[Senate Hearing 112-347]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-347
 
           THE FEDERAL ROLE IN DISASTER RECOVERY AND RESPONSE

=======================================================================



                                HEARING

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            SPECIAL HEARING

                    OCTOBER 12, 2011--WASHINGTON, DC

                               __________

         Printed for the use of the Committee on Appropriations


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        committee.action?chamber=senate&committee=appropriations




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                               __________



                      COMMITTEE ON APPROPRIATIONS

                   DANIEL K. INOUYE, Hawaii, Chairman
PATRICK J. LEAHY, Vermont            THAD COCHRAN, Mississippi
TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin                 KAY BAILEY HUTCHISON, Texas
PATTY MURRAY, Washington             LAMAR ALEXANDER, Tennessee
DIANNE FEINSTEIN, California         SUSAN COLLINS, Maine
RICHARD J. DURBIN, Illinois          LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            LINDSEY GRAHAM, South Carolina
MARY L. LANDRIEU, Louisiana          MARK KIRK, Illinois
JACK REED, Rhode Island              DANIEL COATS, Indiana
FRANK R. LAUTENBERG, New Jersey      ROY BLUNT, Missouri
BEN NELSON, Nebraska                 JERRY MORAN, Kansas
MARK PRYOR, Arkansas                 JOHN HOEVEN, North Dakota
JON TESTER, Montana                  RON JOHNSON, Wisconsin
SHERROD BROWN, Ohio

                    Charles J. Houy, Staff Director
                  Bruce Evans, Minority Staff Director
                                 ------                                

          Subcommittee on the Department of Homeland Security

                 MARY L. LANDRIEU, Louisiana, Chairman
FRANK R. LAUTENBERG, New Jersey      DANIEL COATS, Indiana
DANIEL K. INOUYE, Hawaii             THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            RICHARD C. SHELBY, Alabama
PATTY MURRAY, Washington             LISA MURKOWSKI, Alaska
JON TESTER, Montana                  JERRY MORAN, Kansas

                           Professional Staff
                            Charles Kieffer
                              Chip Walgren
                              Scott Nance
                            Drenan E. Dudley
                       Rebecca Davies (Minority)
                        Carol Cribbs (Minority)

                         Administrative Support

                              Nora Martin
                      Courtney Stevens (Minority)



                            C O N T E N T S

                              ----------                              
                                                                   Page

Opening Statement of Senator Mary L. Landrieu....................     1
Statement of Hon. Craig Fugate, Administrator, Federal Emergency 
  Management Agency, Department of Homeland Security.............     6
    Prepared Statement of........................................     7
The Disaster Relief Fund.........................................     7
Funding the Disaster Relief Fund.................................     7
The Many Roles Played by FEMA's DRF..............................     8
Sound Financial Management Maximizes the Disaster Relief Fund....     8
Fiscal Year 2011.................................................     8
The Budget Control Act...........................................     9
Statement of Hon. Jo-Ellen Darcy, Assistant Secretary of the Army 
  (Civil Works), U.S. Army Corps of Engineers....................     9
    Prepared Statement of........................................    11
Preparedness and Training........................................    12
Response Activities..............................................    12
Coordination.....................................................    12
2011 Operations..................................................    12
Damages to Corps of Engineers Projects from Recent Flooding......    13
Statement of Senator Daniel Coats................................    14
Disaster Relief Fund--Funds Spent in Fiscal Year 2011............    15
Disaster Relief Fund--Funding for Fiscal Year 2012...............    15
Disaster Relief Fund--Cost of Putting Projects On Hold...........    16
Disaster Relief Fund--Estimated Working Balance..................    16
Disaster Relief Fund--Fiscal Year 2012 Funding...................    18
Disaster Relief Fund--Funding for Unforecasted Events............    18
Disaster Relief Fund--Fiscal Year 2012 Budget....................    19
Flood Maps.......................................................    21
Definition of a Major Disaster...................................    27
Disaster Relief Fund--Zero-Balance Projection....................    27
Statement of Hon. Gregory Nadeau, Deputy Administrator, Federal 
  Highway Administration, Department of Transportation...........    30
    Prepared Statement of........................................    32
The Emergency Relief Program.....................................    32
The Emergency Relief for Federally Owned Roads Program...........    33
Emergency Relief Funds at Work...................................    33
Modeling and Research Activities.................................    35
Statement of Fred Tombar, Senior Advisor for Disaster Programs, 
  Department of Housing and Urban Development....................    36
    Prepared Statement of........................................    37
Office of Community Planning and Development.....................    38
CDBG Supplemental Appropriation for Disaster Recovery............    39
Office of Public and Indian Housing..............................    39
Disaster Housing Assistance Program..............................    40
Office of Housing/Federal Housing Administration.................    40
Office of Policy Development and Research........................    41
Office of Fair Housing and Equal Opportunity.....................    41
Office of Disaster Management and National Security..............    42
Inter-Departmental Coordination..................................    42
Statement of James Rivera, Associate Administrator, Small 
  Business Administration........................................    45
    Prepared Statement of........................................    46
SBA's Role in Responding to a Disaster...........................    47
SBA's Response to Hurricane Irene and Tropical Storm Lee.........    47
Fiscal Year 2011 Highlights......................................    47
Preparedness and SBA's Key Improvements to the Disaster 
  Assistance Program.............................................    48
Inter-Agency Coordination........................................    48
Statement of Bruce Nelson, Administrator, Farm Service Agency, 
  Department of Agriculture......................................    48
    Prepared Statement of........................................    51
Department of Agriculture Disaster Assistance....................    48
Crop Insurance...................................................    49
Farm Service Agency Disaster Programs............................    49
Statement of Homer Wilkes, Acting Associate Chief, Natural 
  Resources Conservation Service, Department of Agriculture......    50
    Prepared Statement of........................................    51
Emergency Watershed Program......................................    50
Prepared Statement of David White, Chief, National Resources 
  Conservation Service, Department of Agriculture................    51
Crop Insurance and the Noninsured Crop Disaster Assistance 
  Program........................................................    51
2008 Farm Bill Disaster Programs.................................    52
Emergency Loans..................................................    53
Emergency Conservation Program...................................    53
Emergency Forest Restoration Program.............................    53
Emergency Watershed Protection Program...........................    54
Other USDA Programs..............................................    54
Decrease in Community Development Block Grant Funds..............    55
Potential Statutory Changes......................................    58
Supplemental Revenue Assurance Program...........................    58
Emergency Watershed Program Backlog..............................    59
Rebuilding Schools...............................................    60
Additional Committee Questions...................................    62
Questions Submitted to Hon. Craig Fugate.........................    62
Questions Submitted by Senator Mary L. Landrieu..................    62
Public Assistance Grants.........................................    62
Questions Submitted to Hon. Jo-Ellen Darcy.......................    62
Question Submitted by Senator Mary L. Landrieu...................    62
Question Submitted by Senator Daniel K. Inouye...................    63
Pacific Ocean Division Regional Integration Team.................    63
Question Submitted to Fred Tombar................................    64
Question Submitted by Senator Patrick J. Leahy...................    64
Question Submitted to James Rivera...............................    65
Question Submitted by Senator Patrick J. Leahy...................    65
Questions Submitted to Bruce Nelson..............................    67
Questions Submitted by Senator Patrick J. Leahy..................    67


           THE FEDERAL ROLE IN DISASTER RECOVERY AND RESPONSE

                              ----------                              


                      WEDNESDAY, OCTOBER 12, 2011

                               U.S. Senate,
                 Subcommittee on Homeland Security,
                               Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:37 p.m. in room SD-192, Dirksen 
Senate Office Building, Hon. Mary L. Landrieu (chairman) 
presiding.
    Present: Senators Landrieu, Lautenberg, Leahy, Coats, 
Cochran, Murkowski, Moran, and Blunt.


             opening statement of senator mary l. landrieu


    Senator Landrieu. Good afternoon, everyone. Let me call the 
Subcommittee on Homeland Security Appropriations to order for 
the purpose of conducting a hearing this afternoon on the needs 
of disaster-stricken communities around the United States, to 
get a firmer handle on the needs that are before us as a Nation 
for 2012.
    I am very pleased to have two panels of experts and public 
servants before us today that will testify on this subject. Of 
course, and I will introduce them all later, but the Federal 
Emergency Management Agency (FEMA) and the Army Corps of 
Engineers are on our first panel. And then on our second panel, 
we will hear from the Department of Transportation (DOT), the 
Department of Housing and Urban Development (HUD), the 
Administrator of the Small Business Administration (SBA), and 
then two Administrators from the Department of Agriculture, 
because we know it takes more than FEMA to respond to a 
disaster.
    And let's begin with the two primary agencies, but others 
are involved as well.
    I am going to do a short opening statement and then turn it 
over to my vice chair. My ranking member is on the way.
    This year, as has been widely reported, our country has 
experienced an unprecedented number of disasters, particularly 
major disasters, both in number and scope. Two-hundred and 
twenty-seven disasters have received Presidential declarations 
in 48 States. Unprecedented.
    To put this in perspective, however, there are--as you can 
see in the chart--almost 48 of all the 50 States with disaster 
declarations. But to put this in perspective, although 227 
disasters is a high number, the last year that we have records, 
which is complete records for 2009, there were approximately 
45,000 disasters in the United States, but those are mostly 
State and local disasters--44,600 in 2009 were handled by local 
governments, only 180 were handled by States, and only 115 
qualified for Federal assistance.
    [The information follows:]

    
    

    While we don't have the records for 2010 or 2011, I would 
venture to say that they are going to follow the same pattern, 
which I think is important for us to understand, because there 
is some criticism that the Federal Government is getting 
involved in every disaster, or maybe our problem is that the 
Federal Government is trying to do too much.
    So I want to be clear about these statistics. In 2009, 
there were 45,000 disasters in the United States, but only 115 
qualified to receive Federal assistance. So as we look forward 
to 2012, the same will be clear. There will be tens of 
thousands of disasters, but only a few will receive Federal 
assistance because they are, in fact, major disasters--defined 
as disasters unable to be dealt with at the State or local 
level.
    But not only was 2011 a tough year for the number of 
disasters, but the type of disaster and the scope were alarming 
as well. We had ice storms. We had tsunamis. We had 
unprecedented fires, historic floods, unprecedented tornadoes, 
and very, very powerful hurricanes.
    According to the National Oceanic and Atmospheric 
Administration (NOAA), the United States has sustained 10 
disasters this year with overall damage in cost that each 
exceeded $1 billion.
    And I would like to put the chart up to explain why this 
year is so special and unprecedented, and it is going to take 
all of our best efforts to meet this challenge. You can see 
from the chart on the blue bars that only one other year, which 
was, I think, if I am reading this right, 1998, came up to 
eight disasters more than $1 billion. In 2012, we had 10 
disasters of more than $1 billion. Those are not the only 
disasters we had. But that shows you the breadth and depth of 
the individual incidents that we are trying to respond to that 
are quite large and quite challenging.
    [The information follows:]

    
    

    That is why I want to spend some extra time on this 
subject. I think our subcommittee can be helpful.
    Let me just go back here--I understand unprecedented 
disasters very well because my State, Louisiana, and my 
neighboring State, Mississippi, experienced the most 
destructive natural disasters in U.S. history in 2005. Ninety-
thousand square miles were destroyed, killing more than 1,800 
people.
    So I think I know that it takes a whole Nation, a broad 
effort, including many Federal agencies, not just FEMA, with 
the proper resources and skills and operational tools to 
respond effectively.
    I want to thank the full committee chairman, Chairman 
Inouye, for permitting this very special subcommittee hearing. 
Not only are the members of my subcommittee invited, but the 
chairs of all the Appropriations subcommittees that oversee 
these agencies have been asked to participate, and I am very, 
very grateful for their help.
    FEMA's role, in partnership with State and local 
governments, is to ensure that as a Nation we work together to 
respond and recover from these disasters. The Corps of 
Engineers maintains, constructs, and builds levees to mitigate 
flooding, and takes the lead in debris removal and levee 
repair. They have a very important role to play.
    However, so does the Department of Agriculture, which 
provides funding and technical assistance to rehabilitate 
damaged farmland and forests. The SBA provides loans. There are 
efforts underway to see if we can provide those loans on a more 
favorable rate to the borrowers. The Federal Highway 
Administration (FHWA) provides funds for repair and 
reconstruction of Federal-aid highways and bridges, federally 
owned roads and bridges that have suffered serious damage as a 
result of these natural disasters or catastrophic failures.
    And HUD can provide, if they have resources, grants to 
affected areas, and provide crucial seed funding to start the 
recovery process through mostly the Community Development Block 
Grant (CDBG) program.
    I will note at the time of this hearing, the Senate, on a 
bipartisan basis, has passed to date, through the 
Appropriations Committee or through the Senate floor, $9.3 
billion in disaster assistance through six Federal agencies.
    And if you all will put that chart up?
    [The information follows:]

                     DISASTER RESPONSE AND RECOVERY
------------------------------------------------------------------------
                                                         Combined Senate
                        Program                          action to date
------------------------------------------------------------------------
FEMA Disaster Relief Fund.............................    $5,100,000,000
Corps of Engineers....................................     1,348,000,000
Agriculture...........................................       266,000,000
SBA Disaster Loan Administrative Expenses.............       167,000,000
Federal Highway Emergency Relief......................     1,900,000,000
HUD Community Development Block Grant.................       400,000,000
Commerce--Economic Development Disaster Grants........       135,000,000
                                                       -----------------
      Total...........................................     9,300,000,000
------------------------------------------------------------------------

    As we await further action on these measures, this hearing 
will provide an opportunity for members to get a clearer 
picture about how these monies might be used to assist 
disaster-stricken communities throughout the United States, and 
if more money is needed or less.
    On our first panel, as I said, we will hear from 
Administrator Fugate and then the Army Corps of Engineers, and 
then we will go on to our second panel.
    I would like to turn it over now for opening remarks from 
our vice chair. As soon as our ranking member gets here, he 
will offer comments. And any of the other Senators who wish for 
a brief opening statement, I would be happy to entertain that 
from you all.
    Senator Lautenberg.
    Senator Lautenberg. Thanks very much, Madam Chair, for your 
persistence and leadership on trying to repair what Mother 
Nature occasionally does. And your State and area certainly has 
got its share. I think it has warmed you up for the fight that 
you constantly have to make.
    When Mother Nature sends our country her worst, the 
American people are at their best. They rise to the occasion, 
pull together, and help each other out. The Federal Government 
also has a responsibility to step up to the plate and extend a 
helpful hand.
    A cardinal principle for America, is that we have to 
protect the safety of our citizens, and that doesn't just mean 
from a terrorist attack. It means from attacks whether it is 
from nature or other accidents that come along.
    Since Hurricane Irene tore its destructive path up the east 
coast last month, several agencies have worked hard to help the 
victims recover, rebuild, and restore facilities. In my State 
of New Jersey, FEMA is helping local governments repair 
schools, roads, bridges, sewer systems, and power lines.
    The SBA, as the chair has noted, and several agencies have 
to chime in here, even though FEMA is typically the lead. Other 
agencies are required, and we look to them. The SBA, for 
instance, provides loans for major damages to homes and 
businesses, large and small. The DOT helps New Jersey pay for 
repairs to roadways. And other Federal programs stand ready to 
join the relief effort, including CDBGs, Economic Development 
Administration Grants, which provide long-term recovery and 
support to rebuild local economies.
    But they are waiting for the Congress to provide them with 
the funding they need to really get full bore to work. In the 
wake of Hurricane Irene this year and other major disasters, 
the Senate acted swiftly to fund these vital programs.
    I was pleased that the Senate approved this emergency 
funding without harmful offsets. And that is the way the 
Congress has provided disaster funding in the past. That is why 
the debt limit provided emergency authority to make sure our 
country's disaster victims were not left waiting while we 
fought here over spending cuts.
    Now it is time for the House to get on board, work with the 
Senate to provide the comprehensive, robust response to these 
devastating natural disasters without playing the political 
games. Incredibly, some of our Republican friends are still 
pressing for reckless spending cuts in exchange for disaster 
relief funding. And it is not a good trade.
    We all recognize our country faces serious fiscal 
challenges, but we can't put a price on human lives. Nothing is 
more important than protecting our communities, our families, 
and our economy.
    Bottom line is this: A disaster strikes, victims don't want 
us to reach for the budget acts. They want us to extend a 
helping hand.
    Hurricane Irene and many other natural disasters hit our 
country this year, causing widespread damage. It is going to 
require a tremendous rebuilding effort.
    So I look forward, Madam Chair, to hearing from our 
witnesses about the support that they can offer and why the 
Congress has to act quickly to provide them with the resources 
that they need to get to work and help America rebuild. But 
also to let them know, from an emotional, spiritual standpoint, 
that the country is there behind them. We are going to do what 
we have to and get rid of this political engagement that so 
interferes with our getting our work done. We hope that is 
past.
    Senator Landrieu. Thank you so much.
    I understand that Senator Leahy was here and will come back 
for questioning to DOT.
    Senators Blunt, Moran, and Murkowski, any comments or shall 
we go right to the panel?
    Okay, thank you all so much.
    Let's begin with Administrator Fugate. I think we have 5 
minutes each, and then we will have a round of questioning.
STATEMENT OF HON. CRAIG FUGATE, ADMINISTRATOR, FEDERAL 
            EMERGENCY MANAGEMENT AGENCY, DEPARTMENT OF 
            HOMELAND SECURITY
    Mr. Fugate. Thank you, Madam Chair Landrieu and Vice 
Chairman Lautenberg. Unfortunately, we had to visit when your 
State was being flooded. To the other Senators here, Senator 
Blunt, obviously the Joplin tornado, not discounting the 
earlier floods and tornadoes that also hit your State.
    It has been a very busy year. And based upon that, I wanted 
to talk about some of the things that, Madam Chair, you pointed 
out. In looking at these disasters--both Governors were 
compelled to request assistance from the President. I think 
people think that when that request is made, it is automatic. 
It is not.
    Not every declaration is approved. And I have dealt with 
many calls about why we deny declarations. But it is always 
based upon the premise that the threshold of that declaration 
has exceeded the State's capability and local capabilities to 
manage without Federal assistance. Oftentimes, that is 
financial; sometimes it is actually in the response phase.
    But this year we saw numerous disasters, many of which got 
national attention because of the severity in the loss of life. 
And I think it was important to note, as you pointed out, that 
many disasters are responded to every day by local communities, 
volunteer agencies, and nongovernmental organizations. Those 
same organizations were the first response to these 
catastrophic disasters.
    When you have loss of life measured over impacts of 
tornadoes that we have not seen since the 1950s when we have 
been keeping an accurate record--loss of life greater than any 
previous recorded tornado since the 1950s in Joplin--you 
recognize the response that was done by local responders: 
mutual aid from surrounding communities; States utilizing 
mutual aid under Emergency Management System Compact, 
leveraging resources, much of which has been built through 
funds under Homeland Security grants; volunteer agencies that 
came out and helped shelter, feed, and minister to those that 
were injured and those that had lost their homes or were 
impacted.
    As we work closer together with the private sector, many of 
them are able to get their resources, get their businesses up 
and running, allowing us to focus on the hardest hit areas. And 
again, our role at FEMA is to coordinate--on behalf of the 
President and on behalf of the Secretary of Homeland Security, 
Secretary Napolitano--the Federal response to the Governors' 
requests for assistance.
    When we talk about the Disaster Relief Fund (DRF), last 
year about $7.3 billion was expended in fiscal year 2011, which 
just ended. That, I think, gives you some example of not only 
the disasters that we were still recovering from as far back as 
hurricanes in Florida, Katrina, Rita, Wilma, and numerous other 
disasters that are still going through the rebuilding phase, 
but also the impacts this year to individuals, about $1.2 
billion provided in individual assistance in this past fiscal 
year across all of these storms and disasters.
    But another part of the DRF that I think gets understated 
is the money that we have obligation to pay after declarations 
have been issued, and those funds go to individuals and 
families that are eligible; they go to the permanent work in 
rebuilding communities, as well as the emergency protective 
measures; and they go to mitigating future losses. The DRF is 
also about the ability to respond to the next disaster. I think 
this is one of the key tenets of the DRF that sometimes gets 
not articulated as well as the amount of money we need for the 
current disasters.
    In an event that we may see coming, such as a hurricane, 
but more probabilistic, in an event like an earthquake where we 
don't, our ability to respond quickly in the first days is 
often dependent upon our ability to bring teams on to Federal 
status, such as our urban search and rescue teams, to bring 
staff on and deploy them to the States, and to order up 
supplies and activate contracts to get critical resources to 
the States that are needed.


                           prepared statement


    That is not inexpensive. It is not something that can be 
done without the funds. So as we look at the DRF, and we talk 
about the cost of the existing disasters, we must also remember 
the DRF needs to maintain reserve balance to respond to the 
next disaster, which may not include a forecast and may not 
allow time for future activities to replenish or provide 
additional funding to the DRF.
    Thank you, Madam Chair.
    [The prepared statement follows:]
                Prepared Statement of Hon. Craig Fugate
    Chairman Landrieu, Vice Chairman Lautenberg, Ranking Member Coats, 
and distinguished members of the subcommittee, my name is Craig Fugate 
and I am the Administrator of the Federal Emergency Management Agency 
(FEMA). It is an honor to appear before you today on behalf of FEMA to 
discuss the Disaster Relief Fund (DRF), its uses and how its costs are 
estimated for budget requests. In my testimony today, I will describe 
some of the ways that FEMA uses the DRF to support our State and local 
partners in disaster response, recovery, and mitigation.
                        the disaster relief fund
    The DRF provides a no-year funding base against which FEMA can 
direct, coordinate, manage, and fund eligible response and recovery 
efforts associated with domestic major disasters and emergencies. 
Through the DRF, FEMA can fund authorized Federal disaster support 
activities as well as eligible State, territorial, tribal, and local 
actions, such as providing direct Federal assistance, emergency 
protective measures such as evacuation and sheltering, and debris 
removal. The DRF also funds:
  --repair and reconstruction of eligible disaster-damaged 
        infrastructure;
  --hazard mitigation initiatives;
  --financial assistance to eligible disaster survivors; and
  --fire management assistance grants.
    Following a major disaster declaration from the President, the DRF 
allows FEMA to reimburse States for lifesaving and life-sustaining 
costs when their own resources become overwhelmed due to an emergency 
or disaster.
                    funding the disaster relief fund
    Disaster relief funds are provided to FEMA through congressional 
annual and supplemental appropriations. Each fiscal year, the President 
estimates the amount of funds it projects will be necessary to provide 
disaster relief in the next fiscal year. This amount is included in the 
President's appropriations request to the Congress.
    When calculating the annual DRF request, we ask for the previous 5 
years' average cost to fund FEMA's operational costs to deliver 
disaster relief and to reimburse Federal, State, and local partners to 
respond to, recover from, and mitigate future disasters. This 5-year 
average excludes all catastrophic disasters, that is, disasters costing 
in excess of $500 million. The rationale is that noncatastrophic events 
are more reflective of the historic disaster activity that would be 
experienced in any given year. On the other hand, catastrophic events 
like Hurricane Katrina that occur far less frequently are considered 
``outliers'' that should not be factored into the base budget, but 
addressed separately through the supplemental appropriations process.
    Although annual requests attempt to include all of our anticipated 
costs for noncatastrophic disasters during the year, a large-scale 
disaster may cause us to exceed our annual estimate, prompting a 
supplemental request as the administration requested in fiscal year 
2010 and fiscal year 2011.
                  the many roles played by fema's drf
    FEMA uses the DRF to fund many direct costs in disaster response 
and recovery, such as personnel, facilities, and other general disaster 
logistics supplies, including food and water. FEMA also uses the DRF to 
fund other agency response activities and to reimburse nearly all 
participants in disaster response and recovery operations.
    During an immediate disaster response, FEMA may reimburse State 
search and rescue teams deployed under the Emergency Management 
Assistant Compact, or EMAC, from DRF funds. FEMA also reimburses States 
to shelter disaster survivors as part of initial disaster response 
efforts including funds for the facility, the commodities, and the 
employees to manage shelters.
    FEMA uses the DRF to fund the work of Federal partners who support 
disaster response and recovery activities under the Stafford Act. The 
FEMA mission assignment process is used to task work from Federal 
partners to support disaster response in three ways:
  --Federal support to FEMA or other Federal partners;
  --technical assistance to the States;
  --and direct Federal assistance.
    FEMA also funds many of an affected State's administrative costs 
from the initial emergency through the multi-year disaster recovery 
process. FEMA pays for the overtime, per diem, travel, and incidental 
costs for State employees to participate in preliminary damage 
assessments. More importantly, as States rebuild their communities with 
multi-year infrastructure reconstruction projects funded through the 
Public Assistance Program, FEMA funds or reimburses the State for their 
direct or indirect administrative costs.
     sound financial management maximizes the disaster relief fund
    In light of the current economic climate, FEMA has worked hard to 
create efficiencies and develop new ways to increase administrative 
savings and preserve existing DRF funds as long as possible.
    One recent initiative includes reducing the costs of field 
operations. A primary goal was to minimize administrative costs 
incurred at a Joint Field Office (JFO)--the office space shared by 
State and Federal personnel used to support a particular disaster 
recovery effort.
    FEMA worked to assess staffing needs for each task in a JFO in 
order to reduce initial deployments where possible and right-size 
offices at the earliest opportunity. In some cases, the cost of 
operating a brick and mortar rented office space is avoided completely 
if State partners are comfortable running the disaster operation as a 
``virtual JFO'' and coordinating out of the nearest FEMA regional 
office. FEMA has also capitalized on staff already working in the field 
by co-locating multiple disaster operations within a single JFO.
    FEMA also uses sound financial management practices to manage DRF 
expenditures. FEMA expends DRF funds at an incremental rate for 
contracts, inter-agency agreements, and mission assignments as 
resources are required. FEMA also continually reassesses outgoing 
obligations and reimbursements held against the DRF balance, such as 
contract requirements or Public Assistance projects from past disasters 
to determine if funds can be de-obligated and returned to the DRF. In 
fact, by de-obligating mission assignments and disaster contracts in 
2010 and de-obligating funds from completed projects in 2011, FEMA 
returned more than $4.7 billion (as of September 30, 2011) to the DRF 
since the beginning of fiscal year 2010. Throughout this process, we 
have worked collaboratively with our vendors and our grantees.
                            fiscal year 2011
    Under normal circumstances, FEMA maintains a reserve in the DRF to 
manage fluctuations in cash flow and avoid any potential disruption in 
disaster response services. This year, for the first time, FEMA was in 
the unusual position of managing the DRF down to a near-zero balance 
due to a record number of major disaster declarations (124 declarations 
for 45 States and two territories in fiscal year 2011). In late August, 
as Hurricane Irene approached, in order to preserve DRF resources, FEMA 
implemented Immediate Needs Funding (INF) \1\ and the administration 
requested supplemental disaster appropriations.
---------------------------------------------------------------------------
    \1\ Under INF restrictions, FEMA discontinues funding for permanent 
repair and reconstruction projects under the Public Assistance Grant 
Program. Specifically, FEMA ceases obligating funds for Public 
Assistance Category C-G projects until such time as the DRF is 
replenished.
---------------------------------------------------------------------------
    While the administration awaited congressional action on the 
supplemental request, FEMA undertook an aggressive strategy to recover 
any funding possible to preserve the Individual Assistance program, 
working with the States to expedite recoveries. At the same, additional 
public assistance projects and disaster recovery activities were put on 
hold during September in order to continue to fund Individual 
Assistance. Through these efforts, FEMA managed to preserve the DRF for 
another 5 days at the end of the fiscal year. All of these activities 
will require attention and resources in fiscal year 2012.
                         the budget control act
    We take our fiduciary responsibilities with respect to the DRF as 
seriously as our statutory mission to reduce the loss of life and 
property and protect the Nation from all hazards, including natural 
disasters. We do not, however, control the timing or severity of 
disasters, and when disaster strikes, we must respond immediately and 
with full access to necessary resources.
    The fact that disasters cannot be anticipated is an ongoing budget 
challenge for FEMA and an appropriations challenge for the Congress. 
Forcing FEMA to rely on unscheduled supplemental appropriations 
requests is not sustainable.
    In August 2011, the Congress passed the Budget Control Act, which 
includes a key provision to address this issue through a separate cap 
adjustment for discretionary disaster funding that does not require an 
offset. The cap limits discretionary disaster appropriations to a 
formula based on total amount of DRF funds obligated to major disasters 
annually during the previous 10 years. The formula sums all assistance 
provided more than 10 years but subtracts the 2 outlier years, the 
single highest and lowest years. According to this formula, the 
administration submitted a fiscal year 2012 budget amendment for the 
DRF in September requesting $4.6 billion in additional disaster 
funding.
                               conclusion
    FEMA recognizes the need to balance fiscal requirements across the 
Federal Government while maintaining effective responsiveness to the 
American people following a disaster. Thank you again for the 
opportunity to appear before you today. I am happy to answer any 
questions the subcommittee may have.

    Senator Landrieu. Thank you.
    We will go to Jo-Ellen Darcy and then come back for an 
opening statement from our ranking member.
    Just push your buttons. And you have to talk a little bit 
closely into the mike.
    Mr. Fugate, if you would pull your mike closer to you? I 
think you were heard well enough.
STATEMENT OF HON. JO-ELLEN DARCY, ASSISTANT SECRETARY 
            OF THE ARMY (CIVIL WORKS), U.S. ARMY CORPS 
            OF ENGINEERS
    Ms. Darcy. Madam Chair and members of the subcommittee, I 
am Jo-Ellen Darcy, the Assistant Secretary of the Army (Civil 
Works).
    I am pleased to be here today to testify on emergency 
response requirements and how agencies work together, 
particularly concerning cooperation and coordination between 
the Army Corps of Engineers and our other Federal agencies 
during the natural disasters and the events of 2011.
    This year has been extremely challenging. Along with other 
Federal agencies, tribes, States, and numerous local entities, 
the Corps has a multitude of response activities underway in an 
effort to mitigate the public risk and recovery from these 
severe weather events.
    The Corps has authority under Public Law 84-99 for 
emergency management activities in response to natural 
disasters. Under this law, the Corps is authorized to undertake 
activities, including natural disaster preparedness, advance 
measures, emergency operations, rehabilitation of eligible 
flood control projects, repair of shore protection projects, 
and the provision of emergency water assistance due to drought 
or contaminated sources.
    These activities are funded through the Corps' Flood 
Control and Coastal Emergencies (FCCE) appropriations account.
    The Corps also responds to disasters at the direction of 
FEMA under the Stafford Act. Under the National Response 
Framework, the Corps is assigned as the coordinator for 
Emergency Support Function 3, which is Public Works and 
Engineering.
    And during disasters, the Corps is the primary agency for 
response activities such as ice, water, and temporary power. 
FEMA can assign Corps missions to assist in the execution of 
these and other recovery missions to include debris management.
    Disaster response activities assigned to the Corps by FEMA 
are funded by FEMA's DRF. Under Public Law 84-99, the Corps 
emergency assistance prior to and during a flood event is 
temporary in nature to meet an immediate threat and may only be 
undertaken to supplement non-Federal efforts. The assistance is 
undertaken to mitigate risk to life and public safety by 
providing protection to critical public infrastructure against 
floodwaters.
    Therefore, Public Law 84-99 is not used to protect private 
residences or other developments, unless such protection is 
incidental to protect critical public facilities and 
infrastructure within the area.
    Corps emergency efforts are not intended to provide 
permanent solutions to flood risks. The Corps coordinates with 
all Federal, tribal, and State partners, and close coordination 
occurs with appropriate State emergency management offices.
    This year, the Corps used a joint information center to 
coordinate activities among all response agencies. The Corps 
has also participated in national and regional exercises held 
by the Department of Homeland Security (DHS). These exercises 
provide Federal and non-Federal agencies an opportunity to plan 
for natural disasters and to learn about partner agency 
capabilities, their resources, and their responsibilities.
    This year, the Corps supplemented State, local, and tribal 
efforts with more than 37 million sandbags, 342 pumps, 5,500 
rolls of poly sheeting, 275,000 linear feet of Hesco barriers, 
and 1,280 linear feet of rapid response deployment floodwall. 
The Corps also issued 176 emergency contracts to protect 
critical infrastructure from flood threats.
    My full testimony includes numerous examples of the 
collaborative work in which the Corps was engaged. 
Additionally, I personally traveled and toured the damaged 
areas across the Nation, to include both the Mississippi and 
the Missouri River basins. I am personally aware of the 
challenges that many of these local communities are now facing.
    The Corps of Engineers continues to assess the extent of 
damage to Civil Works projects that are eligible for assistance 
under the Corps' Public Law 84-99 program that are a result of 
these major flood events this past year. The Corps first used 
available funds within the FCCE appropriations account for 
immediate flood fighting in response to the flooding. As the 
flood events continued, the Corps was unable to respond to the 
requirements from our available FCCE funds.
    Since May of 2011, I have exercised my emergency authority 
provided under Public Law 84-99 to transfer funds from other 
appropriation accounts to the FCCE appropriation account to 
respond to the flooding and to begin addressing repairs from 
the ongoing disasters.
    To date, I have authorized four transfers totaling $212 
million. The last transfer, which was $137 million, allowed the 
Corps to begin addressing a portion of the highest-priority 
life and safety repair requirements.
    In order to develop the best estimates of repair 
requirements nationwide, local Corps districts working with our 
non-Federal sponsors are inspecting damaged projects and 
preparing assessment reports. The Corps has set up a rigorous 
process at headquarters for technical experts to examine the 
requirements and to prioritize those requirements based on 
risks to life and safety, in order to make the best use of our 
available funds. I may have to authorize the additional 
transfer of funds to address ongoing emergency needs.

                           PREPARED STATEMENT

    In conclusion, the Corps of Engineers stands ready to 
respond to, and assist in, recovery from disasters as they 
occur, both relying on its own authority and funding, and under 
the Stafford Act in support of FEMA as missions are assigned.
    Madam Chair, this concludes my testimony, and I look 
forward to answering any of your questions.
    [The prepared statement follows:]
               Prepared Statement of Hon. Jo-Ellen Darcy
    Madam Chairman and members of the subcommittee, I am Jo-Ellen 
Darcy, Assistant Secretary of the Army (Civil Works). I am pleased to 
be here today to testify on the matter of emergency response, 
requirements, and how agencies work together, particularly cooperation 
and coordination between the U.S. Army Corps of Engineers and other 
Federal agencies during the natural disasters and events of 2011. The 
year 2011 has been extremely challenging for the Nation, in terms of 
tornadoes, flooding, hurricanes, and tropical storms across multi-State 
areas. Along with other Federal agencies, tribes, States, and numerous 
local entities, the Corps has a multitude of response activities 
underway in an effort to mitigate the public risk and recovery from 
these severe weather events.
    The Corps has authority under Public Law 84-99, Flood Control and 
Coastal Emergencies (FCCE) (33 U.S.C. Sec. 701n), for emergency 
management activities in response to natural disasters. Under Public 
Law 84-99, the Chief of Engineers, acting for the Secretary of the 
Army, is authorized to undertake activities including natural disaster 
preparedness, advanced measures, emergency operations (flood response 
and post flood response), rehabilitation of eligible flood control 
works threatened or destroyed by flood, repair of federally authorized 
shore protective works threatened or damaged by coastal storms, and 
provision of emergency water assistance due to drought or contaminated 
source. The Corps also responds to disasters at the direction of the 
Federal Emergency Management Agency (FEMA) under the Robert T. Stafford 
Act (42 U.S.C. 5121, et seq.). Under the National Response Framework, 
the Corps is assigned as the Coordinator for Emergency Support Function 
(ESF) #3, ``Public Works and Engineering'' and, during disasters the 
Corps is the primary agency for response activities, such as ice, 
water, and temporary power. FEMA is the primary agency for ESF #3 
recovery activities and can assign Corps missions to assist in the 
execution of these and other recovery missions, to include debris 
management. Disaster response activities authorized by the Stafford 
Act, and prescribed by Mission Assignments by FEMA, are funded by 
FEMA's Disaster Relief Fund.
                       preparedness and training
    The Flood Control and Coastal Emergencies appropriation account 
provides funds for preparedness with regard to emergency response to 
natural disasters, flood fighting and search-and-rescue operations, and 
rehabilitation of flood control and hurricane protection structures. 
Disaster preparedness activities include coordination, planning, 
training, and conducting response exercises with local, State, and 
Federal agencies. District commanders, tribal liaisons, and emergency 
management staff meet with Federal, State, and local officials and 
other interested parties to discuss Corps authorities under Public Law 
84-99, share lessons learned from previous flood events, conduct 
tabletop exercises, review sandbagging techniques, and strengthen the 
relationship among the Corps, State, and local governments and tribal 
entities.
                          response activities
    Under Public Law 84-99, Corps emergency assistance prior to and 
during a flood event is temporary in nature to meet an immediate threat 
and may only be undertaken to supplement non-Federal efforts. The 
assistance is undertaken to mitigate risk to life and public safety by 
providing protection to critical public infrastructure against flood 
waters. Therefore, Public Law 84-99 is not used to protect private 
residences or other developments unless such protection is incidental 
to protect critical public facilities and infrastructure within the 
area. Tribes and States must commit all available resources such as 
supplies, equipment, funds, and labor as a general condition to 
receiving Corps assistance. Furthermore, Corps emergency efforts are 
not intended to provide permanent solutions to flood risks. Therefore, 
the removal of all flood fight material at the conclusion of a flood 
event is the responsibility of the respective tribe or State.
                              coordination
    The Corps coordinates with all Federal, tribal, and State partners 
and close coordination occurs with appropriate State emergency 
management offices. This year, the Corps used a joint information 
center to coordinate activities among all response agencies and 
transparently communicate to all affected parties. The Corps has also 
participated in national and regional exercises held by the Department 
of Homeland Security/FEMA. These exercises provide Federal and non-
Federal agencies an opportunity to plan for natural disasters, and to 
learn about partner agency capabilities, resources, and 
responsibilities. The Corps works closely with other Federal emergency 
response partners to include:
  --the Department of Transportation;
  --the United States Coast Guard;
  --the National Guard Bureau;
  --the Department of Energy;
  --the Department of Agriculture; and
  --State and local agencies.
    The Corps also works closely with the Interior Department's Bureau 
of Reclamation, which has been an exceptional partner, providing vital 
resources to support the Corps' surge requirements for quality 
assurance personnel.
                            2011 operations
    This year, the Corps supplemented State, local, and tribal efforts 
with more than 37 million sandbags, 342 pumps, 5,500 rolls of poly 
sheeting, 275,000 linear feet of HESCO barriers, and 1,280 linear feet 
of rapid deployment flood wall; and the Corps also issued 176 emergency 
contracts to protect critical infrastructure from flood threats. The 
Corps also was engaged with numerous Federal agencies and provided 
technical assistance to State governments and tribal organizations for 
flood response. This experience improved multiple partners 
understanding the Corps' capabilities and Public Law 84-99 authorities. 
Some examples follow:
  --In March, the winter flooding from rain and snowmelt began with 
        more than 120 personnel engaged in the flood response effort 
        from Illinois to Alabama. Five million dollars of FCCE funds 
        were allocated for this event, during which Corps projects in 
        the Great Lakes and Ohio River Valley Division reached the 
        fourth-highest average flood control reservoir storage level 
        recorded.
  --Beginning in April 2011, the Nation witnessed historic flooding 
        along the Mississippi, Missouri, and Souris River basins. 
        During these events, the flood stages exceeded the historical 
        Mississippi River flood stage record set in 1937. The Birds 
        Point-New Madrid Floodway was operated on May 3, 2011 and 
        opening of three additional floodways was synchronized to best 
        manage the flows in the Mississippi River Basin, preventing 
        flooding of more than 9.8 million acres and preventing damages 
        in excess of $60 billion. More than 800 personnel were engaged, 
        with more than $76 million of FCCE funds allocated and more 
        than $59 million in FEMA mission assignments under the Stafford 
        Act.
  --Flooding along the Missouri River approximately doubled the 
        historic record for water flows. The combined May through July 
        runoff of 34.3 million acre-feet made 2011 an historic year of 
        record for reservoir water storage along the Missouri River. 
        Flood response efforts engaged more than 400 personnel and $83 
        million of FCCE funds were allocated.
  --On June 24, 2011 more water passed along the Souris River at the 
        Sherwood gage in 1 day than had been recorded in entire year 
        for 45 out of 82 years. During the recovery phase for this 
        event, the Corps received seven FEMA mission assignments 
        focusing on debris removal and temporary housing and worked 
        closely with the Department of Agriculture.
  --In late April, tornadoes caused significant destruction in both 
        Alabama and Mississippi. The Corps received 27 FEMA mission 
        assignments focusing on debris removal, power, and critical 
        facilities involving more than 460 personnel, including retired 
        personnel, and activated reserve soldiers for a total of $262 
        million.
  --On May 22, 2011, an EF5 tornado (worst damage category) devastated 
        Joplin, Missouri, destroying homes, schools, fire stations, and 
        hospitals. Debris and temporary housing teams as well as 
        subject matter experts for debris, infrastructure assessment 
        and critical public facilities required deployment of more than 
        270 Corps personnel for nine FEMA mission assignments totaling 
        $239 million.
  --The severe weather continued with Hurricane Irene's path from North 
        Carolina to Vermont, compounded by Tropical Storm Lee. More 
        than 260 personnel were engaged in the Corps support to FEMA in 
        11 States and Puerto Rico with 83 FEMA mission assignments for 
        more than $33 million (technical assistance, dam safety, 
        commodities, water, power, debris, infrastructure assessment, 
        government liaison, ESF #3 support). The Corps worked closely 
        with the U.S. Coast Guard to determine threats to navigation 
        and navigation closures.
      damages to corps of engineers projects from recent flooding
    The Corps of Engineers continues to assess the extent of damages to 
Civil Works projects and non-Federal projects that are eligible for 
assistance from the Corps under Public Law 84-99 as a result of the 
major flood events this past year. The Corps first used $46.6 million 
of available funds within the FCCE appropriation account for immediate 
floodfighting and response to the spring flooding. As the flood events 
continued, the Corps was unable to respond to the requirements from 
available FCCE funds alone. Since May, 2011, I have exercised my 
emergency authority provided in Public Law 84-99 to transfer funds from 
other appropriation accounts to the FCCE appropriation account to 
respond to the flooding and to begin addressing repairs from the 
ongoing disasters. To date, I have authorized four transfers totaling 
$212 million. The last transfer, $137 million, allowed the Corps to 
begin addressing a portion of the highest-priority life and safety 
repair requirements.
    In order to develop the best estimates of repair requirements 
nationwide, local Corps districts, working with non-Federal sponsors, 
are inspecting damaged projects and preparing assessments reports. The 
Corps has set up a rigorous process at the headquarters level for 
technical experts to examine the requirements and to prioritize those 
requirements based on risk to life and safety, among other parameters 
in order to make the best use of available funds. I may have to 
authorize the additional transfer of funds from other Corps accounts to 
the FCCE account to address ongoing emergency needs.
                               conclusion
    In conclusion, the Corps of Engineers stands ready to respond to, 
and to assist in recovery from, disasters as they occur, both relying 
on its own authority and funding and under the Stafford Act in support 
of FEMA as missions are assigned. Madam Chairman, this concludes my 
testimony. I would be happy to answer any questions you or other 
members of the subcommittee may have.

    Senator Landrieu. Thank you. We do have questions.
    I am going to turn it to my ranking member for an opening 
statement.

                   STATEMENT OF SENATOR DANIEL COATS

    Senator Coats. Madam Chair, thank you. And I apologize for 
being a little bit late.
    Director Fugate, I caught you in mid-presentation, but I 
have read your statement. And I appreciate your leadership 
during a tough year.
    And yours also, Madam Chair.
    As I said, this has been a challenging year for Americans 
across the continent here. My State was hit by floods and some 
really tough storms this year, not the same magnitude as 
compared to some of the other States and what they have had to 
endure. From flooding and hurricanes, tornadoes and other, 
Mother Nature has not been so kind this year. Hopefully, we 
won't repeat that cycle next year.
    But as has been said, we know the needs will come, just 
based on the nature of Mother Nature, hopefully not as severe 
as it has been in the past.
    As we delve into this issue, I just want to remind everyone 
that the need to constrain Federal spending is not just a goal 
for the Congress, but a requirement, given our dire fiscal 
state. And this is pertinent, obviously, to today's topic.
    As Chairman Landrieu has mentioned before, the Senate 
Appropriations Committee has marked up 11 of 12 fiscal year 
2012 appropriation bills, including a disaster cap adjustment 
in six of those bills covering seven different agencies. Those 
cap adjustments will provide $8.1 billion in fiscal year 2012 
funding and disaster assistance of various kinds out of a total 
cap of $11.3 billion for fiscal year 2012.
    I hope we will be able to discuss these issues today. I am 
particularly interested in your letting us know how prepared 
are we; what level of resources do we have or should we put 
toward these efforts; and how can we provide the resources 
needed to prepare for and respond to future disasters in a way 
that provides efficiency and hopefully will be economically 
feasible?
    It is just a fact of life that we are dealing with 
constrained resources. And yet, the storms, the hurricanes, the 
tornadoes, we are not able to communicate that to them, to ease 
off for a while because we are in bad fiscal straits.
    So it is a challenge for all of us, and I commend the chair 
for calling this hearing and continuing to pursue this with the 
passion that she has. I look forward to the testimony and your 
support not only today, in getting us some thoughts about how 
we go forward, but looking forward in the future because we do 
look at this on a 5- and 10-year aggregating system, as well as 
supplementals when needed.
    Madam Chair, with that, I thank you for the opportunity to 
offer this, even though I am a little bit out of turn.

         DISASTER RELIEF FUND--FUNDS SPENT IN FISCAL YEAR 2011

    Senator Landrieu. That is okay. Thank you so much for your 
partnership on this subcommittee because it is going to take 
all of us to figure these numbers out because they are very 
challenging.
    I just want, again for the record, to be very clear to 
start with the number that you just gave, Administrator, that 
it was $7.3 billion that FEMA used last fiscal year; is that 
correct?
    Mr. Fugate. Yes, Madam Chair. That is based upon all of our 
funds that were spent in the DRF, both open disasters, new 
disasters, as well as all the fire management grants that were 
issued because of wildfires; in addition to that, all of our 
administrative costs within the DRF for administering all of 
those disasters.
    Senator Landrieu. And that was really for disasters that 
occurred in 2011 and then prior, correct?
    Mr. Fugate. Yes. This would go all the way back to all open 
disasters where permanent work is still being done as well as 
all the recent disasters. It does not include much of the 
permanent rebuilding costs from the more recent disasters, 
from, let's say, spring forward. It doesn't include ongoing 
individual assistance costs that we are paying for in this 
current fiscal year based upon the most recent disasters.
    We have housing missions in multiple States, and we have a 
lot of folks that are still receiving rental assistance as they 
are still dealing with the aftermath of recent disasters.

           DISASTER RELIEF FUND--FUNDING FOR FISCAL YEAR 2012

    Senator Landrieu. When do you think those estimates will 
come in?
    Mr. Fugate. We are working with the Office of Management 
and Budget (OMB) and the continuing resolution. We are working 
to get a number, what we believe will be for fiscal year 2012 
on October 15. We know that in the original appropriations 
request and then with the supplemental request, those were 
based upon numbers not including what we were concerned about, 
which was the permanent work from Hurricane Irene and the 
remnants of Tropical Storm Lee. As we get those numbers, we 
have been working with OMB, and they will be providing an 
updated number on October 15, as required under the continuing 
resolution.
    Senator Landrieu. Is there any chance that the number that 
we are working on now will go down?
    Mr. Fugate. Not based upon what we have seen. In fact, 
another issue was we pulled forward some of our projected 
recoveries from fiscal year 2012 to get the funds to keep the 
DRF going in fiscal year 2011, so we are also having to factor 
in a reduction on what we think we will recover from open 
disasters in fiscal year 2012.
    Senator Landrieu. Okay, you understand that in the 
continuing resolution that we are operating on, there is only 
$2.6 billion for disasters for 2012? Is that number sufficient, 
to your understanding to date?
    Mr. Fugate. Through the continuing resolution period, yes.
    Senator Landrieu. But after the continuing resolution?
    Mr. Fugate. After the fiscal year, no. We would have to go 
back into immediate needs funding to be able to continue 
providing individual assistance.

         DISASTER RELIEF FUND--COST OF PUTTING PROJECTS ON HOLD

    Senator Landrieu. Okay, I understand that in this last 
year, to try to stretch the dollars that were appropriated, you 
had to put on hold approximately $550 million worth of 
projects. Is that true?
    Mr. Fugate. Yes, ma'am.
    Senator Landrieu. Do you have any estimates of what it 
costs to put projects like that on hold? In other words, are 
there penalties that the Government pays for stopping projects 
midstream? Are there labor costs that go up? Are there 
constituencies in these contracts?
    And if you have that information, would you submit it? And 
if not, can you ask your staff to submit that to the 
subcommittee? We would like to know, because if that has to 
happen again, we want to factor in, if there are additional 
costs from stopping projects when the DRF runs low.
    Mr. Fugate. I do not have that number. We will look at 
that.
    Because most of this is reimbursement for permanent work, 
it will be a question we will have to work with our States to 
see what the impact is. I know for some it will be the 
increased costs or the inability to complete work before the 
winter season. This was a prime concern in our northern tier 
States because they have a season in which they cannot move 
forward with road construction, so that window would also have 
been affected and could drive costs higher if they have to wait 
until spring.
    [The information follows:]

    The Federal Emergency Management Agency (FEMA) does not have 
specific information with regard to costs directly attributable to 
suspending project funding under Immediate Needs Funding (INF) 
procedures. FEMA does incur additional administrative costs in tracking 
and administering projects affected by INF. There may be costs or 
savings associated with changes in labor rates or contractor scheduling 
because these rates could go up or down with market fluctuations. These 
are project- and locality-specific and would most likely not be 
realized until project closeout, when final actual costs for approved 
scopes of work are reviewed. In fiscal year 2011, FEMA implemented INF 
procedures for a limited period of time and, therefore, does not expect 
substantial impacts on project costs attributable to the delay in 
obligation of funding.

    Senator Landrieu. So the bottom line is, when we fail to 
provide the adequate money to the DRF, you sometimes have to 
stop projects that are not easily restarted in some States, 
depending on their weather patterns, winter, et cetera? Is that 
the essence of your testimony?
    Mr. Fugate. That is correct.

            DISASTER RELIEF FUND--ESTIMATED WORKING BALANCE

    Senator Landrieu. Okay.
    You stated in your testimony that you like to have a 
balance to work with because you cannot ever anticipate what 
disasters will be. And in a perfect world, without having to 
stop projects, what is the kind of working balance--what 
businesses would call their working capital--that you are 
comfortable with, really not knowing what is really around the 
corner? Is it $500 million? Is it $1 billion? What is your 
comfort level in your experience?
    Mr. Fugate. I can give an example. When we looked at our 
National Level Exercise issue, which was a New Madrid 
earthquake, approximately $1.7 billion was either done through 
mission assignments or would have been done in the exercise in 
bringing teams up and deploying teams. And that was in the 
first week.
    Senator Landrieu. Say that again?
    Mr. Fugate. $1.7 billion.
    Senator Landrieu. In a week?
    Mr. Fugate. In a week.
    Senator Landrieu. If we had a major earthquake?
    Mr. Fugate. A major earthquake.
    We looked at how we could manage with a lower balance, but 
again, it comes back to we can only spend the funds that have 
been appropriated. We cannot defer certain costs such as 
personnel costs or other things required for the response.
    So when that fund balance begins dropping to $1 billion, we 
have to look at not only the next disaster, but try to ensure 
we can continue individual assistance, which is our higher 
priority, if we are funding over permanent work.
    Senator Landrieu. Okay.
    I think it would be very helpful for this subcommittee, and 
I know this is difficult, but you have in your staff a lot of 
experience. If you could submit to us exactly what, for a major 
earthquake, we would spend approximately $1.7 billion a week, 
in the first week. For a major hurricane, you could pick any 
one that we have experienced--the Senator from Mississippi and 
myself--and give us an estimate. What would we spend within the 
first week or two? You could give us a group of tornadoes, just 
to help us understand what that balance might need to look like 
as we struggle with how much money to try to appropriate for 
disaster relief funding.
    [The information follows:]

    The estimated costs for disasters are dependent on a variety of 
factors including the location, severity of the event, population 
density, and so on, which makes coming up with a specific estimate 
complex and inexact. Contained in the following table are average 
funding (allocations and obligations) amounts for several events, which 
depict funding levels for the first 7 days. Based on the number of 
Stafford Act disasters and emergencies declared (more than 1,200 since 
1989), this type of limited analysis does not follow accepted 
statistical principles and could lead to spurious conclusions. The 
allocated amounts shown in the table reflect the funds set aside for 
the referenced disaster in support of the first 7 days; the obligations 
shown the amounts that had been drawn down as of the 7th day. The 
remaining allocations were obligated after the first 7 days.

                       FIRST 7 DAYS FUNDING ACTIVITY--STRATIFIED SELECTED DISASTER EVENTS

----------------------------------------------------------------------------------------------------------------
                                                                                                  Obligations as
                                                                    Data as of       Allocated       of day 7
----------------------------------------------------------------------------------------------------------------
Earthquakes:
    1911DR California--Declared 5/7/2010........................       5/14/2010      $4,007,900        $195,446
    1859DR AmSamoa--Declared 9/29/2009..........................       10/6/2009      42,993,595      34,544,750
    1664DR Hawaii--Declared 10/17/2006..........................      10/24/2006      10,868,000         799,944
                                                                 -----------------------------------------------
      Average...................................................  ..............      19,289,832      11,846,713
                                                                 ===============================================
Tornadoes:
    1994DR Massachusetts--Declared 6/15/2011....................       6/22/2011       6,349,404       4,695,200
    1980DR Missouri--Declared 5/9/2011..........................       5/16/2011       7,341,900       5,898,700
    1969DR North Carolina--Declared 4/19/2011...................       4/26/2011       8,820,900       7,742,659
                                                                 -----------------------------------------------
      Average...................................................  ..............       7,504,068       6,112,186
                                                                 ===============================================
Hurricanes:
    Irene (multiple declarations)...............................        9/3/2011     143,033,018      63,731,020
    Dolly 1780DR Texas--Declared 7/24/2008......................       7/31/2008      12,718,809       4,788,231
    Wilma 1609DR Florida--Declared 10/24/2005...................      10/31/2005     528,674,800     357,163,404
                                                                 -----------------------------------------------
      Average...................................................  ..............     228,142,209     141,894,218
----------------------------------------------------------------------------------------------------------------


    My time is up. I do have a question for the Corps, and I 
will reserve my right as chair to come back to that.
    But let me turn it over to my ranking member, Senator 
Coats.

             DISASTER RELIEF FUND--FISCAL YEAR 2012 FUNDING

    Senator Coats. Madam Chair, thank you.
    Director Fugate, the fiscal year 2012 Senate report and 
bill for DHS includes a total of $6 billion for the DRF. I 
think the administration's request was $6.4 billion, if I am 
not wrong on that. Do these numbers reflect the best estimate 
currently today? Has anything changed since those submittals?
    Mr. Fugate. Yes, sir. Those numbers did not include the 
permanent work for Hurricane Irene and for the remnants of 
Tropical Storm Lee, which caused, again, a lot of serious 
flooding in some of the areas impacted by Hurricane Irene.
    We are working with OMB as part of the continuing 
resolution to update that number as to what we believe it will 
be for fiscal year 2012--October 15.
    The original request had emergency work, but we did not 
have all the permanent work numbers to project for those 
storms.
    Senator Coats. You don't have that number yet. You are 
waiting to----
    Mr. Fugate. We are working with OMB, and I believe that the 
goal there is to have that presented back October 15.
    Senator Coats. I assume you expect that number to be 
adjusted up, based on what you said?
    Mr. Fugate. Yes, sir.
    Senator Coats. But that does include all disasters to date, 
except for the two you mentioned?
    Mr. Fugate. Yes, sir. That would include all of our known 
disasters and the more recent disasters, as well as what we are 
projecting would be the permanent work for the most recent 
storms.

         DISASTER RELIEF FUND--FUNDING FOR UNFORECASTED EVENTS

    Senator Coats. What advice would you give to us, in terms 
of going forward? Were you satisfied with the product of the 
subcommittee--obviously given, not just in terms of numbers, 
but in terms of process and given the reality that we have 
relative to our fiscal situation?
    Mr. Fugate. To be honest, sir, no. I am just very concerned 
that the balance of the DRF dropped to a level so low that our 
ability to respond to an unforecasted or no-notice event would 
compromise our ability to respond.
    We were doing everything we can to keep funds going to keep 
individual assistance because we did not want to stop that most 
immediate need for people who needed housing. But our balance 
has gotten to such a point that it was a concern of mine what 
would have happened if an earthquake or other large-scale event 
had occurred.
    And I would hope that when we look at the DRF, we remember, 
it is not just for the disasters that have happened. It is also 
the mechanism by which this country responds to the next 
disaster, which may be the terrorist attack. It may be the 
unforeseen, unforecasted earthquake. It could be the hurricane 
that strikes a populated area.
    Senator Coats. I don't disagree with that at all. I guess 
the question is, is it possible for us to fund that number or 
determine that number through the normal process, or do we have 
to rely on going to an emergency supplemental as quickly as we 
can after the disaster occurs?
    Mr. Fugate. I think the agreements that were made, in 
looking at the current budget control agreements, will allow us 
to take a longer-term look at numbers that would be more 
realistic to project what you can expect by the known 
disasters.
    But you also must factor in what can happen in that fiscal 
year, and then have mechanisms to address that in a timely 
fashion, so that we don't impact recovery efforts from previous 
disasters while we are responding to the next disaster.
    Senator Coats. To me, the key word there was 
``mechanisms''. I suppose, would you agree that those 
mechanisms should include a rainy day fund, so to speak, and 
may be combined with some mechanisms for very expedited 
response by the Congress?
    Mr. Fugate. I would think I would, again, leave that to the 
capable hands of the Congress to determine. But I would 
recommend that the DRF be seen not only as funding for existing 
disasters, but a balance of which should not get below a 
certain level without some sort of mechanism or action to 
address that, so we don't drop below a level that would 
minimize or impact our ability to respond to the next disaster.
    Senator Coats. Thank you.
    Thank you, Madam Chair.
    Senator Landrieu. Senator Lautenberg.

             DISASTER RELIEF FUND--FISCAL YEAR 2012 BUDGET

    Senator Lautenberg. Yes, thank you.
    Administrator Fugate, first of all, a good job is being 
done by FEMA. And when we add problems to insufficient funding 
for reserves, we are looking at a point in time which hell 
could break loose for us. FEMA has requested a total of $6.4 
billion for the DRF in 2012. The Senate has already passed a 
bill to provide this funding.
    But the Republican House, forgive me, the House has not 
acted to give FEMA the funding it needs. What will the impact 
be on recovery efforts in response to Hurricane Irene if FEMA 
doesn't receive the additional funding it requested for 2012?
    Mr. Fugate. Mr. Vice Chairman, I think, again, we will work 
and continue the priority on the immediate response costs, the 
individual assistance. We will continue to do as much permanent 
work as we can.
    But if the DRF does not receive the additional funds that 
the administration has asked for--and again, we will be 
updating that request on October 15--then we may risk having to 
go back to immediate needs funding and suspending permanent 
work on all open disasters to ensure we continue the individual 
assistance and more immediate needs.
    Senator Lautenberg. Suspending permanent needs to continue 
on jobs that we already have in process that are not completely 
restored or rehabilitated?
    Mr. Fugate. Yes, sir.
    Senator Lautenberg. So you would have to move those funds 
around to the most serious damage that appears in front of us?
    Mr. Fugate. Yes, sir. And that would be always for us the 
survivors first, the emergency protective response cost to the 
State and local jurisdictions. And then we would hopefully not 
have to stop permanent work under public assistance or hazard 
mitigation. But we will do that to preserve the funds to 
continue emergency work and individual assistance, and to 
ensure we can respond to the next disaster.
    Senator Lautenberg. The debt-limit deal that was struck in 
August gave the Congress the authority to respond quickly to 
natural disasters by not requiring disaster relief funding to 
be offset, which leads to drawn-out debates over which programs 
to sacrifice. Yet, the House has repeatedly called for disaster 
relief funding to be offset, and it stands as an obstacle to us 
providing timely and efficient forces and sources for getting 
the job done.
    How would a prolonged debate for offsets for disaster 
relief funding affect FEMA's ability to help disaster relief 
victims? And I think that you really dealt with that already. 
It is just not going to be there for you.
    The Senate passed a disaster relief bill. It includes 
funding for the Corps to repair damage projects, but this 
funding level does not yet account for damages from Hurricane 
Irene.
    And I see it in my own State. I mean, there is a lot of 
work yet to be done. People are waiting impatiently to see 
results.
    While assessments may not be complete now, how much 
additional funding do you think the Corps will need for repairs 
to projects damaged still by Hurricane Irene?
    Ms. Darcy. Senator, we currently have ongoing assessments 
from the impact of Hurricane Irene. Some of those preliminary 
estimates are combined with our estimates for other disasters, 
but the number is still in flux, and it is ongoing. I couldn't 
give you a definite number, but it is going to be well more 
than $100 million.
    Senator Landrieu. A hundred what?
    Ms. Darcy. Million. Just for Hurricane Irene.
    Senator Lautenberg. I think, forgive me, but that sounds 
terribly short, when I see the disaster that is out there just 
in my own State and nearby States.
    The Corps has transferred more than $200 million from 
projects across the country to other projects deemed higher 
priority, because it lacks sufficient funding to rebuild flood 
damage projects.
    In short, the Corps is being forced to rob Peter to pay 
Paul. I think it robs Peter and Paul, as a matter of fact.
    If the Corps doesn't receive additional disaster relief 
funding, how is it going to fund future high-priority needs?
    Ms. Darcy. Senator, we are going to have to, if we don't 
receive additional funds. We will continue to do what we have 
been doing, which is transfer money from existing projects in 
the out-years to fund the needs we have right now. As you said, 
we have transferred $212 million.
    Senator Lautenberg. Madam Chair, as we stand here, Rome is 
burning, and we are not ready to put out the fire.
    Senator Landrieu. Thank you, Senator Lautenberg, for those 
excellent remarks and questions.
    Senator Murkowski.

                               FLOOD MAPS

    Senator Murkowski. Thank you, Madam Chair.
    Administrator, I am kind of reaching back to a letter that 
I had sent to you earlier this year. It was back in June, and 
this related to flood maps in the State of Alaska, most 
specifically.
    In Juneau, we had received some concerns, some complaints 
that the process for public comment had been less than 
adequate, that FEMA had failed to consult with the city in 
connection with the revision of the flood maps there. There was 
concern that the maps were inaccurate. And Juneau had requested 
an opportunity to reopen the process.
    You did correspond back with me, letting me know what the 
community process was. But it really didn't help me answer the 
people of Juneau's concern about whether or not it is possible 
to reopen, so that they can have their concerns addressed, so 
that they can speak to what they believe are clearly 
inaccuracies in the flood maps.
    Since that time, the community of Homer in south-central 
Alaska has noted the same concerns that there was an issue with 
failure to consult as they revised the flood maps there.
    The question for you this afternoon is how is FEMA 
addressing the concerns that communities, whether it is Juneau, 
Homer, or communities across the country, have about these 
flood maps, the accuracy of them, and what recourse any 
property owners may have in terms of being able to comment once 
the period has closed?
    So if you can just speak generally to that, I would 
appreciate it.
    Mr. Fugate. Yes, Senator, in general, this has been a 
challenge for us any time we have map revisions that adversely 
affect folks because there are going to be people who find 
themselves in a special risk area or the area of risk is 
greater than what had been previously mapped. And we know that 
that communication is a key part of educating, to make sure 
people understand the risk. So we continue to work on that.
    I am proud to say that most recently we have been able to 
add a new member to our team, David Miller, who was previously 
the State director in Iowa who dealt with a lot of flood 
issues, and who has quite a strong background in this. We are 
working with Ken Murphy, our regional administrator in region 
10, on this issue.
    And one of the things that we will continue to work on with 
you and your staff is to make sure that we can address the 
communication.
    As far as the specifics, I really need to defer to staff. 
But again, I have recognized this. That is why I have asked 
David Miller to join the administration, to help us work on 
flood insurance and mitigation issues. As a past State 
director, he was a customer of FEMA, so he understands many of 
the challenges we have on the flood insurance program.
    Senator Murkowski. I don't know whether it is Mr. Miller 
that we would need to discuss it with, or if there is someone 
else on your staff, but it is my understanding that the issue 
in Juneau has not yet been resolved. And in terms of 
inaccuracies, some of what we saw were actually a little bit 
bizarre, and I think we need to understand fully. And now that 
this new problem has cropped up in Homer, I would like to know 
that we have got some follow through with your office, if we 
may. And I look forward to that.
    Mr. Fugate. Yes, ma'am.
    Senator Murkowski. I appreciate it.
    Ms. Darcy, I want to ask you again, I am going back to 
letters here, and this does not relate to flooding issues at 
all, but it does relate to a bridge, a proposed bridge over the 
Colville River Delta in Alaska. You have had an opportunity to 
visit the State, visit the proposal.
    As you know, we have been waiting and waiting and waiting 
for resolve of this issue. We were told earlier this summer 
that the Corps would address the issue of the appeal, and that 
a decision was imminent.
    When I visited the State with Secretary Salazar in August, 
we all fully anticipated that a decision would be out from the 
Corps by then. I have sent you a letter dated September 20, now 
3 weeks ago, asking for at least a determination in terms of 
when we may expect an answer on this.
    For those who are not following the issue, this is one 
where, as a State, as a Nation, we have an opportunity within 
the National Petroleum Reserve to help address some of our 
Nation's energy needs, but we cannot get permission to put a 
bridge over the river. And it is the Corps of Engineers and 
your department that has mysteriously been silent on this for 
months. When can we expect a determination?
    Ms. Darcy. Senator, I don't have an exact date, but I can 
give you the status report as I know it, as of today.
    Senator Murkowski. I would appreciate that.
    Ms. Darcy. As you know, the permit was denied. The permit 
was elevated to the Division Commander. The Division Commander 
took that permit and remanded it back to the District 
Commander, asking him for six additional points of information 
that he, in working with the local applicant, has come up with.
    The applicant has responded to all of those inquiries. It 
is my expectation that the District Commander will have a final 
decision soon. I don't want to tell you tomorrow or next week. 
I want to know from him.
    So I will tell you now that I will contact the District 
Commander and try to get a date as to when we could have a 
decision.
    Senator Murkowski. I do appreciate that because the word 
``soon'' has been used repeatedly for probably at least 4 
months now. And there is a little bit of impatience because we 
are not able to get an answer. So if you can help us with that, 
it would be appreciated.
    Ms. Darcy. I will, Senator.
    Senator Murkowski. Thank you.
    Thank you, Madam Chair.
    Senator Landrieu. Thank you.
    Senator Blunt.
    Senator Blunt. Thank you, Madam Chair. Thank you, 
particularly, for your leadership on these issues. You have 
been vigorous, tough, and determined, as you always are. And 
for our ranking member, Senator Coats, he has also understood, 
both from past experience and from watching what has happened 
around the country this year.
    As you mentioned, we have had tornadoes, we have had 
floods. And the FEMA response has been extraordinary. FEMA is 
at a level that we have lots of confidence in FEMA.
    I am going to ask in a minute, Craig, about the end-of-the-
year funding concern that I and many others have.
    Before that, I want to talk about a couple of Corps issues.
    And, Ms. Darcy, I was in northwest Missouri, Monday of last 
week. We had 400,000 acres underwater in our State at one time 
or another this year, a lot of it underwater along the Missouri 
River for 3 and 4 months.
    Normally, a flood is a flood, and then it is gone and you 
try to recover. But we have had standing water for a long time. 
We had at least four major Missouri River bridges gone, large 
pieces of the interstate highway inaccessible and gone.
    In one of my visits there with one of the county 
commissioners, he made what I thought was a pretty succinct 
point about not just agriculture jobs, but all jobs, and the 
point was: The factory doesn't open back up until the highway 
is repaired. And the highway doesn't get repaired until the 
flood protection is restored. And the flood protection is not 
restored until the Congress comes up with the money. And he is 
exactly right.
    And so on a couple money questions, even before Hurricane 
Irene, where Senator Lautenberg has really stepped in to 
respond to that disaster in a tremendous way, I think the 
Corps' estimate before Hurricane Irene was that there was at 
least $1.5 billion worth of disaster requirements that were 
known, and another $850 million anticipated. And I wondered 
what your new numbers look like on what you need to get back to 
where we were a year ago at this time.
    Ms. Darcy. The numbers right now, Senator, as of the end of 
September, are $1.6 billion in known needs, and approximately 
$450 million in anticipated needs, so a combined total of about 
$2 billion.
    Senator Blunt. And that would be since September 1, or that 
includes everything?
    Ms. Darcy. That includes through the end of September.
    Senator Blunt. Through the end of September. Would that 
include Hurricane Irene or not?
    Ms. Darcy. The anticipated estimate is partly Hurricane 
Irene. It is not a complete assessment at this point, but part 
of the Hurricane Irene assessment is part of the anticipated 
$450 million.
    Senator Blunt. Give me those again.
    Ms. Darcy. $1.6 billion in known needs, and $450 million in 
anticipated.
    Senator Blunt. I am going to have to check my numbers 
because my number said, from the Corps the first week of 
September, it was $1.5 billion already and $850 million in 
anticipated.
    Ms. Darcy. Yes, sir. Some of the anticipated needs are no 
longer there.
    Senator Blunt. Because they were----
    Ms. Darcy. When the water went down, the damage wasn't as 
much as we had anticipated, for example. And the known has gone 
up, because what we had anticipated is now what is actually 
known. That is the reason for the shift.
    Senator Blunt. We are going to try to get you the resources 
you need, but we do need to have a good sense of what those 
resources are and, sort of, how they would be allocated.
    One other question I have got. We have a lot of inland 
ports in our State along the Mississippi River. And they were 
pretty impacted by the floods. What is going to be the dredging 
criteria for inland ports, disaster-based?
    Ms. Darcy. Disaster-based? We are going to have to look at 
those. Again, we are looking at the funding for this response 
on a life safety basis first, so that is how we are going to 
prioritize.
    Within the inland navigation system and those dredging 
needs, they will have to compete with other needs, including 
the life safety requirements. We can look into our Operation 
and Maintenance account, as well as our Mississippi River and 
Tributaries (MR&T) account, to look at some reprogramming 
within these accounts in order to address those needs.
    But again, we are first spending our money on life safety.
    Senator Blunt. And now that we are in another fiscal year, 
are you beyond some of the immediate concerns you were having 
in September on funding or not?
    Ms. Darcy. No, sir. As I said earlier, we are taking money 
from other current pots of money in order to pay for this. We 
have never had FCCE funding other than from an emergency 
supplemental.
    Senator Blunt. Right. But right now, you have moved into 
the----
    Ms. Darcy. Transferred money. Money from other accounts.
    Senator Blunt [continuing]. October part of money that you 
are now reprogramming.
    I think I am out of time here. I am going to come back 
later.
    Senator Landrieu. Yes.
    Senator Blunt. I do want to ask the question about funding 
of FEMA, and I am sure Mr. Fugate has an answer. I just want to 
hear it.
    Senator Landrieu. I do appreciate the Senator's leadership 
on the Corps because that is one of the numbers we want to 
leave this subcommittee with. What are the updated numbers from 
the Corps?
    And I think I heard you. It is $1.6 billion for known, $450 
million for anticipated. But I am not sure that includes 
dredging requirements, and I want to come back to that.
    But Senator Cochran is in line now for his questions.
    Senator Cochran. Thank you, Madam Chair.
    Thank you for being here, our witnesses who are submitting 
testimony in support of budget request needs, and other support 
that we may have available here on the Hill to meet some of 
these challenges.
    And I was thinking along the same lines as the Senator from 
Missouri when he asked questions about future requests for 
funding. My concern is, and I was talking with my staff, have 
we seen any estimates from anybody as to the extent of the 
damage that was done by the Mississippi River flooding and the 
tributaries flooding, although we didn't see the kind of damage 
that many of us feared alongside the river that was caused by 
that massive flood, because the system that was in place 
worked. And it worked so well, it was just amazing that there 
was no more damage.
    But that was just visible. That would have been just 
visible flooding damage and erosion of embankments or damage to 
roadways, houses, and businesses, alongside the river.
    But what I am told is that there is no indication 
whatsoever of any assessment being done now of the costs of 
repairs that will be needed to restore the protection projects, 
elements of the MR&T protection, to the pre-flood state.
    So there is something out there. There are some numbers out 
there. There are some damages that had to have been done. And 
from what I hear, the administration has submitted no requests 
for supplemental funding for this next fiscal year. We are just 
going on as if that flood hadn't happened. It didn't cause any 
damages.
    Are you troubled by that?
    Ms. Darcy. Senator, the numbers that I spoke to earlier do 
include the repairs for the MR&T system, as well as the entire 
system both on the Mississippi and on the Missouri. So any 
damage that was done to our levees, any damage that was done to 
miter gates, are all considered in that number that I just 
gave.
    So we are looking at the repair of the whole system, to 
pre-flood conditions.
    Senator Cochran. What is the number?
    Ms. Darcy. $2 billion, sir.
    Senator Cochran. Okay.
    We are very blessed with an ability to come up with 
funding. I hope that the Congress feels like they are in a 
generous mood when it comes to time to pay the bills for those 
damages, because they are Federal projects. The States have 
contributed in terms of land acquisition, helping to have local 
cost-share involved in a lot of those situations. But we just 
hope the Federal Government doesn't wait around and fail to 
encourage the appropriations of funds that would certainly be 
needed in the future, if we were confronted with anything like 
what we saw in that flooding situation last year.
    Thank you, Madam Chair.
    Senator Landrieu. Senator, I would just like to follow-up 
with that because the Senator from Mississippi has been a real 
leader in this effort, literally for decades. And just to be 
very clear, the flood in 1927 was historic in every proportion 
and just really shook the politics of this country, as we know 
from history, literally on its head.
    I want the record to show that the Federal Government 
responded significantly after that flood of 1927. There were 
500 lives claimed; 600,000 people were left homeless; and it 
flooded more than 26,000 square miles.
    Now, here we go this year. The first major flood since 
then, and because we invested $13 billion in fixing the MR&T, 
which took more than 75 years and billions of dollars, when the 
flood happened this time, I don't believe we lost one life. And 
it was a 27-to-1 return on that investment.
    I think that is what Senator Cochran, Senator Blunt, I, and 
others are saying, that after this historic flood, we need to 
take an assessment of not only how to repair what was damaged 
in the flood, but what investments we need to continue to make, 
to make sure that when this flood happens again--I mean, we 
were lucky not to get a loss of life. But there was tremendous 
economic damage that we are still experiencing because of a 
lack of dredging.
    I have companies that are light-loading ships. The 
Mississippi River itself was shut down, which is a huge artery 
to shut down for several days. I have my captains still 
complaining they can't get dredging money, which brings me to 
my next question.
    Why have we never had an emergency budget for the Corps? It 
would seem to me that you need one.
    Ms. Darcy. Senator, the account I referenced earlier, the 
FCCE account, has not been funded in the last 5 years. Any 
funding we have received has been through an emergency 
supplemental.
    Senator Landrieu. This subcommittee may be interested in 
sending a letter to the administration asking them to rethink 
that situation because it would seem to me that setting aside 
some emergency money for the Corps would be a wise way to 
operate, so we are not taking money from projects that are 
crucial and necessary.
    Ms. Darcy. Senator, the President's budget request has 
included funding for the FCCE account.
    Senator Landrieu. How much did it request?
    Ms. Darcy. In 2012, I believe it was $30 million.
    Senator Landrieu. $30 million?
    Ms. Darcy. In fiscal year 2012.
    Senator Landrieu. Okay, but you just testified that you 
need at least $2 billion----
    Ms. Darcy. That is correct.
    Senator Landrieu [continuing]. For the repair of the 
emergencies, so we got that number down.
    Let me just ask, and then we will go to the second panel, 
unless you all have other questions.

                     DEFINITION OF A MAJOR DISASTER

    I want the Administrator to explain, when you say, Craig, 
that there is a level that has to be reached in order for a 
major disaster. My understanding is that number is $127 per 
capita. Could you explain that to the subcommittee and for the 
record?
    And is that what you are testifying today to, that when a 
disaster costs more than $127 per capita, then you can declare 
an emergency--or you recommend the President declares emergency 
and then public assistance is supposed to be coming?
    Mr. Fugate. The $127 refers to the extraordinary cost that 
would be the basis for us recommending to the President to 
adjust cost share from 75/25 to 90/10.
    Senator Landrieu. Okay, thank you for correcting that.
    So what is the amount that gives you the definition of a 
major disaster?
    Mr. Fugate. For public assistance, it is based upon the per 
capita. I believe it is a $1.35 for public assistance.
    Individual assistance does not have a numerical value, but 
we look at historical impacts, the trauma, deaths, other 
associated factors, unemployment, and the impacted uninsured 
losses determine for individual assistance. And again, we look 
at these and factor that into the recommendations to the 
President.
    Senator Landrieu. Okay. Are there any other questions 
before we close this panel out?
    Senator Blunt, and then we will get to you Senator Cochran.

             DISASTER RELIEF FUND--ZERO-BALANCE PROJECTION

    Senator Cochran. Okay.
    Senator Blunt. I do have one, Madam Chair. Thank you.
    Director Fugate, I sent you a letter on September 30, and I 
will put a copy of that letter in the record today on this 
topic. And I would still like a written response to that.
    But basically, I would just like to know what happened 
between your initial request on September 9 and the revised 
request on September 26. I think it is fair to say it solved a 
fairly big internal problem here, but I am sure you must have a 
better answer than that.
    Mr. Fugate. Our projections on the DRF and the possibility 
that we would hit a zero balance prior to the start of the 
fiscal year or a continuing resolution was based upon the 
immediate impacts that we were seeing with Hurricane Irene and 
the individual assistance registration.
    And that again is not a constant number, so we have to 
project what we see coming in, also what we are able to recover 
from past disasters. And we projected based upon those 
expenditure rates that we would get below a zero balance before 
the end of the fiscal year.
    We saw that the individual assistance numbers actually 
didn't stay at that rate. We had a very high level of 
registration at the very beginning, and so on some days we had 
as much as $20 million being authorized going out to 
individuals. That number dropped off.
    But when we were making the assessments, it was based upon 
what we knew at that time, how much we were seeing as going out 
each day for individual assistance, and how much we were seeing 
going out on the existing emergency work from all the open 
disasters, including all the way to Joplin and previous events.
    But the other thing was, we had been working with our State 
partners on open disasters that had open projects in which the 
work had been completed, but the project had not been 
reconciled, where we could de-obligate funds to go back into 
the DRF. And because we were working several different issues 
without having information to say yes or no, this number was 
going to stay constant through that period.
    We had a couple of factors in our favor. One was a lot of 
people registered quickly for assistance, and then those 
numbers trailed off, so we didn't see that high level continue 
through that period. We also were able to pull some recoveries 
from what we had planned for in fiscal year 2012, because 
States were able to tell us that they had completed all the 
work, they were not going to have any more needs for funds, and 
we could de-obligate the remaining balance and put that back in 
the DRF.
    These were done in real time, so it was difficult for us to 
know that, based upon some of those projections, we would end 
up running out of money. But then we saw that some of those 
trends did go down, allowing us to get to the end of the fiscal 
year without having to stop individual assistance.
    But literally, we had just about stopped every other 
discretionary activity we could to either prolong or postpone 
payments in order to keep funds moving toward the individuals 
and the most immediate protective measurements measures.
    Senator Blunt. Okay, thank you. And if you could get me 
that response in writing that I am sure your staff is working 
on already, that would be fine.
    And thank you, Madam Chair.
    Senator Landrieu. Thank you.
    Senator Cochran.
    Senator Cochran. Madam Chair, I am not going to just keep 
on talking about the same subject, but the more I look at my 
notes that staff prepared for me, the more I realize that there 
is an intentional underestimating syndrome in this agency.
    You just look back over the last 3 or 4 years, and you look 
at the supplementals that have been provided by the Congress to 
bail out the administration, Republican or Democrat. But this 
agency continues to request less money than they know is going 
to be needed----
    Senator Landrieu. Exactly.
    Senator Cochran [continuing]. For these accounts. And I 
just think it is something that needs to be known.
    Under current budgeting practices, the DRF, which we have 
been talking about, will have a $16 billion shortfall by the 
year 2014.
    Senator Landrieu. For the Corps? Everybody?
    Senator Cochran. I think it is. It may just be for the 
Homeland Security Department's----
    Senator Landrieu. Or it may be FEMA.
    Senator Cochran [continuing]. DRF.
    Anyway, it is enough to worry you, and I am not saying that 
anybody is going to intentionally mislead the Congress about 
what the funding needs are. But when you know there is going to 
be a $16 billion shortfall under current budgeting practices, 
the general public needs to know that, the Congress needs to 
know that. Somebody needs to respond to this situation.
    Senator Landrieu. And that is why I am going to ask for the 
numbers to be given to us from both of you all, as past 
disaster requirements, current disaster requirements, and 
potential responses, so that we can get a better handle on 
these numbers. And I think the Senator from Mississippi is 
absolutely correct.
    And my final--and we will move to the panel--Administrator 
Fugate, we spoke in September about a pending reimbursement 
problem. This is the Louisiana issue with Livingston Parish.
    We have a pretty major bill outstanding with you all of $60 
million for debris removal. Can you please give me an update--
not now, but in writing, please--about this project?
    [The information follows:]

    Since Hurricane Gustav, Livingston Parish has received more than 
$10 million for debris removal and management costs. This included $2.7 
million for the removal of 253 hazardous trees (leaners) and 17,653 
hazardous limbs (hangers). The applicant requested an additional 
$13,891,333 for the cost of removing 1,349 hazardous trees and 88,892 
hazardous limbs. Based on a review of all of the documentation provided 
by the applicant's contractor and the applicant's debris monitor, the 
Federal Emergency Management Agency (FEMA) found that the applicant's 
contractor performed ineligible work to remove leaners and hangers, 
such as work on private property, the removal of dead trees, and the 
removal of unbroken limbs. FEMA subsequently determined the work to be 
ineligible and denied the request for additional funding. To determine 
eligibility, FEMA relied upon: photos, load tickets, monitors' daily 
notes, and two different validations. The applicant's monitoring firm 
required and took photographs as a standard practice. The applicant 
supplied approximately 120,000 photographs to FEMA with its initial 
documentation submittal (many of which depicted ineligible work). The 
monitoring firm's notes also documented ineligible work. The approved 
funding of $2.7 million was based on a sample validation conducted on 
the work. The first sample was conducted by FEMA and was based on a 20 
percent sampling of documentation provided by the applicant's debris 
monitoring contractor, as well as site verification by FEMA staff. FEMA 
determined that only 34 percent of the leaners and 16 percent of the 
hangers that the applicant claimed were eligible. A second sample 
generated by the State resulted in a lower eligibility rate, however 
funding was based on the first (higher) validation, as it included the 
best information. Based on a thorough review of the project worksheet, 
the additional $13,891,333 for removal of hazardous trees and limbs was 
denied on first and second appeal. The second appeal decision of 
January 6, 2012, is the agency's final determination in this matter.
    Livingston Parish has also submitted a second appeal for funding in 
the amount of $46 million for waterway debris removal. The first appeal 
determination denied this funding request because it was found that 
debris was removed from unimproved property where there was not a 
threat posed to public health and safety, environmental and historic 
preservation reviews were not conducted, and necessary permits for the 
work were not obtained from the U.S. Army Corps of Engineers. The 
second appeal for these projects is currently pending. The applicant 
has requested additional information from FEMA as part of this appeal, 
which is currently under review for release under the Freedom of 
Information Act. The applicant has indicated it may submit additional 
information to FEMA once the release of that documentation from FEMA is 
complete.
    Under FEMA regulations, all applicants have the ability to file two 
appeals on determinations made by FEMA as part of the Public Assistance 
Program. The first appeal is determined by the FEMA Regional 
Administrator, and the second by the Assistant Administrator for 
Recovery at FEMA headquarters. At the request of the parish, FEMA met 
with representatives of the parish on the second appeal concerning 
hazardous trees and limbs. The applicant has also requested such a 
meeting with FEMA regarding the waterways debris removal appeal. At the 
request of the applicant, this meeting will take place after they 
submit any additional information once the request for additional 
documentation from FEMA is completed. The arbitration process that was 
the subject of congressional action and that is stipulated in FEMA 
regulations applies only to Hurricanes Katrina and Rita.

    We have many dozens of businesses that have been involved 
with trying to work this out. It has been going on for more 
than 3 years, and we just need a resolution on that as soon as 
possible.
    Okay, thank you all.
    And let's move to the second panel.
    Thank you. As they come forward, let me go ahead and 
introduce the panel, in light of the time. And we are going to 
try to move through this panel in the next 45 minutes to 1 
hour.
    I want to welcome them and ask to speak in the following 
order: Mr. Gregory Nadeau, Deputy Administrator of the Federal 
Highway Administration (FHWA); Mr. Fred Tombar from the 
Department of Housing and Urban Development (HUD) and Senior 
Adviser for Disaster Programs; Mr. James Rivera, Associate 
Administrator for the Small Business Administration (SBA); Mr. 
Bruce Nelson, Administrator from the Department of Agriculture 
Farm Service Agency (FSA); and Mr. Homer Wilkes, Acting 
Associate Chief for the Department of Agriculture Natural 
Resource Conservation Service (NRCS).
    I would really love if you could limit your statements to 3 
or 4 minutes, if you have to, take 5. We are going to move 
through them very quickly. But this is, to me, a very important 
part of disaster relief. It is not just FEMA.
    And the testimony that you are providing will give us a 
clearer picture of what really the Federal Government's 
responsibility is to be a good partner in disasters for the 
people of all of our States.
    Let's start with you from the Transportation Department, 
Mr. Nadeau.
STATEMENT OF HON. GREGORY NADEAU, DEPUTY ADMINISTRATOR, 
            FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT 
            OF TRANSPORTATION
    Mr. Nadeau. Thank you, Madam Chair Landrieu and Vice 
Chairman Lautenberg. Thank you for the opportunity to testify 
today regarding FHWA disaster response activities.
    As you are well aware, our country has experienced a number 
of devastating disasters in the past year, from floods and 
tornadoes to hurricanes and other severe storms.
    Although lives lost from such disasters can never be 
replaced, programs like the Emergency Relief (ER) program 
administered by FHWA play a pivotal role in helping communities 
rebuild critical transportation infrastructure. Restoring vital 
transportation links in the wake of a disaster requires 
immediate attention, so people can travel safely and return to 
their daily routines and activities. It is also critical for 
the restoration of the flow of commerce.
    The ER program is intended to aid Federal, State, and local 
highway agencies with unusually heavy expenses associated with 
repairing serious damage to Federal-aid highways, bridges, and 
roads on Federal lands, as a result of natural disasters or 
catastrophic failures from an external cause. When a natural 
disaster or a catastrophe strikes, the ER program is available 
to provide assistance to clear a roadway, reopen highways to 
traffic, and to make permanent repairs to restore a damaged 
highway facility.
    Following Hurricanes Katrina, Rita, and Wilma in 2005, the 
ER program was instrumental in assisting the gulf coast region 
with needed efforts to restore critical highway infrastructure. 
With division offices in each State, FHWA was well-positioned 
to respond rapidly to the effects of the hurricanes.
    FHWA's division offices provided advice to State and local 
jurisdictions concerning ER program eligibility and engineering 
and contracting issues, and shared lessons learned from prior 
emergency situations. State DOTs are the ER program's first 
responders with their local partners.
    In April of this year, strong storms and tornadoes struck 
the State of Alabama, leaving catastrophic destruction in their 
wake. In June, Secretary LaHood and Federal Highway 
Administrator Victor Mendez visited Birmingham to survey the 
damage and announce an ER allocation of $1.5 million in quick-
release funds to assist the recovery and repair efforts of 
Federal-aid highways damaged by the tornado. These funds 
provided a down payment to help the State address the initial 
destruction.
    More recently, in August, Hurricane Irene brought 
substantial rainfall and heavy winds, resulting in damages to 
Federal-aid highways along the east coast. In Vermont, the 
heavy rains combined with mountainous terrain created 
concentrations of runoff that caused washouts of roads and 
bridges throughout the State. Several bridges were completely 
destroyed, and temporary bridges will be necessary to restore 
traffic at those locations.
    Just 4 days after the storm, FHWA made $5 million in quick 
release emergency funds available to the Vermont Agency of 
Transportation to help repair roads and bridges damaged by 
floods from Hurricane Irene. VTrans will use these quick-
release funds to expedite emergency repairs to roads, highways, 
and bridges critical to communities across the State.
    FHWA has also made quick-release funds available to several 
other States along the east coast to begin repairs to bridges 
and roads damaged by Hurricane Irene, including Connecticut, 
Maine, New Hampshire, New Jersey, and New York.
    Those are just a few examples of how ER funds are helping 
States across the country undertake the massive job of 
restoring damaged roads and bridges so the public can travel 
safely and communities and businesses can rebuild. FHWA also 
intends to explore technologies and other tools to help highway 
infrastructure better withstand the effects of extreme weather 
events.

                           PREPARED STATEMENT

    As we continually brace for new natural disasters and 
catastrophic failures, FHWA remains committed to helping States 
repair and reconstruct transportation infrastructure damaged by 
such events.
    Madam Chair, thank you for inviting me to testify.
    [The prepared statement follows:]
              Prepared Statement of Hon. Gregory G. Nadeau
    Chairman Landrieu, Ranking Member Coats, and members of the 
subcommittee, thank you for the opportunity to testify today regarding 
Federal Highway Administration (FHWA) disaster response activities.
    Our country has experienced a number of devastating disasters over 
the past year--from floods and tornadoes to hurricanes and other severe 
storms. What nature destroys in seconds can take weeks, months, or even 
years to rebuild.
    The Obama administration is committed to helping Americans recover 
from the damage caused by these natural disasters. Although lives lost 
from such disasters can never be replaced, programs like the Emergency 
Relief (ER) program play a pivotal role in helping communities rebuild 
critical transportation infrastructure. Restoring vital transportation 
links in the wake of a disaster requires immediate attention so people 
can travel safely and return to their daily routines and activities.
                      the emergency relief program
    The ER program provides funding to States for the repair and 
reconstruction of Federal-aid highways and roads on Federal lands that 
have suffered serious damage as a result of natural disasters or 
catastrophic failures from an external cause. Examples of natural 
disasters include floods, hurricanes, earthquakes, tornadoes, severe 
storms, and landslides. A catastrophic failure is defined as the sudden 
and complete failure of a major element or segment of the highway 
system that causes a disastrous impact on transportation services. In 
addition, the cause of the catastrophic failure must be determined to 
be external to the facility. A bridge suddenly collapsing after being 
struck by a barge is an example of a catastrophic failure from an 
external cause. Failures due to an inherent flaw in the facility itself 
do not qualify for assistance under the ER program.
    The Congress has funded the ER program through a permanent annual 
authorization of $100 million since 1972. When ER program needs exceed 
available funding, the Congress may provide supplemental appropriations 
to cover the ER program needs. Over the past 12 years, the costs of 
nationwide ER events, not including large-scale disasters (e.g., 
Hurricane Katrina) have averaged about $350 million annually.
Eligibility
    Two major categories of repair are eligible under the ER program--
emergency repairs and permanent repairs. Emergency repairs include 
repairs needed to restore essential traffic, minimize the extent of 
damage, or protect the remaining facilities. Emergency repairs can 
begin immediately following a disaster without prior approval from 
FHWA. Permanent repairs are those repairs that permanently restore a 
highway facility to its pre-disaster condition. FHWA approval and 
authorization is required prior to permanent repairs.
    Funding under the ER program is intended to aid Federal, State, and 
local highway agencies with an unusually heavy expense of repairing 
serious damage to Federal-aid highways and roads on Federal lands 
resulting from natural disasters or catastrophic failures from an 
external cause. The ER program provides for repair and restoration of 
highway facilities to pre-disaster conditions based on current design 
standards; ER funds are not intended to replace other Federal-aid, 
State, or local funds for new construction to increase capacity, 
correct nondisaster-related deficiencies, or otherwise improve highway 
facilities.
    Generally, all elements of the highway cross section damaged as a 
direct result of a disaster are eligible for repair under the program. 
This includes, but is not limited to, elements such as pavement, 
shoulders, slopes and embankments, guardrail, signs and traffic control 
devices, bridges, culverts, cribbing or other bank control features, 
bike and pedestrian paths, fencing, and retaining walls. When a 
pedestrian or bicycle trail that is within the right-of-way of a 
Federal-aid highway is damaged, that damage is eligible for ER funding 
whether or not the roadway itself is damaged. Because ER funds are 
intended to cover only that repair work which exceeds heavy 
maintenance, is extraordinary, and will restore pre-disaster service, 
incidental costs resulting from a disaster, such as project delay costs 
or lost toll revenues, are not eligible expenses.
Federal Share
    Emergency repair work to restore essential traffic, minimize the 
extent of damage, or protect the remaining facilities, accomplished 
within the first 180 days after the occurrence of the disaster, may be 
reimbursed at 100 percent Federal share. For the costs of permanent 
restoration work, and the cost of all repairs incurred after the first 
180 days, the Federal share is based on the type of Federal-aid highway 
that is being repaired. For Interstate highways, the Federal share is 
90 percent. For all other Federal-aid highways, the Federal share is 80 
percent.
Oversight
    The Federal-aid highway program is a federally assisted, State-
administered partnership between the FHWA and the States. FHWA's 
Division Offices, located in every State, function as the Agency's 
focal points in advancing Federal-aid highway projects. The Division 
Office is available to brief State and local officials on the ER 
program; offer advice regarding the eligibility of repairs for funding; 
assist in performing on-site damage surveys and preparing estimates of 
the costs of repairs; expedite the flow of ER funding and the 
advancement of projects; provide technical assistance on the design of 
repair projects; and coordinate damage surveys with other Federal 
agencies.
    FHWA manages ER projects in accordance with normal Federal-aid 
project requirements. Contracts for both permanent repair work and 
emergency repairs must incorporate all applicable Federal requirements. 
ER program project oversight is performed in accordance with the FHWA 
stewardship agreement with the State.
Release of Funds
    The decision to seek ER program assistance rests with the State. 
Local highway agencies make their applications through the State. The 
State has the option to determine whether it will seek ER funding for 
repair of either State-owned or local-agency-owned Federal-aid 
highways.
    The State and local transportation agencies are empowered to begin 
emergency repairs immediately to restore essential traffic service and 
to prevent further damage to Federal-aid highway facilities. Properly 
documented costs are later reimbursed after the State formally requests 
ER funding, and the FHWA Division Administrator makes a finding of 
eligibility for ER funds.
    There are two methods for developing and processing a State request 
for ER funding--the ``traditional'' method and the ``quick release'' 
method. The first method is labeled as ``traditional'' because it 
follows the normal process used to develop a funding request. The 
second method, the ``quick release'' method, is intended to provide an 
immediate infusion of funds to a State in order to start getting 
communities back on their feet. Quick release funds act as a down 
payment on additional ER requests a State will make as it assesses the 
full extent of damage following a large-scale disaster.
         the emergency relief for federally owned roads program
    Emergency Relief for Federally Owned Roads (ERFO) is authorized 
within the ER program to assist Federal agencies with emergency repairs 
to roads associated with Federal and Tribal lands. The ERFO program is 
authorized and funded under the ER program, typically receiving 
approximately 10 percent of the ER program funds, which is the average 
relative share of needs on Tribal and Federal roads compared to State-
administered needs.
    Roads eligible for the ERFO program include forest highways, forest 
development roads and trails, park roads and trails, parkways, public 
lands highways, public lands development roads and trails, refuge roads 
and trails, and Indian reservation roads. The Federal share for the 
ERFO program is 100 percent. FHWA's Federal Lands Highway Office 
administers the ERFO program.
                     emergency relief funds at work
    ER program funds are essential to maintaining mobility for the 
American public. Natural disasters and catastrophes that destroy 
highways and bridges are unpredictable events and can occur anywhere in 
the country. When a natural disaster or catastrophe strikes, the ER 
program is available to provide assistance to clear a roadway and 
reopen highways to traffic and to make permanent repairs to restore a 
damaged highway facility.
    Following the 2005 gulf coast hurricanes, FHWA employees worked 
shoulder-to-shoulder with their State and local counterparts to rapidly 
assess the situation and to shape strategies that would provide the 
most efficient response. With permanent Division Offices in each State, 
FHWA was well positioned to respond rapidly to the effects of the 
hurricanes. FHWA's Division Offices provided advice to State and local 
jurisdictions concerning ER program eligibility and engineering and 
contracting issues and shared lessons learned from prior emergency 
situations. The Congress provided approximately $2.8 billion in ER 
funds to assist States in the repair and recovery of Federal-aid 
highways damaged by the hurricanes. These funds were instrumental in 
assisting the gulf coast region with needed recovery efforts following 
the devastating impact from Hurricanes Katrina, Rita, and Wilma.
    In November 2006, storms across Washington, Oregon, Idaho, and 
Montana caused damage to the historic Going to the Sun Road in Glacier 
National Park. Emergency repairs, including the installation of a 
temporary bridge, began after the snow melted the following spring. 
FHWA provided $10.4 million in ERFO funds for permanent repairs 
constructed between 2007 and 2009.
    In March 2010, a severe storm resulted in heavy rain across 
portions of New Jersey. The high winds and extreme runoff and flooding 
caused damage on the local highway system in the counties of Atlantic, 
Burlington, Gloucester, Monmouth, Morris, and Somerset. The damage 
included widespread failure of traffic signs and signals, roadway and 
culvert damage, erosion, and failure of a retaining wall. In response 
to this disaster, FHWA provided New Jersey with an ER allocation of 
$1.7 million in April 2011.
    Heavy rainfall in May 2010 resulted in a section of US 87/89 near 
Belt, Montana experiencing a catastrophic slope failure. The over-
saturated subgrade caused movement of an underlying slip plane and 
resulted in excessive roadway damage. Essential traffic was immediately 
detoured to allow emergency repairs and maintain public safety. FHWA 
provided $2.7 million in ER funds in April of this year to assist 
Montana in the rebuilding of US 87/89.
    A significant rain event resulting in more than 300 percent of 
normal precipitation occurred in parts of western and central 
Washington in January 2010. This event contributed to landslides, rock 
falls and washouts, threatening citizens and property in King, Chelan, 
Okanogan, and Jefferson counties. In April 2011, FHWA provided an ER 
allocation of $3.1 million to Washington to help repair damaged 
Federal-aid highways.
    Strong storms and tornadoes struck the State of Alabama on April 
27, 2011, leaving catastrophic destruction in their wake. A very large 
and exceptionally destructive tornado struck Tuscaloosa, Pratt City, 
Pleasant Grove, and the northern suburbs of Birmingham. President Obama 
declared an emergency that same day. In June, Secretary of 
Transportation Ray LaHood and Federal Highway Administrator Victor 
Mendez visited Birmingham to survey the damage and announce an ER 
allocation of $1.5 million in quick release funds to assist in the 
recovery and repair efforts of Federal-aid highways damaged by the 
tornado. These funds provided a down payment to help the State address 
the initial destruction.
    Excessive snow melt from the mountains of Montana and unusually 
heavy rain throughout the upper Missouri River basin resulted in 
historic flooding of the Missouri River along the western border of 
Iowa starting in May 2011. Flood waters remained high in the area for 
several weeks, closing several major highways. In July, Secretary 
LaHood announced $2 million in quick release funds available to the 
Iowa Department of Transportation to reimburse the State for work done 
on Federal-aid highways immediately following the flooding. These funds 
will be used to reimburse Iowa for costs of controlling traffic flow; 
shoring up roads and bridges; and other measures implemented 
immediately after the flooding to prevent further damage, including 
strengthening the shoulder sections of the highways, sand bagging, and 
asphalt overlays.
    Beginning on August 26, Hurricane Irene brought substantial 
rainfall and heavy winds resulting in damages to Federal-aid highways 
along the east coast. In Vermont, the heavy rains combined with the 
mountainous terrain created concentrations of runoff that caused 
washouts of roads and bridges throughout the State. Several bridges 
were completely destroyed, and temporary bridges will be necessary to 
restore traffic at those locations. Just 4 days after the storm, the 
FHWA made $5 million in quick release emergency funds available to the 
Vermont Department of Transportation (VTrans) to help repair roads and 
bridges damaged by floods from Hurricane Irene. VTrans will use these 
quick release funds to expedite emergency repairs to roads, highways 
and bridges critical to communities throughout the State. VTrans 
currently estimates that it is possible that overall damages to 
Federal-aid highways from the floods will exceed $700 million.
    Anticipating the effects of Hurricane Irene, FHWA postponed the 
release of ER funding available to address fiscal year 2011 obligation 
needs so that immediate needs could be addressed. In addition to 
allocations made to Vermont, FHWA recently has made quick release funds 
available to several other States along the east coast to begin repairs 
to roads and bridges damaged by floods from Hurricane Irene, including 
Connecticut, Maine, New Hampshire, New Jersey, and New York. FHWA is in 
the process of surveying all States to assess their current ER 
obligation needs and plans to allocate a substantial amount of 
additional ER funds by the end of this month.
                    modeling and research activities
    In addition to implementing the ER program, FHWA is engaged in 
several other activities to help minimize the effects of natural 
disasters and catastrophic events on highway infrastructure. FHWA 
provides States with access to the Freight Analysis Framework (FAF) 
modeling tool which can help States prepare for freight traffic shifts 
resulting from major road closures after natural disasters. The tool 
works by removing the closed or damaged highway from the network model, 
rerouting the freight traffic on undamaged highways, and then 
displaying routes the freight traffic likely would take.
    The FAF tool is posted on the FHWA Web site and has been refined 
and updated over the years to make it more widely available. Knowing 
the potential changes in regional freight travel patterns in times of 
crisis helps States to establish detours, prepare alternative routes to 
handle more traffic, and adjust signals and message signs. It can help 
ensure traffic continues to flow smoothly and safely for travelers on 
the highways.
    Additionally, FHWA has been engaged in researching, developing, and 
deploying technologies associated with improving infrastructure 
resilience in support of disaster response and recovery. These 
activities address hazard mitigation in the area of windstorms, 
flooding and scour, earthquakes, and security hazards. FHWA also 
participates in intergovernmental committees such as the National 
Science and Technical Council's Subcommittees on Disaster Reduction and 
Infrastructure that provide advice to the White House Office of Science 
and Technology Policy and coordinate research and development 
activities among Federal agencies.
    FHWA is conducting research and collecting data to develop 
technologies that would minimize damage to bridges from wind hazards. 
The Agency monitors a number of bridges at various field test sites and 
conducts in-house testing at the aerodynamics laboratory housed at the 
Turner Fairbank Highway Research Center (TFHRC).
    FHWA's Bridge Hydraulics Program focuses on scour, the leading 
cause of bridge failure, and also studies flooding and other soil 
erosion problems occurring around bridge supports. This research is 
conducted in the TFHRC hydraulics laboratory. After Hurricanes Katrina 
and Rita, FHWA conducted a study to examine the impact of wave forces 
on bridge decks and developed optimum bridge deck shapes to minimize 
the type of damage that resulted from these hurricanes.
    Under the Seismic Program, FHWA has researched how bridges and 
other structures perform during large, damaging earthquakes and has 
developed a number of technologies to improve the design of bridges to 
better withstand earthquakes.
    Since the events of September 11, 2001, FHWA has administered a 
program to develop technologies that mitigate against terrorist 
threats. Working together with DHS, the Army Corps of Engineers, and 
bridge owners, FHWA has developed systems to harden bridge components 
against blast loadings. FHWA also has contributed to the National 
Response Plan, the Transportation Sector Specific Plan, and the 
Critical Infrastructure Protection Research and Development Plan 
managed by DHS.
                               conclusion
    ER funds are helping States across the country undertake the 
massive job of restoring damaged roads and bridges so that the public 
can travel safely and communities can rebuild. FHWA also continues to 
explore technologies and other tools to help highway infrastructure 
better withstand the effects of extreme weather events. As we 
continually brace for new natural disasters and catastrophic failures, 
FHWA remains committed to helping States repair and reconstruct 
transportation infrastructure damaged by such events.
    I thank you for the opportunity to discuss FHWA's disaster response 
efforts. I would gladly answer any questions at this time.

    Senator Landrieu. Thank you. I appreciate that.
    I am going to ask you if $100 million is enough, and how 
many people you have had to tell no to when you ran out of that 
money.
    And I want you all to be very clear about funding levels, 
not just your general mission about what you do. I think we are 
all aware of that.
    Mr. Tombar.
STATEMENT OF FRED TOMBAR, SENIOR ADVISOR FOR DISASTER 
            PROGRAMS, DEPARTMENT OF HOUSING AND URBAN 
            DEVELOPMENT
    Mr. Tombar. Thank you. Chairwoman Landrieu, Ranking Member 
Coats, and members of the subcommittee, thank you for the 
opportunity to testify regarding HUD's services and resources 
available to address disaster relief and recovery.
    HUD plays a crucial role in disaster recovery, as 
demonstrated by our response to Hurricane Katrina. When 
President Obama took office 3\1/2\ years after that storm, 
40,000 displaced gulf coast families still relied on temporary 
government housing assistance.
    But, Madam Chairwoman, I am proud to say that, working with 
our partners at FEMA, we have since helped 99.99 percent of 
those families to move into permanent housing, and we continue 
to focus on helping the remaining families.
    HUD's efforts in disaster recovery continue as we assist 
many communities that were affected by disasters this year. HUD 
plays a key role in long-term recovery following disasters. It 
is important to note that unlike FEMA or SBA, we do not serve 
as a primary provider of disaster assistance. Instead, affected 
areas use or reprogram their existing HUD resources to address 
recovery needs. However, in circumstances involving 
extraordinary disaster impacts, HUD's role can be expanded 
significantly, though only through an interagency agreement 
with FEMA or a specific appropriation.
    I would like to briefly outline some of our key disaster 
recovery programs. HUD's disaster assistance starts with our 
Office of Community Planning and Development (CPD). Through 
CPD, the Community Development Block Grant (CDBG) and the HOME 
Investment Partnerships programs allow grantees to reprogram 
existing formula funds and direct future grants to address 
disaster recovery needs. Now, the Secretary is authorized to 
waive or suspend program requirements in presidentially 
declared disasters.
    The Congress has often used CDBG to provide supplemental 
disaster recovery assistance in response to extraordinary long-
term needs. Supplemental CDBG disaster relief funding has 
historically provided the Secretary with broad waiver 
authority, which allowed States and local governments to 
address their unique needs.
    Following a disaster, HUD's Office of Public and Indian 
Housing (PIH) has a standing contract to assess damage to 
Public Housing Authority (PHA) properties. Depending on 
funding, HUD may increase PHA's administrative fees, allow 
voucher holders to move to higher cost units, and extend 
obligation and expenditure deadlines. HUD may also subsidize 
lost income from damaged public housing units while repairs are 
being made.
    PIH's primary disaster recovery programs are the Disaster 
Housing Assistance Program (DHAP) and a Disaster Voucher 
Program (DVP). DHAP is dependent on an interagency agreement 
with FEMA, and DVP can be funded through direct appropriations.
    These programs leverage HUD's PHA network across the 
country to provide temporary rental housing assistance and case 
management services.
    Our Office of Housing, which includes the Federal Housing 
Administration (FHA), also has resources available for disaster 
relief and recovery, including mortgages that provide 100 
percent financing for rebuilding or repairing homes destroyed 
in a disaster, or insurance for the rehabilitation and repair 
of single-family properties.
    FHA has also instituted 90-day moratorium on foreclosures 
for FHA-insured mortgages in presidentially declared disaster 
areas. Under FHA's loss mitigation program, special forbearance 
agreements are available to suspend or reduce mortgage 
payments, so borrowers have the time they need to recover from 
damages.
    FHA has also recently announced a pilot program in response 
to tornadoes in Alabama and in Missouri to provide discount 
sales of HUD real estate-owned properties to public housing 
agencies. Specifically, an eligible PHA can purchase HUD-owned 
properties at a 50 percent discount to lease them to disaster 
victims for a year or sell them to disaster victims at a 
discount.
    In 2010, HUD established an Office of Disaster Management 
and National Security. This office has played a critical role 
in the coordination of the Department's response and recovery 
activities for recent disasters.
    HUD has been working closely with FEMA and other Federal 
agencies on the National Disaster Recovery Framework, and we 
lead the housing recovery support function under that 
framework.

                           PREPARED STATEMENT

    In closing, HUD continues to maximize our resources to 
address community disaster recovery needs. With our mission to 
create stronger, more sustainable communities, we are 
positioned to administer Federal disaster recovery funds while 
helping to build local capacity and promoting building 
approaches that reduce risk before and after disasters.
    Thank you again, Chairwoman Landrieu, for the opportunity 
to testify, and I welcome any questions.
    [The prepared statement follows:]
                   Prepared Statement of Fred Tombar
    Chairwoman Landrieu, Ranking Member Coats, and members of the 
subcommittee, my name is Fred Tombar, and I am the Senior Advisor for 
Disaster Recovery to Secretary Donovan at the Department of Housing and 
Urban Development (HUD). Thank you for the opportunity to testify today 
regarding HUD services and resources available to address disaster 
relief and recovery.
    HUD plays a crucial role in disaster recovery, as evidenced by the 
Department's response to Hurricane Katrina. Hurricane Katrina destroyed 
more than 200,000 homes in Louisiana alone, including more than 82,000 
rental homes. All told, the storm displaced more than 1 million people 
from the gulf coast, with 600,000 households displaced 1 month after 
the hurricane. Three-and-a-half years later, nearly 40,000 families who 
had been displaced by the storms were still relying on government 
assistance to find housing and more than 30,000 of those families were 
on the verge of losing housing assistance when HUD's Disaster Housing 
Assistance Program (DHAP) came to an end.
    HUD worked with nearly 350 public housing agencies throughout the 
country to find permanent housing by extending disaster rental 
assistance for an additional 6 months, providing comprehensive case 
management, and providing 12,300 of the most vulnerable families with 
permanent housing choice vouchers. Today, of the 40,000 families who 
relied on temporary government housing assistance when President Obama 
took office, we have helped 99 percent of them move into permanent 
housing. But we will not rest until we've completed the job for the 
remaining families.
    HUD's efforts in disaster recovery continue as we assist the 
communities that were affected by the tornadoes earlier this year.
    The Department is now working with the Federal Emergency Management 
Agency (FEMA) and our other partners to assist Vermont following 
Hurricane Irene. HUD provided $350,000 each to Birmingham and 
Tuscaloosa, Alabama, and Joplin, Missouri, through the Community 
Development Block Grant Sanctions Fund, which helps communities to 
address their long-term recovery needs following the impacts of recent 
disasters. Part of a successful recovery is planning and smart building 
before the disaster. In 2010, the Department awarded $311 million from 
the Disaster Recovery Enhancement Fund helping communities reduce risk 
from future disasters as they rebuild and recover. HUD is committed to 
not only rebuilding communities, but rebuilding them stronger, better, 
and faster.
    Consistent with the Department's mission to create strong, 
sustainable, inclusive communities and quality affordable homes for 
all, HUD plays a key role in State and local long-term recovery 
following disasters. However, unlike FEMA or the Small Business 
Administration (SBA), the Department is not authorized or funded to 
serve as the Federal Government's primary provider of assistance 
following all presidentially declared disasters.
    For the vast majority of disasters, HUD works in coordination with 
its Federal partners to address long-term recovery needs primarily 
through the flexibility and existing waiver authority of its standing 
programs and resources. The Department does not receive any dedicated 
annual funding for disaster recovery purposes, and thus helps 
individuals and communities by enabling them to use or re-program their 
existing HUD resources to address recovery needs in an expedited 
manner.
    However, in circumstances involving extraordinary or catastrophic 
disaster impacts that exceed the ability of existing Federal disaster 
resources to address, the Congress at times provides HUD with an 
expanded role. This expanded role is disaster-specific and is made 
possible through an Inter-Agency Agreement with FEMA (which funds DHAP) 
and/or a supplemental appropriation (which has provided Community 
Development Block Grant disaster recovery (CDBG-DR) funds and disaster 
housing vouchers).
    I would like to briefly identify the Department's various resources 
available for disaster recovery.
           office of community planning and development (cpd)
    CPD utilizes various approaches to assist communities impacted by 
disasters. Two annual formula-based programs--CDBG and HOME--allow 
grantees to reprogram existing funds and direct future grants to 
address disaster recovery needs. Collectively, these two grant programs 
allow grantees to meet a broad range of needs including housing, 
economic development, infrastructure, and the provision of public 
services.
    In addition, the Secretary is authorized to waive or suspend the 
CDBG and HOME program requirements for use of funds in presidentially 
declared disaster areas except for those related to public notice of 
funding availability, nondiscrimination, fair housing, labor standards, 
environmental standards, low-income housing affordability, and 
requirements that activities benefit persons of low- and moderate-
income. In the past, CDBG statutory waivers have included the removal 
of prohibitions on new housing construction and modifications to 
expenditure limits for public services.
    CDBG regulatory waivers have extended the annual performance report 
submission deadline for grantees delayed by disaster impacts and have 
extended the period within which grantees must expend at least 70 
percent of their CDBG funds to benefit low- and moderate-income 
persons.
    The HOME program provides funds to States and localities to provide 
affordable housing to low-income people. Waivers and regulations have 
been utilized to allow communities to better address housing needs 
after disasters. For example, section 220(d)(5) of the HOME Investment 
Partnerships Act permits HUD to reduce the match requirement by up to 
100 percent for jurisdictions in presidentially declared disaster 
areas.
    While the CDBG and HOME programs are not designed as disaster 
recovery programs, they are able to be used to address disaster-related 
needs. However, in order to re-program funds for disaster recovery 
purposes, communities must do so at the expense of the previously 
planned activities for which the funds were initially budgeted. If 
funding for these programs decreases in fiscal year 2012 communities 
will have fewer tools and resources to meet their unanticipated 
disaster recovery needs. As funding decreases, it becomes more likely 
that what limited funding is received will be dedicated to critical 
core services and activities, thus creating a challenge to re-
programming funds.
    CPD's Section 108 Loan Guarantee Program provides communities with 
a source of financing for economic development, housing rehabilitation, 
public facilities, and large-scale physical development projects. This 
makes it one of the most potent and important public investment tools 
that HUD offers to local governments.
    CPD headquarters and field office staff provide ongoing and direct 
technical assistance to grantees to leverage their specialized 
knowledge and skill sets. HUD may provide technical assistance through 
a cadre of service providers and specialists in which years of 
professional experience is applied to addressing targeted needs. This 
coordinated combination of guidance and technical assistance is a key 
focus of CPD to help build the capacity of local and State 
jurisdictions so that they can maximize their use of limited public 
investments.
    cdbg supplemental appropriation for disaster recovery (cdbg-dr)
    Since 1992, the Congress has elected to use the CDBG program as a 
vehicle for providing supplemental disaster recovery assistance in 
response to extraordinary long-term disaster-related impacts. 
Supplemental CDBG-DR funding is distinguished from regular CDBG funding 
in that each appropriation has historically provided the Secretary with 
broad waiver authority (with the exception of requirements related to 
fair housing, nondiscrimination, labor standards, and the environment). 
This waiver authority allows State and local governments to address the 
unique and urgent needs that disaster recovery presents.
    CDBG-DR also provides State and local governments with the ability 
to develop disaster recovery strategies specific to their needs. For 
example, State grantees are provided greater discretion in developing 
and implementing targeted disaster recovery strategies by allowing them 
to directly administer activities.
    Since the terrorist attacks of September 11, 2001, nearly $30 
billion has been awarded under CDBG-DR to assist communities recovering 
from disasters in 27 States. These funds may be used for a wide range 
of recovery activities as long as their use does not duplicate other 
disaster recovery assistance, such as that from FEMA, the SBA, and 
private insurance. In order to better leverage Federal investments, CPD 
routinely coordinates with other Federal agencies funding disaster 
recovery activities. For example, HUD has worked with SBA and FEMA to 
develop guidance for local and State grantees that help them be more 
efficient and effective in preventing duplication of benefits. HUD and 
SBA are also signing a memorandum of agreement regarding how we will 
work together on duplication of benefits issues. In addition to FEMA 
and SBA, CPD has also worked directly with the Department of Health and 
Human Services regarding community health clinics in New Orleans, the 
Department of Treasury regarding tax credits, and the Army Corps of 
Engineers regarding levee construction and flood protection measures.
               office of public and indian housing (pih)
    PIH has modeled a variety of disaster housing programs on the 
Housing Choice Voucher (HCV) program. The HCV program permits existing 
voucher-assisted families to move within the original jurisdiction to 
another area. Challenges following a disaster include:
  --the availability of remaining safe housing stock in the affected 
        area,
  --the ability of a family to relocate to an area with limited 
        employment opportunities, family support, or social service 
        connections,
  --the availability of Public Housing Authorities (PHAs) to subsidize 
        portability moves to higher cost areas, and
  --the capacity of impacted PHAs to pay in a timely manner while 
        functioning at reduced staff levels.
    Following a disaster, PIH has a standing contract in place to 
assess damages to PHA properties. Depending on HUD and PHA funding, HUD 
may:
  --approve extraordinary PHA administrative fees;
  --allow voucher holders to move to higher cost units;
  --extend obligation and expenditure deadlines; and
  --waive PHA submission requirements.
    HUD may also subsidize lost income from damaged public housing 
units while repairs are being made. Operating fund allocations are 
based on prior year utilization, so there may not be sufficient reserve 
amounts in a particular year to fully subsidize a large number of 
damaged units.
    The HCV program is currently at 99.98 percent budget utilization, 
which limits the ability of families to move to higher cost areas. If 
too many families move from a PHA, it can impact the renewal funding 
and leasing ability of that PHA.
    The Public Law 112-10 (Department of Defense and Full-Year 
Continuing Appropriations Act, 2011, enacted on April 15, 2011) 
established the methodology for calculating HCV renewal funds and the 
allocation of funds to a limited set of tenant protection vouchers. To 
specifically assist disaster-impacted families through the HCV program, 
HUD would require additional congressional authorization.
    Previously, additional congressional funding has enabled PIH to 
implement a variety of post-disaster housing programs. For example, PIH 
has implemented 2-year, emergency housing vouchers for families 
displaced by Hurricane Andrew in 1992 as well as emergency housing 
certificates for families in the aftermath of the 1994 Northridge, 
California earthquake. However, PIH's primary disaster recovery 
programs are the Disaster Housing Assistance Program (DHAP) and the 
Disaster Voucher Program (DVP). DHAP is dependent on an Inter-Agency 
Agreement (IAA) with FEMA and DVP is funded by a direct appropriation 
from the Congress.
    Additionally, the Congress passed the Supplemental Appropriations 
Act for fiscal year 2009 (Public Law 111-32) in June 2009. The act 
provided $80 million for HCV program funding to PHAs in presidentially 
declared disaster areas following Hurricanes Katrina and Rita. Priority 
for voucher funding under this special appropriation was provided to 
PHAs in the most heavily impacted areas of Alabama, Louisiana, 
Mississippi, and Texas. Priority was also given to PHAs that agreed to 
establish a preference for families in FEMA temporary housing units.
               disaster housing assistance program (dhap)
    In response to large-scale disasters since 2005, HUD and FEMA 
currently administer DHAP as a pilot program. It leverages HUD's PHA 
network to provide temporary rental housing assistance and case 
management services. As a transitional housing program, it helps 
eligible families displaced by a disaster to rebuild their lives as 
they move toward greater self-sufficiency. DHAP is currently funded by 
FEMA and is facilitated through an IAA. There were two DHAP programs, 
DHAP-Katrina (ended October 31, 2009) and DHAP-Ike (ended September 30, 
2011). Total funding provided by FEMA from the Disaster Relief Fund is 
more than $1 billion. The use of DHAP to assist families impacted by 
other disasters would require FEMA authorization and funding through 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
    In addition to DHAP, PIH administers the Disaster Voucher Program. 
DVP is a housing program for families in HUD-assisted housing disaster 
impacted areas that were displaced by Katrina and Rita.
    PIH has maintained a successful and productive working relationship 
with FEMA through multiple disasters and two iterations of the DHAP 
program. It is currently collaborating with FEMA on a data sharing 
agreement and a standard IAA for future disasters. PIH staff is 
frequently consulted as experts on HUD's disaster programs due to their 
wealth of institutional knowledge. Staff often coordinate with State 
and local officials through HUD's existing network of field offices and 
public housing agencies as well as through onsite technical assistance.
         office of housing/federal housing administration (fha)
    The HUD Office of Single Family Housing has various resources 
available for disaster relief and recovery. The National Housing Act 
grants FHA the authority to insure mortgages that assist borrowers in 
rebuilding, repairing, and rehabilitating homes that have suffered 
damage in a disaster. Section 203(h) mortgages provide 100 percent 
financing for rebuilding or repairing homes destroyed in a disaster. 
Under this section, FHA can insure these mortgages made by qualified 
lenders to victims of a major disaster who have lost their homes and 
are in the process of rebuilding or buying another home. In addition, 
section 203(k) mortgages provide insurance for the rehabilitation and 
repair of single family properties. These mortgages may be used for 
disaster relief.
    FHA also has processes in place that may provide financial relief 
to borrowers with FHA-insured mortgages who have been affected by 
disasters. FHA has instituted an automatic 90-day moratorium on 
foreclosures associated with FHA-insured mortgages for properties in 
presidentially declared disaster areas. This provides borrowers 
additional time to remain in their homes following a disaster. In 
addition, under FHA's Loss Mitigation Program, type 1 special 
forbearance agreements are available for eligible borrowers. These 
agreements suspend or reduce mortgage payments to allow borrowers 
sufficient time to recover from the cause of default.
    Furthermore, in order to provide assistance to individuals 
displaced by disasters, FHA recently announced a pilot program to 
provide discount sales of HUD REO properties to eligible PHAs. Under 
the pilot, an eligible PHA, whose jurisdiction is in a presidentially 
declared disaster area and that has administered a homeownership 
program for 2 years, is allowed to purchase HUD-owned properties at a 
50 percent discount for the purpose of leasing them to victims of a 
disaster for 1 year or selling them to disaster victims at a discounted 
sales price. Eligible buyers or tenants for these properties include 
those with income levels at or below 120 percent of median income for 
the disaster area and/or neighboring area in which they reside. This 
pilot program was launched in Alabama and Missouri on August 16, 2011 
in responses to the tornadoes.
    The goal of the HUD Office of Multifamily Housing is to work with 
the owners of HUD-assisted properties to repair, rehabilitate, or 
rebuild these affordable housing units and maintain the rental 
subsidies (if applicable) as quickly as possible after a disaster 
event.
    The Office has developed a handbook chapter that provides guidance 
and policies solely on addressing mortgage forbearance, priorities for 
temporary and permanent rental housing, allowing multiple occupants in 
a unit, leases and rents, Real Estate Assessment Center inspections, 
use of escrows, and flexibility in occupancy. Immediately after an 
event, the Office initiates a damage assessment protocol and process 
for all HUD-assisted properties in the impacted areas. The process 
includes initial telephone assessments (both of the physical 
development as well as the status of the residents), followed by 
physical site visits to the projects receiving moderate and serve 
damage. This is followed by subsequent meetings (both individual and 
group) with the owners to discuss repairs, rehabilitation, or 
rebuilding of the properties as well as the identification of funding 
resources.
    The Office continues to monitor the status of the repairs, 
rehabilitation, or rebuilding efforts for each property until the work 
is complete and the project is fully operational. For those projects 
that have been severely damaged or destroyed, the Department continues 
to work with the owners to rebuild on site and obtain the necessary 
financing or move the rental assistance, use agreement, and/or mortgage 
to alternate sites under existing statutes.
            office of policy development and research (pd&r)
    The multidisciplinary PD&R staff includes economists, planners, 
social scientists and engineers. Building on the broad skill set and 
knowledge of HUD programs, PD&R is able to identify strategies for the 
response to and recovery from disasters across the entire urban 
landscape. As part of the Federal team addressing long-term recovery 
needs, PD&R staff assist in conducting impact assessments and 
estimating unmet needs. This information is critical to helping 
agencies at all levels best match limited resources to greatest need.
    Through analyzing data provided by others and integrating 
information to identify areas of particular need, these tools help 
focus resources on the areas that are most affected. Economists are 
able to provide tailored analysis in affected areas and engineers can 
support with technical assistance on innovative building approaches.
          office of fair housing and equal opportunity (fheo)
    FHEO enforces the Fair Housing Act to ensure all people have equal 
access to housing of their choice free from discrimination regardless 
of their race, color, national origin, religion, sex, familial status, 
or disability. FHEO has the responsibility to ensure that persons 
affected by disasters are not victimized when searching for new place 
to call home. Victims of housing discrimination may file a complaint 
with HUD and FHEO will investigate the complaint free of charge. FHEO 
services include:
  --a housing discrimination hotline where victims may file a 
        complaint;
  --investigation of complaints;
  --a telephone language interpretation line for persons who are 
        limited English proficient;
  --written translation of vital documents for persons who are limited 
        English proficient; and
  --conducting education and outreach to disaster survivors and housing 
        providers.
    FHEO communicates and collaborates with an array of State and local 
government agencies and community based organizations to provide 
multilingual information on fair housing rights, responsibilities, and 
resources. HUD educates new emergency housing providers on how to 
comply with the Fair Housing Act and has created new materials for 
disability-related and other community service groups.
    HUD has added Fair Housing tips to the National Housing Locator 
Service and assisted a network of foreign consulates to reach otherwise 
hard to contact local residents. Finally, HUD has works with local 
communities in the rebuilding stages to ensure future plans 
affirmatively further fair housing.
       office of disaster management and national security (dmns)
    HUD is also in the process of standing-up the Office of Disaster 
Management and National Security to coordinate disaster response and 
recovery activities across the Department. The Office was established 
in 2010 to serve as a focal point and improve coordination of the 
Department's response and recovery activities. The Office has worked 
closely with key HUD program offices and the affected HUD Regional 
Offices to coordinate departmental response and recovery activities for 
recent disasters including the spring 2011 tornadoes, severe summer 
flooding throughout the Missouri River Basin, Hurricane Irene, and 
Tropical Storm Lee.
    The Office serves as a coordination point with FEMA and other 
Federal partners at the headquarters level and in the field to help 
plan and implement response and recovery work. The Office also includes 
five disaster coordinators who help coordinate disaster response and 
recovery activities at the regional level, serve as a liaison between 
HUD and FEMA regions, help plan and implement mission assignments, and 
work closely with HUD program offices to make the most effective use of 
existing programs and resources. The Office was established through a 
change in the Department's operating plan. HUD expects to complete 
staffing of the Office this fall.
                    inter-departmental coordination
    HUD has been working closely with FEMA and other Federal 
departments and agencies to help develop and implement the new National 
Disaster Recovery Framework (NDRF). The NDRF serves as a guide to 
ensure coordination and recovery planning at all levels of government 
before a disaster, and defines how we will all work together following 
a disaster. It is built upon existing programs, authorities, and best 
practices, and was developed in partnership with stakeholders 
representing local, State, tribal, and Federal governments, private 
organizations, professional associations, academic experts, and 
communities recovering from disasters.
    The Framework introduces six new recovery support functions that 
are led by designated Federal coordinating agencies at the national 
level. HUD's role, in support of FEMA, is to coordinate the Housing 
Recovery Support Function. The Housing Recovery Support Function is 
intended to help address pre- and post-disaster housing issues and 
coordinate and facilitate the delivery of Federal resources and 
activities to assist local, State, and tribal governments in the 
rehabilitation and reconstruction of destroyed and damaged housing, 
whenever feasible, and development of other new accessible, permanent 
housing options. The primary agencies include our partners at the 
Department of Homeland Security/FEMA, the Department of Justice, and 
the Department of Agriculture. The Framework has just recently been 
released and HUD will be working closely with FEMA and our key housing 
partners to improve coordination of existing programs to help meet the 
needs of States and communities.
    As previously noted, the Department already undertakes a great deal 
of interdepartmental coordination in the everyday implementation of its 
programs. We expect to continue working close together with all of our 
Federal partners.
                               conclusion
    In closing, while the Department is not funded or authorized as a 
primary provider of Federal disaster recovery assistance, it continues 
to maximize its existing programs, tools, staff, and financial 
resources to address community disaster recovery needs. With its 
mission to create safer, more affordable, and sustainable communities, 
it is naturally poised to administer supplemental appropriations of 
Federal disaster recovery funding when necessary. HUD will continue to 
serve its everyday role in building local capacity and promoting 
building approaches that reduce risk from hazards--both in advance of 
and following disasters.

    Senator Landrieu. Thank you.
    We have been joined by the Senator from Vermont, who was 
here earlier and is now back. I am happy to take your comments 
now and questions, Senator. I know your time is limited. Or we 
can wait through the panel. Whatever is----
    Senator Leahy. I hate to interrupt, Madam Chair. I am 
hosting, along with the chair of the Intelligence Committee, 
the discussions----
    Senator Landrieu. Okay. You have the seniority enough here.
    Senator Leahy. Thank you.
    I just had a quick question for Mr. Rivera. The SBA is the 
only Federal resource that a business that has a disaster can 
turn to in time of need. I am worried about what they might be 
doing in Vermont.
    This, actually, is a picture I took from a helicopter. That 
bridge--I have been going across that bridge since I was a 
little child. I am 71 years old. Maybe you can see, we have 
numerous others from Hurricane Irene in Vermont.
    In my lifetime, I have never seen anything like that. We 
have been hit far worse than we have ever been hit by anything.
    Now the State started moving immediately. Even before any 
Federal agencies came, people were out cutting temporary roads, 
getting kids to school, and all that.
    But I understand that earlier this week when I was up 
there, the SBA received requests for applications from more 
than 1,600 businesses in Vermont. You had in hand 140 completed 
applications, but you only approved 24. That is around $3 
million.
    The Vermont Economic Development Authority, which is a very 
small agency and does not begin to have the resources you do, 
created a disaster loan program within 48 hours of Hurricane 
Irene. They made the first loan 5 days later. They have 
obligated $10 million in loans to more than 150 businesses, 
including some SBA denied.
    I know you have to be careful, but businesses are coming to 
you because their offices, computers, and everything have been 
destroyed. It doesn't make them look very creditworthy. That is 
why it is a disaster loan program, as you know better than all 
of us.
    And finally, weeks later, SBA opened a recovery center in 
Brattleboro. I think that was yesterday. We have been asking--
the State has been asking for weeks.
    But then I understand those loans are looked at somewhere 
in Texas. I don't know what that does in looking at what has 
happened.
    You have a 1.4 percent approval rate. Vermont is fiscally a 
very conservative State. Vermont is the only State in the Union 
that does not have a balanced budget amendment, and we are the 
one that always balances its budget. It has the lowest 
foreclosure rate, I think, in the country.
    I know you have to do these things down in Texas. We are a 
little bit different, size and everything else.
    What is happening?
    I may sound a tiny bit perturbed.
    Mr. Rivera. No, I understand. Thank you, Senator Leahy.
    Let me update the information that we have. Apparently, the 
information that you have is very early on.
    To date, we have approved 199 loans for about $11.5 
million. In the State of Vermont, we are currently----
    Senator Leahy. How many?
    Mr. Rivera. There have been 199 loans.
    Senator Leahy. Okay, out of 1,600 applications. Go ahead.
    Mr. Rivera. Right. And the 1,600 applications, those are 
ones that are issued. This is for uninsured loss. A lot of 
times what happens is, individuals don't respond because their 
local banker can fulfill their need or they have insurance to 
fulfill their loss from that perspective.
    We have about 102 applications currently in the queue to 
process. And we are currently at a 47 percent approval rate, 
which is pretty much in the 5-year average over the last 
several years. So that is basically what we have from that 
perspective.
    Senator Leahy. I just want to make sure you understand--I 
was looking at my numbers here. I am talking about businesses. 
You had homes in there. I have 167 homes, 24 businesses. Are 
you talking just businesses?
    Mr. Rivera. No, sir. I was speaking----
    Senator Leahy. Tell me the number just for businesses.
    Senator Landrieu. He wanted businesses.
    You are right, Senator Leahy. This is something I have gone 
through with them now more than a dozen times. We just want to 
focus on business loans.
    Mr. Rivera. I will have to get back with you on that. I 
apologize, Senator Leahy.
    Senator Leahy. Can you get back with me by tomorrow?
    Mr. Rivera. Yes, absolutely.
    Senator Leahy. Please.
    Mr. Rivera. Yes, sir.
    Senator Leahy. I have a listed home phone number and a 
listed office number. Feel free to call me.
    Mr. Rivera. Okay.
    Senator Leahy. And I mean that seriously.
    And I know you are all trying and I appreciate this. I know 
USDA also has a backlog.
    We have been trying to get assistance from HUD. I have been 
begging HUD to send somebody up there on a permanent basis. I 
have talked to the Secretary twice.
    I will put my other questions in the record.
    But having said that, and Madam Chair, I can't thank you 
enough. For everything from housing to highways, you have been 
an enormous help.
    I will put these questions in the record. I really would 
like an answer this week. We will expedite with whoever you 
tell us to do it. But I would like an answer this week.
    It is going to be snowing in Vermont, and yes, it is 
gorgeous. Next week we could have a foot of snow. We are 
limited in what we can do. We are limited in what we can do.
    I live on a dirt road. We weren't hurt. But I know if that 
road had been wiped out, there would be hell to pay to try and 
put it back. A lot of other people weren't so lucky.
    So thank you. Thank you, Madam Chair.
    Senator Landrieu. Thank you. And I commit to work with the 
Senator of Vermont to make this business loan program the very 
best that it can possibly be.
    And I think, personally, from the experience, it has some 
shortcomings, and we need to work through it, be honest about 
it.
    One of the other shortcomings is that we are lending people 
money at 6 percent and 7 percent. We call that a low-interest 
loan. Some people don't think it is low enough. And we want to 
make sure that we are giving the best aid that we can as 
quickly as we can for businesses like this.
    I understand there were restaurants there, Senator, 
correct?
    Senator Leahy. That is right.
    Senator Landrieu. Along that, there were restaurants or 
retail establishments, right there next to the bridge.
    Senator Leahy. One of the premier glass-blowing companies, 
Simon Pearce, is in there. I saw them. I went down and met with 
all of the family--went down with their kids who were digging 
out--and saw what they are doing.
    I mentioned that dirt road. Senator Cochran has been on 
that dirt road in Vermont with me. He knows exactly where I 
live.
    Senator Landrieu. And these businesses just don't provide 
jobs. They provide the heart and soul of communities. These are 
businesses that have been there sometimes for decades, 
sometimes centuries. And if they come back, it sends a positive 
signal to the community that they can rebuild. And when they 
don't come back, because they can't get the right kind of loan, 
particularly from sort of a lender of last resort, which is us, 
that is a real problem.
    So I thank the Senator.
    And let's continue. We will get right to you.
STATEMENT OF JAMES RIVERA, ASSOCIATE ADMINISTRATOR, 
            SMALL BUSINESS ADMINISTRATION
    Mr. Rivera. Okay, thank you.
    Good afternoon, Madam Chair Landrieu, Vice Chairman 
Lautenberg, Ranking Member Coats, and distinguished members of 
the subcommittee. Thank you for inviting me to discuss SBA's 
role in disaster response and recovery.
    The SBA's Office of Disaster Assistance is responsible for 
providing affordable, timely, and accessible financial 
assistance following a disaster to businesses of all sizes, 
homeowners, and renters. This financial assistance is available 
in the form of low-interest loans. And since SBA's inception in 
1953, we have provided more than 1.9 million disaster loans for 
more than $49.6 billion.
    SBA is not a ``first responder'' agency, even though we are 
on the ground immediately following a disaster. SBA's primary 
focus is providing low-interest, long-term loans as part of 
recovery efforts in coordination with other government partners 
at the Federal, State, and local levels.
    As part of the overall effort to assist survivors to get 
back on their feet, SBA's disaster home loan of up to $200,000 
help those employed in the local community return and rebuild 
their homes. Moreover, businesses of all sizes and nonprofit 
organizations are eligible for loans up to $2 million.
    Additionally, SBA offers economic injury disaster loans to 
small businesses, small agriculture cooperatives, and most 
private nonprofit organizations who have suffered economic 
injury caused by disaster.
    The devastating damage to the east coast from Hurricane 
Irene and the remnants of Tropical Storm Lee have elicited a 
strong and proactive response from the SBA. Since the beginning 
of the devastating storms in September, since September 1, SBA 
has approved more than $127 million in disaster loans to help 
more than 129 homeowners, renters, businesses, and nonprofit 
organizations begin the recovery and rebuilding process in the 
wake of Hurricane Irene and Tropical Storm Lee.
    Of the $127 million in loans to date, $35 million 
represents loans to disaster survivors located in New Jersey, 
$32 million in New York, and $21 million in Pennsylvania.
    From a workforce perspective, SBA has responded to these 
disasters by deploying 398 SBA disaster assistance workers to 
staff 160 disaster recovery centers located throughout the east 
coast.
    SBA is co-located with FEMA in 22 centers in New Jersey 
with 64 staff on the ground, 24 centers in New York with 83 
staff on the ground, 39 centers in Pennsylvania with 91 staff 
on the ground. At these centers, SBA representatives are 
meeting one-on-one with disaster survivors, answering 
questions, explaining SBA's disaster loan program, and helping 
survivors complete disaster loan applications and close 
disaster loans.
    As of last week, SBA personally met with more than 8,700 
disaster survivors.
    The agency is prepared to aggressively respond to all 
disasters large and small. During fiscal year 2011, SBA 
approved more than 13,640 disaster loans for more than $743 
million. Two of SBA's largest Presidential disaster 
declarations in fiscal year 2011 were the North Dakota floods 
where the SBA loaned more than $234 million, and in Alabama 
where the tornado survivors received $101 million in SBA loans.
    To ensure overall preparedness in the disaster program, we 
currently have 1,700 employees in pay status with a reserve 
force of more than 2,000 employees. From a loan processing 
perspective, we are currently exceeding our processing goals by 
approving or declining loan applicant requests within 8 days 
during fiscal year 2011. Our goal is 14 days for homeowners and 
18 days for businesses.
    In response to Hurricane Irene and Tropical Storm Lee 
events, SBA is processing loan applications in less than 10 
days on average.
    In responding to the disasters, the SBA works closely with 
our sister agencies. SBA and FEMA have consistently worked 
together in order to effectively provide assistance to disaster 
survivors. SBA and FEMA implement internal agency agreements, 
so that we can continually exchange data electronically.

                           PREPARED STATEMENT

    In closing, I appreciate the opportunity to share with the 
subcommittee the role SBA plays in small business disaster 
recovery efforts. We firmly believe that the reforms we have 
instituted have enabled us to be prepared to efficiently and 
effectively respond to the needs of our Nation's disaster 
survivors.
    I look forward to answering any questions. Thank you.
    [The prepared statement follows:]
                   Prepared Statement of James Rivera
    Good afternoon Chairman Landrieu, Vice Chairman Lautenberg, Ranking 
Member Coats, and distinguished members of the subcommittee. Thank you 
for inviting me to discuss SBA's role in disaster response and 
recovery.
    The SBA Office of Disaster Assistance is responsible for providing 
affordable, timely and accessible financial assistance following a 
disaster to businesses of all sizes, homeowners, and renters. Many 
disaster survivors have insurance, which covers part or all of the 
physical property losses due to a natural disaster, but for disaster 
losses not covered by insurance, an SBA loan is the primary form of 
Federal financial assistance. This financial assistance is available in 
the form of low-interest loans, and since the SBA's inception in 1953, 
we have provided more than 1.9 million disaster loans for more than 
$49.6 billion.
                 sba's role in responding to a disaster
    SBA is not a ``first responder'' agency even though we are on the 
ground immediately following a disaster. SBA's primary focus is 
providing low-interest, long-term loans as part of the recovery effort 
in coordination with other government partners at the Federal, State, 
and local levels. In addition to SBA's disaster loan program, we help 
small businesses recover through our guaranteed lending, technical 
assistance, and government contracting and business development 
programs.
    Disaster loans are a vital source of economic stimulus in the 
affected areas following a disaster. As part of an overall effort to 
assist survivors to get back on their feet, SBA's disaster home loans 
of up to $200,000 help those employed in the local community return and 
rebuild their homes. Moreover, businesses of all sizes and nonprofit 
organizations are eligible for loans of up to $2 million to assist with 
any uninsured and otherwise uncompensated physical losses sustained 
during a disaster to repair or replace damaged physical property.
    Additionally, SBA offers Economic Injury Disaster Loans (EIDL) to 
small businesses, small agricultural cooperatives, and most private 
nonprofit organizations who have suffered economic injury caused by a 
disaster. If a small business or organization is unable to meet 
obligations and pay its ordinary and necessary operating expenses, an 
EIDL loan can help. These loans provide working capital to businesses 
or organizations. The maximum loan amount is $2 million for physical 
and economic injuries combined.
        sba's response to hurricane irene and tropical storm lee
    The devastating damage to the east coast from Hurricane Irene and 
Tropical Storm Lee has elicited a strong and proactive response from 
SBA. The agency has undertaken a multifaceted, aggressive approach to 
the event.
    Since the beginning of these devastating storms on September 1, SBA 
has approved more than $94 million in disaster loans to help more than 
2,200 homeowners, renters, businesses, and nonprofit organizations 
begin the recovery and rebuilding process in the wake of Hurricane 
Irene and Tropical Storm Lee. Of the $94 million in approvals to date, 
$29 million represents loans to disaster survivors located in New 
Jersey, $24 million in New York and $11 million in Pennsylvania.
    From a workforce perspective, SBA has responded to these disasters 
by deploying 398 SBA disaster assistance workers to staff 160 disaster 
recovery centers located throughout the east coast. SBA is co-located 
with FEMA in 18 centers in New Jersey with 64 staff on the ground; 28 
centers in New York with 90 staff on the ground; and 35 centers in 
Pennsylvania with 83 staff on the ground. At these centers SBA 
representatives are meeting one-on-one with disaster survivors, 
answering questions, explaining SBA's disaster loan program, and 
helping survivors complete disaster loan applications and close 
disaster loans. As of last week, SBA had personally met with more than 
6,800 disaster survivors. SBA has also responded to more than 45,000 
phone calls at its disaster customer service center with a wait time of 
less than 20 seconds.
                      fiscal year 2011 highlights
    The agency is prepared to aggressively respond to all disasters, 
large and small. During fiscal year 2011, we successfully responded to:
  --36 Presidential individual assistance declarations;
  --60 agency declarations;
  --9 economic injury declarations;
  --mailed out more than 306,000 disaster applications within 1 day of 
        a FEMA referral; and
  --approved 13,643 disaster loans for more than $739 million.
    Two of the largest Presidential declarations in fiscal year 2011 
were the North Dakota flooding, where SBA loaned more than $234 
million, and in Alabama, where tornado survivors have received more 
than $101 million in SBA loans. We also successfully responded to 
smaller disasters (SBA's Administrative Disaster Declaration authority) 
in other States like Indiana, where we loaned $326,500 to 10 disaster 
survivors.
  preparedness and sba's key improvements to the disaster assistance 
                                program
    To ensure overall preparedness in the disaster program, we maintain 
1,850 workstations in the Fort Worth processing and disbursement 
facility and more than 300 more surge workstations in our Sacramento 
center. We currently have 1,700 employees in pay status with a reserve 
force of more than 2,000 employees. Additionally, our office works with 
local SBA District Directors on the ground along with area small 
business development centers and other SBA resource partners.
    From a loan processing perspective, we are currently exceeding our 
processing goals by approving or declining loan application requests 
within 8 days during fiscal year 2011 (our goal is 14 days for 
homeowners and 18 days for businesses). In response to the Hurricane 
Irene and Tropical Storm Lee events, SBA is processing loan 
applications in less than 10 days on average.
    In regards to marketing and outreach, SBA has developed an 
aggressive plan to reach all potential applicants in an area before a 
disaster strikes. We are concentrating on areas that are vulnerable to 
recurring disasters by providing expanded outreach efforts before a 
disaster strikes. Additionally, we have provided all SBA employees with 
access to an online ``disaster tool kit'' with detailed information on 
the agency's role in preparedness, outreach, and disaster assistance.
    We have also instituted annual disaster trainings for SBA's 
Regional Administrators, District Directors, and Disaster Public 
Information Officers on disaster assistance responsibilities.
                       inter-agency coordination
    In responding to disasters, the SBA works closely with our sister 
agencies. For instance, SBA and FEMA have consistently worked together 
in order to effectively provide assistance to disaster survivors. SBA 
and FEMA implemented internal agency agreements so SBA and FEMA can 
continually exchange data electronically. The data exchanges are 
critical in providing improved disaster assistance to survivors such as 
accelerating referrals to SBA and providing SBA loan application status 
updates in ``real time.''
    In closing, I appreciate the opportunity to share with the 
subcommittee the role SBA plays in small business disaster recovery 
efforts. We firmly believe that the reforms we have instituted have 
enabled us to be prepared to efficiently and effectively respond to the 
needs of our Nation's disaster survivors. I look forward to answering 
any questions. Thank you.

    Senator Landrieu. Mr. Nelson.
STATEMENT OF BRUCE NELSON, ADMINISTRATOR, FARM SERVICE 
            AGENCY, DEPARTMENT OF AGRICULTURE
    Mr. Nelson. Madam Chairwoman, Ranking Member, and members 
of the subcommittee, thank you for the opportunity to discuss 
the U.S. Department of Agriculture's (USDA) efforts to assist 
Americans affected by natural disaster.

             DEPARTMENT OF AGRICULTURE DISASTER ASSISTANCE

    USDA delivers help in a variety of ways. My agency, FSA, 
delivers assistance to farmers who lose crops, livestock, or 
infrastructure. As you know, many other USDA agencies, 
including our sister agency NRCS, are also directly involved 
with disaster assistance, both in small towns and big cities.
    Today, I would like to briefly explain how we have been 
able to help in a record disaster year. Every year carries a 
significant risk for every farmer and rancher. But as you 
described, Madam Chairwoman, one only needs to look at the past 
few months to see that this year was different and touched the 
lives of many thousands of U.S. farmers and ranchers.
    America's farmers and ranchers are the best in the world, 
and they are resilient. But at the end of the day, the weather 
is beyond their control, and safety net programs are critical 
for producers who need help when events beyond their control 
occur.

                             CROP INSURANCE

    Crop insurance is the first line of defense. The Risk 
Management Agency administers the Federal crop insurance 
program, which provides insurance policies on more than 100 
crops. FSA also offers financial assistance for farmers whose 
crops are not covered by Federal crop insurance. The concept is 
to be sure every producer can purchase some level of coverage.

                 FARM SERVICE AGENCY DISASTER PROGRAMS

    The next line of defense is five new disaster programs 
authorized under the 2008 farm bill. These programs provide 
help for lost crops, livestock deaths, livestock feedlots, and 
damage to private forests.
    Under Secretary Vilsack's leadership, FSA implemented these 
programs and, since January 2009, has provided more than $3.3 
billion in disaster assistance to producers.
    All losses to 2011 crops that occurred prior to September 
30 will be covered under the five disaster programs. However, 
the authorization for these programs expired on September 30, 
and losses for many disasters after that date will not be 
covered.
    To strengthen this support, the administration proposes to 
extend these programs or similar types of disaster assistance 
that are of a similar cost for the 2012 to 2016 crop years. FSA 
also has a number of other programs which supplement the farm 
bill disaster programs, primarily the Emergency Conservation 
Program (ECP) and the Emergency Forest Restoration Program 
(EFRP), along with the Emergency Loan Program.
    ECP offers emergency funding and technical assistance for 
farmers to rehabilitate farmland damaged by natural disasters. 
As of September 30, FSA has more than $127 million in 
outstanding ECP requests from 33 States and one territory. 
Because all appropriated funding has been obligated for ECP, 
the outstanding requests would need an additional appropriation 
from the Congress.
    ECP works in concert with EFRP, which addresses restoration 
of private forestland. A 2010 supplemental appropriation 
provided $18 million for the EFRP. FSA has obligated virtually 
all of that funding and currently has $49 million in 
outstanding EFRP requests generally due to tornadoes. We 
anticipate the number of both ECP and EFRP requests to increase 
as damage is assessed from recent disasters.
    Finally, FSA makes emergency disaster loans to help 
producers recover from production and physical losses. Last 
year, we provided nearly $33 million in emergency loan 
assistance to about 300 farmers.
    Madam Chairwoman, ranking member, and members of the 
subcommittee, thank you again for the opportunity to share 
information on FSA disaster programs. I am happy to answer any 
questions that you might have.
    Senator Landrieu. Thank you.
    Mr. Wilkes.
STATEMENT OF HOMER WILKES, ACTING ASSOCIATE CHIEF, 
            NATURAL RESOURCES CONSERVATION SERVICE, 
            DEPARTMENT OF AGRICULTURE
    Mr. Wilkes. Thank you, Madam Chairwoman, ranking member, 
and members of the subcommittee, for the opportunity to discuss 
the NRCS effort to assist those----
    Senator Landrieu. Try to lean into your mike a little bit 
better. Thank you.
    Mr. Wilkes [continuing]. Impacted by the natural disasters.

                      EMERGENCY WATERSHED PROGRAM

    NRCS' Emergency Watershed Program (EWP) responds to 
emergencies caused by natural disasters, it relieves imminent 
hazards to life and property caused by floods, fires, drought, 
windstorms, and other natural occurrences.
    Unlike ECP, which replaces lost agriculture practices, EWP 
can prevent imminent hazards to life or property, and this can 
include removing debris from streams and preventing the loss of 
bridges. It also includes stream bank stabilization to protect 
buildings or houses before any structures are actually lost.
    EWP requires the involvement of landowners and local 
sponsors. Contracts are developed with local sponsors who may 
be a legal subdivision of the State. This includes any city, 
county, general improvement district, or Native American tribe 
or organization.
    Once determined eligible, NRCS contributes up to 75 percent 
of the cost share while the sponsor contributes not less than 
25 percent that can be either paid in cash or in time.
    Once disaster strikes, regardless of whether it is a 
presidentially declared disaster or local disaster, NRCS field 
staff are on-site to assess the damages.
    One advantage NRCS has is that our structure allows us to 
respond to emergencies quite quickly, because we have employees 
located in almost every county in the Nation. Project 
applications are placed in one of two categories--exigent or 
nonexigent.
    An exigent situation occurs when natural disasters pose an 
imminent or immediate threat to life and property. Nonexigency 
situations are still emergency situations but there is no 
immediate threat to life or property.
    In some situations, NRCS also has the authority to use EWP 
funds to purchase floodplain easements. Due to exigency weather 
and experience across the country in 2011, NRCS has provided 
$90.7 million to a wide variety of exigent projects across the 
country, ranging from spring flooding on the Missouri and 
Mississippi rivers, to wildfires in Arizona and Texas, to the 
tsunami waves in Hawaii, to tornadoes in both Mississippi and 
Alabama, to ice storms in New York and New Jersey, and of 
course, the Tropical Storm Irene in Vermont.
    At this time, NRCS has a balance of roughly $7 million that 
is remaining in our accounts, and that is available for the 
rest of exigencies that may happen until we get additional 
funds.
    NRCS is still evaluating the status of the claims out 
there, but as of October 11, 2011, we have a backlog of $188.2 
million worth of projects. And those requests have come up from 
the States and other places.

                          PREPARED STATEMENTS

    Again, I want to thank you and the rest of the members for 
the opportunity to provide the status of our EWP.
    And I will answer any questions that you may have now.
    [The prepared statements follow:]

Prepared Statements of Bruce Nelson, Administrator, Farm Service Agency 
  (USDA); David White, Chief, National Resources Conservation Service 
  (USDA); and Homer Wilkes, Acting Associate Chief, Natural Resources 
                      Conservation Service (USDA)
    Madam Chairwoman, ranking member and members of the subcommittee, 
thank you for the opportunity to discuss the U.S. Department of 
Agriculture's (USDA) efforts to assist those affected by disasters. In 
times of need, USDA stands ready to provide food, emergency assistance, 
and other resources to affected areas.
    As you probably are aware, net farm income is the highest 
inflation-adjusted value recorded since 1974. However, the risks that 
our farmers and ranchers take are significant and many of the 
tremendous challenges our producers face are beyond their control. This 
past spring, cool temperatures combined with above normal snowmelt and 
excessive rainfall delayed and in some cases prevented planting of 
major crops. Flooding was widespread and devastated substantial amounts 
of land in the Mississippi, Missouri, and Ohio River valleys. While 
water receded enough to allow late plantings in certain areas, some 
prime ground along the Missouri remained flooded the entire summer. 
More recently, Hurricane Irene and Tropical Storm Lee devastated parts 
of the east coast and much of the northeast, leaving some farmers 
without power and crops underwater. At the same time, prolonged and 
record drought in Texas, Oklahoma, and parts of Kansas, accompanied by 
severe heat, have left fields parched, crops ruined, and ranchers 
forced to sell their livestock. The resulting lack of grazing and 
forage has forced some livestock producers to cut herds and raised 
their costs. While our farmers and ranchers are resilient, these 
disasters illustrate the importance of a strong and effective safety 
net for producers who truly need it when events out of their control 
occur.
   crop insurance and the noninsured crop disaster assistance program
    In times of crop loss caused by natural disasters, insurance is the 
first line of defense. The Risk Management Agency (RMA) administers the 
Federal crop insurance program, which provides insurance policies on 
more than 100 crops. Complementing crop insurance, FSA offers the 
Noninsured Crop Disaster Assistance Program (NAP), which provides 
financial assistance to eligible producers affected by droughts, 
floods, hurricanes, or other natural disasters. NAP covers crop losses 
and prevented planting situations that are not covered by Federal crop 
insurance.
    Both of these programs have existed for many years, and payments to 
producers have been substantial. For crop year 2011, RMA expects 
indemnities to exceed any previous payout, largely due to drought in 
the Great Plains and flooding in the Mississippi River watershed. The 
previous record for indemnity payments was $8.7 billion in crop year 
2008, on a total program liability of about $90 billion and premium 
volume of approximately $9.9 billion. In comparison, program liability 
in crop year 2011 is more than $110 billion and premium volume is more 
than $11.6 billion. Texas is likely to be the largest indemnity 
recipient in crop year 2011, given the importance of agricultural 
production in that State and its historic drought. Record indemnity 
payments are also expected in many other Great Plains States.
    The size of the crop insurance program has grown significantly over 
time. Significant Midwest flooding also occurred in crop year 1993, 
when large indemnities were paid and the loss ratio reached 2.19. Yet, 
total indemnities were less than $1.7 billion for that year, as premium 
volume was less than $800 million--compared to the $11.6 billion noted 
above for 2011.
    Given that crop insurance coverage is offered for major crops 
across the United States, NAP payments to producers have been far less 
overall, averaging about $72 million per year over the past 3 years. 
Historically, top commodities covered by NAP include grass for grazing 
and forage, which accounts for more than 50 percent of historical 
payments, and watermelons, cucumbers, alfalfa, and squash (each 
accounting for less than 4 percent of total payments). In total, more 
than 150 specialty crops have received NAP payments in recent years.
                    2008 farm bill disaster programs
    The 2008 farm bill authorized five new disaster programs, which 
cover a wide spectrum of commodities. These programs are all 
administered by FSA. The most well-known is the Supplemental Revenue 
Assistance Payments Program (SURE), which provides whole-farm, revenue-
based assistance to crop producers in times of natural disasters. To be 
eligible for SURE, producers must have Federal crop insurance or NAP 
coverage on all economically significant crops and be located in a 
county included in the geographic area covered by a natural disaster 
designation issued by the USDA Secretary. The secretarial disaster 
designation is not required if a farmer can prove a whole farm loss of 
more than 50 percent of normal. If a farmer qualifies, his or her 
payment is based on 60 percent of the difference between a calculated 
farm revenue guarantee and the farm's realized farm revenue (including 
government payments) in a given year.
    As of October 4, 2011, payments for 2008 and 2009 crop losses total 
nearly $2.8 billion to date. Texas ($415 million) and North Dakota 
($374 million) are by far the largest recipient States. Overall, 28 
States have received more than $10 million each since the inception of 
SURE. Given the extent of natural disasters this year, we anticipate 
quite substantial SURE payments for 2011 losses as well, which will be 
made in 2013. This significant payment lag exists due to the 
calculation of actual farm revenue (a critical element in determining 
payment availability) specified in the farm bill. Farm revenue depends 
on season average prices reported by USDA's National Agricultural 
Statistics Service, which are usually released 13 months after the 
start of the crop year. It also depends on crop insurance indemnities 
and farm program payments, which are also not known until well after 
the time of the loss.
    Per the 2008 farm bill, disasters occurring after September 30, 
2011 are not covered by SURE. (Disasters occurring after September 30, 
2011 also are not covered under the Livestock Indemnity Program (LIP), 
the Livestock Forage Disaster Program (LFP), the Emergency Assistance 
for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP), and the 
Tree Assistance Program (TAP), which are discussed immediately below.) 
At the time of filing a 2011 or 2012 SURE application for payment, the 
producer is required to certify that the disaster occurred on or before 
September 30, 2011. Crops are not required to be harvested on or before 
September 30, 2011, to maintain SURE eligibility. FSA will review the 
crop's planting and growing period, the asserted disaster event, and 
any other pertinent information that may be available to assess the 
validity of the producer's certification.
    The 2008 farm bill also authorizes disaster assistance programs for 
livestock. These include LIP, which provides assistance to producers 
who lose livestock due to adverse weather; LFP, which compensates 
livestock producers for grazing losses due to drought and fire on 
federally managed lands; and ELAP, which provides funds for losses that 
are not covered by other disaster programs.
    About $121 million has been paid out under LIP as of October 4, 
2011 for 2008-2011 losses. LIP payments are very timely and allow 
producers to quickly rebuild herds and undertake other activities. 
Major LIP recipient States include South Dakota ($32 million over the 
4-year horizon) and North Dakota ($21 million). Payments to ranchers in 
these two States have been particularly helpful in times of animal 
losses due to blizzards. Texas ranks third in terms of payments, at 
nearly $10 million over the 4-year horizon.
    The LFP has provided $479 million to ranchers affected by 2008-2011 
drought events. LFP payments can typically be made within a few weeks 
of a county qualifying for assistance. Nearly 50 percent of all LFP 
payments made over the 4-year horizon have been paid to Texas ($178 
million) and Oklahoma ($57 million) due to drought losses in 2011. An 
additional eight States have received more than $10 million to date for 
2008-2011 losses.
    ELAP provides assistance for those livestock losses that are not 
covered by LIP or LFP. Funding is limited by statute to $50 million per 
calendar year. Of the $30 million disbursed to date for 2008-2011 
losses, primary recipient States include Florida ($4.6 million), South 
Dakota ($4.4 million), and California ($3.2 million). ELAP has provided 
substantial assistance to beekeepers whose bees have suffered from 
colony collapse disorder.
    The 2008 farm bill also authorized TAP, which provides assistance 
for tree death losses. TAP payments for 2008-2011 losses have totaled 
$10.7 million, largely to Florida ($5.1 million) and California ($2.9 
million) growers. As with the other 2008 farm bill programs discussed 
above, TAP does not cover losses due to disasters occurring after 
September 30, 2011.
                            emergency loans
    FSA also makes emergency disaster loans to help producers recover 
from production and physical losses due to drought, flooding, other 
natural disasters, or quarantine. Emergency loans are available to 
family farmers that suffered losses in a disaster area and cannot 
obtain commercial credit as a result. Loans may be used to refinance 
farm debt, repair or replace damaged or destroyed property, and pay 
other farm expenses. In fiscal year 2011, FSA provided $32.6 million in 
emergency loan assistance to 298 farmers, primarily in Arkansas, North 
Carolina, and Virginia. FSA borrowers that operate in a disaster area 
may request a disaster set-aside of the next FSA loan installment 
coming due. In fiscal year 2011, 256 FSA borrowers received a disaster 
set-aside of their loan installments.
                     emergency conservation program
    The Emergency Conservation Program (ECP), also administered by FSA, 
offers emergency funding and technical assistance for farmers and 
ranchers to rehabilitate farmland damaged by natural disasters and for 
carrying out emergency water conservation measures in periods of severe 
drought. The Congress has not appropriated funding for ECP since fiscal 
year 2008, but provided transfer authority in the 2009 Supplemental 
Appropriations Act (allowing FSA to transfer unobligated funds from 
previous appropriations for Hurricane Katrina, California wildfires, 
and other activities into ECP). Subject to availability of funds, 
locally elected county FSA committees are authorized to implement ECP. 
ECP participants receive cost-share assistance of up to 75 percent of 
the cost to implement approved emergency conservation practices, such 
as removing debris; restoring fences and conservation structures, and 
providing water for livestock in drought situations.
    County FSA committees determine land eligibility based on on-site 
inspections, taking into account the type and extent of damage. For 
land to be eligible, the natural disaster must create new conservation 
problems that, if untreated, would: impair or endanger the land; 
materially affect the land's productive capacity; represent unusual 
damage which, except for wind erosion, is not the type likely to recur 
frequently in the same area; and be so costly to repair that Federal 
assistance is (or will be) required to return the land to productive 
agricultural use. Conservation problems existing prior to the 
applicable disaster are ineligible for ECP assistance.
    Since 1978, ECP has provided assistance to help between 2,000 and 
nearly 38,000 farms a year. This wide range in the number of farms 
served is due to the variation in appropriated amounts available and 
the considerable annual variation in the extent of natural disasters. 
Appropriated funds are allocated to States based on projected needs. 
Since actual usage may be less than the amount allocated to a State, 
unused funds are periodically reallocated to other States to meet new 
demands. FSA allocated more than $100 million in carryover funding to 
address a portion of the needs that have arisen in fiscal year 2011. 
This amount was allocated to 40 States, with Texas receiving nearly $30 
million (to help producers suffering from wildfire and hurricane 
losses) and Arkansas receiving nearly $16 million (largely for flood 
and tornado damage).
                  emergency forest restoration program
    ECP works in concert with the Emergency Forest Restoration Program 
(EFRP), which was authorized by the forestry title of the 2008 farm 
bill. Also administered by FSA, this program addresses restoration of 
nonindustrial private forestland after a hurricane, tornado, or other 
natural disaster. EFRP participants may receive financial assistance of 
up to 75 percent of the cost to implement approved emergency forest 
restoration practices as determined by county FSA committees. Funding 
for EFRP is appropriated by the Congress. In general, forestry 
practices are much more costly to implement than traditional practices 
under ECP.
    Subject to the availability of funds, locally elected FSA county 
committees are authorized to implement EFRP. These county committees 
determine land eligibility using on-site damage inspections that assess 
the type and extent of damage. To be eligible for EFRP, nonindustrial 
private forest land must: have existing tree cover (or had tree cover 
immediately before the natural disaster occurred and be suitable for 
growing trees), and be owned by any nonindustrial private individual, 
group, association, corporation, or other private legal entity that has 
definitive decisionmaking authority over the land. In addition, the 
natural disaster must have resulted in damage that, if untreated, would 
impair or endanger the natural resources on the land and materially 
affect future use of the land.
    To restore eligible land, EFRP program participants may implement 
emergency forest restoration practices, including emergency measures 
that are necessary to repair damage caused by a natural disaster to 
natural resources on nonindustrial private forest land and restore 
forest health and forest-related resources on the land. Other emergency 
measures may be authorized by county FSA committees, with approval from 
State FSA committees and the FSA national office.
    The Supplemental Appropriations Act of 2010 provided $18 million in 
EFRP funding for losses resulting from natural disasters that occurred 
on or after January 1, 2010. As of September 30, 2011, more than $15 
million in funding had been allocated to Alabama, Arkansas, Georgia, 
Idaho, Minnesota, Mississippi, New Hampshire, Ohio, and Vermont, 
largely to fund restoration practices associated with tornado-related 
losses. FSA maintains a reserve of $1 million for errors, omissions, 
and appeals and has allocated $1.8 million for technical assistance 
provided by the Forest Service.
                 emergency watershed protection program
    The Emergency Watershed Protection Program (EWP), administered by 
USDA's Natural Resources Conservation Service (NRCS), was established 
to respond to emergencies created by natural disasters. EWP helps 
conserve natural resources by relieving imminent hazards to life and 
property caused by floods, fires, drought, windstorms, and other 
natural occurrences. Although EWP and ECP have similar goals, 
generally, ECP contracts are developed with the landowner while EWP 
requires contracting with an outside sponsor. Under EWP, USDA works 
with States, counties, or other local sponsors to provide financial 
assistance to address problems caused by natural disasters. Sponsors 
must provide a share of the resources to support the project. A 
national emergency declaration is not required for an area to be 
eligible for assistance.
    NRCS may bear up to 75 percent of the construction cost of 
emergency measures or up to 90 percent in limited resource areas. The 
remaining cost-share must come from local sources and can be in the 
form of cash or in-kind services. Examples of conditions qualifying for 
assistance include:
  --debris-clogged stream channels;
  --undermined and unstable streambanks;
  --jeopardized water control structures and public infrastructures;
  --wind-borne debris removal; and
  --damaged upland sites stripped of protective vegetation by fire or 
        drought.
    Both public and private landowners are eligible for assistance but 
must be represented by a project sponsor. All emergency projects must 
be sponsored by a legal subdivision of the States with authority of 
imminent domain. This includes any city, county, general improvement 
district, or Native American tribe or tribal organization as defined in 
section 4 of the Indian Self-Determination and Education Assistance 
Act.
    Project applications for EWP are placed in 1 of 2 categories. 
Category 1 projects are exigent situations where the natural disaster 
is posing an imminent or immediate threat to life and property. 
Category 2 projects are nonexigent cases--while the situation may be an 
emergency, there is no immediate threat of loss of life and property. 
Category 1 applications are funded first.
    The program can also be used to purchase floodplain easements which 
do not require a project sponsor for participation. Landowners may 
voluntarily offer to sell a permanent conservation easement that 
provides the NRCS with the full authority to restore and enhance a 
floodplain's functions and values. NRCS provides an easement payment 
and 100 percent of the restoration costs on any floodplain lands that 
have been damaged by flooding at least once within the previous 
calendar year or that have a history of repeated flooding.
    In 2011, NRCS has provided $90.7 million in EWP funds to address a 
wide array of natural disasters ranging from drought and fires in the 
southern and western States, to tornadoes, to flooding caused by ice 
packs or extensive snow pack, to the most recent flooding caused by 
Hurricane Irene. For the spring flooding in the Midwest, NRCS provided 
$29.5 million in assistance. For flooding caused by Hurricane Irene, 
NRCS has provided $4.8 million in assistance.
                          other usda programs
    USDA also provides food and housing assistance to those in need. 
Through the Food and Nutrition Service (FNS), we can supply food to 
disaster relief organizations such as the Red Cross and the Salvation 
Army for mass feeding or household distribution. In certain, limited 
situations, USDA can provide food to State agencies for distribution 
directly to households. FNS also authorizes States to operate a 
Disaster Supplemental Nutrition Assistance Program (D-SNAP). Through D-
SNAP, FNS is able to quickly offer short-term food assistance benefits 
to families suffering in the wake of a disaster. Eligible households 
receive 1 month of benefits, equivalent to the maximum amount of 
benefits normally issued to a SNAP household of their size. This 
spring, FNS provided more than $150 million in D-SNAP benefits to help 
more than 1.1 million individuals in 471,581 households in 11 States 
and 220 counties in response to the devastating spring 2011 storms, 
tornadoes, and floods. In response to the extended power outages and 
flooding caused by Hurricane Irene and Tropical Storm Lee, and the 
wildfires in Texas, preliminary reports show that FNS has provided more 
than $47 million in D-SNAP benefits to almost half-a-million people in 
more than 225,000 households to help disaster survivors in 6 States and 
109 counties. In addition, through the disaster household food 
distribution program, FNS has provided more than 50,000 food boxes to 
more than 16,615 families in 13 municipalities in Puerto Rico.
    USDA's Rural Development (RD) can also help rebuild communities 
affected by a disaster and provide relief to existing RD borrowers 
through payment waivers. The Rural Housing Repair and Rehabilitation 
Program (section 504) can provide a loan to repair damaged homes for 
rural families living at or below 50 percent of the area median income 
for their county. The Rural Rental Housing Program may be able to 
relocate families displaced by natural disaster into Rural Development 
financed housing projects. Finally, the Community and Business Program 
areas have several loans that could be used to repair and rehabilitate 
community infrastructure and affected businesses. Schools, hospitals, 
water and wastewater systems, and privately owned businesses--among 
others--may be eligible for funding.
    Madam Chairwoman, ranking member and members of the subcommittee, 
thank you again for the opportunity to share with you information on 
USDA's programs available to those affected by disasters. We are happy 
to answer any questions that you might have.

    Senator Landrieu. Thank you so much.
    I am going to turn the mike over to Senator Lautenberg now 
for his questions, and then to Senator Cochran, and I am going 
to go last, because they have been so generous with their time, 
and I can stay and get a few more things on the record.
    So, Senator Lautenberg, go ahead.
    Senator Lautenberg. Thank you, Madam Chairwoman. I know 
that all of us have time pressure, including you. But I 
appreciate the opportunity to move early.

          DECREASE IN COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS

    Mr. Tombar, the disaster relief bill the Senate passed only 
included $108 million for CDBG block grants for 48 States that 
received disaster declarations this year. In contrast, in 2008, 
more than $6 billion was provided for CDBG funding in 23 
States. Now we have 48 States that have gotten disaster 
declarations. And what is proposed is the Senate has passed 
only $100 million--in contrast to $6 billion for 23 States.
    What can we tell the communities what help we are going to 
bring them we are talking about that relatively small sum of 
money?
    Mr. Tombar. Senator, you make a good point, that the $100 
million is way out of balance with what we saw the last time 
the Congress made a major disaster CDBG appropriation.
    And honestly, for HUD, allocating that money would be 
determined based upon, first, the language the Congress 
provides us in the appropriation. One of the things that we 
have found is that those supplemental appropriations vary, the 
language and how we are supposed to go about making the 
allocations.
    But then also there is a process. We look at unmet needs. 
We look at data from our friends at the SBA, and from FEMA, in 
terms of the number of applicants that they have had, the 
number of applicants that they have been able to serve, and 
what the needs are that remain after they have provided their 
assistance. And then we make a proportional allocation of 
whatever funding the Congress provides us. So that $100 million 
would have to be split proportionally to the unmet need that 
remains subsequently. So the communities that are expecting it, 
I would----
    Senator Lautenberg. You will forgive me, Mr. Tombar, but it 
looks like show and tell, because I can't imagine when you 
would distribute this to 40-plus States that there is going to 
be enough to really make a difference.
    Mr. Tombar. That is the point I was preparing to make, is 
that the communities that--you asked what can we tell the 
communities. From $100 million, I would tell them not to expect 
a lot of money, if we have to do a proportional allocation 
according to unmet needs.
    Senator Lautenberg. Mr. Nadeau, the FHWA ER program faced 
more than $1 billion backlog in projects even before Hurricane 
Irene struck. The Senate Appropriations Committee provided $1.9 
billion in FHWA's disaster relief last month.
    Now, what can this do to help transportation systems in the 
States damaged by Hurricane Irene?
    Mr. Nadeau. Senator, the way the program and the Federal-
aid highway program work, as you know, it is a reimbursement 
program. Basically, as we manage the backlog over time----
    Senator Landrieu. And what is your backlog right now?
    Mr. Nadeau. The total backlog is about $2.1 billion.
    Senator Landrieu. Total backlog of transportation projects 
to date.
    Mr. Nadeau. Including Hurricane Irene.
    Senator Landrieu. Including Hurricane Irene.
    Mr. Nadeau. $1.2 billion of the backlog is pre-Irene, and 
about $900 million to date is----
    Senator Landrieu. So it is a $3 billion backlog?
    Mr. Nadeau. No, $2.1 billion total.
    Senator Landrieu. $2.1 billion total, including Hurricane 
Irene?
    Mr. Nadeau. Correct.
    Senator Landrieu. Okay.
    Mr. Nadeau. And as we manage that backlog, we are doing 
several things to assist the States.
    We, at the beginning of each year, survey the States to 
determine two things: One, what projects they have--ER-eligible 
projects they have that are ready to obligate. So the funds 
that we are allocating toward the backlog every year are going 
toward projects that are ready.
    Second, we are determining the extent to which States may 
have funds that were not obligated that are now available to 
redistribute.
    So in that way, we are trying to address backlog with the 
annual authorized appropriations of $100 million plus whatever 
funds we can recover, and allocating those funds to projects 
that are ready to go.
    But if you look back more than 12 years, the average ER 
demand is about $350 million.
    Senator Lautenberg. Was that before Hurricane Irene?
    Mr. Nadeau. That is right. Not including extraordinary 
disasters, correct.
    So since 2005, during the life of SAFETEA-LU, about $5.3 
billion has been provided by the Congress in special 
appropriations.
    So what FHWA attempts to do is take resources that are 
provided either from our annual allocation or special 
appropriations and manage the program as efficiently and 
effectively they can with our State partners.
    Essentially, States have a couple of choices. In immediate 
response to a disaster, we have the quick release funds 
capability, which is very helpful, particularly these days when 
States are in such dire straits with respect to cash on hand. 
But it also enables them to either make a decision based on----
    Senator Lautenberg. Current need or long-term requirements.
    Mr. Nadeau. So they may have the ability to defer certain 
repairs or permanent repairs associated with a disaster. They 
may choose to utilize their regular Federal-aid program 
dollars, which of course will render those funds unavailable 
for----
    Senator Lautenberg. These are kind of Hobson's choices, in 
many ways.
    Madam Chair, thank you very much. The one thing that I hope 
resounds through this body of ours, and that is, you have got 
serious problems out there. What is being done now hurts the 
quality of life, the ability of people to get on, because there 
is so much damage around.
    And there is a commercial I have seen lately, and the theme 
song is, ``when will they ever learn?'' And when will we ever 
learn that you have got to pay for your needs, and the public 
is making demands that are very serious and, frankly, 
destabilizing in so many ways.
    Thank you all very much for your excellent testimony.
    Senator Landrieu. Thank you, Senator. And it gets back to 
what Senator Cochran said earlier. I think, unfortunately, we 
have developed a habit and a pattern of underbudgeting for 
emergencies that we absolutely know, based on historical 
records, are going to occur. And it is now caught up with us, I 
think.
    Senator Cochran.
    Senator Cochran. Madam Chair, first of all, let me join you 
in thanking our panel of witnesses. I think they have added to 
our understanding of some of the challenges we face in putting 
reality into the mix, over and above what we are prone to do 
sometimes--overpromise in Federal Government programs, or at 
least the beneficiaries don't get what they are entitled to. 
They think we have overpromised, but I think that is one of the 
big challenges in the job.
    I know Mr. Nelson and our friend from Mississippi, Homer 
Wilkes, are familiar with farmers' complaints, and the efforts 
to comply with Federal regulations. And it is a big challenge 
for both sides, Government agency representatives, as well as 
the producers who are trying to participate in programs, be 
eligible for benefits that the Congress has directed that be 
made available to them in situations like disasters. And then 
it takes so long to process the applications, go through the 
drill of standing in line, in many cases.
    I think the purpose of our hearing is to try to figure out 
how we streamline, modernize, and make user-friendly the 
programs that we have. Our hearts are in the right place. 
Yours, too, I am confident of that. And this hearing, I think, 
will serve the purpose of helping us all realize that we do 
have a responsibility to the constituents, to the people of 
this country, to make these Federal Government programs work as 
they were intended, and to make them make sense, too, in terms 
of benefits to which a citizen has a right to be entitled in 
our country today.
    I did not know I was going to make a speech. I was going to 
ask a question.

                      POTENTIAL STATUTORY CHANGES

    One thing was, in your work, Mr. Nelson, as administrator, 
have you come up with suggestions or could you come up with 
suggestions to make a part of the hearing record, things that 
could be changed if there need to be changes in either the 
letter of the law, the provisions of the statute, or in the 
regulations that would make it easier but still with the 
safeguards you need to get benefits that are needed by the 
people when they need the benefits?
    Sometimes it takes 2 years to process things and go through 
the appeals. I wonder if you or Homer Wilkes, either one, have 
thoughts on that subject.
    You go first, Mr. Nelson.
    Mr. Nelson. Senator, I appreciate that question because in 
addition to being the Administrator of this agency for a few 
months now, I am also a dryland wheat farmer from Fort Benton, 
Montana, whose family has participated in these programs over 
the years. So I understand from a producer point of view as 
well.

                 SUPPLEMENTAL REVENUE ASSURANCE PROGRAM

    And one program that I mentioned earlier that is part of 
that package of disaster programs from the 2008 farm bill, the 
Supplemental Revenue Assurance Program that the administration 
has recommended that it or a similar program with a similar 
cost continue in the future, that is one that could use some 
work, because this is a case where, as you are talking about 
everybody's intentions are good, but because of the statutory 
design of the program, and the need to get to the point where 
we know the national average market price of crops before we 
can pay benefits to producers, we can't get the darn program 
out there until at least 13 months after the crop year.
    And as we all know, that doesn't help a heck of a lot when 
you are facing the bills that are inevitably there in one of 
those down years.
    So we would look forward, Senator, to working with you and 
other Members of Congress on retooling, refining, and reforming 
that program, so that it could more timely and more effectively 
meet the needs of producers.
    Senator Cochran. Thank you.
    Senator Landrieu. Thank you. I really appreciate those 
comments, Senator Cochran, as a longtime leader in Agriculture 
and a longtime member of the Committee on Appropriations, you 
clearly understand this. And I wanted you to know, I had 
mentioned to Madam Chair Stabenow, who is now the chair of 
Agriculture, she is directing her Committee to look very 
carefully in the reauthorization of these five disaster 
programs and how they may be improved, what budget numbers 
should be attached to them, or funding levels should be 
attached. So hopefully through the work of our subcommittee and 
oversight over disasters, and her Committee, we can come up 
with better ways to help the farmers and the rural areas 
particularly.
    Mr. Wilkes. Madam Chair.
    Senator Cochran. Mr. Wilkes, did you have a comment?

                  EMERGENCY WATERSHED PROGRAM BACKLOG

    Mr. Wilkes. Senator Cochran, thank you for the opportunity.
    I guess where the NRCS stands, as far as our programs, we 
have worked over the years with members of this subcommittee to 
streamline those programs. And for the most part, I think we 
are doing okay.
    But this particular program we are talking about here 
today, EWP, we have had some flexibility as far as making sure 
that our dollars were brought back into Washington, where we 
could actually put them out there in exigency areas. As I said 
earlier, we have about $7 million that is actually there now. 
So as disasters occur, we try to put dollars in those places 
first.
    But with the backlog that we actually have, about $188 
million, the biggest help that we could use right now is making 
sure that the funds are actually available, based on those 
requests that have come from the outlying areas.
    So that seems to be the biggest obstacle that we are facing 
right now, and we are just hopeful that we can field those 
requests based on what is coming from the countryside.
    Senator Cochran. Thank you very much for being here and 
cooperating with our subcommittee.
    Senator Landrieu. Thank you.
    I have a comment, and then just a few questions, and we 
will wrap up.
    But you know, the programs can be used as beautifully and 
elegantly designed by all of us, but if they are not funded, 
they don't work. And so we have to do both, design programs 
efficiently, effectively, and in some ways elegantly, and then 
fund them. Or, tell the country we can't afford to do it and we 
are not going to do it. One of the two.
    But to have programs that people have hope for and not fund 
them I think is the cruelest of all. So that is what we are 
going to attempt.
    And getting to that, Mr. Tombar, I personally have found 
HUD to be extraordinarily helpful in the rebuilding of the 
Gulf, which is what I am most familiar with. Of course, it is 
the area that I represent. But I do try to pay attention to 
things happening around the country.
    I think these CDBG funds when applied are extraordinarily 
powerful tools for rebuilding. I will give you an example.

                           REBUILDING SCHOOLS

    St. Bernard Parish, not Orleans. People have heard a lot 
about Orleans. And one of the small parishes, but one of the 
finest school systems in all the country. They used $7 million 
of CDBG funds that were given after Katrina and Rita to stand 
up the first school in St. Bernard. Without that money, I am 
not sure how that school system would have been stood up 
because the reimbursement process for schools was just not 
working. And that is one example. I could give you hundreds.
    This is my point and my question. It gets back to Senator 
Lautenberg. After four hurricanes in 2004, this Congress 
awarded $150 million to Florida in CDBGs. After Katrina and 
Rita, that number went up to almost $20 billion. That is how 
bad our storms were.
    Then after Ike, Gustav, and the Midwest floods, it went up 
to almost $7 billion.
    Right now, I don't think we have anything--right?--for 
CDBG? We don't have anything in the House for CDBGs. Zero.
    Now it is hard to measure, because this isn't sort of an 
authorized program, about what the right level is. But I will 
tell you that if you used just one measurement, which is 
insured losses, the insured losses for each of the years I 
mentioned, insured losses ranged from $15 billion to $90 
billion. In the first 6 months of 2011, insured losses are 
already $18 billion. I want to repeat that. In all the years I 
mentioned, the average is $15 billion to $90 billion; CDBG was 
allocated different numbers. In the first 6 months of 2011, 
there are $18 billion in insured losses, and there is not a 
penny appropriated so far in the House approach.
    And is there any in ours? In the Senate, $400 million.
    This is going to be a problem, I think.
    Let me go back to Mr. Tombar. Do you have a comment?
    Mr. Tombar. Yes, ma'am.
    First of all, thank you for noting the work that HUD has 
done. As you know, the Secretary is very committed to the work 
in the gulf coast and Louisiana. And you are right, that the 
insured losses do sort of portend where there might be great, 
unmet needs.
    And as Senator Lautenberg was pointing out, the amount of 
money that is being considered thus far would suggest that it 
would be woefully insufficient in terms of addressing those 
unmet needs with the amount of money----
    Senator Landrieu. And some of these communities like 
Joplin, Missouri, and North Dakota, and others, and parts of 
Vermont, I think it is going to be extremely difficult even 
with the array of other programs.
    We found in the gulf coast, without these CDBG funds, and 
actually without GO Zone bonds, Senator Cochran, I think we 
would have had a very difficult time rebuilding.
    But for transportation--and I am going to come to an end--I 
just want to be clear that you all have budgeted about $100 
million you said every year, but your average has been $350 
million in your emergency accounts, correct?
    Mr. Nadeau. Correct.
    Senator Landrieu. Is that what you testified to?
    Mr. Nadeau. The authorized----
    Senator Landrieu. And your backlog is how much right now?
    Mr. Nadeau. I am sorry?
    Senator Landrieu. Your backlog is how much?
    Mr. Nadeau. About $2.1 billion total, including----
    Senator Landrieu. $2.1 billion?
    Mr. Nadeau. Correct.
    Senator Landrieu. Okay.
    And again, the Senate has at least in the works $1.9 
billion to respond to that. The House has zero.
    So we are really going to have an issue trying to reconcile 
these numbers, getting the Senate numbers right, more accurate, 
and then negotiating with the House and the White House about 
what this approach needs to be to move forward for this year, 
2012.
    Also, Senator Cochran, I really want to work with the 
members to think about better ways to budget for these things 
in the future and try to get ahead of the situation.
    Is there anything anybody else wants to say before we close 
out? I think the staff has the numbers we need.
    Mr. Nadeau. Madam Chair.
    Senator Landrieu. Go ahead.
    Mr. Nadeau. Just one quick clarification on the backlog 
number for the ER program. In terms of the language in the 
Senate appropriations proposal, that applies to Stafford 
events, essentially.
    So basically, for the ER backlog, about $1.9 million are 
backlog items eligible under Stafford. Non-Stafford events 
would not be eligible, as we read the language.
    So the $1.9 million backlog is really what would be 
applicable with respect to the language proposed in fiscal year 
2012----
    Senator Landrieu. But for disasters that fall under the 
Stafford Act, DOT has $1.9 billion in backlog. And the addition 
are emergencies----
    Mr. Nadeau. That are non-Stafford Act.
    Senator Landrieu [continuing]. That are non-Stafford Act. 
Okay.
    Today's hearing has been useful. There is much we still 
need to do in disaster recovery. One month ago, on a bipartisan 
basis, I am proud that the Senate adopted a $6.9 billion 
disaster recovery that included all of your agencies.
    I hope that the House will act soon on this important 
legislation. And I look forward to working with my colleagues 
in the coming weeks on these issues.
    I thank you all for your testimony. It is important work. 
It means a great deal to people who have lost their homes, 
schools, churches, and places of business.
    And we want to help them to get back up, not only because 
it is the right thing to do, but economically, it is the smart 
thing to do because we need jobs and we need income produced in 
this Nation. And the best way to do it is to help people get 
back to work.

                     ADDITIONAL COMMITTEE QUESTIONS

    [The following questions were not asked at the hearing, but 
were submitted to the Departments for response subsequent to 
the hearing:]
                Questions Submitted to Hon. Craig Fugate
            Questions Submitted by Senator Mary L. Landrieu
                        public assistance grants
    Question.--How many days, on average, does it take to approve a 
funding application for a Federal Emergency Management Agency (FEMA) 
public assistance project? How many days does the application spend, on 
average, at each step of the review process, including the local field 
office, FEMA regional office, FEMA headquarters, Department of Homeland 
Security (DHS), and Office of Management and Budget (OMB)?
    Answer. In the last 2 years, for 88,801 public assistance 
subgrantee projects processed, the average number of day between 
submittal and award was 45.5 days. Review of the projects includes 
reviews for eligibility (initial and final), insurance, environmental/
historic preservation, floodplain management, hazard mitigation, 
grantee/State review, and million-dollar project notifications. Certain 
projects may go through other specific reviews as well, depending on 
the type of project. Pursuant to the notification requirement passed by 
the Congress, projects more than $1 million (Federal share) are 
transmitted to FEMA headquarters, and only these projects go through 
the notification process that includes FEMA headquarters, DHS, and OMB.
    Question. How many approved public assistance applications, within 
the last 10 years, by fiscal year, were not paid within the timeframe 
of the regulatory deadline? How many days after the deadline, on 
average, are applications finally approved?
    Answer. FEMA regulations at 44 CFR section 206.204 establish 
timeframes for completion of work but do not include requirements for 
when funds must be obligated to the State. The completion timeframe for 
emergency work is 6 months, and permanent work is 18 months from the 
date of declaration. Under the regulations, the grantee has the ability 
to extend these deadlines: 6 months for emergency work and 30 months 
for permanent work. Additionally, the Regional Administrator has the 
authority to grant further extensions based on requests and 
justification from the grantee. Once a project is approved, FEMA will 
obligate funds to the grantee. It is then the role and responsibility 
of the grantee to make payments to individual applicants for costs they 
incur for their approved subgrants (project worksheets). The grantee 
may take additional steps before payments are made to subgrantees.
                                 ______
                                 
               Questions Submitted to Hon. Jo-Ellen Darcy
             Question Submitted by Senator Mary L. Landrieu
    Question. Secretary Darcy, you stated that known damages exceed 
$1.6 billion. Are all of these damages in areas with Presidential 
disaster declarations? If not, what is the magnitude of damages related 
to areas without these declarations? If only the items with disaster 
declarations are funded, how will the Corps of Engineers address these 
needs?
    Answer. Known repair requirements total $1.591 billion, of which 
$155 million have been funded with project funds or through transfers 
to the Flood Control and Coastal Emergencies (FCCE) appropriation, 
leaving $1.436 billion of unfunded repairs. Of the unfunded repairs, 
$1.197 billion is in areas with Presidential declarations of major 
disasters, and $239 million is outside those areas. Of the funded 
repairs, $120 million is in areas with Presidential declarations of 
major disasters and $35 million is outside those areas. In addition, 
$259 million of preparedness and response activities have been funded.
    The Corps has established a process for evaluating and prioritizing 
repair requirements throughout the Nation. The Corps has transferred 
funds to the FCCE account to begin addressing the highest priority 
needs. If the Congress provided funds to only address damages within 
areas with Presidential declarations, then the remaining repairs that 
are outside declared major disaster areas would be evaluated for 
potential transfers.
                                 ______
                                 
             Question Submitted by Senator Daniel K. Inouye
            pacific ocean division regional integration team
    Question. I wish to inquire about the status of two Hawaii disaster 
repair projects--the Hanapepe River Flood Control Project on the Island 
of Kauai, and the Alii Drive Shoreline Protection Project on the Island 
of Hawaii (Big Island). Funding for these repair projects are under the 
Flood Control and Coastal Emergency (FCCE) program.
    The Hanapepe River Flood Control Project was first damaged by a 
storm in February 2008, and again in December 2010. I understand that 
repairs were underway for the 2008 damages, when the December 2010 
storm hit and further damaged the project. The damages include erosion 
to the earthen levee toe and river embankment. The repair work is 
eligible for Federal assistance including the rebuilding of the levee 
toe protection and river embankment in two locations. While I 
understand that the FCCE funds are being used to address the 
Mississippi floods and east coast hurricanes, I wish to inquire what 
the Army Corps plans are for funding repair projects across the Nation, 
including the Hanapepe River Flood Control Project.
    The Alii Drive Shoreline Protection Project was damaged by the 
March 2011 tsunami. I have been advised that this project was deemed 
ineligible by your agency to receive Federal repair assistance. At the 
same time, I understand that the language in your regulations allows 
for Federal repair of federally constructed and authorized shoreline 
protection structures. I urge your agency's reconsideration in allowing 
for Federal repair assistance for the Alii Drive Shoreline Protection 
Project, which includes filling voids in the project's seawall 
foundation.
    Answer. [Follows:]
    Hanapepe River Flood Control Project.--The Army Corps of Engineers 
has identified damages from a multitude of events across the Nation. 
The Honolulu District is currently preparing a supplemental analysis to 
the Project Information Report (PIR) to the Hanapepe River Flood 
Control Project on the Island of Kauai, Hawaii resulting from the 
December 2010 storm damages. The supplemental analysis, which is 
scheduled to be completed by February 2012, will determine if repairs 
from the additional damages caused by the December 2010 storm are 
eligible for Federal assistance under the FCCE program.
    Alii Drive Shoreline Protection Project.--The Honolulu District 
prepared a PIR that addressed damages to the Alii Drive Shoreline 
Protection Project. This project was originally constructed in 2001 
under section 14 of the Flood Control Act of 1946, as amended. Section 
14 authorizes the Corps to construct small projects for emergency 
streambank and shoreline protection.
    The original project consisted of pumping concrete into geotextile 
bags that were placed in voids along the ocean side of the existing 
seawall foundation at a total Federal cost of $240,000. The proposal 
recommended in the PIR consists of an impermeable curtain of grout that 
would be installed along the entire length of the land side of the 
seawall at an estimated Federal cost of $1,602,000. The proposed 
solution is significantly larger in both scope and cost than repairing 
the original project.
    Public Law 84-99 provides broad authority to the Corps to perform 
repair or restoration of flood control works threatened or destroyed by 
flood. Engineer Regulation (ER) 500-1-1 prescribes policies for the 
Civil Emergency Program of the Army Corps of Engineers, in accordance 
with authority provided under Public Law 84-99. The regulation 
specifies that bank protection works, river control structures, or 
other projects constructed by the Corps, including section 14 projects 
(under the Continuing Authorities Program) and specifically authorized 
bank protection projects, are not eligible to receive rehabilitation 
assistance. Exceptions may be granted by Corps headquarters on a case-
by-case basis. Corps headquarters has considered an exception for the 
Alii Drive project, but determined that an exception for the Alii Drive 
Shoreline Protection project should not be granted.
    Given the substantial demand for Public Law 84-99 funds, ER 500-1-1 
provides that use of those funds is limited to emergency measures to 
repair or restore flood control works to their pre-disaster condition 
and level of protection. Also, rehabilitation assistance is not 
provided to modify flood control works to increase their degree of 
protection or capacity, to provide protection to a larger area, or to 
otherwise improve upon deficiencies in the project. In the case of Alii 
Drive, restoration to its pre-storm condition would involve replacing 
or repairing the original geotextile bags that were placed in voids 
along the ocean side of the existing seawall foundation for the purpose 
of preventing erosion. In contrast, the project proposed in the Alli 
Drive PIR to be constructed with Public Law 84-99 funds consists of an 
impermeable curtain of grout that would be installed along the entire 
length of the land side of the seawall for the purpose of reducing 
future erosion.
    There are no known previous HQ exceptions for rehabilitation work 
for a section 14 project under the Public Law 84-99 program. In 
addition, completed section 14 projects that are subsequently damaged 
are not considered for rehabilitation funding under the Continuing 
Authorities Program authority. Where exceptions could be granted to 
fund repairs of section 14 projects with Public Law 84-99 funds, the 
scope of the rehabilitation assistance work would be limited to 
emergency measures to restore the existing project to its pre-disaster 
condition. The project proposed in the Alii Drive PIR differs from the 
original pre-disaster project in both scope (geotextile bags versus 
impermeable grout curtain) and location (oceanside versus landside of 
the seawall) and therefore, Public Law 84-99 funds cannot be used.
    I have reviewed the facts related to Alii Drive Shoreline 
Protection Project, and I concur with the Corps' assessment that an 
exception to established policy is not merited.
                                 ______
                                 
                   Question Submitted to Fred Tombar
             Question Submitted by Senator Patrick J. Leahy
    Question. Mr. Tombar, thank you for testifying before this 
subcommittee today. Some of the most devastating damage caused by 
Hurricane Irene has been to the houses, mobile homes, and apartments 
where Vermonters have built their lives and made their homes. Entire 
mobile home developments have been washed away and Vermonters are now 
turning to the Federal Government and the Department of Housing and 
Urban Development (HUD) for assistance.
    Unfortunately following the devastation of Hurricane Irene to my 
small State, it has become clear that while HUD is able to offer some 
minimal assistance through waivers of existing programs or mortgage 
assistance, HUD's budget does not include emergency funding 
specifically set aside for programs like the Community Development 
Block Grant (CDBG) and the HOME Investment Partnership program (HOME) 
to address the immediate housing and rebuilding needs following a 
disaster but rather relies on the Congress to appropriate funds for 
programs through unscheduled supplemental appropriations requests.
    The Congress has recognized the critical role CDBG funded as played 
as part of the Federal response and rebuilding efforts following a 
natural disaster and has historically responded to such need by 
appropriating the emergency funds for HUD to administer. From 2005-2010 
the Congress appropriated more than $26 billion in emergency CDBG 
funding to address the unmet in States recovering from disasters after 
the Federal Emergency Management Agency (FEMA) and insurance provided 
preliminary assistance. I was pleased to support the inclusion of $400 
million for emergency CDBG in the fiscal year 2012 Transportation, 
Housing and Urban Development Appropriations bill to begin to address 
the housing needs in disaster areas. However, I am concerned that with 
major Federal disasters declared in 48 States, $400 million will be 
woefully insufficient in addressing the needs of the towns and 
communities around the country expecting assistance from the Federal 
Government.
    What type of need has HUD identified for CDBG emergency funding 
around the country and will $400 million level of emergency funding be 
sufficient to adequate address those needs? If not, what level of 
funding do you estimate would be needed to assist disaster areas around 
the country?
    Answer. HUD allocates funds based on its estimate of the total 
unmet needs for infrastructure and the unmet needs for severe damage to 
businesses and housing that remain to be addressed in the most impacted 
counties after taking into account December 2011 data on insurance, 
FEMA assistance, and SBA disaster loans. To meet the statutory 
requirement that the funds be targeted to ``the most impacted or 
distressed areas,'' this allocation:
  --Limits funding to the States and counties with the highest level of 
        severe unmet needs. Specifically, the calculation of unmet 
        housing and business needs is limited only to those homes and 
        businesses that experienced severe damage (see definitions 
        below). That is, it excludes homes and businesses with minor or 
        moderate damage that may have some unmet needs remaining. 
        Further, to target funds to the most impacted or distressed 
        areas, only counties with $10 million \1\ or more in severe 
        unmet housing and business needs are used to determine a 
        State's allocation. Thus, funding is provided based on the 
        severe needs of the most impacted counties in each State.
---------------------------------------------------------------------------
    \1\ For the cut off thresholds used in this formula, minimum county 
need of $10 million in severe unmet housing and business needs, the $10 
million minimum grant for a State (point 4), and the $6 million minimum 
grant for an entitlement jurisdiction (point 5a), these represent 
``natural breaks'' in the distribution. That is, the next county, 
State, or grantee on the list has a significant separation in need or 
estimated grant from the last county, State, or grantee included in the 
list.
---------------------------------------------------------------------------
  --Factors in disaster-related infrastructure repair costs statewide 
        that are not reimbursed by FEMA Public Assistance. For all of 
        these disasters, this is calculated as the 25 percent State 
        match requirement.
  --Funds are allocated based on each State's share of total unmet 
        needs. This is calculated as each State's proportional share of 
        the sum of infrastructure and severe unmet housing and business 
        needs from the most impacted counties.\2\
---------------------------------------------------------------------------
    \2\ When calculating the grants, the internal weight between 
factors is maintained at the ratio of all severe unmet housing and 
business needs in all counties to unmet infrastructure needs in all 
counties.
---------------------------------------------------------------------------
  --Restricts funding only to States that receive a minimum grant of 
        $10 million or more. These funds are limited to only the States 
        with the highest levels of unmet need. As such, funding is 
        limited to States that would receive aggregate funding of $10 
        million or more based on their total unmet needs. The 
        calculated grant amounts for States that would have received 
        less than $10 million are provided to the States above $10 
        million through a pro-rata increase.
  --Specifies the counties and jurisdictions that are most impacted or 
        distressed by:
    --Providing direct funding to CDBG entitlement jurisdictions (and 
            one nonentitlement city) with significant remaining severe 
            unmet needs. Within a State, if an entitlement jurisdiction 
            accounts for $6 million or more of the funding allocated to 
            a State, it is allocated a direct grant (the $6 million 
            threshold represents a ``natural break'' in funding among 
            entitlement jurisdictions). Otherwise the funding is 
            provided directly to the State. Due to its extraordinarily 
            high level of localized need, one non-entitlement 
            jurisdiction (Minot, North Dakota) also receives a direct 
            allocation.
    --Directing that a minimum of 80 percent of the total funds 
            allocated within a State, including those allocated 
            directly to the State and to local governments, must be 
            spent on the disaster recovery needs of the communities and 
            individuals in the most impacted and distressed counties 
            (i.e., those counties identified by HUD). The principle 
            behind the 80 percent rule is that each State received its 
            allocation based on the unmet needs in the most impacted 
            counties (those counties with more than $10 million in 
            severe unmet housing and business needs) and thus HUD will 
            require that all grantees within a State direct these 
            limited resources toward those most impacted counties.\3\ 
            Nonetheless, HUD recognizes that there are likely 
            circumstances where its data is incomplete, damage is 
            highly localized outside of one of the heavily impacted 
            counties, or recovery would otherwise benefit from 
            expenditures outside of those most impacted counties and 
            thus provides some flexibility to address those needs for 
            State grantees. While local governments receiving direct 
            grant allocations from HUD must spend their total grant 
            within their own jurisdictions, HUD will allow a portion of 
            the State non-entitlement grant to be spent outside of the 
            most impacted counties, in an amount not to exceed that 
            which yields 80 percent of all funding within a State to be 
            spent in the most impacted counties.
---------------------------------------------------------------------------
    \3\ Each State receives funding based on all of infrastructure 
needs within a State, minus the infrastructure needs estimated to lie 
within entitlement jurisdictions receiving direct grants. In addition, 
each State also receives funding from all severe housing and business 
needs in the most impacted counties minus the estimated severe housing 
and business needs within entitlement jurisdictions receiving direct 
grants.
---------------------------------------------------------------------------
                                 ______
                                 
                   Question Submitted to James Rivera
             Question Submitted by Senator Patrick J. Leahy
    Question. The Small Business Administration (SBA) often is the only 
Federal resource a business impacted by a disaster can turn to in its 
time of need, but I am beginning to worry about the effectiveness of 
the SBA disaster loan program for businesses in Vermont.
    As of October 10, I understand the SBA had received 141 completed 
applications from businesses in Vermont--yet you had approved only 24 
business loans, totaling just $3 million. That seems like a very low 
success rate to me.
    To put the need in perspective, the Vermont Economic Development 
Authority--our State lending agency--created a disaster loan program 
within 48 hours of Irene; made its first loan 5 days later; and has 
since obligated nearly $10 million in loans to more than 150 
businesses, including some businesses subsequently denied loans from 
the SBA.
    I understand that the SBA needs reasonable assurances that a 
business can repay a loan. But following a disaster--when offices, 
facilities, computers, and equipment are destroyed--no business appears 
credit worthy. That is why we have the disaster loan program and why 
there should be a different standard for these applications from the 
normal SBA process.
    I appreciate that the SBA finally opened a recovery center in 
Brattleboro yesterday, but I understand loan decisions ultimately are 
made out of a centralized loan processing center in Texas. I worry that 
this does not enable a loan officer to take an adequate look into the 
history and importance of a business severely impacted by the disaster.
    Why does it seem like the SBA is denying disaster assistance to so 
many Vermont businesses impacted by Hurricane Irene? As shown in the 
chart below, 24 out of 141 is only a 17 percent approval rate.

               SBA #12784--Vermont (Tropical Storm Irene)

                         SBA Disaster--VT-00021

                             FEMA--4022--DR

                      Physical Deadline: 10/31/11

                         SMALL BUSINESS ADMINISTRATION (SBA) SUMMARY AS OF COB: 10/10/11
----------------------------------------------------------------------------------------------------------------
                                                                             Economic injury
          Loan applications                  Home             Business            (EIDL)             Total
----------------------------------------------------------------------------------------------------------------
Applications issued.................              3,913              1,682                 22              5,617
Number received.....................                539                141                 11                691
Number approved.....................                167                 24                  1                192
Dollars approved....................         $8,277,700         $3,053,100             $3,100        $11,333,900
----------------------------------------------------------------------------------------------------------------

    In addition, in preparing appropriations legislation fiscal year 
2012, the Senate has included an additional $167.3 million for SBA 
disaster loans. Is this funding sufficient to address the current need? 
And if not, what does the SBA estimate would be necessary to 
appropriately fund the SBA disaster program for both home and business 
loans?
    I understand there is a great emphasis on processing time at your 
Texas facility. Does the SBA risk prematurely denying loan applications 
due to the focus on processing time?
    Answer. The U.S. Small Business Administration Office of Disaster 
Assistance is responsible for providing affordable, timely, and 
accessible financial assistance following a disaster to businesses of 
all sizes, homeowners, and renters. Many disaster survivors have 
insurance, which covers part or all of the physical property losses due 
to a natural disaster, but for disaster losses not covered by 
insurance, an SBA loan is the primary form of Federal financial 
assistance. This financial assistance is available in the form of low-
interest loans, and since the SBA's inception in 1953, we have provided 
more than 1.9 million disaster loans for more than $49.6 billion.
    Below is an updated summary of disaster business loan activity in 
Vermont through November 3, 2011.

------------------------------------------------------------------------
                                             Number of        Dollars
            Loan applications               businesses       approved
------------------------------------------------------------------------
Received and accepted...................             213  ..............
Remaining to be processed...............              54  ..............
Withdrawals.............................              40  ..............
Approvals...............................              58      $7,657,000
Declines................................              57  ..............
Approval percentage.....................              50  ..............
------------------------------------------------------------------------

    As illustrated above, we have approved 50 percent of business loan 
applications processed (completed processing less withdrawals) to a 
decision. Because SBA lends taxpayer funds to disaster victims, we have 
a dual responsibility as both a protector of taxpayer interests and as 
a provider of disaster assistance. Accordingly, SBA is permitted to 
make disaster loans only to those who can demonstrate a reasonable 
assurance that the loan can and will be repaid. For this reason, we 
must consider credit worthiness and repayment ability in making our 
loan decisions.
    At this time, the $167.3 million appropriated for fiscal year 2012 
for SBA disaster lending is sufficient to cover the current and 
projected disaster loan activity.
    Currently, we have six centers located throughout the Vermont 
disaster area, with a total of 14 SBA disaster employees on the ground 
to assist disaster victims through the entire phase of the disaster 
loan process. Completed applications are processed at SBA's Processing 
and Disbursement Center in Fort Worth, Texas, which has specialized 
units that separately manage home and business loans. This 
specialization allows SBA to process loans more efficiently, because 
loan officers develop expertise in either home loan or business loan 
processing. Our Processing and Disbursement Center employs highly 
skilled business loan officers who understand that all businesses 
impacted by a disaster deserve every consideration when processing a 
loan.
    Although SBA places a high priority on the timely processing of 
disaster loan applications, every application receives a thorough 
review. SBA has an extensive appeal process, which provides declined 
applicants with multiple opportunities to overcome the reasons for a 
decline. A declined applicant receives a letter describing each reason 
for the decline, and may present additional information to overcome the 
reason(s) for the decline. When an applicant requests reconsideration, 
the case file is assigned to a new loan officer for processing so that 
the application information may receive a fresh look. Applicants 
declined upon reconsideration may then request further reconsideration.
                                 ______
                                 
                  Questions Submitted to Bruce Nelson
            Questions Submitted by Senator Patrick J. Leahy
    Question. Administrator Nelson, in your testimony you mentioned 
crop insurance and the Noninsured Crop Disaster Assistance Program 
(NAP), which helps eligible farmers affected by natural disasters. Both 
of these programs have existed for many years, but unfortunately as we 
discovered after Hurricane Irene ravaged many of our river valleys and 
carried away top soil and the fall harvest, a large number of Vermont's 
farmers have not enrolled in these programs, especially our specialty 
crop farmers.
    What changes do you think can and should be made to the programs, 
especially NAP, in order to encourage more farmers to enroll to recover 
from these sorts of natural disasters?
    Answer. We would recommend increasing outreach to the farmers about 
the risk management tools that would have been available to them after 
this most recent disaster and explain the benefits they could have 
realized and show them how the coverage is worth it. This is especially 
true of NAP, which the farmer would have had to have in order to 
qualify for the Supplemental Revenue Assistance Payments (SURE) 
program. The small fee one pays for catastrophic coverage is worth it. 
I would be happy to provide technical assistance and work with you 
during upcoming farm bill discussions on any proposed changes to these 
programs.
    Question. Also Administrator Nelson, as we begin to debate the farm 
bill here in the Senate, many policy proposals are circulating about 
how to reform the current insurance and agriculture disaster programs, 
most notably SURE. To date the majority of these reform proposals have 
focused on whole-farm revenue losses related to reduced yields, 
quality, and prices--but only for Risk Management Agency (RMA) 
insurable commodity title crops. In Vermont, Hurricane Irene impacted 
more than 440 agricultural producers and more than 8,000 acres of 
farmland, many of those were fruit, vegetable, and hay acres that rely 
on NAP coverage and unfortunately would not be covered under the 
proposed shallow loss whole farm program reforms.
    How would you propose supporting and protecting our specialty crop 
and hay producers that face the same disasters uncertainty that the 
commodity producers do as we move forward with farm bill reforms?
    Answer. I would be happy to work with you during the upcoming farm 
bill discussions on options that will work well for Vermont's farmers 
and ranchers. The President's budget proposes to extend the 2008 farm 
bill's mandatory disaster assistance programs, or similar types of 
disaster assistance that are of a similar cost, for the 2013 to 2017 
crops. The SURE program has provided more than $7 million in disaster 
assistance to 561 Vermont farmers for crop losses in 2008 and 2009. One 
of the advantages of the SURE program is that it covers all crops 
including covered commodities, fruits and vegetables, and hay.

                         CONCLUSION OF HEARING

    Senator Landrieu. Thank you very much. The subcommittee is 
recessed.
    [Whereupon, at 4:38 p.m., Wednesday, October 12, the 
hearing was concluded, and the subcommittee was recessed, to 
reconvene subject to the call of the Chair.]

                                   - 
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