[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

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





     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.]


              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
                       [all]