    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

     BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: MITIGATING DAMAGE
                     AND RECOVERING QUICKLY FROM DISASTERS

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

                                    (115-12)

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
        ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                     OF THE

                                  COMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 27, 2017

                                   __________

                           Printed for the use of the
                 Committee on Transportation and Infrastructure

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         Available online at: https://www.govinfo.gov/committee/house-
         transportation?path=/browsecommittee/chamber/house/committee/
                                 transportation
                                   __________

                          U.S. GOVERNMENT PUBLISHING OFFICE

    25-310                     WASHINGTON : 2019

                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      BILL SHUSTER, Pennsylvania, Chairman
    DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
    JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of
      Vice Chair                             Columbia
    FRANK A. LoBIONDO, New Jersey        JERROLD NADLER, New York
    SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
    DUNCAN HUNTER, California            ELIJAH E. CUMMINGS, Maryland
    ERIC A. ``RICK'' CRAWFORD, Arkansas  RICK LARSEN, Washington
    LOU BARLETTA, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
    BLAKE FARENTHOLD, Texas              GRACE F. NAPOLITANO, California
    BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
    DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
    JEFF DENHAM, California              ALBIO SIRES, New Jersey
    THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
    MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr.,
    SCOTT PERRY, Pennsylvania                Georgia
    RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
    MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
    ROB WOODALL, Georgia                 DINA TITUS, Nevada
    TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
    JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut,
    BRIAN BABIN, Texas                       Vice Ranking Member
    GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
    BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
    DAVID ROUZER, North Carolina         JARED HUFFMAN, California
    MIKE BOST, Illinois                  JULIA BROWNLEY, California
    RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
    DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
    BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
    LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
    PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
    JOHN J. FASO, New York
    A. DREW FERGUSON IV, Georgia
    BRIAN J. MAST, Florida
    JASON LEWIS, Minnesota
                                    ------

     Subcommittee on Economic Development, Public Buildings, and Emergency
                                   Management

                      LOU BARLETTA, Pennsylvania, Chairman
    ERIC A. ``RICK'' CRAWFORD, Arkansas  HENRY C. ``HANK'' JOHNSON, Jr.,
    BARBARA COMSTOCK, Virginia               Georgia
    MIKE BOST, Illinois                  ELEANOR HOLMES NORTON, District of
    LLOYD SMUCKER, Pennsylvania              Columbia
    JOHN J. FASO, New York               ALBIO SIRES, New Jersey
    A. DREW FERGUSON IV, Georgia,        GRACE F. NAPOLITANO, California
      Vice Chair                         MICHAEL E. CAPUANO, Massachusetts
    BRIAN J. MAST, Florida               PETER A. DeFAZIO, Oregon (Ex
    BILL SHUSTER, Pennsylvania (Ex           Officio)
        Officio)

                                    CONTENTS

                                                                       Page

    Summary of Subject Matter........................................    iv

                                   WITNESSES

    Hon. W. Craig Fugate, Former Administrator, Federal Emergency
      Management Agency:

        Testimony....................................................     5
        Prepared statement...........................................    39
    Hon. R. David Paulison, Former Administrator, Federal Emergency
      Management Agency:

        Testimony....................................................     5
        Prepared statement...........................................    49
    Andrew Phelps, Director, Oregon Military Department, Oregon
      Office of Emergency Management:

        Testimony....................................................     5
        Prepared statement...........................................    58
    Chief John Sinclair, President and Chairman of the Board,
      International Association of Fire Chiefs:

        Testimony....................................................     5
        Prepared statement...........................................    67
    Mark Berven, President and Chief Operating Officer, Property and
      Casualty Operations, Nationwide Mutual Insurance Company, on
      behalf of the BuildStrong Coalition:

        Testimony....................................................     5
        Prepared statement...........................................    74

                           SUBMISSIONS FOR THE RECORD

    Submission of the following correspondence by Hon. Brian J. Mast,
      a Representative in Congress from the State of Florida:

        Letter of July 6, 2016, from Hon. Rick Scott, Governor of
          Florida, to President Barack Obama, through the Federal
          Emergency Management Agency Region IV......................    81
        Response letter of July 15, 2016, from Hon. W. Craig Fugate,
          Administrator, Federal Emergency Management Agency, to Hon.
          Rick Scott, Governor of Florida............................    84
        Letter of August 14, 2016, from Hon. Rick Scott, Governor of
          Florida, to President Barack Obama, through the Federal
          Emergency Management Agency Region IV......................    85
        Response letter of August 25, 2016, from Hon. W. Craig
          Fugate, Administrator, Federal Emergency Management Agency,
          to Hon. Rick Scott, Governor of Florida....................    96

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

     BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: MITIGATING DAMAGE
                     AND RECOVERING QUICKLY FROM DISASTERS

                                  ----------

                            THURSDAY, APRIL 27, 2017

                      House of Representatives,
                  Subcommittee on Economic Development,
            Public Buildings, and Emergency Management,
                Committee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:08 a.m., in
    room 2167, Rayburn House Office Building, Hon. Lou Barletta
    (Chairman of the subcommittee) presiding.
        Mr. Barletta. The committee will come to order. Before we
    begin, I ask unanimous consent to have members not on the
    subcommittee be permitted to sit with the subcommittee at
    today's hearing and ask questions. The purpose of today's
    hearing is to discuss how the country can protect its
    infrastructure from disaster damage, control disaster spending,
    and ensure the Federal Emergency Management Agency is able to
    respond when the Nation needs it most. These are difficult
    challenges, and I am excited that our witnesses have brought
    some bold ideas to the table for tackling these problems.
    Addressing the rising costs of disaster, both in terms of
    property and human life, is my top emergency management
    priority. It comes as no surprise that disaster costs have
    grown considerably over the past three decades. What may be
    surprising is that this increase is caused by a small number of
    really big disasters. Take a look at this slide.
        The Congressional Research Service reviewed disaster
    declarations and spending since 1989, and found that the vast
    majority of Federal disasters are small and have little impact
    on total spending. In fact, one-quarter of declared disasters--
    that means the big ones--account for 93 percent of all costs.
    In other words, we can eliminate three-quarters of all
    federally declared disasters, and barely cut 7 percent from
    Federal disaster spending. These facts are in direct
    contradiction to the common wisdom that disaster spending is
    growing because the number of federally declared disasters is
    growing. That simply is not true.
        In addition, I would argue the amount saved by eliminating
    those smaller disaster declarations would not outweigh the
    benefit they provide in helping our smaller, remote communities
    respond to and recover from disasters.
        So what can be done to bend the cost curve on big
    disasters, which is where over 90 percent of the money goes?
    This is a big challenge, and our witnesses have brought some
    bold ideas to the table for Congress to consider.
        Administrator Fugate, while he was at the helm at FEMA,
    promoted the idea of a disaster deductible to assure States
    have skin in the game before they are eligible to receive
    disaster assistance. The BuildStrong Coalition has proposed an
    array of ideas, including Federal cost-share adjustments, to
    encourage States to take steps to strengthen infrastructure and
    reduce disaster damages over time.
        Consolidating disaster recovery programs administered by 19
    different Federal agencies under FEMA is also recommended.
    Congress needs to give these and other proposals serious
    consideration. Right after I became a Member of Congress in
    2011, my own district was hit hard by Hurricane Irene and
    Tropical Storm Lee. As we were rebuilding, I was amazed that
    much of the Federal assistance was used to rebuild in the same
    place in the same way, leaving people vulnerable to the next
    storm. The Federal Government has a responsibility to respond
    after a disaster, but we also have a duty to be good stewards
    of taxpayer dollars and ensure what is rebuilt can withstand
    the next disaster.
        Finally, as we sit here 1 month away from the start of the
    Atlantic hurricane season, FEMA is still without a nominee for
    FEMA Administrator. This is a critical and important time for
    FEMA, and unfortunately, it is vulnerable. As Administrator
    Fugate observes in his written statement, as recently as 2016,
    FEMA's authorities were under assault. We must remain vigilant
    to ensure FEMA has the necessary protections and authorities so
    that it is ready and able to respond when the country needs it
    most.
        I look forward to your testimony and your ideas for how the
    country can protect itself from the growing cost of large
    disasters. And thank you for being here. At this time, I would
    like to recognize the chairman of the full committee, Mr.
    Shuster.
        Mr. Shuster. Thank you very much, Chairman Barletta, for
    holding this important hearing today. I appreciate our
    witnesses being here. And since the beginning of this Congress,
    we have had a President that got elected that has been talking
    about the need to invest in our infrastructure, and what FEMA
    does is play a key role in protecting that or making sure that
    we are doing the right things when we are building, whether it
    is infrastructure of the Federal Government, or whether it is
    the infrastructure that we build and the homes that we build,
    the buildings that we build around the country.
        So I have told them to be bold. Let's get great, big ideas
    out there. I think we are going to have an opportunity this
    year to do a big infrastructure bill, and that is going to
    probably include everything this committee, every part of this
    committee's jurisdiction, and it will include some other things
    that this committee doesn't do, like building out more
    broadband access, and improving our power generation grid, so
    we have a real opportunity here to do some important things.
        So, again, we want to make sure we are bold. I appreciate
    the testimony today, some of the testimony I have seen. There
    are some bold ideas out there.
        One of the things that I had the great fortune to do, and I
    encourage all Members to go down to the IBHS down in South
    Carolina and watch them burn a house or blow a house away or
    whatever they do. But that really is important work that the
    insurance industry is putting together. And what they have told
    me, for a couple thousand dollars on a couple hundred thousand
    dollar home, you can do some things to it that make it
    withstand some of these natural disasters.
        So those are the kinds of things we need to be looking at.
    It is not something that I want to regulate from the Federal
    Government because what is good in South Carolina maybe doesn't
    work in Pennsylvania. But encouraging States to be looking at
    these kinds of things to make sure that, again, when a natural
    disaster occurs, you have got buildings there that can
    withstand this better, so that the Federal Government, as the
    chairman pointed out, doesn't continue to have to spend these
    huge amounts of money. I mean, that is one of the most
    important things we do, is the response to the natural
    disasters. And, again, it is one of the most important things
    this committee has jurisdiction over. So making sure we are
    doing the right thing is really important for us.
        I know that Administrator Fugate's testimony is talking
    about the issue of the Agency's authorities, and I appreciate
    his work. And he was able to, through a personal relationship
    with the President, he had a direct relationship to the
    President, so when something happened, he was the guy they were
    turning to in these disasters that occur. I hope that this
    administration carries that on.
        When they put FEMA into DHS, that was something that I
    opposed. I didn't think it was the best fit, but it is what it
    is now, and now we have got to figure out how to manage it as
    best we can. As I said, controlling these, the mitigation, the
    response to these natural disasters, is really taxing the
    Federal Government when they happen. Again, those numbers that
    the chairman put up there are quite staggering, that so few
    things cost the Federal Government so much money.
        But, again, I look forward to hearing the testimony of our
    witnesses today, and I really appreciate you being here to help
    educate the committee on these issues. Thank you. I yield back.
        Mr. Barletta. Thank you, Chairman Shuster, and I now call
    on the ranking member of the subcommittee, Mr. Johnson, for a
    brief opening statement.
        Mr. Johnson of Georgia. I thank you, Mr. Chairman. And I
    apologize for being late. I was giving a speech, and I got a
    little long-winded, I think, and lost control of the time.
        But I thank you all for being here, and I say good morning
    to you. We all know that disaster costs and losses are rising.
    It is likely that every member of this committee has seen
    disasters strike in their district or in their State. While we
    cannot control Mother Nature, we can do something to lower
    disaster costs and losses. Both the Congressional Budget Office
    and the National Institute of Building Sciences' Multihazard
    Mitigation Council found that for every dollar invested in
    mitigation pre-disaster, $3 to $4, respectively, are saved in
    future disaster spending.
        Today's hearing is timely, because while we are discussing
    the importance of mitigating future disaster damages in an
    attempt to control rising disaster costs and losses, President
    Trump has proposed to cut or eliminate funding for the Federal
    Emergency Management Agency's Pre-disaster Mitigation Grant
    Program in his so-called skinny budget. President Trump would
    be wise to heed the old adage, ``if it ain't broke, don't fix
    it.''
        State and local communities use pre-disaster mitigation
    funds to develop hazard mitigation plans, retrofit
    infrastructure to protect it from floods, earthquakes, and
    other hazards, converting flood-prone land to open space and
    other critical projects. Mitigating disaster damage also saves
    lives and reduces injuries, which is why I was disheartened to
    learn that FEMA had placed an administrative hold on fiscal
    year 2016 and 2017 Pre-disaster Mitigation Grants, and on many
    nondisaster preparedness grants because the President's
    Executive order prohibited funding to so-called sanctuary
    cities. Thankfully, 2 days ago, a Federal judge issued a
    temporary injunction on enforcing President Trump's Executive
    order, allowing FEMA to award these essential grants.
        We must be vigilant to ensure that the administration does
    not, once again, try to prioritize its immigration policies at
    a cost to the lives, health and safety of our citizens. Many
    members of this committee signed a letter to the Appropriations
    Committee urging continued funding for FEMA's Pre-disaster
    Mitigation Program. We must continue our efforts to provide
    sufficient funding and by reauthorizing this program.
        Finally, earlier this month, we saw part of a highway
    collapse in Georgia. This incident reinforces the need to
    invest in infrastructure that is resilient to disasters,
    whether natural or man-made. As Congress moves forward on an
    infrastructure package, we must require any infrastructure
    constructed with Federal dollars to be resilient and meet the
    latest building codes. It is necessary to have requirements
    like these so that we can actually reduce disaster costs and
    losses without merely shifting costs.
        I look forward to today's testimony and further ideas on
    actions Congress can take to reduce disaster costs and losses.
        And I yield back.
        Mr. Barletta. Thank you, Ranking Member Johnson.
        Today, we are joined by the Honorable W. Craig Fugate, who
    was FEMA's Administrator from 2009 to January 2017. He
    transformed FEMA into a survivor-centric response organization
    and drove the delivery of disaster assistance in ways that are
    more efficient and reduced Federal disaster costs.
    Administrator Fugate will share his thoughts about what can be
    done to reduce disaster damages, lower disaster spending, and
    protect FEMA's capabilities.
        The Honorable R. David Paulison was the FEMA Administrator
    from 2005 until January 2009 and began the restoration of FEMA
    in the wake of Hurricane Katrina. Administrator Paulison will
    talk about how we can change the Nation's approach to
    mitigating disaster damage.
        Mr. Andrew Phelps, the director of Oregon's Office of
    Emergency Management, who joins us to share some of the State's
    innovative mitigation practices and how they have leveraged
    Federal investments to maximize community resiliency.
        Chief John Sinclair is the president and chairman of the
    Board of the International Association of Fire Chiefs. Chief
    Sinclair is also an active fire chief in the State of
    Washington. Chief Sinclair will talk about the importance of
    pre-disaster mitigation and post-disaster mitigation and
    discuss some initiatives to protect infrastructure from future
    damage.
        And Mr. Mark Berven is the president and chief operating
    officer of Nationwide's Property and Casualty Operations. Mr.
    Berven is here on behalf of the BuildStrong Coalition. Mr.
    Berven can inform us on some of the alarming trends in disaster
    costs and losses and some of the bold ways they are proposing
    to curb these costs and losses.
        I ask unanimous consent that our witnesses' full statements
    be included in the record. Without objection, so ordered.
        For our witnesses, since your written testimony has been
    made as a part of the record, the subcommittee would request
    that you limit your oral testimony to 5 minutes.
        Administrator Fugate, you may proceed.

       TESTIMONY OF HON. W. CRAIG FUGATE, FORMER ADMINISTRATOR,
     FEDERAL EMERGENCY MANAGEMENT AGENCY; HON. R. DAVID PAULISON,
      FORMER ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY;
      ANDREW PHELPS, DIRECTOR, OREGON MILITARY DEPARTMENT, OREGON
    OFFICE OF EMERGENCY MANAGEMENT; CHIEF JOHN SINCLAIR, PRESIDENT
     AND CHAIRMAN OF THE BOARD, INTERNATIONAL ASSOCIATION OF FIRE
    CHIEFS; AND MARK BERVEN, PRESIDENT AND CHIEF OPERATING OFFICER,
     PROPERTY AND CASUALTY OPERATIONS, NATIONWIDE MUTUAL INSURANCE
            COMPANY, ON BEHALF OF THE BUILDSTRONG COALITION

        Mr. Fugate. Thank you, Chairman Barletta and Ranking Member
    Johnson, as well as Chairman Shuster and some of the other
    folks represented here.
        The first thing I want to hit on is something that Chairman
    Shuster talked about as FEMA's role. FEMA has been a part of
    the Department of Homeland Security since its formation, and
    through that time, it has gone up and down as far as its
    availability to do its job. Congress clarified those roles with
    the post-Katrina emergency management format, dictating that
    the FEMA Administrator must have experience in the profession,
    that they are a person that reports to the President during
    disasters, and is the principal adviser on these issues to the
    Homeland Security Council, the President and others.
        We don't have a FEMA Administrator. I think that on the
    response side, the career folks will do an adequate job. They
    will do good. But without a political person, as this
    administration continues to move forward, FEMA risks not being
    part of the policy discussions without the political
    leadership. So as we approach hurricane season, if I remember
    correctly, my nomination and confirmation occurred by May 19,
    before the start of hurricane season. It may be symbolic, but I
    think the longer we go without the political leadership at
    FEMA, the greater the risk. They are not part of the policy
    discussions that set the agenda going forward.
        The second thing, as you said, Chairman Barletta, is the
    rising cost of disasters. Let's remind everybody. Do you know
    what that money pays for? Uninsured losses. Now that is
    reasonable when you call out the National Guard or you are
    providing emergency food and sheltering. But I will give you a
    recent example of one of these large disasters, the recent
    flooding in the State of Louisiana last fall, just in
    individual assistance for people who did not have flood
    insurance, we paid out close to $1 billion in the first 30 days
    just in individual assistance. It took us about 3 more days to
    get to that same figure in the State of New Jersey and New York
    during Hurricane Sandy.
        And we are seeing this across the board, that at local and
    State levels, more and more public buildings are self-insured,
    which means you are paying for that. We are seeing that for
    municipal or co-ops or Government-backed utilities, you pay for
    that as well. But the private sector, you are not. So when we
    had all the hospitals impacted in New York, the majority of
    which were eligible entities as nonprofit or Government-based,
    you spent a lot of money rebuilding uninsured losses. Now, that
    is the key thing here. It was all uninsured. We don't pay for
    insured losses. Any investor-owned hospital in the same impact
    would have gotten no assistance from FEMA, just like any
    utility that is investor owned gets no assistance from FEMA,
    the taxpayer. It all goes for uninsured losses.
        So my first question is, why aren't we seeing more
    insurance on State and local buildings? And the answer is our
    pain point is so low on disaster declarations that many
    governments make the calculated decision that they can go self-
    insured on small disasters, but if it is really big, you are
    going to come in at 75 cents on the dollar. So what we have
    done is we transferred a lot of risk to the Federal taxpayer,
    underwriting risk at the local level, and it is an informed
    decision they are making.
        Without good codes and standards, without insurability,
    those disaster costs are going to continue to climb, and they
    are climbing faster because the risk is changing. And what we
    have done as a Nation is set the pain point on risk so low we
    are not changing behavior. So you are subsidizing development.
    You are subsidizing decisionmaking about risk. I am not always
    sure that is done in the best interests of the taxpayer.
        So we began looking at disasters. And, Mr. Chairman, you
    are absolutely right. If we took out all small disasters, it
    doesn't really change the equation. It is the big ones. But we
    looked at something that would be an incentive to get more
    encouragement of good behavior, because States like Oregon and
    others do a lot of work to buy down risk. Yet, in the
    calculation of determining a disaster declaration, that is not
    recognized. While the Stafford Act says you look at a lot of
    different factors, the reality is the number-one factor to
    determine a disaster declaration is the per capita cost, with
    no factor of what States do to buy down risk. So the idea of
    creating a deductible is just like any insurance policy. I
    hardly know anybody that has car insurance or health insurance
    that doesn't have a deductible. You got skin in the game.
        By creating a deductible, the idea was we would not go back
    to the first dollar as we currently do when they hit their
    thresholds. Now that is not going to save a lot of money in big
    disaster----
        Mr. Barletta. Excuse me. Can you pull the microphone a
    little bit closer? This is important. I would like to hear it.
        Mr. Fugate. The idea of the deductible was we would not go
    back to the first dollar, as we currently do. If you hit the
    threshold, and my State of Florida, I know it best, it is about
    $24 million is the threshold on public assistance. If we hit
    that threshold, we go back to the first dollar, 75 percent of
    that, 75 cents on the dollar. The idea of the deductible is we
    would not go back to that first dollar. We would start probably
    around what their threshold is, so anything over $24 million,
    you would do the cost share, but below that, the State would
    have the full amount.
        Now States will rightfully tell you--and this is their
    position--that we are transferring it back to the States. I am
    like, well, under the Constitution, it was yours in the first
    place. It is up to the discretion of the President to even
    declare a disaster. So let's get past that we are transferring
    risk back. It is actually the responsibility of State and local
    governments to do this. The Federal Government is there when it
    exceeds their capabilities. So that is what the law says,
    exceeds their capabilities.
        So other than the proposed deductible, what we want to do
    is give credits to States like Oregon. So whatever their
    deductible is, because they do so much work in mitigation and
    we say we get a $4 savings for every dollar invested. If they
    are investing a State dollar in mitigation, they ought to buy
    down $4 of their deductible. And the idea would be you got
    strong codes and land use, you do things to buy down risk, it
    lowers your deductible. You could probably get to zero.
        Now, as the chairman points out on small disasters, that
    won't save money; but over time, it will start changing and
    incentivizing States that are taking steps to buy down the
    risk, and we will see that trend. If you go to FEMA.gov and you
    look at disasters by States, you will find some of the States
    with the most frequent disasters are also proud of the fact
    they have hardly any redtape or barriers to building and
    constructing in high-risk areas. Why? Because you, the
    taxpayer, are underwriting that risk, and every dollar you
    spend on that is uninsured.
        So this last piece of that is we have got to tighten up the
    insurance requirements. You build it back, you carry insurance.
    We should not be rebuilding buildings, three, four, five times
    as we have seen, and you are paying again because they weren't
    carrying insurance.
        So this is a way to move forward, Mr. Chairman. It
    addresses your issues. There will be pain. There will be
    change. But we have to remember, we got a built infrastructure
    that we got to figure out how to take care of, improve, and
    people's lives are at stake. And we should not single out
    individuals for punitive ``we're not helping.'' The State and
    local governments need to have better incentives to change
    their behavior, or those disaster costs will continue to climb.
    Thank you.
        Mr. Barletta. Thank you for your testimony. Administrator
    Paulison, you may proceed.
        Mr. Paulison. Chairman Barletta, Ranking Member Johnson,
    and distinguished members of the committee, I would like to
    thank you for holding what I consider a very important meeting
    today. We are going to be talking about building the 21st-
    century infrastructure in America. Specifically, I want to
    address how we can mitigate damage, recover quickly from
    disasters. And I am very grateful for the leadership of the
    chairman and the ranking member and the members of this
    committee, and I am willing to assist any way that I can.
        In no uncertain terms, I want to impress on the committee
    today that we have a moment, we have a moment right now, to
    make America resilient again and save both lives and taxpayer
    dollars. In my 35 years' experience dealing with natural
    disasters at the Federal, State, and local level, including my
    service as FEMA Administrator, as you pointed out, I can tell
    you, our Federal policy regarding disaster does not nearly do
    enough to prevent infrastructure failure before the disaster
    strikes.
        My position is largely influenced by experiencing firsthand
    the aftermath of multiple catastrophic events. I have seen
    homes and businesses destroyed because they were never built to
    withstand a natural disaster that would inevitably come, or, in
    some cases, because building codes that would have fortified
    these structures simply were not enforced. This has become a
    reality of our Nation's current disaster policy. A disaster
    strikes; homes are destroyed; we spend billions to rebuild. And
    when the next disaster strikes, the homes fail again. This
    method wastes billions, and even worse, lives that are
    unnecessarily lost.
        To break the existing cycle of destruction and recovery,
    the U.S. must adopt a proactive system that focuses on
    protecting the Nation from the rise in frequency of major
    disasters. So I am going to give you four game-changing ideas
    that I believe will make America resilient again and save
    billions of dollars, and, perhaps, countless lives.
        First, we must get serious about States to ensure improved
    mitigation plans and adopt and enforce statewide building
    codes. The fact is that the Federal Government continues to
    have massive fiscal exposure in high-risk areas, in part
    because States are either not adopting appropriate building
    codes or they are not enforcing the codes. That is why we
    should tie Federal money for disaster assistance directly to
    the decisions by the States in preparing for disasters.
        Today, the Federal minimum cost share following a natural
    disaster, as was pointed out, is 75 percent. The committee
    should look at rewarding States that improve resiliency by
    increasing their cost share to maybe 80 percent. Conversely,
    the committee should lower the Federal cost share to, let's
    say, 60 percent, for States that fail to approve, adopt, or
    enforce mitigation plans or building codes. This action will
    force States to work with fewer Federal dollars if they
    continue to shirk their responsibilities on the State and local
    levels in order to ensure the homes are built to code.
        Secondly, the FEMA Pre-disaster Mitigation Programs are
    incredibly small compared to the massive amount of post-
    disaster money that flows to Congress. Post-disaster spending
    swamps pre-disaster mitigation spending at a ratio of 1 to 14.
    That must change if we are going to reduce the cost of
    disasters in money and lives. We should use a dedicated portion
    of the total annual money spent in the Disaster Relief Fund and
    allocate it towards a new Hazard Mitigation Grant Program. This
    new program would be funded with existing DRF funds, not a new
    appropriation, and would force the Federal Government to fund
    nationwide mitigation programs. A national Hazard Mitigation
    Program could operate like the Hazard Mitigation Grant Program,
    except funds would be available nationwide without regard to
    whether a disaster has occurred.
        Third, the Federal Government should do everything possible
    to encourage resilient building codes, especially in areas
    where disaster has already occurred. Right now we do very
    little. If a State has not fortified correctly, we should try
    to take some positive out of the event occurring by making sure
    the State has the opportunity to fix its oversight. Funding
    should be available as essential assistance for development and
    enactment of statewide building codes for 2 years after the
    disaster strikes. These funds would be used to defray costs
    associated with the development and enforcement of statewide
    building codes, and it would accelerate recovery also.
        And, fourthly, the Federal Government currently has a
    reactive response to disasters. This caused a large flow of
    money to come to many different agencies in a short window,
    resulting in a lack of accountability to the taxpayer. We can
    actually reduce disaster spending by consolidating ad hoc
    Federal disaster assistance programs under FEMA. FEMA, in
    consultation with other agencies, would publish a list of
    programs that would be transferred to and administered by FEMA.
    I suggest we also require FEMA-administrated projects to meet
    cost-benefit standards, be directly related to disaster
    damages, and be coordinated with other disaster-mitigation
    measures.
        My 35 years in working in emergency preparedness tells me
    that we simply are not doing enough. There is no excuse not to
    demand the States enforce building codes when it is the Federal
    taxpayer who must foot the bill. Federal policymakers must stop
    this terrible deal for the taxpayer and help make America
    resilient. These measures will save lives and save taxpayer
    dollars. They will force States that are not achieving a level
    of efficiency in their structures to either improve or lose
    access to millions of dollars in disaster relief. And I
    encourage the committee to take this opportunity to act.
        I want to thank you. I look forward to continuing to work
    with this committee on this, what I consider a very important
    issue. Thank you, Mr. Chairman.
        Mr. Barletta. Thank you for your testimony, Administrator
    Paulison. Mr. Phelps, you may proceed.
        Mr. Phelps. Thank you, Chairman Barletta, Ranking Member
    Johnson, and members of the subcommittee, for holding this
    hearing today. As stated, my name is Andrew Phelps, and I am
    the director of the Oregon Military Department's Office of
    Emergency Management, and I am pleased to be here to bring a
    State perspective to this important discussion of hazard
    mitigation.
        I was working as an actor in New York City when I found
    myself on the roof of my East Village apartment in Manhattan a
    few minutes before 9 o'clock in the morning on September 11,
    2001, watching one of the World Trade Center towers burn.
    Moments later, an airplane appeared on the horizon, flew
    towards Manhattan, disappeared behind the second tower, and
    emerged from the other side in a ball of flame. Until that
    time, I hadn't even taken so much as a first aid class.
        That moment changed me as it changed so many others in so
    many different ways. I never wanted to experience something
    like that again, and began working towards a career aimed at
    preventing the impacts of disasters. Over the past 15 years, I
    have come to accept that we cannot eliminate every hazard, but
    what compels me to do the work that I and my colleagues in the
    great State of Oregon do every day is the belief that the role
    of an emergency manager is to prevent hazards from becoming
    disasters.
        Through collaborative partnerships among community groups,
    nonprofits, the private sector, cities, counties, Tribal,
    State, and Federal Government, we have spent millions of
    dollars in Oregon in often innovative mitigation projects that
    have, in turn, saved tens of millions of dollars in disaster
    damages and an incalculable number of lives. It is my hope that
    all the testimony shared today will help illuminate the side of
    emergency management that seldom makes headlines, because it is
    just not exciting to talk about what did not happen in the
    disaster that was prevented.
        Oregon has a long history of leveraging Federal mitigation
    funds, regardless of the program or hazard, to reduce the
    negative consequences of when the water flows, when the ground
    moves, or the wind blows. A prime example of the importance of
    mitigation in Oregon comes from the 2007 flood that ravaged the
    city of Vernonia outside of Portland. Oregon leveraged $23
    million in Federal mitigation funds, an addition of millions of
    local and State dollars to reduce that community's ongoing
    flood risk.
        In December 2015, the Portland metro area saw historic
    rains in a storm similar to the 2007 event, but little damage
    occurred in Vernonia, which the city administrator attributed,
    in large part, to the mitigation efforts of the previous 8
    years.
        As this subcommittee examines the Federal mitigation grant
    programs, I encourage you to look at those areas where more
    work is needed, like the catastrophic wildfires that have
    become commonplace in the Western United States, and are
    becoming more prevalent in other parts of the country.
        In 2015, FEMA announced a pilot project to provide Hazard
    Mitigation Grant Program funds for wildfires receiving Fire
    Management Assistance Grant declarations. Oregon received
    around $2.5 million through that program due to the
    particularly bad wildfire season we had experienced.
        A similar program was not funded in 2016, yet I remain
    hopeful we can learn from the 2015 pilot to address this
    critical gap and fund wildfire-specific mitigation.
        Another area in desperate need for resources is earthquake
    mitigation. Oregon, like many States, is accustomed to the
    moderate quake. However, Oregon, California, and my friends in
    Washington face an entirely different threat.
        Given my impetus for pursuing what has become my passion,
    emergency management, I make it a point to regularly review the
    ``9/11 Commission Report.'' And one chapter always jumps out at
    me, chapter 8: ``The System Was Blinking Red.'' That chapter
    discusses the many warning signs before those attacks that were
    unable to be capitalized upon to stop that threat. In Oregon,
    in the Pacific Northwest, the threat of Cascadia is blinking
    red. The Cascadia Subduction Zone Fault runs from northern
    California to British Columbia, Canada, and has a well-
    documented history of generating 9.0 magnitude quakes,
    resulting in up to 5 minutes of strenuous, intense shaking,
    followed almost immediately by tsunami waves reaching 50 feet
    in height or higher.
        Oregon has effectively used Federal dollars towards
    education, outreach, and research programs, and tens of
    millions of dollars in State and local funds to mitigate this
    threat through initiatives like the Oregon Seismic
    Rehabilitation Grant Program. But more work and help is needed.
    A Cascadia event highlights the urgency for strong,
    collaborative engagement across public bodies, and with
    nongovernmental partners. For example, Oregon and the city of
    Portland received over half a million dollars in Federal Pre-
    disaster Mitigation Grant funds for a public-private
    partnership to seismically retrofit homes owned by
    predominantly low-income earners. The Federal dollars were
    effectively doubled when homeowners put up half the cost for
    retrofits that secured their homes' frames to their
    foundations.
        Now, be it tornadoes, hurricanes, floods, earthquakes, or
    fires, Government cannot engineer their way out of hazards.
    However, we can armor up our infrastructure, take personal
    actions to prepare and provide our citizens with the tools they
    need to educate themselves about the threat and be alerted when
    one is imminent.
        Thank you all for the opportunity to be here today and
    speak.
        Mr. Barletta. Thank you for your testimony, Mr. Phelps.
    Chief Sinclair, you may proceed.
        Chief Sinclair. Good morning, Chairman Barletta, Ranking
    Member Johnson, and members of the committee. My name is John
    Sinclair, and I am the fire chief and emergency manager of the
    Kittitas Valley Fire and Rescue Department in Ellensburg,
    Washington. I am also the president and chairman of the Board
    of the International Association of Fire Chiefs.
        The IAFC represents approximately 12,000 leaders of the
    Nation's fire, rescue, and emergency services. Thank you for
    the opportunity to testify today about the importance of
    mitigating damage and recovering quickly from disasters. Every
    disaster starts at a local level. The local fire department
    usually is the first agency to respond on scene during an
    incident, and the last to leave. It is an all-hazards response
    force that must be prepared for a variety of missions. From the
    national response perspective, there are no national or State
    fire departments. When a disaster or national emergency
    strikes, the Nation relies on local fire departments to provide
    service to the stricken communities.
        The IAFC is concerned by the increasing number of disasters
    in the United States. Between 1960 and 1969, the average number
    of disaster declarations was approximately 19 per year. Between
    2010 and 2014, this number skyrocketed to 67 per year, with a
    record 99 major disaster declarations in 2011. In addition, the
    cost of these disasters is increasing. Between 2009 and 2012,
    the average annual cost of Federal wild land fire suppression
    operations was $1.25 billion. For the following 4 years, the
    average annual cost increased by 32 percent to $1.84 billion.
        The Nation must develop a comprehensive strategy for
    addressing this problem. The strategy must highlight the
    importance of investing in pre-disaster mitigation, ensuring an
    effective emergency response, and authorizing critical post-
    disaster mitigation.
        Mitigation is a vital component to any comprehensive
    strategy. As Ben Franklin said: An ounce of prevention is worth
    a pound of cure.
        The IAFC recommends that States adopt model residential and
    commercial building and fire codes. These codes are developed
    using a consensus-driven process. All interested stakeholders
    are included with the intent to construct safer buildings.
    Scientific research has clearly demonstrated that the adoption
    of building codes saves lives and reduces property damage.
        The IAFC also recommends the adoption of community
    preparedness programs. The IAFC's Ready, Set, Go! Program is a
    cooperative program with the U.S. Forest Service. Through
    community outreach and education, it helps communities mitigate
    the risk of wild land fires. The program educates individuals
    to plan ahead in order to evacuate in the case of a major fire.
    These preparations for wild land fires through the Ready, Set,
    Go! Program helps communities prepare for other hazards as
    well.
        An effective emergency response is another key to reducing
    the damage from a disaster or emergency. For example, the
    sooner a wild land fire is extinguished, the less damage it can
    do. Experienced leadership is significant for an effective
    response. The IAFC recommends that the administration appoint
    experienced leaders to be the FEMA Administrator, the U.S. Fire
    Administrator, and other leadership positions within FEMA.
        The IAFC also asks Congress to ensure the continued
    development of future fire and EMS leaders by reauthorizing the
    U.S. Fire Administration. The USFA's National Fire Academy is
    the premier fire and EMS and leadership institute. It provides
    leadership training and education for the next generation of
    emergency managers.
        Local fire and EMS departments are part of the backbone of
    the National Preparedness System. As such, the IAFC asks
    Congress to reauthorize the FIRE and SAFER [Staffing for
    Adequate Fire and Emergency Response] grant programs. These
    merit-based matching grants help local fire departments meet
    their staffing, equipment, and training needs. A fire
    department must have effective day-to-day operations to be able
    to provide assistance in national disasters.
        We also ask that Congress continue to support the State
    Homeland Security and UASI [Urban Area Security Initiative]
    grant programs. These programs incentivize Federal, State, and
    local law enforcement, fire, EMS, emergency management, and
    public health, the whole community, to plan and train together.
    This planning and training is crucial for an effective all-
    hazard response.
        We also want to thank the committee for its support of the
    USAR system, which is an effective Federal-local partnership.
        The IAFC also thanks the committee for its focus on post-
    disaster mitigation. Effective post-disaster mitigation can
    prevent future disasters.
        For this reason, we support H.R. 1183, the Wildfire
    Prevention Act. This legislation allows jurisdictions that
    receive FMAG grants to receive hazard mitigation assistance as
    well.
        I want to thank the committee for the opportunity to
    discuss the need to address the rising number and cost of
    disasters. By focusing on pre- and post-disaster mitigation,
    community preparedness, and effective emergency response, we
    can begin to address this problem in a comprehensive fashion.
    This work will require cooperation at the Federal, State, and
    local levels. Learning from the tragedies of 9/11 and Hurricane
    Katrina, the Federal Government has made strategic investments
    to improve the Nation's capability to prepare and respond to
    all hazards. We recommend that Congress continue to support
    these efforts to keep America safe.
        Thank you very much.
        Mr. Barletta. Thank you for your testimony, Chief Sinclair.
        Mr. Berven, you may proceed.
        Mr. Berven. Chairman Barletta, Ranking Member Johnson, and
    members of the subcommittee, thank you for inviting me to
    testify today.
        My name is Mark Berven. I am the president and chief
    operating officer of the Nationwide Mutual Insurance Company.
    Over the past 91 years, Nationwide has grown from a small
    mutual auto insurer owned by our members to one of the largest
    insurance and financial service companies in the world. We
    offer our members a full range of insurance products and
    financial services, and are the Nation's leading insurer of
    small businesses, farms, and among the leaders in auto and
    property insurance.
        Nationwide has been a member of the National Association of
    Mutual Insurance Companies since our inception, and I currently
    serve on the board of directors. Both NAMIC and Nationwide are
    founding and executive committee members of the BuildStrong
    Coalition, on whose behalf I am testifying today. The
    BuildStrong Coalition was created in 2011, and is committed to
    building the Nation's homes and businesses more resiliently.
    The coalition salutes you, Chairman Barletta, for seeking ways
    to reduce Federal disaster losses. We share your serious
    concern surrounding the Federal Government's current approach
    to pre-disaster mitigation, which has failed to provide
    communities and individuals across the Nation with the tools
    they need to prepare for the next storm.
        Natural catastrophes are increasing in frequency and
    severity at an alarming rate, as we have discussed. Between
    1976 and 1995, there were an average of 39 Federal disaster
    declarations per year. This number skyrocketed to an average of
    121 between 1996 and 2015. During that time, we saw the country
    hit by Hurricane Katrina and Superstorm Sandy. And just last
    year, the U.S. experienced the second highest number of
    billion-dollar weather events ever recorded, including
    devastating flooding in Louisiana and in the Southeast
    following Hurricane Matthew. Research has shown time and again
    that pre-disaster mitigation is our best line of defense in a
    time where we face more severe catastrophes.
        Through the groundbreaking research of the Insurance
    Institute for Business and Home Safety, we know that the IBHS
    FORTIFIED Home program is proven to help strengthen homes from
    hurricanes, wildfire, high winds, and hail. By simulating real-
    world disaster conditions at their state-of-the-art facility,
    the IBHS has proven that even small things--the way in which a
    door swings, the size of a roofing nail--can have a major
    impact in surviving a natural catastrophe.
        But despite knowing the power of resilient building and
    pre-disaster mitigation, the Federal Government continues to
    take a reactive posture, waiting for a disaster to strike. From
    2004 to 2013, FEMA spent a massive 89 times more on post-
    disaster assistance than pre-disaster mitigation. Certainly,
    victims should get the help they need to get back on their feet
    in the aftermath of a disaster, but the fact that we invest
    such a small amount to prepare communities for severe disasters
    is further evidence that we need a wholesale change in FEMA's
    approach.
        Now is the time to focus on protecting our homes,
    businesses, and communities. And since we know the most
    effective way to shield lives and property during a disaster is
    resilient construction, the BuildStrong Coalition is calling on
    President Trump and Congress to take a multipronged approach to
    strengthening how we build in this country.
        First, we are seeking a critical reform designed to
    encourage States to exit the cycle of destruction. This can be
    accomplished by creating a powerful incentive of additional
    post-disaster funding for States that adopt and enforce strong
    building codes.
        Second, we should shift some of the Federal resources from
    reactive post-disaster spending to proactive mitigation
    investments in our communities. One of the most effective ways
    we can make this shift is by creating a new national Hazard
    Mitigation Grant Program. This new program could be funded with
    10 percent of the amount already allocated to the existing
    Post-Disaster Hazard Mitigation Grant Program and could be used
    by communities to protect homes, businesses and to mitigate
    risks before disaster strikes. At Nationwide, part of our
    commitment to our members is to help them prevent losses. When
    our members are victims of natural disasters, we see the tragic
    impact, the loss of loved ones, the emotional distress of
    seeing everything that someone owns gone in a minute, and the
    loss of a sense of security. It doesn't have to be this way,
    and it shouldn't be this way.
        As Congress and the President work together to improve our
    Nation's infrastructure, we urge you to adopt a national
    strategy for investing in pre-disaster mitigation that will
    save lives, property, and billions in taxpayer dollars.
        Thank you again for the opportunity to present at today's
    hearing and for this important work.
        Mr. Barletta. Thank you for your testimony. I will now
    begin the first round of questions limited to 5 minutes for
    each Member. If there are any additional questions following
    the first round, we will have additional rounds of questions as
    needed.
        Mr. Berven, as I mentioned in my opening statement, the
    data is clear. A small number of very large disasters make up
    almost all disaster spending. What is it about these disasters
    that costs so much, and what, if anything, could reduce those
    costs?
        Mr. Berven. It is a great question, and you are absolutely
    correct. You know, as we look at what's driving some of the
    factors of the cost of the losses today, we see a lot of things
    coming together. First, it is a product of a successful
    society. You know, Americans are building bigger homes, larger
    commercial structures. Residential development in high-risk
    coastal areas has skyrocketed. For instance, today the U.S. has
    over $10 trillion worth of property in coastal high-risk areas.
    It is easy to see that historically as we would look at a storm
    that would come in; that same storm today would cost
    significantly more because of the infrastructure that is in
    existence within these locations of high risk.
        So a number of things contribute. In addition, I think the
    comments that were made earlier about what academics would call
    the moral hazard that we have, essentially when people and
    businesses figure out that uninsured properties at the time of
    a post-disaster will receive recovery from the Federal
    Government, it lowers the incentive of insurance and other ways
    that we could save dollars that the Federal Government would
    not need to spend. Mitigation strategies, as we discussed,
    research at the IBHS, with scientific information that easily
    can improve the sustainability of homes and properties is a
    critical element to improve that.
        Mr. Barletta. Thank you. Administrator Paulison, the key to
    reducing disaster costs seems to be reducing damage. When
    physical damage is high, large numbers of people are displaced.
    The local economy is crushed, and reconstruction costs soar.
    What do you think are the appropriate roles of the Federal
    Government, the State and local governments, with respect to
    reducing disaster damages?
        Mr. Paulison. That is another good question. I firmly
    believe that in statewide building codes, that we have to put
    model codes out there that are going to build our homes and our
    businesses based on the disasters that are going to be there.
    We did that very clearly after Hurricane Andrew in south
    Florida and through our State, where we changed what we saw
    what the damage was, homes that failed that should not have
    failed, and we changed our building codes to mitigate that. And
    now we get some of these same storms come through, and they are
    not going to fail. So I think that is the State's
    responsibility to have those codes and enforce the codes.
        It is the Federal Government's responsibility to hold the
    States accountable. I talked about the carrot-and-stick method.
    I think that is very important. You have to have a strong
    carrot and a strong stick. If you do this, we are going to help
    you. If you don't do this, you are going to be on your own for
    part of that. So I think those are the issues we have to look
    at. Make sure the codes are there, the codes are enforced, we
    have mitigation plans in place, and the Federal Government has
    to be the parent in this particular issue.
        Mr. Barletta. Administrator Fugate, you proposed the
    disaster deductible as a means to encourage States to take
    steps to lower disaster costs over time and improve their own
    emergency management capabilities. And Administrator Paulison,
    you proposed that adjusting Federal disaster cost shares in
    order to accomplish a similar purpose. Could both of you
    explain why you believe these proposals are important and how
    they would work?
        Mr. Fugate. Mr. Chairman, I will start with the deductible.
    What I have found is the political reality is if we come in
    with too heavy of a stick in the aftermath of a disaster, there
    is not the political will to hold fast. You want to help
    people. A deductible is a lower threshold, less painful,
    because in many cases, their deductible they would have been
    paying for if they hadn't reached those thresholds to get
    declared. So it is not such an egregious amount that it makes
    it difficult to recover, but it is surprising that those dollar
    figures will get the attention of State legislatures because
    they run balanced budgets, and suddenly coming up with tens of
    millions of dollars in a disaster that didn't reach that
    threshold, or they had a deductible, is a forcing mechanism
    that I think is politically sustainable.
        So, I am always a realist. There are the absolute things we
    should be doing, and then after a disaster, there is the
    political reality that we as a Nation are going to help our
    neighbors. We are not going to let survivors suffer because of
    decisions State and local governments did or didn't make.
        So I always look at it from the standpoint if you set the
    price too high, the political pain, it is hard to enforce that
    after a big disaster. That is why I look at a deductible more
    along things that people are used to that you can budget for
    and understand. And I think that would be a way to do it.
    Director Paulison's idea about adjusting cost share, that would
    be another tool, but I would also remind you, anything under 75
    percent would require legislative action. That is set in law by
    the Stafford Act.
        Mr. Paulison. Administrator Fugate, it is correct, it does
    require a legislative action, but that is what you do. So you
    have to be able to reward the States and give them an incentive
    to put the mitigation plans in place, to put statewide building
    codes in place. If we don't do that, we are going to end up,
    even if we have a deductible, I think we are going to end up
    with States not doing what they should be doing. And I think if
    we do the reward, make it 80 percent if you are doing the right
    thing, and make it 60 percent if you are not doing the right
    thing, and that will encourage States to put those things in
    place because they are not that expensive for a State to do
    that.
        Mr. Barletta. Thank you. The Chair now recognizes Ranking
    Member Johnson for 5 minutes.
        Mr. Johnson of Georgia. Thank you, Mr. Chairman. Mr.
    Fugate, the State of Georgia has submitted comments on FEMA's
    proposed disaster deductible, arguing that it creates
    additional administrative burdens on State government. As a
    proponent of the disaster deductible, can you shed light on
    whether or not there is an undue burden placed on State
    governments?
        Mr. Fugate. Well, if I am State government, any time the
    Federal Government wants me to do something different, I always
    say it is an unfunded or unfunded mandate or burden. I think we
    have got to be realistic here. It will require us working
    together, and there would be additional processes built into
    it. It is going to be hard just to say an absolute deductible
    if we are also trying to give States credit for the things they
    are doing to buy down that risk.
        Knowing how things work up here, I could very easily become
    a bureaucratic burden. But I also think that if we work
    together, we can get to a better answer working as a team. But
    just saying it is going to cause more problems or more
    regulations is another way of saying we just don't want to do
    it. As I have told the States, I said you may not like my idea,
    but you better have an alternative because the next time this
    Congress has to face a $60 billion supplemental, things may
    change that they did not participate in. And so my response is,
    work with FEMA on that to build a system that works. If you
    don't like the answer, come up with another solution, and just
    don't say we don't like what you are doing because, again, I
    think that the cost of disasters needs to be addressed, and
    States need to be a part of that conversation.
        Mr. Johnson of Georgia. Thank you. Anyone else have a
    comment they would like to make on that issue? All right. Mr.
    Fugate, you discussed the statutorily defined qualifications
    and experience that the FEMA Administrator is required to meet.
    The International Association of Fire Chiefs has proposed that
    the Deputy Administrator and Assistant Administrators meet
    similar requirements. Do you have any thoughts on that?
        Mr. Fugate. Again, it would be something I could support. I
    think it would be, if you look at the post-Katrina emergency
    management format, it is in there for the Administrator and for
    the regional Administrators. And since we have moved a lot of
    our regional Administrators to career positions, there are
    fewer political positions left. But I think if you built that
    in in many cases, you look at the Deputies, the Chief Operating
    Officer, again, you want people to have experience. But you
    also want people--I always caution people. It is real easy to
    say you got to do this to the administration, but it is also
    important that the administration has their people in there,
    because if they don't go to those people, don't trust those
    people, they will bypass FEMA. So it is important to have the
    qualifications but not be so prescriptive that we take away any
    administration's responsibility to pick their team and the
    people that they are going to go to in a crisis.
        Mr. Johnson of Georgia. Thank you. Mr. Paulison, under your
    reduced cost-share proposal, how many States do you estimate
    would have higher cost shares, and how many States would have
    lower cost shares?
        Mr. Paulison. I don't have that figure. I do know that
    there are only 16 States that have enforceable statewide
    building codes. We have pockets of building codes in some of
    the major cities. But as far as statewide building codes, I
    believe the number is right around 16, so there is a lot of
    work to do. But I do agree with Mr. Fugate, it is things we
    have to work together on of how do we get from A to B to make
    sure everybody is on the same page? And I think we can do that.
    But if we don't do something to incentivize States or to punish
    States who do not do this, we are going right back to where we
    were. Time after time, we rebuild homes, and the next time a
    storm comes along, whether it is an earthquake or flood or
    winds, they blow down again, they are destroyed again. And we
    can't continue doing that. It is simply not sustainable as far
    as fiscally the way we are doing things. We have to stop and
    take a deep breath. What can we do to fix this? That is one
    recommendation I put on the table that we need to really look
    at.
        Mr. Johnson of Georgia. Thank you, Mr. Chairman. I yield
    back.
        Mr. Barletta. Thank you.
        The Chair now recognizes Mr. Smucker for 5 minutes.
        Mr. Smucker. Thank you, Mr. Chairman.
        Mr. Fugate, if I understand your testimony correctly, you
    believe that we have not achieved the proper balance of risk
    share which drives behaviors so States and other impacted
    jurisdictions are not providing proper mitigation and, in fact,
    you said are not even insured in some cases. So I wanted to
    understand that a little more. Who is it that is not insured
    for loss?
        Mr. Fugate. State and local governments. And that is the
    bulk of what you are paying out. Individual assistance, you are
    basically paying out for people who don't have flood insurance
    and some people that are underinsured or not covered. But the
    bulk of your public assistance dollars, you are picking up
    debris; you are fixing roads and stuff. I don't think I would
    really focus on insuring that. But in the city of New York, of
    the nine hospitals on hospital roads, eight of those got
    billions of dollars of taxpayers' money to pay for imaging
    equipment, damages, and other losses that they did not have
    insurance on.
        Mr. Smucker. So what you are saying is insurance is
    currently available for State and local governments to cover
    their loss----
        Mr. Fugate. Yes, sir. [Inaudible] private sector.
        Mr. Smucker. But they are choosing not to insure because
    they believe the Federal Government will come in?
        Mr. Fugate. What they do, in many cases, is they do is what
    they call self-insurance. But it is not really self-insurance.
    It is not actuarially based. They will cover their reoccurring
    and routine losses and exposures, but then they will state that
    either insurance wasn't available or not affordable.
        Mr. Smucker. Do we have statistics--I am sorry I am rushing
    you a little bit. But do we have statistics regarding State and
    local insurance--or jurisdiction--how many are insured and how
    many are not?
        Mr. Fugate. What we tend to find is discovery learning. We
    learn about it after they get hit, and then they come forward
    with their claims. Sometimes those decisions are made recently.
    Others are longstanding practices. And I have had the situation
    in some States, for example, school districts, one school
    district is fully insured; the school district next to it is
    self-insured. We are paying for that.
        I was in Arkansas--and it is kind of bad when it is in your
    term it happens. It got--a school got destroyed in 2010
    Arkansas. It wasn't insured; it was self-insured. We paid for
    the entire replacement of that school, 75 percent. In 2014, it
    got hit by another tornado, flattened again. The only reason
    why the taxpayer didn't pay for it: the construction company
    hadn't turned it over to the school district, and it was still
    under their insurance. But if that school had been built 30
    days earlier, you would have paid for that school twice.
        Mr. Smucker. Thank you. I am going to change directions.
        Mr. Paulison and Mr. Berven, you had both referenced
    statewide building codes. I have a background in construction
    and also, in the State Senate in Pennsylvania, did considerable
    work on the statewide building code there. And I fully
    understand the need to implement standards that mitigate risk.
        There is another side to it, and I would just like to get
    your perspective. And that is each of those standards can add
    cost to construction. And speaking for PA-16, my area, one of
    our major problems is affordable housing. And so if we add too
    much cost to construction, we literally impact the quality of
    life for individuals because they may not afford the home. And
    so, obviously, at some point, it is inefficient. And so I guess
    I would just like to--while I support a strong building code, I
    would like to get your perspective on achieving that balance.
        Mr. Paulison. I will take the first crack.
        First, I have got a background in construction also. I was
    a State-licensed general contractor. And it does add a cost to
    building a home. But it is not significant enough to put it out
    of the price range of people buying the homes. Sometimes it is
    as simple as how many nails you put in a roof. So there is
    minimal cost there. And we change our building codes to: You
    can't use pressboard on a roof. You got to use plywood. It has
    got to be five-eighths, you know, 3 inches on the seam, 6
    inches in the field, and ring shank nails. So it is a couple
    hundred bucks for the roof. And that--and we find that now that
    roof doesn't come off. Making sure how you fasten the windows
    in: instead of into the wood buck, it goes into the concrete.
    You know, we build CBS down there. And it is things like that.
    It doesn't add a big cost but protects the envelope of the home
    so it doesn't--you know, the--the doors coming into that have
    to swing out in south Florida, because we found, in Hurricane
    Andrew, the doors that swung in blew in, and then, once you get
    wind in the house, the roof comes off from the inside out. So
    there is no cost to that.
        Mr. Smucker. Right.
        Mr. Paulison. It is just which way you swing the door.
        So the builders will tell you, yes, it runs the cost up.
    And the truth is it does not run the cost up that much, and
    then you don't have to rebuild a home twice, like Mr. Fugate
    said.
        Mr. Smucker. I wonder if Mr. Berven could answer that as
    well.
        Mr. Berven. You bet. And I thought it was a great response.
    You know, it is a very important issue of this. I think one of
    the things at the BuildStrong Coalition that we have looked at,
    one of the four elements that we really see as being core of
    what we are doing here is creating a Federal incentive for
    extra post-disaster funding that could be utilized for pre-
    disaster mitigation to address and could be administered
    appropriately to make sure that the proper funding goes to
    alleviate some of those affordability concerns.
        I think that there are also things that, while not in the
    construction trade, from the insurance trade, from the private
    sector piece, that the incentive to continue to find ways to
    assist in the affordability and incentivize through insurance
    transactions also exists. Nationwide is trying some of that
    today because, again, of the Mutual heritage, investing for the
    longer term, we believe that there is an opportunity to
    continue through a private piece to provide incentive on the
    insurance transaction, both from potentially the construction,
    the contractor side, as well as the individual homeowner, that
    there is kind of that joint opportunity, both through the
    incentive, in post-disaster, shifting that funding, as well as
    private solution.
        Mr. Smucker. Mr. Chairman, do I have time for another
    question? Or are we moving on?
        Mr. Barletta. We are going to have another round.
        Mr. Smucker. OK. Thank you very much.
        Mr. Barletta. Sure.
        The Chair recognizes Ms. Norton for 5 minutes.
        Ms. Norton. Thank you, Mr. Chairman. And I appreciate this
    hearing particularly at this time.
        Pre-disaster mitigation has been a bipartisan favorite of
    this committee. And yet we have never been able to convince any
    administration to--on the 3-to-1 savings because that is not
    how the appropriation process works, and we tend to matters
    after the fact, which is, of course, the most costly way to
    treat them.
        As far as I am concerned, there is an elephant in this
    hearing room.
        I am interested in unanticipated disasters, which we are
    increasingly seeing around the country and around the world. I
    think the chairman quoted statistics from the CRS: 25 percent
    or so of the disasters account for 92 percent of the cost. One
    wonders how long those figures will remain where they are. For
    example, there are unheard of disasters in places unseen
    before. And the intensity of disasters has shocked the Nation.
        I mean, who would have expected Hurricane Sandy to take out
    whole sections of New York City and New Jersey in the way it
    did? We are seeing climate disasters of the kind that were
    never had in that particular region before.
        In North America, we see five times the weather-related
    events over the prior three decades. I don't think any
    weatherman told us all of these things were coming down the
    road.
        So I don't care where people are on climate change. The
    science is pretty clear on that. I am concerned with whether we
    are prepared to deal with increasingly unanticipated and
    intense climate events.
        Now, Chief Sinclair, for example, says in his testimony,
    comments on the increasing number of disasters--increasing
    number of disasters--in the United States and quotes from the 9
    years: from 1960 to 1969, there were 19 per year; escalated to
    67 per year from 2010 to 2014. Something is happening.
        He also speaks in his testimony--I am looking at page 2--
    about the intensity and costs. And so, when I refer to
    Sinclair, for example, it was the intensity that drove these
    matters.
        So I need to know whether this panel believes that the
    country is ready for unanticipated disasters of far greater
    intensity than we have ever seen before.
        Mr. Fugate, I would like to go down the line. Are you ready
    for that? All this talk about pre-disaster mitigation, that is
    based on the disasters we have seen. I am now talking about the
    disasters we are seeing. So could I have your response to the
    new--the intensity and the new disasters in places that they
    have not been seen before.
        Mr. Fugate. Yes, ma'am. Climate change is real. I am going
    to tell you how real it is. Insurance companies generally don't
    get into debates about public policy like that. But there is a
    recent article in the Bloomberg that Travelers Insurance is now
    tracking tornado impacts in their tornado seasons, and they are
    seeing a climatic signal in their losses that is not
    sustainable. When insurance companies start telling you that
    the weather is changing more than they can compensate for and
    what their rates are, they are going to do one of two things:
    they are either going to increase their rates to become more
    affordable, shifting that to the taxpayer, or they are going to
    stop writing policies, shift it to the taxpayer.
        You have to build back not by past data. It is not good
    enough. It doesn't tell us what is about to happen. And we
    really need to drive this conversation by what is insurable.
    And a simple answer may be, if the private sector doesn't think
    it is a good bet over 20 to 30 years and won't insure it at
    affordable rates, maybe we are not building in the right place
    the right way. But our past history of weather data is too
    insignificant to continue to use only that to determine what we
    should be building to. And time and time again, when we have
    used that data, right after it, another event occurs and takes
    it out again, and they didn't have insurance.
        Ms. Norton. Thank you.
        Mr. Paulison?
        Mr. Paulison. I think, regardless of whether a climate
    change believer or not, it is building our homes, building our
    businesses, our public structures to withstand whatever type of
    disaster is going to be in that area. If you are in California,
    you build to earthquakes or you build to wildfires. You have a
    sustainable space around your house. You can't have a wood-
    shingle roof anymore.
        In south Florida, we build our homes to withstand
    hurricanes. We know we are going to get 150-mile-an-hour winds.
    So we design our homes to deal with that. So I think if we
    start looking at that part of it, being very pragmatic, and
    saying, OK, we need to--instead of our home being blown down
    every time, why did it blow down? You know, or why did it
    flood? Or why did it catch on fire from a wildfire? And let's
    build our homes to withstand these types of things. So,
    regardless of how many come along or how intense they get,
    every time we have damage, let's step back and say, OK, why did
    it have damage, and what can we do to mitigate that?
        I think that is the approach we need to take.
        Ms. Norton. Mr. Phelps?
        Mr. Phelps. Thank you, Congresswoman Norton, for the
    question.
        Speaking from Oregon's perspective, certainly we have seen
    increases in all types of weather, and catastrophic wildfire
    has been a particularly big issue for us. We in emergency
    management often find ourselves in the business of consequence
    management. I am not quite as concerned--or have less control
    over why the wildfires are starting so frequently and burning
    so hot and in such large areas as how we can prevent those
    fires from burning, quickly extinguish them, and, probably most
    importantly, prevent the loss of lives and property in those
    fires.
        So Oregon's perspective, we take an all-hazards approach to
    how we prepare and mitigate against disasters. We have got
    rugged coastline, agricultural valleys, alpine mountains, and
    high desert. It is a big task to look at that hazard profile
    and try to find an effective statewide mitigation strategy to
    do so. But the work that we are doing with the State and,
    probably more importantly, the work of our counties and Tribal
    governments in their areas is more valuable at buying down some
    of that risk.
        Ms. Norton. With your indulgence, Mr. Chairman, can I get
    the next two, their responses to this one question I asked?
        Mr. Sinclair.
        Chief Sinclair. Thank you very much for the question.
        We currently have a 40,000-acre fire burning today in
    Arizona. The Okefenokee Swamp is in the process of burning.
    Wild land season used to be about an 85-day. It is now 365
    days. When you take a look at the past 20 years, it has
    typically been in the Intermountain West where the major fire
    problems have been. The scientists tell us that that the fire
    problem is going to go across the hardwoods of the Plains
    States, up in the Great Lakes region, all the way into the mid-
    Atlantic and into the New England States. Last year, we saw
    disastrous fires occur in Tennessee and Georgia at a time when
    we wouldn't have done that.
        The answer to your question is, are we ready? It depends on
    the community. One of the things that we are looking at is
    that, in the Intermountain West, we are educating the
    communities as it relates to defensible space, fire-adaptive
    communities, the Ready, Set, Go! Program.
        If there is anything that CNN, MSNBC, will teach us, it is
    that every community across this great land needs to be
    prepared for the wild land problem.
        And so are we there yet? No.
        That is the reason why we need the codes. It is the reason
    why we need to have a very open dialogue about where we are
    building buildings and what we can do to make them fire
    resistant. It is also vital that--because every one of those
    buildings is going to have people in it and making sure the
    people are prepared to--for all types of hazards. Whether or
    not it is a wild land fire, whether it is a tornado, whether or
    not it is an earthquake, we need to make sure that we have got
    resilient communities.
        Ms. Norton. Thank you, Mr. Sinclair.
        Especially from the insurer, I would like to get a final
    response.
        Mr. Berven. Thank you very much. It is a great question.
        And we spend our time, from the insurance sector, trying to
    expect the unexpected and build for that. And I think in the
    testimony that I provided, as we talked about, the scientific
    research at the Insurance Institute for Business and Home
    Safety, the one thing that we know is that the unexpected is
    going to continue, and it is going to continue to rise, as we
    talked about, the frequency and severity. So the core for us is
    about investing in scientific research about what we can do to
    mitigate the unexpected losses that are coming.
        Many folks have seen the Insurance Institute for Highway
    Safety where cars are crashed and think about the decades that
    that work has gone on to improve safety on our roadways. That
    same effort is being aggressively applied to the property side
    now at the Institute for Business and Home Safety. And we
    believe that the building codes and the research that we are
    finding will help us mitigate loss that will occur because we
    know that these trends are going to continue.
        Ms. Norton. Thank you very much, Mr. Chairman. I appreciate
    your indulgence.
        Mr. Barletta. Thank you.
        The Chair recognizes Mr. Weber for 5 minutes.
        Mr. Weber. Thank you, Mr. Chairman.
        I live on the gulf coast of Texas, and I have probably been
    through more hurricanes than anybody in the room. Contrary to
    my children's belief, I was not in the 1900 storm there in
    Texas.
        Hurricane Ike hit in 2008.
        Mr. Paulison, were you with FEMA in 2008?
        Mr. Paulison. Yes, sir.
        Mr. Weber. OK. It has been called the third costliest
    hurricane in history, almost 200 people killed and about $30
    billion--with a b--in damage. Hurricane Ike hit the gulf coast
    about 18 to 20 miles east of the Houston Ship Channel. Had it
    gone up through the Houston Ship Channel, it would have shut
    down about 30 to 40 percent of the Nation's refining capacity
    and energy production. So, for us, it is a very, very huge area
    that we want to make sure that we get covered. We are in the
    process of trying to get some coastal barrier protection.
        And, Mr. Berven, I think you mentioned Hurricane Ike in
    your testimony. You rarely hear about Hurricane Ike. It is
    called the forgotten hurricane because it happened September
    13, 2008, and then the bottom dropped out of the housing market
    and the stock market about 2 or 3 weeks later.
        So about 6 million people there on the Texas gulf coast. As
    I said, a lot of energy production.
        Mr. Berven, you mentioned that some communities never
    recover from those kinds of disasters. Galveston is one of
    those communities. The Galveston Island had 50,000 people in
    it, and, as such, it met the level for Federal grants. Now that
    it dropped below 50,000, we are working on trying to get some
    language where communities that come back up following a
    Federal disaster, whether it is a wildfire or whatever it is,
    could, before the next census, get that designation back.
        So my question to you is, if changes can be made to help--
    this is for you, Mr. Berven--if changes can be made to better
    help communities access these programs following a major storm,
    would that have an impact on insurance markets in your opinion?
        Mr. Berven. Yes. There is--it is a great question. I
    appreciate the opportunity. And we see it--you know, a real-
    life scenario that we see with properties that were constructed
    on the gulf coast of Texas. During that hurricane, I believe
    there were 13 that were constructed with IBHS hurricane
    standards. There were 11 of those, and they were about the only
    11 properties left at the end of that storm that were still
    standing. So, again, that, from the dynamic of, you know, the
    insurability and the affordability, and we think about all of
    those issues, it all has to do with mitigating and preventing
    the loss where those payments go out.
        So, by improving the infrastructure and the sustainability
    through these building codes, it has a direct impact on the
    availability and affordability of insurance, which as we all
    know, is core to the overall communities in which we live.
        Mr. Weber. Thank you for that response.
        I may be one of the only ones here in the room that has
    built his own house on the Texas gulf coast and built it to
    hurricane--in fact, built it beyond what we call windstorm
    program there in Brazoria County. We just really went above and
    beyond. As my own contractor, I can do things that most people
    wouldn't necessarily have the time or the money to do. So it is
    very important to us.
        We are working on--having been part of this committee, and
    Chairman Shuster leading a great codel over to the Netherlands
    a couple weeks back, we are watching the coastal barrier
    protection over there. I am thinking that if we can protect--if
    the Federal Government could come in with about $15 billion--
    with a b--worth of protection on the upper Texas gulf coast,
    and we protect 6 million lives, homes, property, industry,
    refining industry, and actually probably about 20 percent of
    the Nation's economy, then it would yield a lot of rewards. So
    $15 billion worth of infrastructure on the front end might
    conceivably prevent--we had $30 billion in Ike and, as I said,
    200 lives lost.
        Do you think that, in and of itself, would impact the way
    that industry does insurance? I am talking about the refining
    industry now. Or do y'all just do strictly homes, residentials?
        Mr. Berven. More on the residential and the homes is the
    piece where we have been on----
        Mr. Weber. OK.
        Mr. Berven [continuing]. On that piece.
        Mr. Weber. OK.
        Well, I appreciate your indulgence, Mr. Chairman. I am
    going to yield back.
        Mr. Barletta. Thank you.
        The Chair now recognizes Mr. Sires for 5 minutes.
        Mr. Sires. Thank you, Mr. Chairman.
        I want to thank the panelists, and I want to especially
    thank Mr. Fugate. I must have listened to you speak a half a
    dozen times, and you are always available for us to speak. You
    know, my gripe is always the same. And when you were telling
    the story regarding the Arkansas school and then another storm
    came by and destroyed it, why do--if a storm destroyed a
    school, why do we build another school that can be destroyed by
    a storm? Why can't we build that in a stronger, more storm--how
    can I say it? I am looking for a word, but I can't think of it.
    But just to be able to withstand the storm? Why is it that we
    have to build it the same way?
        Mr. Fugate. Well, sir, previously, before the Sandy
    Recovery Improvement Act, FEMA would have to look at whatever
    the local building codes were. And that is what we built back
    to, and anything above that would be mitigation. But one of the
    things the committee did in Sandy was they gave the President
    the authority to use modeled or standard building codes, and we
    were able to adopt that. It is hard to build a school that
    would not be damaged by an F4, F5 tornado.
        But this is what I consider almost criminal. We build it
    back without a safe room. So we took the work the International
    Code Council had done to develop standards for safe rooms to
    provide those tornado-hardened rooms to withstand F5 tornadoes
    so at least we are saving lives. And President Obama directed
    that we find a better solution after Moore. Well, the committee
    had given us a tool that allowed us to go above what the local
    building codes were and began using that to put safe rooms in
    all new construction after disasters. When we rebuild, if it
    was substantially damaged and it was a school, we are going to
    put a safe room in there.
        So that was one of the things you did recognize on the
    committee, that many times when we are rebuilding, even if
    State and local codes weren't strong enough, FEMA should be
    building that into the repairs without having to do cost-
    benefit analysis or defaulting back to just mitigation, that it
    should be based upon the best science, best available data at
    the time of the damage to build back to, and really look to
    build to the future risk.
        So, when that school got destroyed, we didn't have that
    tool. After that, we started building back. And so, after
    Moore, Oklahoma, FEMA's policy has been to use the tools we got
    in the Sandy Recovery Improvement Act unless the jurisdiction
    says, ``No, we will not fund rebuilding substantially damaged
    schools without safe rooms.'' We may not be able to stop all
    the damage in a tornado, but we want to make sure that we can
    provide survivable space for those children if a tornado
    threatens again.
        Mr. Sires. Thank you.
        You know, sometimes I think it is just common sense, some
    of the things that we just don't do.
        You know, I live--when Sandy was very--in New Jersey where
    it was very damaging, and I remember going to the train station
    and just the electrical boxes were put on the floor. I mean,
    nobody thought at the time to put these electrical boxes on the
    floor, that one day they were going to get wet. So now they
    decided to put them up on the ceiling.
        The other thing is these electrical centers, the
    transformers, they put them in a flood area that was low. So
    now they are raising them. But the problem in New Jersey, also,
    people want to live on the beach, but they want to live on top
    of the beach. And, to me, that was always a problem, even when
    I was in the State legislature. You just can't build sometimes
    in areas where they are now, and I don't know how to educate
    people.
        I have been working on this--this National Mitigation
    Investment Act--with Carlos Curbelo from Florida to try to
    provide incentives for the States. But what actually works?
    What is the most effective incentive that you can give a State
    to do some sort of mitigation work, other than money?
        Mr. Paulison. Well, one of the proposals we talked about
    earlier was on the disaster side, if they do what they are
    supposed to do, give them a few more dollars, make it 80
    percent instead of 75; and if they don't do it, cut it down to
    60. I mean, that is my recommendation. Of course, that is
    something for your discussion, obviously. But there has to be
    an incentive, and there also has to be a disincentive for not
    doing what you are supposed to do, what the States are supposed
    to.
        And don't forget: Hurricane Sandy was not a very powerful
    storm, barely a category 1. So what if you would have had a
    category 4 or 5 like we have in south Florida?
        I disagree with Mr. Weber. I am in south Florida. I have a
    lot of hurricanes too.
        Mr. Sires. And the other thing is, you know, some of these
    areas where Sandy hit, they are old areas. They have a lot of--
    one of the things that people didn't notice is, for example,
    the city of Hoboken, there were over a thousand apartments that
    were in basements that were flooded. And that was an issue with
    the insurance companies.
        You know, in urban areas that are really densely populated,
    people do live--and, you know, now they had to fight the
    insurance company because they didn't want to pay.
        So this whole thing is just difficult to work through
    sometimes.
        Thank you very much. And thank you for being here.
        Mr. Barletta. The Chair now recognizes Mr. Faso for 5
    minutes.
        Mr. Faso. Thank you, Mr. Chairman.
        I appreciate the panel coming here today. And I am
    intrigued by--I think it was Administrator Fugate; maybe, Mr.
    Paulison, you touched on this as well--the notion of
    municipalities not insuring their public buildings. And are
    there instances around the country where municipalities are
    typically doing this?
        We had a significant storm in my district, Irene and Lee,
    the Schoharie County Courthouse was completely flooded. It had
    never happened before. It had basically destroyed all of their
    public records dating back well over 100 years. And the
    building was flooded. And, obviously, the basement flooded, but
    also it was well up on the walls of the first floor of that
    courthouse. And FEMA did fund a substantial mitigation and
    repair effort there. So, just in terms of trying to get
    municipalities, incentivize them to carry insurance, can you
    talk a little bit more about that? And where around the country
    are municipalities actually doing so?
        Mr. Fugate. Well, the problem is all over the place, and it
    can be side-by-side. I think you may want to put a question in
    for the record to FEMA to show how many times they pay for
    uninsured losses on structures. That would be your best
    indicator.
        Mr. Faso. That would be an excellent idea.
        Perhaps, Mr. Chairman, we can have the committee submit
    such a question to FEMA and have them place that in the record
    at this point.
        Mr. Fugate. Not being there, I don't mind giving them extra
    work.
        But one of the things that--and this is something else I
    think the committee should look at. FEMA has a requirement that
    if we pay the first time, you should carry--you are required to
    carry insurance for the life of that afterwards. But there is a
    clause in there that, if the State insurance commissioner says
    it was neither affordable nor available, we will pay the
    second, third and fourth time. Now, FEMA's rule says we
    shouldn't be doing that. But the reality is FEMA is susceptible
    to Member pressure to try to find a way to get to yes. And in
    many cases, we have bent ourselves in a pretzel to get to yes
    to repair that structure the second or third time. I think it
    would be helpful to FEMA to get the intent of Congress to more
    clearly stipulate that, if you are damaged the first time and
    you weren't insured, OK, we got you; we are going to repair it.
    We will put mitigation in it. But we will never come back to
    that structure again; you must carry insurance for that risk.
        I think that needs to come from Congress because too often
    when FEMA has that discretion, the pressure to find a way to
    yes is so strong that we oftentimes repair it a second,
    sometimes a third, time.
        Mr. Faso. And when you are mentioning public
    infrastructure, are you including--I didn't quite hear your
    answer before--are you including infrastructure such as roads
    and bridges?
        Mr. Fugate. I would defer on roads and bridges because that
    is something that I am not sure how you insure. But I would
    figure, if it has got a wall and it has an occupancy of stuff
    or people, it ought to be insured. And, generally, on the
    building side, where it is contents--I have been in many--like
    Dave says, in Florida, we probably rebuilt half the fire
    stations across south Florida. And think about it: the only
    reason we were paying as a Federal Government was because they
    didn't have insurance on those fire stations. Now, I am not
    going to hold the fire chiefs accountable because their budgets
    are set by their city and county commissioners. But somebody is
    making the decision to go self-insurance and hope somebody else
    will pick up the check if it is really bad.
        Mr. Faso. And it is always the iron law of Government, as I
    have found, is that it is always easier to spend someone else's
    money.
        Mr. Fugate. Yes, sir.
        Mr. Faso. And, now, Administrator Paulison, you had--we
    talked about, both you and Administrator Fugate, had talked
    about the issue of State building codes and creating an
    incentive if a State had a modern building code. Could you give
    us a little more information in terms of which States might be
    at the--really complying with your goal, and how would we--what
    is the standard which we should potentially put in law to
    determine which States might be reimbursed at the higher rate
    as opposed to those who were laggards and would be reimbursed
    at a lower rate, rather than that 75 percent?
        Mr. Paulison. I will just talk about my own State, the
    State of Florida, where we do have a statewide building code,
    and we actually beefed up that code based on the damage we saw
    during Hurricane Andrew. We totally changed--we had to fight,
    you know, with some of the contractors, because they thought we
    were going to raise the cost of houses beyond what people could
    afford. And it didn't happen. So we pushed hard to change the
    code, looked very clearly at what type of damage we had, and
    why did these homes fail. And I am talking about brandnew homes
    that failed, an area called Country Walk. These are brandnew
    homes, and every one of them failed. So why did they fail?
        We had engineers look at that. And based on that, we
    looked--took a step back: OK. Here is why they failed. What can
    we do to fix it where they don't fail the same way again?
        So a State like Florida would definitely get an incentive
    because they have done this, and they enforced their building
    codes. There may be another State--and I won't pick on
    anybody--but let's say they don't have a statewide building
    code or they have one and it is not being enforced, so we are
    going to rebuild those homes back time and time again either
    through insurance costs or through costs from FEMA or somebody
    else. It still falls back to the taxpayer if a State, A,
    doesn't have a code, and it blows down, well, all of our
    insurance rates go up to compensate for what is--so it still
    comes back to the taxpayer.
        So I am saying, let's--you know, let's be the adult here. I
    think Congress needs to step up and say that, if you don't have
    a statewide building code, if it is not being enforced, there
    has got to be a cost to that.
        Mr. Faso. Thank you.
        I thank the panel.
        I yield back.
        Mr. Barletta. Thank you.
        The Chair recognizes Mr. Ferguson for 5 minutes.
        Mr. Ferguson. Thank you, Mr. Chairman.
        And thank you all for taking time to come meet with us
    today.
        A couple of questions. First of all, Mr. Paulison, your
    comments about not adding a lot of cost to the construction,
    particularly in Florida, related to, say, hurricane damage and
    the things you described, I agree with you. Thinking about it
    regionally--and this is more just a curiosity question--Mr.
    Phelps, how much more does it cost to build a home to make it
    earthquake resistant? I realize there is no such thing as
    earthquake proof. I mean, because there is a big difference
    between putting a few more nails in and changing the roof
    design as opposed to building one for earthquakes.
        Mr. Phelps. That is an excellent question.
        Most of the improvements that can be made, whether it is
    building new construction or retrofitting an existing single-
    family home, are relatively inexpensive. Things like strapping
    water heaters to the walls, a couple of bucks for some metal
    strapping and some screws into a stud goes a long ways toward
    having your house burn down or be flooded following an
    earthquake. More robust improvements like strapping the home to
    the foundation if it was built, generally speaking, 40 years
    ago or so, when homes were not actually attached to their
    foundation, which, when I think about that, kind of blows my
    mind a little bit--but that was the case--those projects can be
    $3,000, $4,000, $5,000, depending on the size of the home.
        So it is a relatively small investment. And, again, we have
    been very grateful in Oregon to be able to use some pre-
    disaster mitigation funds to do just that and work with
    homeowners to defray some of those costs on some of those
    expenses. So it is relatively inexpensive to retrofit, and I
    would imagine even less expensive to include those costs
    upfront during new construction.
        Mr. Ferguson. So y'all--you like that--obviously, the
    statewide building codes. Does that tend to have a regional
    component to it as well? I mean, are you thinking that maybe
    you get to the point that you have regional building codes for
    something like a fault line or a hurricane section?
        Mr. Paulison. Even in Florida, although we have statewide
    building codes, some of the counties, particularly Monroe
    County in the Keys, Dade, Broward, and Palm Beach Counties, it
    is a little bit tougher code than what you would have in the
    middle part of the State. So, yeah, although there is a
    statewide building code, you look at the type of damage or
    you--or type of disaster you may have, and what kind of damage
    it can cause, and you modify the code through that whole State.
        And along those lines, every State is not the same. We
    don't do earthquake mitigation in south Florida. But then, in
    Idaho, they are not going to do hurricane preparedness either.
    So every State is going to be different. What we are saying is,
    look at the type of natural disaster you may have in your
    particular State or your particular area and develop your codes
    to mitigate that type of damage. If we do that, it will save
    this country literally billions of dollars.
        Mr. Ferguson. Mr. Fugate, question for you.
        It appears that when there is a natural disaster, there is
    a really, really high impact on small businesses.
        Can you tell me why you--based on your experience, why this
    number of new businesses failing to reopen is so high?
        Mr. Fugate. They can't survive the cashflow and the cost.
    They are a small business. They don't have reserves. They
    cannot distribute their losses over a large corporate
    footprint. So they tend to be the most vulnerable.
        And as we talked about all those billions of dollars, they
    don't go to small businesses. The only thing small businesses
    can potentially get is Small Business Administration disaster
    loans. So we have seen--my experience in Florida--but see now,
    FEMA across the Nation--is we see failure rates of 40 to 70
    percent of small businesses do not make it through the
    disaster. The reasons are: no workforce, no customers, lack of
    housing, can't handle the cashflow.
        And I tell some businesses, I said: This is a harsh
    reality. Reopening may not be your best option. Your best
    option may be to preserve your capital, cash out your
    insurance, and wait for conditions to improve.
        And that is kind of harsh when local builders or local
    officials are trying to get their community back up and their
    tax base back up. But this is a harsh reality. Small businesses
    do not have a distributed footprint to absorb this, and our
    current programs are essentially a loan program that, in many
    cases, is a life line to nothing. It just gets them over a
    little bit, but they still end up failing because they don't
    get over the original impact.
        Mr. Ferguson. What would be your idea of a solution to
    address that issue?
        Mr. Fugate. Well, the first thing is, is kind of the basic
    stuff we are talking about about homes, is building more
    resilient construction for the businesses, but also doing
    something that I found that I learned, of all places, when we
    were down helping out USAID in Haiti is you have got to buy
    local and hire local. If we are not putting money back in the
    local economy, we are not targeting the local businesses, and
    we are always bringing help in from the outside, you miss
    opportunities. We spend hundreds of millions of dollars in
    response phases and initial housing on a lot of things that,
    locally, if we did a better job of tapping into that, we help.
        I think it is something the committee needs to provide
    oversight to FEMA on is the tendency is we go with a lot of big
    contracts; we bring in a lot of folks from the outside to help.
    But a lot of times the best resources were right there in that
    community, and we didn't hire them, and we didn't put them to
    work. So I think that is one thing you should continue to
    hammer us over, is buy local and hire local from those local
    communities. That is the best thing we can do for small
    business in a disaster, is give them work and give them some
    income.
        Mr. Ferguson. Thank you, Mr. Chairman.
        Mr. Barletta. Mr. Mast stepped out. So I will begin a
    second round.
        Administrator Fugate, earlier this year, I introduced, and
    the House passed, the Disaster SAVE Act, which would increase
    FEMA's small project threshold to $500,000. Do you support this
    legislation and could you describe how you think it could speed
    up disaster recovery, reduce administrative burdens, and lower
    costs?
        Mr. Fugate. Mr. Chairman, I supported you when you had it
    at $1 million, but I understand that people were a little
    squeamish about that. But the idea that on small projects--we
    pretty much end up spending about as much money sometimes on
    small projects as we do big ones because of the overhead. By
    increasing the threshold--I believe by going to a half a
    million dollars, I think FEMA says that is going to be about 97
    percent of what we actually do. It reduces the overhead burden
    on local governments and States. I don't think it increases the
    risk to the Federal taxpayer, and the oversight really isn't
    saving us. If we are going to do that kind of oversight, let's
    do it on big projects. And you gave us great tools to do cost
    estimates and speed that up. But on smaller projects, I think
    the risk of not providing that degree of oversight is more than
    compensated by the controls in place at State and local
    government, and the savings would be tremendous.
        Again, FEMA estimates that, of the projects they write,
    they could get almost 97 percent of what they write into that
    threshold, which reduces the burden of regulatory oversight for
    State and local governments, reduces FEMA's costs of
    administering the grants, and I don't think increases the risk
    to the taxpayer by eliminating that process.
        Mr. Barletta. We have got a project right now back in my
    district where the administrative costs that they are trying--
    that they are spending will be more than what they are trying
    to recover.
        Mr. Fugate. Oh, absolutely.
        Mr. Barletta. Since September 11, 2001, DHS has provided
    over $40 billion in preparedness grants to State, local, and
    Tribal governments to strengthen their preparedness to
    terrorism and other hazards.
        Chief Sinclair, as a former mayor, I know how critical
    Assistance to Firefighters Grants can be to local fire stations
    in obtaining the personal protective equipment that they need.
    Can you tell us how fire grants and other preparedness grants
    help our first responders prepare to manage the consequences of
    all hazards and what might happen if those capabilities were
    removed or diminished?
        Chief Sinclair. Thank you, very much, Chairman Barletta,
    for the question.
        In my written testimony, one of the things that we
    referenced is the National Fire Protection Association just did
    their fourth needs assessment of the fire service. And one of
    the things that that points out are all of the deficiencies
    that still currently exist.
        The AFG [Assistance to Firefighters Grants] and the SAFER
    grant programs have been very good for providing opportunities
    for people to upgrade their equipment. I can tell you that, in
    2007 and 2008, at my local organization, we were able to put in
    for an AFG grant that allowed us to replace very essential
    bunker ensembles and the self-contained breathing apparatus
    ensembles that we were unable to at that particular time. What
    that allowed us to do was take two organizations, a city and a
    fire district, merge those together, and become a much more
    effective and efficient system for the community. And it was
    the seed money from that purchase that got us working together,
    and it ultimately led to a merger.
        The issue is, is that you broaden that out to the SHSGP
    [State Homeland Security Grant Program] and UASI money, and one
    of the things that we see there is that you have got people
    that are looking at this from an all-hazards perspective. And
    they are working together.
        One of the things that we saw locally is that by working
    together and--it allowed us to go through flooding events,
    wildfire events, and a blizzard event where every road into our
    community was cut off. And the just-in-time supply piece cut
    in. So we wound up working with local law enforcement, the
    health department, and all of the other providers. But it was
    the seed money that allowed us to begin that planning process.
    And it made us a much more resilient community.
        Mr. Barletta. Thank you.
        The Chair now recognizes Ranking Member Johnson for 5
    minutes.
        Mr. Johnson of Georgia. Thank you.
        Mr. Phelps, you discussed how FEMA piloted its public
    assistance reengineering process with a 2016 disaster in Oregon
    that resulted in a substantial increase in the use of hazard
    mitigation. The State of Oregon received a disaster declaration
    earlier this year. Was the State able to replicate the
    increased use of mitigation in the 2017 disaster recovery?
        Mr. Phelps. Thank you for that question.
        We were. Not to such a great extent, primarily just because
    of the nature of the damages. The 2016 declaration was more
    permanent work repairing the infrastructure that has been
    spoken about today.
        The more recent disaster declaration was a lot of what we
    call category A and category B damages: debris removal and
    emergency response measures to be reimbursed with that Federal
    disaster declaration.
        The handful of projects that we did have that involved
    permanent work, we certainly are considering mitigation. Our
    goal is for 100 percent of those projects. And right now, we
    are at about 25 or 30 percent of those projects with mitigation
    work being done on those permanent repairs.
        Mr. Johnson of Georgia. Thank you.
        Other witnesses recommend allowing mitigation funds to be
    used to develop and enforce statewide building codes. Do you
    have any thoughts on whether this is an issue of lack of
    funding that some areas do not adopt statewide building codes,
    or is it an issue of a lack of willingness to adopt those
    codes?
        Mr. Phelps. I don't believe, in my experience, it is a lack
    of funding so much, but it is the perceived cost burden,
    perhaps, on increasing the building codes. I had heard a
    statistic--I can't verify the accuracy of it--but for every
    $1,000 a home increases, 100,000 people are priced out of
    purchasing that home. So every increase in the cost of building
    a home certainly has an impact on who can afford homes. And in
    Oregon, we have affordable housing concerns to be sure.
        I think the building codes are one piece of it, but another
    piece is probably land use planning and how we look at where we
    are building in relation to coastal areas, in flood plains, and
    certainly the wild land interface where homes become much more
    susceptible to the threat of wildfire.
        Mr. Johnson of Georgia. What has prompted the State of
    Oregon to invest in mitigation?
        Mr. Phelps. We talked a little bit today about the carrot-
    and-stick approach. I think I can say with 100 percent
    certainty that the carrot for Oregon to do mitigation and
    robust mitigation and educate our policymakers on the
    importance of it--mitigation--is not the promise of Federal
    disaster dollars. We tend to wear, as emergency management
    directors at the State level, disasters--Federal disaster
    declarations--as notches on our belts. I would have been
    perfectly pleased going through my entire career never having
    received a Federal disaster declaration. Sadly, in 2 years,
    that has not been the case, and I have been blessed with a few
    Federal disaster declarations.
        Our primary incentive is to save lives, protect property
    and reduce impact to the environment and the economy. That is
    what drives us to do the robust mitigation work we do. It is to
    try to limit the forecasted 10,000 dead and injured after a
    Cascadia Subduction Zone earthquake. So that number isn't
    nearly as great.
        Mr. Johnson of Georgia. Thank you.
        Anyone want to add to that?
        OK. From a State's perspective, Mr. Phelps, do you see any
    problems with requiring infrastructure built or repaired with
    Federal FEMA assistance to be constructed to meet the latest
    model building code?
        Mr. Phelps. I think we would welcome the opportunity to
    rebuild any damaged infrastructure during a disaster to
    whatever code is needed to withstand future stressors following
    disasters. There is talk, when FEMA comes in to help rebuild
    infrastructure, building it back to pre-disaster condition.
    More often that than not, that is not acceptable, and you are
    going to find yourself in the cycle of damages and disaster
    that has been referenced earlier. So certainly would welcome
    that opportunity.
        Mr. Johnson of Georgia. Thank you.
        Chief Sinclair, you discussed the lack of training for many
    local fire departments. Do you have a recommendation on how to
    improve the availability of FEMA or Department of Homeland
    Security training programs for local fire departments?
        Chief Sinclair. Thank you very much for the question.
        Certainly, our premier training organization that we
    utilize is the U.S. Fire Administration and the National Fire
    Academy.
        They do a couple of different approaches to this. They have
    onsite courses, and they also work with the State fire training
    directors to send courses out.
        What we are constantly doing is taking a look at what those
    evolving threats are and getting those types of information
    out.
        There are other grant programs, such as the ALERT grants,
    that allow us to take specific training, for example, railway
    safety classes, especially out into the rural areas. And it is
    important for us to have a myriad of different ways to approach
    that training.
        If you take a look at the railroad system and the bulk and
    the crude oil issue, the majority of the places where they have
    had issues is out in rural areas. And so every fire department
    that is on that rail line needs to know how to mitigate an
    actual event. So there is a host of different things.
        When you are talking about the U.S. Fire Administration,
    they have established classes. Every time they go out and
    update those classes, it takes money to be able to do that. And
    that is one of the reasons why, in our testimony, we are asking
    for the U.S. Fire Administration to be fully funded.
        Mr. Johnson of Georgia. Thank you.
        Chief Sinclair. Thank you.
        Mr. Johnson of Georgia. I yield back.
        Mr. Barletta. Thank you.
        The Chair recognizes Mr. Mast.
        Mr. Mast. Thank you, Chairman.
        You know, I would like to dig a little bit more into the
    burden of the State government, the burden of individuals,
    individual property owners, and what is the burden of the
    Federal Government. Basically, should States and individuals
    have to insure against the Federal Government creating an
    emergency for those entities?
        And so, to put this in context, in 2016 and years prior,
    the Federal Government released trillions of gallons of
    literally toxic algal blooms into my community on the east
    coast of Florida, freshwater algal blooms into saltwater
    estuaries from separate bodies of water. And it was done
    because they were worried about a failing dike that surrounds
    Lake Okeechobee in our community and what it would have done to
    those communities south of that lake had that dike been
    breached. And as a result of those trillions of gallons of
    toxic algal bloom that was released into the community, it
    devastated human health. It devastated wildlife, devastated the
    economy.
        So my question is for Mr. Fugate: If the Hoover dike, for
    which the Federal Government does have sole responsibility, had
    failed like what happened in New Orleans, would FEMA have
    helped those flooded communities?
        Mr. Fugate. Yes.
        But you are asking, actually, a very simplistic question,
    because nobody wants to deal with why all the toxic waste is in
    Lake Okeechobee from the farmland runoffs. And that dike is
    providing your drinking water supply in the dry seasons. So it
    is not a simple answer of one release causes another problem.
    That is a whole ecosystem that has a lot of issues.
        Mr. Mast. But would FEMA have covered a flooded community
    if the dike had breached around Lake Okeechobee just like what
    happened in New Orleans?
        Mr. Fugate. Yes.
        Mr. Mast. That is what I figured.
        And as FEMA's chief Administrator, last year, twice you
    signed off to say that an emergency declaration that our State
    requested would be denied and despite the fact that it was the
    Federal Government who was the sole arbiter of releasing these
    trillions of gallons of toxic water into the communities. So
    what I am basically hearing is that, if the Federal Government
    had overseen a failing dike, they would have come to our aid;
    they would have come to our assistance. But when the Federal
    Government releases trillions of gallons of toxins, they are
    going to hang us out to dry; they are not going to provide any
    assistance. They are going to say, basically, that you are on
    your own.
        Mr. Fugate. You know, I have been in the State of Florida
    and State director through a lot of algae blooms and releases.
    My job was to make a job recommendation to the President and
    point out whether or not that release exceeded the State's
    capabilities to manage. Other than economic losses, you did not
    demonstrate any other types of losses. Generally, FEMA does not
    reimburse for economic losses or nuisance events.
        So, when we evaluated the criteria, it did not meet the
    criteria to make the recommendation. Ultimately, that was the
    President's decision.
        Mr. Mast. So I do want to get into that criteria a little
    bit.
        First, Mr. Chairman, I would ask unanimous consent that the
    official correspondence between our Florida State Governor
    Scott and FEMA Administrator Fugate be included in the record,
    and these letters, please.
        Mr. Barletta. No objection.

            [The correspondence between Governor Scott and FEMA
            Administrator Fugate is on pages 81-96.]

        Mr. Mast. Mr. Fugate, there are some other areas on that I
    want to touch. And that is basically this: Does the Federal
    Government's role in causing an emergency situation, does that
    play into the decisionmaking process, and should it play into
    the decisionmaking process?
        Mr. Fugate. Depending upon the types of impacts, the
    Stafford Act is directed toward the impacts to State and local
    governments from a causative eligible event. The Stafford Act
    defines what those eligible events are for major Presidential
    disaster declarations and gives guidance on what is an
    emergency declaration. It does not always specify whether or
    not the responsible party is present. But, generally, when
    there is a responsible party, it is the responsible party in
    that program that is looked at for the cost or the
    reimbursements. Several examples of this were other events
    where other Federal agencies had the lead role for events that
    did occur that did not trigger a Stafford Act declaration even
    though it was requested.
        So the denial of the State of Florida's request was not
    unique in the administration. There were other events that had
    occurred where Federal Government events were attributed to
    having caused that disaster; it was not determined to meet the
    Stafford Act. There were other events, though, such as fires,
    that had met triggering events from controlled burns, and FEMA
    was directed, through legislative action, to provide assistance
    due to controlled burns that resulted in fires off the Federal
    properties, and FEMA did administer those programs at the
    direction of Congress.
        But I think, in many cases, the Stafford Act does have its
    limitations. If it is Congress' intent to fund that type of
    response, Congress can provide additional clarification and
    guidance to those events.
        Mr. Mast. Chairman, I will yield back, unless you want to
    give me a second round.
        Mr. Barletta. Since you missed your turn, we can continue.
        Mr. Mast. I just have a couple more questions in this same
    line.
        Mr. Fugate, this is a little bit about State population
    size. In regards to the same issue, the State of Florida was
    noted by your Director of Communications saying the State of
    Florida is the largest State in the Nation--one of the largest
    States with a population of almost 20 million people, has a
    robust capability to respond to emergencies and disasters. Does
    the phrase ``State population size,'' does that--is that a
    place--something that appears anywhere in the Stafford Act?
        Mr. Fugate. No. But in the guidance that FEMA uses in
    determining the impact of disaster, you do look at the size and
    capabilities of a State. Per capita, a loss of eligible losses
    on a per capita basis is one of the factors that FEMA uses in
    calculating the threshold for disaster declarations.
        Mr. Mast. So it doesn't appear anywhere in there. But
    should there be a hurricane or wildfire or something else, FEMA
    is going to take into consideration a State's size and
    population?
        Mr. Fugate. Yes. It looks at the per capita impacts as one
    of the determinations; did it exceed State capabilities?
        Mr. Mast. Thank you for your responses. I know you are
    highly regarded in the emergency management circles and for
    your work under Florida's Governor Bush. So thank you for your
    responses, and thank you for your time.
        Mr. Barletta. The Chair recognizes Mr. Graves for 5
    minutes.
        Mr. Graves of Louisiana. Thank you, Mr. Chairman.
        I want to thank all of you for being here today.
        Administrator Fugate, Administrator Paulison, Louisiana has
    had probably more than its share of disasters, everything from
    Hurricane Katrina to the August flood, which I believe FEMA has
    indicated was the fourth most costly flood disaster in U.S.
    history. A consistent theme comes up in each of these, and that
    is that what we see over and over and over and over again is
    that floods happen, disasters happen, and there were mitigation
    projects that were on the books that could have been done that
    would have prevented these.
        In the case of Hurricane Katrina, some of the projects
    dated back to the 1960s, and these were Corps of Engineers'
    projects. Administrator Fugate, following Hurricanes Gustav and
    Ike, as I recall, in 2011, you and I rode around--all around
    the Northshore and Plaquemines Parish and other places talking
    about some of this. And, you know, FEMA has its Pre-disaster
    Mitigation, Hazard Mitigation Grant Program, and other things.
    And the efficacy of these programs, Administrator Fugate, as
    you have testified before this committee, they are
    extraordinary: studies indicating that you get $3 in cost
    savings for every $1 you invest. And I have seen other studies
    that have numbers that are beyond there. And I certainly think
    the numbers are higher.
        Can you comment on your opinions now that you are both
    totally free? Can you comment on your opinion? We have the
    Corps of Engineers involved in resiliency. We have HUD. We have
    the Department of the Interior. We have USDA. We have FEMA. But
    just on the amount of money we spend, how we prioritize and
    coordinate these investments as compared to the amount of money
    we spend following a disaster?
        Mr. Fugate. Well, Representative, as we talked and we
    walked those parishes, many of those parish presidents were
    indicating they had projects on the books that just weren't
    funded. This is, I think, something that this committee has
    looked at, is how we have divided up disaster response. People
    look at FEMA's budget, and that is just, in many cases, just a
    small pool of what is actually going out there. A lot of times
    what will happen is we will end up with programs that get
    authorized, but there is never any funding. And then the Corps
    of Engineers has to take what limited funding they have across
    the Nation now and figure out where they are going to fund
    those priorities.
        I think, again, it would be helpful for Congress to give
    more direction to the agencies to work on something we ask
    States to do, a statewide mitigation strategy. Perhaps an idea
    for this committee to consider is a national mitigation
    strategy, to at least draw the thread between all the various
    committees and the funding sources of saying we have got finite
    resources, but we are spreading the mitigation around all over
    the place and not really getting to the critical mass. Maybe if
    it was the intent of Congress to look at this funding and
    direct it more toward where the natural interests are, where we
    see the greatest disaster risk, may be a way to get some better
    utilization of that.
        But I would suggest that that would be something that
    Congress and the intent and will of a national mitigation
    strategy that all agencies would be working from, versus each
    agency trying to figure out where they are going to get the
    biggest impact.
        Mr. Graves of Louisiana. Thank you. I think that is a
    fantastic perspective. I want to push back a little bit on the
    Corps of Engineers. I don't think it is just the funding issue.
    I think the Corps has wrapped themselves around the axle in
    many cases, simply incapable of delivering projects, but that
    is a separate discussion.
        Mr. Paulison, do you care to add any perspective there?
        Mr. Paulison. I think we touched on something here we need
    to deal with. One, FEMA was created to make sure we had one
    belly button, one point of contact for disaster response and
    mitigation issues. Now it has kind of morphed----
        Mr. Graves of Louisiana. Did you say belly button?
        Mr. Paulison. I did say belly button. Now we have this
    mission creep. We have disaster programs across the Federal
    Government. Department of Transportation has them. HUD has
    them. They are all over the place. I think Congress needs to
    focus these things back where they belong, put them back into
    FEMA, or put them under the control of FEMA, so we can have a
    cost-benefit analysis of each program that goes out there, of
    each thing we are going to be doing. Because right now, we
    really don't have a handle on how much money we are spending on
    these disasters. We kind of think we do, but we really don't.
    It is coming from a multitude of agencies. My recommendation is
    to put them back under the control, if not under FEMA, at least
    under the control of FEMA, so we know how much money we are
    spending, we know what is it being spent on, and is it being
    spent on something that needs to be done? Sometimes we are just
    spending it on stuff that is foolishness. So I think the whole
    thing, the mitigation thing, let's go back to where we were and
    why FEMA was created to begin with.
        Mr. Graves of Louisiana. You are both coming from FEMA,
    runs NFIP, and then you also respond to disasters. Do you think
    this continued policy of having a divorce or insulation between
    the Flood Insurance Program and where we invest our resiliency
    dollars should continue?
        Mr. Fugate. No. First of all, we got to figure out the
    Flood Insurance Program cannot run as a pure insurance company.
    It has got to look at factors--we got a built environment that
    is not going to change overnight. So we need to really put more
    emphasis on where our greatest exposure is in the Flood
    Insurance Program and, again, prioritize where we are going to
    put our resources, because the Flood Insurance Program itself
    doesn't generate the revenue to provide the additional funds
    for buyouts and mitigation. Pre-disaster mitigation, again, it
    is just not going to be enough. It's really going to take us
    taking a step back, and if there are opportunities in national
    infrastructure investments, let's buy down our risk,
    particularly in flood insurance.
        I just read the Congressional Budget Office, we are about
    $1 trillion exposure just on one hurricane on the east coast.
    We subsidize 25 percent of those policies. Inland communities
    subsidize coastal communities, and it is not sustainable. So
    let's buy our risk down by making smarter investments on
    mitigation.
        Mr. Graves of Louisiana. Amen.
        Mr. Barletta. Thank you. Thank you all for your testimony
    today. Your comments have been helpful to today's discussions.
    If there are no further questions, I would ask unanimous
    consent that the record of today's hearing remain open until
    such time as our witnesses have provided answers to any
    questions that may be submitted to them in writing and
    unanimous consent that the record remain open for 15 days for
    any additional comments and information submitted by Members or
    witnesses to be included in the record of today's hearing.
    Without objection, so ordered. I would like to thank our
    witnesses again for their testimony today. If no Members have
    anything to add, this subcommittee stands adjourned.
        [Whereupon, at 12:04 p.m., the subcommittee was adjourned.]

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