Mr. Witt. Yes, we can break it down to percentages for you 
and provide it to you.
    [The information follows:]

    At this time, State applications for buyout funding have 
not been completed. Once applications are completed and 
processed, we will report to the Committees on Appropriation on 
income levels of applicants.
    Although specific information is not currently available, 
FEMA expects that low income property owners receive a high 
percentage of the funding available for buyouts. FEMA guidance 
to States seeking buyouts states that FEMA intends ``to use the 
funding to meet the needs of lower income households in the 
areas that are most affected by flood damage.'' Additional FEMA 
guidance caps the buyout award levels at $300,000.

                      Purchase of Flood Insurance

    Mr. Price. Now, the issue, of course, comes up about flood 
insurance and why more people didn't have flood insurance, 
questions of how adequate the maps were and so forth. I am told 
that one reason is that a lot of these homes had been in 
families for years. They weren't still paying on mortgages, 
and, therefore, the provisions attached to mortgages that 
required insurance didn't apply.
    Does that seem right to you? Is that a major factor? And 
can you describe in more detail why more people in this area 
didn't have flood insurance?
    Mr. Witt. You are absolutely accurate in that a lot of the 
housing that we have seen flooded over the years has 
traditionally been handed down through generations and does not 
have a mortgage on it. Even though we are behind on flood 
mapping by 10 years and need to update them, we don't have the 
money.
    But even if they were all updated, in some cases you are 
not going to get everyone that lives in a flood-risk area to 
buy insurance simply because they haven't been flooded, they 
don't have a mortgage on the property, and there is no 
incentive for them to buy the insurance.
    The one thing that has helped is 1994's Flood Relocation 
Act that Congress passed that says if you get flooded once and 
you get Federal help, you are not eligible for those grants the 
next time unless you have flood insurance. Our programs aren't 
designed to bail people out. Our programs are designed to help 
people put a roof over their head temporarily, and the 
insurance is designed to help replace what they lose.
    JoAnn Howard, the Federal Insurance Administration 
Administrator, is here today. We have a huge marketing campaign 
underway to get more people to buy flood insurance. Coverage 
has increased dramatically in comparison with what it was in 
1994. We have gone from $210 billion to more than $500 billion 
in coverage as a result of the marketing campaign. It has 
increased, but yet we still have a long way to go.

               north carolina's contributions to buyouts

    Mr. Price. Now, you are working with North Carolina, which, 
as I said, has appropriated substantial funding for buyouts 
itself at the State level. How is that partnership working, 
that partnership with the State? In doing a comprehensive 
buyout effort, we are, of course, wanting to protect the 
Federal treasury from future claims and protect individual 
homeowners. Has there been a division of labor here that we 
ought to know about, or is this kind of instructive in terms of 
future efforts? And then what is the situation with respect to 
the supplemental appropriation, the additional funding 
requested there? How effectively do you think those funds can 
be used?
    Mr. Witt. Of the eight States that were declared in 
Hurricane Floyd, we first looked at North Carolina to determine 
from early estimates how much property would be eligible for 
buyout relocation or elevation. We are looking at $429 million.
    What Governor Hunt and North Carolina legislators have done 
is basically something that I have not seen in the 7 years I 
have been Director of FEMA. They are enhancing the buyout 
relocation effort by some $800 million that they appropriated 
to give grants to individuals in the amount of $25,000 to 
rebuild outside the 100-year floodplain.
    Mr. Price. And that supplements the your buyout amount.
    Mr. Witt. Absolutely. I have never seen this done. It will 
make a huge difference in North Carolina, and I really commend 
them for doing it. It makes all of our jobs easier, and helps 
people rebuild much faster.
    Mr. Price. Now, is that the main way this is working, to 
supplement buyout grants that you are already making, or are 
there some properties that are for some reason not eligible for 
the Federal program that the State covers? What is the division 
of labor?
    Mr. Witt. A lot of times people will have a mortgage on the 
property, and this supplemental grant will help them satisfy 
that mortgage where our buyout program would not. Also, it will 
be used to purchase property outside the floodplain. In North 
Carolina a lot of the affected properties were manufactured 
homes. North Carolina has a huge manufactured-home business. 
The equity in a manufactured home is pretty much depleted over 
the years. A buyout will help them move to higher ground and 
buy another home to live in. This program will make a huge 
difference for the people in North Carolina.
    Eric Tolbert, the State director in North Carolina, and 
Lacy Suiter, our Associate Director for Response and Recovery, 
have worked very closely, and have done an incredible job with 
a huge task. I can tell you, to anyone else, it would be 
totally mind-boggling to try to address all of the requirements 
and needs in North Carolina without a good strong program, and 
you all have a good program.

                      Supplemental Buyout Request

    Mr. Price. Could you address the supplemental request, 
Director?
    Mr. Witt. The $77 million is very important for us to 
finish what we have started in North Carolina and the other 
States, and we are very hopeful that we get it. You are talking 
about thousands of homes and decisions that people are going to 
make, and it is very important.

               Support to States for Emergency Management

    Mr. Price. Finally, if I could ask about another State-
related matter, I know FEMA has proposed a State-managed 
disaster system that would allow States to have greater 
authority following some of the smaller-scale disasters. The 
problem seems to be that there has been no funding increase to 
State and local governments' emergency funding for the past 7 
years, so the capacity to take this on is not clear.
    Why has there been an expansion of seemingly every other 
program and the addition of new programs such as Project Impact 
when the basic State and local capabilities are being held 
flat? And I guess a related question, could additional 
emergency management performance grants, EMPG grants, be used 
to help shore up those basic capabilities?
    Mr. Witt. With the exception of 2001, we have asked for 
more funding for our State grants every year. This year is the 
first year that we have implemented the EMPG grant program. 
Before that funds were requested under the CCA or PPA, where 
the program pretty much required the State to spend this amount 
on this program. We have all been working very hard to get this 
to a grant program where the State can use the funds basically 
as they see fit to meet the risks in that State, through 
training, exercising, planning and development.
    This is the first year for this consolidated grant program, 
and we want to make sure the program is solid. We want to make 
sure it requires accountability for the States so we can report 
back on what works, what is good management, and what we need. 
We need to make sure that it is working right before we expand 
it.

                  state management of small disasters

    Mr. Price. Well, EMPG aside, there does seem to be a kind 
of mismatch between the notion that the States could have 
greater authority on these smaller-scale disasters and the kind 
of funding picture we have.
    Mr. Witt. For the smaller-scale disasters, what we and the 
States working with us are trying to do is to come up with 
three levels of disasters: small disaster, medium-size 
disaster, and catastrophic, or Levels 1, 2, and 3. We want 
States to have the capability of managing that disaster Level 
I, small themselves, including managing debris, public health 
and safety concerns, infrastructure, bridges and roads and so 
forth.
    We would have an FCO, a Federal coordinating officer, and 
about ten people to work with the State to provide technical 
support, but the States could manage that disaster. We would 
not have to set up a disaster field office, or have a huge 
number of staff there to help coordinate a small disaster. It 
will save disaster costs, and give the States an opportunity to 
really manage it themselves. Most of the States want to do 
this.
    There may be one or two States that do not have enough 
staff to do it, and we will augment the staff and help them, 
but most of the States are ready and want to do this. Some 
States, such as North Carolina could probably handle a Level 2 
disaster with the capability they have in place. We would 
continue to provide individual assistance because we have the 
processes in place. States agree to that, too.
    Mr. Price. Thank you. Thank you again for all that you and 
your colleagues have done.
    Mr. Frelinghuysen [presiding.] Thank you, Mr. Price.
    Mr. Goode.

                              fire grants

    Mr. Goode. Thank you, Mr. Chairman.
    Let me follow up one thing, if I might, that Congressman 
Mollohan had asked you about, the $25 million demo project. I 
want to be sure that I understood you correctly. You said that 
the grants would be available to volunteer fire departments 
just the same as paid departments. Is that correct?
    Mr. Witt. Yes.
    Mr. Goode. If you were to get the appropriation, how many 
grants do you think you would--what would be your minimum grant 
and your max grant? Just ballpark.
    Mr. Witt. This is Ken Burris, chief operating officer of 
the USFA.
    Mr. Burris. We have not come to any definite number of 
grants because we have not put a cap on the grant amount that a 
particular jurisdiction would get. We do anticipate that it 
would be no fewer than a couple of hundred and certainly no 
more than four or five hundred, because once you start 
spreading that $25 million out over a large number of 
jurisdictions, it makes it difficult to have a positive impact 
in the arena of health and safety.
    Mr. Goode. Yes, but what is the max grant you think you 
would want to award under this?
    Mr. Burris. Well, in discussions, we've proposed the 
maximum to be in the area of $200,000.
    Mr. Goode. Okay.

                   emergency food and shelter funding

    I noticed you are asking for an increase in your emergency 
food and shelter fund to $140 million. Let me ask you this--and 
I know you work cooperatively, as you said in your statement. 
How much do you get from the Red Cross, just for instance, and 
the United Way? And are the taxpayers the main contributors to 
that fund?
    Mr. Witt. This program is probably one of the best 
administered and at least costly of any program of the Federal 
Government. There are fewer than five people in FEMA 
administering this program.
    Mr. Goode. I understand. That is good and is to be 
commended.
    Mr. Witt. Yes.
    Mr. Goode. That is fabulous. But, I mean, how much--does 
the Salvation Army participate in the fund, the American Red 
Cross? How much money does it get from the National Council of 
Churches, the United Way?
    Mr. Witt. All of the organizations that participate in the 
emergency food and shelter program are contributing in 
communities every single day. They operate and maintain 
shelters, and probably contribute a lot more than we do.
    Mr. Goode. They are contributing, I take it from what you 
say, rather than cash money, a lot of volunteer time and help.
    Mr. Witt. And they do a great job. Through the National 
Board, Kay Goss and the Preparedness Training, and Exercises 
Directorate work with the United Way, Catholic Charities, and 
all of the other organizations. They are well spent dollars to 
help people that are in dire straits. We have seen a huge 
increase in the number of people coming to shelters or needing 
food and shelter, assistance, and the numbers are getting 
higher.
    Mr. Goode. But the overwhelming amount of the money, the 
cash money, is the U.S. taxpayer.
    Mr. Witt. Yes, sir.
    Mr. Goode. Very little cash, but, I mean, the contribution, 
as you say, is tremendous.
    Mr. Witt. Oh, it is.

          flood insurance requirements after flooding disaster

    Mr. Goode. In time and energy.
    To jump to another area--well, let me ask one other 
question, something Congressman Price asked you about. Congress 
passed a rule saying that if you lost your home because of 
flood, one time you are all right, but unless you have flood 
insurance, we weren't going to help you again. Are there any 
exceptions to that?
    Mr. Witt. The 1994 Flood Insurance Reform Act says that if 
you get Federal help once in a flood disaster, then you better 
have flood insurance the next time because you will not be 
eligible for grants under the individual and family grant 
program or the emergency home repair grant, which is up to 
$10,000. We can still help a family with the individual 
assistance under the temporary housing program.
    Mr. Goode. But you are not going to build back another 
house.
    Mr. Witt. No.

                         flood map license fee

    Mr. Goode. Okay. You have got proposed in your budget a 
license fee for flood hazard maps. Does this apply to everyone 
that wants a loan? You know, I figure that the way they shop 
for loan packages, if you don't have that sheet of paper, you 
are not--they won't--you are going to have to have it.
    Mr. Witt. Actually, we have changed the proposal in the 
context that this fee would not be assessed against your bank 
if you were getting a mortgage and had to have your 
certification of floodplain elevation. This is now proposed as 
a map determination fee to be paid by the individuals or firms 
that do the elevation determinations.
    Mr. Goode. Yes, but they are going to pass that along to 
them.
    Mr. Witt. Probably. I would be tickled to death if Congress 
would give us the money to update the map program instead of 
having to assess the fee.

                         need for updated maps

    Mr. Goode. I am sure you would. [Laughter.]
    But don't you--let me ask you, on a refinance they would 
want that sheet of paper in there saying that we have an 
updated map.
    Mr. Witt. Absolutely.
    Mr. Goode. I mean, you are going to have to have everything 
remapped. Isn't that right?
    Mr. Witt. Well, we are 10 years behind now.
    Mr. Goode. And some of them aren't accurate now.
    Mr. Witt. That is right. Some communities can't make good 
planning decisions because those maps aren't accurate. What we 
are trying to do with the map modernization program is bring 
them up-to-date. If we can get the money, we can contract with 
the community and let the community do the mapping.
    Mr. Goode. In making the maps, who decides where the 100-
year floodplain is or the 20-year floodplain?
    Mr. Witt. Basically, the Corps of Engineers establishes the 
base flood elevations, and then our technical engineers work 
with the Corps of Engineers.
    Mr. Armstrong. We have hydrologists that work in our 
regional offices, and we also contract with people to do actual 
surveying. We are also trying to model new technology that 
would increase our ability to do more accurate mapping. But the 
surveying and hydrological engineering support comes primarily 
from the Army Corps and the USGS.
    Mr. Witt. I just can't stress the importance of these maps. 
Every lending institution in the United States, real estate 
professionals, builders, and developers in every community need 
these updated maps. What we really need to do in the map 
modernization program is to digitize these maps, and put them 
on the Web so an individual, a bank, or a community planner can 
pull them up on the Web. I mean, if you can access updated 
maps, people can make better decisions about where they build. 
We just don't have that right now.
    Mr. Armstrong. We have roughly 20,000 communities in the 
National Flood Insurance Program, and 7,000 of these 
communities have either outdated or unmapped areas. All of them 
need to be digitized so that, as the Director said, they will 
be more accessible, and also we can accelerate the updating 
process to determine how new development and new growth should 
occur.
    Mr. Goode. Just Virginia, for instance, what percentage of 
Virginia is mapped sufficiently in your opinion?
    Mr. Witt. A fourth, I would say.
    Mr. Goode. A fourth?
    Mr. Armstrong. Well, if you apply the national percentage 
to Virginia, most of the communities have a map, but the 
question is how old is the map. Some of our maps are as much as 
15 or 20 years. We should be mapping every 5 years.
    Mr. Goode. Do I have any time left, Mr. Chairman?
    Mr. Walsh. Yes.

                        headquarters relocation

    Mr. Goode. You made the comment that the new facility had 
to be in the District, and you said ``for obvious reasons.'' 
What are some of those?
    Mr. Witt. Well, I think it is important that we be 
accessible to Congress and to the administration. If we are 
located outside the District and in the middle of a crisis 
situation, with the traffic congestion that we deal with every 
day, it could be hours instead of minutes to be able to respond 
to someone.
    Then, also, in our emergency operation center, we house 26 
Federal agencies that work out of that center when we are 
facing a catastrophic disaster response. It is important that 
those agencies can access our location easily to respond very 
quickly.
    Mr. Goode. So you are one that believes to some extent in 
closeness of the people and not rely too much on e-mail and 
faxes and----
    Mr. Witt. Absolutely. I like to see the faces.
    Mr. Goode. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mr. Knollenberg.
    Mr. Knollenberg. Thank you, Mr. Chairman.
    Director Witt, welcome.
    Mr. Witt. Thank you, Congressman.

           subsidized property under flood insurance program

    Mr. Knollenberg. You know, after 8 years you haven't aged a 
bit. [Laughter.]
    I think overall you have been doing the very best that you 
can and doing an adequate job, in some cases I would say a 
superb job.
    Mr. Witt. Thank you.
    Mr. Knollenberg. That obviously reflects on your staff, 
too.
    Let me get into a couple things very quickly, and I want to 
follow up in a moment on Mr. Goode's comments about the fee. 
Flood insurance. There is only a handful of people that know 
what pre-FIRM and post-FIRM is. I am one of them. I used to 
sell this stuff in a prior life.
    Last year you were able to tell me by virtue of your work 
that you had reduced the--well, the intent of Congress 
originally was not to subsidize, but to go to an actuarially 
based program. And I think you were leading into some successes 
along that line, which included a reduction last year from 36 
percent to 32 percent. Where are you this year? What can you 
report in this time?
    Mr. Witt. I don't think it has changed too much. Has it, 
JoAnn?
    Ms. Howard. About 30 percent of the local business is pre-
firm. The buyouts will help because they typically involve the 
older pre-FIRM, subsidized properties.

                       repetitive loss properties

    Mr. Knollenberg. On the buyouts, you say that has increased 
to a point which alleviates some of this problem and it is 
apparently substantial?
    Ms. Howard. Yes, sir. Under the Director's initiatives, we 
identified the properties from all of our flood insurance 
payments over the past 30 years. We now know the number of 
losses that properties have suffered so we can target them. We 
have our repetitive loss properties identified separately now 
so we can monitor them more effectively.
    Mr. Knollenberg. You didn't have before?
    Ms. Howard. That is correct.
    Mr. Witt. We pay $200 million annually in repetitive flood 
losses. JoAnn and her staff have identified by address all 
those 10,000 pieces of property. Some of them are much worse 
than others. JoAnn has found that we have actually paid claims 
equaling more than the value of the property in some cases. It 
just doesn't make sense to continue doing this.
    Mr. Knollenberg. Absolutely not. That is one of the things 
that we have been driving for for years, and I hope we are 
going to get there.
    The Flood Reform Act stipulates that if you are affected by 
a flood disaster once, you get Federal help. And I think you 
have just covered some of this with Mr. Goode. But then you are 
required to have flood insurance the next time, or you will not 
be eligible for most disaster assistance. You mentioned that 
they would be eligible for----
    Mr. Witt. They would be eligible for temporary housing.
    Mr. Knollenberg. Temporary housing. Not a Taj Mahal, but 
just something that--additional living expense in the policy 
itself----
    Mr. Witt. Temporary housing for up to 3 months.

                    rise in flood insurance policies

    Mr. Knollenberg. Oh, it is 3 months, 90 days. All right. 
That has been limited primarily to avoid any additional cost. I 
think that is ample.
    Has it been your experience that the number of policies has 
gone up since this became law, this 1994 Flood Reform Act? 
Pretty substantially?
    Mr. Witt. Yes, sir, as a result of the marketing campaign 
that JoAnn has undertaken.
    Mr. Knollenberg. This is a continuation of the same one you 
had last year?
    Mr. Witt. Yes, sir.
    Mr. Knollenberg. The 1-800 number and all the rest of it?
    Mr. Witt. Yes. Our goal was to get a 20 percent increase 
from this marketing campaign. We have actually seen more than a 
20 percent increase in policies.
    Mr. Walsh. Would you identify yourself for the record?
    Ms. Howard. JoAnn Howard, Federal Insurance Administration. 
We started a new campaign in the fall, a blue and yellow flood 
alert caution sign. Just since the time that we began running 
the new commercials this spring, we have had 55,000 inquiries, 
and sold a substantial number of policies. We are also focusing 
on retention, working with write-your-own companies because, 
unfortunately, in some areas, after a major flooding event, 
people tend to let down their guard and expect that since a 
flood has happened, there is some equity in nature and it won't 
happen again there. Unfortunately, that is not the case. As 
North Carolina found this year, for example, there were three 
major flooding events within about a 4-month period.
    Mr. Knollenberg. I would hope that there will come a time--
and I don't know that we will see it, Mr. Witt, on your clock--
when we reduce or eliminate those subsidized policies in their 
entirety.
    Mr. Witt. I agree.

                 flood hazard determination license fee

    Mr. Knollenberg. It just doesn't make any sense because 
their taxpayer friends are paying for it, and have been paying 
for it by virtue of the bailout provided.
    Let me go back to this fee, and several of you, I guess, 
have been talking about it. I am hearing from realtors and a 
variety of people, consumers and customers complaining about 
this mysterious $12 fee. It seems to me last year there was a 
$15 fee that was--they called a mortgage transaction fee?
    Mr. Witt. Yes.
    Mr. Knollenberg. Whatever happened to that?
    Mr. Witt. We have changed our proposal with this other fee.
    Mr. Knollenberg. Now, the confusion within the industry, 
within the real estate industry is that they have to charge, I 
guess, everyone that fee, regardless of whether they are in a 
mapped area of a flood-prone area. Is that not true? What is 
true?
    Mr. Witt. It would be on each flood map determination.
    Mr. Knollenberg. But you are using maps that are outdated?
    Mr. Witt. Right now, many are outdated.
    Mr. Knollenberg. And you want money to improve them.
    Mr. Witt. Yes, we are trying to modernize all of the map 
inventory.
    Mr. Knollenberg. This 12 bucks goes for that?
    Mr. Witt. Yes.
    Mr. Knollenberg. Wouldn't there--well, how successful--how 
quickly would you be successful if you were given the money?
    Mr. Witt. We envision a 7-year program.
    Mr. Knollenberg. It takes that long?
    Mr. Witt. Yes, sir. We are talking about thousands of maps 
that need to be updated for 20,000 communities, and we are 10 
years behind to start with.
    Every year I have addressed as part of my testimony the 
importance of the flood mapping program. We estimate a $750 
million cost to do this project, and we don't have the money.
    I personally think if we don't do this, then we are going 
to continue to pay flood-related disaster costs simply because 
we don't have updated maps that are needed to make smart 
decisions about building.

                         need for updated maps

    Mr. Knollenberg. In the meantime, what is happening here, 
though, is that you are charging the consumer for a product 
that is impure, inaccurate, and it further frustrates and 
compromises and, in fact, increases the problem in many ways 
because many of them might be obliged to--not many, but you say 
just those in the mapped area. But that is a pretty large 
portion.
    Mr. Witt. Right now we spend $50 million a year out of the 
flood insurance policy holder fees to try to maintain flood 
maps, to remap as much as we can, and particularly to do new 
maps that the communities have asked for.
    With the level of flood claims, like the $200 million just 
in North Carolina alone, the Flood Insurance Program can't 
maintain and update flood maps.
    Somebody is going to have to pay for the modernization of 
these maps, if we are going to have good maps. Who should be 
taxed with paying for it?
    Mr. Knollenberg. Well, I do think that something has to be 
resolved here. Mr. Chairman, it appears to me that--maybe you 
are in a box, but when we start charging consumers for a faulty 
product that is outdated and basing, of course, the claim that 
you must buy insurance because you are in an area--and many 
times you are not really in a flood-prone area or in a----
    Mr. Witt. Some of the flood zones have changed, you are 
right. We have had people request a map revision because they 
don't think they are in a floodplain anymore. In some cases 
they are absolutely correct.
    Mr. Knollenberg. Does FEMA have the right to actually--
isn't there a legislative process here that should be abided 
by?
    Mr. Witt. The only way we would have the right to charge 
the fee is if you give it to us.
    Mr. Knollenberg. That is what I mean. But that is what you 
are doing with this $12 add-on?
    Mr. Witt. Yes.
    Mr. Knollenberg. Well, I do appreciate the dilemma, but it 
seems to me that sooner or later we are going to have to 
straighten this thing out because working with faulty equipment 
doesn't produce the right result. I would hope that there would 
be some way that that would be complied with in a minimal 
dollar fashion. I don't know what that is, but this one is a 
little strange.
    Mr. Witt. Let me say, Congressman, we are working with NASA 
and exploring new technologies to do this in a cost efficient 
way. We want a map modernization plan that saves money, but 
will produce a good product. It is very difficult.
    Mr. Knollenberg. You know, some of the--I suspect lenders 
will still want a sheet of paper saying that the property is 
not in an area that is mapped, will they not?
    Mr. Witt. Most likely.
    Mr. Knollenberg. And I will finish with this, Mr. Chairman. 
I think the problem is pretty clear. The one remaining question 
I have is this: Is any of this process, this stumbling and 
struggling and the problem we have with the maps, is that 
preventing home ownership, any home ownership? Are people 
saying, hey, I have had about enough, the packet of papers, and 
now you have got one more you want to charge me a mysterious 
fee on a river that I have to fear is 50 miles away and doesn't 
even get this way? You know, are those the kinds of things 
that----
    Mr. Witt. I don't think it will be a hindrance to home 
ownership. If you have ever sat down to do a closing on a 
mortgage for a piece of property and you look at the amount of 
paperwork that is involved, it is enormous.
    Mr. Knollenberg. I may have some follow-up questions, but I 
will do those for the record. Thank you, Mr. Witt.

               work with other agencies on flood mapping

    Mr. Walsh. Mr. Hobson.
    Mr. Hobson. Thank you, Mr. Chairman.
    Nice to see you, Mr. Director.
    Mr. Witt. Good to see you, sir.
    Mr. Hobson. Even though we complain, I think you do a good 
job, and I have worked with you for a number of years on a 
number of things, and I want to congratulate you on that. And 
you sure have a great guy in Chicago.
    Mr. Witt. I think so, too.
    Mr. Hobson. I have a couple questions. You touched on one 
of them here. Do you want to tell us a little bit--I like when 
agencies work together and we don't duplicate programs. Can you 
tell me what FEMA is doing with NASA and other Federal agencies 
like DOD to reduce some of the costs in the flood map 
modernization?
    Mr. Witt. Dan Goldin has been very responsive in working 
with us and trying to come up with the technology using 
satellite imagery developed for the new shuttle mission for the 
remapping. They are looking at how that would benefit us, and 
it has been helpful. The Corps of Engineers, of course, works 
well with us, as does USGS.
    We just did a plot project in Louisiana using LIDAR, to 
give us flood elevations or ground elevations. They are still 
getting some bugs out of it, but I think it has huge 
possibilities.
    I think eventually we will come up with some technology 
that is going to be very good. There is a company in New York 
State that has been working with us on their technology, and is 
trying to provide good sound elevation shots cheaper and 
faster. Getting elevation data in the most effective and 
efficient way has been difficult.
    Mr. Hobson. I can tell you from some personal experiences, 
I had a property in Columbus where the flood mapping was a 
problem where there was a problem with insurance. And I have 
had constituents come to me where the maps were wrong and 
things had changed and people wanted to do additions to their 
buildings, and they were stopped from doing additions. It is a 
problem.
    I remember when I bought my first house, I think we had a 
note, a mortgage, a title opinion, and a closing statement. 
That is all we had. And, you know, I lived in that house for a 
long time, then sold it and didn't have any problem. But the 
next closing----
    Mr. Witt. It is different now.

               cooperating technical communities programs

    Mr. Hobson. And when you do it, it is a lot different 
today, and I don't know that we achieved any more or not. With 
that much you get in a fight. But most of the times--today you 
have title insurance, and nobody would close on just a letter 
from a lawyer anymore saying that everything was okay. But 
everything is the secondary--a lot of this is driven by the 
secondary market and selling paper.
    I have just two other quick things. I am concerned about 
the CTC program. We have got some places where communities 
can't really afford the amount of money they might have to come 
up with to pay half the costs in some of the--to modernize the 
mapping. Are there any programs to help some of these 
communities that can't pay anything?
    Mr. Witt. Well, we have been trying to update the maps for 
some time, but we just do not have the money to do it. So, we 
are looking at some type of a user fee, for the people who use 
the maps. We spend $50 million a year now for flood mapping out 
of the policy holder fee, but if we do it right, the way it 
should be done, and update all the maps, you are talking about 
a cost of $750 million over 7 years for this program. By 
digitizing the inventory, we hope that in the future it will be 
much cheaper to maintain, and much easier to access.
    We have tried our best to look at every option, but our 
request of $134 million includes $104 million from the map 
determination fee.
    I wish that I could have better news for you, but it is 
something that has got to be done. Of course, you know how 
important it is.

                    improvements in fema's response

    Mr. Hobson. I do know it is important. I am in the 
development business on the side, so I know.
    The other thing, I just want to comment on the EMA grants, 
and I was surprised--but that is something I am not going to go 
into again, but it is a problem for States transitioning into 
that. But I also want to say that I think some of the things 
you have done at FEMA, I think FEMA is a much better agency 
today. I know we complain about some things, but since I have 
been on this committee--and I was on another committee, on an 
oversight committee. And I have to tell you that I think the 
response of FEMA today and the way it is run today is better 
than in all my experiences since I have been in Congress. You 
have had probably more major things to deal with, and I think 
there has been less criticism of FEMA. So I think sometimes 
when you--we tend to get into an adversarial position many 
times. That is part of our job is to kick you when we don't 
think you are doing the right things. But I also think we have 
an obligation to say that in my experience in a little place 
like St. Paris, Ohio, which is, you know, kind of off the 
charts----
    They responded and they did a good job in a little 
community.
    On the other hand, when you go in--and I have experienced 
some things, not in my district but before in some big places, 
we had huge problems in the past, and they didn't quite respond 
the way people thought. But I think currently you did, you have 
in some of these big--and we don't hear the complaints about 
FEMA that we heard before.
    There are other things today, but the overall responses to 
the major disasters, you have gotten it under control. You move 
your equipment better than you used to. You have gotten a 
little better equipment, and your emergency response teams have 
been--that is a huge success, what you have done with those. I 
think I have the only on a military--that is headquartered at a 
military base. But those are good things, and it seems to work 
well, and I want to congratulate you on that.
    Mr. Witt. Thank you, sir.
    Mr. Hobson. I came over--I know I was late, but I wanted to 
mention that to you because I think this agency for the most 
part has turned around in some difficult times.
    Mr. Witt. Thank you, sir.
    Mr. Hobson. That is all, Mr. Chairman.

                    hazard mitigation grant program

    Mr. Walsh. Thank you.
    I just have a couple of questions remaining. We are on the 
second round now. Regarding the hazard mitigation grant 
program, whenever there is a natural disaster, funds are made 
available to the State experiencing the disaster to finance the 
recovery. In addition, mitigation grants are made available for 
the use by the State in order to take projects with the goal of 
decreasing the cost of future disasters.
    In your opinion, have the States been using the hazard 
mitigation grant funding in a cost-effective manner by 
addressing major problem areas? Or are the States spreading the 
grants too thin to satisfy local political pressure?
    Mr. Witt. We ask States to develop a statewide mitigation 
plan to determine if they have a disaster, where they would 
spend the money, and what they would focus on to eliminate 
their greatest risk. I think they have done a really good job 
in that area.
    Could we do more? Absolutely. Could we save future dollars? 
Absolutely.
    Mr. Walsh. How do you get that desired result under the 
existing program?
    Mr. Witt. I think the Stafford Act amendments that the 
House has already passed and that are in the Senate will help a 
great deal by increasing the percentage for 404 mitigation 
funds from 15 to 20 percent. As I have said many times, every 
dollar we spend now is going to save $2 to $3 in future losses. 
We are also going to have a better built community.
    This is so important, and it is just like all of the 20,000 
pieces of property we bought out through this program. Time and 
time again, we have seen that same property flood, but we won't 
spend one single dime in disaster money again on that property. 
The cost savings, is going to be much greater in the future.
    Mr. Walsh. Your department recently instituted a policy 
that allows States to use up to 5 percent of its hazard 
mitigation grant funding for projects for which benefits are 
not easily determined. Are you happy with the way in which the 
States have been using that 5 percent allocation? Are you aware 
of any instances where the allocation has been used to buy 
furniture or refurbish offices or in other similar ways?
    Mr. Witt. The money primarily has to be spent on public 
health and safety projects. A large part of the 5 percent has 
been used, I think wisely, in support of siren and early 
warning systems for tornadoes and hurricane warnings. In 
several of the States, it really did help them to get their 
warning systems in place. I think that is one of the reasons 
why we are seeing less loss of life in tornadoes than in the 
past.
    Mr. Walsh. Do you have a program of auditing procedures 
that will ensure that these funds are used properly?
    Mr. Witt. Yes, sir. Gary, in his position, has set up a 
very good financial management system in addition to a grants 
management program, which is managed by Pat English. Also, our 
Inspector General does a good job of holding us all accountable 
and responsible. They are very good about being part of our 
management team, even though they are independent. They have 
done an excellent job in reviewing our progress, and making 
sure that we are all in compliance.
    Mr. Walsh. Thank you.
    Mr. Mollohan.

       reaction of flood map determination firms to proposed fee

    Mr. Mollohan. Thank you, Mr. Chairman.
    Mr. Witt, just following up on a couple of questions about 
map modernization. This year's budget calls for fees on firms 
that use the maps. Have you worked with those firms or with the 
industry about their attitude regarding this proposal? And 
could you share with the committee what their reaction has 
been?
    Mr. Witt. Yes, and then I will turn to Mike Armstrong.
    Mike and his staff have set up many meetings with our 
customers and partners on this. We would not have gone forward 
with our proposed if they had not supported it; however, it 
seems as though some of them have turned around and don't 
support it now. So I am going to let Mike tell you what they 
shared with him.
    Mr. Armstrong. Michael Armstrong, Associate Director for 
Mitigation. We have met several times specifically with the map 
determination community, but the larger lender community as 
well. I am sorry Congressman Knollenberg isn't still here 
because there are some significant changes from last year's fee 
proposal that I'd like to point out.
    This year's fee, instead of being a mortgage transaction 
fee, would not require lenders to establish an accounting 
mechanism to track the fee, which they complained about last 
year. This year's proposal would add to a fee that is already 
charged.
    Secondly, it would require the use of standard flood zone 
determination regardless of whether the mortgage is federally 
regulated. That was another criticism from last year that we 
changed in this proposal.
    Thirdly, the collection would be limited to those providing 
map reading services, so it doesn't have the broad impact on 
the lending community that they objected to last year.
    We have also spoken with officials at Fannie Mae and 
Freddie Mac who have suggested to us that we need to be looking 
at ways where that would have as little impact as possible on 
the private sector. I have asked my staff to see if we are 
privatizing enough on mapping activities. We already are 
privatizing a lot of our hydrological engineering survey 
activities. If there is data gathering occurring right now that 
we could pay for that would be cheaper than producing our own, 
we will look at those things. We will look at everything we can 
to reduce the overhead cost.
    We have done some internal reviews that have dropped $100 
million off the price tag. A year ago we estimated a cost of 
$850 million. Now it is $750 million. We will keep doing those 
internal reviews as well.
    Mr. Witt. We are also proposing that instead of us hiring a 
technical firm or engineering firm, we will work with the local 
community and if they have the capability to contract 
themselves for an engineering firm to do those maps, then we 
will let them do the contracting. This will save, a lot of 
appeals and reviews that sometimes follow when we do the maps.
    Mr. Hobson. That actually happened in my community. We 
challenged some of these maps.
    Mr. Witt. Yes. Who knows the community better than the 
community? Let's contract with the community, and let them do 
their own flood maps. Then we will review them. It will save 
time, save money, and probably result in more accurate maps.
    Mr. Hobson. If the gentleman would yield for just one 
second?
    Mr. Mollohan. Yes.
    Mr. Hobson. And if those maps aren't accurate, I am telling 
you, it creates havoc on a property owner. I had a situation 
where a fellow owned a piece of ground, the map came out, and 
there was a change. Just a few feet, a foot or two, can throw 
you totally into a zone where you cannot add on to your 
existing building, which, again, could shut down the planned 
expansion and job creation or even continuing to operate in the 
existing building. So it is important that, one, it be correct 
and, two, we have a way to make sure within the communities 
that the communities understand what is happening and when it 
is happening, because it affects a lot of things that they do 
in zoning and the insurance guys.
    I had another building where we transferred the ownership 
of the building. At the time of the transfer of the ownership 
of the building, it was learned that the map had changed, and 
suddenly we were in a zone which we didn't know we were in or 
we weren't in before, and the insurance rates--it affected the 
ability to make the sale.
    Mr. Witt. Congressman, it goes back to us at FEMA pushing 
communities not to build or develop in the floodplain, and the 
community saying, where is the floodplain? Give us a good map. 
The floodplain does change, however.

                            digitizing maps

    Mr. Mollohan. Well, there are at least two issues there. 
One is getting accurate information and getting it into the 
mapping process, and two is modernizing how you reference these 
maps and how they are accessed. And this modernization plan 
covers through digitization, so they can retrieve it in 
different ways.
    Mr. Witt. Yes, sir. We want to digitize the maps, and put 
them on the Web where people have access to them, without 
having to have them mailed to them. With today's technology, we 
need to get into the 21st century with our mapping.
    Mr. Mollohan. Is there general support for that among the 
mapping community?
    Mr. Witt. Yes, sir. And we have digitized some maps 
already.
    Mr. Mollohan. He is cynical. He thought these people worked 
themselves out of a job. [Laughter.]
    Well, how are you doing with that? And how much money are 
you going to need for how long a period of time?
    Mr. Witt. The map modernization program will be $750 
million over a 7-year period.
    Mr. Mollohan. And that includes digitization.
    Mr. Witt. Yes.
    Mr. Mollohan. Well, that is a great program, $750 million.
    Mr. Witt. Over 7 years. We would take any or all of it at 
any time that OMB and Congress would approve it. [Laughter.]

                           planning for risks

    Mr. Mollohan. I would like to explore with you a little bit 
this idea of finding the hazard zones and dealing with them. We 
spent an awful lot of time appropriately trying to define what 
is the floodplain, so that people do not locate in a place 
where they should not locate. The idea is to get them separated 
from the disaster, and have incentives and disincentives in 
order to enforce that idea, which you have a real expertise and 
familiarity with.
    To what extent are those concepts of the relationship 
between the individuals, where they live, where they work, and 
where they operate, applicable to other kinds of disasters as 
they apparently are to floods? Because we don't talk a lot, 
about other kinds of disasters.
    I suppose tornadoes are so random that it would be really 
difficult to do, but I think about earthquakes, which are 
pretty well defined.
    Mr. Witt. Mike Armstrong and his staff in the Mitigation 
Directorate are working on the HAZUS modeling for earthquakes, 
and trying to broaden HAZUS to include the other risks in order 
to help communities use this as a multi-hazard modeling tool. I 
think it is going to be very successful. We have a timeline 
laid out, with release of the full HAZUS model in 2005. This 
will help a community a great deal, and I am very supportive of 
it.
    Mike, do you have anything to add on HAZUS?
    Mr. Armstrong. Yes. We just met yesterday, as a matter of 
fact, to talk about marketing the fact that we are moving into 
flood and not just earthquakes. This HAZUS model--it stands for 
Hazards U.S.--is a loss mitigation methodology that uses census 
data, on age of buildings, where the population is 
concentrated, and where you have high-risk populations like 
children, seniors, and people that are unable to get out of 
buildings. You can simulate an activity, an earthquake, a 
flood, a tornado, a hurricane, and predict where the high 
likelihood of damage would be, which would help urban search 
and rescue teams, help with deploying first responders, and it 
would also help urban planners in terms of future growth and 
future development.
    We are working with the National Institute of Building 
Sciences to develop this methodology. The earthquake piece is 
pretty much online and being used, but we now need to expand to 
flood and wind. We are also taking an overall look at the risks 
generally faced in the Nation, and what factors are built into 
the risk. which we think will help in terms of things like 
selecting Project Impact communities and creating hazard zones.
    Mr. Mollohan. Is it appropriate to think about people 
removing themselves from those earthquake-prone areas, as we do 
with floods?
    Mr. Witt. No, but, what many States and local communities 
have done is enforce good seismic building codes in earthquake-
risk areas. You can take an older building and retrofit that 
old building to meet life safety codes where it will withstand 
a 7.0 or 6.5 earthquake. The fact is that we need to use that 
same analogy now through HAZUS into helping the other hazards 
that we face.

                             Seismic Safety

    Mr. Mollohan. Well, I just saw on television that there was 
a stadium built right upon a fault.
    Mr. Witt. Sure.
    Mr. Mollohan. Well, why should somebody be rewarded in the 
case of a disaster by getting Federal money when in recent time 
they built a stadium right on a fault? Because we are certainly 
not rewarded when we build a house in a floodplain.
    Mr. Witt. That is true.
    Mr. Mollohan. Why shouldn't that same standard apply?
    Mr. Witt. You may not believe this, but Gary used to run 
our earthquake program. [Laughter.]
    Mr. Johnson. Well, I think from the seismic hazard 
perspective, Congressman, the principal thing you are trying to 
deal with is the building codes that deal with ground shaking. 
However you shouldn't be building in fault rupture zones. That 
is simular to being in the floodway.
    Mr. Mollohan. So if people have built there and they have 
an earthquake, and we send them billions of dollars, shouldn't 
there be some rules about where they build or at least how they 
build, and that affect their eligibility for these millions of 
dollars of Federal money that we make available?
    Mr. Witt. I agree with you. Absolutely.
    Mr. Mollohan. Is anybody thinking about that? I mean, we 
are stepping up to the flood issues big time, and we are really 
affecting people's lives in North Carolina and Mississippi, but 
are we doing the same thing in earthquake-prone areas? And if 
not, why not? There is a lot more exposure associated with a 
major earthquake out there than there is with ten floods in the 
East.
    Mr. Witt. When I was the State director in Arkansas we got 
seismic legislation passed for earthquake building codes, which 
had never been done. California probably has the best building 
codes and standards on earthquakes of any State in the United 
States right now, and they enforce the codes, which they 
should. What concerns me more than anything are the buildings 
that were built back some time ago.
    Mr. Mollohan. I am not talking about that.
    Mr. Witt. I know what you are talking about. I agree with 
you. I think there should be some similar responsibility. The 
earthquake faults are identified, just like the floodways were 
identified.
    Mr. Mollohan. Thank you, Mr. Director, thank your whole 
team.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mr. Frelinghuysen. I would like to wrap this up at noon. 
You can take the rest of the time if you like.

      Differences Between License Fee and Mortage Transaction Fee

    Mr. Frelinghuysen. Yes, just a brief question relative to 
the license fees, the map determination fee, and how it differs 
from last year's proposal of a $15 mortgage transaction fee. 
Last year's $15 fee was to yield, as I understand it, $58.5 
million. Is that right?
    Mr. Witt. Yes.
    Mr. Frelinghuysen. Does that just affect new purchases or 
refinancing as well?
    Mr. Johnson. The mortgage transaction fee proposed last 
year applied to all federally related mortgage transactions.
    Mr. Frelinghuysen. This year's $12 fee is to yield $104 
million. Is that right?
    Mr. Johnson. That is correct, Congressman.
    Mr. Frelinghuysen. What different and obviously larger base 
is used for the lower $12 fee to yield a larger return?
    Mr. Johnson. Using the modeling data that came from the 
Home Mortgage Disclosure Act, and we were able to estimate that 
there would be about 5.4 million in Federal loan originations 
in fiscal year 2001. We linked it to the Federal side because 
of the triggering mechanism to buy flood insurance. Then, also, 
this year's proposal applies to non-Federal transactions as 
well. We made an assumption there that approximately half of 
the non-Federal transactions might generate this fee. So we are 
looking at somewhere on the order of about 8.7 million loan 
originations times the $12 to produce $104.4 million in revenue 
to support the mapping.
    Mr. Frelinghuysen. If that documentation exists, could we 
just have that for the record.
    Mr. Johnson. Yes. I will definitely get it for the record.
    [The information follows:]

                    Flood Determination Fee Revenue

    The $104 million in revenue estimated for Fiscal Year is 
based on Home Mortgage Disclosure Act data, available on the 
Federal Financial Institutions Examination Council web site. 
These data indicate approximately 12.9 million loan 
originations in 1998 and 13.8 million in 1999. The percent 
change in housing starts for 1999 to 2000 and 2001 was used to 
project the percent change in mortgage originations. This 
projection results in 11.3 million mortgage originations in 
2001. This number was multiplied by an adjustment factor of 
0.77 to account for some non-federally regulated lenders 
choosing not to require a flood hazard determination. Thus, the 
estimate of loan originations generating a license fee would be 
approximately 8.7 million. That number multiplied by $12 yields 
a revenue estimate of approximately $104.4 million.

    Mr. Frelinghuysen. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you, sir, and thank you all, and to all of 
your staff for the very important work that they do, thank you.
    Mr. Witt. Thank you.


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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Armstrong, Michael...............................................   455
Brown, Carrye....................................................   455
Burris, Ken......................................................   455
Goss, Kay........................................................   455
Howard, Joann....................................................   455
Johnson, G. D....................................................   455
Magaw, John......................................................   455
Musick, Anthony..................................................     1
Suiter, Lacy.....................................................   455
Witt, J. L.......................................................   455
Wofford, Harris..................................................     1
Zenker, Wendy....................................................     1


                               I N D E X

                              ----------                              

             Corporation for National and Community Service

                                                                   Page
Budget Justification.............................................   349
Census...........................................................   164
Contractor Performance Report....................................    35
DC Reads Evaluation..............................................   170
Disability Set-aside.............................................   165
Disaster Relief..................................................   296
Financial Management System......................................   163
Funding History..................................................    40
GAO Report.......................................................    39
Increase in Americorp Membership.................................    36
Increased State Commission Funding...............................    34
Lifting Cap on National Directs..................................    43
Literacy Program................................................81, 304
Member Demographics and Attrition Rates..........................    36
Oral Statement...................................................     2
Private Sector and Faith Based Partnership.......................    44
Procurement......................................................    35
Program Administration and New Initiatives.......................    30
Questions for the Record.........................................   311
Volunteer Leveraging.............................................   302
Written Statement................................................     5

                  Federal Emergency Management Agency

Blue Ribbon Panel Recommendations on Burn Safety.................   470
Budget Justification.............................................   520
Community Participation in Project Impact........................   471
Contingent Emergency Appropriation...............................   472
Cooperating Technical Communities Programs.......................   492
Cost Sharing.....................................................   475
Differences Between License Fee and Mortgage Transaction Fee.....   498
Digitizing Maps..................................................   496
Director's Opening Remarks.......................................   456
Emergency Food and Shelter Funding...............................   485
Emergency Versus Non-emergency Disaster Request..................   473
FEMA Buyout Program..............................................   479
Fire Grants......................................................   484
Flood Hazard Determination License Fee...........................   489
Flood Insurance Requirements After Flooding Disaster.............   485
Flood Map License Fee............................................   486
Grants for Burn Care Research....................................   470
Grants for Small Businesses......................................   479
Grants for Fire Departments......................................   473
Hazard Mitigation Grant Program..................................   493
Headquarters Relocation........................................472, 487
Improvements in FEMA's Response..................................   492
Need for Updated Maps..........................................486, 490
North Carolina's Contributions to Buyouts........................   482
Planning for Risks...............................................   496
Purchase of Flood Insurance....................................478, 481
Questions for the Record.........................................   500
Reaction of Flood Map Determination Firms to Proposed Fee........   494
Rebuilding in New Jersey After Floyd.............................   477
Repetitive Loss Properties.......................................   488
Responsible Development in Emergency Management..................   476
Rise in Flood Insurance Policies.................................   488
Seismic Safety...................................................   497
State Management of Small Disasters..............................   483
Subcommittee's Opening Remarks...................................   455
Subsidized Property Under Flood Insurance Program................   487
Supplemental Buyout Request......................................   483
Supplemental for Buyouts.........................................   478
Support to States for Emergency Management.......................   483
Use of Other Agencies' Technology................................   479
Work With Other Agencies on Flood Mapping........................   491
Written Statement................................................   458

                                
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