[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


  DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2020

_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SIXTEENTH CONGRESS

                              FIRST SESSION

                    ___________________________________

   SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND 
                URBAN DEVELOPMENT, AND RELATED AGENCIES

                 DAVID E. PRICE, North Carolina, Chairman

  MIKE QUIGLEY, Illinois			MARIO DIAZ-BALART, Florida	
  KATHERINE M. CLARK, Massachusetts		STEVE WOMACK, Arkansas
  BONNIE WATSON COLEMAN, New Jersey		JOHN H. RUTHERFORD, Florida
  BRENDA L. LAWRENCE, Michigan			WILL HURD, Texas
  NORMA J. TORRES, California
  PETE AGUILAR, California

  
  NOTE: Under committee rules, Mrs. Lowey, as chairwoman of the full 
committee, and Ms. Granger, as ranking minority member of the full 
committee, are authorized to sit as members of all subcommittees.

       Joseph Carlile, Winnie Chang, Josephine Eckert, Angela Ohm,
              Sarah Puro, Rebecca Salay, and Gladys Barcena
                            Subcommittee Staff

                    ___________________________________

                                  PART 5

                                                                   Page
  HUD's Management of Housing Contracts During the Shutdown.......... 1                   
                                      
  Stakeholder Perspectives: Fair Housing.............................77                                            
                                                                                                           
  Stakeholder Perspectives: Affordalble Housing Production.......... 99                                      
  Stakeholder Perspectives: Passenger Rail Development............. 129                                                                                    
  Stakeholder Perspectives: Building Resilient Communities......... 159                                                              
  Member's Day......................................................189                                                     
                                                      
                                        
  Department of Housing and Urban Development.......................209                                                             
                                        
  Department of Transportation......................................249
                                                                        
                       ___________________________________    

                                                            

          Printed for the use of the Committee on Appropriations
          
                 U.S. GOVERNMENT PUBLISHING OFFICE
37-628                   WASHINGTON : 2019                 
          
          
   
   
 COMMITTEE ON APPROPRIATIONS

                        NITA M. LOWEY, New York, Chairwoman
MARCY KAPTUR, Ohio				KAY GRANGER, Texas			
PETER J. VISCLOSKY, Indiana			HAROLD ROGERS, Kentucky
JOSEï¿½ E. SERRANO, New York			ROBERT B. ADERHOLT, Alabama
ROSA L. DELAURO, Connecticut			MICHAEL K. SIMPSON, Idaho
DAVID E. PRICE, North Carolina			JOHN R. CARTER, Texas
LUCILLE ROYBAL-ALLARD, California		KEN CALVERT, California
SANFORD D. BISHOP, JR., Georgia			TOM COLE, Oklahoma
BARBARA LEE, California				MARIO DIAZ-BALART, Florida
BETTY MCCOLLUM, Minnesota			TOM GRAVES, Georgia
TIM RYAN, Ohio					STEVE WOMACK, Arkansas
C. A. DUTCH RUPPERSBERGER, Maryland		JEFF FORTENBERRY, Nebraska
DEBBIE WASSERMAN SCHULTZ, Florida		CHUCK FLEISCHMANN, Tennessee
HENRY CUELLAR, Texas				JAIME HERRERA BEUTLER, Washington
CHELLIE PINGREE, Maine				DAVID P. JOYCE, Ohio
MIKE QUIGLEY, Illinois				ANDY HARRIS, Maryland
DEREK KILMER, Washington			MARTHA ROBY, Alabama
MATT CARTWRIGHT, Pennsylvania			MARK E. AMODEI, Nevada
GRACE MENG, New York				CHRIS STEWART, Utah
MARK POCAN, Wisconsin				STEVEN M. PALAZZO, Mississippi
KATHERINE M. CLARK, Massachusetts		DAN NEWHOUSE, Washington
PETE AGUILAR, California			JOHN R. MOOLENAAR, Michigan
LOIS FRANKEL, Florida				JOHN H. RUTHERFORD, Florida
CHERI BUSTOS, Illinois				WILL HURD, Texas
BONNIE WATSON COLEMAN, New Jersey
BRENDA L. LAWRENCE, Michigan
NORMA J. TORRES, California
CHARLIE CRIST, Florida
ANN KIRKPATRICK, Arizona
ED CASE, Hawaii



                    SHALANDA YOUNG, Clerk and Staff Director

                                      (II) 
 
DEPARTMENT OF TRANSPORTATION, HUD, AND RELATED AGENCIES APPROPRIATIONS 
                                FOR 2020

                              ----------                             

                                        Tuesday, February 12, 2019.

  OVERSIGHT HEARING: THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTS 
          MANAGEMENT OF HOUSING CONTRACTS DURING THE SHUTDOWN

                               WITNESSES

IRV DENNIS, CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF HOUSING AND 
    URBAN DEVELOPMENT
BRIAN MONTGOMERY, ACTING DEPUTY SECRETARY, FHA COMMISSIONER AND 
    ASSISTANT SECRETARY FOR HOUSING, U.S. DEPARTMENT OF HOUSING AND 
    URBAN DEVELOPMENT
    Mr. Price. The subcommittee will come to order.
    Welcome to the first Transportation, Housing and Urban 
Development hearing of 2019.
    Today we will be conducting oversight of HUD's management 
during the recent government shutdown, with a focus on nearly 
1,200 expired housing contracts that put tens of thousands of 
tenants at risk.
    I am pleased to have Brian Montgomery, the Acting Deputy 
Secretary of HUD, and Irv Dennis, the Department's Chief 
Financial Officer, here to testify this afternoon.
    Thank you for being here. We look forward to your 
testimony.
    Before I make a brief opening statement about the subject 
matter of the hearing, I do want to say how pleased I am that 
Mr. Diaz-Balart and I will again be working as partners in 
running this subcommittee, more or less, doing the best we can 
in a cooperative fashion. And that was the way it was when Mr. 
Diaz-Balart was chairman, and I certainly intend to operate in 
the same way. We plan to be collegial and cooperative, to work 
through our differences, and to produce a good fiscal 2020 HUD 
bill that will garner strong bipartisan support.
    I also want to introduce the new subcommittee members on 
the Democratic side of the dais: Representative Bonnie Watson 
Coleman of New Jersey; Representative Norma Torres of 
California; and still to come, Representative Brenda Lawrence 
of Michigan. These are great new members. They are going to 
bring valuable perspectives to the subcommittee, and we are 
excited to have them join our returning members on Team T-HUD, 
we will call it.
    Now let's return to the business before us this afternoon.
    The recent presidentially induced government shutdown, 
which lasted 35 days, was one of the worst blunders in American 
political history. Probably wouldn't get much disagreement on 
that. It was self-inflicted, damaging, and counterproductive. I 
don't believe anybody in this room wanted it. Unfortunately, 
the President did, and it took more than a month before he even 
allowed even a temporary solution to be put in place.
    Unfortunately, HUD was a major casualty of the President's 
recklessness. Shutdowns hinder or halt essential government 
functions, and agencies like HUD are left with a skeleton staff 
to cope with the fallout. And every indication is that this 
time the damage was especially severe.
    Serious questions have emerged about the Department's 
management of the lapse of appropriations, including the degree 
to which the shutdown was anticipated and whether adequate 
preparations were made in the weeks that preceded it.
    Many housing contracts were allowed to expire, putting tens 
of thousands of tenants at risk, in the Project-Based Rental 
Assistance Program and the 202 and 811 housing programs for the 
elderly and disabled respectively.
    Approximately 650 of these contracts expired in December, 
many of them before the lapse in appropriations occurred. The 
shutdown then greatly complicated the task of curtailing the 
damage. That is unacceptable. The Department should have seen 
this coming, but senior leadership failed to take necessary 
action.
    HUD's options were further limited by the fact that the 
Department had imprudently spent approximately $400 million in 
advance appropriations at the beginning of the fiscal year. 
Now, this money is flexible. It is designed to accommodate 
housing contracts, since they operate on a calendar year basis 
rather than a Federal fiscal year. HUD could have used the 
advance appropriations during the shutdown to renew expiring 
contracts, but the money had already been spent.
    Compounding the problem was the Department's haphazard 
communication with stakeholders, including tenants, housing 
providers, and, I have to say, the Congress.
    HUD expected landlords and nonprofit groups to tap into 
their funding reserves, their own reserves, to keep contracts 
afloat, but the Department failed to issue timely instructions. 
We heard numerous reports from landlords who had not received 
guidance.
    Meanwhile, this subcommittee got wind of the difficulties 
and requested basic information from the Department about the 
number of expiring contracts and affected properties. HUD had 
already shared this information with outside stakeholders but 
refused to provide Congress with the same information for 
nearly a week despite frequent inquiries.
    So this, too, is unacceptable. This Appropriations 
Committee expects HUD to comply with legitimate oversight 
requests, and I hope we will receive assurances from our 
witnesses today that this kind of episode won't be repeated. We 
need a better understanding of what went wrong and why it went 
wrong. Just as important, we need to know what HUD is doing to 
ensure similar problems don't recur.
    The subcommittee is prepared to be a partner with HUD. If 
there are certain adjustments in the way the Department's 
funding is working, we need to know that. We want to be 
helpful. But we also need for HUD to provide an honest 
assessment of what happened and how it can improve.
    So, again, I look forward to hearing from our witnesses 
this afternoon.
    I would like to recognize our ranking member, Mr. Diaz-
Balart, for his opening statement.
    Mr. Diaz-Balart. Mr. Chairman, thank you very much.
    I, again, first, would like to start to also welcome the 
new members of the subcommittee. So, Mr. Chairman, you already 
mentioned the new Democrats, and we are joined by, I think, 
among the best Members that the Congress has: Mr. Womack, Mr. 
Rutherford, and Mr. Hurd.
    Frankly, I am thrilled that you are part of this 
subcommittee.
    Mr. Chairman, you will find them to be, frankly, phenomenal 
members of this committee.
    I might be a little biased, but I really think that this 
subcommittee plays a special, significant role to our Nation. 
And so I am thrilled to be on the subcommittee with all of you.
    Now, let me start by first congratulating you, Mr. 
Chairman, for your chairmanship. Don't get me wrong, I would 
much rather--I liked it when you were ranking member better.
    But, on a serious note, look, I have had the privilege to 
serve on the subcommittee with Mr. Price for 4 years now. And 
he is fair. It has been a partnership. And we not only have 
gotten to, I think, work and like each other but trust each 
other, and that is the most important thing.
    And I have also gained a special appreciation for the 
chairman for his dedication to not only public service but, 
frankly, Mr. Chairman, your deep understanding of the 
individual and sometimes very complex programs of the 
jurisdiction of your subcommittee.
    So I look forward to continue working with you, again, not 
only working with you but collaborating with you, and we are 
going to have a good time together, Mr. Chairman.
    And I would just note, a lot of the times, it is, in 
essence, you know, chairman versus ranking member in the 
negotiations, and that has not been our experience. It has been 
House negotiating as one in the subcommittee to deal with the 
important issues.
    And so, again, I look forward to continue working, Mr. 
Chairman. And congratulations.
    I want to welcome our witnesses today.
    Acting Deputy Secretary Montgomery, you know, you stepped 
into your role--again, the second in command at HUD--4 weeks 
into the shutdown, in difficult times. That was not an easy 
assignment, but I know you took on this role with, again, deep 
understanding of HUD's mission and operations.
    And you also serve as Assistant Secretary for Housing and 
FHA Commissioner, and so you are serving double duty, managing 
the day-to-day operations of HUD while overseeing a trillion-
dollar housing portfolio--something that a lot of us obviously 
care deeply about. So that is quite a responsibility, sir, and 
thank you for what you are doing and your service.
    And, Mr. Dennis, I know you had an entire career in the 
private sector before you came to serve here at HUD as CFO. 
Thank you for agreeing to do that. I appreciate that you 
combine, again, a private-sector perspective, which is so 
helpful, with a commitment to HUD's mission and its workforce.
    Thank you both for your service.
    I look forward to a hearing about how you dealt with this 
extremely challenging time and keeping HUD programs running 
across the country as best as you possibly could during the 
shutdown.
    I would also like to thank the professional staff at HUD 
who were called to duty during the shutdown. And, again, I 
don't think staff gets enough credit. Even as they missed two 
paychecks, they worked to make sure that programs across the 
country continued to serve the neediest among us. Your efforts 
and theirs, gentlemen, ensured that no tenants were evicted 
during the 35-day shutdown.
    We have an opportunity today to look at lessons learned 
from, again, this experience and explore how to move forward 
and improve HUD's systems and processes.
    Chairman Price and I share the goal of helping HUD meet its 
mission, to serve our most vulnerable citizens, including the 
elderly, the disabled, and our heroes, our veterans. So I hope 
today's hearing will be a beginning of a conversation with you 
and other senior leaders at HUD on how to best do that. And so 
I look forward to our dialogue today.
    I thank the chairman.
    Mr. Chairman, I yield back.
    Mr. Price. Thank you very much.
    And we will now turn to the statement from our witnesses.
    Mr. Montgomery, I understand you have a full written 
statement for the record. We will include that. You are 
recognized for 5 minutes.
    Mr. Montgomery. Thank you.
    Chairman Price, Ranking Member Diaz-Balart, and members of 
the subcommittee, thank you for welcoming me today to discuss 
the most recent lapse in appropriations and how HUD performed 
during this weeks-long interruption to our normal operations.
    And to those new members of the subcommittee, I would like 
to say welcome. Secretary Carson and the rest of HUD's senior 
leadership team looks forward to working with you.
    I am pleased to be joined today by our Chief Financial 
Officer, Irv Dennis. Irv came to HUD in January of 2018 after 
considerable private-sector experience. With 37 years of 
accounting and audit work under his belt, ultimately as a 
partner with the global firm of Ernst & Young, Irv brings a 
vast well of knowledge to HUD as we seek to improve the 
agency's financial management and accounting practices--in 
short, to be better stewards of the taxpayer dollars.
    Today I would like to offer you a brief summary of HUD's 
operations during the most recent government shutdown.
    I am proud to report that, despite the furlough of close to 
97 percent of our dedicated workforce, HUD continued to support 
activities that impact the health and safety of the individuals 
and families that we serve.
    For example, we continued to make payments to 3,200 public 
housing authorities during the shutdown; we continued to make 
contract payments to private owners participating in our 
Project-Based Rental Assistance Program; and we continued to 
renew expiring Section 8 contracts during the shutdown.
    In cases where payments could not be made, our team worked 
with owners to find interim solutions, such as accessing 
property reserves, in order to ensure that residents were not 
impacted. We understood the vulnerability of those families who 
were concerned that, through no fault of their own, they would 
be at risk because of expired contracts.
    In contrast to some of the predictions you may have read in 
the media, there were no evictions of our residents in any of 
our properties as a result of the shutdown. Zero.
    On the single-family side, we continued to make certain 
families could secure FHA-ensured mortgages so they could 
purchase a home or refinance an existing mortgage.
    In the area of disaster recovery, while our ability to 
review pending long-term disaster recovery action plans was 
suspended during the shutdown, we took the necessary steps to 
ensure that Puerto Rico could access the obligated $1.5 billion 
in Community Development Block Grant disaster recovery funds 
for which an action plan had already been approved.
    We continued and are continuing to provide needed technical 
assistance to our grantees in the development and execution of 
the recovery programs. I can assure this subcommittee that the 
shutdown did not materially alter the long-term recovery of our 
grantees.
    Specifically in the case of Puerto Rico, we moved heaven 
and earth to make sure the financial systems were in place to 
allow the Commonwealth to draw upon their already-approved 
funds. In fact, just last week, Secretary Carson and I met with 
Governor Ricardo Rossello to confirm that HUD's work during the 
shutdown allowed Puerto Rico to proceed with its initial draw 
as early as February 4, 2019. I am pleased to announce this 
occurred on February 8. Again, we did what needed to be done.
    Finally, we were in daily contact with your staff to make 
certain we were as transparent as could be during a very 
difficult period.
    And we accomplished this all with just 3 to 5 percent of 
our staff, using IT systems that are in desperate need of 
modernization.
    HUD employees from multiple program offices, none of them 
being paid during the shutdown, moved mountains to make sure 
that our critical and legally permissible activities continued 
to function even though most of our agency could not.
    Irv's team and the Office of the Chief Financial Officer 
played a role that cannot be overstated, which is one of the 
many reasons I am pleased to appear with him today. We can all 
be immensely proud of their public service.
    Again, thank you for the opportunity to tell the story 
before this subcommittee. Irv and I will be pleased to answer 
any of your questions.
    [The information follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Price. Thank you.
    Let me, before we start the questioning, just say that we 
plan to continue the ground rules that have been in effect on 
this subcommittee for some time. We will have 5-minute segments 
for questions and answers, the standard 5-minute rounds. We 
will alternate sides between the parties. We will recognize 
members in order of seniority as they were seated at the 
beginning of the hearing, and then those who come in after the 
beginning will be recognized later.
    We ask all members to be mindful of your time. It is not 5 
minutes for the question and then the answer is another 5. The 
idea is to have the question and the answer both within the 5-
minute period. So you need to allow our witnesses time to 
answer within your 5-minute turn.
    If there are no questions about that, we are familiar with 
the procedure, and I will go ahead with the first question.
    We, of course, faced a huge challenge, as everyone 
acknowledges, when it organized on January 3. In fact, as soon 
as was possible, that very day, we passed legislation on the 
floor of the House to reopen the government. And we knew the 
harm that a shutdown can cause and was already causing.
    The effects are widespread. We anticipated that there would 
be severe consequences for many, many Federal agencies and the 
people they serve, including this agency, HUD. And there was a 
risk of people being evicted. Thankfully, they were not 
evicted, as Mr. Montgomery just said, but we came very close. 
It was a real possibility. And that is a shocking realization 
and one that is at the heart of our inquiry today.

                         MULTIFAMILY CONTRACTS

    So let me ask you, Mr. Montgomery--and, Mr. Dennis, chime 
in as needed--when did you know there was a problem with the 
renewal of expiring multifamily contracts--that is, that there 
could be a problem with respect to not only a shutdown but a 
CR? When did you realize that this could pose a problem and you 
would need to deal with it well in advance?
    Mr. Montgomery. Thank you, Mr. Chairman.
    To pull back the curtain a little, we have contracts 
expiring every day. Contracts are expiring as we sit in this 
room today. We have 23,000 of them. We renew them on an ongoing 
basis.
    I would add, it is a very paper-centric process, using 
antiquated technology, largely driven by wet signatures on 
paper documents. So it is a very time-consuming process we hope 
to fix through some upgrades in technology that are long 
overdue.
    We began preparing for this shutdown, again, not knowing if 
it would ever occur, much less how long it would happen, weeks, 
if not months, before it happened.
    Mr. Price. How far? How many weeks or months? That is what 
I am asking.
    Mr. Montgomery. Mr. Chairman, I know we had some 
discussions in November. You know, we frequently assess things, 
including the shutdown plans. Thankfully, the last one was 5 
years ago. And, by and large, that was the blueprint, that 
contingency plan developed during the previous administration. 
But, again, you never really know a shutdown happens until it 
happens.
    Mr. Price. There is a 4 months' notice--is that right?--a 4 
months' notice period. So would you not have known for--the 
contracts expiring at the end of year, let's say, would you not 
have known in--or had the notice period beginning in September?
    Mr. Montgomery. Well, again, the contracts expire on a 
ongoing basis. The overwhelming of them, sir, out of the 23,000 
contracts, almost 21,500 of them were paid up through February, 
over 94 percent of them. The percentage of contracts that 
expired in December was about 550. We had another 500 or so 
expire in January.
    Again, we typically, since that process happens all through 
the month, we, many times, spend the next couple of weeks of 
the following month getting caught up on the previous month, 
again, largely due because of the antiquated process that is 
currently used.
    Mr. Price. So, in September, though, September, that is the 
4-month advance notice date, right?
    Mr. Montgomery. Well, sir, but, again, we didn't know in 
September that there was going to be a shutdown.
    Mr. Price. Well, that is part of my question. You had some 
pretty good clues, didn't you, that there would at least be a 
continuing resolution?
    Mr. Montgomery. Well, sir, I would say there have been a 
lot of CRs, and it is a difficult place to be in to administer 
a----
    Mr. Price. All the more reason to anticipate. I mean, we 
worked on a--we had very good bill ready to go in September. I 
firmly believe that if we had been here 1 more week before we 
adjourned to go campaign we would have had that bill on deck, 
ready for the new fiscal year. But we didn't. And we certainly 
never doubted that the bill was in jeopardy.
    I am asking, could you not anticipate in September that 
there might be a problem with these December contracts?
    Mr. Montgomery. Well, sir, I will reiterate that every 
month we have contracts expire. We typically spend into the 
next month to get caught up, which is what we did here, evening 
during a shutdown--which, by the way, we had never renewed 
contracts during any government shutdown. We are told by our 
long-term HUD staff that it had never happened, despite the 
fact that they had expired in previous shutdowns.
    Mr. Price. All the more reason to anticipate a shutdown is 
coming and get as much of this cleared up as you possibly can 
in terms of----
    Mr. Montgomery. Yes, sir. No objections, sir.
    Mr. Price. All right.
    And so how long did it take you to get a handle on the 
magnitude of this problem?
    Our staff were informed that HUD might have failed to 
review 1,150 multifamily housing contracts on January 4 and 
received confirmation of that from HUD.

                       CONGRESS-HUD COMMUNICATION

    On January 9, Mr. Montgomery, I think you participated in a 
call with stakeholders where you provided additional details 
about the renewal problems. Those stakeholders then reached out 
to committee staff with this information.
    Our staff then called HUD to confirm these details and were 
told that HUD could not confirm it but that the information 
was, quote, ``probably accurate.''
    Surely you can see why that would be frustrating.
    Mr. Montgomery. And, sir----
    Mr. Price. It is concerning we wouldn't hear about this, or 
that we would hear about an issue this important only after 
outside groups were told.
    Mr. Montgomery. Well, sir, I will apologize for any 
miscommunication. I am fairly certain that Mr. Dennis' staff 
spoke with the committee staff on January 4. My first call was 
to housing advocates for the following week, I believe, started 
on January the 11.
    I would say, could communication improve if there is a 
future shutdown? Absolutely. But, sir, I would just ask you to 
understand we had less than 3 percent of our staff trying to 
run an agency and it was pretty long days for everybody.
    Mr. Price. Well, we will return to this.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman.

                           CONTRACT RENEWALS

    Mr. Montgomery, so we hear that there were approximately 
1,200 contracts expired during the shutdown. How many of those 
contracts were you able to ultimately get signed during the 
shutdown? Any idea?
    Mr. Montgomery. Well, it is a lengthy process. And, again, 
I just want to keep reiterating this point. It is an 
antiquated, slow process that is long overdue for 
modernization. And, unfortunately, this episode pulled back the 
curtain on that.
    So, again, we started renewing those contracts by recalling 
staff, something that had not been done during previous 
shutdowns. There was 550, another 650 or so in January. I am 
pleased to report that, as of today, all of them----
    Mr. Diaz-Balart. Well, that was going to be my followup. 
How many of those remain?
    Mr. Montgomery [continuing]. All the ones for December and 
January have been authorized for renewal.
    Mr. Diaz-Balart. So you don't have any remaining that 
expired that are still expired today, as far as you know?
    Mr. Montgomery. Well, I just want to make sure I am clear 
on the point, that they have been authorized for renewal, 
which, by and large, means all that is left to be done is to 
execute a signature----
    Mr. Diaz-Balart. Right.
    Mr. Montgomery [continuing]. Typically now by the owner.
    So the total of 1,175 for December, January, and February 
have now been authorized for renewal. And that actually 
happened yesterday.
    Mr. Diaz-Balart. That is great to hear. And that is an 
impressive number, by the way. And, particularly, again, we are 
talking about a shutdown situation, so that is amazing.
    Let me talk to you a little bit about during normal time, 
not shutdown times, as you run this program. I understand that, 
again, project-based, elderly, and disabled contracts, again, 
they can periodically expire. And so can you provide us with 
some of the reasons, normally, that you may not be able to 
immediately renew contracts that on the verge of expiration or 
that have already been expired? I am not talking about a 
shutdown situation; I am talking about the regular order of 
business.
    Mr. Montgomery. Well, again, we have some 23,000 contracts 
all together. About 18,000 are Project-Based Rental Assistance. 
Another 5,000 are what we call PRAC (Project Rental Assistance 
Contract) renewals, which are essentially for Section 202 and 
811, the elderly and persons with disabilities programs.
    There are different pots of money, sir, but, regardless, 
they all require a contract. So, as I mentioned before, that is 
a process that is ongoing, happens every day, all day. And, 
again, it is very time-consuming. And we have been working with 
our CIO (Chief Information Officer), as a result of lessons 
learned during the shutdown, to greatly modernize that process.
    Mr. Diaz-Balart. So, during the shutdown--and, again, to 
say you were understaffed during that time is an 
understatement, obviously--can you walk us through the steps 
that HUD took to, for example, communicate with the private 
owners whose contract had expired during the shutdown? How were 
you able to do that? Or were you able to do that at all?

                 HUD COMMUNICATION WITH PROPERTY OWNERS

    Mr. Montgomery. Well, as has been the practice in previous 
shutdowns--which, thankfully, they are not very frequent--we 
sent out notices to owners. This time, I elected to personally 
call some housing stakeholders, some advocates. I thought that 
they should hear directly from me with an update. I didn't 
realize until later that might be an issue, but, again, I stand 
by what I did.
    So, again, we typically don't face off directly to tenants. 
That is simply done through the landlords and through the 
property owners.
    Mr. Diaz-Balart. Right.
    You mentioned a little bit in your opening statement that 
certain owners could borrow from their reserves, right, if 
their contracts had expired? Can you just very briefly kind of 
explain to me how that works?
    Mr. Montgomery. Yes, sir. So owners are aware that they 
can, if they have to, pull down some of those, what are called, 
replacement for reserves. I suspect the ones we talked with 
anticipated, you know, that a shutdown was occurring there just 
days before it happened, but we officially put out a couple of 
notices, one on January the 4th and one on January the 9th, 
reaching out to property owners, advising them of the current 
situation.
    Mr. Diaz-Balart. And let me ask you then also, do you know 
how many staff did you have to recall to HUD headquarters and 
to the field to do the work of, again, dealing with all these 
issues?

                      HUD STAFFING DURING SHUTDOWN

    Mr. Montgomery. So approximately 15 staff in the 
headquarters were working on it. We ultimately recalled 
another--a total of 50 out in the field. Because, you know, 
again, these contracts could have been in any number of 
places--in a field office, in our Fort Worth office, could have 
been with the owner, could have been with the headquarters 
staff.
    Mr. Diaz-Balart. I have to tell you that I am super-pleased 
to hear that you managed this shutdown--and it was a lengthy 
shutdown--without any evictions, obviously, which would have 
been horrendous, which I think says a lot to the skills and the 
ability and commitment of your team, frankly.
    And I am running out of time, and if we get another round I 
want to kind of touch a little bit about that. Because that 
obviously is a huge priority for this subcommittee, and it 
obviously was a huge priority for you. And, again, that part, I 
think all of us have to say, job well done.
    Mr. Montgomery. Thank you.
    Mr. Diaz-Balart. I yield back, Mr. Chairman.
    Mr. Price. Mrs. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman.
    Mr. Montgomery, I am new to this subcommittee, so I am 
listening and learning. So I might ask you some very 
fundamental questions.
    Mr. Montgomery. Yes, ma'am.

                           EXPIRING CONTRACTS

    Mrs. Watson Coleman. Of the 1,250, or the 1,150, or the 
1,200 contracts that were expired during this shutdown, were 
these contracts with owners of properties? And did these 
represent multiple tenants, or were these contracts per tenant, 
per owner?
    Mr. Montgomery. So these are contracts basically per 
property, with a combination of what we call Project-Based 
Rental Assistance and then the Section 202 elderly program and 
then the section 811 program for persons with disabilities.
    Mrs. Watson Coleman. So the 1,200, or the----
    Mr. Montgomery. 1,175.
    Mrs. Watson Coleman [continuing]. 1,175 represents 
contracts which expired over the spectrum.
    Mr. Montgomery. January--excuse me, December and January.

                              HUD PROGRAMS

    Mrs. Watson Coleman. But over different programs.
    Mr. Montgomery. Yes, ma'am.
    Mrs. Watson Coleman. What is 811?
    Mr. Montgomery. That is a program for housing for persons 
with disabilities.
    Mrs. Watson Coleman. Okay. And the 202 is for?
    Mr. Montgomery. For the elderly.
    Mrs. Watson Coleman. For the elderly.
    Mr. Montgomery. Yes, ma'am.
    Mrs. Watson Coleman. And so there are Section 8 housing 
programs for individuals that are renting an entire house, 
right?
    Mr. Montgomery. Well, most of these are for multifamily 
properties that are owned by--the project-based are owned by 
private owners, unlike the traditional public housing.
    Mrs. Watson Coleman. Okay. And what about the public 
housing contracts? Were those affected here as well?
    Mr. Montgomery. They have a different pot of money. They 
had access to more funds than we had. They were largely paid up 
through February during the shutdown.
    Mrs. Watson Coleman. When you talk about reserves, what 
kind of landlord are you talking about?
    Mr. Montgomery. So it depends on the program. If the 
project has FHA insurance, they are required to have reserves. 
Of those that don't, most of the owners keep reserves anyway 
for rainy-day funds. And for 202 and 811, they are required to 
have reserves.
    Mrs. Watson Coleman. These are the rentals, all rentals we 
are talking about?
    Mr. Montgomery. Yes, Congresswoman. Yes, they are.
    Mrs. Watson Coleman. All right.
    So you said that all the contracts that had expired are 
brought up to date and only need a signature now.
    Mr. Montgomery. The category is ``authorized for renewal.'' 
And, right now, we are--actually made a decision a couple of 
days ago to accept PDF signatures. We put our heads together 
and realized we don't want to rely on not knowing what is going 
to happen Friday on U.S. mail or FedEx, so we are accepting PDF 
signatures.
    Mrs. Watson Coleman. So how long will it be before those 
people affected by those contracts actually receive the money 
that they would have gotten over that period of shutdown?

                           CONTRACT RENEWALS

    Mr. Montgomery. Well, we have already--well, 100 percent of 
them are authorized for renewal. About half of them actually 
have all the signatures. They should be receiving those funds 
imminently, if they haven't already. And our goal is to wrap 
all this up by Friday so that, again, not knowing what is going 
to happen Friday, we can have them all buttoned up.
    Mrs. Watson Coleman. So, during this shutdown, was there 
any--because I get the impression that everything went well, 
from your presentation. If that is so, that is great.
    But is there any situation over this shutdown where, if you 
had had the advance appropriations of $400 million unspent or 
some other pot of money, you would have actually had the 
occasion to use it then, during that shutdown?

                        ADVANCED APPROPRIATIONS

    Mr. Montgomery. Without passing judgment, I would just say 
it is difficult to administer a Cabinet agency under continuing 
resolution after continuing resolution. The last one, we had 
all of 2 weeks to expend those funds, again, not knowing what 
was going to happen, whether or not there was going to be 
another shutdown.
    So that makes it very difficult, given we have a thousand 
different allotments--excuse me, we have about 85 different 
allotments and about a thousand different accounts, and every 
time we have a CR, we have to do that process all over again.
    And, Irv, you might want to add something to that.
    Mr. Dennis. Yeah. You know, operating under a CR is 
extraordinarily difficult. The money that is appropriated on 
the first day of the CR is not available immediately for 
obligation. We have funds controls that go in place.
    It is really a five-step process. There are 83 allotments. 
It finds itself down to a thousand accounts. And through those 
five processes, there are multiple levels of review and 
control. And it could take up to 1\1/2\ to 3 weeks for money to 
get from CR to obligation.
    Mrs. Watson Coleman. Can I ask a question just for 
clarification? The $400 million that is defined as advance 
appropriations, what is that intended for?
    Mr. Dennis. So the advance funds--and this gets to an issue 
that we have been focused on since I have been there and even 
prior, is the technology side of our business. The advance 
funds are used to bridge us from one year to the next.
    So the end of the fiscal year is September 30. Due to our 
poor and antiquated technology, we shut down the systems for 
2\1/2\ weeks to close our prior year's books. Historically, 
these advance funds are used to bridge that period.
    We do not use these advance funds to anticipate a shutdown. 
They are pretty much used in the first quarter, first month or 
two.
    You know, I would say, during the CR, you know, we had 2 
weeks to take the appropriated money, go through the steps of 
obligation. And this is Christmastime, it is holiday time. We 
were very focused on making sure that January and February's 
funds were allocated so there wouldn't be any----
    Mrs. Watson Coleman. Mr. Dennis, I am sorry. I am brand-
new, and my time long ago expired.
    I yield back.
    Mr. Dennis. Okay.
    Mrs. Watson Coleman. Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Womack.
    Mr. Womack. Thank you, Mr. Chairman. Congratulations, by 
the way.
    Mr. Price. Thank you.
    Mr. Womack. In a previous life, I served on this 
subcommittee. I am back. So, warning to everybody.
    To the gentlemen today, thank you. I mean, from what I have 
heard, it is not like we didn't have a shutdown, because we 
did, but it seems to me, based on the discussion that has 
happened here today already, that HUD did a masterful job in 
saving a lot of heartache out there, a lot of hardship out 
there. And that is a credit to the leadership of the 
organization, and I commend the Secretary and everybody on 
down.
    I will come to you, Mr. Dennis, here in just a minute.
    But how long could this successful handling of kind of a 
crisis situation actually have gone before we start seeing the 
ill effects of a shutdown that I am quite surprised maybe 
didn't happen?

                    EFFECTS OF A LONG-TERM SHUTDOWN

    Mr. Montgomery. Well, obviously, during a shutdown, you 
can't obligate funds you don't have. We don't want to, 
obviously, get over the line of the Antideficiency Act.
    If the question is when would we have reached a state of 
where things would have gotten a little out of control--I don't 
want to put words in your mouth, Congressman, but is that your 
question?
    Mr. Womack. I think that is about the right way to put it, 
yes.
    Mr. Montgomery. Okay. March 1, things would have gotten 
much more difficult.
    Mr. Womack. What have you been doing since we reopened the 
government, knowing that we have another cliff that we could 
possibly step off into, to continue the professional work and 
the activity that involved so many moving parts during the day?
    You mentioned you have 23,000 contracts that you deal with. 
I did a little quick Arkansas math. That is about 100 a day 
that you are dealing with, maybe more, maybe less on given 
days.
    So what have you been doing to prepare for what could 
happen if an agreement were not to be reached by the end of the 
week?
    Mr. Montgomery. So we find ourselves in a unique period. We 
just worked through the longest shutdown in government history. 
We came out of that for 21 days. We are spending that period to 
get caught up from the shutdown, to conduct regular business 
that we would during a 21-day period, and also try to prepare 
for the next shutdown, which may or may not happen and, if it 
does, could be of unknown length.
    So it has been an extremely busy, you know, 50, 60 days 
now, whatever, since the last shutdown. And we are moving 
heaven and earth, staff working overtime, to get all these 
contracts fully executed and get the funds obligated.
    I can assure you, we are moving every possible way to try 
to get this complicated and antiquated issue resolved, not 
knowing what is going to happen Friday.
    Mr. Womack. Quick question about modernization, because 
that is a subject for a more advanced discussion, short of 
having to talk about shutdowns.
    What would modernization do, from the IT perspective, that 
would allow you a better--not that we ever want to be experts 
at handling a government shutdown, because we don't like those 
and we shouldn't have to go through those. But what would 
modernization do, for example, in the past shutdown, that would 
have made life a little easier for you and the people you 
represent?

                            IT MODERNIZATION

    Mr. Montgomery. That is an easy question, sir. Thank you.
    Knowing the status of the contracts at any moment in time, 
knowing where they are and where they are in the process, would 
greatly improve our situation any day of the week, with or 
without a shutdown. And we did not have that capability and 
still do not have it.
    The system that we use is early-1990s technology. It is 
called TRACS. And while it performs okay, it is almost 30-year-
old technology.
    Mr. Womack. Mr. Dennis, quickly, a question for you.
    Mr. Dennis. Sir.
    Mr. Womack. Thirty-six-year distinguished career at Ernst. 
Tell me your frustration in dealing with the--you have to have 
some frustration, do you not?
    Mr. Dennis. I have actually very much enjoyed this last 
year. We have retirement at our firm at an early age, and I 
wanted to do public service and give back. So I have not been 
frustrated. I actually have enjoyed it.
    But there are differences. And I would say the two key 
differences, when people ask me this question, is: When you 
want to get something done and progress and modernize, you 
know, I do not have control of resources. You know, I can't 
control people like you want to control in the private sector, 
and I don't control funds like you do in the private sector.
    And I will tell you that probably the biggest frustration 
that we have at HUD is the technology. When you look at our 
technology--I had our team put together a matrix of all the 
systems and how they interface--it is old, it is antiquated, it 
is clumsy. It doesn't interface well. It is hard to move 
information from point A to point B. Sometimes that is a manual 
process; sometimes it is on an Excel spreadsheet. Very dated 
stuff.
    And the number-one thing we need is to improve that 
technology. It would help with everything that the Acting 
Deputy Secretary just talked about, and that is just in that 
program. We could eliminate a lot of overtime.
    And I think, generally, when I look at HUD per se, I look 
at the infrastructure and I look at the operations, and our 
operations are now starting to take over our infrastructure. 
And when you look at the number of employees 30 years ago, we 
were close to 16,000, 17,000; today we are around 7,000. When 
you look at the funds that went through the operations 35 years 
ago, it was about $5 or $7, $8 billion; today we are over $50 
billion.
    So we have the same infrastructure of technology doing the 
much more complicated stuff with half the people. So, to me, it 
is a very mildly risky environment. And, you know, I think the 
way that the team pulled together and did what we needed to do 
in the CR was a yeoman's effort on everyone's part.
    Mr. Womack. Really appreciate the work.
    Mr. Chairman, I know my time has way since expired. Thank 
you so much.
    Mr. Price. Thank you.
    Mrs. Torres.
    Mrs. Torres. Thank you, Mr. Chairman.
    And I am, too, new to this subcommittee.
    I don't expect you to have a crystal ball to try to, you 
know, figure out what the White House is going to do and when 
the next shutdown is going to come, if and when. Nobody here 
wants to see that, obviously. I think you have heard that from 
both sides of the aisle here. But we do expect you to do the 
best under the circumstances.
    I am looking forward to reading your proposal on new 
technology, since you are operating under a 30-year-old TRACS 
program. I can understand how frustrating that must be not only 
for you but for your employees.
    On the issue of employees, your guidance states that, you 
know, you are to determine, you know, who is going to come to 
work based on health and safety issues that may come across 
that employee. So how did you determine, when it comes to 
housing issues, you know, who is a priority to come to work, 
who would be exempted?

                           EXEMPTED EMPLOYEES

    Mr. Montgomery. Well, there was a contingency plan that was 
in place at HUD that was used during the previous 
administration, and that was the basis of what we used this 
time.
    Mrs. Torres. So you haven't updated that?
    Mr. Montgomery. Well, we have updated it now.
    Mrs. Torres. Okay.
    Mr. Montgomery. We have what we are calling version 2.0, 
lessons learned from the last 34 days. So we have made a fair 
number of revisions to that plan.
    Mrs. Torres. Is that made available for us to review?
    Mr. Montgomery. It absolutely will be available as soon as 
it is finalized.
    Mrs. Torres. And when I look at domestic violence 
shelters--which, as a former 911 dispatcher, I am very keen to 
the needs of shelters and ensuring that they have funding 
available for domestic violence victims to be relocated and 
moved away from their abusers, not just the female or male 
victim but also the children involved in that family unit.
    Were those employees that work that program required to 
come to work?
    Mr. Montgomery. So, as I understand NOFAs (Notice of 
Funding Availability), notice of funding availabilities, those 
are not permitted activities because they require the 
allocation of funds during a government shutdown.
    Mrs. Torres. So that is not a public safety issue?
    Mr. Montgomery. Well, it absolutely is. We still have to 
have the funding.
    What we did, though, is we did recall staff to come in and 
be prepared to announce those grants as soon as the shutdown 
ended, which we did the day after it ended.
    Mrs. Torres. Can you walk me through the question on 
advance appropriations funding? Because I don't think that I am 
clear on your answer.
    You had this funding available, but you spent it very early 
on in the fiscal year. You say that you need that for bridge 
funding. So how is the bridge funding made up later on? And did 
you have any CR funds go unused?

                        ADVANCED APPROPRIATIONS

    Mr. Dennis. So the advance funds are used, as you say and 
as we discussed earlier, early in the year; they are bridges 
from one fiscal year to the next. It is my understanding those 
advanced funds are not made up during that calendar year. They 
are not made up with subsequent CRs. They are used and then not 
available.
    Mrs. Torres. So they are really not bridge funding. I mean, 
if you were utilizing it as part of your budget, why is it not 
just part of your budget?
    Mr. Dennis. It is the way the money is appropriated to us.
    Mrs. Torres. So is that a recommendation to change? Because 
if you are holding, you know, landlords accountable for having 
a reserve, where is your responsibility for a reserve?
    Mr. Dennis. I think you are bringing up a good point, that 
it would be very helpful through the appropriation process if 
we had a little more flexibility within the funding side.
    We have some flexibility in the S&E (Salaries and 
Expenses), but on the program side we do not. And once the 
funds are appropriated for that particular program, it is 
there. You know, once the money is appropriated, there is not a 
lot of flexibility to move around once we run into these 
situations.
    And we have had some conversations with your committee 
staff on the S&E funds for creating a little more flexibility 
as we go forward. And we hope that our financial controls--and 
we can prove to you that we are improving our financial 
controls----
    Mrs. Torres. In the last 3 seconds, did you have any CR 
funds go unused, yes or no?
    Mr. Dennis. We had--the answer is yes, but it wasn't a full 
month's worth of appropriations for those programs.
    Mrs. Torres. Okay.
    I yield back.
    Mr. Price. Thank you.
    Mr. Rutherford.
    Mr. Rutherford. Thank you, Mr. Chairman.
    Mr. Dennis, you are the Chief Financial Officer. Can you 
tell me, under your rental assistance program, you have about 
3,200 public housing authorities who receive payments. You have 
2,300 contracts that we have talked about, all expiring every 
day.
    Of those public housing authorities, how many of those did 
not receive payment during this time?

                      HUD PAYMENTS DURING SHUTDOWN

    Mr. Dennis. January and February, I think zero. I think 
most everyone received payments.
    Mr. Montgomery. And, yes, sir, just to split hairs, the 
public housing authorities are different than the 23,000 
contracts.
    Mr. Rutherford. Okay. So that is in addition to the 23,000 
contracts?
    Mr. Montgomery. Yes, sir. And those were paid up through 
February, the public housing authorities.
    Mr. Rutherford. And then all 23,000 contracts, of those, 
can you tell me how many did not get paid?
    Mr. Montgomery. Well, there are 18,000 that are project-
based, 5,000 that are PRAC renewals. We advance paid 21,500 of 
them out of the 23,000 roughly. And there were some that are 
what we call suspension. This happens all the time, nothing to 
do with the shutdown.
    Mr. Rutherford. Right.
    Mr. Montgomery. So the 1,175, when you boil the number 
down, that is the amount that I referenced earlier that----
    Mr. Rutherford. And so those people that are doing business 
with you, no one was harmed financially. Is that----
    Mr. Montgomery. Well, I would hope not. I mean, again, it 
is difficult on owners, certainly on tenants. I don't think 
they would want to go through this again.
    Mr. Rutherford. Right. No, I understand that. Nobody wants 
to go through this again.
    What about the Federal Housing Administration mortgages? 
Were any of those delayed or refused because of this shutdown?
    Mr. Montgomery. Well, thankfully, we were able to continue 
to process--because lenders do a good bit of that--the FHA 
forward mortgages. The reverse mortgages, however, ran out of 
commitment authority, so we can could not process or endorse 
any reverse mortgages. So we are getting caught up on those as 
well.

                                CDBG-DR

    Mr. Rutherford. And all of the CDBG money for Puerto Rico 
that was obligated, that was all accessible and ready for them 
as well, right?
    Mr. Montgomery. Well, on the $1.5 billion, we were still 
working through, since those funds have been allocated, through 
the grant agreement. That has been finalized, as I mentioned 
before. Puerto Rico drew down the first amount Friday evening, 
$45,000 out of the $1.5 billion.
    Mr. Rutherford. Right.
    So all of the angst that we heard in the media about the 
catastrophic hit that was about to take place in HUD, can you 
tell me how many tenants were actually evicted during that 
time?
    Mr. Montgomery. Sir, we are told that none were evicted as 
a result of the shutdown.
    Mr. Rutherford. Right.

                           HUD COMMUNICATION

    Mr. Montgomery. But I do want to say, just a lesson learned 
here, that there are could absolutely be better communication 
between all parties. And there was no intent on my part to not 
better communicate, but getting those contracts resolved was 
our highest priority. So we will endeavor to improve 
communications, with or without a shutdown.
    Mr. Rutherford. Right.
    And during your normal business processes, you have these 
lapses in the contracts all the time. Is that correct?

                           CONTRACT RENEWALS

    Mr. Montgomery. That is correct, sir. Contracts renew every 
day, and we typically use a good bit of the next month to get 
caught up from the previous, because they come in all until the 
end of the month. And it is an ongoing, everyday process.
    Mr. Rutherford. Okay. And now, as of now, the 1,175 
contracts that had expired through January, those are all back 
in place, correct?
    Mr. Montgomery. Well, sir, the category they are in right 
now is authorized for renewal, which happened this morning. 
About half of those still require the actual signatures. But, 
as I mentioned before, we are going to accept PDF signatures, 
which we were told are permitted.
    Mr. Rutherford. Okay.
    Mr. Montgomery. So we are working to get all those done by 
midnight just----
    Mr. Rutherford. But even with those, nobody missed a 
payment and nobody was put on the street. Not a single man, 
woman, or child was put on the street because of this----
    Mr. Montgomery. Well, we are not aware of any that happened 
as a result of the shutdown relative to the contract issues. I 
don't want to say--we all worked hard to make sure that didn't 
happen. We were focused on that every day that we were working 
through this.
    Mr. Rutherford. I think as you said--and I will close with 
this. I think, as you said, that 3 to 5 percent of your 
personnel, they did move heaven and earth. So thank you all.
    Mr. Montgomery. Well, and, by and large, that was career 
staff. Some of them are here with us today. They deserve the 
vast majority of that credit, and Irv's team in particular.
    Mr. Rutherford. Thank you.
    I yield back, Mr. Chairman.
    Mr. Price. Thank you.
    Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman. Nice to be back with 
the subcommittee.
    Welcome to our new members.
    And, of course, all our thoughts are with Mike Quigley as 
he goes through this sad time.
    Thank you. Thank you for being here.
    I sort of want to go back to the line of questions that my 
colleague Congresswoman Torres started. It is my understanding 
that HUD's contingency plan for shutdowns, a lapse in 
appropriation, calls for HUD to continue performance functions 
that are necessary to prevent an imminent threat to the safety 
of human life. Is that correct?

                         HUD SHUTDOWN PROTOCOL

    Mr. Montgomery. That is correct, but there still has to be 
funding allocated for us to do that. Otherwise, we might find 
ourselves in an Antideficiency Act violation.
    Ms. Clark. So is it not really correct in a shutdown? Like, 
how do you make those decisions? If that is your contingency 
plan, then it is also subject to funding levels when it 
involves safety of human life?
    Mr. Montgomery. It is my understanding, again, to be able--
we still have to have the funds to be permitted to be used, 
which is one reason why there are reserve funds that we require 
some--if it has FHA insurance, on 202s and 811s, they have 
those funds for situations like this when they have to access 
those reserve accounts.
    Ms. Clark. So is it your testimony that you have 3 percent 
of the workers who are still working, not furloughed, because 
they are there because of an imminent threat to human life, and 
then--but somehow domestic violence does not get covered. And 
is that decision--how was that decision made, to eliminate that 
from the category that is in your own contingency plan?

                        CONTINUUM OF CARE GRANTS

    Mr. Montgomery. I don't know that we eliminated it. The 
issue, as I understand it--and I am happy to research this more 
when this is over--that we didn't have the funds to allocate 
just yet. However, we knew we would at some point. So, so that 
we could be ready when the shutdown ended, that is the staff 
that we recalled to work on the Continuum of Care NOFA grants, 
to be prepared to announce them when the shutdown ended, which 
we did the day after the shutdown ended. And then we announced 
another one a week or so later, another NOFA grant.
    Ms. Clark. So were there any other situations where a real 
safety to human life is threatened where you would have said, 
well, we have to wait until after the shutdown? Or was it only 
domestic violence that fell into that category of----
    Mr. Montgomery. Well, again----
    Ms. Clark [continuing]. Not having the funding? Because if 
it is an emergency, sort of the essence of it is, we realize 
you are in a shutdown and don't have access to regular funding, 
but this is an emergency situation.
    Mr. Montgomery. Absolutely. So many of these nonprofits and 
organizations get money from us every year, so they, by and 
large, would have funds from the previous year. Again, this 
would have been access to future funds, again, which we 
announced, you know, the day after the shutdown ended.
    Ms. Clark. But isn't that the emergency nature of that 
exception in the shutdown, about protecting human life? I don't 
understand why domestic violence decided to get pushed out of 
that emergency planning.
    Mr. Montgomery. It is not that we pushed it out of the 
emergency planning; I just can't allocate funds that I don't 
have. And, again, we wanted to be ready to go when it ended, 
and we did it the next day. I totally understand where you are 
coming from, but, again, I can't allocate funds that I don't 
have.
    Ms. Clark. That is why we have emergency contingency plans 
when human life is at stake, as it was for many cases, you 
know, cases that we have heard of.
    Another thing that we heard of was that domestic violence 
shelters attempting to secure HUD funding were locked out of 
the system. But that, again, is part of your contingency plan. 
It specifically says they will be able, in a shutdown, to 
access homeless assistance grants. So why were they not able to 
access that?
    Mr. Montgomery. So some of those groups that we heard from 
had password issues. Some of them had other issues just 
accessing the system. A lot of that is done through field 
office staff that was furloughed. So, working with our CIO in 
headquarters when we heard about this, we developed a 
workaround solution that allowed us to work through those 
problems from headquarters.
    So, again, when we heard about them, we acted, we created a 
solution, and, as I am told, eliminated the problems, the few 
that had problems accessing the system.
    Ms. Clark. Do you think, when we see your report on lessons 
learned, that protecting people whose lives are at risk because 
of domestic violence will be back at the top of needing 
protection in the very unfortunate event that we ever go 
through another government shutdown?
    Mr. Montgomery. Well, they are absolutely a priority for 
HUD, I can assure you, every day of the week.
    Ms. Clark. Well, it seems like, if they are supposed to get 
funding in an emergency when life is threatened, and yet you 
say they weren't able to access that because there wasn't 
funding, that there is a breakdown in the system in how we are 
addressing these very real needs of the people in this 
situation in HUD properties.
    Mr. Montgomery. It is a convergence, obviously, of the CR, 
one funding cycle ending, another one beginning, and what we 
are permitted to do during a shutdown.
    Ms. Clark. Thank you.
    Mr. Price. Thank you.
    Mr. Hurd.
    Mr. Hurd. Thank you, Chairman.

                             HUD EMPLOYEES

    Gentlemen, thank you for being here.
    Have all of your employees, especially the 3 to 5 percent 
that worked their tails off to make sure everybody was 
protected, been made whole with their pay?
    Mr. Montgomery. Well, the good news, all of them were paid 
by the 31st. That was the last pay period in the previous 
calendar year and the first one this calendar year. We are 
absolutely working through ways that we can show our gratitude 
to the staff that worked without pay for 34 days.
    Mr. Hurd. Leave, pay, any----
    Mr. Montgomery. Any combination----
    Mr. Hurd [continuing]. Issue with healthcare, all of that 
has been sorted out?
    Mr. Montgomery. It is my understanding, yes. But, again, to 
show the gratitude for the staff that did that work, working 
through ways that we can show that gratitude in ways that they 
would appreciate.
    Mr. Hurd. Good copy.

                            IT MODERNIZATION

    You talked about the manual processing of the TRACS system. 
Had this not been a manual process, the difficulty on the 3 to 
5 percent that were running the show, it would have been a lot 
easier for them to understand where contracts were. Is that 
correct to understand that?
    Mr. Montgomery. It could have been nearly instantaneous----
    Mr. Hurd. Gotcha.
    Mr. Montgomery [continuing]. To track those contracts.
    Mr. Hurd. And who is responsible within HUD on automating 
the TRACS system? Who has operational control of that project?
    Mr. Montgomery. By the way, I would say to my previous 
answer, assuming we had the funding, obviously.
    Mr. Hurd. Sure.
    Mr. Dennis. Well, it is a joint effort between--a 
collaborative effort between all of the programs, the CIO, CFO. 
And one of the things that I did when I came----
    Mr. Hurd. Gotcha. I heard what I wanted to hear, the CIO's 
role, all right?
    Mr. Dennis. Okay.
    Mr. Hurd. And, Mr. Dennis, you said that there is no 
flexibility on the program side. Would you not consider the MGT 
Act that Congress passed last year--it is a piece of 
legislation from a dashing young Congressman from Texas--that 
was supported by this committee, would that not be considered 
flexibility within the program side?
    Mr. Dennis. I am going to have to--I don't know the answer 
to that. I am not familiar with that.
    Mr. Hurd. MGT was designed to have working capital, if you 
modernize your infrastructure, your IT infrastructure, the 
money that you save could be put into a working capital fund. 
And I see on your Fitara score card, which you went from a D in 
November of 2015 to a C+ in December, that you only got a C on 
MGT, which means you had plans on creating an MGT fund, but you 
hadn't.
    Mr. Dennis. Yeah. So thank you for clarifying the word 
capital fund. That is an area that we may be able to create 
some flexibility. One of the things that we are doing in the IT 
funds is really geared towards maintenance. And to the extent 
there are funds that roll over from 1 year to the next, we are 
hopeful that we can go through a reprogramming exercise and 
develop----
    Mr. Hurd. The answer is not may, it can, and that is why it 
was designed to do that. And I see on your software licensing 
on MGT--on your Fitara score card is an F, meaning that you do 
not know all the programs that are being used on your system.
    Now, Mr. Montgomery, you have been on the job for less than 
a month. Is that correct?
    Mr. Montgomery. Well, I have been FHA commissioner since 
June 2018. I took over as acting deputy secretary a week before 
the shutdown ended.
    Mr. Hurd. Gotcha. Other agencies have saved billions of 
dollars on understanding the software licensing, which could 
then go into the MGT fund, which could then be used as rollover 
funds to work on the TRACS system. So I would be interested in 
your plans on how you plan to get control over the software 
licensing, because that can drive modernization in so much of 
your program, as well as how you plan to use MGT for the 
modernization of the TRACS system.
    Mr. Dennis. Thank you. We will absolutely take a look at 
that and come back to you with our thoughts. But, you know, I 
have spent time with your team talking about our finance 
transformation plan, which includes IT modernization. We are 
working very closely with our CIO and administration and the 
programs to make that a holistic approach. It is, you know, it 
can't be understated or overstated how antiquated these IT 
systems are for us. So any ideas that you have to allocate 
money and help us find money is much appreciated.
    [Mr. Dennis responded for the record:]

    The Office of the Chief Information Officer (OCIO), and in 
particular the Chief Technology Officer (CTO), manages the acquisition 
of software licenses at the agency. The CTO has instituted a software 
inventory process, which includes validation and verification of all 
Agency licenses. The CTO has begun to consolidate and optimize software 
licenses in use by multiple Program Offices. The initial effort has 
already begun to realize some cost savings by allowing HUD to remove 
software that is no longer required to meet its mission. CTO is also 
working to acquire an IT Service Management (ITSM) solution that 
provides automated software asset management capabilities that will 
significantly improve our ability to manage software license 
requirements and costs and software compliance requirements.
    OCIO is also working with GAS's Assisted Acquisitions office to 
explore quicker and more efficient ways to acquire software licenses. 
In the past, OCIO has had to complete individual procurement actions 
for each software purchase or renewal. The new approach is for a 
blanket purchase agreement in which all IT assets (licenses, hardware, 
supplies and warranties) will be procured and centrally tracked. Our 
current IT assets will then slowly transition to this vehicle.
    TRACS is a legacy application residing on HUD's IBM Mainframe 
platform and using COBOL code that is over 30 years old. The CTO's 
recent assessment of HUD's systems determined that TRACS functionality 
closely aligns to HUD's overall subsidy management and enterprise 
financial management capabilities. Therefore, we are incorporating 
TRACS system requirements into our Enterprise Subsidies Management 
Program, which has been established to modernize HUD's subsidies 
programs to include business process, financial management, and 
technology. This will transform and ultimately optimize the utilization 
of $35 billion in housing subsidies, which include both Tenant-Based 
Rental Assistance (TRRA) and Project-Based Rental Assistance (PBRA).
    HUD is already using the Technology Modernization Fund provided by 
the MGT for a $20 million project to migrate other critical systems off 
HUD's Unisys mainframe. That project will transition from on-premise 
physical hardware to a cloud virtual machine environment. It will 
consolidate and modernize the existing infrastructure, which will 
substantially reduce costs for software licenses, operations, and end 
user support. The TRACS modernization, as part of the broader 
subsidies/financial management effort will instead use available 
resources in HUD's appropriate IT Fund. The initiative will embrace an 
agile methodology with six-month deliverables and identify potential 
cost savings for reinvestment, similar to the Unisys TMF project.

    Mr. Hurd. Well you have taken the first step in empowering 
your CIO, making sure that person reports directly to Mr. 
Montgomery and actually having a permanent CIO. Many other 
agencies haven't even taken these basic steps in order to 
modernize that enterprise. And it is going to increase 
efficiencies, which I am glad we have talked almost through 
everybody's question.
    With that, I yield back, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. It is good to be back 
in this subcommittee. I still remain the low person on the 
totum pole, so we have got to figure out how that worked. And 
just nice to follow the dashing young man from Texas walking 
through procurement and IT with us.

                      PUERTO RICO DISASTER FUNDING

    Mr. Dennis, I wanted to ask you about Puerto Rico. Can you 
clarify your position on CDBG disaster funding (CDBG-DR)? HUD's 
contingency plan for the shutdown, as we have discussed, but it 
specifically mentioned appropriating in the fiscal year 2018 to 
be disbursed during the shutdown. HUD delayed the disbursement 
of funds to Puerto Rico because the agency required additional 
documents outlining how Puerto Rico will spend the disaster 
funding.
    On February 9, HUD published a notice stating the agency 
will take 60 days instead of 40 days it would normally take to 
review Puerto Rico's application.
    So my question is, what is the delay? Shouldn't we be 
working to review this more quickly and disburse these funds?
    Mr. Montgomery. Do you want me--that is probably more my 
area, sir. So the $1.5 billion I referenced earlier, we were 
able to work on that action plan. In those funds, Puerto Rico 
was able to draw down on February 4, that is the $1.5 billion. 
And they did make the first draw Friday evening of $45,000. The 
$8.2 billion, and this is all unmet need category, that is this 
tranche of money, I believe, sir, that you are probably 
referring to.
    We will be putting out a notice shortly regarding that 
action plan. We discussed this with Governor Rossello when he 
was in last week, and we communicate with his staff regularly. 
And we are hopeful then to get that action plan finalized and 
get the grant agreement signed. And we have been communicating 
this with his staff as recently as Friday.
    Mr. Aguilar. I appreciate that you are having those 
discussions with them. What are the delays?
    Mr. Montgomery. Well, sir, I am not sure that there is a 
delay right now. Again, and it is not just Puerto Rico, I know 
your question is directed at that. There is obviously 
California, Georgia, North Carolina, Texas, and other States in 
there. We have made the first tranche of unmet need a priority, 
which is why we did the $1.5 billion first.
    Puerto Rico, along with other states, we are reviewing 
their action plans as we speak, and hopefully getting closer to 
a solution on those as well.
    Mr. Aguilar. How would you describe their action plan 
compared to the other States that you mentioned, Georgia, 
California?
    Mr. Montgomery. Well, certainly the damage was more 
profound in Puerto Rico, no doubt about that. Texas, Florida, 
and Georgia had significant damage, as did some communities in 
California. There is no doubt Puerto Rico's was significant. 
The damage was devastating.
    Mr. Aguilar. I guess my comments would be--I appreciate the 
clarification. My comment would be, these individuals, when we 
speak with them, they know that Members of Congress advocate, 
and that is what we all do. They don't feel that they have the 
ear of folks here. They feel like they have been left behind. 
That they are U.S. citizens, but they aren't receiving the 
funds and the care and the advocacy, quite honestly, that other 
individuals, other communities receive.
    So I would just like to ask that you be sensitive to that. 
We don't need to treat them any differently. Let's move on 
these action plans and let's give them the help that they need 
so those communities can rebuild, just like Georgia, Texas, 
Florida, California, the States that you mentioned.
    Mr. Montgomery. I will absolutely commit to doing that 
better, sir, where I haven't. I will be very mindful of that 
going forward.

                               FHA LOANS

    Mr. Aguilar. I appreciate it, sir. Mr. Montgomery, again, 
for you. The FHA handbook, mortgages can be made to 
nonpermanent residents if the application is authorized to 
work--if the applicant, I am sorry, is authorized to work in 
the U.S. and has a history of status renewals. As you might 
know, Deferred Action for Childhood Arrivals, the DACA program, 
allows some undocumented immigrants to work in the United 
States.
    In many cases, DACA recipients have renewed their status at 
least once, if not multiple times. These hardworking young men 
and women pay taxes and have undergone vetting process to 
participate in the DACA program. In December, an article was 
published that revealed HUD advised lenders to stop lending to 
FHA-backed loans to DACA recipients.
    According to the article, HUD shared this information with 
lenders over the phone and at conferences, however, the agency 
has not put out any policy in writing. There is 700,000 DACA 
recipients living in the United States who I said pay taxes and 
contribute to our economy. Many want to become homeowners, and 
more are working to attain that goal in the future.
    To your knowledge, has HUD issued any type of policy 
surrounding DACA recipients' eligibility for FHA-backed home 
loans?
    Mr. Montgomery. Sir, I can tell you, at my level I am also 
the FHA commissioner. The policy has been unchanged for many 
years. The current policy was developed in 2003 and it was 
codified into the new FHA handbook in 2015 in the previous 
administration. That policy is exactly what we are following 
today, sir.
    Mr. Aguilar. So it would surprise you if HUD staff or 
individuals were advising lenders of that, not to--not to work 
with DACA recipients?
    Mr. Montgomery. I am not aware of--I have heard some 
accusations of that, sir, it hasn't come from me.
    Mr. Aguilar. Sure.
    Mr. Montgomery. But, again, I can't speak for all my staff, 
but I do know we haven't changed that policy dating back 15 
years or so.
    Mr. Aguilar. Okay. Well, we can make sure that you have 
that article as well that goes into some specifics, but I 
appreciate your answer. Thank you.
    Thank you, Mr. Chairman.

              HUD CONTRACT MANAGEMENT DURING THE SHUTDOWN

    Mr. Price. Thank you. Well, gentlemen, let me return to the 
subject with which we started, namely, the contract expirations 
and the way in which that--that they were handled and the kind 
of conclusions you have drawn, looking back on this as to how 
this went and how the process might be improved in the future.
    As I understand it, as we said initially, there was a 
failure to renew some 1150 contracts that came to light about 
two weeks into the shutdown in early January. And those 
contracts were about half December contracts, half January 
contracts. And the question is, were those expirations 
appropriately anticipated and dealt with in the best possible 
way?
    Mr. Montgomery, I appreciate your comments about 
communication, we do, of course, need to pay attention to that, 
and I appreciate your acknowledgement of that. In looking over 
this episode, we don't find much about this in the shutdown 
plans that HUD developed. In fact, the level of detail is much 
less than we have seen from other agencies. And then, as others 
have raised, there are questions I think that maybe we could 
nail down a little further about sources of funding that might 
have been used had they been available to deal with this 
situation into this shutdown. For example, the advanced 
funding. The advanced appropriations.
    In retrospect, might that have been handled differently? 
And might that have been available to bridge some of these 
gaps? Had that not be been spent, those $400 million not been 
spent earlier.
    And then the question was raised about the CR funds. The CR 
funds, of course, had expired on the 21st. We understand that 
something like a billion of those funds, a billion dollars of 
those funds, were allowed to expire. Might that have been 
applied to some of these contract renewals at an earlier point?
    So you see what concerns us here. We, of course, are 
grateful that worse consequences didn't materialize, but it was 
a fairly close call, and there are plenty of alarm bells going 
off about what this might look like in the future. So you see 
what we are looking for here. And as you are looking toward the 
future and whether some of this might be corrected, we would 
like to have your reflections on that. We all need to 
understand it going forward.
    Mr. Montgomery. Absolutely. Mr. Chairman, and while I hope 
we never go through one again, it was certainly a big learning 
process for all of us. And we carefully documented, we have 
carefully updated our contingency plan as we see fit. And, you 
know, again, these happen so infrequently that it is hard to 
gauge.
    First off, are they actually going to happen until they 
happen? And then, secondly, when they do happen, how long are 
they going to last? The last one in 2013 was a matter of days. 
I think you have to go back to 1995, 1996, to find one that 
lasted as long as this one.
    So our principle driving and guiding principle, sir, was we 
didn't want people to suffer as a result of this. So there were 
different--between reserve accounts--replacement for reserve 
accounts, some either with the owners, some with HUD, through 
other funds--sources of funds, the housing certificate. We had 
the funds to get those contracts renewed, the 1175 for December 
and January.
    Mr. Price. Yes, but you were scrambling. You were piecing 
together funds from various sources. And I asked you about two 
particular sources of funds that weren't available for you, for 
the reasons I stated. What is your retrospective assessment of 
that?
    Mr. Montgomery. So on the $400 million, again, with the 
technology limitations we have and the gap between fiscal 
years, we literally, and this began a number of years ago, have 
to shut down the system--for 2\1/2\ weeks to change over. It is 
that $400 million that is used every year to do that. So I 
don't know specifically when those funds were gone, but they 
were long gone, I am told, before the shutdown happened.
    Mr. Dennis. The other thing I would add is, you are right, 
some of that money from the CR was there, it wasn't quite a 
full month. And we are looking at a--it would require a change 
of a business process to get those allocated quicker, and also 
a different technology. It is a very decentralized process, it 
requires coordination and communication with the landlords and 
our folks. It is not centrally controlled out of headquarters.
    But, you know, as we learned, and as we go through finance 
transformation, IT modernization, we will take a look and see 
if there is a more efficient and a quicker way to allocate 
those funds. But I would say in the 2 weeks that we had or even 
in anticipation before, which is your question, it is very 
difficult to do that in a CR environment with our systems and 
our processes the way they are.
    Mr. Price. Well, I appreciate that and we will await the 
results of those considerations. We have asked--our staff has 
asked that you provide more detail and future shutdown plans to 
address contract renewals. It really was not sufficiently 
detailed. Whatever your judgment about the kind of steps you 
took to meet these needs.
    Mr. Montgomery. And I will apologize for that.
    Mr. Price. You need to articulate much more precisely what 
kind of activities will and will not be performed.
    Mr. Montgomery. Absolutely. Yes, sir, we absolutely will. 
And I apologize for that miscommunication and lack of it.
    Mr. Price. And this is a question of planning also and 
making quite explicit what is going on be done in various 
contingencies.
    Mr. Montgomery. Absolutely, sir.
    [Mr. Montgomery responeded for the record:]

    Per OMB Circular A-11, contingency plans are living documents that 
are updated on an on-going basis, at the very least every two years. 
This year draft contingency plan revisions are due to OMB by August 1. 
In the short CR window following the lapse ending January 25, HUD 
worked diligently to in corporate the lessons learned into a draft plan 
before the expiration of the CR. As the full year bill was enacted, HUD 
incorporated the lessons learned into the full revision of the 
contingency plan planned for this summer. Beginning in April, HUD will 
work across all offices to revisit the issues identified during the 
shutdown and propose corresponding updates to the contingency plan 
where appropriate. HUD will work internally with legal counsel to 
review proposed updated and the resulting draft plan will be submitted 
to OMB for review in late July. HUD and OMB will resolve any areas 
which need further review and a final updated contingency plan is 
expected to be posted publicly by mid-September.

    Mr. Price. Thank you. Mr. Diaz-Balart.

                            DISASTER FUNDING

    Mr. Diaz-Balart. Thank you very much Mr. Chairman.
    Actually, Mr. Aguilar just reminded me, speaking about 
CDBG-DR. One of the things that I am really proud of is that I 
worked with the chairman to provide funding not only for 
recovery, but also for mitigation, long-term mitigation. And 
just--I don't expect you to have the answer to this one now, 
but if I could just throw your way is--so obviously our States 
are awaiting anxiously for Federal Register notification for 
the disaster mitigation program. And if you could, again, I 
don't expect you to have it now, but if you get back to me 
about the status of the notifications of the CDBG-DR Mitigation 
funds, when you can, it would be helpful.
    Mr. Montgomery. And I am happy to do that now or we can do 
it afterwards.
    Mr. Diaz-Balart. I mean, if you have--you don't need to 
give it to me now, but--so let me go to other questions, but I 
would love it if you can get that to me.
    Mr. Montgomery. Absolutely sir.
    [Mr. Montgomery responded for the record:]

    HUD anticipates publishing the notice by May 1.

                           CONTRACT RENEWALS

    Mr. Diaz-Balart. Mr. Dennis, let me--obviously, the issue 
about--if you can give me some more details about how you 
worked to find the available funds to renew the contracts, 
because, you know, which accounts did you scrub, which programs 
presented the greatest challenges you worked to find the 
available funds to renew these contracts. And also you 
mentioned about the issue of the Antideficiency Act violations, 
how were you able to ensure that you weren't running into that?
    Mr. Dennis. So the first part of your question as it 
relates to the funds. You know, I would say we did a relatively 
normal process, only on an accelerated basis. You know, we did 
scrub prior year funding that was available. That is an 
exercise we go through every once in awhile. We did that during 
the two weeks and before.
    So, again, we accelerated what I would call a normal 
process, that money is carried over from prior years and if we 
were able to use it, we did. PBRA was probably a little more 
challenging, but all programs have their challenges. PBRA 
probably, just because of the decentralized nature of it, and 
the process manual and having to reach out to the landlords on 
the other side of the contract.
    Antideficiency is--again, 37 years in public accounting, I 
understand controls, I am passionate about them. And we have 
a--the Appropriations Law staff is within the CFO shop at HUD, 
as you know. We work very closely with the programs. Any time 
we want to make a modification to a contingency plan or do 
something different with funds, we go through that process.
    I love his precision. He is very precise. He is good. And 
if there is--on the contingency plan, once we go through the 
process internally between the program lawyers, our--the 
Appropriations Law lawyers, and then General Counsel obviously 
goes through OMB review as well at that point. So we are very 
conscious of that, making sure that we did not have any ADA 
(Anti Deficiency Act) violations or tried not to.
    Mr. Diaz-Balart. Well, I appreciate that. Every member of 
the Appropriations Committee hates CRs, and obviously, 
shutdowns. And I think one of the issues we have had--there are 
so many new people in Congress, try to explain to folks just 
how damaging CRs are, not only shutdowns, but CRs are. And so I 
think you all kind of hit on that today, which I think is 
important for frankly other Members to hear as well.
    But, you know, again, you just talked about--Mr. Dennis, 
you have extensive private sector experience. So what--tell me 
a little bit about some of the lessons learned from this 
experience, which is unique, obviously?

                        SHUTDOWN LESSONS LEARNED

    And, you know, are there some processes and improvements 
that HUD could make when it comes to, you know, project-based 
contracts, and just kind of an open-ended question, but again, 
you know, your experience. I want to tap into that.
    Mr. Dennis. Yeah, so--again, I constantly get asked the 
question, observe the difference between private and public 
sector. And I don't want to--you know, I have been through and 
have led a lot of crisis management through my 37 years, and I 
don't want to put this in a category of crisis, although some 
may suggest 3 percent of your workforce doing critical duty 
could be in that category.
    And what I observed through this 2-week CR was great 
management by a great leadership team. You need calmness, which 
happened. You need coordination amongst all of the leadership, 
which happened. And you needed great communication within HUD. 
And I appreciate--you know, we maybe need a little bit better 
communication with you folks, and we can talk about that.
    But I thought the team did a great job getting through it. 
The lessons learned from HUD specifically is, again, just a--
not so much learned, but just another indication and awareness 
that our IT systems need to be improved. We did learn some from 
process stuff that we may be able to take a look back at future 
potential CRs. I think we learned that if we had a little more 
flexibility in how we can maybe use some of the program money, 
that would have been helpful to us.
    So, you know, I think there are lessons learned that we can 
certainly share with you and maybe work together to get some of 
the flexibility that would help us do our jobs better and more 
efficient.
    Mr. Diaz-Balart. Thank you. Thank you, Mr. Chairman.

                         HUD EMPLOYEE EXEMPTION

    Mr. Price. Mrs. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman. I would just 
like to have some clarification on a line of questioning that 
Congresswoman Clark endeavored upon, and it has to do with 
exempting employees, including those who are performing 
emergency work involving the safety of the human life or the 
protection of property or performing certain other types of 
accepted work.
    How do you determine who that is and what functions are 
they doing that constitute health and safety under your 
definition?
    Mr. Montgomery. So, again, those plans are developed and 
used infrequently and, you know, there is--it is a constant 
flow of program dollars between when NOFA grants are made, when 
old funding runs out, when new funding is made. In terms of 
what actually is used for health and safety, again, it is not 
like there is a moment in time where that organization will run 
out of money, in this case in January.
    Mrs. Watson Coleman. Okay. I think my question is more 
like, who--what types of programs are covered under that? For 
instance, my colleague presented for your consideration 
homeless programs, homelessness programs, especially in the 
dead of winter, and domestic violence programs involving 
protecting women and their children, moving them, paying for 
things that are actually life safety, taking them out of very 
violent situations. Do those not constitute accepted employee 
functioning under this definition?
    Mr. Montgomery. Well, you know, again, this was for a new 
notice of funding availability going from that point forward. 
We fund these organizations every year, whether it is domestic 
violence, homeless shelters, you name it.
    Mrs. Watson Coleman. I am sorry, Mr. Montgomery, you are 
confusing me. I just want to know, did those functions--those 
kind of programs, particularly sheltering the homelessness 
under--especially in bad weather like we have had, and domestic 
violence programs, do those people working to ensure that those 
programs are running, do they fall into that category? That is 
a yes or a no.
    Mr. Montgomery. Some staff are permitted to work on 
preparing those NOFAs, but again, Congresswoman, I can't make 
an announcement for funding I do not have. I think that is the 
core issue here.
    Mrs. Watson Coleman. I am sorry. That is a really--another 
good point. This seems to be directed at an emergency 
situation, the health and safety of somebody or some building 
or whatever, is in peril in proximity. What does that mean you 
got to have funding?

                       EMERGENCY PROGRAM FUNDING

    Mr. Montgomery. Well the Antideficiency Act prohibits me or 
any government employee from obligating funds they do not have. 
And if I don't have the funds for the NOFA, then I can't 
announce the notice of those funds being available.
    Mrs. Watson Coleman. Did you say NOFA?
    Mr. Montgomery. I am sorry, ma'am. Notice of funding 
availability, NOFA.
    Mrs. Watson Coleman. So should there be a fund available 
for such situations since they are not anticipated, they just 
occur. How do you deal with that?
    Mr. Montgomery. Well, that is probably a question probably 
more within this body, but we are certainly open to having 
those discussions with you. Again, we receive the funds as they 
are allocated.
    Mrs. Watson Coleman. But you ask for what you need, too.
    Mr. Montgomery. Yes. Well, we get those funds every year, 
and Congress gives them to us.
    Mrs. Watson Coleman. But you don't have any such things as 
emergency funds for that purpose per se, right?
    Mr. Montgomery. I am not aware of any emergency funds under 
the program. Congresswoman, I will be happy to look into that 
though.
    [Mr. Montgomery responded for the record]

    The NOFA and formula grant processes are what HUD uses to provide 
funding to organizations for service to the homeless and domestic 
violence victims. In HUD's programs, offices do not have emergency 
funds or the authority to fund organizations in any other way.
    However, 2017 grant agreements for providers across the nation were 
in place during the shutdown. HUD is not aware of any programs 
suspending or terminating services during the shutdown. There were 
staff and TA services working to ensure that those programs were 
running.

    Mrs. Watson Coleman. Thank you, Mr. Montgomery.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Rutherford.

                       DOMESTIC VIOLENCE PROGRAMS

    Mr. Rutherford. Thank you, Mr. Chairman.
    Mr. Montgomery, I think what might be a little confusing 
here, the domestic violence in housing and technical assistance 
initiative that the money is provided for, $2.3 million at one 
time, is to actually work with four different organizations, 
the District Alliance for Safe Housing in Washington DC, the 
National Network in Domestic Violence in Washington DC, the 
National Resource Center for Domestic Violence in Harrisburg, 
Pennsylvania, and the Training Development Associates from 
Laurinburg, North Carolina, and slash, Collaborative Solutions 
in Birmingham, Alabama.
    Now, those four grant recipients of this domestic violence 
program, they are actually working to develop policy. How to 
improve a policy. How to ID promising practices around the 
country. Sort of a best practice initiative. And strengthening 
collaboration with community stakeholders. This is a planning 
function, correct? This is not someone who is like the police 
or providing protection to a domestic violence victim. Is that 
correct?
    Mr. Montgomery. Congressman, I would have to look into 
that. I have been in the acting deputy secretary role for just 
about 3 weeks, and so if I could get back to you on that 
question, I would be happy to.
    Mr. Rutherford. Let me know because I am sitting here a 
little confused myself. Are you actually--is HUD actually 
entering into agreements where they are taking on the 
responsibility of protecting domestic violence individuals, or 
are they developing policies where they will collaborate with 
the stakeholders in the community like police and others who 
are--you know, domestic violence shelters and those kind of 
things. Now, let me know because my----
    Mr. Montgomery. I will, Congressman.
    Mr. Rutherford. Because my understanding it looks more like 
a planning process than, you know, where I am responding to the 
scene of a domestic violence call.
    Mr. Montgomery. I would be happy to look into that, sir. I 
don't know the exact specific answer.
    Mrs. Watson Coleman. It is about shelter and shelter--they 
are protecting.
    Mr. Montgomery. We will look into this and get back to the 
committee.
    [Mr. Montgomery responded for the record:]

    Those grants were awarded by HUD, DOJ and HHS to the grantees named 
by Rep. Rutherford to form a consortium that will work with DV 
providers and homeless service providers to improve policies, identify 
promising practices and strengthen collaborations. This consortium does 
not police or directly provide protection to a domestic violence 
victim.

    Mr. Rutherford. Let me know. Thank you.
    Mr. Montgomery. I apologize. That I just came under my 
purview a few weeks ago.
    Mr. Rutherford. That is fine.
    With that, Mr. Chairman, I yield back.
    Mr. Price. Thank you. Mrs. Torres.
    Mrs. Torres. We fund shelters. We fund emergency housing 
programs. My initial question was about the shelters that we 
fund for domestic violence victims. Within those shelters they 
have programs, housing programs, sometimes they have to get an 
emergency voucher to get them from their abuser into a new 
location. Sometimes they have to pay utility bills. So those 
programs is what I was referring to. They were at risk.
    There is no place to send a victim of a domestic violence 
if they don't have the funding. Should they have a mechanism of 
reserves, maybe--but, remember, that shelters depend on the 
Federal Government for 80 percent of their funding, 80 percent. 
So there are no reserves, sir. You are the reserve. And when we 
choose to shut down and refuse entry to workers that 
specifically work to fund those programs, people's lives are at 
risk.
    Now, I want you to look forward and I want to figure out 
how we can fix this. I pray to God that, you know, this 
President would not shut down the government once again, but 
who knows what he will do if he doesn't get his way. But the 
grownups in the room here have to figure out how we are going 
to deal with victims and how we are going to house people that 
have severe disabilities and prevent them from being evicted. 
So you say so far you have heard of no evictions.
    I say we have--I have heard from my housing authorities in 
the district that I represent, and the confidence that 
landlords no longer have in the Federal Government is a cost of 
doing business, and not just a cost of doing business, it is a 
cost of protecting a victim of violence. Now, that is not on 
you, that is on President Trump shutdown. I am not saying that 
is on you.
    What is on you is a policy that I hope to get real soon on 
how we can be better at this. And as the first lady would say, 
we need to be best.
    So I yield back.
    Mr. Montgomery. And I will absolutely commit to working 
with you, Congresswoman, and this committee on how we can avoid 
this should there be any future shutdowns. Thank you.
    Mr. Price. Mr. Hurd.
    Mr. Hurd. Thanks again, Mr. Chairman. The San Antonio 
Housing Authority provides assistance to about 65,000 people, 
half of those are kids under 18. How did HUD ensure that the 
vulnerable families that need a HUD voucher was able to get 
that to make their rent payment?

                        HOUSING CHOICE VOUCHERS

    Mr. Montgomery. So, as I mentioned previously, the public 
and Indian housing program, separate from the PBRA that I run, 
they were paid up through February. All those public and 
housing authorities were paid up through February.
    Mr. Hurd. So if----
    Mr. Montgomery. That is the housing choice vouchers----
    Mr. Hurd. And going into a--you know, speaking like my 
friend, Mrs. Torres, was talking about looking forward, if the 
government were to shut down this weekend, how does it impact 
those people that need those payments?
    Mr. Montgomery. They would be paid up through April.
    Mr. Hurd. Because of the----
    Mr. Montgomery. The funding that we got during the CR we 
are in right now.
    Mr. Hurd. Good copy. I appreciate that. Thank you, Mr. 
Chairman, I yield back.

                       DOMESTIC VIOLENCE PROGRAMS

    Mr. Price. Thank you. Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman. Just going back again 
to this domestic violence issue. There are emergency transfers 
for Section 8 and homelessness assistant grants. I understand 
that funding was out, very difficult for people to access, 
maybe the people were furloughed who could help with the 
passwords, et cetera. What we have heard reports of is because 
they were blocked and these were true emergencies, some 
domestic violence organizations actually took out loans to 
provide the money to find alternative housing.
    Is there a plan in HUD to reimburse those organizations for 
those costs?
    Mr. Montgomery. Yes. It is my understanding they will 
absolutely be reimbursed.
    Ms. Clark. Great. Thank you. Back to your testimony that 
there are zero evictions, and I understand you are putting some 
qualifiers around that, but to the best of your knowledge there 
are zero evictions, but there are definitely reports that while 
not technically an eviction, we do have landlords who are not 
renewing Section 8 housing leases because of the experience of 
the shutdown. So while different, the practical effect is the 
same. Tenants are forced to leave their housing.

                            LOSS OF HOUSING

    Do you have account of how many situations that has 
happened with? How many landlords have decided not to renew 
because of the shutdown?
    Mr. Montgomery. Congresswoman, we don't have those, but I 
would say that with or without a government shutdown, it is 
always a problem regarding preservation and owners that want to 
opt-out for reasons, increased property value. So preservation 
with or without a shutdown is always a problem that we 
confront.
    Ms. Clark. It is, but I think you can agree that the 
shutdown definitely accelerated that in certain cases. Are you 
trying----
    Mr. Montgomery. I wouldn't disagree.
    Ms. Clark. Are you trying to get a handle on how many that 
may be? Are you--or just don't have that information yet or you 
are not counting?
    Mr. Montgomery. We don't have the information yet because 
we are using this three-week period to get caught up from the 
last one, get the funds allocated today, and prepare for 
another one. But we certainly had discussions about those 
topics.
    Ms. Clark. Yeah. Speaking of that. Having met with HUD 
employees in my home State of Massachusetts and having dealt 
with the many talented people who devote their careers to 
public service, I am struck, Mr. Dennis, by you coming into 
public service after a career in private sector, and your 
comments on the dire staffing needs of HUD.
    And I know from speaking to employees in my district that 
they are concerned that what was a problem before the shutdown 
is now accelerated. We can't have a month-long furlough with 
all the grants and other deadlines that people need to make to 
get the housing needs met in our communities without having a 
ripple effect across the system.
    So can you tell me in the administration's budget what 
staffing level increases you are requesting to meet these very 
real needs?

                              HUD STAFFING

    Mr. Dennis. I don't have the numbers off the top of my 
head, but we can certainly get them for you and we are very 
focused on getting the right head count in our--at HUD.
    Ms. Clark. Okay. Great.
    Mr. Dennis. I am be happy to supply that information for 
you.
    Ms. Clark. We will look forward to that. Thank you very 
much.
    [Mr. Dennis responded for the record:]

    HUD's staffing levels have declined over the last four decades from 
a high of almost 18,000 FTEs in 1977 to fewer than 7,600 FTEs in FY 
2018, while its budget authority has steadily increased from just under 
$30 billion to more than $50 billion. This trend has resulted in fewer 
staff to manage and monitor compliance on an increasing number of 
grants, PHAs, and other programs. To mitigate these risks and reverse 
the decades-old trend of declining staff, the HUD 2020 Budget allocates 
$1.6 billion toward salaries and expenses (S&E). This funding will 
provide HUD the resources to increase its staffing to nearly 7,800 
employees, which includes the Office of the Inspector General. Using 
workforce succession strategies, the Department intends to execute this 
increase to ensure that additional staffing results in the right people 
allocated to the right jobs, providing the biggest impact toward 
achieving HUD's priorities.

    Mr. Price. Thank you. Let me turn to CDBG-DR funding to a 
very different, but I think quite pertinent questions that I 
would like to raise as we enter our final round of questioning 
here.

                            DISASTER FUNDING

    Mr. Montgomery, I will address this to you. In your 
testimony you used the rather striking phrase, move heaven and 
earth, in the case of Puerto Rico. I certainly hope that is 
true, and appreciate your emphasizing the--that is exactly the 
approach that needs to be taken in that very dire situation.
    Now, we have heard lately in the press that the White 
House, and in particular the OMB director, Mick Mulvaney, 
former OMB director, that they are considering syphoning money 
away from Puerto Rico recovery efforts to help fund border wall 
construction. That clearly would circumvent the wheel of the 
Congress and probably violates both appropriations law and the 
separation of powers.
    But I wonder what your view of that would be? Does HUD have 
the authority to divert funding from grantees that have 
received CDBG-DR allocations? And have you or anyone else, in 
HUD, that you know of, had conversations with the White House 
or OMB about redirecting funding from Puerto Rico, California, 
other grantees, to the President's wall project?
    Mr. Montgomery. Discussions that we have obviously with 
White House staff, we typically can keep private, but I would 
say there is no discussion about syphoning money away from 
disaster recovery, and it is my understanding that would 
require Congress to do that. So there has been no discussion of 
that topic, sir.
    Mr. Price. And your understanding is that that would be in 
violation of appropriations law?
    Mr. Montgomery. It is certainly my understanding, Mr. 
Chairman, yes.

                       DISASTER RECOVERY EFFORTS

    Mr. Price. Well, we share that understanding. Now, let me 
turn to the State action plans and something I hope you can 
clear up. I am referring now back to the shutdown contingency 
plan back in December, and a couple of apparently contradictory 
items here. Maybe you can respond right off the bat, maybe you 
will need to come back to us.
    But on page 8 there is statement to the effect that the 
Office of Community Planning and Development will continue 
disaster recovery assistance programs funded through multi-year 
appropriations. That is into a shutdown period. The disaster 
funding included in the Bipartisan Budget Act is available 
until expended and contained $10 million for salaries and 
expenses to administer the CDBG-DR program. But on that same 
page, the Department asserts that the review of consolidated 
plans or action plans is not an accepted activity.
    Now, that appears, on the face of it, to be a direct 
contradiction. And the Department in fact did suspend review of 
CDBG-DR action plans and amendments during the shutdown. So it 
is not just a hypothetical problem.
    So given the fact that no-year funding, no-year funding has 
been provided for disaster recovery efforts, and the 
contingency plan states that HUD would continue these programs, 
why did you suspend review of the action plans? Why didn't the 
Department use the $10 million provided for salaries and 
expenses to continue to review plans and plan amendments?
    Mr. Montgomery. Mr. Chairman, I will give you a brief 
answer and then commit to responding with a more detailed one. 
There are several pots of money, as you mentioned, there is no-
year money, and then there some staff that are called term 
staff. I do know this, I understand that we are prohibited from 
working on any sort of consolidation plans during a shutdown.
    Funds that have been obligated, for example, with Puerto 
Rico, we were permitted to work on those funds that we were 
working to get available and allocated to Puerto Rico. Irv and 
I and a set of confirmed appointees were able to work on that.
    So I apologize, again, for giving a short answer, but I 
will commit to getting a more detailed response to you 
following this hearing.
    [Mr. Montgomery responded for the record:]

    In accordance with its contingency plan, HUD limited its activities 
during the lapse in appropriations and did its best to make difficult 
but prudent choices to minimize the number of staff it recalled. The 
Department, in consultation with OMB, ultimately chose to extend the 
disaster action plan and plan amendment review timeline. On January 9, 
2019, HUD published a notice announcing that the Secretary found good 
cause to waive the statutory 60-day review deadline and issued an 
alternative requirement for review of pending action plans and plan 
amendments.
    HUD deemed this extension of the plan review timeline necessary, 
given the lapse in appropriations, because review of CDBG-Disaster 
Recovery (CDBG-DR) action plans and plan amendments requires the work 
of HUD staff from a number of offices, not just the Office of Community 
Planning and Development (CPD). Plan review includes staff from the 
Offices of General Counsel, Fair Housing and Equal Opportunity, Public 
and Indian Housing, Housing, and Policy Development and Research.
    Using the no-year disaster appropriations set-aside for salaries 
and expenses (S&E) during a lapse for all necessary HUD staff as 
mentioned above would have been inappropriate. The permanent HUD 
employees that would have been needed to perform this work during the 
lapse are paid from HUD's regular, annual S&E appropriations and 
switching funding sources to pay them during a lapse and switching it 
back after the lapse would have be inconsistent with GAO appropriations 
law guidance. These no-year S&E funds were used to keep term employees 
working on CDBG-DR activities during the lapse, but they could not 
complete reviews on their own given the absence of necessary employees 
from CPD and other HUD offices.

    Mr. Price. I appreciate that. That too is possibly an item 
for future attention--clarification.
    Mr. Montgomery. Yes, sir. And there are various pots of 
money, some employees are treated under different categories, 
and we will definitely work to clear that up.
    Mr. Price. So related to that, when do you plan on 
announcing the resumption of these plan and plan amendment 
reviews? What should we----
    Mr. Montgomery. That is imminent, sir, probably within 
several days.
    Mr. Price. Several days?
    Mr. Montgomery. Yes, sir.
    Mr. Price. All right.
    Mr. Montgomery. And I can probably by the end of the week 
have a much better idea of the specific day.
    Mr. Price. Have you communicated that to grantees and other 
interested parties?
    Mr. Montgomery. We have constant communication with those 
states. They do know that something is imminent, but again, 
sir, I think by the end of the week we will have a better idea 
of the exact date. We are working very hard, again, like a lot 
of things, to get caught up on that as well.
    Mr. Price. All right. Thank you.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, I will be brief. Actually, I 
was going to touch on exactly the same issue that you just did 
about--now, I understand that, you know, time and time again 
you said you can't allocate funds that you don't have.
    So I think it is a pretty strong consensus, bipartisan 
consensus, at least among appropriators, and I think among many 
that--I don't care what you want to call it, CRs. And you can 
put names to the CRs. Is it this person's CR. Or is it this 
person's CR? Or is it the Schumer shutdown or the last long 
shutdown. The reality is CRs are frankly very detrimental and 
shutdowns are beyond that. And so I just hope more people 
understand that. Clearly, the Appropriations Committee 
understands that.
    But my understanding is that the impact communities from 
the storms were able to draw down funds because the funds were 
already available. And I know that Florida, for example, was 
able to continue drawing on funding allocations for Hurricane 
Irma and long-term recovery.

                      DISASTER MITIGATION EFFORTS

    So I would just also--and I kind of asked about that to 
you, sir, about the CDBG-DR, the mitigation funds. Do you want 
to--where is that in--and, again, I didn't think you were going 
to be ready for that at this----
    Mr. Montgomery. Maybe in my----
    Mr. Diaz-Balart. Exactly. I know, exactly. But, again, if 
you want to touch a little bit on that, and if not, if you can 
get back to me on that.
    Mr. Montgomery. Sure. I will just provide a brief update. 
Our first priority was on met need, obviously. HUD is more the 
long-term supplemental funding mechanism. We have had 
discussions with FEMA, you know, they are more the resiliency 
and mitigation experts. And really the mitigation funds, this 
is the first time they have been allocated separately. To be 
forward looking, I think that was a great move by Congress. And 
now----
    Mr. Diaz-Balart. And we know that was this subcommittee, by 
the way.
    Mr. Montgomery. Absolutely.
    Mr. Diaz-Balart. It wasn't the Senate, it wasn't the--it 
was this subcommittee, right?
    Mr. Montgomery. But it is the first time we have done it, 
and we don't want it to necessarily look like traditionally 
what HUD does, nor do we want it to look exactly like what FEMA 
does. So in our discussions with them, sort of the hybrid 
approach, making sure it does its intended purpose.
    Mr. Diaz-Balart. Thank you. Look, and Mr. Chairman, let me 
thank you. I think it has been a very important hearing, a very 
fruitful hearing. But I do want to end by thanking you all. 
And, you know, the folks that were working under very difficult 
circumstances, weren't getting paid, doing some really 
important jobs. And, again, I would hope that non-appropriators 
would listen to what we have heard today and what those of us 
that kind of have a little bit better understanding as to the 
potential impacts. Not only the shutdowns, which are obviously 
disasters, but even the CRs that you mentioned time and time 
again.
    But, again, I just want to thank you. And if you could, 
just know that--and I think I can speak for everybody, how 
grateful we are to all of you, but also those folks that you 
called up who worked awfully hard under difficult 
circumstances, not getting paid, and frankly not knowing when 
they could get paid.
    So just--again, thank you all for what you do, and 
hopefully you will not have to ever deal with that 
circumstance. It is something that none of us should ever have 
to deal with.
    But, again, Mr. Chairman, thank you for this hearing. I 
yield back.
    Mr. Price. Thank you. And let me underscore that we see 
from our discussion here today the kind of circumstances that 
we are dealing with, that shutdowns are terrible, CRs are only 
slightly less so. And the kind of anticipation, planning, 
contingency planning that is required is very demanding, and 
you shouldn't have to go through this again. And, of course, we 
will do everything in our power to make certain that you don't.
    I do want to thank you for being here today. I thank you 
for the preparation that went into this, the participation, 
your answers. I thank the people behind you, the staff members 
that back you up, the HUD staff that has been professional and 
dedicated and under a good deal of duress.
    So we do acknowledge that and thank you for your good work, 
and we will hopefully now be free to, as you say, wrap up 
unfinished business, but then look down toward the writing of a 
new bill and dealing with any kind of challenges that need 
work, and prepare to learn from our experiences and chart a 
positive course going forward.
    I think we will have a number of questions probably to 
submit to you for the record, and so we will do that within a 
very short period of time.
    Please work with OMB to return the information for the 
record, and 30 days is the deadline we ask you to meet, 30 days 
from Friday. And so then we will be able to publish the 
transcript of today's hearing and make an informed decision as 
we look toward 2020.
    Mr. Diaz-Balart, any final comments?
    Mr. Diaz-Balart. Thank you. Mr. Chairman.
    Mr. Price. If not, then we thank you, and this hearing is 
adjourned.
    Mr. Montgomery. Thank you, Mr. Chairman. Thank you, ranking 
member.
    [Material submitted for inclusion in the record follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    

                                      Wednesday, February 27, 2019.

                 STAKEHOLDER PERSPECTIVES: FAIR HOUSING

                               WITNESSES

CLAUDIA L. ARANDA, SENIOR RESEARCH ASSOCIATE, DIRECTOR OF FIELD 
    OPERATIONS, URBAN INSTITUTE
KEENYA ROBERTSON, PRESIDENT AND CEO, HOUSING OPPORTUNITIES PROJECT FOR 
    EXCELLENCE, INC.
    Mr. Price [presiding]. The hearing will come to order. Good 
morning. Welcome, everyone, to our second Transportation, HUD 
Subcommittee hearing of the year. Today we are going to examine 
fair housing, a critical component of our ongoing national 
effort to combat discrimination and ensure equal opportunity 
for all of our citizens.
    Last year we celebrated the 50th anniversary of the Fair 
Housing Act, one of the three key civil rights acts of the 
1960s. It outlawed discrimination on the basis of race, 
national origin, religion, sex, familial status, or disability. 
This and other landmark laws, including the other civil rights 
acts and the Americans with Disabilities Act, have bolstered 
and expanded fair housing protections for millions of people, 
whether it is someone seeking a mortgage, renting an apartment, 
or living in federally-assisted housing.
    These laws promote equal rights and economic opportunity, 
but the Fair Housing Act goes one step further. It requires the 
Department of Housing and Urban Development and its State and 
local grantees affirmatively to further the goals of the act. 
In other words, there is an expectation that communities must 
proactively combat discrimination to overcome historic patterns 
of segregation and to foster inclusive communities.
    HUD has placed renewed focus on enforcing this aspect of 
the Fair Housing Act until the current administration 
indefinitely suspended the affirmatively furthering fair 
housing rule that was promulgated in 2015. To say the least, 
that is concerning. HUD has an obligation to receive and 
investigate fair housing complaints, issue grants to State and 
local government as well as nonprofit organizations to help 
enforce our fair housing laws, and to assist communities as 
they seek to comply with the Fair Housing Act. These activities 
support what should be a bedrock Federal commitment to fair 
housing.
    Unfortunately, we have seen some troubling signs in the 
last 2 years that this commitment is waning at HUD 
headquarters. In addition to suspending the affirmative 
responsibility rule, the affirmatively furthering fair housing 
rule, the number of high-profile Secretary-initiated fair 
housing complaints intended to address systemic discrimination, 
such as banks being less likely to approve African-Americans 
and Hispanics for mortgages, those have dropped precipitously.
    The disparate impact rule that sought to ensure lenders and 
landlords were held accountable for discriminatory outcomes, 
whether the discrimination was intentional or not, that is 
being reassessed reportedly by HUD. Guidance for the equal 
access rule, which laid out protections for LGBT individuals 
has been removed from the HUD website.
    HUD has yet to distribute fair housing enforcement grants 
despite having received funding for this purpose in the Fiscal 
Year 2018 THUD bill enacted last April. As a result, local 
organizations that work with vulnerable populations are feeling 
pinched. There are also reports that HUD's staffing levels and 
internal capacity are inadequate when it comes enforcing our 
fair housing laws.
    Finally, we need to come to terms with new and emerging 
trends in housing discrimination. Who faces discrimination 
today? What is being done about it? How has technology made it 
easier or harder to enforce fair housing laws? How can HUD 
improve their oversight, and how can this subcommittee be an 
active partner in this effort?
    To help us examine these questions, I am pleased to have 
two expert witnesses join us today. Claudia Aranda is a senior 
research associate, director of field operations, at the Urban 
Institute where she conducts research on the housing market and 
housing discrimination. She has supervised numerous empirical 
studies about differential treatment in the rental housing 
market, including some work on behalf of HUD. We are also 
excited to have Keenya Robertson with us this morning all the 
way from Miami, Florida, Mr. Ranking Member. She is president 
and CEO of the Housing Opportunities Project for Excellence, a 
private, nonprofit fair housing organization. Prior to her work 
with HOPE, Ms. Robertson worked as an attorney fighting on 
behalf of people with disabilities and other vulnerable 
populations in Georgia, Arkansas, and Mississippi.
    Both witnesses will provide us with valuable insight and 
perspectives about fair housing. We expect this hearing will 
help us inform our subcommittee's work as we engage with HUD 
officials on this issue in the months ahead, and eventually 
draft a Fiscal Year appropriations bill. So we really do 
appreciate your both being here. We look forward to your 
testimony.
    Now I would like to recognize our distinguished ranking 
member, Mr. Diaz-Balart, for any statement he might have.
    Mr. Diaz-Balart. Mr. Chairman, thank you very much. I also 
would like to welcome our witnesses today, and I thank Chairman 
Price for holding this important hearing. Mr. Chairman, I will 
be brief in my opening remarks, one hopes, so that we can get 
right to the witness testimony and questions.
    I do want to first welcome Ms. Robertson. Thank you for 
making the trip from sunny, warm southern Florida. Look, anyone 
who lives, works, or visits the southern part of the State of 
Florida quickly understands that it is not only one of the most 
dynamic places in the country, but it is also a very diverse 
part of the country. So, again, I look forward to listening to 
your testimony. Thanks for being here.
    Ms. Aranda, I also look forward to hearing from you today. 
I know HUD and, frankly, the wider community has benefitted and 
continues to benefit from your research. So I, again, look 
forward to hearing from both of you. The research, I believe, 
leads to improved policies. Frankly, there are few areas as 
important as our common goal of eliminating discrimination and 
expand opportunities. We value your perspective and look 
forward to your testimony.
    Chairman Price and I have worked very closely together to 
make sure that housing opportunities are available to 
vulnerable populations, and I am proud of what we have been 
able to do together with our bills, particularly within the 
last past 2 years to expand opportunities for veterans, for the 
disabled, and families with children.
    I have made it a priority, by the way, during my service in 
Congress and before that, my service in the Florida 
legislature, to ensure that nothing stands in the way of 
housing opportunities. To expand opportunities, we need to work 
together and remove barriers, and the Fair Housing law, I 
believe, is a key component of this work.
    And so it has been over 50 years since passage of the Fair 
Housing Act. Much progress has been made, but we obviously know 
that there is yet important work that has to take place. And 
so, again, I look forward to your testimony. Thank you for 
being here. And with that, Mr. Chairman, I yield back.
    Mr. Price. Thank you. Now let's turn first to Ms. Aranda, 
if that is all right, for her testimony. You are recognized for 
5 minutes. We are happy, of course, to print a longer statement 
in the record. But if you could shoot for 5 minutes for an oral 
statement, and then we will have plenty of time for our 
discussion. So Ms. Aranda.
    Ms. Aranda. Chairman Price, and Ranking Member Diaz-Balart, 
and other members of the subcommittee, thank you so much for 
this opportunity to discuss the importance of housing 
discrimination, its forms and its prevalence, and to highlight 
lessons from the past decade of paired testing research 
conducted by me and my colleagues at the Urban Institute, a 
nonpartisan research organization based here in Washington, DC.
    My name is Claudia Aranda, and I am a research associate at 
Urban. The views I express today are my own and should not be 
attributed to the Urban Institute, its trustees, or its 
funders.
    Since the late 1980s, Urban has conducted numerous housing 
discrimination studies funded by the Department of Housing and 
Urban Development, including the 1989, 2000, and 2012 studies 
on racial and ethnic discrimination in rental and sales markets 
nationwide. Over the past decade, we have also conducted a 
national study on people with disabilities, those who are deaf 
or hard of hearing, and people who use wheelchairs, and pilot 
studies on families with children, sexual orientation, gender 
status, and Housing Choice voucher holders.
    The paired testing research we have conducted since 2010 
shows that the discrimination that persists today in 2019 is 
harder to detect than it once was, but the barriers confronted 
by home seekers increase the time and cost of their search for 
housing, and further limit the choice that in many metropolitan 
areas is already constrained by the challenge of reaching 
landlords and finding available affordable housing.
    Our research confirms that for many Americans, the promise 
of the Fair Housing Act has not yet been realized, even more 
than 50 years after its passage. As the director of field 
operations since 2010, I have overseen the completion of over 
14,000 paired tests in over 44 metropolitan areas. In a paired 
test, 2 people are assigned fictitious identities and 
qualifications. They are comparable in every way except for the 
characteristic being tested, such as race or ethnicity. When 
the almost identical home seekers receive unequal treatment 
from landlords and real estate agents, paired testing 
essentially catches discrimination in the act.
    When the Federal Fair Housing Act was passed in 1968, 
African-American families were routinely and explicitly denied 
homes and apartments in white neighborhoods. The findings from 
the first HUD-funded studies of the 1970s and 80s showed 
discriminatory practices against minorities that further 
perpetuated high levels of segregation and limited access to 
opportunity-rich neighborhoods. In 2012, the most recent 
nationwide study on race and ethnicity, showed that although 
the most blatant forms of housing discrimination may be less 
common, such as when a landlord refuses to meet with a 
potential renter, minority home seekers still faced 
discriminatory practices, even when they are well qualified as 
renters and home buyers. Landlords and real estate agents 
recommend and show fewer available apartments and homes to 
African-Americans, Latinos, and Asian-Americans compared to 
equally-qualified whites.
    The discrimination studies we have conducted on other 
groups, some of which are also explicitly protected by the Fair 
Housing Act, also experienced differential treatment, including 
people with disabilities, transgender people, gay men, and 
voucher holders. It is also important to note that our testing 
studies may underestimate the level of discrimination against 
any particular group because testers were well qualified for 
the housing they sought, and tests were done in response to 
publicly-listed advertisements. For housing that is not 
advertised, discrimination is likely more overt and more 
prevalent as fair housing organizations may confirm in smaller 
scale enforcement testing. Additionally, our studies capture 
the discriminatory treatment that can occur during the initial 
inquiry and information gathering phase, but not during the 
final stage of a rental or sales transaction.
    Paired testing is a powerful tool for detecting and 
documenting discrimination, but it does not fully explain or 
begin to address the longstanding patterns of residential 
segregation and economic disparities seen in communities across 
the country. In order to overcome ongoing housing 
discrimination and the legacy of past exclusionary land use and 
zoning policies, a multipronged strategy is needed, one that 
includes that vigorous enforcement of anti-discrimination 
protections as well as proactive testing to uncover otherwise 
undetected forms of differential treatment, public education 
and outreach to residents about housing rights and 
opportunities and incentives to encourage affordable 
development and neighborhood reinvestment.
    As rental and sales markets continue to change and as 
attitudes towards residential diversity continue to evolve, 
policymakers and fair housing practitioners will continue to 
need reliable evidence, not only on the forms incidents and 
targets of discrimination, but also in other factors that may 
contribute to segregation and disparities in neighborhoods, 
such as information gaps, local regulatory policies, 
stereotypes, and fear.
    Taken together, these efforts and other recommendations I 
outline in my written testimony can help grow and sustain 
inclusive high-opportunity communities that give residents 
access to good schools, jobs, transportation, and other 
services.
    Thank you again for this opportunity to share highlights 
from our research. I look forward to answering any questions 
you may have.
    Mr. Price. Thank you very much. Ms. Robertson.
    Ms. Robertson. Good morning. I am, again, Keenya Robertson, 
president and CEO of Housing Opportunities Project for 
Excellence, or HOPE, a private, nonprofit fair housing 
organization serving Miami-Dade as well as Broward Counties. I 
also serve as chair of the board of directors of the National 
Fair Housing Alliance, the only national organization solely 
dedicated to ending housing discrimination.
    Thank you, Chairman Price, for this opportunity. Your 
stalwart support of fair housing enforcement has not gone 
unnoticed, and I thank this committee for putting fair housing 
on the agenda today. I am also grateful to our congressman and 
ranking member, Mario Diaz-Balart, for his support of efficient 
fair housing enforcement and equal housing opportunity.
    I would like to talk to you today about community-based 
perspectives on the Nation's enforcement of the Federal Fair 
Housing Act, and to express concerns regarding the resources 
that the major players have to combat housing discrimination. 
Enforcement of the Fair Housing Act in the United States is 
carried out through a combination of efforts by U.S. HUD, DOJ, 
local and State civil rights and human rights agencies, and 
private nonprofit fair housing groups. Fair housing assistance 
programs, or FHAPS, are State and local agencies that operating 
under a memorandum of understanding with HUD to process 
complaints of housing discrimination. It allows HUD to be more 
efficient and far reaching.
    HUD's Fair Housing Initiative Program, or FHIP, is the only 
Federal funding for groups like mine, private, nonprofit fair 
housing groups, to carry out fair housing education and 
enforcement throughout the country. FHIP has three major 
components. Those components are education and outreach, 
enforcement, which allows testing complaint intake. 
Organizations like mine do direct advocacy on behalf of the 
individuals who call us, and we also conciliate, take cases to 
mediation, and other processes that get to resolution. The Fair 
Housing Organizations Initiative allows for new organizations 
as well as expansion of existing programs.
    The FHIP Program is made available through the notice of 
funding availability, or the NOFA. Over several years we have 
watched the deterioration of the process. You have delays in 
release of the NOFA itself, award decisions, grant award 
negotiation, timing of payments to grantees. All of this has 
caused serious damage to long-established organizations, often 
the only entities serving their areas. As a small agency, we 
serve two major metropolitan areas.
    Many have been forced to take out lines of credit to 
complete existing work, to continue paying their employees, and 
to maintain basic operations, and some have even been forced to 
close their doors for a period of time. In fiscal year 2017, we 
were awarded a new 3-year enforcement grant. We successfully 
negotiated the terms in December of 2017. However, we were 
offered a start date of April 2018. We pushed and pushed and 
got a March 1st start date.
    For 2 months, we had to operate and maintain staff and 
their benefits with very previous cash reserves. During our 2-
month funding gap we received a complaint from an expectant 
mother. She lived in a low-income tax credit property with her 
two other small children. Her lease was not being renewed for 
failure to provide truthful information on her rental 
application. What this meant was she failed to disclose her 
pregnancy on the application, provide an ultrasound picture of 
her unborn child, and a doctor's letter estimating the time of 
birth of the child.
    In order to save her housing, a Federal lawsuit was filed. 
News coverage of the case resulted in other residents coming 
forward. Three families joined the lawsuit. Two of them had 
already lost their housing, and one came from another property 
where the same discriminatory rule was being enforced.
    We also received a complaint from a gentleman who had 
recently moved from the property. When he returned from the 
hospital after having open heart surgery, he went to the 
leasing office to request a live-in aide. Despite providing 
documentation and being asked to show his surgical scar to the 
assistant property manager in the leasing office, his request 
was denied.
    We are able to successfully resolve cases like this with 
significant changes in policies. These properties, they were 
for women, for families with children, and residents with 
disabilities. This may not have been accomplished had we been 
forced to lay off our staff or close our doors during that 
funding gap.
    HUD's Office of Fair Housing and Equal Opportunity is 
experiencing a shortage of staff that affects all aspects of 
its work, but, most importantly, the administration of its 
program and timely investigation of complaints. FHEO needs the 
adequate human resources and additional resources to assist in 
the development of increasingly complex investigations.
    FHIP organizations like ours need increased funding. Large 
areas served by small agencies like ours need adequate funding 
to serve our actual service areas, and those FHAP organizations 
need increased funding to maintain their staff and to conduct 
thorough investigations. We have submitted further detail in 
the written testimony, and I look forward to any questions that 
you may have. Thank you for this opportunity.
    Mr. Price. Thank you, Ms. Robertson. We do want to get to 
your comments about FHIP and how they operate and how they are 
funded in due course. I want to first ask you, though, for a 
little more direct commentary on some of the trends we have 
seen at HUD during this administration that affect our 
capacities to enforce fair housing and equal opportunity.
    These look like troubling signs to me, and I would like to 
know what your assessment is in terms of what their impact 
might be. The affirmatively further fair housing rule has been 
suspended. The disparate impact rule is being reassessed, that 
standard of judgment. Guidance on the treatment of LGBTQ 
individuals have been removed from the website Number of 
Secretary-initiated complaints addressing systemic 
discrimination has been scaled back to just one, I believe.
    So whichever you see as most impactful and whichever you 
would focus on, I want to ask you both about those moves and 
how they might affect your work and fair housing overall. So, 
Ms. Robertson, I will start with you. These trends or others 
you might want to highlight, how have they affected your 
ability to carry out your mission of advancing fair housing? 
What particularly should we be focused on?
    Ms. Robertson. Thank you, Chairman Price. I think 
everything that you mentioned impacts our work directly, 
indirectly, and holistically. I can start with disparate 
impact. I am very concerned that a legal doctrine acknowledged 
by the United States Supreme Court that has bene in effect for 
over 40 years. I was in the room during oral arguments during 
the Inclusive Communities case, and even Justice Scalia 
acknowledged that the Court has acknowledged the doctrine of 
disparate impact and its applicability to the Fair Housing Act.
    I think that one of the most important approaches to 
disparate impact is commonsensical. I am going to use domestic 
violence victims for example. You have unintended consequences, 
for example, with a nuisance ordinance and also rules of a 
housing provider regarding criminal activity. Women happen to 
be the most common victims of domestic violence in that if you 
had rules that people out of housing or subjected them to fines 
or other penalties, you would have a disproportionate impact on 
women when those rules are enforced against them as victims. 
The unintended consequence would be the displacement of women 
from housing when you do not put the appropriate protections in 
place.
    Where disparate impact is concerned, I can speak to south 
Florida and some of the work we have been able to do with 
regard occupancy restrictions. Some apply to affordable housing 
and then also high-end housing on Key Biscayne, on the water. 
Occupancy restrictions that limit residences to less than 2 
persons per bedroom have a disparate impact on families with 
children.
    For example, we examined the policies of the fifth largest 
affordable housing developer in Florida, representing about 
7,500 housing units. They had less than 2 persons per bedroom 
allowed in some of their units, and we looked at the policies 
across the entire State. An example would be a three-bedroom 
unit that did not allow more than 4 people. So a family of five 
or a family of six would be put out completely of housing 
availability at these affordable housing properties. You would 
also have families, for example, we had a mother who had two 
daughters who was forced into a larger, more expensive unit as 
opposed to allowing her daughters to share a bedroom. She was 
required to get a 3-bedroom unit.
    Shall I continue? Thank you.
    Mr. Price. Those appear to be almost textbook cases of 
disparate impact.
    Ms. Robertson. Absolutely. And you also saw this with 
regard to another property management company that had over a 
dozen between Miami and Broward Counties where we were able to 
eliminate those policies and make sure that a reasonable 
standard of at least 2 persons per bedroom was the occupancy 
restriction.
    So doing away with the rule, cutting back the rule, scaling 
back the rule would eliminate the ability for us to do work 
like this and have that type of impact in our investigations. 
These were systemic investigations where we got multiple 
properties. We had statewide impact, actually one of the cases 
that was a Secretary-initiated complaint. Our jurisdiction is 
only Miami-Dade and Broward, so to reach the rest of the 
properties throughout the State, there was a HUD Secretary-
initiated complaint that made that property management company 
take a look at its policies throughout the State and change 
them.
    Mr. Price. Thank you. That gets into another controversial 
area. And my time has expired, so, Ms. Aranda, we will wait for 
the next round to let you elaborate. What I do want to ask you 
is the impact as you see it of these changes and overall if you 
have seen any, it is early I know to say this, but have you 
seen changes in discrimination trends in the last year and a 
half. But let's wait on that.
    I will turn to Mr. Diaz-Balart for his questions.
    Mr. Diaz-Balart. Mr. Chairman, thank you very much. Ms. 
Robertson, so your organization is charged with raising public 
awareness on fair housing issues and also helping clients, as 
you mentioned, with allegations of discrimination when they 
arise. So how do you work with your organization to balance 
these two priorities, outreach and compliance?
    Ms. Robertson. In each of our offices we have an education 
and outreach coordinator, one assigned to each county. In 
Miami-Dade and Broward, each office has an investigations 
coordinator, and then we also have one person who coordinates 
all intake of complaints. So being able to maintain that staff 
is critical.
    These are not individuals that you find out in the market. 
From an employer's perspective, I can get an accountant. I can 
get someone to help with me human resources. But individuals 
who conduct fair housing investigations, we invest a lot of 
time, training, dollars into those staff members. By 
maintaining them, we are able to continue our programs and also 
hit the ground running as soon as we receive new funding 
awards.
    And I think that the big difference between just simple, 
sterile complaint intake and investigating of a process and 
filing a complaint, we are advocates on behalf of the residents 
who call us. I am just going to pull an example from Hialeah. 
We had a young man who is 9 years old, came to this country 
from Cuba with his mother and his father. Their grandfather had 
a 3-bedroom, 2-bathroom mobile home in a mobile home park. The 
policy of the housing provider was to use the children's report 
cards, specifically their conduct grade, to make decisions on 
whether or not the family was going to be allowed to stay.
    We were able to get enough outrage from community and get 
the local news investigator to chase folks through the parking 
lot asking about the policy, and essentially shamed them, 
educated them about what was wrong that shamed them into 
changing policies.
    Mr. Diaz-Balart. And you work with local community 
organizations as well, right?
    Ms. Robertson. Absolutely.
    Mr. Diaz-Balart. And so do you work with also faith-based 
organizations?
    Ms. Robertson. Absolutely. Every type of organization that 
we can get our foot in the door with, we do. Our housing 
counseling agencies allow us to teach first-time home buyers 
how to spot discrimination. With regard to religious 
organizations, we would speak to them specifically about fair 
housing, but also issues that affect folks who are 
discriminated against on the basis of religion. We get to 
schools to talk to families with children.
    Working with community organizations that are service-based 
allow us to, say, get to 10 counselors, but those 10 counselors 
each have access to, like, 70 folks. So one of the cases that I 
mentioned with regard to the occupancy restrictions was 
referred to us. Their client was referred to us from one of 
their counselors. Now, while we can't reach 700 or 7,000 
clients, just getting to those counselors alone allows us to 
get to folks.
    Mr. Diaz-Balart. And, Ms. Aranda, so if you could give us 
your assessment of HUD's Fair Housing Initiative Program, FHIP, 
you know, and also what makes for an effective grantee?
    Ms. Aranda. What makes for an effective grantee as a FHIP 
agency?
    Mr. Diaz-Balart. Yeah.
    Ms. Aranda. So, you know, just to clarify my perspective on 
this issue, we have in order to be able to do all this work 
over the last decade have worked closely with FHIP 
organizations. We have worked closely with Mr. Robertson. We 
wouldn't have been able to do this work out the FHIP 
organizations.
    And the housing discrimination studies, because we have had 
to do so many tests to be able to generate these estimates have 
required some of the fair housing organizations to do 200, 400, 
in some cases 600, paired tests in the course of a year in 
addition to all of the other important work that they are 
doing. And so that is certainly very challenging work that we 
ask them to do.
    But one of the things that we talk about across all of the 
reports that we have completed over the last decade, and 
actually consisting in reports in previous years when we have 
completed the national discrimination studies, is the 
importance that we see in ongoing enforcement work, ongoing 
outreach and education, the work that many of the FHIPs do in 
so many of the communities across the country that without 
them, that wouldn't be accomplished.
    And so I talk about in my written testimony, but certainly 
there is a lot more detail that we include in the reports about 
the importance of those functions. And that without them, 
obviously our fair housing laws would go unenforced without 
that important work.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. My time is up.
    Mr. Price. Thank you. Mrs. Watson Coleman?
    Mrs. Watson Coleman. Thank you, Mr. Chairman, and thank you 
for your testimony, both of you. My very first job in life was 
working for the Division on Civil Rights in the State of New 
Jersey. My very supervisory position was to be the chief of the 
Bureau of Rooming and Board. I mean, the chief of housing 
discrimination complaints, so somewhat familiar. I want to 
understand, you do complaints. You do conciliation conferences. 
Where is your enforcement authority, and what happens if a 
person doesn't cooperate?
    Ms. Robertson. So unlike the organization or the agency 
that you led, our role is a little bit different. We are able 
to initiate our own complaints. So we are actually complainants 
and plaintiffs in appropriate actions. Sometimes we are simply 
referring victims, and depending on the role that we took in an 
investigation, we actually become a party.
    Mrs. Watson Coleman. To whom do you refer these complaints? 
Is there a division on civil rights that enforces the law 
against discrimination?
    Ms. Robertson. Well, for HOPE, we have different avenues, 
and if there is a victim of discrimination involved, it is 
actually their choice, but we offer to them the different 
choices. For example, Miami-Dade County has a human rights 
division that accepts complaints as does Broward County. The 
difference between the two is Broward County receives funds 
directly from HUD to investigate. We can file them directly 
with HUD, which we have done, particularly when there is HUD 
funding involved. We think we can be more impactful with making 
change. And then we have nonprofit cooperating attorneys. The 
Florida Justice Institute and the Disability Independence Group 
are tow private nonprofit law firms that we refer clients to as 
well.
    Mrs. Watson Coleman. And so the consequences of a landlord 
or realtor or person who is selling a home who does not comply 
with the findings of discrimination, what are they?
    Ms. Robertson. Will you repeat the question for me?
    Mrs. Watson Coleman. What are the consequences of not 
getting someone to do the right thing?
    Ms. Robertson. Well, it is going to depend. It will depend. 
I mean, if the investigator or the investigative agency finds 
cause, usually what would follow would be a lawsuit. Everything 
that we have actually initiated that is based on our 
investigations has ended in settlement. We have been able to 
come out with resolutions that change policies that remedy the 
victims, and also put in place best practices that avoid 
closure of housing opportunity and eliminate discriminatory 
practices.
    Mrs. Watson Coleman. So the reexamination of the disparate 
act is like putting a damper on looking at policies in place 
that are supposed to be neutral on their face, but have a 
disparate impact. Patterns and practices are harder to 
investigate and deal with without this authority?
    Ms. Robertson. Absolutely, yes.
    Mrs. Watson Coleman. Okay. When I was in the Division on 
Civil Rights back in 19----
    [Laughter.]
    Mrs. Watson Coleman [continuing]. The best way to determine 
whether or not someone was being discriminated against was this 
pair testing, and that is what you do now. But you also 
mentioned that discrimination is harder to detect. So I want to 
know something about that, but I also want to know to what 
extent do you hold referred complaints of realtors who are 
doing the targeting into communities based upon race, and 
ethnicity, and other issues, and low income? I would like to 
hear from both of you if I have that----
    Ms. Aranda. Thank you for the question, Congresswoman. And 
I can say a little bit more about what we have seen most 
recently in our work on the paired testing methodology, and 
that when the paired testing methodology was first used by 
civil rights organizations in the 60s and 70s, that the 
treatment was much more overt, right? So a landlord might to 
say to you we don't rent to black people, right? So you knew in 
that moment that you were discriminated against, whereas now 
what we see if that a landlord may tell somebody, sorry, that 
apartment has been rented, and then later that afternoon the 
second tester in the pair will be offered an appointment to 
view that apartment, right?
    So without that direct comparison, and that is the power of 
the methodology, you wouldn't know that discrimination was 
happening. And so that is the benefit of what you see.
    The role that we play is as a research organization, so our 
testing is designed to be able to look at systematic 
differences. And so we wouldn't actually take action on any 
particular outcome. And so I am happy to let Mrs. Robertson say 
more about that.
    Mrs. Watson Coleman. My time is up, and perhaps we can get 
to this a little bit later. Thank you.
    Mr. Price. Thank you. Thank you. We will ask you to defer 
and pick this up on the next round. Mr. Rutherford.
    Mr. Rutherford. Thank you, Mr. Chairman. And thank you both 
for being here this morning. Ms. Robertson, in your testimony 
you referenced the challenges in some of the delays in funding 
and what that does to the operation. When did these delays 
actually start, and have they had a major impact on HOPE?
    Ms. Robertson. Absolutely. I can trace delays back to, if I 
just go through our funding cycles. We received a Fiscal Year 
2010 enforcement grant that was a 3-year grant. Typically in 
the grant cycle, April would be the notice of fund availability 
release, and before September 30 you would receive notice. Our 
Fiscal Year 2010 grant actually didn't begin until May of the 
following year. We had a 6-month funding gap during that time 
period.
    This is a competitive process, so unlike the government 
agencies, the local private agencies don't receive ongoing 
consistent funding. This is competitive based. But when we 
successfully get a grant, we should be able to hit the ground 
running with the dollars. When you lose staff during funding 
cuts, you have to start all over again with training them with 
regard to testing. We conduct testing. It is a very specific 
process, and then every new test coordinator has to get its 
whole new tester pool to be able to conduct its investigations.
    Mr. Rutherford. Well, you know, I used to run a very large 
law enforcement organization, and I know losing those knowledge 
skills and abilities of those investigators, you don't just 
hire somebody and start, you know, where you left off. It takes 
a long time to ramp that up. Is everyone on the same grant 
cycle or do some FHIPs have longer periods where they are not 
funded than others? Are you all----
    Ms. Robertson. No, it is different, so my answer would be 
affirmative to the latter part of your question. So, for 
example, the Fair Housing Center in Atlanta, their 3 years 
ended on January 31st, I believe. Right now the Fiscal Year 
2019 awards have not even been announced. They don't know if 
they are going to get funding. And then once they do find out 
they are going to get funding--I am claiming it for them--they 
have got to negotiate the grant.
    And in the meantime there is no telling whether or not they 
are going to be able to maintain all of the staff members that 
they currently have. Staff morale is very important. When you 
are cutting back on benefits, when you are not able to provide 
cost of living increases because the dollar amounts have not 
increased, it becomes difficult.
    Mr. Rutherford. So let me ask this in light of all that. Do 
you have other sources, and I think I already know the answer 
to this having listened to you. Do you have other sources of 
income, like private funding and other things, that will help 
you get over those gaps? You mentioned earlier you have to lay 
people off.
    Ms. Robertson. Right. I have currently 3 staff members who 
are on part-time schedules right now. But what we do is 
traditional nonprofit fundraising and resource development. We 
do consulting work for some of the housing authorities, and we 
are also fair housing planning consultants to some of the 
jurisdictions. When we talk about affirmative furthering fair 
housing, one piece of that is accomplished through funding fair 
housing organizations. And some of our local jurisdictions 
provide some funding as there are cuts in CDBG and other funds.
    For example, our funding has been cut. When I joined HOPE 
in 1998, we had $200,000 in funding from Miami-Dade County. We 
don't receive a dime any longer. We had $50,000, I believe, 
from Miami Beach and from City of Miami. We are down to $10,000 
from each of those organizations and $20.
    Mr. Rutherford. So is that at the heart of your request? In 
your conclusion in your testimony, in your written testimony, 
you talked about the need to hire an additional, I think it was 
almost 300 individuals at the FHEO.
    Ms. Robertson. Yes, sir.
    Mr. Rutherford. And I would assume that would be to help 
mitigate and eliminate some of these gaps?
    Ms. Robertson. Right, to replace retirees, to make certain 
that programs are running efficiently. Also to make certain 
that when you look at the significant backlog of its own 
complaints, for HUD to be able to investigate and process its 
own complaints to resolution.
    Mr. Rutherford. Thank you. I see my time has expired, Mr. 
Chairman. I yield back.
    Mr. Price. Thank you. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. Ms. Aranda, I wanted 
to dive back into the paired testing discussion in your 
testimony. Can you go into more detail about the experience 
that immigrants with limited English-speaking abilities face 
and what were their experiences, and what guidance can the 
committee provide to HUD to make housing more accessible to 
these populations?
    Ms. Aranda. Thank you for the question, and I just wanted 
to point out that so far we actually haven't done any paired 
testing studies that focus on immigrants or individuals with 
limited English capacity. That is certainly one of the groups 
that we identify as potentially being a group that we would 
focus on in future work and that we would certainly recommend 
would be the subject of future work. But we haven't included 
those groups so far.
    Mr. Aguilar. What types of work can we do with HUD in order 
to kind of dive deeper into the outcomes that you found with 
paired testing?
    Ms. Aranda. So one of the things that I think is important 
to just note is that these studies that we have done over the 
last decade beyond the national studies have been these pilot 
studies, have also been exploratory studies that have been 
really important first steps for HUD to take looking at 
families with children, looking at voucher holders. Our study 
on LGT community was actually 2 distinct studies. So it was a 
pilot study focused on same-sex couples, but then also it was 
an exploratory study looking at discrimination against 
transgender people.
    And so I think that we learned many things from that work, 
but there are certainly many opportunities to be able to push 
forward in that work in the study focused on transgender people 
to be able to take some of those lessons, some of the initial 
challenges that we faced in thinking about the safety concerns 
for our testers and worrying about whether we needed to have 
particular protocols in place to make sure that they had clear 
procedures in case something happened to them in the course of 
a test or they felt threatened in the course of a test.
    And we work closely with advocacy organizations, with LGBT 
organizations to develop these protocols and procedures. And so 
the fact that there has been so much learning that has happened 
in the course of this work, and then to be able to take that 
and take the next step to be able to do a pilot study, to 
develop estimates of discrimination in particular regions and 
across the country, would, I think, be a very important 
opportunity for further learning and for the Department to 
take, and similarly to be able to do that based on what we have 
learned from voucher holders, that voucher holders suffer 
discrimination that when they are looking for housing in places 
that have higher opportunities, that are low-poverty areas, 
they face even more discrimination.
    So the issue of whether it is really the case that voucher 
holders, although in theory they should be able to take their 
vouchers anywhere to be able to find housing, just the 
challenge that it takes. We had to review many ads, hundreds of 
thousands of ads, to be able to do the testing in the five 
places where we conducted the study. And it took us on average 
39 ads to find that seemed that it might be affordable for 
someone with a voucher. In some places, it took more work than 
that to be able to find an ad.
    So just the level of effort that the housing search itself 
takes is something that we have continued to see across all of 
these studies. But particularly when we were looking in the 
part of the market that would be affordable to a voucher 
holder, that is something that was definitely underscored for 
us of just the amount of effort, time that it takes. And then 
ultimately, given the particular parameters of the voucher 
search, of how long voucher holders are given, the fact that 
they may end up in a neighborhood, they may end up in housing 
that is not what they might want to try to be in. It is not 
near good schools. It is not in a community with other services 
that they might want, but they are put in a position where they 
have to take what they have found because other housing with 
more opportunities is not available to them. So I think these 
have been important lessons, but they have also been important 
first steps that have been taken.
    Mr. Aguilar. Thank you. Thank you, Madam Chairman.
    Mr. Price. Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman, and thank you for both 
your testimony today. Mrs. Robertson, I would like to go back 
to some of the discussion of the guidance that was issued on 
local nuisance ordinances. And studies have shown us that 
domestic violence is the leading cause of homelessness for 
women and children. According to a survey by the National 
Center for Children and Poverty, 80 percent of women with 
children experiencing homelessness are identified as survivors 
of domestic violence.
    So we have this sort of perfect storm forming with the 
nuisance laws that we have seen and also the difficulty that 
both of you have testified to around familial status. And that 
is one of the most prevailing forms of discrimination that we 
see. With the guidance that HUD has issued around nuisance 
ordinances, have you seen that being used by local governments 
and housing providers, and has it resulted in change that has 
been positive for domestic violence survivors?
    Ms. Robertson. In Broward County, they added the specific 
protection for victims of domestic violence and stalking to its 
local ordinance that is substantially equivalent to the Fair 
Housing Act. I think that the training that is done with regard 
to survivors of domestic violence and current victims specific 
to the Violence Against Women Act and the requirements of 
properties that are federally subsidized have been quite 
effective in getting those changes.
    I don't know that it was specifically the HUD guidance and 
their reading of it, but I do believe that the work on the 
ground that is done by fair housing organizations to train 
housing providers with regard to their responsibilities to make 
them aware of guidance and to also talk to them about best 
practices in protecting victims. Another piece that I believe 
fair housing organizations are able to address, for example, we 
had a familial status and disability-related complaint at a 
project-based Section 8 property in Miami Gardens. This are 
fully-subsidized units throughout the property. But in just a 
review of all of their rules, we were able to identify their 
lack of protection for victims of domestic violence.
    So I think that really what all of it ties back to for me 
is the education and outreach that is important. That is most 
important to raise awareness of victims of their rights, but 
also housing providers about their responsibilities. And that 
is what really translates itself into change. So in resolving a 
complaint we are able to make certain that they put those 
policies in place, that they train their employees, et cetera.
    So I think that is what it really looks like when you start 
to see change. It is that awareness that education and outreach 
initiatives are part of or that they affect as well as taking a 
look at holistically everything that limits housing opportunity 
in the rules of the housing provider to address those things.
    Ms. Clark. Great. Thank you. Do you have anything to add?
    [Nonverbal response.]
    Ms. Clark. Okay. I had a question for you. There has been a 
lack of Secretary-initiated complaints coming out of this 
Administration, and it has been an effective tool that has been 
used by prior Administrations to combat systemic 
discrimination, both Republican and Democratic administrations. 
One example is in 2015, an agreement between HUD and the 
Wisconsin-based Associated Bank where the bank paid $200 
million in settlement for denying mortgage loans to African-
Americans. How do you see HUD's lack of these Secretary-
initiated cases as impacting the work of fair housing across 
the country?
    Ms. Aranda. I think it is certainly like disparate impact, 
like the AFFH rule. I think it is an important tool, and we 
certainly agree and include in our reports recommendations for 
very vigorous enforcement. And so I think it is another 
important tool.
    Ms. Clark. Thank you. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Ms. Aranda, I am going to pick up 
right where you left off and where we left off in the first 
round because I would like to give you the chance to comment on 
the various trends we have seen in HUD over the last 2 years 
and if you can detect direct impacts. And then maybe a little 
more broadly what kind of changes you have seen in 
discrimination trends, however you would account for them, and 
these new forms of discrimination that we have heard about, and 
what is required to deal with those.
    Ms. Aranda. No. Thank you for the question and the 
opportunity to return to your first question where I think 
everything that you named--AFFH, disparate impact, the LGBT 
guidance--all of those key issues and tools being really 
important in being able to combat ongoing discrimination, but 
also to address the effects of past discrimination, past 
exclusionary policies.
    And so I did want to say a little bit more about the 
implementation of the AFFH rule because we have included in our 
all of our reports the recommendation of the fact that 
jurisdictions across the country, in order to be able to combat 
the past effects of these exclusionary practices, need to be 
able to approach it very holistically. And so it doesn't 
include just enforcement based on complaints that come in. It 
is not just about doing additional outreach, and we certainly 
recommend the increased outreach not only to housing providers 
about the law because we have seen over time the impact that 
litigation and then the education that becomes sort of 
compulsory afterwards, that that seems to have played a role in 
decreasing the level of discrimination, certainly the overt 
discrimination.
    So in terms of the AFFH rule, that the initial 
implementation and the lessons that we have seen from the 
initial cohort of jurisdictions that actually began to 
implement this new planning process, that they benefited from 
not only some of the specific guidance, but also some of the 
technical assistance that was provided as part of the 
implementation of the rule, and what that led them to do as far 
as community outreach, community engagement, and really 
reflecting diverse communities, the communities that Mrs. 
Robertson talked that she works with in Miami, to have them 
reflected in the planning processes and the thinking about what 
can be done in a particular jurisdiction to not only combat 
what continues to happen, but what has happened in the past, 
the levels of segregation that we have continued to see in 
communities across the country.
    These are hard things to combat. And so the fact that this 
planning process really has given in the initial implementation 
of the rule a path for communities to be able to follow. And I 
think we began to see, however limited a time frame we have, we 
began to see the impact of some of that.
    But to your question about what discrimination continues to 
look like in these sort of emerging forms, one of the issues 
that I think is really important is related to what we have 
continued to see and that I mentioned about the challenge of 
the housing search process. And all of the different modes in 
which home seekers may be communicating with landlords, may be 
communicating with housing providers, the different ways that 
they may receive information. So we have certainly seen as 
prospective renters looking for housing, that they may be 
initially emailing in response to an ad that is posted online, 
but then they may receive a message from a prospective landlord 
saying, why don't you text me, and then I will send the link to 
the updated posting. And the landlord may call the prospective 
renter and then may say, why don't you fill out this form 
online.
    And so all the different ways that people are receiving 
information or not receiving responses then to their requests, 
all the ways that they may be looking for information, that the 
housing search process is much more complicated. And all of 
these different modes provide opportunities for landlords to 
limit the response, to limit information based on what they are 
able to learn about a particular person based on what 
information may be available to them, and some kind of a credit 
screening or background check. And one of the things that we 
have seen over time is apartment complexes that may not even 
make an appointment with you until you go through an initial 
screening process. So just the different challenges that we 
have continued to see in getting access to information.
    Mr. Price. Thank you. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, thank you very much. When I 
think of, you know, obviously the issue of discrimination, 
which is such an important issue, you know, I always think back 
about how fortunate we are to have a Secretary of HUD, somebody 
who's history and life is an example to all of us as to how to 
move forward despite all of one's challenges.
    Let me kind of go into an issue that obviously much of 
HUD's fair housing work is delegated to the States and local 
levels to the fair housing assistance programs. Now, I know 
that neither of you work directly with this particular program, 
but your work touches some of the same issues and challenges, 
frankly, faced by FHAP organizations. So while I have you here, 
and I want to take advantage of it, could you, both of us, give 
us your views on how well that program works? What are some of 
the challenges faced by these organizations as they carry out 
their mandates? It may be a little unfair to kind of ask you to 
do that, but I am going to take advantage of having both of 
you.
    Ms. Robertson. Yeah, we actually work closely with those 
programs. We work in partnership with HUD as well as our local 
FHAP agencies. I was just in Tampa yesterday conducting a 
training for recipients of Federal funding along with the City 
of Tampa, who happens to be a fair housing assistance program.
    I believe that the same funding issues exist for FHAP 
organizations. I believe that the time that they invest in 
their investigations and bringing their complaints to 
resolution require increased funding. In order to be efficient 
they also require adequate staffing in order to conduct their 
investigations timely and thoroughly. And also for them to be 
able to conduct any type of outreach or marketing to let their 
communities know that they are a resource for individuals to 
file complaints, you know, for them to know who they are and 
what they do. And we certainly include that in the work that we 
do.
    And that is why the partnerships are so very important 
because we all work together to make the most efficient and 
impactful use of what we consider to be limited funds.
    Mr. Diaz-Balart. And, Ms. Aranda, do you want to comment on 
that as well?
    Ms. Aranda. So we don't work directly with FHAPs and 
haven't in our work, but certainly in looking at complaint data 
overall continue to see the important role that they play and 
that they play in enforcement.
    Mr. Diaz-Balart. And so, Ms. Robertson, you were talking 
about this, I don't know if it is more a challenge in fair 
housing, you know, access to folks with personal disabilities, 
but you were also talking about families with children. Is that 
something that you are seeing more of?
    Ms. Robertson. I think it has been a consistent issue. 
While disability has overtaken race in many instances as the 
most common form of discrimination----
    Mr. Diaz-Balart. That is an interesting statement you just 
made.
    Ms. Robertson. Oh yeah, but as you look at the work that 
HOPE has done and even some of the litigation that we have been 
involved in, the discrimination against families with children 
is quite prevalent. It comes in different forms. And we already 
talked about disparate impact with regard to rules, but there 
are also just discriminatory rules period. We have seen, and I 
want to add to Ms. Clark's questions regarding realtors.
    For example, we received a complaint from a realtor who was 
seeking housing for her client, a rental property. And when 
contacting a listing agent, MLS and in the text exchange was 
told, the owner doesn't want any children. And we also received 
another complaint out of Bell Harbor. There was a gentleman 
looking for a unit to rent, and the realtors when you called 
them up, we do testing as well. We do responsive testing to 
complaints, and we substantiated the fact that the realtors 
were enforcing the no children rule. And they felt that because 
it was the owner's desire not to have children, it was okay as 
a real estate professional to enforce that particular desire of 
the owner.
    We have no children allowed on the second floor for safety 
reasons, pregnant women evicted, and then rules and regulations 
that don't allow children's things to be present on a property, 
that don't allow them to play in common areas, parking lot, on 
your balcony or anywhere that anybody can see you. The 
requiring of report cards for children as like character 
references or background checks for kids is something that has 
also been seen not just in that example that I gave. There was 
a case that came out of Palm Beach County as well.
    So families with children I believe experience, and also 
different terms and conditions, pools that they can't use or 
restrictive hours where the pool is only open Monday through 
Friday 9 to 5 when the kids are at school in their after-school 
programs, that sort of thing. So the effect of discrimination 
on families with children I think is definitely more prevalent 
than people realize and takes effect in many different forms 
that we have to continue to attack.
    Mr. Diaz-Balart. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Rutherford.
    Mr. Rutherford. Thank you, Mr. Chair. Ms. Aranda, when we 
were talking about the difficulty with the folks with vouchers, 
and in your testimony it talks about extending the Search 
Assistance Program from 60 to 120 days. And I am not familiar 
with this, quite frankly. So is that a rule that FHAP passes 
down and all of the assistance programs follow that rule? How 
does that work?
    Ms. Aranda. So the search times, and this is part of the 
rule for Housing Choice Vouchers. Those are the particular 
vouchers that we were looking at, and so that is the time frame 
that is then required and it has to sort of be enforced by the 
housing authorities. If they are a part of particular different 
kinds of programs, there may be some leniency that they are 
able to apply.
    But essentially, and you may know already, that in so many 
places there are very long wait lists for people trying to get 
a voucher. Some of those wait lists, many of them have 
essentially been closed for a very long time because there 
haven't been new vouchers to be able to issue. And so if you 
are able to get access to a voucher, you have this particular 
window of time to be able to use it. If you can't use it, then 
you lose it. And so it is the issue then of as I described the 
challenge of finding housing that meets their needs.
    Mr. Rutherford. Can't we simply change the rule?
    Ms. Aranda. So the rule can certainly be changed.
    Mr. Rutherford. Let's change it. [Laughter.]
    It doesn't take a law, right? I mean, it doesn't take an 
act of Congress to change that, does it?
    Ms. Aranda. And I think that is right, and I think there 
are other rules related to the Voucher Program that also could 
provide tremendous support to voucher holders to be able to use 
their voucher in the way that it is intended. And one of the 
things that we talk about in the report is certainly to be able 
to provide housing search assistance. There are public housing 
authorities that struggle to be able to provide a list to 
people, but it is the issue of continuing to expand outreach to 
landlords as well, to be able to provide better sort of service 
and support to them so that that is a way of also bringing them 
into the program.
    Mr. Rutherford. You mentioned in the paired testing that 
you find the discrimination, but you don't really necessarily 
know why they are doing what they are doing. And I think that 
is a very good question to ask because they are property 
owners. They have concerns. They want to protect against, for 
example, it was mentioned earlier, the number of people that 
can sleep in a room and that sort of thing. That is reasonable 
to me because you don't want human trafficking. You don't want 
other things that could be going on in a rental property that 
someone owns.
    What are we doing about looking into those circumstances 
sometimes? That is evaluated, too, right, the property owners' 
concerns?
    Ms. Aranda. So this is an issue that we feel there is a lot 
more learning to do, and there has been some recent work that 
does do some interviews of landlords to better understand the 
challenge. You may know that the Secretary also launched in 
response actually to our findings on the voucher study, 
launched a landlord task force that has had some initial 
meetings around the country and encourage landlords to come and 
talk about their experiences, so the experiences that some 
report of having concerns about receiving payments on time from 
a particular housing authority, the issue what screening they 
are able to do of voucher holders.
    So I think that that is something that we have started to 
learn a little bit more, but on the whole the methodology 
doesn't really allow us to learn more about that. I think that 
would be an important next step.
    Mr. Rutherford. I also appreciate your intent to, you know, 
go out and actually proactively search for landlords that would 
be willing to take vouchers. I know we did the same thing with 
felons coming out of prison. We went to businesses and asked, 
you know, would you consider, and gave them all the information 
on why it really is a good idea to hire this convicted felon. 
And so I see my time is up, and thank you very much for what 
you are doing. I yield back.
    Mr. Price. Thank you, and I am going to turn the gavel over 
to Ms. Torres. It is her turn to question, and I have another 
hearing I meant to check in on.
    Mrs. Torres [presiding]. Thank you, Mr. Chairman, and good 
morning. I am bouncing back and forth in between meetings, so I 
apologize if I ask something that has previously been covered, 
maybe not exactly to the extent that I am interested in hearing 
a response.
    You should know that in 2005, I had a devastating fire. I 
lost everything that I owned. I checked into a hotel with 
nothing but the clothes that I had on. My oldest son had no 
shirt on, and my youngest son didn't have shoes on. Everything 
was lost completely. At 3 a.m. checking into a hotel, little 
did I know what I would experience in trying to house myself 
and my children.
    When landlords refer to teenage sons as ``how many of those 
do you have,'' at first I was shocked because I thought, like, 
what are they referring to, and then I realized he's talking 
about a human being. I said, oh, you are talking about the 
young man that is with me. I have three of those. And add a pet 
to that liability, it is impossible. It is impossible. So we 
lived in a hotel for several months, and then we had to pay 
almost double what the house, the rental would have been 
because of the liabilities that I had.
    So discrimination is real. Discrimination is very, very 
difficult to prove. For us it was a terrible experience, not 
just trying to deal with landlords, but trying to deal with 
school districts that all of a sudden because I did not have a 
permanent residence, my children did not belong in that same 
school district. So all of those things are very difficult. It 
is no wonder why we have a homelessness epidemic. It is no 
wonder why so many people are sleeping in the streets every 
single night.
    So of the complaints that you receive and of the complaints 
that you have filed with Secretary Carson's office, what are 
you getting back? Are you getting responses? I mean, what is 
happening there?
    Ms. Robertson. I most recently was talking about a 
complaint that we filed that was actually received from a 
realtor regarding another realtor. We had also filed, I don't 
believe this was with Secretary Carson, but Region 4, HUD's 
office, with a project-based Section 8 property. What you end 
up getting is your intake. Fair housing agencies are able to 
put together complaints that are concise and guaranteed to be 
jurisdictional so that they are efficiently and quickly 
processed by HUD. We can help victims put theirs together that 
way as well. That assists HUD also in weeding through 
allegations.
    You receive back their words of what they believe your 
complaint is and how it fits into what a fair housing violation 
may be or that which is jurisdictional under the act for them 
to investigate. There you are assigned to an investigator, and 
then you are also offered the opportunity to conciliate or 
negotiate the resolution of the complaint. Both parties have to 
agree.
    Mrs. Torres. But for a person with disabilities, for 
example, that may need some accommodations, right, a wider door 
maybe, it doesn't have to be changing the entire facade of a 
building.
    Ms. Robertson. What does that one look like?
    Mrs. Torres. What does that one look like?
    Ms. Robertson. So immediate needs, an earlier example was a 
woman whose lease wasn't going to be renewed. That is an 
emergency situation. We actually work with private, nonprofit 
cooperating attorneys. You can file a lawsuit and a HUD 
complaint at the same time. So if we have the immediate need of 
preserving housing, acquiring housing, or an accommodation 
because sometimes for a person needing a reasonable 
accommodation or even a modification, life could be at risk as 
well as health, and other safety issues come into play.
    So I was describing to you an administrative process, you 
know.
    Mrs. Torres. Right.
    Ms. Robertson. So we are able to take on different 
approaches in terms of the people we serve to get them 
immediate assistance when something is on fire, so to speak. 
HUD, they do offer the availability of immediate action. We 
have not utilized that because you are still going through a 
process. For me, I am a real person on the ground dealing with 
a real issue and a family that has got to stay right now. So 
whoever can get help to them the quickest, that is the 
connection we are making.
    Mrs. Torres. My time is up, but I would love to follow up 
with you more on this issue.
    Ms. Robertson. Absolutely.
    Mrs. Torres. I am going to now turn it over to Ranking 
Member Diaz-Balart.
    Mr. Diaz-Balart. Madam Chairman, thank you. I actually 
don't have any more questions, but I do want to take the 
opportunity to thank both of you for being here. I think your 
testimony has been, frankly, very helpful to us, and I look 
forward to continuing to working with you. Thank you for being 
here and thanks for your testimony. Very helpful. Thank you, 
Madam Chairwoman.
    Mrs. Torres. Congressman Rutherford? No? Okay. Great. And I 
think I am okay. I am not going to keep you here any longer, 
but I would again like to follow up with you. Thank you so much 
to the both of you for your testimony. This is a critical 
issue. I am afraid that once you being to negotiate as a victim 
of housing discrimination, the only way to negotiate is your 
rights away. And you are on the front lines of ensuring that 
that doesn't happen, and I appreciate your work very much.
    And with that, the hearing is now adjourned. And I get to 
do this. [Laughter.]

                                           Thursday, March 7, 2019.

        STAKEHOLDER PERSPECTIVES: AFFORDABLE HOUSING PRODUCTION

                               WITNESSES

SCOTT FARMER, EXECUTIVE DIRECTOR, NORTH CAROLINA HOUSING FINANCE AGENCY
ELLEN LURIE HOFFMAN, FEDERAL POLICY DIRECTOR, NATIONAL HOUSING TRUST
ANTHONY SCOTT, CHIEF EXECUTIVE OFFICER, DURHAM HOUSING AUTHORITY
    Mr. Price. Good morning. The hearing will come to order. 
Thanks for being here, everyone. We look forward to a 
productive discussion on Affordable Housing Production, a very 
timely topic.
    I don't think it is an understatement to say there is a 
housing crisis in our country. Many of the people affected by 
this crisis are the most vulnerable among us, seniors, the 
disabled, low-income families with children, veterans. But 
increasingly, middle-income families, also, are being squeezed.
    Studies from HUD and other sources indicate that more and 
more families are struggling to pay rent. The cost for housing, 
for transportation, for medicine and education keep increasing.
    Amazingly, only one in four people at this moment, one in 
four, eligible for Federal rental assistance can receive it 
because of funding constraints. Now, we sometimes talk about 
funding constraints like they are written in the stars, 
actually they are not. It is a political failing. It is a 
matter of political judgment. It is a matter of political 
priority setting.
    At a time when housing should be a front-burner issue we 
seem to be falling further behind. It is not a reality any of 
us should be comfortable with; in fact, it should force us to 
ask tough questions about our values and priorities.
    There are numerous factors that contribute to this crisis, 
aging housing stock, rising rents, low vacancy rates, onerous 
local zoning requirements, high unemployment in areas of 
persistent poverty. The list goes on and on as all of you know.
    We know the crisis spans geographic boundaries, both urban 
and rural areas are suffering from an acute lack of affordable 
housing. Meanwhile, producing and preserving these units has 
become nearly impossible without government subsidies.
    At the Federal level, this means flexible grant programs 
like HOME and CDBG, which can act as gap funding. It also means 
categorical programs like 202 for the elderly, 811 for people 
with disabilities, and transformational grants, like Choice 
Neighborhoods.
    Other Federal funding streams for public housing and 
project-based rental assistance to ensure millions of America 
have a safe, decent place to call home.
    On the tax side of the ledger, the low-income housing tax 
credit remains an absolutely essential source of private equity 
for new, affordable housing.
    Unfortunately, the Trump administration's budget request 
for the previous two fiscal years have been draconian, entirely 
eliminating many of these categories of funding. But I am proud 
that this subcommittee under the leadership of then Chairman, 
Mario Diaz-Balart, rejected those cuts on a bipartisan basis, 
and after last year's enactment of the Bipartisan Budget 
Agreement to lift the spending gaps, we made some progress to 
boost funding for some of these housing programs, including new 
production, for example, under 202 and 811 for the first time 
since 2011.
    We must build on this progress. The consequences of failing 
to reach consensus on the budget this year would be dire. At 
least 10,000 units of public housing each are lost, private 
properties utilize other Federal funding streams to maintain 
affordability are increasingly vulnerable. Without an influx of 
new resources and capital we won't make a dent in our national 
affordable housing crisis.
    Of course addressing this challenge isn't just about the 
production of a unit, it is also about preserving our existing 
stock that would otherwise fall into disrepair, or no longer 
remain affordable.
    How do we balance production and preservation? What Federal 
funding steams and tools are most useful? How should Congress 
prioritize investment in housing programs and make it easier 
for housing providers to use them?
    These are some of the questions I hope we can explore 
today. And we have a panel that is well equipped to help us 
with these questions.
    Our slate of witnesses this morning includes Scott Farmer, 
the Executive Director of the North Carolina Housing Finance 
Agency; Ellen Lurie Hoffman, the Federal Policy Director of the 
National Housing Trust; and Anthony Scott, the Chief Executive 
Officer of the Durham North Carolina Housing Authority.
    Each of these witnesses brings a unique perspective on 
affordable housing production and preservation. I realize the 
representation of North Carolina is a bit robust.
    Mr. Diaz-Balart. How did that happen?
    Mr. Price. Well, I don't know. We had a Miami witness last 
week, you will remember. So we are happy to have robust 
representation, and believe me, I am sure our other witness can 
more than hold her own.
    But these gentlemen are here for a reason. They are both 
accomplished at what they do. They both have a story to tell, 
and they have quite different perspectives; and not contrasting 
but complementary perspectives on the questions that we are 
raising here today. And so I wanted them both here, but I 
assure you we will be inviting witnesses from any and all 
states who can help us out in future hearings, in any way.
    Thank you all for being here this morning. I would like to 
recognize our Ranking Member for his opening statement.
    Mr. Diaz-Balart. Mr. Chairman, first, let me thank you for 
holding this hearing. And on a serious note, the Chairman has 
put together a great list of witnesses. Not only for this 
hearing, but others also.
    And Mr. Chairman, on a serious note, I want to thank you 
for doing that. The fact that they happen to be slightly heavy 
in one part of the country, doesn't diminish the fact that you, 
Mr. Chairman, have done a great job, and have been very fair. 
So, I appreciate that.
    Let me first welcome our witnesses. Your appearance today 
here will offer us frankly three unique perspectives on the 
challenges of preserving and expanding affordable housing 
opportunities for the people of this country.
    This work often happens in the communities back home, and 
so again, this is going to be very, very important for us to 
hear from you as we prepare our work for the FY 2020 Budget.
    And Mr. Scott, as Public Housing Authority Director you 
know you are a little bit unique. Right? You are not only a HUD 
customer, but you are also a steward of HUD's resources, and so 
we appreciate what you bring to the table today.
    And Mr. Farmer, your perspective as the State Housing 
Finance Agency is important for us to hear today. Each of the 
State's Financing Agencies across the country is tasked with 
leveraging millions, or frankly, potentially even billions of 
dollars in housing tax credits, and bonds with the objective of 
ensuring that families have affordable housing options.
    Ms. Hoffman, we also look forward to hearing your views as 
a representative of a national organization with the goal of 
bringing, frankly, really complicated pieces together with a 
unique focus on affordable housing preservation.
    And so, thank you all for being here today. We look forward 
to your testimony in this engagement.
    As I have engaged with HUD's budget and programs over the 
years, I have been struck by the fact that, as I have said 
before, that the vast majority of HUD resources are deployed to 
outside organizations, outside of HUD.
    This includes public housing authorities, state and local 
governments, non-profits and countless private organizations, 
again including for for-profit entities. It is also important 
to note that HUD resources often work in conjunction with tax 
credits, bonds, and private equity.
    So, when we evaluate HUD programs we should look at them as 
part of a really network that involves decision-makers from 
many sectors, government, nongovernmental, non-profit and for-
profit.
    In recent years, when the Chairman and I have considered 
the HUD budget, we first have to evaluate what it takes to just 
preserve the housing options for the nearly 5 million 
households that receive housing assistance.
    And as the Chairman and I note every year, just to keep 
pace with inflation we, in essence, have to just add about a 
billion dollars each year, just to keep up; that is not new 
people that is just to keep up. And it is a challenge. It is a 
challenge to do so.
    We have been in the fortunate position in the last 2 years 
in particular to provide targeted increases for programs for 
the disabled veterans, and the elderly, and recent increases in 
CDBG and HOME.
    Now I, however, appreciate the significant investments to 
preserve or expand affordable housing units are really only 
possible through tax credits and bonds. Often in conjunction 
with HUD programs such as Section 8, project-based rental 
systems, and home improvement partnerships.
    So, again, I look forward to learning how these resources, 
and these financial tools are deployed at the community level, 
hearing about the important work that you all do. And I thank 
you for being here. And I thank the Chairman for putting 
together such a great panel.
    Thank you, Mr. Chairman. I yield back.
    Mr. Price. Thank you. All right. Let us begin. And Mr. 
Farmer, we will start with you, and you will be followed by Ms. 
Hoffman, and then Mr. Scott.
    Our procedure is to ask you to speak for 5 minutes, and we 
understand you may have a longer statement that we will put in 
the record, and we will do that immediately following your oral 
statement. But that will let us proceed quickly to questions 
and to the exchange we want to have. Now, Mr. Farmer?
    Mr. Farmer. Let me try that again. Chairman Price, Ranking 
Member Diaz-Balart, and honorable members of the subcommittee, 
my name is Scott Farmer, and I am the executive director of the 
North Carolina Housing Finance Agency.
    Thank you for the opportunity to share how state housing 
finance agencies use Federal resources to leverage private 
market resources to create and preserve affordable housing. 
Among these programs are the HOME Investment Partnerships 
Program, Community Development Block Grant Program, the 
National Housing Trust Fund, tax exempt housing bonds, and the 
low-income housing tax credit.
    Nationally, State Housing Finance Agency have used these 
and other resources to deliver more than $450 billion in 
financing to purchase, build or rehabilitate more 7 million 
homes and apartments.
    Housing build strong communities, support families and 
drives our Nation's economy. Housing contributes to social 
mobility, educational attainment, and health care access and 
outcomes, these and other benefits and largely unrealized in 
the face of a nationwide affordable housing shortage, which is 
most-acutely felt by low-income households as housing cost 
outpace wages.
    Construction costs have risen dramatically since the Great 
Recession while Federal housing production resources have 
stagnated, or in the case of HOME and CDBG, declined.
    While recent increases are a positive step the 2019 HOME 
appropriation is still 32 percent below the 2010 levels.
    The housing shortage affects both homeowners and renters. 
Many credit-worthy homebuyers are priced out, particularly 
first-time homebuyers, who have struggled to obtain affordable 
mortgages and save for a down payment.
    Renters fare no better. Affordable apartments are scarce 
with nearly half of the U.S. renters paying more than 30 
percent of their income for housing.
    In North Carolina only affordable home is available for 
every eight low-income families. Back-to-back hurricanes have 
exacerbated this situation hitting areas with already extreme 
housing shortages and older housing stock.
    The housing loss to these devastating storms cannot be 
easily replaced. Decades-old home valued at $40,000 costs far 
more to replace in 2019 dollars. Recognizing there is no single 
solution, our Agency employs a range of resources to address 
the needs.
    Our Agency sells mortgage revenue bonds or MRBs to finance 
low-cost mortgages and down payment assistance for low-income, 
first-time homebuyers. Nationally, MRBs have helped more 3 
million low-income buyers. We also invest HOME funds in 
community-based homeownership programs, such as Habitat for 
Humanity.
    HOME is an important resource for Habitat affiliates 
nationwide. HOME funds are also to rehabilitate existing homes, 
stabilize communities and yield significant health savings by 
keeping low-income seniors, veterans, and disabled homeowners 
in their homes, and avoiding costly institutionalized care. 
CDBG funds can also be used to make critical home repairs as 
well as for infrastructure cost and single-family developments.
    HOME is critical for making housing credit developments 
feasible in rural communities where rents are not high enough 
to cover building costs and replay loans.
    In urban markets HOME allows for rents that are affordable 
to lower-income households. Housing bonds used in conjunction 
with housing credits have produced nearly 1 million units of 
affordable housing to low-income families nationwide.
    In 2018 our Agency awarded more 300 million in tax exempt 
bonds for housing credit apartments, more than doubling the 
affordable units financed by housing credits alone.
    CDBG is also an important tool for housing credit 
developments, as they can be used for eligible infrastructure 
costs.
    Federal funding is vital to the work of Housing Finance 
Agencies, expanding housing credits and increasing other 
Federal funding sources, would allow us to leverage private 
market resources to address the most urgent housing needs to 
our most vulnerable citizens.
    Given the impact that housing has on local state and 
national economies, and its influence on education and health 
care outcomes, preserving and expanding successful programs 
promises to deliver exceptional return on investment, our 
Agency is proud of what has been accomplished for North 
Carolina, and its citizens through the use of housing credits, 
bonds and HOME.
    We thank Congress for entrusting us with these resources, 
and pledge to continue investing them with efficiency and 
innovation to meet our State's housing needs.
    Thank you for the opportunity to share our story.
    Mr. Price. Thank you very much. Ms. Hoffman.
    Ms. Hoffman. Good morning, Chairman Price, Ranking Member 
Diaz-Balart, and distinguished members of the committee. Thank 
you for the opportunity to testify today.
    I am Ellen Lurie Hoffman, Federal Policy Director at the 
National Housing Trust.
    NHT is a National non-profit organization dedicated to 
preserving and improving affordable rental housing, which we 
pursue through real estate development, rehabilitation, finance 
and policy advocacy. NHT has saved more than 36,000 affordable 
homes in all 50 states leveraging more than $1.2 million in 
financing.
    I will limit my remarks today to the need to preserve the 
Nation's affordable rental housing stock, or the late knowledge 
that meeting our National housing needs will require both 
preserving and building affordable housing.
    First, I would like to tell the story of one property of 
one property that NHT preserved as affordable. Friendship Court 
is home to 150 low-income families in Charlottesville, 
Virginia. In 2001 NHT acquired the property partnership with 
Piedmont Housing Alliance, a regional non-profit housing 
provider, amid strong concerns that its 150 apartments with 
project-based rental assistance would be lost to market rate 
conversion.
    Today we are redeveloping Friendship Court using low-income 
housing tax credits and local resources to maintain long-term 
affordability and improve the property.
    The redevelopment plan was designed in collaboration with 
residents and the community and will expand the property onto 
currently-vacant land, and add 200 new units of affordable and 
workforce housing, creating and economic ladder for residents. 
Located just blocks away from Charlottesville's Downtown 
Pedestrian Mall, residents will benefit from robust job 
opportunities nearby.
    Without preservation it would undoubtedly have been 
converted to market rate housing, becoming out of reach to low-
income families as luxury condominiums and hotels have sprouted 
up nearby.
    Friendship Court is home to the Martin family, comprised of 
a single mother and six children who were able to escape 
homelessness by moving to this poverty where they benefit from 
onsite educational and recreational resources.
    The story of Friendship Court's successful preservation and 
the residents who benefit from it is far from unique. As rent 
levels climb and income stagnate, our Nation faces a rental 
housing affordability crisis, 11 million renter households pay 
more half their incomes for housing.
    Federal housing assistance serves just 25 percent of very 
low-income renter households. The gap between supply and demand 
for affordable rental units for very, very low-income household 
is around 11 million. This shortfall could become much worse 
because subsidized units with expiring housing assistance are 
at risk of shifting to market rate. Affordability restrictions 
on 533,000 low income housing tax credit units, 425,000 project 
based Section 8 units, and 142,000 other subsidized units are 
set to expire within the next 10 years placing over 1 million 
households at risk of losing their affordable homes.
    Current levels of new affordable multifamily construction 
roughly 100,000 annually will replace only about half of what 
is at risk of loss in the coming years. Falling far short of 
meeting rising demand.
    Preservation ensures that a property's housing subsidy and 
rent restrictions remain in place ensuring long term 
affordability. Often accomplished by mission driven developers, 
preservation usually involves financial recapitalization and 
physical renovation of a property.
    The high cost of land, labor and materials all present 
barriers to building more affordable housing. New construction 
projects financed with housing credits have per unit total 
development costs that are nearly $60,000 higher than rehab 
projects. In contrast, preserving affordable housing costs 30 
to 50 percent less than redeveloping new units.
    Rising rents in hot markets increase incentives for owners 
to opt out of housing programs. When properties become 
affordable, just as neighborhoods improve, residents may be 
displaced, missing out on the enhanced access to jobs, schools 
and transit that comes with economic growth. Preservation 
enables residents to benefit from these opportunities.
    New construction of affordable housing often faces a 
lengthy, local regulatory approval process and community 
opposition. But preservation promotes equitable development in 
high cost areas.
    NIMBY opposition doesn't occur when existing properties 
already familiar to community members are preserved as 
affordable. Preserving affordable housing can catalyze the 
revitalization of a distressed community reversing years of 
neglect and sparking public, private investment. Everywhere 
preservation protects the billions of tax payer dollars already 
invested in affordable housing, maximizing he efficient use of 
resources.
    As described in my written statement, we asked Congress to 
fully support Federal preservation tools including Project 
Based Rental Assistance, the HOME Program, housing credits, RAD 
and the Community Development Financial Institution Fund, as 
well as the Family Self-sufficiency Program which helps 
residents build assets and become economically mobile. Thank 
you for the opportunity.
    Mr. Price. Thank you for a very persuasive case for 
preservation strategy. We appreciate your testimony. Mr. Scott.
    Mr. Scott. Chairman Price, Ranking Member Diaz-Balart, and 
members of this subcommittee, my name is Anthony Scott and I am 
the Chief Executive officer of the Durham Housing Authority in 
Durham, North Carolina.
    I am here today representing the Council of Large Public 
Housing Authorities which is a national nonprofit membership 
organization. CLPHA members manage almost half of the Nation's 
public housing and nearly one quarter of the Section 8 housing 
choice voucher program.
    CLPHA appreciates the subcommittee holding this hearing 
looking at one of the most challenging, frustrating and 
critical issues confronting our Nation today. That is 
maximizing affordable housing production and combating the 
critical housing shortage and housing instability facing our 
Nation's most vulnerable and disadvantaged citizens.
    Among housing authorities, we often face year's long 
waiting list of families desperate for housing. When waiting 
lists opens to families for unit's that come available, 
thousands and tens of thousands of applications flood in. Often 
times public housing is the last reasonable option before 
homelessness.
    The Administration record over the past 2 years is not 
encouraging since budgets in proposals have been to eliminate, 
zero out, drastically reduce funding for most affordable 
housing programs. We are not hopeful that the soon to be 
released 2020 budget proposal will be an improvement.
    I want to touch upon some programs that we believe have and 
can make real differences in people's lives. The public housing 
capital funds. The capital needs backlog was estimated by HUD 
at $26 billion 10 years ago. Current estimates by industry 
stakeholders place that number at over $50 billion today. While 
the boost in capital funding provided by Congress in both FY 
'18 and FY '19 was a significant amount by most accounts and 
gratefully received by housing authorities, it is still wholly 
inadequate when compared against the annual accrual and backlog 
need.
    Housing Choice Vouchers. The Housing Choice Voucher Program 
is an essential component providing much needed rental 
assistance to the countries low income resident. The challenge 
to voucher utilization is finding available housing. Vouchers 
are important in addressing affordability, mobility and access 
to high opportunity areas. However, landlords must be willing 
to accept vouchers along with other Federal requirements it 
entails.
    The Choice Neighborhoods Initiative. Over 25 years ago when 
HOPE 6 was first established, the program received funding in 
the $5 to $600 million range to revitalize public housing 
communities including producing affordable housing. Today we 
are fortunate to muster $150 million for a successor of the 
Choice Neighborhoods Initiative and that amount would not be 
possible without the heroic efforts of Chairman Price, a 
staunch supporter and defender of the program. As a national 
program, CNI has tremendous potential that is lacking 
sufficient resources, that is funds, to meet the need.
    Rental Assistance Demonstration and the Low Income Housing 
Tax Credit Program. RAD allows housing authorities to leverage 
private capital in order to tackle the backlog in public 
housing. However, the arbitrary unit cap under the program 
creates artificial limits on unit conversions, interferes with 
long term portfolio planning, impedes the allotment of 
timeframes for additional funding sources, constrains and 
prohibits developing a pipeline and hinders full portfolio 
conversion over multiple years. What is now needed is a 
complete elimination of the RAD cap at 455,000 units.
    Moving to Work. The 20 plus year Moving to Work program has 
served as a laboratory for innovation and flexibility and 
program administration and utilization of program funding to 
meet local needs. Many of its innovations have been adopted 
into legislative and regulatory forms for all public housing. 
Congress authorized an expansion of an additional 100 housing 
authorities. We would like to see the expansion program have 
the same flexibilities as their original 39 housing 
authorities.
    Further, given the successes created by MTW, we urge 
Congress to allow selected and targeted flexibilities for 
housing authorities short of full MTW status through a defined 
statutory process.
    Transforming and preserving public housing. We believe 
Congress should take the steps necessary to enact statutory 
changes to promote and enable sustainable operation in support 
of the long term affordability of this portfolio. We have a 
rare opportunity with modest targeted investments leveraging 
private sector funding, partnerships and expertise where needed 
to develop and implement a strategic plan to improve and secure 
this critical public infrastructure once and for all.
    The plan could foster deregulation, local control and more 
flexible use of Federal, state, and local resource. It could 
be--it could enable public housing providers to connect 
residents to jobs, healthcare, educational opportunities to 
better improve life outcomes for them and their families.
    And finally, infrastructure. The Administration and 
Congress had signaled that restoration of the Nation's 
infrastructure is critical to our Nation's economic vitality, 
health and safety. A significant Federal investment in 
affordable housing infrastructure should be a top priority. And 
CLPHA urges Congress to provide at least $20 billion in funding 
to housing authorities for new, affordable housing and 
infrastructure projects. Thank you for the opportunity to 
testify today.
    Mr. Price. Thank you. And thanks to all of you. You really 
followed very closely the request we made of you to identify 
the funding streams very concisely and helpfully I think as we 
look at this budget. These are not necessarily interchangeable. 
One size doesn't fit all. And the combinations that you put 
together as you put these projects together look very complex 
but there are patterns here that we need to understand and we 
certainly need to understand what the critical components are. 
And we are going to I am sure ask you in various ways to 
elaborate on that.
    I will start with you, Ms. Lurie Hoffman. You, as I have 
said made a very convincing case for preservation as a cost 
effective way to preserve housing but also to maintain the 
overall stock of affordable housing, much more efficient way 
when we can do it than when relying on new production.
    I want to ask you to elaborate a bit on the funding 
streams. How do housing providers mix the different funding 
streams and the tax credits to engage in preservation 
particularly?
    The Project Based Rental Assistance, the HOME program of 
course factor into these efforts and I wonder if maybe you can 
give an example but help us understand a little bit better how 
these pieces come together.
    Ms. Hoffman. Sure, thank you, Mr. Chairman. So, you know, 
when I try to explain the financing of the preservation of 
affordable housing to congressional staff, many of whom I 
recognize behind you, we often times--I often talk about a 
layer cake. And Project Based Rental Assistance is sort of the 
base of the cake. In many cases its affordably--subsidized 
housing that has had long term contracts where it is privately 
owned housing, private owners own the multifamily affordable 
housing and they receive a contract, a long term contract from 
HUD to keep the property--the units affordable to residents who 
pay no more than 30 percent of their income for rent and are 
meeting eligibility requirements according to their incomes.
    In order--when that property is under risk of losing its 
affordability, then the PBRA is able to leverage investment, 
usually the Low Income Housing Tax Credit is needed to keep the 
property affordable as you pointed out. And that can be done 
with either the 9 percent of the 4 percent Low Income Housing 
Tax Credit without getting into the weeds of that. But often 
the housing credit alone is not enough to cover the cost of 
recapitalizing a property, bringing it up to current physical 
standards and ensuring the long term affordability. So other 
sources of financing like the HOME program are needed as gap 
financing to meet the overall costs. And in addition, often 
times there is local sources, state and local governments have 
their own resources that they can help to continue to fill 
remaining gaps and private lending as well. So I know our real 
estate development team puts together extremely complicated 
packages. Often times the project based assistance is the basis 
that the consistent flow of funding from the Federal Government 
for project based rental assistance is critically important to 
give lenders and private investors the security knowing that 
they have a stable source to cover the basic rents.
    Mr. Price. Thank you. That is very helpful. Let me turn to 
you, Mr. Scott. I expected you to come in this morning as a 
strong defender of RAD and sure enough, you did just that. Both 
as an association spokesman but also reflecting I am sure on 
your experience in Durham where you are undertaking large scale 
RAD conversation.
    Wonder if you could help us understand the potential of 
that program to address the housing goals that we are dealing 
with here today? Maybe some indication of how this looks to you 
from the standpoint of your local position.
    And also, how do we deal with some of the apprehensions 
that people have had about RAD or how have you dealt with them? 
You know, is the overall--we know the reasons for having 
diverse communities so that they are not all at the same income 
level, but at the same time, we don't want to displace people 
of--at the lowest income levels. We don't want to have an 
overall lesser supply of housing.
    How does RAD work to, you know, realize its potential, its 
virtues but also avoid some of the possible pitfalls?
    Mr. Scott. Correct. I think that a lot of the questions 
around the RAD program and its pitfalls largely through my 
experience both being at the Baltimore Housing Authority and to 
a lesser extent at Durham, had been with misinformation and not 
understanding how the program works. When you look at the law 
of the RAD program, it has a lot of protections built into it.
    One of the chief issues that bubbled up early on in the 
process in Baltimore was that there is no way that you could 
get private sector investment in a public housing community and 
they not want to kick out the existing residents. And we 
stressed that in the law it states that that housing will be--
remain permanently affordable, that the housing authority has 
to have an ownership interest in that development over time, 
and that there is 1 for 1 replacement. And that replacement is 
on a bedroom for bedroom size. Not just a unit. Like you can't 
replace a 3 bedroom until with a 1 bedroom unit. You need to do 
a bedroom for bedroom replacement of any units that you happen 
to tear down if that is part of your plan.
    So I think for us, we spent a lot of time trying to educate 
the advocates that felt like this was really a land grip or an 
opportunity to take public housing units and turn them into 
market rate housing. And we did a lot of encouraging for those 
advocates to read the law and understand what it says. There is 
a provision that says that if people are still going to pay 30 
percent of their income towards rent. So a lot of the same 
characteristics of the public housing program are in fact 
reflected in the RAD program.
    On the extremely plus side, for housing authorities, what 
you see is an opportunity to shift to a more stable funding 
platform via the Section 8 program versus the Section 9 program 
which is how public housing is traditionally funded. And you 
also have flexibilities in how you can leverage those 
properties to create a greater financial stability of that 
development long term.
    At the end of the day what the housing authorities are most 
interested in doing is trying to create financial stability for 
these public housing communities over the long haul. So one of 
the challenges as we talked about early on is that we have 
severely underfunded both on the operations side as well as the 
capital side and that leads to ongoing deterioration of our 
public housing units.
    And through the RAD program, we create the opportunity for 
greater stability over the long term so that those units can be 
properly maintained and not in dealing with units being the 
kinds of conditions that we see now.
    Mr. Price. Thank you, very much. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, thank you. Let me stay on 
the RAD motif if I may. So, Mr. Scott, you have been talking 
about it. What are the critical needs that you are trying to 
address through the RAD program? And what specific improvements 
are you hoping to make to your PHA's properties using RAD? I 
mean, how does that specifically work?
    Mr. Scott. So we have two key approaches for us. Overall, 
what our goal is to replace our existing public housing 
communities with mixed income developments and the mixed income 
again is an aim at trying to create greater financial stability 
over the long term.
    We also though had some properties in which we are doing 
renovations of those buildings. And we typically are using 4 
percent tax credits as the primary financing vehicle for that 
along with bank financing and if we still find there is a gap, 
we are looking to the local support for that such as the city 
of Durham which has been a phenomenal partner for us in North 
Carolina.
    When you look at the capital needs that we have had and I 
can give you some vey practical examples. So we are doing a 
renovation of two different developments that totals 336 units. 
The renovation costs for those units are well over $100,000.
    We are looking at a different approach for our downtown 
properties where we have 447 units on over 50 acres, they're 
scattered, and we are doing a more robust, redevelopment of 
those sites. And so we are able to take that development 
because 50 acres and 447 units, that's a very low density and 
we are turning that into 2500 units including the replacement 
of the existing RAD properties, the existing public housing 
units into RAD units. As well as adding an additional workforce 
housing units and market rate units as well.
    So by utilizing a RAD program, we're leveraging a property 
that is in a significant state of disrepair to properties that 
are adding 74 percent of which are affordable housing, 26 
percent are market. We are also including over 270,000 square 
feet of retail commercial space.
    So we are able to leverage a property that is at a severe 
disadvantage to becoming quite an advantage for the Durham 
community.
    Mr. Diaz-Balart. And you mentioned one of the partnerships. 
Can you elaborate a little bit about on what are some of the 
partnerships, you know, who are some of those partners that you 
deal with on these type of projects?
    Mr. Scott. In terms of development partners or just 
financial partners?
    Mr. Diaz-Balart. Both actually.
    Mr. Scott. Right. So with our development plan, we are 
engaging private sector and in some cases nonprofit sector 
development partners that the developments that we have done 
thus far, the renovation work that we are doing, we are 
actually self-doing the renovation by our own organization. But 
for the new construction redevelopment that we are doing, we so 
far have engaged two partners. One is a for profit entity that 
is--has properties nationwide. The other is a fairly local 
partner who has properties in--who has done work in North 
Carolina, in Virginia and others.
    So each of these larger scale developments where we are 
going to need stronger financial partners with greater 
development expertise, we bring them in as partners to work 
with us on the development of these new communities.
    Mr. Diaz-Balart. Great. And I heard you talking about the 
RAD caps and it might, I don't have a lot of time but if you 
have other suggestions like that, again to improve, you know, 
breaking down red tape and, you know, the administrative 
burdens we would like to get those from you.
     I think it would be helpful.
    Mr. Scott. Well, one of the things that we feel very 
strongly about because we are doing a portfolio wide 
conversion, that is that our entire portfolio is going to be 
converted under the RAD program. The way that the RAD program 
works currently, there are time limits and time constraints. 
Our objective is to be able to look at all of our portfolios at 
one time. By doing so, we can leverage other development 
opportunities because we can place other units with another 
developer and that allows us to diversify our housing. The way 
RAD is structured currently, it makes it very difficult to do 
that because of the various time constraints. So, we end up 
finding ourselves in a position where we can't fully leverage 
opportunities throughout the larger Durham community.
    Mr. Price. You know, get us as much specific information. 
And, Mr. Farmer, I don't have a lot of time, but it would be 
great if you could describe how the RAD program, how it factors 
into your financing programs, and, you know, the ones sponsored 
by your agency.
    Mr. Farmer. Thank you very much. The RAD program we have 
worked with, over half a dozen housing authorities across our 
state in various ways with the RAD program, including the 
Durham Housing Authority. I think one of the benefits of the 
program is it has allowed them to sort of tailor it based on 
their abilities and their needs. Some of the housing 
authorities have handled the work directly themselves. Others 
have worked with for-profit or nonprofit partners who have the 
tax credit experience.
    In our state, we have encouraged the use of 4 percent with 
tax exempt bonds, primarily because we are already so far over-
subscribed on the 9 percent housing credit. It is a better 
tool. It ensures that, you know, they don't run into those 
timeframe issues with the 4 percent credits that they would 
with the 9 percent, and it is a better pathway and they can 
have more units done. One particular housing authority was able 
to do I think it was 10 properties under 1 bond issue to get 
the work going over a period of 2 to 3 years. We have had other 
small housing authorities where they only had three properties, 
but they were able to work with a for-profit development 
partner who had the tax credit experience. They packaged those 
together. It recast and refinanced those properties. They were 
able to get the much needed rehab and get the units back online 
and up to an upgraded condition.
    We have tried to work closely with our housing authorities 
in our state, So there is over a hundred housing authorities in 
North Carolina. We had a meeting a little bit over a year ago 
with a group of about 10 of those, just so that we identify and 
know what is coming down the pipe. That helps us from a 
planning standpoint.
    To sort of piggyback on one of the things that Ellen 
mentioned is, she mentioned layer cake. We always sort of refer 
to it as lasagna financing. None of this happens--none of these 
funding sources work on their own. So, you really have to 
figure out how do you better leverage all of these different 
resources off of each other to have the best outcome and have 
the most efficient use of all of those resources. I think the 
partnerships and the communication that we have in our state is 
the reason why the RAD program has worked so well. And I hope 
it will continue to work well in years to come.
    Mr. Price. Thank you. Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman, and thank you to the 
panel for being here. I am a fan of both lasagna and layer 
cake, so I am excited. In my district in the city of Cambridge, 
they are also applying RAD to their entire portfolio. And I 
wanted to follow up a little bit on the ranking member's 
questions on what we can do to help remove some of the barriers 
for success.
    You mentioned, Mr. Scott, time limits and constraints that 
can work against these large-scale projects and throw off the 
timing of taking advantage of private development projects. Are 
there other areas where you think, as Congress, we can help 
improve this program and leverage greater funding?
    Mr. Scott. Well, I think, you know, Scott had mentioned the 
9 percent program. That is such a critical component for us to 
be able to look at redevelopment of public housing. And for 
many of us, it would be great if there is an effort around 
looking at perhaps some particular financing in the 9 percent 
realm that would allow housing authorities who are pursuing 
RAD, particularly if there is a comprehensive approach to RAD, 
and having some 9 percent funding being set aside that would 
allow us to leverage those opportunities.
    When I talk about leveraging, when we look at our plan for 
our downtown properties, 52 percent of our financing for that 
is normal bank financing, but 31, 32 percent of that is 
actually utilizing either 9 percent or 4 percent tax credits. 
Fifteen percent of that is going to be localized funding. So, 
our city is stepping up there. They are calling for a housing 
bond in order to support our redevelopment efforts. And a small 
fraction, about 2 percent or so of that, is the housing 
authority putting in the meager resources that we have, which 
includes the land and funds that we have in reserves for the 
properties, et cetera. So, it really is the lasagna, layer 
cake, or perhaps parfait to use a Shrek reference----
    Ms. Clark. To add a new desert.
    Mr. Scott [continuing]. Is all a part of the struggle we 
have in trying to pull it together, the financing package, to 
make these deals successful.
    Ms. Clark. Yeah. And just to follow up on the ranking 
member, if there are more detailed suggestions, we would love 
to work with you on how we can be helpful in making sure this 
program really is creating those partnerships.
    I have a question for Ms. Hoffman. I have been looking at 
the extensive research of Raj Chetty on social mobilization and 
really how much outcomes for children are determined by their 
environment and where they are. Could you speak a little bit to 
how preservation can be a tool to give low-income families a 
better shot at economic mobility?
    Ms. Hoffman. Absolutely. Thank you. As I mentioned in my 
opening statement, preservation can be a way to help low-income 
families live in high opportunity areas, as long as the housing 
is not lost when neighborhoods improve. The Urban Institute did 
a study a few years ago and they found that for project-based 
rental assistance, the portfolio of properties with project-
based rental assistance, 43 percent of them are located in low 
poverty areas. Now, that was not always necessarily the case 
when the properties were originally built, but that is where we 
are today. And just by maintaining that housing in those 
communities, we enable residents to benefit from changes in 
their communities. Like our property in Charlottesville that I 
mentioned in our opening statement, Charlottesville was, I 
think, a strong community when we purchased the property in 
2001, but over the past 18 years, it has gotten more and more 
gentrified. It obviously has terrific educational and job 
opportunities. By keeping that property affordable, we let 
those residents stay there and be able to benefit from the 
improvements.
    We have also preserved quite a few properties here in 
Washington, DC, in neighborhoods that were really transitional 
when we first purchased the properties and kept the subsidies 
in place. Now, you know, many of us can't afford to live in 
those neighborhoods. And there has been improvements in the 
schools, to jobs, there is access to the transit.
    So, you know, obviously we need to both build and preserve 
housing, but if we can hang on to what we have in areas as they 
improve and not lose them to being a converted--there is 
obviously so much pressure right now to convert any affordable 
rental housing to market rate housing because there is a huge 
demand across every income level of the population for more 
rental housing. But if we can maintain what we have as 
affordable, then we can ensure that people who have been in 
those properties for a long time can benefit from the changes 
that are going on and can have access to the improvements.
    Ms. Clark. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Womack.
    Mr. Womack. Thank you, Mr. Chairman. Not lost on me is the 
fact that this Carolina-centric panel and the timing of this 
hearing in advance of the real heat of March Madness, so I 
appreciate them being there. They will probably be a little 
preoccupied here in a few weeks. And maybe the most important 
question for Mr. Scott is when is Zion coming back?
    Mr. Scott. Soon, I hope.
    Mr. Womack. I know that to be the case. So, I am a former 
mayor. And I have worked on some housing projects, mainly of 
the 202 variety, which there seems to be an on--as the 
population ages, obviously there is going to be a lot more need 
for that type of housing, not so much on the 811, but 
interested in it. So, when we were working with the two 
specific projects that I had some interest in, the city came to 
the table as a partner, primarily with good site locations, 
which I know scores pretty well when they are ranked and 
competing for these dollars.
    So, what is the role of a municipal or a county government 
to better leverage, that word has come up a couple of times in 
the testimony today, to better leverage the Federal resources, 
so that we have got a real true partnership going on here to 
address these needs? It is not just our responsibility here. It 
is also the responsibility of the local population to help 
address its needs as well. So, how do we do that? How do we 
leverage these resources and what is the role of the local 
government?
    You had mentioned--yeah, you can go first. You had 
mentioned the Durham connection and how good they were with it. 
So, what are they doing?
    Mr. Scott. So, there are I would probably say three 
categories in what our city is doing. First and foremost, they 
have been looking at land that is city-owned that could be used 
for housing. And they have asked us in our more comprehensive 
planning to look at some sites that we could use to develop 
housing on. And two of those sites are included in our downtown 
planning.
    Secondly, they have been instrumental in bringing together 
various departments, such as the Community Development 
Department, the Office of Workforce and Economic Development, 
the Neighborhood Improvement Services, so that we can look at 
how we are not just focused on bricks and mortar, but we are 
focused on how we can help our families in public housing move 
up and hopefully out of public housing by giving them 
opportunities to connect with various social services, 
opportunities to connect with jobs. Those are important 
components that are necessary.
    It is very similar to what you will see in the written 
testimony where we talk about the ability for housing 
authorities at the Federal level to connect with Departments of 
Labor, Department of Education, Health and Human Services, et 
cetera. Well, we are doing that at a local level and most 
housing authorities are. It would be great if we can get that 
same sort of initiative at the Federal level where those 
departments are working more closely together so that it is not 
just about the bricks and mortar. It is truly about the 
families that are there, and hopefully we can create 
environments, create support surrounding those families, so 
that they are able to move out of public housing as a long-term 
goal and other families who are desperately in need of that 
housing can move in.
    The third thing is that our city in particular is stepping 
up in advocating for funding. So, in our efforts over the 
last--in my tenure in the Durham Housing Authority, the city 
has contributed literally millions of dollars to our efforts 
for affordable housing. Also, more recently, our mayor has just 
announced a request for a bond of $95 million and 68 million of 
that is to support our overall long-term plan for redeveloping 
our public housing.
    Mr. Price. In order for this program to be more of the 
layer cake or the lasagna, and not necessarily the tossed 
salad, are there things that we are doing from a Federal 
resource standpoint that we should do a little less of and a 
little more of something else?
    Mr. Farmer. I will be happy to chime in on that. I think 
from the Federal level, I would say from the programs that we 
work with is those that are the most flexible are the most 
useful. It allows the states, who then work with the local 
governments and the developers in those communities, to figure 
out how those resources best match up with the type of 
development you are trying to do. For example, the HOME program 
is extremely flexible in what it can be used for and we use it 
on the different types of properties. However, there are 
strings attached to those dollars that make it more difficult 
to use in rehab properties, for example, or preservation 
properties than it is for new construction.
    There is also some timing issues related to some of the 
rules and regulations that prohibit or make it difficult to use 
on single family units or on smaller properties where timing 
and funding are critical. They are necessary. And a lot of 
those rules, such as the environmental review processes, Davis-
Bacon, are important factors to have and include with the 
Federal funding, but they don't work well on a small-scale 
property where it may be four units in a small town in a rural 
part of the state where the environmental review costs add 20 
to 25 percent to the overall cost of the project.
    If I may, to your question about the local government, I 
would also highlight that whether it is a large community or a 
small rural community, the best thing that they can do is be 
advocates for affordable housing. Developers want to go where 
they are wanted. So, by identifying land, sometimes it is 
removing some of the impediments, streamlining the permitting 
and review processes, primarily with the housing credit 
program, because there is a timeline. Once those properties are 
funded, they have basically 24 months to place in service. So, 
anything that the local governments can do to help streamline 
and identify sites, find the land, approach the developers. If 
you want the housing, the best thing to do is make it 
accessible and make it an easy process for them.
    Mr. Womack. Thank you very much, Mr. Chairman.
    Mr. Price. Thank you. Ms. Torres.
    Ms. Torres. Thank you, Mr. Chairman, for holding this 
hearing today. Affordable housing is something that all of our 
communities are absolutely struggling to build and certainly 
many of our taxpayers and voters are supporting bond measures 
and opportunities to ensure that there is a local matching 
funding mechanism to ensure that those funds are there 
available to build affordable housing.
    In many communities, the cost of construction has led 
builders to only build high-cost housing, limiting access to 
inventory for most Americans. In 2017, in San Bernardino 
County, there were 65,000 extremely low-income households with 
only 13,000 available units, the deficit of 52,000 units. And 
this is according to a study by the Urban Institute Housing 
Assistance Matters Imitative.
    So, the lack of real wage growth to keep pace with the cost 
of living has increased the number of people who are now 
considered a cost burden when it comes to housing. The Harvard 
Joint Center for Housing studies concluded that a 56.7 percent 
share of renter households in the Riverside, San Bernardino, 
Ontario metro area, which is the area that I represent, are 
cost burdened and a 30.6 percent are severely cost burdened, 
paying more than 50 percent of the income on housing.
    During the meltdown of the economy and the foreclosure 
crisis, the area that I represent was one of the hardest areas 
that was hit. Housing credits, developers were not utilizing 
housing credits and were shying away from them, you know, 
because there wasn't enough money available.
    So, how are the housing credits now being--is that in 
popular demand once again as it was previously in the nineties, 
for example? Can anyone speak to that?
    Mr. Price. Scott can answer that one.
    Mr. Farmer. I will take a shot at that one. Yes, the 
housing credits are in high demand. There was a lull 
immediately after the crash as many of the primary investors 
were banks, large insurance companies, and others, who sort of 
had to take a step back and see where they were going to be, 
but I would say that the market is extremely strong now. Prices 
have stabilized and so we are in a really good place. I think 
there is plenty of demand. From a development standpoint, you 
know, we--our applications, we are still receiving four 
applications for every award that we can make. So I think the--
--
    Ms. Torres. I just don't want to hang my hat on just that, 
knowing, you know, that that is a vulnerable place.
    Regarding the environmental review process, I was a local 
mayor, too. And, unfortunately, a developer built homes in an 
area on a hillside area where, 10 years later, 2 of the 30-some 
units that were built in that area fell. So, we have to make 
sure that we are holding folks to high standards, so that when 
cities and taxpayers invest money in building this 
infrastructure, it is not for a short period of time.
    On the issue of manufactured homes, I see that as an option 
for the affordable housing portfolio. Have you or any of you 
explored affordable housing production through manufactured 
housing? And if not, what are some of the barriers?
    Mr. Scott. Not in Durham, but when I was head of the 
Richmond Redevelopment Housing Authority in Virginia, we 
actually did do a modular home development. And for us, we 
looked at the cost. We looked at the efficiencies. And this was 
pre-crash, right? So, the timing wasn't the best in terms of 
where we were as we launched it, but we looked at it as a 
viable opportunity in Virginia.
    And it really is one of those things where you have to look 
at it on a location-by-location basis to see if you have a 
manufacturer that is nearby. For us, we had two that were 
within about 3 hours' drive of where we were looking to build, 
so that made it something that made a lot of sense.
    And the other thing is that having the right contractors 
who is the middle man between the manufacturer and what has to 
be done on site. But I think it is definitely a viable way to 
look at doing affordable housing but it also depends on who the 
manufacturers are nearby.
    Ms. Torres. Okay, thank you. I yield back.
    Mr. Price. Thank you. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. I wanted to ask the 
panel a question homelessness and, again, getting a little bit 
more geographically diverse with some West Coast examples. Over 
130,000 of my fellow Californians are experiencing homelessness 
or unstable conditions in shelters, in dilapidated trailers and 
garages, in overcrowded rooms and closets and hallways.
    Homelessness is an issue across this country.
    This question is for Mr. Scott and Mr. Farmer. What role do 
Homeless Assistance Grants play in helping reduce the homeless 
populations in your regions? Are there policy recommendations 
do you think Congress should give to HUD, so local housing 
authorities can have more flexibility to maximize those 
dollars, specific to Homelessness Assistance Grants?
    Mr. Scott. So, for us, we have a strong partnership with 
our local homeless organizations in Durham, so there is a 
coalition of homeless providers, and what we have done is we 
have targeted our voucher program to work with our homeless 
providers. So, we have a certain number of vouchers that are 
dedicated just to dealing with the homeless population, and 
those providers will provide the wraparound services for that 
homeless family to make sure that they are able to stay and 
maintain that housing, and they are required to do that for at 
least a year. We have seen a very low recidivism rate based on 
that model.
    Similarly, we did something like that in Richmond as well 
when I was there. We actually provided a set-aside of units in 
our public housing community, and we have a similar program in 
Durham.
    I think the voucher program is one of the best options 
around that, in addition to perhaps--in our--from our 
perspective, we have set aside some units. The key is making 
sure they are the wraparound services, so that those homeless 
families will--are able to maintain and keep their housing over 
the long haul.
    And I should point out that I spent 14 years in Southern 
California, so a little of Southern California is being 
represented out of North Carolina, too.
    Mr. Aguilar. Appreciate it. Mr. Farmer.
    Mr. Farmer. Yes, and I will add to that. The--within our 
housing credit program, we have had what we refer to as the 
Targeting and Key Program, which we have set aside 10 percent 
of all of our units within housing credit developments, 
beginning in 2003, for persons with disability or formerly 
homeless. And with that, we work with our State Department of 
Health and Human Services, and they work with those clients to 
provide the services. They also are providing the rental 
assistance for those units through our agency. So, it is--
basically, we will have--we have rental assistance available 
until they are able to qualify either for Section 8 voucher or 
some other type of assistance, as the bridge financing was the 
design behind it.
    Since 2003, we have housed over 5,800 folks with 
disabilities or formerly homeless in those units.
    We also work very closely with our homeless advocates 
across the state, whether it be the rehab of existing shelters 
or the development of transitional housing over the years. So, 
it is an important piece, but, you know, I am stressing that 
the rental assistance is really the key piece in helping those 
folks to get over that hump and to bridge that to other 
resources.
    Mr. Aguilar. Thank you. I appreciate it. Ms. Lurie Hoffman, 
my colleague, Ms. Torres, asked some questions about low-income 
housing. According to the National Low Income Housing Coalition 
in California, California has a shortage of over a million 
rental units that are affordable and available to extreme low-
income renters, even for households making 100 percent of area 
median income. This coalition reports that there are only 85 
units available for every 100 renters.
    At the national level, you know, we tend to see that the 
most important and effective--you know, what are some of the 
most effective ways to incentivize? You have mentioned a few in 
your testimony. Can you elaborate on those to address, 
specifically, the low- and moderate-income households?
    Ms. Hoffman. Sure. You know, I talked in my oral statement 
about preservation and, obviously, we think it is critically 
important that we just preserve all of the affordable housing 
we have, but that is not going to produce more units to address 
the folks who are not being served. And Chairman Price 
mentioned, you know, I think it comes down to what the 
priorities are for funding and use of the tax code to 
incentivize the production of more affordable housing.
    I mean, I think at the end of the day, we need more 
resources. Those resources from the Federal Government are 
leveraged, as has been mentioned several times here, but, you 
know, the Affordable Housing Credit Improvement Act, which 
would expand the low-income housing tax credit with a 50 
percent increase in the allocations in every state, is a very 
strong bipartisan bill in the last Congress. We expect it to be 
reintroduced in both the House and the Senate any day now, and 
I think it is critically important to be able to both preserve 
and build more housing.
    It is the--we have talked a lot about the Low Income 
Housing Tax Credit today. I would echo Scott in saying that it 
is a flexible program that allows states and communities to 
identify what their most pressing needs are, and to target the 
resources to what the affordable housing needs. Every 
community, every state is different, but there is a need for 
affordable housing everywhere in this country, whether it is in 
urban, rural, or suburban areas.
    So, I mean, we think that that is a top priority that the 
Federal Government really needs to embrace.
    And then, of course, more funds for rental assistance. You 
know, we have not--the project-based rental assistance program 
at its inception was a construction--involved new construction. 
We have not funded that in many, many years, and we are just 
trying to hang on to enough resources to renew the existing 
contracts. And I recognize that that has a big price tag and it 
takes up a lot of the HUD budget, but if we were able to think, 
you know, forward in this country and provide more rental 
assistance that we can see how it is leveraging so much more 
private investment to help really tackle the problem of 
affordable housing. We need state and local governments to 
help, too, with the zoning restrictions, but, I mean, those are 
the big things.
    Mr. Price. Thank you. Thank you very much. Mr. Quigley?
    Mr. Quigley. Thank you, Mr. Chairman. So, I want you to 
think small. Chicago, like a lot of other municipalities, is 
experimenting with tiny homes, small homes, largely between 100 
and 400 square feet that have electricity and internal 
kitchens, but they share plumbing. It is an alternative to 
shelter housing and can be permanent supportive housing for the 
homeless, which provides safe, secure, and private structures.
    I did talk about this directly with Secretary Carson, about 
this possibility. He expressed some enthusiasm, but we have yet 
to see any progress at that point in time. If you could, share 
your experience to the extent you have it with us, and your 
thoughts on this possibility?
    Mr. Farmer. As luck would have it, we have funded two 
small, supportive housing developments that are utilizing the 
tiny house model. Neither of those have started construction 
yet. Our funding--we provided that funding in the last 2 years, 
and it is primarily the seed funding that would then allow them 
to go forward and try and identify additional resources.
    As you mentioned, I think it is a great option, or a 
potential option, for homeless, formerly homeless. One of the 
properties is designed for veterans, formerly homeless 
veterans. The other is supportive housing for persons with 
disabilities, as sort of that next step of housing.
    Our agency's approach has long been to--there is a 
continuum of housing and there is a continuum of ways that you 
can do this. There is no one right way or wrong way. So, we are 
anxious to see how this model works. I don't know that we will 
be doing hundreds of tiny home communities across North 
Carolina, but I certainly think it is an opportunity and an 
option that may work well in some communities and for certain 
populations, and we are anxious to see the results.
    Mr. Scott. We are exploring tiny houses. We have some 
interested folks in Durham that are looking to do that. So, our 
role would be to look at our availability for land to provide 
for folks to build the tiny houses on, and it is similar to 
what Scott said, a focus being on veterans and homeless.
    Mr. Quigley. Another alternate----
    Mr. Hoffman. That is my area of expert----
    Mr. Quigley. I am sorry.
    Ms. Hoffman. So, I was just going to say I know you look 
like you were looking for me, and we have not explored tiny 
houses. Although we are very supportive of any efforts to 
create energy efficient housing as--and I believe that is part 
of the model.
    Mr. Quigley. And also thinking small and in terms of 
compared to larger units, single-room occupancy hotels. Chicago 
is losing them, has been losing them for some time. I was 
always taught that this is, you know, what has always been one 
level above homeless, and your thoughts of where this country 
is trending with this kind of supportive housing. Anyone?
    Mr. Scott. We have no experience with that. Only when I was 
in Southern California did we kind of look at SROs.
    Mr. Farmer. We have not seen much interest or appetite in 
single-room occupancy in the last few years. I think the--it 
seems to be that from the development community side that it is 
a more difficult--it is more of a transitional model. So, 
therefore, you have higher turnover rates within those units. 
And so they have looked to, even our supportive housing 
programs, they have looked to use the more integrative 
supportive housing model, where it would be units within an 
existing property and provide services in a more permanent 
setting as opposed to the single-room occupancy. But that is 
certainly a tool that many local governments are still funding, 
those type of developments on a smaller scale. But as I said 
before, you know, there is a continuum of housing and all of 
these tools work. Some work better in certain cases and with 
certain programs than others.
    Mr. Quigley. Yeah. I do not see a lot of development in 
that area. I am just trying to keep what we have because, 
again, if they are not there, they are in a shelter. So, 
extraordinarily important for us.
    Any other thoughts? Thank you very much. I yield back. 
Thank you, Mr. Chairman.
    Mr. Price. Thank you. Let me just underscore what we heard 
over the last few exchanges about state and local cooperation. 
It strikes me that this is a very, very important topic, and it 
is not just a topic for us. It is a topic, if I may say so, for 
the associations of housing authorities, for the associations 
of county commissions, of city councils.
    The story Mr. Scott tells of the cooperation between the 
housing authority and the city, and the way the city has filled 
some of the gaps. Unfortunately, that is not replicated 
everywhere, and there is a good reason for the way housing 
authorities are governed with their separate boards and so 
forth, but we all know that can also be an obstacle to the kind 
of cooperation that we need across jurisdictional boundaries.
    So, I really think we need to underscore that, that these 
cooperative arrangements need to be considered a very high 
priority, and all of our cities and counties in--the major 
cities and counties in North Carolina are facing these housing 
challenges. It is the main issue in municipal elections by far, 
and so we need to do some new things, and certainly integrating 
the housing authorities into the effort and vice versa with our 
municipal governments is critical.
    Mr. Farmer, I want to give you a chance to say a little bit 
more about the particular challenge of rural housing, and you 
began to talk about that. You could be a little more explicit 
about the distinctive approach that needs to be taken there, 
what your experience is. And then I want to ask you to reflect 
on something you and I both heard at a round table a couple of 
weeks ago for people serving people with disabilities. This 
really caught my attention and I am sure it caught your 
attention.
    We heard about the backlog of need, both for the group 
homes and for vouchers for people with disabilities to live in 
rental units. Thousands, thousands on the waiting list, and yet 
we also heard that 200 available units were unoccupied, not 
claimed And why was that? A lack of supportive services, 
supportive services that involve funding from state agencies 
and Medicaid that, of course, is not in the purview of this 
subcommittee, but that got my attention, as I am sure it did 
yours.
    The situation illustrates an important point.
    Even as we increase housing, we need to ensure that, 
especially for the disabled, of course, but to some extent, for 
other populations as well. There needs to be a corresponding 
increase in services, be it workforce training or wraparound 
services for the disabled or whatever it is.
    So, I will start with you, Mr. Farmer, but anyone who wants 
to comment on that, we, of course are mainly about housing 
here, but housing is also about other things.
    Mr. Farmer. Thank you. I will tackle the first question 
there on the rural housing. Our state is a very diverse state 
in terms of population, and the urban versus rural conversation 
we have often. We make sure that our resources that are 
distributed across all of those communities and counties--our 
North Carolina Rural Center, we met with them earlier this 
year, and they had done a tour of 80 counties across the state 
that they work with, and in all 80 counties, affordable housing 
was in one of their top priorities. So, it absolutely is an 
issue in--across North Carolina.
    As I mentioned in my opening remarks, for every one unit, 
there is eight families waiting for that unit. So, we have a 
great shortage of affordable housing. The differences are in 
the rural communities, part of it is they have an aging housing 
stock and an extremely--and which is of lower quality and less 
availability, and many of those communities were hit by the 
hurricanes, Matthew and then Florence. So, we lost a 
significant number of units to that in those communities.
    They also are seeing, while there is a decrease in 
population, the cost of the housing has not gone down. The 
cost, in fact, have increased. So, if you are in a lower 
income, small community that has a need for 40 units or 48 
units of housing, you cannot generate the rents from the cost 
of that property, even with the housing credits, without then 
also having some level of rental assistance or additional 
subsidies.
    In our state, we are very fortunate. We do have what is 
called the Workforce Housing Loan Program, which is a state-
funded appropriation that allows us to put additional resources 
into those rural properties to help lower those rents to make 
them affordable, but, again, that only goes so far.
    We also are still a fast-growing state. We were just--the 
Raleigh area was just ranked as one of the fastest--top 10 
rated cities in the country, which brings more and more folks 
to North Carolina, which pushes more and more folks out into 
those more rural areas to find affordable housing. So, we are 
just stretched as thin as we can go.
    As mentioned earlier, it is a--really is a resources game. 
I realize the challenges that Congress has in trying to balance 
out, you know, just--just as you mentioned, Ranking Member, 
just to fund where we need to be would increase by a billion 
dollars a year just to keep up with the rising cost of the 
rental assistance programs and the other programs that we 
operate in. And that is not even talking about trying to meet 
the additional needs.
    And so it is a challenge that we all face, but it is--at 
the end of the day, it comes down to the resources available. 
To your----
    Mr. Price. Let me defer the answers. I will give any of you 
who wish a chance to respond on the services issue, but my time 
has expired. I will turn to the--I'll turn--no. We will come 
back to it. I will turn to the ranking member.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. Let me talk a 
little bit about--you know, you just mentioned, Mr. Farmer, 
about how, again, growth, right? Growth is a factor there. And 
so, obviously, high-growth neighborhoods can provide also 
economic opportunities, right, and for families, but then their 
families can be at risk of getting priced out, and then--as you 
were mentioning, and obviously something that we do not want to 
see. So, how do you--particularly, for example, when you are 
dealing with project-based contracts, right, that they expire 
and then, obviously, owners might be tempted to convert their 
properties to market rates.
    And so, let me go to you, Ms. Hoffman. What, you know, what 
strategies would you recommend to maintain those properties 
affordable? And you talked a little bit about that in your 
opening statement, but if you want to elaborate a little bit 
more on that.
    Ms. Hoffman. Well, traditionally, the owner community that 
has been--that has participated in project-based rental 
assistance has been very stable. We always worry about opt-outs 
because they have the, you know, legal opportunity to opt out. 
I will say that having the consistent flow of funding is really 
important, and, for example, you know, the shutdown, the 
government shutdown that we recently had, where hundreds of 
contracts were not renewed, is something that really scared us 
in the affordable housing community because, first of all, 
those property--there were properties whose contracts were not 
being renewed that--where the owners really just had to cover 
their expenses for an indefinite period of time. And high 
capacity, nonprofit owners, like the National Housing Trust, 
have reserves and resources that we can bring to bear, but some 
owners are not--do not have the same resources to bring, and we 
also did not know how long the shutdown was going to go on for.
    So, obviously, we want to avoid that from happening again, 
and, you know, the whole process where--which we have fallen 
into with continuing resolutions. And I know, as appropriators, 
that you both really do not, or all of you, do not want to 
see--would like to get back to a normal order of business. But 
renewing the contracts in a timely way, and giving owners the 
reassurance that this funding is going to be there and that 
their rental assistance is going to be provided on time and is 
going to be consistently funded is critically important just to 
reassure them that this is a good way to make their livelihood.
    And then, you know, from there, it is just a question of 
putting together--if--when properties need recapitalization, 
when owners decide to recommit, they need to be able to put 
together the layer cake of resources to preserve them. And that 
gets back, again, to Federal resources, like the Low-Income 
Housing Tax Credit and the HOME program, and then state and 
local governments bringing in their own, and lenders. But it 
all sort of rests on the stability of the rental assistance, I 
think, at the base, and if people do not feel like maybe that 
is so stable as it used to be, that that puts everything else 
into jeopardy.
    Mr. Diaz-Balart. Let me go--change a little bit to, so, 
obviously when you have strong economic growth that you have 
now, but also prices go up. And so, Mr. Farmer, you mentioned 
how and then people moved to more rural areas, but That is 
again, a lot of times were less opportunities or et cetera. So, 
how do you keep people or how do you afford to have affordable 
housing in areas where you have an economy That is booming, 
people moving in, prices going up? Is there a way to keep 
affordable housing in areas like that? And how do you do that?
    Mr. Farmer. That is the challenge.
    Mr. Diaz-Balart. What tools do you have and what do you do?
    Mr. Farmer. Well, it is again, identifying the resources 
that are available and a lot of this happens at the local 
level. And you know, I will use Durham and both Raleigh as 
examples where they have taken the approach of identifying land 
within their own portfolios. Land cost is one of the biggest 
drivers and can be one of the biggest costs of any type of 
development. So, if they can bring--if they can sell land, or 
if they have land that they will lease--long-term lease, 50 
year lease, hundred year lease for this purpose, it lowers that 
total development cost. The construction costs are pretty 
consistent. Whether you are building in urban settings or rural 
settings, that cost is not going to vary nearly as much as the 
land and infrastructure. So, that is one important tool I would 
say for sure. The other is just stacking these other resources 
and you recognizing you are going to have to pay more on the 
front end and bring those additional subsidies so that you can 
keep those rents low to keep the housing available for the 
school teachers; for the firefighters; for the police force.
    Mr. Diaz-Balart. Right and there goes the lasagna or layer 
cake that you both have talked about before. Thank you, Mr. 
Chairman.
    Mr. Price. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. Ms. Hoffman, you were 
just talking about stability and certainty with respect to the 
CRs. I wanted to ask you a little bit about the Government shut 
down as well. We just hit the longest Government shutdown in 
history and during that time period, project based rental 
assistance contracts expired forcing owners in some cases to 
scramble to make the needed repairs and cover payments. I have 
serious concerns about how this is going to discourage owners 
from partnering with Government in the future. What impact do 
you believe the shutdown a will have on future landlord 
participation in this space and what do you think we can do to 
repair that relationship?
    Ms. Hoffman. Yeah, we are very concerned about that. We 
were very concerned to at the time. Also, I would say that the 
lack of communication from HUD during the shutdown and the fact 
that we had been reassured that HUD would be able to continue 
renewing contracts through the month of January and then all of 
a sudden after the holidays, they told us they had not renewed 
several weeks of contracts, hundreds of contracts in December 
and could not renew anymore in January was quite alarming and 
it was hard to get a consistent information from the leadership 
at HUD. And we know that it was an unusual situation. It was a 
CR that led into a shutdown that went on much longer than 
anyone probably expected. But we are very, very concerned about 
that having a shadow over owners who are thinking about whether 
they want to continue to participate in the program. And I 
mean, I think my message to Congress would be to just continue 
providing the funding; do what you can in a bipartisan way to 
try to get the budget process to work more smoothly and also to 
ask HUD for information. And I know this subcommittee has asked 
for quite a bit of information about what actually happened 
during the shutdown from HUD and I think that one thing we all 
learned is that there is a bit of a lack of transparency on the 
contract renewal process and how funds are allocated. And it 
would be helpful to have more information about how that works. 
And also, at the hearing that the subcommittee had a few weeks 
ago, the representatives from HUD pointed to a need for 
improving the information technology systems at the Department 
and we would certainly support that and there probably needs to 
be an investment in that as well, so that the whole process is 
done in a smoother and more state-of-the-art way. But the 
investment is the most important thing that is going to keep 
owners feeling comfortable that this is how they want to do 
business and not be tempted to convert the properties to market 
rate.
    Mr. Aguilar. And I thank you. Mr. Scott, Mr. Farmer, on how 
the shutdown impacted your work, if at all?
    Mr. Farmer. Yeah, from our standpoint, it did not directly 
impact any of the funding sources we had, but it had a 
tremendous effects on some of our partners and the work that 
they were doing. Whether it was waiting for multifamily 
approvals for loans that were being underwritten by HUD or may 
have had project-based contracts attached to them, to single 
family home buyers who were waiting for IRS paperwork to be 
approved and released. We had many loan closings that were 
delayed for 30 days or more in people's lives were sitting in 
storage units waiting to move into homes. So it--in the other 
example I will share is that we had some of our housing 
counseling organizations who relied on some of the HUD grants 
and other funding that they had to shut down for a period of 
time. So they were not able to help their clients that were 
going through foreclosure counseling or a home buying 
counseling. They had to shut down their operations or work 
without pay for a period of time. So, our agency faired very 
well, but our partners struggled through the shutdown for sure.
    Mr. Aguilar. Mr. Scott, similar.
    Mr. Scott. Well, one of the challenges that housing 
authorities always have is a landlord participation in a 
voucher program. And for those landlords that were on the 
program, there was a lot of concern. We got a lot of calls. We 
posted messages saying--giving them updates as we understood 
them and largely trying to allay their fears. It would stop us 
from being able to provide payments because one of the strong 
selling points of the voucher program is that on the first of 
the month their money is in the bank. And having that sort of 
shadow over the heads was something that was a little bit 
trying. And for those who are on the outside sort of deciding 
rather they would like to participate in a program, this was 
something that definitely a sort of set us back a bit. The 
other issue is that, like Scott mentioned, we had several 
things that were in the works that sat at HUD headquarters or 
sat at HUD field offices that were literally delayed by that 
timeframe. We had some loans that we are looking at. We had 
some approvals for a project with Habitat that we are trying, 
we have been trying to get off the ground for well over a year. 
And so those delays have impacted us in being able to move 
projects along timely.
    Mr. Aguilar. Thank you so much. Appreciate it. Thank you, 
Mr. Chairman.
    Mr. Price. Thank you. We will have one final round, 
although the noon hour has approached. If you will bear with 
us, I think both Mr. Diaz-Balart, Mr. Aguilar, and I have some 
final questions. I do want to return to the question of 
wraparound services and the way that affects your ability to 
place and keep people in affordable housing. And the way it may 
be an independent factor in creating some of the shortfall we 
are talking about if even if units become available, the 
services are not there to enable people to occupy them. That is 
clearly a major, major frustration that we need to address. And 
it is not totally, of course, a Federal issue. So I would 
welcome anybody else comment on that?
    Mr. Farmer. Yeah, I apologize. It was not--I was going to 
get to that question previously. Yeah, I was surprised to hear 
the same remarks about the unused units. What I can tell you is 
we are not a service provider, but we do partner with our State 
Department of Health and Human Services and with many of the 
managed care organizations who are responsible for providing 
the services. And what I can tell you is services are critical 
to the success of keeping people in housing. That is one of the 
big challenges that we are facing right now with our targeting 
programs and also with our community living programs where we 
are housing persons with disabilities, trying to move them out 
of institutional settings into integrated settings is they are 
able to get into the housing, but maintaining that services and 
maintaining them through that first year is critical. I cannot 
answer the question as to whether or not it is simply a 
resources question for services. I know that in conversations 
that we have had in meetings that I have attended, one of the 
challenges is that they are facing in that industry and is in 
many others is finding qualified workers, enough qualified 
workers, be able to provide the services. So, you face that 
challenge of constant turnover. These are private sector 
companies, but the having enough qualified workforce to be able 
to work across the state in all these communities is going to 
continue to be a challenge. There has got to be better ways. 
Again, we do not provide the services, but we make sure that 
those units are available and we do know for a fact that 
services are critical to maintaining that housing long-term.
    Mr. Price. Ms. Hoffman, excuse me.
    Ms. Hoffman. Yes. I would like to add something about 
services, not so much for the homeless folks transitioning out 
of homeless, but as a way to help people in properties with 
project-based rental assistance and other forms to be able to 
become more economically mobile so that they can then move out 
at the other end. And either become homeowners or move into 
market rate housing. And that is just by pointing to the family 
Self-Sufficiency Program, which has been around for a long time 
for residents with voucher, with housing choice vouchers or in 
public housing, but was recently permanently authorized for 
properties with project-based rental assistance. And we think 
it is a terrific program, which helps residents both develop 
job skills and learn about financial literacy. The way that it 
works is they sign a 5-year contract and agree to participate. 
They set goals for themselves and they receive job training and 
the support that they need to learn how to manage their 
finances. And as their incomes rise there, instead of having 
their rent go up as it would normally be the case in assisted 
housing, the additional earnings are put into an escrow account 
and as long as they participate in the program at the end they 
receive the resources from the escrow account and they can use 
it to achieve some of the goals, whether it is down payment on 
a home or paying for education for someone in the family. It 
has been a highly successful program. It has just been--it was 
authorized as you I am sure know on an annual basis through the 
appropriations bill. And there were a couple of nonprofit 
developers, owners who have used the program very successfully 
and we had great results. We are excited and think that a lot 
more owners will come in and participate in FSS now that it is 
permanently authorized. We do think that there is no funding 
currently for resident service coordinators for properties with 
project-based rental assistance and we hope that the 
Appropriations Committee will consider a modest appropriation 
to support that so, that we can--because currently, private 
owners have to do their own fundraising to pay for service 
coordinators. Given the success of the program and how 
important it is so that people are cycling into housing--
assisted housing when they need it, but then are able to move 
out. We hope that the Committee and Congress will consider an 
increase in the appropriation for service coordinators to help 
meet some of the additional need now for those properties with 
project-based rental assistance. And I have a lot more details 
in my written statement about that.
    Mr. Price. Thank you. That is very helpful.
    Mr. Aguilar. And I think that the supportive services is 
the key for us to be able to see our families be at their 
greatest level of success. When you look at some of the things 
that we are doing when we talked about our downtown development 
plan is $566 million, but 430 of that is actually a 
construction and we are working with the city's Office of 
Workforce and Economic Development, Durham Technical College, 
as well as the Community Development Department to make sure 
that we are going to provide folks and an on ramp to be able to 
access those jobs. Because as Scott mentioned, there are a lot 
of jobs in the triangle, but we are having a difficult time 
having qualified people actually be able to get access to those 
jobs. The supportive services will help keep them on track and 
help support them in maintaining their stability and getting 
and maintaining those jobs. Similar with the light rail project 
as proposed for Durham, there are millions and millions of 
dollars of jobs that will be associated with that. So when it 
gets passed and we are working with Go Triangle to see that we 
can have the residents of public housing make sure that they 
have job opportunities there. Also with--there is a weird sort 
of quirk with the RAD Program. With RAD, you are no longer 
eligible for FSS in Ross in Jobs Plus. So, if you convert to 
RAD those supportive programs go away and that actually does a 
lot more harm than good. And we think that is something that 
the Congress should look at when it comes to those programs and 
supporting housing authorities that are converting to the RAD 
program.
    Mr. Price. Thank you for flagging that letter item. Well, 
our time is expired. I am going to take another minute. I think 
the answer to this will be short, not that I want to predispose 
you in any way, but maybe this is in the department of 
connecting the dots that are already pretty obvious, but the 
basic situation we are facing here is awaiting the President's 
budget. It is going to be before us soon. And we hope that past 
is prologue, but if it goes the same way it has gone in the 
last 2 years, we could anticipate some critical items being 
eliminated. CDBG, Home Choice Neighborhoods, just as quickly as 
possible. What would be the effect of that on the kind of 
programs you have described here today? We have put those items 
back in on a bipartisan basis here, but I just want to ask you 
to make sure for the record, what be your disposition toward 
this round of a budgeting?
    Ms. Hoffman. I am just going to--you did not mention rental 
assistance, but I will say it would be quickly devastating. The 
rent reforms that the Administration has proposed for the last 
two years would raise according to the Center on Budget and 
Policy Priorities raise rents by more than $2 billion on nearly 
1.8 million low income families. And there is much more 
analysis, but the rent reforms that have been proposed in 
association with the budget would increase the rents--
effectively increased rents on the lowest income Americans. It 
is unclear what the objective of that is, but we think it would 
be devastating.
    Mr. Price. Thank you.
    Mr. Farmer. Okay. I would echo those and the loss of the 
Home and CDBG program would force the housing credit to serve 
higher incomes and that range rather than the lower income 
families that we are able to serve by utilizing those 
resources. We pride ourselves on doing more with less, but 
there is, without question, we would have less production of 
additional affordable units in our state.
    Mr. Scott. Well, in short, with an average rent of $238 in 
our public housing communities, we would see clearly an 
increase in homelessness. We would have to cut staff. We would 
see a loss of public housing units. It really comes down to 
being just at sample based on what has occurred, what has been 
proposed over the last two years as we have done an analysis of 
how it will impact our housing authority. We do not see how we 
could, in any way, shape or form continue to function near the 
levels that we are now.
    Mr. Price. Thank you, Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, thank you. Let me just throw 
kind of a bit of an open-ended question about the 9 percent tax 
credit versus a 4 percent tax credit. And if you can just 
describe for us a little bit of the difference, different uses 
of the 9 percent versus the 4 percent. And what are the 
relative advantages or disadvantages of both of those? Why a 
developer would choose one program over the other and also, if 
you also can, so I get a bit of an open-ended question about 
that, but also how does CDBG funding factor in, into the actual 
how you deal with your tax credit programs. And so I do not 
know who wants to take a stab at that.
    Mr. Farmer. I will take the first shot at that. The primary 
difference between the 4 percent and the 9 percent is really 
the amount of the tax credit equity generated. One is, they 
refer to it as a 70 percent credit and 30 percent credit. That 
is almost how it balances out in terms of the equity side. On a 
typical tax credit, a 9 percent deal, the private market 
investment will generate between 60 and 70 percent or covers 
between 60 and 70 percent of the cost of that property. For the 
bonds, it is going to get you 20 to 30 percent. So you are 
going to have--one is going to carry more debt or have to carry 
more debt or find other subsidy sources to make those work. 
From a competitive standpoint in our state at least, and it is 
not true in all states, some states have a higher demand for 
their bonds and they do for their nine percents, but in North 
Carolina, we have less demand for the tax exempt bonds and 4 
percent credits. So, we have tried to encourage and many of our 
local governments are realizing that now and they are putting 
more of their resources towards the bond program to assure they 
have a better opportunity rather than it being a 1 in 4 shot, 
basically if they can piece the deal together and fill in that 
funding gap, they will be able to get that deal in the upcoming 
cycle. To your question of CDBG funds, CDBG is one of the 
sources that local governments often use as a gap filler for 
housing credit properties. It can cover those eligible costs. 
The easiest way to describe it is everything up until the time 
you started to go vertical. So, any of the site and 
infrastructure work bringing water and sewer, road 
improvements, sidewalks, things like that. So, it is a critical 
resource that sometimes the local governments will use that so 
that it does not become part of the project development cost to 
help lower their overall costs. So it is a critical resource 
both in the urban areas as well as in our small cities. They 
are able to tap into that resource at the state level as well.
    Mr. Scott. And I would concur with that. It means the 
difference between the 4 and the 9 is additional gap that is 
needed to be filled.
    Mr. Diaz-Balart. Mr. Chairman, changing the subject a 
little bit going to what Mr. Aguilar was talking about, and I 
think we have a lot of new Members of Congress and the House 
and the shutdown I think hopefully illustrated a little bit of 
why the appropriators always think that shutdowns are horrible. 
I do not know if the rest of Congress understood that before. I 
am hoping they do it now.
    Mr. Price. We have got a good lesson.
    Mr. Diaz-Balart. Right. Now, but what I am not sure is if 
folks understand the difficulties with the CR, which you all 
have talked about, have pointed out from time-to-time. And I 
just bring that up, Mr. Chairman, because I think we kind of 
assume as appropriators or whatever.
    But I am not quite sure if they do and particularly with so 
many numbers--new members and it is just kind of wanted to put 
that out there as food for thought that one of the things that 
we might want to consider doing. Really more of a full 
subcommittee issue than a full committee issue than a 
subcommittee issue, but we should try to educate our--
particularly so many new Members of the House as to why CRs, I 
think shutdowns and maybe people understand, but I do not think 
people understand that that CRs can be very detrimental, and 
some may have a better understanding about why that is bad for 
defense, but I do not know folks--our colleagues frankly, have 
any ideas to how problematic they can be, Mr. Chairman.
    Mr. Price. I appreciate those and we need to know a lot of 
what it was said here in response to the question about the 
shutdown applies at least to a major degree to a CR as well. 
And to an environment of CRs where the uncertainty is great.
    Mr. Diaz-Balart. And Mr. Chairman, I will just wind up by 
saying despite what some of our colleagues were saying about 
having it to a group that is too heavy on North Carolina, I 
will tell you this has been a great, great, great panel. Thank 
you all for being here. I think this has been very informative, 
very positive and I thank you, Mr. Chairman for having this 
hearing.
    Mr. Price. Especially appreciate that observation because 
I----
    Mr. Diaz-Balart. I am always here to backup the Chairman.
    Mr. Price. All right. I also am very appreciative and I do 
not think I have seen a panel that I can recall where the 
testimony was as complimentary as it has been this morning. You 
have filled in our knowledge on lots of areas and I think the 
length of the hearing and the tenor of the questions does 
indicate that. So, we are very grateful to you. The committee 
staff will be in touch with you after we conclude regarding any 
questions anyone has for the record that you might be asked to 
submit an elaboration for. And we would ask if you do get those 
requests, that you return any response to the committee within 
30 days, so we can be able to publish the transcript of today's 
hearing. Any further comments? If not, we do really appreciate 
everything that you have brought to us. We will try to reflect 
on it as we prepare the next year's bill and with that our 
subcommittee is adjourned. Thank you.

                                           Tuesday, March 12, 2019.

          STAKEHOLDER PERSPECTIVES: PASSENGER RAIL DEVELOPMENT

                               WITNESSES

STEPHEN GARDNER, SENIOR EXECUTIVE VICE PRESIDENT, COMMERCIAL, MARKETING 
    AND STRATEGY, AMTRAK
DJ MITCHELL, ASSISTANT VICE PRESIDENT, PASSENGER OPERATIONS, BNSF 
    RAILWAY
JASON ORTHNER, RAIL DIVISION DIRECTOR, NORTH CAROLINA DEPARTMENT OF 
    TRANSPORTATION
    Mr. Price. Good morning, everyone. The subcommittee will 
come to order.
    Today we are going to hear testimony from a diverse group 
of witnesses about passenger rail development.
    Joining us are Jason Orthner, the Rail Division Director of 
North Carolina Department of Transportation; Stephen Gardner 
the Senior Executive Vice President of Commercial Marketing and 
Strategy, Amtrak; and DJ Mitchell, the Assistant Vice President 
of Passenger Operations, BNSF Railway. Thanks to each of you 
for being here.
    Inner city passenger rail moves millions of Americans every 
year, and it serves as an economic engine for our rural and 
urban communities. Rail service when running smoothly offers 
passengers an extremely attractive travel option, compared to 
car and aviation alternatives, especially over short and medium 
distances.
    While Amtrak provides the majority of passenger rail 
service in the U.S. numerous States have stepped up with their 
own funding and equipment to support specific routes and to 
improve service and frequency.
    Meanwhile, much of the track utilized by passenger trains 
outside the Washington to Boston Northeast Corridor, are owned 
by freight railroads, which must balance their operational 
needs with accommodating passenger service.
    We are interested to hear about the challenges and 
opportunities facing all of our rail stakeholders, including 
investment priorities, ongoing PTC implementation, that is 
train control implementation, and the future of inner city 
passenger rail.
    The rail ecosystem is complex, and the various industry and 
government entities operating within this system must work 
together in order to achieve growth for the future.
    In the last three fiscal years this subcommittee has 
provided more than $1.6 billion in funding for inner city 
passenger and freight rate improvements, through various grant 
programs, authorized by the FAST Act. This amount is in 
addition to our annual appropriation for Amtrak which just shy 
of $2 billion in the 2018 and 2019 fiscal years.
    These incremental investments build upon more than $10 
billion allocated for high speed and inner city passenger rail 
in the Recovery Act, and the fiscal 2010 Appropriations Bill. 
Unfortunately, we faced a major gap in our commitment to rail 
during the intervening years, but I do believe we are on a 
stronger footing now. States like North Carolina and Washington 
State, for example, have used Recovery Act dollars and 
subsequent DOT grants on several major projects to improve 
track, to separate at-grade crossings, to expand stations, and 
to purchase signals and other equipment.
    These investments in passenger rail not only improve 
service, they help improve freight bottlenecks, they improve 
safety in congested corridors, and they contribute to economic 
growth. These and other success stories provide us with a 
useful roadmap, but if we want to accelerate this progress and 
replicate we are clearly going to need more funding, properly 
targeted.
    Maintenance needs to continue to grow particularly in the 
aging Northeast Corridor, and establishing new passenger rail 
corridors in the Southeast, Midwest and Gulf Coast, and other 
regions will require major commitment from Congress.
    At the same time we need to ensure that low-interest loans 
and other innovative tools supplied by USDOT, such as private 
activity bonds which Brightline has employed to build passenger 
rail in Florida, remain viable for rail projects as a key 
source of financing.
    And finally, we need better coordination and cooperation 
between, among, Amtrak, the States, and their freight rail 
partners, particularly as freight and passenger traffic 
continues to grow.
    So, we have high hopes for this hearing. We want to 
facilitate these working relationships and help inform our 
subcommittee as we shift our attention to drafting the Fiscal 
2020 Appropriations Bill.
    Now, before going further I want to recognize our 
distinguished Ranking Member, my friend Mr. Diaz-Balart, for 
his opening statement.
    Mr. Diaz-Balart. Mr. Chairman, Mr. Price, again, thank you 
for calling this hearing and giving our members a chance to 
discuss passenger rail, which is so critical to our Nation's 
economy, and to the wellbeing of our citizens.
    I would like to welcome our distinguished witnesses, and 
thank you, the three of you for appearing in front of us today. 
The three of you oversee major portions of our Nation's rail, 
transportation network, together your organizations are 
responsible for the moving of millions of passengers, and 
billions of dollars of commodities and products.
    And Mr. Gardner you appeared before the subcommittee just 
last year, and we look forward to hearing from you again, 
Amtrak has a unique status.
    As you know, Mr. Chairman, as a private corporation with a 
mandate to serve the public, a very unique situation, we are of 
course are interested in hearing about how you deploy the 
resources made available by the subcommittee, but also we are 
interested in hearing about your vision for the future, and 
what you see in the future for passenger rail in our country.
    Mr. Orthner, I look forward to hearing your perspectives as 
a transportation leader, from the chairman's State. Your 
perspective from North Carolina is important to us, not only 
because you are from the chairman's state, but that is not to 
be underestimated either, undervalued, but for obvious reasons. 
Look, you have overseen some significant growth in passenger 
rail service in years, and the last number of years.
    And Mr. Mitchell, your perspective from BNSF can help us 
understand that close, very unique relationship between freight 
and rail. The role of freight rail is obviously huge to our 
economy, to our country, and that is less obvious, but 
critically important is that role in housing passenger rail on 
your lines.
    And so I look forward to learning how we ensure that both 
freight passenger rails can thrive in the future, and to make 
sure that our economy continues to grow.
    And so again, the chairman and I have been fortunate in 
this friendship and partnership, to actually make some 
strategic investments in infrastructure, in our inner city 
communities' bills, particularly the last two years, rail 
investment has been a key part of this, with historic new 
funding for the Northeast Corridor, a state of good repair Mr. 
Chairman, repair grants, and consolidated rail infrastructure 
safety grants, however, the investment in Federal dollars is 
just one piece of the puzzle.
    Linking the Federal resources to innovation and with public 
and private partnerships will be a key to building our future, 
our real infrastructure for the next generation.
    I look forward to hearing from each of you on these 
challenges. Mr. Chairman, thank you for putting together I 
think a great hearing. And I yield back.
    Mr. Price. Thank you very much. All right, we will get on 
with our witnesses. We will as each of you to speak for 5 
minutes, to give your oral testimony for 5 minutes. Your fuller 
statements will all be included in the record.
    Let us start with Mr. Orthner, followed by Mr. Gardner, and 
then Mr. Mitchell. Mr. Orthner, you are recognized.
    Mr. Orthner. Good morning. And thank you, Chairman Price; 
and Ranking Member Diaz-Balart, and all the members of this 
committee for holding this hearing to discuss passenger rail as 
an important component of our national transportation system.
    My name is Jason Orthner, and I serve as the Rail Division 
Director for the North Carolina Department of Transportation. 
Our Department actively supports the health of the rail system 
through a number of freight passenger and rail safety programs.
    These include programs to boost the conflicts between 
highways and rail, modernize and improve tracks and signals, 
facilitate rail access for new and expanding industries and 
educate the public and law enforcement on rail safety.
    We also support a successful inner city passenger rail 
system with service extending into neighboring states and 
beyond. We have 16 passenger stations located in large cities 
in small towns from populations of 6,000 to over 800,000.
    These stations serve as access points for our national 
transportation system, and are also centers of economic growth 
in the communities they serve. Our state is one of the fastest-
growing in the nation and is anticipated to add 2.4 million 
residents by 2038. Much of this growth is anticipated to occur 
along work orders near stations.
    As highways and airports become more congested and more 
difficult and costly to expand, investing in effective and 
productive transportation along a separate network will 
increase mobility between rural and urban centers, maintain 
highway capacity and allow for economic expansion.
    North Carolina is one of 18 states that support passenger 
rail service with a focus in providing safe, efficient and 
frequent service for business leisure and other travel needs. 
Nationwide state-supported services represented an important 48 
percent of Amtrak ridership in fiscal year 2018, carrying 15 
million passengers and contributing over 800 million to support 
Amtrak's bottom line.
    As the established partner of the class 1 railroads, Amtrak 
has certain unique rights and access privileges to the freight 
rail network at the Federal level. Our relationship with Amtrak 
is important to us or ensuring individual corridor development 
projects, and we continue to rely on them, to operate the 
states-sponsored passenger services.
    Our relationships with our freight rail partners are very 
important to us, including Class 1 in short lines, having a 
healthy freight rail system is critical to providing cost-
effective transportation as well as the growth and development 
of manufacturing, agriculture and international trade.
    Federal funding opportunities to increase both freight and 
network capacity, including development of separate high volume 
freight and passenger corridors, in certain areas, will also 
help to address the critical of long-term performance.
    Until 2010 our state had limited access to significant 
Federal funding to support the growth of or rail system. That 
year we received 545 million in our funds for the Piedmont 
Improvement Program, which significantly accelerated planned 
improvements to our tracks, signals, stations and trains.
    The program also improves the freight rail system, through 
the elimination of 40 at-grade crossings and modernized signals 
and tracks. The funding created a revolutionary change to our 
rail infrastructure, and has resulted in increased ridership 
through multiple additional train frequencies.
    North Carolina completed this program on time, and within 
budget and stands ready to begin the next phase of system 
expansion.
    North Carolina is partnering with other southeast states to 
develop the Southeast Corridor, stretching from Washington, DC, 
through Virginia and North Carolina to South Carolina, Georgia, 
Tennessee and Florida. Several other corridors are identified 
across the Nation to serve the significant transportation needs 
of rapidly-growing regions. On the North Carolina/Virginia 
portion of the Corridor, a Federal Record of Decision was 
completed in 2017 to create a critical new link from Raleigh to 
Richmond, which will allow additional train frequencies, 
significantly reduce travel times, and enhance connectivity and 
reliability of the service.
    As an incremental step towards developing this corridor, 
North Carolina is leveraging state transportation dollars for 
current Federal discretionary grant opportunities.
    These proposals involve construction of safety and freight 
projects with immediate benefits such as grade separations, 
cross enclosures, and sidings. However, the full project, like 
many across this country cannot be constructed at current 
Federal fund levels.
    Existing discretionary grant programs are very helpful for 
maintaining current services; however, a consistent funding 
program that can be relied on without evolving criteria for 
project eligibility will allow new interstate rail 
infrastructure programs to be established for continued growth.
    State-supported services need Federal funding capital to 
support both infrastructure expansion, and equipment 
modernization. In addition, there are opportunities to acquire 
strategies corridors as where it would share lower-volume 
lines.
    Funding is needed to preserve these corridors, and 
assembling new rail corridors is often infeasible.
    In summary, North Carolina and many other states are making 
significant investments in passenger rail to create an 
efficient and effective transportation system, but the current 
level of investment cannot match the opportunity for growth 
without consistent and widespread federal funding.
    Thank you very much for the opportunity to speak with you 
today, and I would be pleased to answer any questions you may 
have. Thank you.
    Mr. Price. Thank you very much. Mr. Gardner.
    Mr. Gardner. Good morning, Chairman Price, and Ranking 
Member Diaz-Balart. Thank you for holding this hearing today, 
and let me also thank my fellow witnesses for their 
partnerships with Amtrak.
    Before I begin, it is with sadness that I must note the 
recent passing of our Former President and CEO, Joe Boardman. 
Mr. Boardman was a frequent visitor to this subcommittee and 
left an indelible mark on Amtrak. He was an impassioned 
advocate for passenger rail and we owe him a tremendous 
gratitude for all he did for our company.
    I also thank you and your staff for your hard work on the 
FY 2019 appropriations bill. We greatly appreciate the strong 
funding levels for Amtrak, and the FRA grants, and we look 
forward to working with you on next year's bill.
    In fact, we will be transmitting our FY 2020 legislative 
and grant request shortly, after we have time to study the 
administration's recent budget proposal.
    Despite significant challenges last year, we made strong 
progress on many important fronts. We reduced our operating 
loss to historic levels.
    Finally, through strong partnerships across the Nation with 
states like North Carolina, we have added destinations and 
additional daily frequencies, including another Piedmont in 
your state, Mr. Chairman.
    While we are proud of the accomplishments to date, we know 
we have much more to do. We are working hard to improve and 
expand our system. To do this, we continue to need your help in 
addressing two of our most immediate challenges: our aging 
assets and our relationship with our host railroads.
    As the subcommittee knows, the lack of reliable capital 
funding over our history has meant that many of our bridges, 
tunnels, and passenger cars have become outdated and aged 
beyond their useful life. In this era of perpetual highway 
congestion and serious environmental concerns we encourage the 
subcommittee's continued investment in our assets, and 
additional funding to Amtrak and the states to improve our 
network through projects like the Southeast High Speed Rail 
Corridor. Whether it is Portal Bridge or the replacement of our 
coach fleet, failure to advance our critical capital projects 
places our current system at risk.
    Our other major immediate challenge is the performance of 
our host railroads. Unfortunately, today some host railroads 
are simply disregarding the Federal law that grants Amtrak 
preference rights over freight, since there is no reinforcement 
of this requirement. Since 2018, for instance, Amtrak trains 
were delayed 1.2 million minutes by freight trains. Of our 15 
long-distance trains, only 1 service was on time more than 70 
percent last year. When Amtrak trains are routinely delayed by 
freight trains we disappoint our customers and increase our 
costs making us more dependent on your funding.
    Surely, this is not what Congress intended and we 
appreciate actions like the subcommittee's requirement in the 
fiscal year 2019 bill that our IG update our study on the cost 
of host railroad delays to Amtrak. Looking ahead to fiscal year 
2020, we seek your continued support for further actions and 
incentives that could help us achieve better on-time 
performance as well as expansions of service with our host 
railroads.
    We strongly support investments in our host railroads' 
infrastructure to improve both our systems. But we must find a 
better way to fairly determine what those investments should 
be, and after making them, ensure that we all reap the promised 
benefits.
    Lastly, let me raise some critical longer-term 
opportunities and challenges. We believe the time has come to 
modernize and expand our network in order to serve more people 
across America. We are busy developing a plan and vision that 
we hope to share with Congress in the coming months as we turn 
to the reauthorization of the FAST Act. As our owner, the 
Federal Government sets the overall vision, funding levels, 
policies, and rules for Amtrak, and the time is upon us as we 
approach 50 years of age to ask fundamental questions about the 
future role of Amtrak in the Nation's transportation system, 
and how limited Federal resources should be invested to support 
services across the Nation.
    For the vast number of our customers and your constituents, 
we believe we can do even more to provide them with better 
transportation options. And as part of reauthorization, 
Congress will need to grapple with how our network should 
respond to the changing landscape and demographics of the 
Nation and the evolving needs of our riders.
    These are difficult questions, but prudence requires that 
we face them together. I can commit to you that Amtrak will 
always work hard to provide a safe, high-quality transportation 
alternative in the most cost-effective manner, consistent with 
our mission. However, we will need your help going forward to 
better define our goals for the modern era and to fund their 
achievement. Thank you for the opportunity to testify today and 
I look forward to answering any of your questions.
    Mr. Price. Thank you. Mr. Mitchell, we will turn to you.
    Mr. Mitchell. Good morning, Chairman Price, Ranking Member 
Diaz-Balart, and members of the subcommittee. I am DJ Mitchell, 
head of BNSF Railways Passenger Operations Group for the most 
part of the last 20 years. I appreciate the opportunity to 
testify before the subcommittee regarding the perspective of 
the stakeholders on passenger rail development in the United 
States.
    Almost 10 years ago, then BNSF CEO, Matt Rose, testified 
before this committee about the interface between passenger and 
freight rail service operating on predominantly freight rail 
lines. What has changed since that time?
    Passenger train costs, at least on BNSF, have remained 
relatively constant. However, in 2018, BNSF set an all-time 
record freight volume record. Today, we operate about 1,500 
trains a day, including 254 passenger trains. To meet 
increasing freight demand BNSF has made more than $40 billion 
in capital investments in our railroad since 2009.
    Creating and preserving network capacity is very important 
to us. New track and facility construction increases capacity 
as does the proper maintenance of existing facilities. In 
recognizing this, we have made significant investments in both.
    At BNSF, we often speak of a ``virtuous cycle,'' wherein we 
are able to serve our customers, grow our business, and earn 
returns sufficient to reinvest in our network. That is in the 
best interest of the country, the supply chain upon which every 
community in America depends, and in the best interest of the 
passenger services which operate over us.
    In addition to BNSF's annual investments in capacity and 
maintaining our railroad of very good repair, there has been 
public investment in BNSF network in places where state-
sponsored Amtrak corridor and commuter services operate, such 
as the San Joaquin Valley, the Pacific Northwest, the Los 
Angeles Basin, and between Chicago and Galesburg, Illinois.
    In each case, and others not mentioned, state and local 
communities have availed themselves of the funding tools under 
the FAST Act, the TIGER/BUILD Program, and other Federal grant 
and aid programs to improve passenger service reliability and 
expand passenger service without adversely impacting freight 
capacity and operations.
    None of these public investments happened by accident. They 
have been the project of BNSF's careful planning completed in 
close cooperation with commuter agencies and the state DOT's 
that sponsor Amtrak state-supported services, as well as Amtrak 
itself. In each case, this work has been guided by BNSF's 
longstanding passenger rail principles which we submit with my 
testimony today. These are the principles that BNSF applies 
when considering whether or not it can accommodate requests for 
new or additional commuter or state-supported corridor service.
    Safety is always our first consideration. That said, 
regarding our passenger principles, our first principle among 
equals is the principle that no proposed passenger service will 
degrade BNSF freight service, negatively affect BNSF's freight 
customers, or BNSF's ability to provide them with service. This 
means that BNSF must be provided the present and future 
capacity that the proposed passenger service will take from the 
freight network before such service is started.
    Going back for a moment to the matter of safety, we are 
proud of our safety record. Our safety culture and practices 
have reduced both train accident and employee injury rates by 
40 percent or more since 2000. But we always seek continuous 
improvement and we believe that technologies will provide the 
next gear for achieving additional safety improvements. One of 
those technologies now in service is positive train control or 
PTC. BNSF has fully deployed the required PTC facilities and 
equipment on our network. It is interoperable with Amtrak and 
is present on all Amtrak and commuter lines hosted by BNSF that 
were mandated by the Federal Government.
    So, with respect to my opening question, what has changed 
and what is the same? Freight volumes are up; public sponsors 
of passenger service on BNSF's network have martialed public 
investment and reached agreements with us to initiate expanded 
service consistent with the passenger principles. And what 
hasn't changed? Amtrak's long-distance trains: they have 
priority access, but find themselves operating in a capacity 
constrained, highly variable operating environment with little 
ability to help mitigate reliability and capacity constraints 
that impact their service.
    What can be done about this situation? Amtrak and BNSF work 
closely on this matter almost every day and while we may have 
differences about certain elements of how long-distance trains 
are scheduled, we most likely agree that the subcommittee's 
inquiry into whether Federal programs can make a difference is 
important. We are open to that conversation and a larger 
discussion about how the role of passenger rail service plays 
in service transportation, if the Congress wishes to engage in 
the same. I appreciate the opportunity to testify today and 
would be happy to answer any questions. Thank you.
    Mr. Price. Thank you very much. Thanks all of you for 
useful opening statements and we will now proceed with 
questions. I want to refer in beginning to North Carolina's 
expanded passenger rail service. Glad to have the man who is 
presiding over that at the moment with us, but I intend to use 
this as a window onto the situation nationally; the challenges 
and the opportunities we face nationally.
    One example of expanding passenger rail service Mr. Orthner 
has already referred to, the Raleigh to Richmond route which is 
absolutely essential to the eventual establishment of a 
Washington to Atlanta regional corridor. Restoring Gulf Coast 
service, we also hear a lot about that. These will come with 
significant up-front costs, way before the revenue starts to 
come in through ticket sales or whatever the revenue stream 
looks like.
    Now, unlike aviation, unlike highway funding, there has not 
been a stable, predictable funding source for passenger rail. I 
am very proud of the work this subcommittee has done on a 
bipartisan basis to change this trend, investing $1.62 billion 
in 3 grant programs over the last 3 fiscal years. On the other 
hand, I am well aware of how unique the Recovery Act influx of 
support was, in retrospect. We certainly made good use of it in 
North Carolina. Mr. Orthner can testify to that, but there has 
been a fall-off in funding since then.
    So, we face a real challenge in restoring that kind of 
Federal role. Or, I don't know if ``restoring'' is the right 
word, because the Recovery Act was a one-time investment which 
did a lot of good, but maintaining that, of course, is a huge 
challenge.
    So, Mr. Orthner, we will start with you. I want each of you 
to respond. Can you speak to the complex mix of Federal 
programs North Carolina is tapped into or is exploring to 
support projects like the Southeast Corridor? You might refer 
to our past experience, but mainly we want to look forward.
    Mr. Orthner. Yes, Mr. Chairman, thank you for that 
question. We at North Carolina have been very innovative with 
funding over many years. I will explain a few of the programs 
that we have tapped into and kind of give some context for 
each.
    Everybody should be familiar with the Section 130 funding 
which supports grade crossing safety, hazard elimination. That 
has been a program that we have been a part of for many, many 
years improving our grade crossing safety, upgrading devices; 
we have also used the funding to close a significant number of 
crossings.
    That funding source was sort of the instigator many, many 
years ago when we started what was called the Sealed Corridor 
Program, which we comprehensively looked at grade crossings in 
corridors to look at ways to address safety. We have driven 
down crossing collisions 82 percent since 1988 and we have 
closed over 300 crossings since that time as well. So that 
funding source has been important to us.
    We have used congestion mitigation air quality for funding 
through FHWA for a number of projects and initiatives. It is a 
funding source that actually is supporting the operation of 
some of our services right now, in addition to modernizing some 
of our equipment.
    We have also historically used FHWA enhancement funds. That 
source hasn't been around for a while, but that was a source 
that we used for a number of station projects. We basically, 
from the late 1990s to the mid-2000s, worked with communities 
all throughout the state to use that funding source to upgrade 
historic stations where the communities can be very proud of 
them.
    More recently, we have used TIGER funding sources to 
support Charlotte Gateway Station and Raleigh Union Station. 
Those have been some of our larger funding opportunities 
through those programs as well as some grade separations. Blue 
Ridge Road, which is one of our most complex grade crossings in 
the State, also has received TIGER funding as well as some 
other freight projects.
    And even more recently, the Consolidated Rail 
Infrastructure and Safety initiative, Millbrook Road is a grade 
crossing along with the Sealed Corridor that has received some 
funding under that program, and out of that actually was one of 
the catalysts for getting started on that Sealed Corridor. And 
of course, we mentioned ARA Funds that supported the Piedmont 
Improvement Program as our largest, single funding opportunity.
    That gives you the mix, kind of, of what we have used in 
the past. Our state is very aggressive when it comes to 
pursuing grant opportunities and we will continue to do so. 
Thank you.
    Mr. Price. Thank you. We will pick up with our other 
witnesses on the next round, but thank you. That is a useful 
lining out of the menu of options that we have drawn on. Mr. 
Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. The Chicago 
CREATE Partnership brought Federal and local interests together 
with the railroad industry to really make improvements to 
increase efficiency in passenger and freight rail in the 
Chicago area. Something that Mr. Quigley, as you remember, Mr. 
Chairman, always talked about and we actually spoke about it in 
some of the hearings.
    Mr. Mitchell, I understand that there is potential for 
another partnership like that dealing with the Fort Worth 
region to the North Texas Moves Program, I believe. Can you 
describe the status of that project and the role that BNSF is 
doing to bringing that project potentially forward? What 
specific improvements would you expect to take place if that 
actually moves forward?
    Mr. Mitchell. Thank you, Congressman. I would like to 
explain our role and then the status of the project.
    The role that we have played is identifying the best 
combination possible of public and private investments to 
facilitate the movement of railroad trains, I will be more 
specific in a moment, through the metropolitan area.
    The metroplex Dallas-Forth Worth is very important to the 
railroad. Service from the Pacific Northwest, from California, 
from Chicago headed for the Gulf States and for Houston and the 
ports, all come through that part of Texas.
    It is capacity constrained. We have the ability to build 
out capacity on property we own, like the Madill subdivision 
going north into Oklahoma. We have the ability to build out 
capacity going south toward Houston. But the center of the 
metropolitan area, the property is owned by the public 
agencies. So we have been working closely with the Metropolitan 
Area Planning Council as well as DART and Trinity-Metro to 
identify a series of projects that will benefit all of us; 
benefit the growth of passenger service, that is really needed 
in the metropolitan area, as well as facilitate the movement of 
our trains through the metropolitan area.
    We have modeled that operation using the modeling tools 
that we have at our company at no cost to the public. A group 
of projects have now been identified, one for the eastern part 
of the metropolitan area, one for the western part of the 
metropolitan area. And now it is time that those grant 
applications are prepared and submitted.
    It is a program of projects, not unlike CREATE. I happen to 
be the chairman of the Chicago Planning Group which oversees 
the CREATE implementation; very similar to Chicago. In fact, 
there is a management improvement initiative as part of the 
grant application as well as a number of capital investments 
that we will carry forward, not in 1 year, not in 2 years, but 
probably 3, and we just have to go forward now.
    Mr. Diaz-Balart. Thank you. Mr. Gardner, what improvements 
would you expect to see to Amtrak's operations because of the 
CREATE project? And also what potential do you see in this 
North Texas project?
    Mr. Gardner. Thank you, Congressman. We have already been 
experiencing some of the benefits of CREATE. The program, as my 
colleague here mentioned, is a program of projects, so not all 
of the projects benefit Amtrak service directly, but many do, 
and we are proud to have supported the program and worked 
closely with our colleagues to advance the programs 
incrementally.
    I would note that there is still a lot left to accomplish 
in CREATE; we are not nearly done. And even when CREATE is 
completed, we won't yet have the kind of dedicated 
infrastructure for an entrance to Chicago for passenger rail 
that I think is essential in the long term, but there is no 
question that CREATE has created a credible improvement in 
terms of the interface between the freight railroads, Metro, 
the main commuter provider, and Amtrak on a number of key 
locations.
    Mr. Diaz-Balart. It is a good example to potentially look 
at for other places.
    Mr. Gardner. It is, it is.
    Mr. Diaz-Balart. Yes.
    Mr. Gardner. Absolutely, and the situation in Texas 
similarly. Texas is an incredibly important state in the 
Nation, one of obviously of our fastest growing and largest 
population centers. It is a place also which has remarkably 
little Amtrak service, given its population. You have got the 
fourth and fifth largest cities in Houston and Dallas-Fort 
Worth in terms of metropolitan areas, 13 million people, and 
yet no inner-city passenger services connecting the two cities 
even though we have got reasonable trip time possibility and a 
relatively manageable distance.
    So, in the long term, these are exactly the sort of markets 
where we think Amtrak needs to be playing a bigger role and we 
need to be developing that role and those possibilities, like 
our colleagues in North Carolina have and, like Mr. Mitchell 
mentioned, together with the freight host railroads and the 
commuter providers.
    Mr. Diaz-Balart. Thank you. I yield back, Mr. Chairman.
    Mr. Price. Mrs. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman, Mr. Ranking 
Member, for holding this hearing and thank you for your 
testimony, all of which is very interesting to me, but I have 
about three questions for Mr. Gardner that I would like to get 
through really quickly.
    Mr. Gardner, as you certainly know, Amtrak is critical to 
my district. Since my district is between New York and 
Philadelphia, Amtrak connects the people and the businesses in 
my district to those to major cities and the broader region 
both through Amtrak service and the commuter lines that run on 
Amtrak-owned lines. So, I appreciate your testimony about the 
importance of maintaining, repairing, and enhancing the 
Northeast Corridor, especially the construction of a new Portal 
Bridge and the new Hudson River tunnels as part of the Gateway 
Project.
    The Deputy Transportation Secretary, Jeffrey Rosen, 
dismissed the Gateway Project as a local responsibility. So, it 
is just so unfortunate he would even think that. So, could you 
elaborate on why the Gateway Project is critical to Amtrak's 
operations, and what the consequences of Amtrak would be if the 
Gateway Project is not completed? Question number one.
    In the last two appropriations bills, Congress has 
appropriated $650 million each year to provide for Amtrak's 
Northeast Corridor. Yet, I have heard concerns that the Federal 
Railroad Administration has been slow to provide the money to 
Amtrak. Could you update this committee on the status of Amtrak 
receiving this critical money? Question number two.
    And finally, under the administration's proposed 2020 
budget, Amtrak's Northeast Corridor funding would be cut by 
about 50 percent. How would such a cut impact Amtrak's ability 
to do important projects in the Gateway Project area? Thank 
you.
    Mr. Gardner. Thank you. I will take those in order. So, 
just to put the Northeast Corridor first in context in the 
overall system of Amtrak, we are roughly 31\1/2\ million riders 
last year, and about 17 million of those used the Northeast 
Corridor, both in our Northeast Corridor services and 
passengers who ride on long-distance trains and traverse the 
Corridor. At the center of this, and really the center of the 
rail--passenger rail network in North America is New York's 
Penn Station, and access to New York Penn Station to the south 
and west is provided on a piece of railroad we call the 
Highline from Newark, New Jersey, into New York City Penn 
Station. And this piece of railroad relies on a series of 
infrastructure roughly dating from 1910. And we have two 
critical projects in our phase one of the Gateway Program, 
which, basically, is to rebuild that infrastructure to modern 
standards, and, in the process, create additional capacity over 
time.
    The loss of this infrastructure, even for a day, has huge 
potential impacts. There are 450 trains a day. We have 2,200 
trains a day on the Corridor, 450 of which travel between 
Newark, NJ, and New York's Penn Station, roughly 250,000 trips 
a day. And the Portal Bridge is an old swing-span bridge. It 
occasionally has trouble closing, and when that occurs, we have 
very serious delays. We have trains on 2-minute headways on 
this part of the railroad, and we can have massive delays that 
come.
    So, the Northeast Corridor Commission, of which Amtrak is a 
member, as well as the states and DOT, has estimated the loss 
of infrastructure here as--causes, essentially, $100 million of 
productivity and disruption expense. And if we do not proceed 
down the path of ultimately replacing these assets, we are 
going to be facing reliability risks. We will have more delays 
and, ultimately, we will have to take these assets out of 
service to replace them. And the question is will we have 
adequate additional infrastructure to keep the 450 trains a day 
going? So, that is the criticality. It is essential to the 
entire Corridor, and as such, it is essential to the whole 
region and, therefore, our entire system and Nation.
    As for the authorized--excuse me, the appropriated funds, 
we have received those from the USDOT. So, we do have dollars 
available provided by this committee, which we are very 
thankful for. They are--some of which are being spent on 
Gateway activities, but many of our big activities are, 
essentially, being held in abeyance at the moment. We cannot 
commence with the major construction until we have completed 
the full funding package with USDOT and our state partners.
    So, we are ready with the dollars you have provided us, but 
we need the other pieces of the puzzle to be in place for us to 
be able to make our significant investments, Portal Bridge 
being sort of the clearest, which is ready to go, fully 
designed, fully permitted.
    Mrs. Watson Coleman. Fifty percent cut.
    Mr. Gardner. Yep, and in terms of--we are still just 
looking. We have only seen the very high level budget 
documents, but any significant reduction in funding to Amtrak's 
Northeast Corridor Network or the National Network poses 
substantial risks to our current project. So, we have been 
relying on the additional funding of this committee as provided 
to make good progress towards addressing the state of good 
repair on some of these major projects. And certainly, in our 
request you will see us continue--or ask for that continued 
level of support. It is essential for us to keep making 
progress. Thank you.
    Mrs. Watson Coleman. Thank you. Thank you, Mr. Gardner. 
Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Rutherford. Thank you. Thank you. 
Mr. Rutherford, now.
    Mr. Rutherford. Thank you, Mr. Chairman. Mr. Gardner, what 
we have talked a little bit this morning about, the conflict 
between freight and passenger service and the impact that it 
has had on the passenger service, and I know on the freight 
side, there has been a response to their lack of on-time 
service as well. This whole movement of precision railroading 
that they are implementing now, do you see that able to bring 
any relief to this conflict between freight and passenger?
    Mr. Gardner. Thank you, Congressman. That is a good 
question. Obviously, as the operating model is evolving on the 
freight side, we see both sort of risk and opportunity. I will 
say that CSX, certainly a major proponent here of precision 
scheduled railroading, has achieved very significant 
improvements in the handling of our trains recently, and we are 
very thankful for that. It is the same railroad. We have the 
same trains, and yet, year over year, we have seen a 55 percent 
reduction in their freight train interference delays.
    Mr. Rutherford. Fifty-five?
    Mr. Gardner. Fifty-five percent. So, a very significant 
delay reduction. Seventy-five percent of our auto train 
passengers are now on time this year, which is 18 percent 
better than last year, and 65 percent of our Silver Meteor 
customers are on time, which is 19 points better than last 
year. So, we have seen significant improvement. And I think 
this goes to show that, with focus and commitment, which we 
have received from the new leadership team at CSX, that 
improvement is, in fact, possible.
    Now, these numbers are not where we ideally would want them 
to be, obviously, but we have seen sustained improvement and 
focus. Whether that is attributable to the change in operating 
philosophy or just the focus, you know, I think that could be 
debated, but we do see with scheduled railroading sort of as a 
model, I mean, frankly, the freight railroad operating in a--
more similar to passenger railroad. Obviously, we operate on a 
schedule all the time, and punctuality and reliability are core 
to our product. And if freight railroad operations start to 
look a little bit more like our own trains, and we are all 
operating on schedule, then we have a better chance of staying 
out of each other's way and optimizing the capacity.
    Mr. Rutherford. And I would also ask Mr. Mitchell, do you 
both see opportunities, also, for relieving some of the 
conflict through--and I do not know if it has any direct impact 
or not, but the Positive Train Control innovations is--does 
that enhance any of that scheduling?
    Mr. Mitchell. Congressman, in direct answer to your 
question, probably not, but let me explore the question, the 
broader question you are actually asking. I like to think often 
about our factory, the railroad. It is outdoors, okay? It 
rains. It storms. It is winter. There is snow. Things happen 
out there. Sometimes it takes longer to get to--through what 
you are doing than you would have expected, whether you are 
riding a freight train or loading passengers at some station, 
and sometimes mistakes are made by everybody, right?
    We understand at BNSF our responsibilities with respect to 
priority and preference, and I assure you that we take those 
responsibilities very seriously. But priority and preference do 
not necessarily equate to on-time performance. Let me give you 
an analogy.
    You need an ambulance, downtown Washington, DC, you are 
going to Georgetown Hospital. You go down Pennsylvania Avenue, 
get on M Street, turn right onto Wisconsin, and up Wisconsin to 
Reservoir, turn left, and you are at Georgetown.
    Now, that trip, at 4 o'clock in the afternoon, on a Friday 
afternoon, is certainly going to be different than at 7 o'clock 
in the morning on a Sunday. It is certainly going to be 
different if you have a bright, sunny day or if the District of 
Columbia is blessed with 1 or 2 inches of snow. Things change, 
and you look at it, and you say, how do you respond to those 
changes in condition? There are a couple thoughts here.
    Irrespective of preference or priority, passenger train 
schedules, the timetable that is written by Amtrak and that we 
review and approve, must take into account the operating 
realities that they face and the physical capabilities of the 
railroad over which they will be operating. Writing a timetable 
is a very, very important part of the question you are asking.
    Mr. Rutherford. In the 5 seconds I have got left, Mr. 
Orthner, you mentioned closing 300 at-grade crossings. How do 
you do that? I mean, do you actually shut roads down or are you 
building bridges over or what? How is that happening?
    Mr. Orthner. So, we do--thank you, Congressman. We do it--
we do it through a variety of methods of--primarily, we do a 
study in partnership with the community of where we are looking 
at these crossing closures or other types of improvements, and 
we develop near-term, mid-term, and long-range plans. And then 
from that, we develop what crossings we will improve, which 
crossings we will close, and which crossings we will grade 
separate.
    More recently, we have had our state Transportation 
Investments Law has allowed us to actually kind of jump start 
that a little bit by recognizing the importance of separating 
the highway and the rail network.
    Mr. Rutherford. Okay.
    Mr. Orthner. And so, it is----
    Mr. Rutherford. My time is up, but thank you very much. I 
submit time has expired. I yield back.
    Mr. Price. Thank you. Ms. Torres.
    Ms. Torres. Thank you, Mr. Chairman, and thank you to our 
guests for being here. I want to focus on rail safety. I 
represent California's 35th Congressional District. Southern 
California is home to--we have 21 million people and it has 7 
counties, just to get you familiar with the area.
    In my district alone, I have six freight corridors, okay? 
Of those freight corridors, 50 percent of the Nation's goods 
that come through our ports of entry comes through the port of 
L.A. and Long Beach. Seventy-seven percent of that enters 48 
states through my district. We are the heart of the logistics 
industry. So, rail safety is really important.
    This year, February 19 of this year, there was a report. 
FRA submitted the National Strategy to Prevent Trespassing on 
Rail Property Report to Congress. It identified 10 areas, 
critical areas. The top three, two of them are in my 
congressional district. The top 4 of the 10 are in Southern 
California. I think it is somewhat irresponsible to say that 
this is a local issue. I think that we have to--because 48 
States are benefitting from what comes through my district. I 
think 48 states need to focus on rail safety and the number of 
people that are dying as a result of illegal crossings through 
railroad.
    So, and that report found that there was an increase of 18 
percent. Is that correct? In fatalities? Eighteen percent from 
725 in 2012 to 855 in 2017. How can we work together to ensure 
that it--that we have adequate public safety announcements in 
the community, that we do not leave it to our local police 
departments to oversee this issue, public safety issue? They 
simply do not have the resources to uphold public safety with 
those crossing areas. So, I think that there is more that we 
could do together, and I want you to just talk about that.
    Mr. Mitchell. Where would you like to start?
    Ms. Torres. With the BNSF.
    Mr. Mitchell. Yes, ma'am.
    Public safety is, obviously, very important to us and 
everyone else. We are actually talking about people out there, 
and, like you say, they do get injured, they do get killed at 
grade crossings.
    Ms. Torres. They do not know the extent of the speed that 
these trains are going through.
    Mr. Mitchell. Yes, ma'am. Yes, ma'am.
    Ms. Torres. They do not get it. So, there has to be a 
campaign to teach the public about train safety.
    Mr. Mitchell. We actually have such a campaign. It is 
called--
    Ms. Torres. Not in my district, sir.
    Mr. Mitchell. Well, let me talk a little bit about that, 
okay? We have a systemwide campaign called Operation Lifesaver, 
where we go into communities and talk about the things you are 
very worried about, all right? We invite local officials, 
whether it be police or mayors, whoever, on our trains. It is 
called Officer on the Train, and we will go down a particular 
corridor and let everyone see what we are seeing, what our 
engineers and crews are seeing. We worked very closely with 
both state and local officials in southern California on 
various grade separations. The biggest one, most recently, is 
Rosencrans/Marquardt, which after the CUPC has approved it, 
obviously, that project is now going forward as it is now 
funded.
    So, there is a combination of things. There is the work 
that must be done with the community in talking to people, 
whether it be in old folks' homes or schools or in the 
community meetings, where you basically bring the facts to them 
and say trains run faster than you think they are going to be 
running. You need to stay off the railroad. You stay off the 
right of way.
    There are physical improvements that can be done. The grade 
separations with a proper overpass, with sidewalks and such, 
also very, very important, and we supported those going forward 
in Southern California. I think there are only--I think there 
only three or four grade separations necessary between Los 
Angeles and Fullerton today. Now, I am not exactly sure that 
that is of interest, but you go out to San Bernardino, there is 
a whole series of grade separations that are being built.
    Ms. Torres. I do not represent Los Angeles or Fullerton. I 
represent from Pomona to San Bernardino and--
    Mr. Mitchell. Yes, ma'am. That is the San Gabriel line. We 
are one line south of that.
    Ms. Torres. No, it is the Inland Empire Line.
    Mr. Mitchell. Yeah. So, there is a program and we have it.
    Ms. Torres. I am going to yield back, but I want to say 
that I have not seen your program. And taking a mayor and local 
police department on a ride along is not enough to stop what is 
happening in my community and I yield back.
    Mr. Mitchell. What I will----
    Mr. Price. Go ahead.
    Mr. Mitchell. What I will be glad to do----
    Mr. Price. Go ahead and finish your thought.
    Mr. Mitchell. Okay. What I will be glad to do is prepare a 
summary of the programs that are available, and our staff will 
get them to you.
    Ms. Torres. Thank you.
    Mr. Mitchell. Yes, ma'am.
    Mr. Price. All right. Mr. Hurd.
    Mr. Hurd. Thank you, Mr. Chairman. Mr. Gardner, I know 
you--my district is home to five rail lines in Texas. I am sure 
you are familiar with them. The Sunset Limited runs from Los 
Angeles to New Orleans, and along the way, it makes two stops 
in my district, Alpine and San Antonio. One of the complaints 
that I hear is that it stops too infrequently, it stops too 
quickly, as well.
    My question is a broader question. I know this would take 
more than 5 minutes to have a complete conversation, what needs 
to happen, you know, in order to increase those kinds of stops? 
I know it takes 6 hours to go from Houston to San Antonio. I 
know you have mentioned Dallas and Houston. San Antonio, my 
hometown, the seventh largest city in the country, and we 
already have rail between Houston and Dallas. I would love to 
go see Mr. Aguilar in California on the rail, but I cannot 
spend an hour on the train--or a day on the train, excuse me. 
So, what needs to happen in order to see that increase in 
passenger rail traffic between a place like Houston and San 
Antonio?
    Mr. Gardner. Well, thank you, Congressman. It is--I would 
say this is a very good example of your--your city is an 
excellent example of a place where we are underserving, 
frankly, major population centers with relatively poor and 
infrequent service. The Sunset Limited, the train that operates 
on that route, is only a triweekly train. We operate it, you 
know, once every other day. Basically, in each direction, there 
is one train. It is frequently significantly delayed. And we 
face real challenges as we look forward about how to make a 
train like that functional and really provide utility and value 
for the investment because there is no question that there are 
strong markets there. There is no question that we have got 
connections, both to the East to that--it would be very 
important to Houston, and also to Austin and Dallas that are 
prime markets in the sort of modern 21st century.
    Mr. Hurd. So, is it the lack of rail because----
    Mr. Gardner. No.
    Mr. Hurd [continuing]. You cannot be on enough because of 
the freight issue? Is it consumer demand? It is just not built 
in? This is not the Northeast Corridor? What are some of those 
macro issues at this point?
    Mr. Gardner. Yep. So, I say there are three issues. So, one 
is, at least for this service, to have a frequent trip time 
competitive, reliable service, we would need a state partner in 
the state of Texas. We would need a willing host railroad, who 
would be working with us to create the kind of capacity and 
performance to permit reliable trip times.
    Reliable trip times, typically, require higher speeds, not 
high speeds, necessarily. And we certainly were able to achieve 
that at 79 or 90 or 110 miles an hour, but the faster the 
better, typically. There is a cost-benefit to be considered.
    But as we look forward to the network, this is exactly the 
question we want to ask Congress and to talk to Congress about, 
is what do we do with a train like the Sunset Limited that is 
clearly offering sort of marginal service today, could do a lot 
more for the communities, but will require dedicated 
investment, reliable funding, and a partnership with the 
freight railroads to achieve better outcomes?
    Mr. Hurd. And, you know, Jacksonville was cancelled or a 
discontinued, and so what thoughts go into discontinuing stops, 
you know, based on current demand and current activity?
    Mr. Mitchell. So I think you are referring to the Sunset 
East Portion which we suspended after the hurricane. We are in 
the process of working diligently with the three Gulf Coast 
States to restore service to Mobile, New Orleans to Mobile, two 
round trips a day is our goal there. And those decisions about 
the future of the network I mean ultimately rely on both State 
partners and Federal funding. We think we have a pretty clear 
picture of the type of communities that can benefit from 
intercity service. And what we need is a roadmap going forward 
and partnerships to achieve it.
    Mr. Hurd. Mr. Mitchell, in my remaining 30 seconds, I know 
BNSF announced $400 million in upgrades to critical rail assets 
in Texas. One of that is the Eagle Pass Boarder Gateway to 
handle growth in Mexico. I just welcome your thoughts on what 
kind of that expansion is going to ultimately look like.
    Mr. Mitchell. Congressman, I actually do not know the 
details on that, I will be more than happy to get back to you 
on it.
    Mr. Hurd. Okay. Thank you. Mr. Chairman, I yield back.
    Mr. Price. Thank you. Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman, Mr. Ranking Member. 
Mr. Gardner, couple questions for you about an issue that has 
happened just south of my district.
    In November Amtrak announced that it would close its call 
center located in Riverside, California that employed 500 
people. Constituents were in Ms. Torrez' district, my district, 
Mr. Panetta's district, Mr. Ruiz, and scattered throughout some 
of the region.
    We received a letter from a family in which the mother and 
father of two girls were both employed by Amtrak. The father of 
the family was an employee of Amtrak for 18 years and worked in 
the call center that closed last month.
    Amtrak employees were told that the call center's closure 
would have a chance to go over their employment options, and an 
Amtrak spokesperson said in public, here was the quote ``No 
employee will be laid off as a result of outsourcing.'' In 
December 2018 my colleague, Mark Takano, and I sent a letter to 
Amtrak to express our concerns about the decision to close the 
call center in Riverside and award jobs to a third-party 
contractor. Amtrak responded that payment for separation was 
provided to retirement eligible employees and some non-
retirement eligible employees.
    Can you give us a status update, and was there a 
miscommunication between the spokesperson and the management 
level? I hate to be so parochial about this, but this does give 
me kind of--this does give me a glimpse into the operations of 
the organization and that you are asking us to give you more 
guidance, and I would like to understand this operational 
piece.
    Mr. Gardner. Sure. Thank you. As you mentioned, we did 
consolidate our call center into a single facility in 
Philadelphia. And as part of that we engaged each of our 
employees to discuss the options that they could pursue.
    Our commitment was that any employee who wanted to move to 
become an employee at the new facility would do so. And we have 
in fact had I do believe 93 folks decide to move. We have given 
them generous relocation allowances, and in fact extra time 
beyond what we negotiated with the Union to make that 
transition. So not everyone has moved, some are still in the 
process, but many have selected to move.
    We worked with all the other employees to figure out good 
solutions and pathways for them. 212 employees of the facility 
chose to pursue other positions, to exercise their rights and 
pursue other positions.
    Mr. Aguilar. Within the organization?
    Mr. Gardner. Within the organization, that is right. Yep. 
We did have a number of folks who retired, roughly about 80 
folks who took retirement at the time. We also had a number of 
people who elected, even though they were operating their 
positions elsewhere in the company or who did not make the 
move, who decided to take our, essentially our package to 
resign from the company. So they chose at that point to 
voluntarily separate from the company and receive our severance 
package at the time.
    So we have been working with each of these employees to 
find a path forward that met their needs. We certainly 
understand that this is never done without difficulty, and we 
do firmly support all of our employees and try to find good 
paths for every employee.
    Having said that, the rationale for reducing the call 
center into a single facility is very strong. We had 
approximately 20, 25 years ago had 80 million calls to our call 
centers, and now our calls are only 9 million in 2018. We have 
had a dramatic drop in the number of calls and a huge shift to 
online and mobile purchasing. And in fact call volumes have 
already dropped 13 percent this year. So we continue to adapt 
to the evolving needs of our customers, and that means that we 
need to adjust our workforce to make sure that we have got the 
right level of folks to meet our callings over time.
    Mr. Aguilar. Was any job outsourced though, or were they 
kept in-house? Do you do any call center operations by a third-
party vendor, or are they all internal?
    Mr. Gardner. We do have an outside vendor who supports us 
in peak periods. So we have got staff in Philadelphia that can 
handle the normal call volume and our normal load. There are--
we have an addition support that is available to us when we 
have disruption or delays or additional call volumes beyond the 
normal amount. And, you know, this means that we are trying to 
efficiently staff, which is consistent with our mission from 
progress, to use your funds as wisely as we can and operate 
with good business judgment. But we need to create additional 
capacity to handle those times when we have more calls than 
expected.
    But again, all of the folks who worked for us at this 
facility, we worked to find them opportunities at the company 
so that they could continue to work for Amtrak, either in a 
different role or come to the call center.
    Mr. Aguilar. You gave four categories: decided to move, 
pursue opportunities within the organization, retirement, and 
took the package. I would argue, and take the package, that is 
over 100 people, I would argue, were laid off. If you took a 
package they were laid off. And I think that goes against what 
the spokesperson said. So I just think that you need to tighten 
up some of the communication side of how this was rolled out.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Quigley.
    Mr. Quigley. Thank you. Mr. Gardner, Union Station, which 
is in Chicago, center of the Universe, also something Amtrak 
owns. Ideally how is that station constructed? You know I hear 
about other cities, the fact that the trains run through and it 
is not as cumbersome as the situation is now. But there are 
plans for improvements. Can you detail just exactly what you 
have in store and what the ideal is and how we can help you?
    Mr. Gardner. Sure. Thank you, Congressman, appreciate that. 
And it is a great station, you will not get any arguments from 
me. It is a great place, and we have been investing a lot to 
make it better, still a lot of work to do.
    We got two simultaneous efforts under way. One is our 
Master Development Process, which is associated right now with 
building a new building, a million and a half square feet over 
our parking garage, with a commercial developer, partnership 
there.
    We will take some of those funds and turn them into 
improvements in our Head House. So we will be reactivating the 
former Harvey Restaurant space and creating a new entrance on 
Clinton Street, a new accessible entrance which will help to 
drive both activity in the station but particularly help 
passengers both for Amtrak and Metra in terms of their access 
and egress to the station, and reactive a portion of the Head 
House.
    The concourse is considerably more difficult because, as 
you know, there once was a grand building there. That building 
was demolished well before Amtrak was involved and a tower was 
put up, and we were sort of in the basement. We have been 
working together with the city and Metra on roughly 13 projects 
to improve access and operations at the concourse level where 
all the passengers are, and board trains and platforms.
    We are through the initial phase of some of that design, 
and we weighed funding, frankly, in partnership with Metra to 
advance many of those significant projects. Some of the funds 
that we were able to gain from our recent redevelopment efforts 
could be available for that work. And we are working with 
Metra, for instance, to apply for a Federal/State Partnership 
Grant coming up shortly here to begin some work in the 
concourse.
    But you are right, the lack of run-through tracks does 
create some issues. I would say the biggest challenge is that 
you have incredible amount of people cordoned into a relatively 
small space, again driven by the overbuild that occurred a long 
time ago. But we are working hard to make the station more 
accessible, a much more pleasant place to be with higher 
amenities and more efficient for passengers entering and 
exiting.
    Mr. Quigley. It is interesting, we talked, when we talk 
about our freight friends about opportunities to get straight 
into Chicago on passenger. I have witnessed the Amtrak trains 
whizzing through Michigan at 140 miles an hour, then they go 
through Northwest Indiana and everything slows down, they get 
pushed to the side. And it is not the only example. Is this 
just capacity, or is this techniques, plans, designs, other 
strategies to alleviate that bottleneck service?
    Mr. Gardner. Well I think it is a combination and it 
differs from carrier to carrier. I would say we have an 
excellent partnership with BNSF generally. We have our 
differences but have had a long and fruitful relationship, and 
appreciate the care in which BNSF brings to our business.
    But you are right, we have had significant issues, for 
instance in the Michigan port, the Wolverine service. We have 
seen significant delays associated with the portion of the 
railroad which is owned by Norfolk Southern, which is the 
entrance, essentially, from Indiana into Chicago. 270,000 
customers, 55 percent of our passengers on this train arrive 41 
minutes late in 2018, driven by the delays on this section of 
the route. It is only 13 percent of the route but it's driving 
a very significant portion in delays. And other customers are 
arriving 65 minutes late.
    Mr. Quigley. I took this once and they had me up with the 
engineer, and apparently everybody in freight knew about it so 
they got out of the way. And we got into the first stop in 
Michigan early and there was almost no one there because the 
train had not been on time. People were throwing their cups 
from coffee shops, saying ``Oh, my God, the train is on time.'' 
So, look, it is a complicated issue. Let us talk about it 
because I do not think we can put a member of Congress on every 
Amtrak train running through there, maybe cardboard cutouts 
would work. But we will talk further. I appreciate your 
efforts. Thank you.
    Mr. Price. Thank you. Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman, Mr. Ranking Member, and 
to all the witnesses, we appreciate you being here.
    Mr. Gardner, I want to go back to the Northeast Corridor. 
There is an estimated backlog of $40 billion in repairs, $15 
billion for the Hudson Tunnel, $4.3 billion to replace the 
Baltimore and Potomac Tunnel built in 1873, $1.6 billion to 
replace the two-track Susquehanna River Bridge. My 
understanding is that you have gotten about $650 million for 
the Northeast Corridor.
    How are you planning to tackle this huge backlog?
    Mr. Gardner. Well, Congresswoman, thank you. It is a good 
and daunting question for us we struggle with every day. I will 
say again that the committee's support, the subommittee's 
support has been fantastic over these last two years in 
particular in terms of increasing public resources directly to 
Amtrak and the FRA Grants. But there's a massive amount left to 
do.
    And frankly, it is Amtrak's view that the only way to do 
this in the long term is to establish a dedicated reliable 
multi-year source of funding for this program and for other 
intercity passenger rail projects around the country. Because 
to your point, how do we undertake a 10-year, $13 billion 
project if we rely on annual funding for that project. We have 
to let a contract for, say, four and a half billion dollars 
worth of civil work for internal construction. We cannot sign 
the contract unless we know we can provide the full funds for 
it. And as it relates to industry and passenger rail, we do not 
have the ability to make those kind of commitments.
    So if you look across the Northeast Corridor at our big 
projects, you have mentioned really four critical ones, we are 
looking, in the next 20 years, at needing to expand. Between 
the States, Amtrak, and the Federal government is $40 billion. 
And I think the committee and subcommittee is doing an 
excellent job beginning the pathway by providing these dollars. 
But much more will be needed, and they will be needed over a 
sustained period of time.
    So we will certainly in our, let's say, request, you will 
hear this from us, and we look forward to working with both you 
and the authorizers to try and establish a way to address it on 
a longer term basis.
    Ms. Clark. Can you just tell me the $13 billion figure you 
reference? What does that represent?
    Mr. Gardner. That is roughly the cost of the Hudson Tunnel 
Project.
    Ms. Clark. Okay. Yes.
    Mr. Gardner. Yeah.
    Ms. Clark. All right. Thank you. Mr. Mitchell, I want to 
talk a little bit about positive train control.
    Mr. Mitchell. Yes, ma'am.
    Ms. Clark. I know you have done some good work. But we have 
four railroads that are fully implemented is my understanding, 
and 33 that have either demonstrated meeting or exceeding the 
criteria for an alternative schedule. But as of December, only 
16 percent of the 233 host tenant relationships had achieved 
the PTC interoperability. What do you see, what is your status 
working with the approximately 30 railroads that we need to get 
on board to get interoperability--sorry I struggle with that 
word--and what are the primary challenges that you are facing?
    Mr. Mitchell. Thank you, Congresswoman. The BNSF has 
invested about $2 billion in deploying PTC to date. It is a 
very complex system, and from time to time it is very 
challenging. We have committed to its use and its further 
development. Today we have completed all mandated installations 
operating over 1,000 PTC protected trains a day on 88 
subdivisions in 11,500 miles of track covering 80 percent of 
our freight volume.
    Interoperability, we have been working with our partners, 
whether it be the short lines or Amtrak or the commuter rail 
agencies, all to work out interoperability. In Los Angeles we 
are fully interoperable with the Southern California Regional 
Rail Authority, the MetroLink folks. Other places are not as 
complex because you do not have to interface them.
    But every day, every day I take a look, personally, at how 
we're doing on the passenger side with respect to PTC 
compliance. I receive a series of reports looking at whether or 
not they are any exceptions in Chicago, Minneapolis, Seattle, 
and Los Angeles. In Los Angeles and Minneapolis and Seattle it 
is rare that I ever see an exception. Sometimes in Chicago 
there is one, Chicago is a little bigger, it was deployed last, 
and they are still going, we are still going through some 
teething opportunities, to say the least.
    But we are working toward that. And I am confident that 
with time and the work of the entire industry, whether it be in 
Chicago with all the freight railroads working through the 
create process, or under the create process, or in individual 
locations like Los Angeles or Texas where there is more than 
one freight runner involved, we will get there. It is simply 
hard, that's all.
    Ms. Clark. Thank you, Mr. Chairman.
    Mr. Price. Thank you. I want to ask Mr. Gardner, then Mr. 
Mitchell, to build on the answer Mr. Orthner gave us in the 
first round regarding the kind of funding streams we are 
talking about, the complex mix of Federal programs we have 
tapped into and will need to tape into if we expand passenger 
rail service in the way that we need to do so given the demand 
in this country, and particularly the demand to build out these 
regional routes.
    So starting with you, Mr. Gardner, assuming for the moment 
more generous funding than we have right now, I wonder what you 
would identify. If you could do this pretty quickly, identify 
as the top one or two priorities for each of your services, the 
Northeast Corridor for example, the State supported routes, and 
the long distance routes. And what kind of priorities do you 
have and what kind of funding would you need, and what kind of 
new tools might you need in order to bring this to fruition.
    Mr. Gardner. Thank you, Mr. Chairman. So for the Northeast 
Corridor, our priorities are, I think, what you already know, 
which is our Gateway Program, our Baltimore Potomac Tunnel, our 
East River Tunnel rehab, our Susquehanna River Bridge. Those 
are our major assets that are all, Portal Bridge, are all in 
the state of readiness with environmental work done and getting 
ready to move to construction. So we have a huge need there.
    The tools that you have been funding I think are good. They 
need, as I said, some reliability to them over multiple years. 
And we still struggle a little bit with RRIF and TIFIA and how 
to use the loan programs as well as they might be deployed. 
There I think there could be continued work. But in general the 
programs are good if we have the sufficient resources.
    I will say there is a challenge amongst all these programs 
with the various flow downs. Each of the programs has their own 
set of requirements, and some of those requirements are in 
conflict with one another occasionally. We have been working 
with the Department of Transportation to fix this, but this 
continues as an effort I think to improve and streamline the 
programs.
    On the state-supported network, let me mention two things. 
First, I think corridors like the Southeast High-Speed Rail 
Corridor and other similar high-speed city corridors that today 
have very little service but have lots of population of the 
right distance are absolutely the place to focus.
    And we think the work that Mr. Orthner and North Carolina 
has done has been fantastic along with Virginia, and we have I 
think huge opportunities in expanding and improving the entire 
route from building on what is already done for the Piedmont 
portion from Raleigh to Richmond, and to Washington.
    Similarly, we have got markets we don't serve today, like I 
mentioned Houston and Dallas, Las Vegas, L.A., are perfect 
examples, of 3.5 million air trips, we have no service there at 
all today.
    And there, I think that the Crissy process and the RRIF 
loans, and additional funding there again, and maybe letters of 
intent, which gives us some reliability over time, will be 
important ways to partner between Amtrak and the States and the 
Federal Government.
    But Amtrak is a willing investor we want to partner with 
our states and use our resources to grow and improve these 
services. Additionally, we need more equipment, we already have 
an RFP out on the street to get new lighter-weight equipment 
for these types of service growths.
    Lastly, long distance, our focus is on two areas, one we do 
need to--we aim to achieve PTC across our entire network, that 
is a real focus for us, we think every passenger train deserves 
positive train control implementation, we want to achieve that. 
And second, we need to start really seriously dealing with 
refleeting issues and long distance.
    As we look ahead we have got our base equipment, and our 
bi-level is 40 years old, and needs to be retired and replaced, 
and that remains a major issue for us.
    Mr. Price. Thank you very much. We are going to extend our 
time here just a bit to let you answer. If additional funding 
is provided to support expansions of the sort we are 
anticipating here today. Is there any particular thing we 
should hear from the host railroads. What kind of role would 
you expect to play? Is the current level of cooperation 
adequate? And what obstacles stand in the way of granting 
Amtrak priority access? And would those obstacles, how would we 
deal with those going forward?
    Mr. Mitchell. Mr. Chairman, right now our role to address 
your original question is not to decide what source of public 
funding ought to be used and what set of improvements. That is 
a public responsibility.
    Ours is to do two things, one is to work in very close 
cooperation with the public agencies, to make sure that the 
program of projects make sense, that it stands on its own, it 
can do what the public thinks it ought to do, and it describes 
all the improvements necessary to be successful on its own, as 
well as protect the interest of the freight services.
    We model operations, we do that with each one of our 
partners, whether it be in Southern California, or Illinois, or 
any place else, frankly.
    Once that project is finished we hand it over, we tell 
people, you can look at it, you can question it, it is an open 
book. Once that is done, it is up to the public to decide how 
they want to proceed with the implementation of the program or 
projects.
    On time performance and assuring that the service that is 
proposed can be carried out is a really difficult question, 
because there is an awful tendency to say, I want to do this 
very cheaply, I can get in the door, and there are tracks out 
there, I am going to run the train, because there are tracks 
out there.
    Depending on the level of service you are going to operate, 
depending on the reliability you wish, you could basically look 
at the Pacific Northwest as a perfect example of what was done 
correctly by the Washington State Department of Transportation.
    A $400-plus million ARA project implemented over a couple 
years within budget and on-time as far as we are concerned, has 
brought the reliability that they wanted to buy with the 
improvements they put in place, and whether it be the civil 
system or the bottlenecks we had down toward Tacoma, and then 
all those problems are gone away.
    Now, are we problem free? The answer is no. I will go back 
to what I said earlier about writing a proper schedule.
    We are in the throes of beginning to write a really good 
schedule for that service. We have done so in the Valley in 
cooperation with the Amtrak and the State, and the joint powers 
authority were tomorrow, very soon, like maybe in May, we will 
have what we call a clock phased schedule, simple to 
understand, simple to dispatch, simple to control, and oh, by 
the way, is probably a very much improved scheduled from a 
passenger point of view.
    We hope those kinds of things, when you match that schedule 
with the capability of the railroad, you are going to get good 
on-time performance.
    Mr. Price. Thank you, sir. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. In your 
testimony, Mr. Gardner, you mentioned the need to update 
Amtrak's national network to serve the cities and the states 
where the populations are increasing. And obviously there is 
congestion and more congestion. What would your criteria be for 
adding to Amtrak's network? You know, how would you determine 
what cities should be served in these new routes, and you know, 
could you just, simply just add routes to the current network 
and continue to operate the existing long distance routes as 
well?
    Mr. Gardner. Thank you. Good question. So, we are in the 
middle of working on a proposal we hope to share with Congress 
later in the year which would, I think, outline what we think 
are viable corridors for additional service. And the basic sort 
of criteria is pretty straightforward and well known.
    We look at population size, we look at the distance between 
major cities and intermediate towns and cities between them. We 
look at the existence of current railroad infrastructure and 
its condition, and its capacity.
    And we look at existing transportation service today. 
Whether that is highway, air, bus what the current market is, 
and what the conditions are in those markets. So, do we have 
high levels of congestion, and all of those things. We 
basically have a big matrix we are working on, we will be able 
to sort of share with you what we think these city pairs are, 
and the different elements.
    Certainly, as my colleague said, this will be an open book, 
the data will be what it is in terms of where it is, but the 
Nation has added 118 million people since Amtrak was formed in 
1971, and yet our network looks remarkably similar, and what 
has happened is we have seen tremendous growth in the South, 
the Southeast, the Southwest, the Mountain West and the West, 
and our network has to adapt to those changing demands.
    So, we do believe there is absolutely a role for long 
distance trains as well, and the question is sort of; what are 
the best tools to meet these different needs?
    In some cases we would be better served I believe by having 
corridor service connecting major cities. Most of our long 
distance passengers are not traveling long distance. In fact, 
only 8 percent are going end to end. The vast majority of our 
riders are travelling less than 600 or less than 300 miles on 
our long distance trains.
    But those trains, because they are strung over 2,000 miles 
in some cases, have tendency to be late, and may show up at 
your town in the middle of the night, at the wrong time.
    Mr. Diaz-Balart. And those were not taking, that doing the 
long distance but they are not taking the entire route. I mean, 
are they commuters or not commuters? What are they?
    Mr. Gardner. They are not commuters but they are using the 
train to make primarily discretionary trips that are not 
typically business trips. There are some business trips, but 
they are going to visit friends and family, they are going to 
access. I mean a perfect example is in North Carolina we have 
got, you know, folks who are taking the train from New York to 
points in North Carolina.
    And they could do that by driving, or flying, but they 
chose the passenger rail option. Very few are, for instance, 
taking the train from New York to New Orleans, because that is 
roughly a two-day trip, and it is quite expensive in order to 
do it.
    And so we see the sweet spot for rail, and it is sort of 
400-mile corridors or less, where we can offer a reliable 
product that is essentially several times competitive with 
driving.
    We have an opportunity to help take drivers off the road, 
and give them an alternative that they don't have today, and 
many of those markets served long distance today are just 
inadequately served. There aren't enough trains, and they are 
not reliable enough, and then they are trip-time competitive 
enough. We would like to make them better.
    Mr. Diaz-Balart. Let me go to you, Mr. Orthner. You have 
opportunities and challenges, right? Because you are in a 
growth state, so how do you decide about, you know, where your 
priorities are when you are looking at expanding, potentially 
expanding, passenger rail service?
    Mr. Orthner. Excellent question, Congressman. So, the 
states, I will just say first and foremost, the states are 
required by the Federal administration to develop a state rail 
plan. And so we set our priorities kind of around that plan, 
which engages all the communities throughout the state, and 
considers a lot of different factors, you know, in developing 
the services.
    So, you know, we obviously, when we look at these types of 
corridors for passenger rail development, we are looking at 
volumes of passengers where communities that are struggling 
with congestion can take advantage of an alternate system to 
utilize.
    Of course that is also in the constrained funding 
environment, too, we can only invest, you know, right where 
strategically we get the most benefit cost.
    So, that is generally what we are--that is kind of the 
criteria that we follow right now, and as I have mentioned 
before, and Mr. Gardner mentioned, you know, the Southeast 
Corridor is kind of that corridor that we are looking at as 
sort of the location of great investment.
    We did that with the Piedmont Improvement Program, we would 
like to continue to do that with this line of work.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. My time is up. I 
yield back.
    Mr. Price. Thank you. I want to turn, as we must, to the 
current budget submission from our President, and ask you, 
each, in turn to comment on the implications of those kinds of 
budget numbers for the work you do. I think it is fair to say 
the budget, once again, targets Amtrak, proposing a $455 
million cut, compared that is to the bill Congress just 
enacted.
    And also, I will also ask you to comment on the 
administration's proposal that the states would take over 
increasingly the cost and the responsibilities of Amtrak's 15 
long distance routes.
    So I will just ask each of you briefly to reflect on the 
implications of this budget proposal. Starting with you, Mr. 
Orthner. North Carolina is served by four long distance routes 
that all originated in New York, they go south to New Orleans, 
Savannah and Miami. What kind of challenges would you face in 
trying to take over these routes?
    Mr. Orthner. Thank you, Mr. Chairman. Very briefly, 
obviously this is an unidentified budget item for the state to 
take on such a service that would be number one. Number two, it 
would create a new paradigm where we, again, would have to work 
with multiple states.
    This isn't just true for us, but I am sure it would happen 
across the Nation, where some states would want to participate 
and perhaps some, maybe to a lesser extent. So that would kind 
of challenge certain states that weren't planning to invest 
that way. And so those are the two major challenges I see. 
Thank you, Mr. Chairman.
    Mr. Price. Mr. Gardner for large parts of the country 
including many rural communities, long distance service is the 
only available the inner city passengers realize, as you have 
just stressed. So, how would this change impact Amtrak's long 
distance service in these communities? I am asking that, but of 
course would welcome comments as well on the overall budget 
impact.
    Mr. Gardner. Thank you. Well, as you know, we have just 
received the document as well, and I haven't been able to 
really see the details yet, and so we are looking to understand 
better the administration's proposal here.
    But our view is that the--I mean to Mr. Orthner's point, 
the long distance network has been proposed at various times to 
be funded by the various states, I think that poses some 
obvious coordination challenges, and there are a core set of 
long distance routes which we think make sense in the future of 
the network, and for which Federal support will be necessary.
    There are a number of routes which we do think have 
opportunities for expanded corridor service, and of course we 
today have, through the Section 209--a strong partnership with 
the states to support and fund corridor services, many 
corridors today exist on long distance routes, so there are 
opportunities to have corridors today that are served by long 
distance trains instead of by corridor trains.
    But strong partnership would to exist between the states 
and the Federal Government and Amtrak to support that. 
Certainly, it would be a big transition to start adding those 
services, and I think it would appropriate for Congress to the 
reauthorization, and through the activities at the subcommittee 
to look at the right partnership between the Federal Government 
and the states, as part of the modernization of the network, 
because there clearly are interests that are both local and 
intrastate, and national, that would be served by such an 
improvement.
    Mr. Price. Quickly, any observations on the overall impact 
of a cut of this magnitude?
    Mr. Gardner. Well, certainly, we prepare to request the 
full $1.8 billion authorized by the FAST Act, that is the 
maximum we are permitted to request from your subcommittee, but 
we will include a long list of things that we think are worthy 
of additional funding, so we see really no shortage of things 
that require continued Federal investment, and partnerships 
with our states.
    So, you can be sure we will be asking for the full 
authorized amount, and we think it is essential for us to 
continue the progress we have been making on the network.
    Mr. Price. Thank you. Mr. Mitchell, from an operational 
perspective. How would this proposal affect the host railroads? 
Again, I am asking about the dollars, I am also asking about 
the increased state responsibilities. I would assume it is 
easier to work with one centralized entity, like Amtrak, than 
multiple different states. But then, again, I am not sure what 
the extent of your experience is and how you would evaluate 
this.
    Mr. Mitchell. Mr. Chairman, the question before everyone 
with respect to the budget is really one that is a public 
debate, not ours; our responsibility is to take what the public 
wants to do and try to implement what they want to as best we 
can.
    I have touched several times on two or three central ideas 
here. One is, good schedules are really important; the second 
is, you have got to match what you want to do with the 
capabilities of railroad, both the operating capabilities and 
the physical capabilities.
    And thirdly, we look at the passengers principles as the 
guidance here, so if change is to occur we are going to apply 
the passengers principles, because while we certainly want to 
accommodate to the extent possible that the needs of the riding 
public, we have obligations as well to all of our freight 
customers.
    We have got to balance those so that both are successful, 
and where we will turn to is our passenger principles, and look 
at any change that comes forth, whether it be from Amtrak, 
whether the states, and we have very good relationship with all 
the states we work with on passenger service, and see what they 
have to say. And then we will go through the same process we 
always do, we will take a look at it, understand it, discuss 
it, and try to do the best thing.
    Mr. Price. I appreciate that approach, however, when we 
consider the kind of constraints that your roads, and Amtrak 
are both facing, the need for deconflicting the service in 
these large metropolitan areas especially, the investment is 
enormous, that is required.
    I am not asking you to become a budget expert but I am 
asking you to reflect on the kind of investment that is going 
to be required to--you know, this isn't just a matter of your 
or Amtrak's goodwill, or the kind of pressure you can muster.
    You know, these are genuinely difficult issues, and it 
seems to me that the kind of investments we are talking about 
here, are inevitably a part of easing those pressures, and 
making possible win-win solutions especially in these congested 
urban areas.
    So, I am asking you to comment on that and the kind of 
Federal investment you would give priority to as you survey 
this scene, and think what it is going to take to make it work 
going forward.
    Mr. Mitchell. Mr. Chairman, several people have mentioned 
today the importance of a continuing source of funding, the 
importance of sufficient funding to match whatever the public 
wants to do. So, if the public says, I want two or three round 
trips a day between city pairs that means something to us. We 
will apply the passenger principles and there will be a cost.
    If the passengers group says, we want to have on-time 
performance 100 percent of the time, there is a cost. There are 
cost implications every time you look at this question, and our 
responsibility is to make sure that all parties understand what 
those cost implications are, so they can make a well-reasoned 
decision.
    That is the role we play. We understand that these are 
expense initiatives, you look at California, you look at 
Washington State, you even look at Illinois, they have invested 
sizable amounts of money over the last 20-some or maybe 30 
years, over $2 billion have been invested of public monies in 
our properties to support passenger rail operations.
    That kind of opportunity is going to be part and parcel of 
the discussion that you are now suggesting we are now to have. 
We certainly would be present to help that discussion, but at 
the end of the day it is a public decision as to how you want 
to shape ground transport policy in the United States.
    Mr. Price. We understand where the buck stops as regards 
Federal funding. No question about that. But we are attempting 
to sort this through with good, honest input from the various 
stakeholders. And you have all three contributed to that today. 
We appreciate your being here, appreciate candor as to the 
challenges we face.
    And amid all the talk of difficulties and challenges, there 
is a vision here. There is a picture going forward of increased 
reliance of on passenger rail, increased demand, increased 
ability of Amtrak and other railroad partners to meet this 
challenge. So there is an excitement about this too, and we 
would overcome the difficulties, at the same time we want to be 
realistic about what it is going to take to get there.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Very briefly, Mr. Chairman, I want to 
thank you for I think a very good hearing. I thank the 
witnesses in particular for I think a very good hearing. If 
history is any guide, Mr. Chairman, we will obviously look at 
the President's budget request with great respect, but then we 
will fulfill our constitutional duties.
    And we will do it, particularly how this committee has done 
it, this subcommittee has done it I think in a very responsible 
way, in a cooperative way. I look forward to continuing working 
with you Mr. Chairman, and the members of the subcommittee.
    I think as long as we get an allocation that allows us to 
do that I think we will, hopefully, be able to put a bill 
together that we and the country will be very pleased, very 
proud of, and I will once again, remind everyone, what you and 
I have said multiple times, that while there are lot of 
conversations about infrastructure bills, and we are hoping 
that some infrastructure bill happens, in the meantime, Mr. 
Chairman, this is the infrastructure bill and so, again, I 
thank each and every one of you for testimony, I look forward 
to continue working throughout the subcommittee, and with your 
leadership, Mr. Chairman.
    Mr. Price. Thank you. I want to remind the witnesses in 
closing that our staff is going to be in contact with you and 
your organizations regarding any questions that members might 
submit for the record. We would appreciate you returning 
information for the record to the committee within 30 days from 
Friday. And that will let us publish in a timely way the 
transcript of today's hearings.
    With that, Thank you very much. And the subcommittee is 
adjourned.

                                         Wednesday, March 13, 2019.

        STAKEHOLDER PERSPECTIVES: BUILDING RESILIENT COMMUNITIES

                               WITNESSES

LAURA LIGHTBODY, PROJECT DIRECTOR, FLOOD-PREPARED COMMUNITIES, PEW 
    CHARITABLE TRUSTS
FRANKLIN MOON PH.D., PROFESSOR, CIVIL AND ENVIRONMENTAL ENGINEERING, 
    RUTGERS UNIVERSITY
JENNIFER RAITT, DIRECTOR OF PLANNING AND COMMUNITY DEVELOPMENT, TOWN OF 
    ARLINGTON, MA
CAROL HADDOCK, DIRECTOR, HOUSTON PUBLIC WORKS
    Mr. Price. The subcommittee will come to order. Good 
morning everyone. I am pleased to have this opportunity to hold 
a hearing on how we can plan, design and build resilient 
communities.
    After several years of increasingly severe weather events 
in my home State of North Carolina and around the country, and 
after tens of billions of dollars appropriated for disaster 
relief and emergency programs, much of it coming though this 
subcommittee, we must become more intentional about applying 
the concepts of mitigation and resiliency into our Federal 
Housing and Transportation programs across the board.
    We also need to identify ways we can support these efforts 
at the State and local level. Joining us here this morning are 
several experts in this field with both research and on-the-
ground experience. Laura Lightbody, the Project Director for--
the Project Director of Flood Prepated Communities, Pew 
Charitable Trust; Franklin Moon, Dr. Moon, Professor of Civil 
and Environmental Engineering at Rutgers University; Jennifer 
Raitt, the Director, Planning and Community Development for the 
town of Arlington, Massachusetts; and Carol Haddock, the 
Director of Public Works for the city of Houston, Texas. Thank 
you all for being here this morning.
    Each year, in addition to supplemental appropriations for 
disaster relief, this subcommittee appropriates billions of 
dollars for annual programs at the U.S. Department of 
Transportation, and the Department of Housing and Urban 
Development. These include highway and transit grants to States 
and local agencies and the Community Development Block Grant 
for municipalities among others.
    I think we all know that we have come a long way with 
respect to disaster relief. I am a veteran of these discussions 
by virtue of the disasters we have had in North Carolina over 
the years. And I remember very well the discussions we had 
after the Katrina disaster, trying to preserve the concept of 
mitigation, and preserve a dedicated flow of funds to apply to 
limit the possibilities of future damage and future disasters. 
Those debates, I think, have been moving in a positive 
direction, partly because we have had such repeated experience 
with disaster.
    So it is not the debate it once was when it comes to FEMA, 
or when it comes to CDBG disaster relief, or other funding. It 
is not the debate it once was as to whether we should build 
back more resiliently, or whether we should mitigate against 
future disasters.
    So we have come a long way. But now the question arises, 
and really is overdue for consideration, what about the base 
programs? Why aren't we building smarter from the start, moving 
toward a proactive posture when it comes to strategic and 
capital and operations planning at the DOT and HUD agencies?
    We have taken some steps in this direction. The MAP-21 
highway reauthorization for 2012 required States and localities 
to incorporate assets management into their long range plan. 
Meanwhile several modest pilot programs to assist States and 
our grantees with resiliency planning are now winding down.
    Separately, in 2015, the Obama administration promulgated 
the Federal Flood Risk Management Standard which encouraged 
Federal agencies and, by extension, State and local entities 
that rely on Federal funding, to consider current and future 
risks when taxpayer dollars are used to build or rebuild near 
flood plains. This effort shows some initial promise, but 
President Trump repealed it. He repealed the FFRMS in August of 
2017, ironically, just a few days before Hurricane Harvey made 
landfall. This reversal just defies explanation. It is just--I 
don't know of any good explanation.
    The aversion of the administration to the scientific 
reality of climate change, if that's partly what is going on, 
that shouldn't impede sensible efforts to encourage resiliency 
and strengthen our local communities. So despite some setbacks 
of the Federal levels, some towns and cities have stepped up 
their own comprehensive resiliency plans, as we'll learn here 
this morning. There is some interesting action at the State and 
local level, but the progress remains quite uneven. The high 
quality data necessary to inform these efforts can be difficult 
to obtain. Furthermore, cost-benefit analyses used by 
governments sometimes fail to account for the long-term 
benefits of incorporating resiliency from the start of a 
budget.
    Finally, we need to understand that building resilient 
communities isn't about just storm proofing. It is also a 
potential catalyst for job creation, economic development, 
sustainable growth and the wise stewardship of taxpayer 
dollars. We want to make sure the Federal Government is an 
active partner in these efforts.
    So we're excited to have this panel before us today. We 
expect a robust discussion, and we appreciate your being here. 
Before we move to our witnesses, let me recognize or 
distinguished ranking member, Mr. Diaz-Balart, for his opening 
statement.
    Mr. Diaz-Balart. Mr. Chairman, I thank you for this 
hearing. I, by the way, am also excited about this panel that 
is before us today. This is now the fourth hearing in 3 weeks 
where we have had a chance to hear from stakeholders. They are 
doing important work in the area that this subcommittee has 
responsibility for.
    Now, there are a few topics that are more important to this 
subcommittee than building obviously stronger communities. But 
I am particularly pleased, Mr. Chairman, that our witnesses 
bring this perspective from both transportation and housing 
from the local level, where these programs are not only 
implemented, but frankly, where the impact is felt. And from 
the perspective of research organizations that can look across 
government programs to offer ideas. And again, some good ideas 
that we can hopefully adopt.
    As you know, Chairman Price and I have been busy for the 
last couple of years on this committee. First, we made 
significant infrastructure investments through the regular 
appropriations process through our bill. The 2-year budget deal 
allowed us to make some frankly selected investments in our 
Nation's infrastructure, $20 billion, by the way, over 2 years. 
That is why both of us have talked about, from time to time, 
how this truly is the infrastructure bill. There are great 
theories and ideas out there. We hope that there is some other 
bipartisan infrastructure bill. But what we do know is that the 
work that we have done has, in essence, been the infrastructure 
bill for the last number of years.
    So on top of the regular spending, I think we have done 
some important work beyond those specific investments, and that 
is to make our communities more resilient.
    As a response to the storms in 2017, Harvey, Irma and 
Maria, we provided $35 billion through the Community 
Development Block Grant DR program to help devastated 
communities obviously recover from those storms. But with this 
chairmanship that we have, with the chairman, myself and our 
staffs, by the way, we set aside nearly $16 billion for a new 
mitigation program to help communities, again, make smart 
investments that I am confident that it is not only going to 
help save money in the future, but potentially save lives.
    We initiated this new mitigation program right here in this 
subcommittee, in the House. We were able to convince the full 
committee, the House, and, obviously, the Senate joined along. 
And we are pleased at having done that.
    Investments in resiliency are equally important, not only 
as we consider housing programs, but also transportation and 
infrastructure. Both of these programs are important and are 
playing an important role in recovery after those storms in the 
past 2 years. But this is key, we want to ensure that those 
transportation dollars are allocated with an eye towards 
reducing future costs. That is what we have told our 
colleagues, that is what we are committed to do. This topic of 
disaster recovery and resiliency hits close to home, as the 
chairman said, for him, but also for me.
    Our State saw devastation yet again last year with 
Hurricane Michael and Florence. So it is our duty to be a 
Federal partner, not only in the near term as our communities 
work to recover, but also in the long-term so that our 
communities have the tools they need to thrive, and to recover, 
and to rebuild for years to come. But we also need to 
understand how the range of Federal programs fit together so 
that programs under the jurisdiction of this subcommittee work 
successfully.
    It is our job also to support smart decisions where the 
vast majority of Federal resources are deployed and that is 
obviously at the State and at the local level. Your testimony 
today will help support--we hope, maybe not--the decisions that 
we have made in the last few years, again, saving taxpayer 
dollars over the long term. We are very serious about making 
sure that that money is spent in an accountable fashion. It is 
well spent, it is not just thrown away; again, something that 
this subcommittee started and this subcommittee has a lot of 
ownership in. So I look forward to hearing from you and thank 
you for being here.
    Mr. Chairman, I think this is going to be a very 
interesting subcommittee hearing. Thank you, sir. I yield back.
    Mr. Price. Thank you. We will ready for our witnesses. We 
will recognize each of you for 5 minutes for your oral 
presentation. We will be happy to include your full statement 
in the record. And then what will follow will be 5 minute 
segments of questions. Let me remind everybody that the 5 
minutes is supposed to include both the question and the 
answer, if everybody can keep that in mind with members in turn 
from both sides of the aisle posing questions to you as they 
wish.
    So let's start with Ms. Lightbody and then we will hear 
from Professor Moon, then Ms. Raitt, and then Ms. Haddock, in 
that order, if that is satisfactory with you.
    Ms. Lightbody.
    Ms. Lightbody. Chairman Price, Ranking Member Diaz-Balart, 
and members of the subcommittee, thank you for your invitation 
and time dedicated to discussing ways that we can help the 
Congress support a more resilient infrastructure. As you said, 
my name is Laura Lightbody, I oversee the Pew Charitable Trusts 
flood-prepared communities initiative aimed at reducing the 
impact of flood-related disasters on the U.S. economy, 
communities, and environment, by improving public policy. I 
will start by presenting further data on increasing risk and 
costs of natural disasters followed by policy recommendations 
Pew offers to this committee.
    Why do we focus on flooding? It is the most pervasive 
natural disaster affecting all 50 States, both inland and 
coastal. It respects neither jurisdictional boundaries, nor 
political affiliations. In the last 10 years, flood-related 
disasters have accounted for nearly three-quarters of all 
Presidential disaster declarations. It is also the most costly 
of natural disasters. The Nation--to the Nation, it has cost 
$800 billion since 2000. As communities and cities have 
expanded over time, the natural landscape has been replaced by 
impervious services, like roads and parking lots, homes and 
buildings, increasing the likelihood of flooding leading to 
more lives lost, higher costs incurred, and more structures 
destroyed.
    Last fall, Hurricane Florence ravaged the Carolinas with 
over 30 inches of rain, 28 wastewater treatment plants, 40 
hospitals, 1,200 roads, and dozens of homes and schools were 
impacted, causing ripple effects throughout the community. 
These events, and the resulting devastation are becoming all 
too familiar. The challenge before this subcommittee is how to 
make these much-needed investments in infrastructure, while 
insuring these assets are not washed away by the next major 
flood.
    Today, the majority of financial burden of these disasters 
falls to the Federal Government, the costs are immense. Some 
additional numbers: Since 2000, FEMA's public assistance 
program has obligated $80 billion to disasters; the Federal 
Highway Administration's emergency relief program, nearly $15 
billion; HUD's CDBG-DR program, $64 billion for natural 
disasters and supplemental funding. Yet in the face of these 
enormous and mounting costs, the Nation has underestimated risk 
and underinvested in activities that reduce losses and provide 
long-term savings. As you pointed out, mitigation.
    Mitigation can take on many forms uniquely suited to serve 
community needs: acquisition of flood prone homes, limiting the 
extent of impervious surfaces, elevating utilities, restoring 
wetlands, and most significantly, not putting people and 
buildings in harm's way in the first place.
    Research shows every dollar invested in such activities 
saves society $6 in avoided losses. Yet, perhaps most alarming, 
according to a 2016 GAO report, of the $277 billion that the 
Federal Government has spent on disasters over a 10-year 
period, FEMA spent less than $600 million towards mitigation. 
That is less than it costs to build the National stadium here 
in Washington, DC.
    The good news is that this subcommittee has an opportunity 
to change that dichotomy by building on areas that the good 
work that has already been done. In this area, Pew offers three 
recommendations for your consideration: One, plan with the 
future in mind, invest in mitigation, both DOT and HUD have the 
untapped potential to guide risk reduction measures before the 
next disaster strikes. This could be done at DOT by including 
mitigation as merit criteria for BUILD grants, requiring HUD 
CDBG-DR grantees to incorporate mitigation into their 
applications. Most significantly, dedicating resources 
specifically towards predisaster mitigation within the Federal 
Highway administration Program.
    Two, build and invest smarter. A new poll released today by 
the Pew Charitable Trusts demonstrates that more than three-
quarters of Americans support a requirement that Federally 
funded infrastructure be constructed to better withstand the 
impacts of flooding.
    However, we lack such policy today. We operate under 
standards developed in the 1970s that don't account for 
tomorrow's risks, such as sea level rise and extreme weather. 
Pew recommends that all Federal dollars invested in 
infrastructure come with a requirement to account for future 
risks.
    Lastly, invest in and value the role of nature in reducing 
risk. We recommend dedicating specific funding toward green 
infrastructure, wetlands and parks that can provide self 
sustaining flood defenses that also support ecosystem 
restoration and community amenities.
    In closing, communities around the country are eager to 
become less vulnerable to natural disasters, but lack the 
tools, in some cases, resources and guidance to do so. The Pew 
Charitable Trusts looks forward to working with this 
subcommittee to find solutions to these important issues. Thank 
you.
    Mr. Price. Thank you very much. Dr. Moon.
    Mr. Moon. Chairman Price, Ranking Member Diaz-Balart, 
members of the subcommittee, it is a pleasure to be here today. 
I am really happy to be able to talk and share some thoughts on 
transportation infrastructure resilience. My name is Franklin 
Moon, I am a professor of civil engineering at Rutgers 
University. And I am here on behalf of the Center for Advanced 
Infrastructure and Transportation, U.S. DOT, University 
Transportation Center, that is focused on addressing some of 
the challenges associated with our transportation systems.
    This focus is not accidental, but it grows out of 
challenges inherent within our region. We are at the heart of 
the Northeast corridor, and our local region, while 
geographically small, is home to roughly 10 percent of U.S. 
population. It is also home to diverse and dense transportation 
infrastructure that includes some of the oldest and most 
heavily utilized in the country. Like many of you, we find 
ourselves on the front lines of the new and emerging threats 
related to extreme weather events.
    Before I discuss some areas where I believe continued 
attention is needed, I think it is important to provide some 
context. So first, it must be said that our transportation 
infrastructure system remains a wonder of the world. But if we 
are honest, it only comes into our collective consciousness 
when there is a failure or disruption. It is an important part 
of every one of our lives, it is an engine and key 
transformative driver behind our ever-expanding and evolving 
economy, and it has largely been taken for granted.
    Perhaps this is understandable when you consider how 
reliable our transportation systems are on a daily basis, but 
it is not without consequences. The slow relentless and 
inevitable degradation of our transportation infrastructure was 
left unchecked for too long. For example, as of 2017, over 
54,000 bridges were classified as structurally deficient and 
one out of every 5 miles of highway pavement were in poor 
condition.
    At the same time, these systems now facing new threats, 
particularly associated with extreme weather. The resulting 
disruptions, whether they are due to the slow march of 
deterioration or more acute events, can cause large economic 
damages and severe cascading impacts on other infrastructure 
systems and the communities that they serve.
    Over the last decade or so this vulnerability has attracted 
significant attention and progress has been made. But the fact 
that we are sitting here discussing the need to improve 
infrastructure resilience means that more needs to be done. And 
in particular, there are three areas that I would like to bring 
to your attention.
    First is the development of a uniform resilience metric for 
transportation infrastructure. The old adage of what gets 
measured is what gets improved applies well here. The higher 
level guidance documents that are available from Federal 
highway and others all point to the need to operationalize 
resilience. We believe one of that most effective ways to do 
this is to develop a sound uniformed means of measuring 
resilience, as imperfect as that may be.
    I mentioned previously that today there are over 54,000 
structurally deficient bridges; well, in 2008 there were over 
72,000 structurally deficient bridges. I can tell you this, 
because this metric is uniformly tracked. I can also tell you 
that the reason it has dropped by nearly 25 percent is that 
every State, county and municipality that owns bridges is 
actively engaged in minimizing this number because it is 
tracked.
    To date, there is no accepted and uniformed means of 
measuring the resilience of our transportation infrastructure 
systems, and we see this as a key barrier to operationalizing 
the focus on resiliency.
    The second item in the collection of performance data, so 
to better understand the many interrelated factors that lead to 
both good and poor performance, as well as the associated 
consequences, it is necessary to measure and track our 
infrastructure system perform when they are under stress. 
Historically, this has been done in qualitative low resolution 
manner in the weeks and months that follow an event. Today, 
driven by advances in sensing technology, engineers now have 
the ability to monitor critical infrastructure in real-time 
during events.
    We also have the ability to efficiently capture dense 3D 
data of entire communities, both before and after events 
through the use of remote sensing, technologies deployed on 
vehicles, on drones, even on satellites. Such data carries 
important information about what works and what doesn't work. 
And it will help ensure that we learn all the lessons available 
from future events.
    The final item, and perhaps the most important, is our role 
as universities and, in fact, all of our roles in trying to 
attract the best and brightest to STEM fields. As I am sure you 
are all aware, this is not a need that is unique to 
transportation infrastructure, but rather, a national challenge 
across many domains.
    In addition, our role at universities needs to continue to 
expand beyond traditional undergraduate and graduate students 
with a focus on non traditional aid students, as well as 
current training current workforce in the use of emerging 
technologies and paradigms that have proven to improve 
resilience.
    In closing, I would, again, like to thank you for the 
opportunity to share some of our perspectives. And I look 
forward to this discussion. Thank you.
    Mr. Price. Thank you very much.
    Ms. Raitt.
    Ms. Raitt. Good morning. On behalf of the American Planning 
Association, APA, thank you Chairman Price and Ranking Member 
Diaz-Balart for holding this hearing on a subject so vital to 
the health and prosperity of our Nation's communities. Thank 
you, Representative Clark, who represents the town of 
Arlington, Massachusetts, for her support and leadership.
    Today's hearing could not be timelier. Recent events have 
demonstrated the critical challenge we face to improve the 
resiliency of our communities in the face of hazards, extreme 
weather and a changing climate. APA and planners across the 
country are committed to creating just, healthy, and prosperous 
communities that expand opportunities for all. Safer and more 
resilient communities are central to that vision. I am the 
Director of Planning and Community development for the town of 
Arlington. The town has been a leader in working to address 
climate change and environmental goals. The town is also 
working through a regional partnership to address resiliency. 
In 2015, the Metropolitan Area Planning Council, Metro Mayors 
Coalition, formed the climate preparedness task force to 
facilitate coordination among 15 municipalities, State and 
Federal agencies. The task force has increased to municipal 
capacity to address and assess vulnerabilities, bolster 
coordination, enhance awareness of infrastructure resilience, 
and worked on ensuring the data for flooding and extreme heat 
is consistent and shared.
    Municipalities have performed vulnerability assessments 
through technical assistance. These regional collaborations are 
an important model. They strengthen relationships, build 
capacity and identify priority actions.
    As the task force works on these issues, funding and 
support from Federal agencies is more critical than ever. This 
includes coordination efforts among agencies, as well as grant 
and financing to enhance resilience in critical public 
infrastructure. Massachusetts provides planning grant funds for 
communities to engage in vulnerability planning. Arlington 
received one of these grants which allowed us to examine 
strengths and vulnerabilities, while prioritizing resilience-
building actions. The top priority identified was to address 
storm water overflow, which has recently and historically 
caused significant damage to homes, businesses and other 
properties. The town leveraged this planning process, and 
received a grant to develop and implement ecologically 
sensitive flood management measures. These planning and action 
grants illustrate the importance of local planning that 
addresses and mitigates the effects of new conditions, flooding 
in Arlington's case, and raise the profile of a need to tailor 
future land use policy to protect critical infrastructure.
    As the Massachusetts experience suggests, communities 
across the country are focusing on resilience planning as a way 
for preparing for future shocks and stresses. True resiliency 
policy is comprehensive, and does not seek simply to harden 
infrastructure or rebuild, following disaster, but aims to 
address social, physical and economic systems together. 
Resiliency planning demands that we answer two critical 
questions: One, how do we adapt to recurring events? And, how 
do we recover better and stronger from events so that the next 
and subsequent events are less damaging? The answers to these 
questions should inform how Federal infrastructure housing and 
community development are made.
    Federal infrastructure programs are an essential part of 
advancing local and regional resiliency. The funding programs 
under the jurisdiction of this subcommittee are among the most 
important and proven Federal resources for communities. While 
we are proud to advocate for more Federal housing and 
transportation resources, we know that the Nation needs both 
more and better investments. Competitive grant programs could 
do more to increase the importance of resiliency, and integrate 
these efforts.
    Finally, the support following a disaster through CDBG-DR 
represents an opportunity for improving integration with the 
resiliency-led approach to recovery. FEMA and HUD can improve 
the coordination between their required plans with funds 
prioritized using resiliency focus, emphasizing alignment with 
local planning.
    There is a growing recognition that Federal disaster 
recovery funds should not be used simply to build back to the 
status quo, but rather, to build back in a much more resilient 
way using innovative approaches if possible. While resiliency 
plans will be crafted and implemented locally, there is an 
essential partnership between communities and the Federal 
Government.
    Improving the coordination of Federal investments with 
local resiliency plans will heighten the impact of these 
efforts while avoiding inefficiency and compounding future 
losses. Thank you, again, for the support of these critical 
tools. APA is proud to support continued funding for these 
essential programs, and we urge you to reject proposals to 
slash the funding and to boost the resources instead that are 
available to continuing to advance resiliency and expanding 
opportunities and equity.
    Thank you, again, for this opportunity to testify. I look 
forward to your questions.
    [The information follows:]
    Mr. Price. Thank you very much. Ms. Haddock.
    Ms. Haddock. Good morning. Chairman Price, Ranking Member 
Diaz-Balart, and members of the Appropriations Subcommittee. 
Thank you for the opportunity to discuss infrastructure for 
resilient communities. My name is Carol Haddock, and I am the 
Director of Houston Public Works, the department that is 
responsible for Houston's public streets, drainage, water and 
wastewater infrastructure, as well as permitting inspection of 
development for more than 2.3 million Houstonians. In this 
role, I am also in the midst of recovery from Hurricane Harvey. 
Houston has a significant flooding history, but we are 
committed to build Houston forward towards a resilient 
community that will be ready to withstand the next storm, 
because we all know there will be a next storm. However, we 
still face significant challenges and resiliency today.
    I also currently serve on the board of direction of the 
American Society of Civil Engineers, ASCE, and I am a licensed 
professional engineer in the State of Texas. ASCE appreciates 
the opportunity to discuss the state of our Nation's 
infrastructure, and how we need to insure more resilient and 
sustainable infrastructure when rebuilding these vital assets. 
Every 4 years since 1998, ASCE has prepared a rating of our 
Nation's infrastructure in our infrastructure report card. In 
the 2017 report card our Nation's cumulative grade was a D-
plus. Poor grades reflect an underinvestment in our 
infrastructure and a lack of thoughtful planning for the future 
and its impacts on our infrastructure network.
    Decades ago, and even a century ago in some cases, we built 
our current day infrastructure networks. But with any 
infrastructure investment, time and the elephants have taken 
their toll. As our Nation looks to rebuild, we urge for 
thoughtful leadership for the future. ASCE believes that all 
infrastructure programs and projects supported by 
infrastructure investment legislation must meet the following 
fundamental criteria: Investments must provide substantial 
long-term benefits to the public and the economy; project costs 
must be considered over the entire lifespan, including design 
building and operating and maintaining that infrastructure; 
projects should be built to be sustainable and resilient and 
Federal investments should leverage, not replace, State, local 
and private investment and infrastructure.
    It is through this framework that ASCE urges lawmakers to 
support the following: We should build and rebuild resiliently. 
ASCE's 2017 infrastructure report card emphasizes the 
importance of preparing for the future by ensuring our 
infrastructure is more resilient and sustainable. For every 
dollar spent on mitigation during rebuilding, the Nation can 
save $6 by avoiding future disaster costs.
    We should support the Federal Flood Risk Management 
Standards. ASCE supported the Federal Flood Risk Management 
Standards previously that considered mitigated flood disaster 
risk for federally funded development in flood-prone areas. And 
ASCE believes that the FFRMS is a fiscally responsible, 
commonsense approach to mitigating flood disaster risks and 
should be a part of any sustainable agency and organizational 
planning.
    We urge Congress to develop a Federal flood risk standard 
to safeguard our Nation's infrastructure, protect businesses 
and communities and conserve taxpayer resources. We support the 
appropriate use of lifecycle cost analysis or, LCCA. ASCE 
believes that infrastructure project owners should consider the 
total lifecycle cost when funding new projects, including the 
maintenance in operation until the end of its serviceable life. 
It is an unfortunate reality that minimizing the upfront 
investment can result in infrastructure that falls short in 
resilience and can cost more to maintain in the long term.
    Support standards and codes. Responsible design and 
construction are essential to important quality of life, assure 
safety and durability, and to minimize the vulnerability of our 
Nation's infrastructure. ASCE supports the development, 
adoption and enforcement of a national model building code. 
Disaster-resilient communities, with safe and sustainable 
buildings, can be achieved through design using performance 
base codes and construction practices in concert with the code 
administration program that ensures compliance.
    And we support research and development. Increased 
investment, while clearly needed, must be matched with a robust 
R&D program that can lead to new approaches, materials and 
technologies to ensure our infrastructure is more resilient and 
sustainable.
    ASCE supports R&D programs coupled with demonstration and 
commercialization programs, such as Houston's partnership with 
the nonprofit, Accelerate H2O, to create the Nation's first 
water technology hub for municipal water innovation and 
emergency response.
    ASCE thanks the committee for holding this hearing on a 
topic that affects quality of life, economic prosperity and 
livelihood of every American. ASCE and its 150,000 members look 
forward to working with the U.S. House Committee on 
Appropriations to improve America's infrastructure so that 
every family, community and business can thrive. Thank you.
    Mr. Price. Thank you very much. I want to thank all of you 
for your statements. Very, very substantive and helpful, and 
very well-timed. Nobody was more than 5 seconds off. That is 
pretty impressive, something I don't think members of this body 
can come close to matching, so thank you.
    I also am grateful, Ms. Haddock, that you brought in the 
perspectives of the American Society of Civil Engineers, as 
well as your experience with the city of Houston, just as Ms. 
Raitt did with the American Planning Association. Those 
national perspectives are helpful and complement your local 
experience.
    All right. Well, let's turn to our questions. The examples 
we have, the good examples, I would say, from Houston and 
Arlington, two very different communities, but still here for a 
reason this morning. Because you have taken a proactive 
approach to resiliency in Houston, of course, in the aftermath 
of a horrible disaster. But in both communities looking 
forward, this isn't happening everywhere. In many, many 
communities, large and small, infrastructure is still being 
built without integrating future risk. So my question is, how 
do we induce other States and cities to build resiliency into 
their federally assisted infrastructure projects, including 
both transportation and housing? We welcome input from any 
panelists on this, but I will start with Ms. Lightbody and Ms. 
Haddock in referencing transportation in particular.
    MAP-21 required at grantees include resiliency planning in 
asset management in planning documents, but not in specific 
projects. Should we, with FHWA and FDA appropriations, or 
authorizations, should we include requirements for resiliency 
in the specific project proposals that are funded by the base 
program? If you can address that specific question, but 
anything more generally you would like it say about the 
question I posed.
    Ms. Lightbody, I will start with you.
    Ms. Lightbody. It is clear when you look around with the 
communities that we have here, and communities that are 
presented around the country, that there is a desire to 
undertake more mitigation. If you are able to use 
appropriations from this subcommittee to drive and encourage 
more committees, and give them the incentive and ability to 
undertake mitigation, that would be a good use of Federal 
dollars. You could incorporate that into the programs you 
mentioned. There are other programs that could be incorporated 
into, but making it a required selection criteria, so that 
communities have the opportunity to use mitigation will drive 
more mitigation.
    The programs that do exist at the Federal level have an 
overdemand for mitigation. There is not enough money on the 
table for communities to undertake mitigation. Certainly within 
the transportation sector, the money at HUD, the $16 billion 
that this subcommittee was able to afford, was a great first 
step, but we need to institutionalize that, make regular, 
sustained investments in mitigation.
    Mr. Price. Ms. Haddock.
    Ms. Haddock. So in some ways, the answer to that question 
you are raising is a yes. We certainly, from a local 
stakeholder point of view, if the programs require that that be 
addressed up front the resiliency in each individual project, 
then it will be included. It is a pretty straightforward answer 
to that question.
    But I will say that a lot of the way that the funding comes 
to us that it does not necessarily currently encourage the 
lifecycle analysis or the things that would drive us to a 
resilient answer. And so, we are looking at the upfront costs, 
but we need to be looking at the full investment costs 
throughout the lifecycle of that infrastructure. And if we do 
so, we will be driven to more resilient solutions, because we 
will pick solutions that reduce the future damage, the future 
recovery, and hopefully, the future operations and maintenance 
costs as well.
    Mr. Price. Ms. Raitt, let me turn to you and turn to HUD. 
What could HUD do to encourage recipients of Federal funds to 
include resiliency requirements of federally supported 
projects? Basically, the same question as I posed regarding 
DOT.
    Ms. Raitt. I think the primary thing that could happen from 
the standpoint of we are an entitlement community in Arlington, 
Massachusetts. I think one of the primary issues is really in 
the criteria and the selection of projects. Thinking about the 
connection of those investments in relationship to data that 
has been collected, having good participation, and having 
really a smart regulatory process to back that up, that would 
then make for directing better investments. So the planning 
piece is really the underpinning to all of these programs. 
Without that good planning, none of these investments make 
tremendous amount of sense.
    So we want to make sure that planning is really integrated 
into that process, and that the resulting criteria is also put 
in effect and then directed to local municipalities who receive 
entitlement or other types of funds from HUD.
    Mr. Price. And the way to achieve this, you are saying, is 
through explicit requirements for these programs?
    Ms. Raitt. Explicit requirements in the grant programs, as 
well as directing criteria to applicants--to grantees rather of 
those grant funds.
    Mr. Price. Thank you. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman.
    The timing is right for many reasons. It is good that you 
all are here, because as you know, HUD is in the process of 
developing the new guidance for the new mitigation program. And 
as you know, new mitigation has been eligible for CDBG-DR, but 
there has never been a chunk of money that is actually 
dedicated for this. And so it is something that the chairman 
and I worked hard on, and we have a lot of interest in making 
sure that it is done right and that it succeeds.
    So we expect the details of that program to be announced 
later this spring by HUD. And obviously, the public will have 
an opportunity to comment.
    So really to the four of you, if you were in a position to 
advise HUD as they are now developing these guidelines, what 
would you suggest?
    Ms. Lightbody. I can speak broadly to that. If you are 
going to invest in mitigation, it should do three things.
    Mr. Diaz-Balart. Which we are, which we are. The money is 
there but----
    Ms. Lightbody. It should do three things: reduce risk; 
increase safety; reduce damage and property to infrastructure, 
with the ultimate goal of making us all more resilient. That 
can look like more traditional mitigation mechanisms that we 
are more accustomed to, like elevation, redirecting roads, 
buyouts, building codes and standards. It can also be 
complemented with green or nature-based solutions 
infrastructure; preserving or restoring flood plains, letting 
rivers do what rivers want to do, which is absorb floodwaters; 
increasing more green spaces. So we would recommend that there 
is an incorporation of green and gray infrastructure into the 
mitigation requirements that HUD uses through CDBG-DR.
    Mr. Diaz-Balart. Anyone else want to take a stab at it?
    Ms. Raitt. Just, again, to emphasize the importance of 
focusing on vulnerable populations, low-mod income households 
in particular. I think there is a real opportunity with HUD to 
direct more resources towards affordable housing, which can 
really be a catalyst for economically viable, sustainable 
development patterns, and energy efficiency can be increased as 
well. So, I think that that should be one of the things for HUD 
to think about in their new criteria, as well as thinking about 
transit-oriented development and other lead or other types of 
criteria to encourage better sustainable design of new 
buildings and structures. That would go a long way.
    And then, again, overemphasizing the issue of planning as 
part of any process before those decisions and investments are 
made.
    Ms. Haddock. So Houston is also an entitlement community, 
and we have both housing challenges when it comes to recovery 
from Harvey and infrastructure challenges. On our housing side, 
we are 18 months post disaster, and we still have people that 
are not back in their homes yet. We have many multifamily 
complexes that are still recovering, our last count is over a 
couple of hundred that are still in the process that are 
repairing.
    My recovery is slow, and so my advice on the mitigation 
side to the HUD is that we need to be thoughtful, but we also 
need to be diligent, and we need to get things on the ground in 
a manner that they can be quickly in use, and that our 
communities that are still recovering are back in resilient and 
safer facilities, so that next time around, they will not be 
displaced, they will not be going through the life-changing 
event that they have gone through this time.
    And so one of the things this time, but the other thing is 
in particular is that we don't look at one piece of resilience, 
that as my colleague, Ms. Raitt here said, that we look at 
access to transit, that we look at access to schools, that we 
look at access to grocery stores, that we look at access to 
medical. That all of those things must play in as we look at 
redeveloping our communities and building back better than we 
were before the storm.
    Mr. Diaz-Balart. Let me go do a little follow-up on that. 
Because one of the issues, for example, in communities that I 
represent is their sewer system has been devastated. How do 
you--I am assuming you mentioned that, I think, in your opening 
statement about Houston having that issue as well. So how do 
you make sewer systems----
    Ms. Haddock. More resilient?
    Mr. Diaz-Balart. Yeah. By definition, they are underground, 
right? So how do you make those resilient from storms and 
flooding?
    Ms. Haddock. It is the pipes underground, but it is also 
the treatment facilities and the transmission facilities. 
During Hurricane Harvey--Houston is unusual, we have 39 
wastewater treatment plants, we have almost 6,000 miles of 
collection systems. We have nearly 400 lift stations. And of 
the 39 treatment plants, we had 17 of them that were severely 
impacted, nine of them were submerged at the height of the 
storm. So how do you make those more resilient? Sometimes the 
answer is, they shouldn't be where they are today. But to move 
a wastewater treatment facility may take 10 years, it may take 
longer to build the infrastructure to serve those areas better.
    So what do we do today? We are in the process of doing a 
very active citywide assessment of the condition of our pipes, 
point repairs, replacements. Things that keep minimizing water 
from into our wastewater system. But we also have to partner 
with our communities. Most of our blockages, most of our 
overflows are actually caused by grease and debris in our 
system, not from storm water that is getting in.
    And so, it is a partnership with our community, and it is 
also active operations and maintenance that we have to do--
today's technology has completely changed the way that we can 
evaluate our wastewater system, compared to just 10 years ago.
    Mr. Price. Thank you very much.
    Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman and Mr. Ranking 
member.
    This first question is for you, Dr. Moon. In 2018, more 
than 8,000 wildfires burned 1.8 million acres of land, and more 
than 24 structures in California. Years ago, California's fire 
season lasted a few months. Now fires blaze throughout the year 
at varying degrees of intensity. What types of programs do you 
think Congress should develop to help mitigate the consequences 
of wildfires?
    Mr. Moon. So I haven't actually done a lot of thinking or 
work in the area of wildfires. The one thing I will say is that 
when we talk about resilience, we cannot talk simply about 
floods. There is a lot of other reasons that we need resilient 
infrastructure. Earthquakes are a big one, wildfires, but also 
other hazards. If you look at, for example, why transportation 
infrastructure fails, bridges and roads, et cetera, 50 percent 
of bridges fail because of hydraulic reasons, flood, scour, et 
cetera. That means 50 percent fail for other reasons as well. 
And if we are disrupting our transportation infrastructure, it 
doesn't necessarily matter why that occurred, but we need to be 
able to minimize the potential for that disruption, minimize 
the duration of that disruption, and, certainly, minimize the 
impact on the surrounding communities. So I know I didn't 
directly answer your question, but I don't necessarily feel 
comfortable discussing wildfires.
    Mr. Aguilar. Ms. Lightbody, some of these are connected as 
well, right? Floods often follow wildfires. When we talk about 
flood preparedness, do you think it is helpful if we start in 
those communities that are susceptible to wildfires as well as 
we start to have these conversations?
    Ms. Lightbody. Certainly looking at a multihazard approach 
across the country is critical. There are communities that 
grapple with fire, flood, drought, and excessive heat all in 
the same season. And so, figuring out ways that we can plan for 
all of those hazards. And part of that starts with thinking 
about the future in terms of where we put things. We know now 
much better than we did 30 or 40 years ago our risks and our 
understanding of risk.
    And so, let's be smarter about, in the future, where we are 
going to put and build more stuff, because that means more 
people and more assets are in harm's way, whether they are 
closer to the fire line or they are closer to the flood line.
    Mr. Aguilar. Ms. Haddock, when we talk about grading, and 
Dr. Moon, you as well, when we talking about grading, analyzing 
the types of infrastructure that we have, can we do a better 
job in tracking--clearly, we are talking about measuring as 
well, but when we track, can we use GIS software? Can we use 
software that is available to track our infrastructure, grade 
it? So taking what you do already and making that a little bit 
more real for folks in kind of a map form to say, these are the 
bridges and roads we travel on every day, and this is the grade 
that they have. Is that something we should look at as well?
    Ms. Haddock. Absolutely, yeah. One of things that we as 
engineers do often is make things very complicated to 
understand. And so one of the things we can do a much better 
job of is how we display that to the public.
    Mr. Aguilar. You are talking to the wrong crowd. That is 
usually our line, is making things difficult.
    Ms. Haddock. We are good at that. We are good at that. I 
did actually have one comment about your wildfires. Back in 
2011, Texas had a number of wildfires, and shortly after that, 
we had a really good rainstorm that literally changed the pH of 
our drinking water. And it literally shut our drinking water 
plant down for about 4 days. So everything is interrelated when 
it comes to all of these things. And it is something that we 
have to think of and plan for in our resilience.
    As far as GIS, the city of Houston has been an early 
adopter. We have all of our infrastructure in GIS. But it is 
not just the condition, it is also the capacity of all of these 
things that we have to weigh in on. And I want it make sure my 
colleague here has an opportunity to----
    Mr. Moon. I think you are sort of right on target with this 
point, in that today we have so much data, and yet, that data 
is inaccessible to so many, it is sort of impenetrable. And so, 
coming up with ways to visualize and display that in such a way 
that it does hit home, and we didn't forget about the value of 
our transportation infrastructure in our everyday lives.
    The one thing I would point out that is a big success in 
this area is a system called InfoBridge, which is put together 
by the Federal Highway administration through the Long-Term 
Bridge Performance Program. And that is sort of a very slick 
data visualization tool that is open to the public; they can go 
in there, they can map all of the bridges, see their ages, if 
they are over water, et cetera. They are definitely moving in 
that direction. And I think anything we can do to get these 
issues out in front of the citizens would be a great thing.
    Mr. Aguilar. I appreciate it. Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Rutherford.
    Mr. Rutherford. Thank you, Mr. Chairman. And thank you 
panel for being here this morning. I represent northeast 
Florida, three coastal counties: Nassau, Duval, and St. Johns, 
which happens to house the oldest city in America in St. 
Augustine. And there are amazing historic structures there in 
St. Augustine that are really in danger.
    Ms. Lightbody, when I read that 85 percent of our disaster 
funding, since 2000, has gone toward flooding mitigation, I 
wasn't surprised at all by that. We have seen the effect of sea 
level rise in and the impact it is having throughout any 
district. I also have the St. Johns River, which is also a 
major tributary throughout my entire district.
    So having seen that damage, can you talk a little bit, Ms. 
Lightbody, about what percentage of post disaster funding is 
actually being used to mitigate future damages and build 
resiliency into these systems? In fact, I just joined the 
American flooding--or the American Flood Caucus, because I am 
so concerned about this. So can you talk about what we are 
doing to build resiliency around some of these areas? And then, 
the follow-up to that would be, I don't know if you have any 
familiarity with the National Flood Insurance Plan, but are we 
creating some of these problems by offering insurance that no 
one else will offer, in areas where we have severe repetitive 
flooding? And do you see an issue there?
    Ms. Lightbody. How much time do you have? I will try to be 
quick. Two big questions, knowing what we do know about costs 
that the Federal government has put forward towards disasters, 
when you look back from 2005 to 2014, the Federal government 
spent about $277 billion on disaster recovery. Of that, FEMA, 
which is one of the only agencies that has a specific program 
for predisaster mitigation, $600 million over a 10-year period. 
That is a drop in the bucket when you divide that up between 
all of these communities that need predisaster mitigation.
    So this subcommittee has an opportunity to set aside 
specific resources towards predisaster, not after the disaster 
happens, that--we need that, but if these communities are able 
to plan and do projects in advance of that knowing their risks, 
that will make a big difference. We know it saves money, every 
dollar invested in mitigation saves at least 6 in the long run, 
so it makes a lot of sense from a fiscal steward perspective.
    Mr. Rutherford. Thank you for that.
    What about the flood insurance?
    Ms. Lightbody. The flood insurance program offers flood 
insurance to roughly 5 million people across the country, that 
is coastal, but it is also inland, a lot of inland communities. 
Florida has a lot of those policyholders. And in some cases, we 
are offering subsidized rates and sending a signal to risky 
areas that the price signal is not sending the right message to 
these areas, that we know are flood risk areas. So we have to 
couple the flood insurance program with mitigation, with 
disaster cost, because no matter how much someone has 
mitigated, they are still going to get disaster money and fix a 
lot of these programs so we take a holistic approach to 
planning and mitigation, but also recovery and relief.
    Mr. Rutherford. Thank you very much. I see my time has 
almost expired. I yield back.
    Mr. Price. Thank you.
    Mr. Hurd. I am sorry, we now have the arrival of Ms. Clark, 
I will turn to her and resume the rotation.
    Ms. Clark. Thank you, Chairman Price. And thanks to all the 
witnesses. I am especially glad to have Ms. Raitt here with us 
today from one of my communities of Arlington. And I wanted you 
to talk a little bit about today, we have the unusual situation 
that we don't have counties in Massachusetts, but we need to 
work together. And there have been tremendous efforts, I think, 
on regionalizing what we are able to do with the Metropolitan 
Area Planning Council, Metro Mayors Coalition, are some of the 
examples, Mystic River Watershed. And I wonder if you could 
touch on how the region is working together on its resiliency 
efforts.
    Ms. Raitt. Thank you. I think it is really important to 
emphasize actually the regional connection, because localities 
cannot do this on their own. There is no way that a 
municipality individual jurisdiction can plan for these things 
in a bubble. It all has to happen in a partnership within a 
region, and, of course, as an echo of the State and State 
policy. And that is what we actually have in Massachusetts, 
which is extraordinarily helpful, whereby we have funding that 
is directed from the State to local jurisdictions, and then 
also regional entities. MAPC is a regional planning agency for 
metro Boston, which is serving 101 communities in and around 
Boston. They are actually nine regional planning agencies in 
Massachusetts. And each one of these agencies has a 
responsibility to help their communities work on and address 
these types of issues. I think, in terms of addressing these 
particular issues with resiliency, the critical piece is where 
there are shared resources and trans relational, sort of, 
boundaries where things overlap.
    So that might mean things, such as the Amelia Earhart Dam, 
and other dams, where there are critical infrastructure and 
repaired and require a significant Federal and possibly State 
investment in order to achieve more resilient dam 
infrastructure, so that you cannot just address what is going 
on now with flooding, but in the bigger picture, long-term, if 
there is sea level rise and storm surge, need to really shore 
up that infrastructure.
    The other area where regions can work together is really to 
find other critical resources and infrastructure that they can 
advocate for together to leverage additional resources, whether 
that is additional public resources or private resources to 
also firm up those efforts.
    So you mentioned the Mystic River Watershed Association, 
there are many other nonprofit organizations that can also play 
a partnership role in this and that is also important.
    Ms. Clark. Can you think of the specific ways that we here 
in Congress, through the Federal government, can better support 
the regional efforts?
    Ms. Raitt. I think the primary way is actually through 
encouraging and requiring planning, that any--behind any 
process, any investment----
    Ms. Clark. Does that mean funding planning as well?
    Ms. Raitt. Funding for planning, but also requiring that 
communities are planning for these types of events. Even with 
hazard mitigation, that it is directly tied to vulnerability 
assessments, and then good strong data, as well as good 
community engagement, to understand and direct better and 
improve outcomes. So I do think that that is where the Federal 
government can play a very key role. It is not only encouraging 
those partnerships, that web of partnerships that happens at 
the local, regional State level, but also, the partnerships 
that happen across Federal agencies, which can also come 
through funding resources that eventually make it to the local 
level.
    Ms. Clark. You mentioned sea rise. Two of my coastal 
communities, Revere and Winthrop, are very much concerned with 
flooding and the need for seawalls and expanding. We have a lot 
of marshland and groundwater, low-lying areas in my district as 
well, two 100 coastal storms in the last year. And we--as we 
look at these events across the country, we find great economic 
and racial disparities in Federal disaster aid and recovery 
from vulnerable families is often much more difficult in low-
income and rental neighborhoods, than in more affluent and 
homeownership.
    With 45 seconds left, I wonder if anyone on the panel would 
like to talk about how we can begin to address this? We will go 
with you, Ms. Raitt.
    Ms. Raitt. I think the primary way is to actually address 
this through incentives, and then, again, to ensure that any 
commitment of investments that are made has to go towards 
directing them to shore up those systems and infrastructure, 
that it directly affect vulnerable populations. What you are 
specifically speaking to could be hundreds of thousands of 
people who are currently living in a zone where they are 
susceptible to sea level rise, flooding, and other extreme 
hazards and weather conditions. And we need to really address 
that, in future moving forward, with any resiliency effort that 
is integrated into Federal funding to ensure that housing has 
that incorporated sustainable housing and other types of 
efforts addresses these needs. And that means that requires 
pretty significant investment, but it also requires incentives, 
incentivizing private entities to also incorporate these 
things, not just public, but private entities, who house the 
people we are talking about in these zones.
    Ms. Clark. Thank you, Mr. Chairman.
    Mr. Price. Thank you. Mr. Hurd.
    Mr. Hurd. Thank you, chairman.
    Dr. Moon, you talked about inaccessibility of data. I spend 
a lot of time thinking about data and how technology can be 
used to make better decisions on that data. And one of the 
things that I found that we can do better in the Federal 
government is making sure certain data sets are made open to 
academia, industry, whoever in order to make informed decisions 
on it. Is there types of data that the Federal government has 
that you wish was open and people should have access to?
    Mr. Moon. In the realm of transportation infrastructure, I 
can't think of any. The primary data source, which is the, say, 
the National Bridge Inventory in the case of bridges, is open, 
it has been open for decades. One of the challenges with it 
historically has been that it was such a large database, it was 
provided in a format that was really inaccessible to a lot of 
people. And I mentioned earlier that now with Federal highways 
new InfoBridge web-based software is now open and really 
accessible. So people can go on there, take a look at local 
communities, age of bridge in their counties, States, et 
cetera. So they can really get access to all of that 
information.
    Mr. Hurd. One of the things that actually made that happen 
is the Data Acts. Nobody talks about when Congress does things 
that work, making sure data is in an accessible, machine-
readable format so that you don't have these problems.
    Did any other panelists have any opinions? Ms. Haddock?
    Ms. Haddock. I want to say, first off, actually I was born 
and raised in your district.
    Mr. Hurd. Awesome.
    Ms. Haddock. I graduated Uvalde High School.
    Mr. Hurd. Oh, very cool.
    Ms. Haddock. But I also will say that one of the challenges 
we face in infrastructure, is that much of our infrastructure 
was built before the electronic age. And so we don't have good 
data on much of our infrastructure, whether it be federally 
built infrastructure, or locally built infrastructure. 
Sometimes we are in the field literally locating lines that 
were built 50, 60 years ago during construction.
    Mr. Hurd. Do you know of any initiatives that is trying to 
go back and figure that out?
    Ms. Haddock. So a lot of the environmental enforcement 
things that are being done actually do force us into that. It 
is a good thing, it is a good thing in those particular cases, 
but it is also a competition for that limited space in our 
right-of-way to have all this infrastructure. And so a lot of 
infrastructure we are putting in today has the technology built 
into it for exactly where it is, but the infrastructure that 
was built even just 30, 40 years ago, we are having--research 
and development new technologies is creating ways for us to 
find that, and locate it, and geocode it, and have it 
electronically, but that is expensive.
    We have 6,000 miles of waterline, 6,000 miles of wastewater 
line. When you begin to add those up, it is a massive effort to 
create those in electronic, very specific use to be able to get 
that data.
    Mr. Hurd. What would you like to see happen to help with 
that?
    Ms. Haddock. I think that as we invest in recovery, that 
part of the resilience can be funded through that, including 
those things in how we reinvest. That is not just about 
replacing, that it is about creating those auxiliary upgrades 
at the same time as we are reinvesting those. That way, when we 
come through the end, we actually have a good baseline.
    Mr. Hurd. So would CDBG grants be able--could you use some 
of that for that type of activity? And in my final minute, 
answer that specific question, but also, after your experience 
with Hurricane Harvey, how can the Federal government better 
implement this program, CDBG, especially when it comes to 
recurring natural disasters and how to be prepared for those in 
the future?
    Ms. Haddock. So I do think that through the planning side, 
that we can certainly incorporate that through the existing 
CDBG rules, but there is always competition between gathering 
data versus actual improvements on the ground that benefit 
people immediately. And, so, you are going to have that 
competition of how we prioritize the funding.
    As far as advice that I would give, is that infrastructure 
and housing need to be planned in an integrated fashion. That 
we can't plan infrastructure and plan housing separately. That 
the planning needs to be done together, so that the resilient 
solutions address all of the components of the people that are 
living there and the infrastructure that serves them 
simultaneously.
    Mr. Hurd. Thank you.
    I yield back, Mr. Chairman.
    Mr. Price. Thank you very much. Ms. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman. And thank all 
the witnesses for being here today and sharing their 
information.
    With the constantly increasing risk of severe weather, we 
know it is very important than ever that our infrastructure 
will be resilient. In particular, Dr. Moon, it is good to see 
you here. Thank you for being here. It is great to learn more 
about some of the critical work that is being done at Rutgers, 
which just so happens to be in the backyard of my district. 
Could you elaborate on how the DOT's funding through the 
University Transportation Center Program supports the Center 
for Advanced Infrastructure and Transportation work?
    Mr. Moon. Sure. The U.S. DOT there is a bunch of other 
funding sources, too, but let me talk about just a few programs 
that I think sort of are illustrative in nature. So there is 
one graduate training program, called C2R2, Coastal Climate 
Risk & Resilience. And it is a very unique program in that we 
are bringing students and faculty from social science, 
environmental science, climatology, public policy and 
engineering together. And these students take classes together, 
they go visit communities on the Jersey shore. And so, one of 
challenges with infrastructure resilience is it is such a multi 
disciplinary problem. There is so many perspectives, and a 
program like that really provides graduates that have depth in 
their field, but also an understanding of some of the breadth.
    We do a lot with remote sensing. A colleague of mine has 
been to Corpus Christi to document with high resolution 3-D 
data the damage after Hurricane Harvey, we have been to 
Florida. He has done 600 miles of coastal communities in New 
Jersey. And that data is being used for everything from future 
planning, mitigation strategies, but also things that were sort 
of a surprise, like optimizing where you put debris fields 
immediately after some of these events, so that we can sort of 
get these communities back up and running.
    There is a lot of others. We do things with resilience of 
bridge supply chain, and there is also quite a bit of training 
that gets done through the Center, thousands of individuals in 
the current workforce come in for training on emerging 
technologies and techniques and things.
    Mrs. Watson Coleman. Good to know. What are some of the 
examples of how the research done at the center has translated 
into real world benefits?
    Mr. Moon. So one--I will just point out a project that I 
was sort of closely related--or involved in. A State Department 
transportation came to Rutgers and said, ``You know, we have 
all these structurally deficient bridges, and we need to 
replace them, and we have funding for 15, 20 percent of these. 
And we have no real basis at this point to prioritize them.'' 
And it was an opportunity, as I mentioned in my opening remark, 
to develop sort of a uniformed resilience metric and say, ``You 
know, even if the money is not there to enhance resilience of 
the infrastructure, it can prioritize some of the replacements 
that are going to be done anyways, so that the ones that have 
the biggest impact on reducing, say, the consequences of these 
extreme events, that they get done first.'' And so, that is one 
of things that has been implemented.
    Mrs. Watson Coleman. Is there anything that you can think 
of that the Federal government can do to better support your 
research?
    Mr. Moon. Well, I mean, there is always more funding, 
right? I am a faculty member, I think I am supposed to say 
that.
    To be honest, I do a lot of work with the Federal Highway 
administration, as well as with our local State, and even some 
counties. And there is a big focus on this area. This is not 
lost on them. And so, even if there aren't sort of dedicated 
programs, if you are in the field of civil engineering or 
structural engineering, this is probably the hottest topic, and 
so it has really gotten a lot of people's attention.
    Mrs. Watson Coleman. Thank you very much.
    I yield back. Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    We have heard Ms. Haddock express her and the ASCE's strong 
support for the Federal Flood Risk Management Standards. Dr. 
Moon and Ms. Lightbody, I would like to ask you to address that 
more specifically, maybe starting with Dr. Moon.
    The Obama administration updated the FFRMS in 2015. The 
idea was to leverage the latest scientific research to provide 
additional safety in areas at risk of flooding beyond the 100-
year flood plain, and it would have been a catalyst for cities 
and counties to be serious about planning around water events.
    The FFRMS placed a strong emphasis on using flood plains 
and natural systems to absorb floodwaters and mitigate the 
impact of powerful storms. The Trump administration now has 
repealed the FFRMS. And ironically, they did so in the weeks 
just before Hurricanes Harvey, Irma and Maria.
    So I would like for you to address a couple of questions, 
if you will. Was this the right approach, or what would you say 
about this approach, its strengths and weaknesses, to 
addressing flood risk and Federal infrastructure projects? And 
now that it has been repealed, what is your recommendation? Do 
we simply try to restore it? Or what do we do to ensure that 
Federal assets located in flood plains are built more 
resiliently? Dr. Moon, we will start with you.
    Mr. Moon. So this is a little outside of my area, but the 
one thing I will say is that I am a big believer in research, I 
am a big believer in the scientific method, and if that is what 
was behind and driving this policy, then, I think, it is 
certainly not a good development that we are not increasing 
standards for building, you know, Federal assets in these 
regions. I mean, it is clear that floods are increasing, and we 
certainly don't want to be actively putting new structures and 
systems in harm's way. Beyond that, I really don't really want 
to comment on some of the specifics.
    Mr. Price. Ms. Lightbody.
    Ms. Lightbody. You are correct, it was repealed 10 days 
before Hurricane Harvey, it certainly appeared to be a 
shortsighted decision by this administration. I think there are 
efforts now to understand was that the right approach? And now 
that we have a clean slate, let's take on a new approach. In 
the absence of modernized flood standards, we continue to put 
thousands of assets like utilities, roads, hospitals in harm's 
way. To put it simply, we use Federal and local dollars to map 
where we think it is going to flood, then we use Federal 
dollars to build things in those areas like schools and water 
treatment plans and roads. And then we use Federal dollars when 
it floods to rebuild those exact same facilities. We have to 
stop doing that, we have to stop putting buildings and assets 
and people in harm's way. And we are operating under a policy 
that is now 40 years old.
    Communities like Houston, Nashville, Tennessee, they have 
all gone above and beyond what the Federal government now has 
for building flood plain regulations. And so, this committee--
subcommittee can take this on by requiring that DOT and HUD 
assets have these regulations and standards around them.
    You can take an approach that asks all agencies to do this, 
or you could take an agency-by-agency approach. The Department 
of Defense has embraced this just last year. FEMA, in some 
ways, and HUD in some ways, is already doing this. The 
Department of Transportation needs to take this on.
    Mr. Price. Ms. Haddock, you look like you are ready to 
speak.
    Ms. Haddock. I would love to add to this discussion, so 
Houston stepped out, along with Harris County, immediately 
after the storm. We have had flood plains that we regulated, 
too, and exceeded the Federal standards since 1981. However, of 
the 90,000 structures that are in the 100-year flood plain, 80 
percent of them were built before 1980. So the cycle that we 
are in of a little bit of flooding, repair it, it is still in 
the flood plain. So we adopted an adaptive approach, we 
actually said we know that our rainfall totals will be updated, 
the draft Atlas 14 by NOAA had been put out, and that our 
current 100-year before Harvey was actually--the 500-year 
before Harvey was going to become our new 100-year when the new 
rainfall totals came out.
    So the county and city both took flood plain regulations 
and adopted 2 feet elevation above the 500-year as a baseline 
so that as we made repairs, as we had structures that were 
substantially damaged as new development came in, that it would 
be protected above those levels.
    But we still have thousands of structures that had 1, 2, 4, 
6 inches of water in them, that under the current flood 
insurance program, will be repaired and will be left there to 
flood again.
    Mr. Price. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. Last year, DOT 
inspector general reviewed the highway emergency response 
program, and they recommended that the DOT needs to improve in 
two main areas. One, the IG found that DOT's guidance to States 
on their highway ER program lacks information on how States can 
incorporate resiliency into their projects. Secondly, IG said 
that DOT does not have a good idea of what resiliency programs 
are being made by States. It also noted that there is a lack of 
information of best practices on resiliency, resiliency 
activities that could be shared among States.
    Dr. Moon, you mentioned, in your testimony, the fact that 
there is no accepted and uniformed means of measuring 
resiliency in our transportation infrastructure. This is 
something that Congressman Cuellar, who is an appropriator, not 
on this subcommittee now, has been working on frankly before he 
got to Congress. And I was doing that as well, going back to 
State legislative years like in the 1700s. So how do you then 
deal with--how do you deal with these issues, when, in fact, 
there aren't even standards per se to be followed? Any ideas, 
or any suggestions?
    And again, as I mentioned before, I don't want to beat a 
dead horse, but the chairman and I have put a lot of work and a 
lot emphasis, and frankly a lot of skin in making sure that we 
have all this money for the first time. My concern is, 
precisely, because of some of the things you talked about, but 
also the IG has said, this money will be put out there, and 
then we won't really have an idea of if it is working. How do 
you deal with that?
    Mr. Moon. Well, I think you cannot get around the need for 
some metric that can be developed. And this is not an easy 
thing. Right? That metric has to take into account the likely 
performance of individual infrastructure systems. It has to 
take into account the performance of the network and the 
redundancy of the network. It has to take into account the 
preparedness of the agencies that are tasked with operating 
those pieces infrastructure, and then responding to emergency 
events.
    I think the other challenge that we have is those metrics 
have to be formulated based on the data that we have, not the 
data that we want. And in the case of bridges, the data that we 
have dates back to the 1970s after the Silver Bridge collapse. 
They said this is the type of data we want to take on bridges. 
And resilience was not really a major focus at that point.
    Mr. Diaz-Balart. Are there communities--usually, the 
State--State and locals, and particularly the States, are the 
ones that kind of develop that are most innovative. We saw that 
after Hurricane Andrew in the State of Florida, I think, pretty 
much recognizes as a leader on, you know, storms unfortunately. 
But they have done a really good job.
    Are there States, local communities that we should look to 
that are doing some of the things that you mention that have 
some metrics that are real, or is somebody developing these? 
Has someone already done it that we can kind of, like, 
plagiarize and copy?
    Mr. Moon. Yeah, I mean, I think there are a lot of attempts 
out there. This is not something that nobody said, Hey, I think 
we should do this. I think lots of people have done it. The 
problem is, that they do things differently. And so, I think 
there needs to be an approach of bringing some of these things 
together and deciding, you know, what are we going to go have 
to standard B. Now, the reality I mentioned before what gets 
measured is what gets improved. It is very important what goes 
into that measure----
    Mr. Diaz-Balart. Absolutely.
    Mr. Moon [continuing]. Because if you formulate it 
incorrectly, then we still aren't going, at the end of the day, 
have a more resilient infrastructure, and I think that is 
really one of the big challenges.
    Mr. Diaz-Balart. Does anybody have any ideas as to how we 
can do that? Because it is very difficult, it is very 
complicated, and it is very technical, and, frankly, it can be 
controversial because you can tweak it. Right?
    Mr. Moon. Yeah. And there can be some winners and losers.
    Mr. Diaz-Balart. There always are. There always are. So are 
you all doing that in Houston?
    Ms. Haddock. So we are working to include sustainability 
and resilience in all the projects that we develop. The 
American Society of Civil Engineers was actually part of the 
group that developed the Envision rating system, which is very 
similar to the lead rating system for buildings, it is for 
infrastructure, but it is focused on sustainability, but 
sustainability and resilience really are hand in hand.
    So there are some measures out there for infrastructure 
that help create that base case of what is resilient, what is 
not. But I will say that we are seeing, at least in Houston, 
that our partners in the State are actively engaging us in 
resilience discussions on projects and looking for us to 
partner in addressing flooding at the same time that they are 
addressing transportation and partnership. So the discussions 
are happening at the base level.
    Mr. Diaz-Balart. Thank you, chairman.
    Mr. Price. Thank you.
    Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman. I want to go back to 
Arlington. We have had a hearing in the last couple of weeks 
where we talked about the issue of layered funding for a 
variety of sources. And we used a lot of pre lunchtime words 
that I know are difficult to deal with when you are getting 
hungry, layered cake, lasagna, whichever food you want, but I 
wondered if you could share with us some examples that you have 
used of how you used Federal funding to leverage it, used it in 
conjunction with State and local dollars for mitigation 
purposes?
    Ms. Raitt. Sure. That is a great question. And I think the 
way that that layered cake or some other food group, the way 
that approach works is that it actually works through having a 
plan that identifies the ideas that these different programs 
can work together, and otherwise, if you don't have the plan 
behind that process, there is not a lot of good integration of 
different funding sources.
    So that is really critical. So one example of that is 
actually through the consolidated plan process, which any 
Federal grant subgrantee has to go through in order to get 
access to CDBG home funds and other types of funds. And a lot 
of communities are engaged in that process right now, including 
Arlington, actually with it is regional consortium. I think 
that through that consolidated plan process, that can actually 
set the stage for those layered, sort of, financing situations.
    In Arlington, what we have done is married CDBG with local 
Community Preservation Act dollars, which is basically a local 
tax that we have in Massachusetts which can go towards these 
types of initiatives, and then also, the State funding that we 
have received through the Municipal Vulnerability Preparedness 
Grant Program that the State offers.
    That helps us to address things like flood storage, flood 
mitigation, and that is what we are doing actually on the Mill 
Brook Corridor. There are other examples of the ways in which 
those funds come together that also leverages in kind support, 
I would say, from the Mystic River Watershed Association, who 
also cares very deeply about these issues. So there can be a 
combination of resources that I do think that that is key to 
doing a lot of the things that we are talking about. But the 
underpinning, again, of that is making sure that it is actually 
codified in a planning process. Otherwise you have a lot of 
redundancy, redundancy in data collection, different types of 
evaluation and criteria and metrics, and not enough clarity in 
terms of how these different programs operate and intersect 
across the different agencies. So that is really critical and 
that could be some area where HUD reforms, and even DOT reforms 
could be helpful.
    Ms. Clark. Great. Thank you very much.
    I yield back.
    Mr. Price. Thank you. I want to return to some of the 
signals being sent by the current administration, but before I 
do that, I do want to return to the discussion Ms. Lightbody 
encouraged us to have about dedicated funding for mitigation. 
We, of course, have post disaster mitigation as a feature of 
FEMA programs, which is increasingly, I think, accepted and 
valued. And now, with the CDBG funding, we have CDBG-DR 
funding, we have the mitigation funding distinguished, and we 
are awaiting the guidelines on that in North Carolina and 
elsewhere to firm that program up.
    Ms. Lightbody, you cited, in addition, the need for 
predisaster mitigation. Of course, that is mainly what we are 
talking about here today. As you know, there is a dedicated 
funding stream in the homeland security bill for predisaster 
mitigation projects. I take it that is what you are referring 
to in saying that we needed to increase that support. But 
wouldn't you agree that even if we tripled or quadrupled that 
funding stream, the impact would be less than mainly what we 
have talked about here today, that that is building mitigation 
into all of these funding streams, or as any of them are 
feasible, with both HUD and DOT. And I don't know, has anybody 
done a study of the direct predisaster mitigation grants and 
what kind of--what does their distribution look like? Is there 
anything like a kind of cost-benefit standard that has been 
applied to those? And what would it mean to double and triple 
that funding? We can ask that question, even if it is in 
another bill. But I wonder if you just elaborate a little 
further, I am sure you are not saying one or the other. But how 
would you describe that dedicated approach to mitigation 
projects as opposed to kind of broader strategy of 
incorporating mitigation into virtually everything we do?
    Ms. Lightbody. Certainly. An approach that incorporates 
both would be the strongest. Working with limited Federal 
resources, if you are going to invest money, knowing the 
savings that mitigation returns, it makes a lot of sense to 
dedicate them specifically towards predisaster mitigation. At 
the same time, building in resiliency and mitigation 
requirements to existing programs, so that communities are 
forced to incorporate mitigation into the grants and proposals 
that they put forward.
    States like Florida, actually, serve as a very good 
example. The emergency management division after Hurricane 
Matthew did an assessment of mitigation proposals projects that 
were put in place, 40 mitigation projects cost $19 million; 
avoided losses savings, $81 million. So we know it works and 
that is happening--Raleigh is undergoing a project right now. 
That is happening at a State and local approach right now in 
terms of trying to document the savings and avoided losses.
    Mr. Price. Excuse me, the Florida program you are talking 
about was post disaster mitigation?
    Ms. Lightbody. So the study was done after Hurricane 
Matthew looking at what they have done before Hurricane 
Matthew.
    Mr. Price. Yes, yes, but it was undertaken after the 
disaster?
    Ms. Lightbody. The study was undertaken, the mitigation 
activities were taken before.
    Mr. Price. Before the disaster?
    Ms. Lightbody. Yes.
    Mr. Price. Have any of the think tanks involved in this 
area or the researchers actually assessed the range of pre 
disaster mitigation projects, and how well that money has been 
spent, how efficiently?
    Ms. Lightbody. Because of the nature of tracking, it has 
been difficult to do. I think there is an effort to look more 
closely at what money Federal dollars are going towards 
predisaster mitigation. The easiest place that if you are able 
to do that, is within FEMA, because of a dedicated funding 
stream. And so, as these dollars get spent from HUD, it is 
important that we are able to track and understand where they 
are going and what the savings are as a result.
    Mr. Price. Absolutely. I think we can certainly agree to 
that, that as we get into mitigation as a more and more 
prominent feature of CDBG funding, DR funding, we absolutely 
need to couple with that an assessment of where these dollars 
are going and how we can spend them most efficiently.
    These guidelines will help from HUD, but then, we need to 
assess where the money is going and how well the States are 
doing with this after the fact.
    I will return to my other question on the next round.
    Ms. Clark.
    Ms. Clark. I am going to pass. Back to our ranking member.
    Mr. Price. Sorry, Mr. Diaz-Balart.
    Mr. Diaz-Balart. No problem, Mr. Chairman.
    Actually, Mr. Chairman, on that issue, because I actually 
had a question about that, but on the Florida--and I mentioned 
before that Florida, again, because of unfortunately, because a 
lot of experience in it, has really done a remarkable job, and 
this loss avoidance assessment, which now they do after each 
major disaster has--I think, has been pretty amazing.
    And so the question really is, Ms. Lightbody, you mentioned 
that, and how I think it has--it looks like it has done a 
really good job in kind of getting information, but are other 
States--you sort of mentioned that that maybe some other 
communities--are other States doing similar assessments? Are 
they real? Are they usable? You know, can they be used, and are 
they available? Does anybody know, because I don't?
    Ms. Lightbody. They are happening at different levels, some 
at the State level, some at the community level. And some of it 
depends on funding, if there is funding available, more 
resource communities are able to undertake it. There are also 
Federal ways to drive that to incorporate that into funding 
that goes out the door.
    Mr. Diaz-Balart. Incentivizing it, to incentivize States or 
communities to do the same thing that Florida, in essence, is 
doing?
    Ms. Lightbody. Right, right, right. And it is hard to say 
who is doing it right, because what works in Florida doesn't 
necessarily work in Massachusetts.
    Mr. Diaz-Balart. Or California fires?
    Ms. Lightbody. Exactly, exactly.
    Ms. Haddock. So I will say in Houston, our partner in the 
Harris County flood control district does the majority of our 
buyouts, which are both post and predisaster mitigation 
activities. And they do, after every major flood, actually 
publish the loss avoidance based on predicted losses from 
previous events that would have impacted those structures.
    Those are even within the city of Houston that those are 
published as well. So in that particular regard, we do have 
local numbers on that.
    Mr. Diaz-Balart. I do think, and going back to, I think, my 
original question, which is since HUD is now in the process of 
developing the guidelines for this new, frankly, substantial 
chunk of money that is out there, if you all have any other 
specific recommendations. I am in touch with them, we are in 
touch with them, trying to make sure that those guidelines are 
good. So we have to make sure the States can access them, but 
we don't want that money to be wasted. So it would be really 
helpful if you all have any other ideas, as to what you think 
HUD should be doing as far as guidelines, please let us know, 
please let us know. Because I think that is--again, the 
chairman and I have a lot of interest to make sure the money is 
well spent. It is a substantial amount of money, as you know. 
That would be greatly appreciated.
    Ms. Haddock. I know that Houston has provided specific 
comments along the way, and we will certainly do so during the 
public comment period, but I will make sure they come directly 
to you as well.
    Mr. Diaz-Balart. If you get it to the chairman or to me, 
that would be helpful.
    Ms. Haddock. The thing that I would say is that a lot of 
the current FEMA programs, the only thing that is available to 
people locally in Houston become things--one of the post and 
predisaster mitigation that is happening, I won't say a lot, is 
we have 40 homes that are being elevated, they are literally 
being raised up above the flood plain. Well, we have thousands 
of homes that are in this similar type situation.
    Mr. Diaz-Balart. That is really expensive.
    Ms. Haddock. And we are spending for 40 homes, we are $12 
million in, that is 40 homes. It would actually be less 
expensive to build the exact same size, new homes today's 
standards, but using the criteria, the elevation is the only 
one that meets. And so, we don't want to deny that to our 
residents who are seeking to become resilient, but it is not 
the most efficient use of Federal dollars.
    Mr. Diaz-Balart. Again, any specific recommendations would 
be very helpful, and to get it to us, directly to us, would be 
very helpful.
    Thank you, Mr. Chairman.
    Mr. Price. Ms. Haddock, I wanted to ask you in a moment to 
comment on the pilot program that I understand you are still 
carrying out under FHWA, on resilience and durability to 
extreme weather. But I want to back off initially--stand back 
from that and look at the bigger picture in terms of that kind 
of pilot program and others under DOT and HUD under this 
administration.
    The DOT has removed references to climate change from their 
website, and publications where they address resiliency. FHWA, 
as I understand it, has not renewed funding for pilot projects 
that help cities and regions planned for climate effects and 
build resiliency. HUD had the Sustainable Communities 
Initiative during the Obama administration. That, as I 
understand, has been discontinued. That provided grants to 
support communities in integrating their housing 
transportation, infrastructure, and environmental goals.
    So any of you who are familiar with this and care to 
respond, I wonder what signals we are sending to the agencies--
what signals the agencies are sending to cities, regions, 
States, that are looking to build resiliency into their 
planning and projects? And then, what actual support? It is 
partly a matter of the signals you are sending, it is partly a 
matter of the actual support you are offering. And I would 
appreciate your comments on one or both of those from your 
experience.
    Ms. Raitt. So with the Sustainable Communities Program that 
was operated up until, I think, 2012, 2013, it was actually 
very extraordinarily effective in greater Boston, and one that 
actually set forth a vision in terms of climate adaptations for 
the entire region, and then led directly to local planning 
initiatives that then could be carried out, both at the local 
level, and at, sort of, the subregional level, if you will.
    So that--without that program and without that sort of 
interagency relationship between EPA, DOT, and HUD, it really 
is challenging, again, to marry these different programs and to 
be able to carry out that local work ultimately. Without having 
that interagency partnership and relationship, it is 
challenging. So, I think, any new program moving forward should 
find a way to encourage that interagency collaboration and 
those partnerships, and also ensure that the criteria around 
resiliency is aligned, so that you are not talking about 
different versions of resiliency, but you are talking about a 
version of resiliency which addresses a lot of the things that 
we have been talking about here this morning. And then, also, 
really puts in the forefront equity, and particularly social 
equity directed at vulnerable populations again, where you know 
that the greatest level of investment and infrastructure will 
affect future generations, I think, is critically important.
    So without that Sustainable Communities Program and some of 
the other things that you are talking about, it is challenging 
to operate without that particular program, but I think moving 
forward, there is a way within which it can be integrated into 
future Federal policy and the programs, of course, through 
criteria and other requirements.
    Mr. Price. Thank you.
    Any other comments?
    Ms. Haddock. So I will say that, to some degree, the data 
is coming past the policy in the sense that we now have 
rainfall records that are increasing the amount of rainfall, 
and driving us to design to criteria that the data is just 
driving us there, whether or not we agree with the policy 
implications. And as civil engineers, we have an obligation to 
not only plan for future growth and future demand and all those 
things, but the future environment.
    So we have an obligation to consider those things as we 
move into the planning and the design for infrastructure. And 
so resilience has to be part of that, looking at the changing 
climate and the impacts to whether it is sea level rise. In 
Houston's case, we are more concerned about water supply and 
the changing rainfall patterns, more so than the amount of 
rain, because it is going to be about the same, but we are 
going to get it very differently. So we have to look at all 
those things as we look at where our infrastructure is, how it 
is built, and how it is going to serve our future populations.
    Mr. Price. Of course, you are free to look at the data, 
analyze the data, make the projections?
    Ms. Haddock. Absolutely.
    Mr. Price. Apply for support on that basis?
    Ms. Haddock. Absolutely.
    Mr. Price. Any other comments?
    Ms. Lightbody. One way to--one of the major ways that the 
Federal government can account for future risk is by updating 
the flood risk management standards. We have to stop building 
things in the flood plain that are based on old data and old 
policy made 40 years ago. And so whether that is an agency 
approach, or a Federal wide approach, that is prudent policy so 
that we do not continue to put these homes that are costing 
millions of dollars to retrofit now. Let's not put those homes 
there in the first place now that we understand our risk.
    Mr. Price. Thank you. Since we are wrapping up here, Ms. 
Haddock, let me ask you briefly to comment on the pilot program 
I understand you still have underway on resilience and 
durability to extreme weather the experience with this FHWA 
pilot project, how you expect it to help Houston address 
resiliency in the future. What you would say about FHWA's 
guidance and resources as you have undertaken this, how can it 
be improved? Anything we should know about that?
    Ms. Haddock. So I do have a whole team that works with FHWA 
activities and stuff along the way. So I don't want to get too 
far afield, kind of like my colleague over here, but what I 
will say is that as we look forward to doing each of these 
things, we make sure that we are using the best information 
that we have available today, and that in a lot of cases, that 
we are trying to things we haven't it tried in the past. And 
seeing if they work, that we are basically laying out whether 
it is applied research and development, or whether it is--you 
know, pilot programs are fantastic for local governments, 
because they give us the opportunity to take risk on that is--
that we are adverse to on a daily basis. In general, we do not 
like to implement things that are not tried and true, and 
somebody else has proven for us. So these pilot programs are 
absolutely critical to our ability to try things, and to create 
innovation, and to create forward moving investments that may 
not happen without the implementation of pilot projects on the 
ground.
    Mr. Price. Thank you. If you want to submit more specific 
information about this particular project, feel free to do 
that.
    Ms. Haddock. Absolutely.
    Mr. Price. We will be happy to receive that. Mr. Diaz-
Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman.
    Mr. Price. All right. I think we are ready to wrap up. We 
had a good hearing, I think, a very useful hearing about an 
important topic that is clearly relevant to everything we do, 
it works for every program we are funding. We need to think 
about the implications of today's hearings for that.
    The committee staff is going to be in touch with you, your 
organizations, regarding any questions for the record. We would 
ask you to return any information for the record within 30 days 
from Friday, that is. And that will let us publish the 
transcript of today's hearing in a timely fashion.
    Any final comments? Mr. Diaz-Balart?
    If not, thanks to all of you, and we will hope to be in 
touch as we continue our process here. And the committee is 
adjourned.

                                           Tuesday, March 26, 2019.

                          MEMBER'S DAY HEARING

    Mr. Price. Good morning. The subcommittee will come to 
order. The Transportation, Housing, and Urban Development 
Subcommittee funds programs that affect every city, county, and 
state in the country, from roads and bridges, to housing for 
the elderly and disabled, to recover from natural disasters. 
The programs in this bill protect vulnerable populations and 
rebuild America's infrastructure. Today is our day to hear 
testimony from our colleagues, from members on the programs in 
this bill. We will use this information to guide the 
subcommittee as we assemble our Fiscal 2020 Bill.
    Now, let me--before we begin with our first colleague, I 
recognize Ranking Member Diaz-Balart, for his comments.
    Mr. Diaz-Balart. Mr. Chairman, thank you. This is 
important, that we listen to our colleagues. One of the reasons 
that we are here is to help our colleagues. So, I look forward 
to it. I yield back, Mr. Chairman.
    Mr. Price. All right. Let us proceed. Our first guest is 
Representative Tom Malinowski. We ask you, Congressman, to--we 
are going to recognize you for 5 minutes, ask you to put any--
and we will put any further statement that you have, or any 
attached materials, in the record. You are recognized for 5 
minutes.

STATEMENT OF HON. TOM MALINOWSKI, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF NEW JERSEY

    Mr. Malinowski. Thank you so much, Chairman Price, Ranking 
Member Diaz-Balart; appreciate the opportunity to testify. I 
look forward to building some things with you this year. I am 
here, today, on behalf of the seventh district of New Jersey, 
to advocate for a budget that invests in transportation and 
infrastructure, in particular, public transportation.
    Our infrastructure in America, once the envy of the world, 
is losing its battle, as I think we all know, against time, 
growth, weather, and wear, and no state suffers more from 
underinvestment in infrastructure than New Jersey, where twice 
as many of us use public transportation, as the national 
average.
    To get to and from New York, 200,000 of us still depend on 
just two rail tracks across an old bridge called the Portal 
Bridge, and through the Hudson River Tunnel, two structures 
that were a marvel in 1910, when they were built, but are 
crumbling today. Virtually all passenger rail traffic moving up 
and down the Northeast Corridor depends on these two tracks. If 
we fail to repair this vital transportation corridor in time, 
we will deal a crippling blow to the economy of my region, and 
to the country.
    Even a partial shutdown of the tunnels would disrupt not 
just passenger rail, but car and truck traffic up and down the 
east coast, making commutes virtually impossible for tens of 
thousands of people, diminishing property values, driving away 
businesses in one of the most economically vital areas in the 
country. Congress has recognized that. That is why, in the last 
2 years, in this Congress and the last Congress, we have 
appropriated extra funding to Amtrak's Northeast Corridor, with 
the clear understanding that this should enable construction of 
the Gateway Project, which is designed to repair this critical 
transportation link.
    The first stage of that project, the replacement of the 
Portal Bridge, is shovel ready. The environmental review has 
been completed. All of the funds necessary to complete it have 
already been provided by the Congress. The only roadblock is a 
political one. The Department of Transportation has refused to 
issue grants for the project because it says that New Jersey 
has not committed its share of the funding, even though New 
Jersey has, in fact, committed $600 billion, its share of the 
funding. I can only conclude that this process, because of the 
controversy, for some reason, that has come to surround the 
Gateway Project, has become politicized in the Department of 
Transportation.
    One of the Nation's most pressing infrastructure projects 
should not be stuck languishing on a desk at the Department of 
Transportation. Yet, that is where things stand today. I do not 
believe there is much prospect of that changing in the coming 
months, and that is why I believe the responsibility is on our 
shoulders, to ensure that the Gateway Project, which is so 
vital to the region and the country, is not only funded, but 
built.
    Last year, Congress sent a signal that this is what we 
intended. It is imperative that we do no less this year. 
Indeed, a new Congress should do more, using every legislative 
mechanism at our disposal, to get this project off the ground. 
That is why I am requesting robust funding for two vital 
programs that will provide the necessary resources for Gateway 
to be built, the Capital Investment Grant, Grants Program, and 
the Amtrak Northeast Corridor.
    I am also submitting language requests; one, to ensure that 
the funding we are appropriating is, in fact, being put to use, 
and to make it harder for the Department of Transportation to 
continue making excuses. Another request would make it easier 
for New Jersey, and other States, to finance its portion of the 
Gateway Project, or other States financing their portion of 
similar projects, by allowing states to use Federal 
transportation loans towards their share of jointly funded 
infrastructure projects. That language is in this year's budget 
for only one year. We should extend that. To say that a State 
taking out Federal transportation loans is not putting up its 
share of the cost of that project is like saying that you and I 
are not paying for our house, if we take out a mortgage on our 
house. It is ridiculous, and Congress needs to make that 
absolutely clear.
    So, in sum, these funding and language requests will help 
us get closer to what I believe is our shared goal, ensuring no 
catastrophic loss to this vital transportation link, and 
allowing the Northeast region to continue to drive economic 
growth for the United States, as a whole. Thank you very much.
    Mr. Price. Thank you, Mr. Malinowski. Let me just clarify. 
The Portal Bridge is the first stage in a multifaceted project, 
or projects, among projects. You say New Jersey has committed 
its share, and that share is how much, and what would the 
total--what are the total cost projections, as of this moment?
    Mr. Malinowski. Governor Murphy has committed $600 million 
worth of Series A Bonds that would fund the full share, the 
full expected state share of the project; that, on top of funds 
that we have already appropriated to the Northeast Corridor. Of 
course, we do not have the year mark authority, but I think it 
is understood, within Amtrak, that this funding is to be set 
aside for the Gateway Project because Amtrak cannot survive if 
we allow the Tunnel and the Portal Bridge to fail. Indeed, the 
Portal Bridge is the first stage. This is a bridge that was 
opened in 1910. It is a swing bridge that opens on a--on, kind 
of, a pivot, whenever boats pass, and it is so rickety that, 
when it swings back into place, they often, now, have to send 
out a guy with a sledge hammer to hammer it back into place, as 
stranded rail passengers wait. It is the main source of delays, 
right now, in the Northeast Corridor, and, of course, a delay 
there affects rail traffic all the way up and down the 
corridor.
    The tunnel is the next stage, and, of course, a longer-term 
effort. That is not yet fully ready to go because we are 
waiting for the environmental review to be released by the 
Department of Transportation. The Portal Bridge is shovel 
ready, permitted, reviewed. The only obstacle is they are not 
releasing the grants.
    Mr. Price. Thank you. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Just know that there is no light between 
the Chairman and I on the importance of that, of those 
projects, and of what has to happen, and, so, we will continue 
to work with you.
    Mr. Malinowski. Thank you, sir. I look forward to the 
subcommittee, maybe, some point, visiting the Gateway Project. 
It is a fascinating ride through that tunnel when the lights 
are on, and you, actually, see what a piece of infrastructure 
that old looks like, and thank you for your understanding and 
your support.
    Mr. Price. Thank you. We will next call our colleague, Mr. 
Visclosky. Welcome to the subcommittee. You are recognized for 
5 minutes, Mr. Visclosky; happy to have you submit any 
lengthier materials for the record.

   STATEMENT OF HON. PETER J. VISCLOSKY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF INDIANA

    Mr. Visclosky. Mr. Chairman, my statement is in the record. 
I appreciate the opportunity to appear before yourself, Mr. 
Diaz-Balart, and I am, simply, here to make three points. One 
is to profoundly thank both of you, as well as members of the 
committee and the staff, for your work on the Capital 
Investment Grant Program. For 3 years running, 2017, 2018, and 
2019, you have not only restored, but invested monies in these 
accounts that are important to the gentleman who just spoke 
before me, and others across this nation, including a vital 
redevelopment project in my district. I thank you for that.
    I also understand that, while FTA has monies in their 
account for fiscal year 2019, we are waiting for the obligation 
of funds at this point in time, and would certainly ask for 
sufficient Congressional oversight, as far as their activities, 
or lack thereof, and, finally, would ask the subcommittee to 
continue in the vein they have been in, to include language, to 
ensure that the prerogatives of the Congress and our committee, 
under article I, are abided by the administration, in these 
accounts, and the will of the people are abided by. Again, I 
cannot thank you enough. I know you will do your best. I want 
you to know I appreciate it.
    Mr. Price. Thank you very much. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, I, actually, just want to 
thank the gentleman for his leadership. Your leadership has 
been, frankly, not only aggressive, but exceedingly effective. 
I want to thank you for the way that you have always, not only 
brought issues, but solutions to those issues. It is a 
privilege to work with you, and, again, the Chairman and I look 
forward to continuing to helping in any way we can. I know I 
can speak for the chairman, even though I, obviously, should 
not, but, again, there is no light between us, and I just want 
to thank you for your leadership, sir. I yield back.
    Mr. Price. I agree with my colleague, as you would expect, 
in expressing gratitude for your leadership on our Defense 
Subcommittee, the vital work you do there. We are honored that 
you have broken away to speak with us, this morning, about 
needs closer to home, in terms of your own district. Would you 
like to take just a second to elaborate on the district 
relevance of what you have just told us?
    Mr. Visclosky. On the district relevance, I described the 
First Congressional District as, this school year, having over 
73,000 less children in school than in 1970, which gives you a 
sense of the magnitude of the job loss and the hopelessness of 
people who have just moved because they do not see the 
advantage. We are contiguous to Chicago. We are on the largest 
body of fresh water in the world. We have every East-West 
freight line for interstates, but we are stuck.
    If we connect to the economy of Chicago, whose economy is 
larger than Sweden's, we can prosper. We have the South Shore 
South End Railroad. It is very effective. It is very slow. Our 
intent is to expand service and was pleased that they received 
a medium-high rating for the expansion portion of the project 
in this year's budget and would anticipate that we will make 
progress on what is called a double tracking, to reduce travel 
times and increase the number of trains on the East-West leg. 
That would connect us, and, just to give you an example, in 
Michigan City, which is the Eastern Terminus, by and large of 
my district, it takes an hour and 40 minutes to get on the 
train to Downtown Chicago. The completion of this project will 
reduce that to, about, 57 minutes.
    You are now part of that economy, and all of the quality of 
life that Michigan City holds. Gary, IN, and that is the city 
of my birth; I live in Gary, today. It was recently described, 
in an economist article, as a post-industrial Hell; their 
words, not mine. The neighborhood I live in, in Gary, if you 
can get to Chicago, with the changes in this mass transit, in 
40 minutes or less, you begin to regrow that great city's 
economy and gives hope to its people. Critically important, and 
I would point out, we have all the non-Federal share for 50 
percent. The State of Indiana has contributed, our Regional 
Development Authority, and 16 of our 20 local communities, in a 
completely bipartisan fashion. It is a beautiful thing, Mr. 
Chairman.
    Mr. Price. Thank you. You are very convincing, and we 
appreciate your testimony.
    Mr. Visclosky. Thank you. I would just, parenthetically, 
add that our colleague has a choice as to where he would want 
to spend his time this morning. That would be either on the 
Defense Subcommittee or on yours, and I see he has made the 
right choice. Thank you very much.
    Mr. Price. All right. Thank you, and, now, we will call 
forward Representative Max Rose.

 STATEMENT OF HON. MAX ROSE, A REPRESENTATIVE IN CONGRESS FROM 
                     THE STATE OF NEW YORK

    Mr. Rose. That is what I am talking about. Chairman Price, 
it is good to see you. Thank you for your continued leadership. 
Ranking Member Diaz-Balart, I do not believe I have, actually, 
formally met you. So, nice to meet you, and thank you for your 
leadership, as well. Mr. Aguilar, you are the man. So, I 
appreciate the opportunity to come here, before you, today, 
because, quite frankly, my district, Staten Island, South 
Brooklyn is dealing with a commuting nightmare. It is dealing 
with overall with some of the worst traffic in the country, our 
commute average is 69 minutes per day; 69 minutes. Can you 
honestly imagine that? Two hours spent less with your family, 2 
hours spent less pursuing leisure.
    Our buses just never show up, and overall we have 
collapsing infrastructure. My district also leads New York City 
in terms of private car commuting as a consequence of our 
failed infrastructure on Staten Island and South Brooklyn, 
whereas 22 percent of Manhattanites commute by car every day, 
on Staten Island it is 68 percent. That is just a massive 
economic burden as well.
    My constituents would just love the opportunity to use 
public transportation. They just do not have it. Now, no one 
sent me here to complain, so we are coming to you with some 
real options for things that we can do.
    First, it is one-way tolling on the Verrazano Bridge needs 
to be repealed. The Verrazano is the only bridge in the Nation 
whose tolling is controlled by a Federal mandate.
    This mandate was put in place 30 years ago, and the reasons 
for doing so have been addressed by modern technology. It is 
about time Federal law catches up.
    Two-way tolling would generate millions of dollars in 
additional revenue for New York State MTA, which has a critical 
funding deficit, and this creates an opportunity for us to 
leverage two-way tolling into increased state and local 
investment, particularly in south Brooklyn, and Staten Island, 
both of which are in need of additional buses.
    If you all want to chip in and help for us to pay for the 
additional cameras, for the E-Z Pass System that would be much 
appreciated since we would have had those cameras, had one-way 
tolling not been in place in the first place.
    You know, it is only poetic justice that we deal with this 
through this committee because one-way tolling was originally 
imposed through a THUD appropriations bill.
    Next my district needs substantial improvements to our 
major highways, the Staten Island and Westshore Expressways. 
Tens of thousands of cars use these expressways each day to get 
to work, from New Jersey into Brooklyn, and we can do this, do 
critical programs like the Surface Transportation Block Grant. 
Continued support for capital investment grants is also 
critical for improving access to public transit. Thousands of 
my constituents, as I said, don't have a public option near 
their home, we need additional ferry services. Staten Island is 
an island, South Brooklyn right on the water as well. We are 
prime for so much ferry service to the rest of New York City, 
and even to New Jersey.
    We also, though, have to look at some other options for bus 
rapid transit. We have North Shore bus rapid transit plan that 
is going through an environmental review right now. Staten 
Island Light Rail projects as well, particularly on the West 
Shore as well as going into New Jersey.
    Study show that these projects can have commuting time, and 
we need this community's assistance finishing the studies for 
these plans.
    Now, I am aware that planning and implementing public 
transportation projects, requires coordination between the 
Federal Government and state and local agencies.
    More than anything requires that this committee appropriate 
sufficient funding to making sure that the necessary resources 
are available and are used effectively.
    Therefore, I ask the committee members to include in their 
report language, prioritizing projects in regions with long 
commute times. I think America as a whole is going through a 
rising commuting nightmare as more and more jobs concentrate in 
urban city cores.
    In my conversations with many members of this committee, I 
have been encouraged by your desire to effect real change in 
the way that America and Americans move around. We all came 
here to make people's lives better, and I have shared with many 
of you the sentiment that there is no better way to do that 
than to ensure that people get to and from work quickly, and 
reliably, and can spend more time at home with their families.
    Thank you for the opportunity to speak with you today. And 
I will look forward to working with you all going forward.
    Mr. Price. Thank you very much, Mr. Rose, for your 
testimony. Mr. Diaz-Balart.
    Mr. Diaz-Balart. I actually, just also want to thank you 
for your testimony. And we look forward to working with you.
    Mr. Rose. Thank you very much.
    Mr. Price. Now, we welcome, Representative Steve Watkins. 
Glad to have you, sir.

 STATEMENT OF HON. STEVEN C. WATKINS JR., A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF KANSAS

    Mr. Watkins. Thank you, Mr. Chairman. And thank you Mr. 
Diaz-Balart, and thank you Mr. Aguilar.
    I come here today to draw your attention to Highway 69, it 
is a major route that extends through a large section of my 
district. I am in eastern Kansas, and this Highway 69 stretches 
from north to south connecting Kansas City, which is in our 
northeast corner down to our southeast corner.
    I am an engineer by schooling and by trade, I have 
overseeing millions and millions of dollars of construction in 
several countries, and I note through visually observing as 
well as talking with our state officials that this highway is 
in disrepair.
    And it is not just a matter of the surface and subsurface 
layers cracking, but we are also experiencing an increase in 
volume. Traffic accidents are on the rise, and they are far 
above the rates of state-wide averages and national averages. 
What we have got is a two-lane highway with several, actually 
three freeway corridors that intersect along Highway 69.
    And as the subcommittee drafts their fiscal year 2020 
appropriations bill, I respectfully ask that you include a 
request for the Department of Transportation to conduct a study 
on the safety of Highway 69.
    The safety of American highways is essential and valuable. 
There is no doubt on the return on investment proper safety 
plans and maintenance of our highways is a direct investment in 
American ingenuity and quality of life, failing to do so 
results in slower economic growth, hazards and even deadly 
driving conditions.
    Thank you for the opportunity to speak with you today. And 
I encourage you to lead the effort in rebuilding America's 
infrastructure. Thank you, sir.
    Mr. Price. Thank you, Mr. Watkins. I wonder if you could 
elaborate. We will get your full statement on the record, but 
we have a couple of minutes here. I wonder if you could 
elaborate a bit on the state's part in this, and the level of 
state concern and state effort.
    Mr. Watkins. Sure. Most of what I have participated in, and 
I have had privy to has been, I have actually driven by private 
citizens leading the effort and holding hearings in meetings in 
conjunction with the Kansas Department of Transportation. Now 
there has been improvements made on the highway, and not all 
parts are as dangerous as I have described.
    Now I can provide a report that clearly answers your 
question, but efforts to this point have largely been civilian 
driven.
    Mr. Price. All right. Thank you. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, really on a point of 
personal privilege. Because I just, you know, want to thank you 
for stepping up today. We look forward with you. But also, I 
would be remiss if I didn't thank you for your selfless service 
to the country.
    Mr. Watkins. Thank you.
    Mr. Diaz-Balart. You are doing it now, and you have been 
doing it all your life, and as well as your family. So I just 
wanted to take the opportunity to thank you for that, and it is 
not something that we do not cherish and admire. So, thank you, 
sir.
    Mr. Watkins. You are welcome, sir.
    Mr. Price. Thank you.
    Mr. Watkins. Thank you.
    Mr. Price. We are going next to the witness stand. Our 
Representative Gil Cisneros, welcome.

STATEMENT OF HON. GILBERT RAY CISNEROS JR., A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Cisneros. Thank you, sir. Chairman Price, Ranking 
Member Diaz-Balart, Mr. Aguilar, members of the House 
Appropriations Subcommittee on Transportation Housing and Urban 
Development, thank you for allowing me this opportunity to 
provide input on the fiscal year 2020 appropriations process, 
on behalf of the residents of the California's 39th 
Congressional District.
    I am here today to encourage you to once again reject, on a 
bipartisan basis, the damaging cuts to transportation and 
housing funding proposed in the President's Fiscal Year 2020 
budget request.
    My district is one of many across this nation that relies 
on federal funding for local infrastructure projects to fund 
housing programs and advance our economy. Today, I want to 
highlight just a few examples of the programs in the 39th that 
deserve your attention.
    Among the many highway funding streams under your 
jurisdiction, I urge you to provide increased funding for the 
INFRA Discretionary Grant Program. My district is home to a 
major trade corridor along California State Routes 57 and 60. 
Stakeholders in my district have been working to advance the 
57/60 Confluence Chokepoint Relief Project for over a decade.
    This month, I sent a bipartisan letter with nine of my 
regional colleagues in support of the community's second 
application for an INFRA grant after their application was 
rejected last year.
    I have met with local officials who highlighted that in the 
past year, the total cost of the project has increased due to 
the delayed start date and recent changes in trade policies. 
Strong funding levels for the INFRA Grant Program will ensure 
this project is competitive and completed.
    Additionally, I urge you to provide strong funding levels 
for the Low or No Emission Vehicle Program under the Federal 
Transit Administration.
    I have heard from transit entities across my district who 
are working to meet the statewide goal of reaching 100 percent 
zero-emission bus fleets by 2040.
    The so-called Low-No bus program will help transit systems 
in my district transition their fleets to the lowest polluting 
and most energy-efficient vehicles.
    Further, I hope that you ensure robust funding for rail 
infrastructure programs, including BUILD Transportation grants 
and the Transit Oriented Development, TOD Pilot Program.
    The city of Placentia in my district is proceeding with 
site planning and has secured local and state funding for a new 
MetroLink station.
    Federal funds through BUILD and TOD programming will ensure 
the timely completion of this project and associated economic 
development plans.
    Regarding housing programs, I am extremely troubled that 
the President has proposed to eliminate key housing and 
community development programs, like the Community Development 
Block Grant program, CDBG.
    Since being sworn into office, I have met with 
representatives in every city in my district. In every single 
meeting, mayors, council members, Democrats and Republicans 
urge me to fight for increased funding for CDBG.
    Our cities need these funds to improve the quality of life 
for vulnerable populations. Chino Hills uses these funds to 
support the House of Ruth, which serves domestic violence 
survivors who need shelter. Walnut uses these funds to support 
home renovations for special needs family members.
    Contrary to the President's budget, these programs are not 
low value, and I hope you will reject this proposal.
    Finally, as a former Navy officer, I am outraged that the 
President has not requested funding for HUD-VASH in his budget 
request. It is deeply troubling to see my fellow veterans 
unable to find safe, comfortable housing.
    We owe it to them to do whatever we can to support local 
efforts to finally end veterans' homelessness. I stand with my 
colleagues calling for a return to the fiscal year 2017 funding 
level of HUD-VASH, to 47 million.
    Thank you again for your time and consideration. I know you 
have a tough job ahead of you given the constraints of the 
Budget Control Act. I hope you will keep these stories in mind 
as you craft the Fiscal Year 2020 Transportation, Housing and 
Urban Development Appropriations Acts.
    Thank you very much.
    Mr. Price. Thank you, Mr. Cisneros. We welcome you to this 
institution, and to this committee, and we appreciate your 
testimony. I can assure you that this subcommittee has a 
history of an independent and largely bipartisan scrutiny of 
these budget items. Many of which you have mentioned. The CBDG 
of course ranks very high, so does VASH. We appreciate your 
concern about these matters, and we will tend to them. We 
intend to look at those very carefully.
    Let me turn to Mr. Diaz-Balart for any questions he has.
    Mr. Diaz-Balart. Mr. Chairman, I just want to echo your 
words and I wholeheartedly agree. And thank you for coming in 
front of us today. I yield back.
    Mr. Cisneros. Thank you very much for the time.
    Mr. Aguilar. Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Aguilar. Mr. Chairman?
    Mr. Price. Oh. I am sorry. I recognize Mr. Aguilar.
    Mr. Aguilar. No, I just wanted to say briefly to Mr. 
Cisneros, and other members who are new to Congress who are 
testifying, this is the group under the leadership of Ranking 
Member Diaz-Balart when he was Chairman, and Mr. Price is 
Chairman now, has done exactly what they have both said, is to 
push back on priorities that are important for our communities 
and our regions.
    A lot of the programs that you mentioned were protected and 
saved under the leadership of both of these two individuals. I 
also want to speak a little bit to the region that Mr. Cisneros 
represents. Much like some of our Florida colleagues, a lot of 
our regions are interconnected, and so people may live in my 
district and work in Mr. Cisneros district, or live in his 
district, and drive through my district. We are all connected, 
and a lot of these priorities that he has talked about are not 
parochial and have broad support within regions because of the 
interconnectedness that we have in Southern California.
    So, I thank you for bringing these priorities forward, Mr. 
Cisneros.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mr. Cisneros. Thank you.
    Mr. Price. Thank you, Mr. Cisneros. Now, we call on 
Representative Adriano Espaillat. Glad to have you, sir.
    Mr. Espaillat. Thank you, Mr. Chairman.
    Mr. Price. We recognize you for 5 minutes, and we will put 
any additional materials you wish in the record.

   STATEMENT OF HON. ADRIANO ESPAILLAT, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Espaillat. Thank you, Mr. Chairman; Mr. Ranking Member. 
I want to first start by thanking the Ranking Member, last year 
he helped out in some housing-related matters, with Lake View 
Housing Complex, and it proved to be very successful. So, 
bipartisanship sometimes does work.
    First, I want to thank you, Mr. Chairman, members of the 
committee, for allowing me to testify this morning. My full 
written testimony was already submitted, but I wanted to take a 
few moments of your time to highlight the specific areas of 
interest and concern that I have.
    The first item that I want to speak about is the capital 
investment grants. These grants are vital to the growth or 
modernization of our local transportation systems. I know this 
program has bipartisan support, but I want to add my voice to 
the consistent leaders on this issue, Congressman Blumenauer 
and Congresswoman Walorski.
    The Second Avenue subway is slowly but surely making its 
way uptown in New York's 13th congressional district. This is a 
century-long endeavor in the city of New York, and it requires 
city, state and federal funding, including CIG funding which is 
part of the new STARTs program.
    And I support this type of funding and my constituents 
direly need the extension of the Second Avenue subway, and when 
you are in New York, and you don't take a cab because it is no 
longer practical to do that, because this becomes a permanent 
parking lot, and you have to take the train, I hope you take 
the Second Avenue subway, and you get to where you are going on 
time.
    So, we need the moneys for this. As a new member of the 
Transportation and Infrastructure Committee, and the only 
member representing New York City, it is extremely important to 
my constituents and to all New Yorkers, that the CIG and New 
Starts Program continues to receive bipartisan support. For 
that reason I urge the committee to reject the administration's 
proposed cuts to the program, and maintain funding at current 
levels.
    Now, I know from both sides of the aisle, many of our 
colleagues have projects that will surely benefit from New 
Starts, and I am optimistic and hopeful that we will keep the 
funding.
    The MTA, that is the larger, broader subsystem, not just 
the Second Avenue Subway. It is like your brake pads, you can't 
expect to run your car 100,000 miles with the same brake pads, 
you are either going to have an accident, or you are going to 
have a major, major mechanical, auto-mechanic bill coming up 
with your front end.
    So, the MTA system continues to have great needs, and I am 
hopeful that this committee would advocate for the funding of 
subway systems in New York City. The economy in many ways, the 
financial district is joined at the hip with our subway system. 
New York City's economy is really relying on fast and reliable 
public transportation, and not to have it will hurt, not only 
New York City, but the rest of the country as well. So, I hope 
that you invest wisely in our New York City public 
transportation system.
    Furthermore, I would be remiss if I did not urge in the 
strongest term the importance of funding GATEWAY, the GATEWAY 
Project especially, and especially the replacement of the 
Hudson Tunnel, so it is a regional need, the Northeast Corridor 
is very fragile.
    In fact, I think it is a national public security problem 
there, to have such a fragile corridor of the country in the 
way that it is, and I suggest and encourage funding for a new 
way.
    And finally, Mr. Chairman, and Mr. Ranking Member, I think 
that transportation and infrastructure is not just roads, 
bridges and tunnels, and that is a traditional, so like, 
description of it, but it also involves things like public 
housing.
    I know the Ranking Member is very aware of that, and that 
is something that is very dear and near to him.
    Public housing is part of our infrastructure network, and 
we must invest in NYCHA, the New York City Public Housing 
Authority, 440,000 people living in NYCHA buildings. That is 
bigger than many cities, small cities, even mid-sized cities in 
the country.
    And we have all seen it in the news, the dire conditions 
faced by many of these families, so we have to invest in 
capital improvements for our public housing, not just in New 
York City, but across the country.
    We are the landlords, the Federal Government is the actual 
landlord, and we must have full responsibility in having a save 
and human conditions for many of the families that live in 
public housing. With that I end, Mr. Chairman. I know there are 
other matters such as housing voucher programs that I support, 
as well as other block grants, community development block 
grants that I also support, but I think these are major 
initiatives and I hope I find the support in this committee. 
Thank you so much.
    Mr. Price. Thank you, Representative. We are fortunate 
enough, I think to have Transportation and Housing under the 
same roof, so to speak, in the appropriations process, for many 
of the reasons that you state. And you won't find disagreement 
here with the notion that housing and community development is 
also part of our country's needed infrastructure and 
development crying out at this moment for investment. We 
appreciate your testimony.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, very briefly. This is a 
member who has been exceedingly effective and persuasive, and I 
want to thank you for your involvement, your direct 
involvement.
    You know, just to note that this subcommittee, whether it 
is the chairman or the ranking member, or whether it is the 
staff and their teams, we frankly work as partners, in absolute 
trust. That is one of the reasons that I think not only have we 
been able to do important things, but it will hopefully 
continue to do important things, and just know that, and again, 
if I may be so bold to even speak for the chairman, but we work 
together, and to make sure that we fulfill the priorities of 
the country, and I personally want to thank you for just being 
hands-on as you are and your staff.
    And so I know that I can speak for the Chairman and our 
staffs, to thank you for your involvement, and we look forward 
to working with you and the chairman on that.
    Actually, I can pretty much use that also as my closing 
statement. I yield back. Thank you.
    Mr. Espaillat. Thank you.
    Mr. Price. Thank you, Mr. Espaillat. Next we will hear from 
a colleague, Jeff Van Drew. Welcome, sir.

   STATMENT OF HON. JEFFERSON VAN DREW, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Van Drew. Thank you. Thank you. It is good to be here. 
Chairman Price, Ranking Member Diaz-Balart, and members of the 
Transportation Housing and Urban Development Subcommittee, I 
thank you for the opportunity that you have given me today, to 
speak on behalf of the over 1,400 men and women at the William 
J. Hughes Technical Center in Atlantic City. They keep our sky 
safe, and I am deeply proud to represent them in Congress.
    I represent New Jersey's Second Congressional District 
which encompasses a large swath of the State's land mass, and 
is known for its biodiversity, beaches, fisheries and tourism-
based economy.
    The Tech Center is the Federation Aviation Administration's 
National Scientific test base for the research, development, 
test and evaluation of air transportation systems. The 
research, testing and prototype development conducted by Tech 
Center staff help shape the future of the Nation's air 
transportation system. In short, it is the Nation's premiere 
Air Transportation System Federal Laboratory.
    The Technical Center has a number of unique laboratories 
engaged in research that contribute to aviation system 
development, air traffic management laboratories, simulation 
facilities, a human factor's laboratory, the next-gen 
integration and evaluation capability, a cockpit simulation 
facility, a fleet of specially instrumented, in-flight test 
aircraft.
    The world's largest full-scale aviation fire test facility. 
A chemistry laboratory for analyzing the toxicity of materials 
involved in a fire, surveillance laboratories, a full-scale 
aircraft structural test, evaluation and research facility. The 
national airport pavement testing facility and an unmanned 
aircraft systems research and development simulation 
laboratory.
    The Tech Center is the heart of an aviation cluster that is 
unparalleled. A lot of work at the Tech Center is done in 
partnership with the academic, private and public entities such 
as NASA, the Department of Defense, Department of Homeland 
Security, U.S. Marshalls, and the U.S. Coast Guard. I hope the 
subcommittee supports robust funding for the Tech Center 
laboratory facility, laboratory sustainment, next-gen, and 
operations planning. The next-gen support portfolio and fire 
research, and safety, among others.
    Finally, I oppose the administration's attempt to require 
Tech Center employees to fork out more of their own money for 
their retirement plans.
    Public service is a calling for the Tech Center employees. 
They are proud to contribute to their safety, security, and 
competitiveness of their country. And oftentimes they give up a 
much more substantial salary that could have commended in the 
private sector.
    When the government breaks its commitment, it sends an 
unmistakable signal.
    The recent 35-day Government shutdown, the longest in our 
Nation's history really hurt morale at the Tech Center as 971 
employees were furloughed, and 449 were asked to work without 
pay.
    Critical projects were significantly delayed. Tech Center 
employees, like many Federal employees, simply do not trust the 
Federal Government to keep its end of the bargain anymore and 
may choose to take their expertise elsewhere.
    I implore the subcommittee to reject these onerous cuts to 
Tech Center workers. And again, I ask the subcommittee's 
support robust funding for all programs and operations at the 
William J. Hughes Technical Center.
    I thank the subcommittee for its time, and look forward to 
working with all of you to ensure the safety of our skies. 
Thank you.
    Mr. Price. Thank you, Mr. Van Drew. We welcome you to the 
Congress, and to this subcommittee, and we appreciate your 
testimony. Your region, New York, New Jersey metropolitan 
region and beyond, have been well represented here this 
morning, and we appreciate the chance to learn more about the 
work at the Tech Center, I have been here long enough to 
remember very fondly, Bill Hughes.
    Mr. Van Drew. Yes.
    Mr. Price. And the good work he did. And we appreciate your 
championing of the Tech Center's work, and its employees.
    Mr. Van Drew. And I will continue to do so. And Bill Hughes 
is doing well.
    Mr. Price. Good, good to know. Mr. Diaz-Balart?
    Mr. Diaz-Balart. Mr. Chairman, and you spoke very well for 
me. And so I will yield back. Thank you so much.
    Mr. Price. Thank you very much. We appreciate your 
testimony.
    Mr. Van Drew. Thank you so much.
    Mr. Price. Ms. Jackson Lee? It is a pleasure to welcome you 
to the subcommittee, and we will put your full statement, and 
any material you want to place on the record, but we will 
recognize you for 5 minutes.

   STATEMENT OF HON. SHEILA JACKSON LEE, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Ms. Jackson Lee. Mr. Chairman, thank you. Ranking Member, 
thank you; and thank you for the work of this committee. It is 
sort of the backbone of local communities, and they are eager 
to see the committee's work.
    Let me first of all frame some issues that may seem to be 
authorizing commentary, but I know in the midst of your great 
work and understanding of how dependent our various agencies 
that deal with Transportation-HUD issues, are on the Federal 
Government.
    As relates to transit, I would hope that we would be able 
to overall fund the program at the authorized level or more, 
and not at the proposed administration budget.
    I am shocked at the administration's budget because they 
had a commitment to do an infrastructure bill, which obviously 
is going to take some dollars. Increasing the flexibility where 
possible so local government, meaning local government, not 
state governments, can flex funds to local priorities allowing 
for increased funding of transit projects with highway category 
funds.
    That flexibility will allow local transit entities would be 
very helpful. Allow flexibility of utilizing funds remaining in 
the full funding grant agreement so we can use funds for 
supporting enhancements that were not included in the FFGAs. 
So, to look at that language would be very helpful.
    I am a strong supporter of ensuring the recovery of the 
Virgin Islands and Puerto Rico. I want to emphasize that. I do 
have, actually the appropriation's process to look at the $300 
million that was given in resilience, and whatever has not been 
used by Puerto Rico and the Virgin Islands, to go back to those 
particular entities, like those impacted by Hurricane Harvey, 
and asses their needs as well. We understand the commitment 
that had to be made to Puerto Rico additionally.
    Secondarily, I am hoping for an increased amount of funding 
for bike safety. I will be introducing legislations regarding 
incentives for states to focus on bike safety. I have one of 
the highest numbers of bike death in the Nation down in Houston 
and down in Texas, and it is a transportation dollars 
incentivizing them to get States to really turn their focus.
    It is not just bike trail, which I support wholeheartedly, 
and gave the first $6 million to my community, way back, to 
establish this massive bike trail system that they have. But it 
is bike safety that is crucial.
    I support 1.25 billion for transportation investment TIGER 
grants, they are the lifeline of local communities. I support 
$2.5 billion for New Starts, Texas, but let me just say Houston 
is about 20 years behind, because we had some distractions in 
getting funding early on though many of us oppose it. This is 
going to help the efforts that we have.
    I support $120 million for the FTA providing grants to the 
state and local governments. I support $2.3 billion for the 
Amtrak Passenger Rail, I have always been a support of that 
Amtrak service that is crucial East Coast.
    I support $3.1 billion for capital assistance for high 
speed rail. We are engaged in the process of high-speed rail 
going from Houston to San Antonio, to Dallas. We are using 
certainly private funds to a certain extent, but the Federal, 
State and local partnership is vital to this program, and it is 
going to be an economic engine for many rural communities which 
I think is important.
    I represent the airport and so the $3.4 billion in airport 
improvement, that is where I think we need the greatest 
investment in tarmac reconstruction safety and security is 
crucial.
    As it relates to HUD, again, my district faces the largest, 
or let me just say, a huge number of homeless. I interact with 
them, pass them in huge numbers in Downtown Houston. We have 
tent cities in Downtown Houston made by the homeless, but more 
importantly we have our veterans, of course, that are engaged. 
So, $3.5 billion for community block grants, the homelessness 
of working people is also, the unhoused, it is vital that we 
begin to build housing across America, and be partners to that.
    And so I support the $120 million for housing for the 
elderly, which is crucial. I would even like to see that 
increased. And I support the $1.6 billion for the home 
investment partnership program, there is so many people that 
are designed to be in homes. They are working Americans.
    Now, there is a different issue on the credit score. I 
happen to think if you are a working American, and you can show 
that you pay your--that the normal bills that you need to be 
able to get your down payment and get a house.
    I support the idea of home investment. I support $21.5 
billion for tenant-based rental assistance, too many people 
being evicted, $42.5 million for Fair Housing Initiative, we 
still have the unfortunate circumstances of discrimination 
against immigrant, against the LGBTQ community, against 
elderly, against the disabled and against minorities.
    I support $500 million for HUD VASH programs. Again, that 
is homeless veterans. Many in my district, $90 million for 
housing counseling assistance, $160 million for lead poisoning, 
I think that is a good--I would like to see that increased. I 
think we are finding more lead than we might believe in places 
where we would not believe that we are finding it.
    There are a lot of people living in homes that they are 
renting, and that are very old, in communities like mine that 
have lead.
    Finally, I support $360 million for housing opportunities 
for person living with AIDS, this was something that I 
supported way before I came to the United States Congress, and 
I will tell you that it is a, I will use the term blessing, for 
individuals living with HIV/AIDS.
    Finally, let say that I thank both of you for the service 
that give, count us as partners in this work. You have a vital 
committee for vital lifesaving programs for the American 
people. I yield back.
    Mr. Price. Thank you, Ms. Jackson Lee. We certainly agree 
as to the vitality of this committee and the work we do, and we 
appreciate your advocacy over this broad range of programs. It 
reminds us of how much work we have to do. We appreciate you 
being here. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Mr. Chairman, I have had the privilege to 
work on a number of different areas, and so I want to also just 
join your words. Thank her for being here. But she understands 
the importance of the subcommittee. And just know that the 
subcommittee is committed to a lot of the issues that you just 
mentioned.
    So I want to thank you. Thank you, Mr. Chairman.
    Ms. Jackson Lee. Thank you.
    Mr. Price. I believe, Ms. Jackson Lee----
    Ms. Jackson Lee. Thank you for the time.
    Mr. Price. Thank you. And we appreciate your being here. 
And I believe Ms. Jackson Lee is the last of our witnesses. Are 
there any others coming forward? If not, any closing comments, 
Mr. Diaz-Balart?
    Mr. Diaz-Balart. Mr. Chairman, I want to thank you for 
holding this hearing, again, this is an important step to 
putting together a crucial piece of legislation that is always 
challenging. But again, I look forward to working with you with 
the staff, and with all the members that have testified in this 
subcommittee to putting together a great bill that we can all 
be proud of.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you. We have had an interesting range of 
members today, and some real challenges put before us. So, we 
appreciate that input from veteran members, and also from some 
of our newest members, and all in between.
    With that the subcommittee will adjourn.
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                                          Wednesday, April 3, 2019.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                                WITNESS

HON. BENJAMIN S. CARSON, M.D., SECRETARY, DEPARTMENT OF HOUSING AND 
    URBAN DEVELOPMENT
    Mr. Price. The hearing will come to order.
    We would like this morning to welcome our Secretary, Mr. 
Secretary, from the Department of Housing and Urban 
Development, Dr. Ben Carson, to our annual budget hearing. So 
welcome back. We are glad to see you, Mr. Secretary.
    Across the country, communities are grappling with an 
affordable housing crisis. Many of the people affected by this 
crisis are the most vulnerable among us: seniors, the disabled, 
low-income families with children, and veterans. Studies from 
HUD and other sources indicate that more and more families are 
struggling to pay rent.
    The Department's most recent worst case housing needs 
report to Congress identified more than 8 million renters who 
spend more than half of their current income on rent, live in 
severely substandard conditions, or both. Yet today, just one--
excuse me, one in four families eligible for Federal housing 
assistance gets the help they need. That is 25 percent.
    So at a time when housing should be a front-burner issue 
right up there with education and healthcare in terms of basic 
human well-being, it seems to be actually falling further 
behind.
    As I have said before, this isn't a reality written in the 
stars somehow; this is a political failing. It represents a 
political failing, and it can be changed. For many years, 
nearly all of HUD's affordable housing and community 
development programs have been underfunded compared to 
demonstrated need. We know from both personal testimony and 
available research that HUD programs make a positive difference 
in the lives of millions of people. They can transform 
struggling communities, improve health and education outcomes, 
especially for children, reduce homelessness, and support self-
sufficiency and human dignity.
    That is why it is disappointing that the Department for the 
third year in a row has put forward a budget request that is 
wholly inadequate for the task at hand. Sometimes we say the 
third time is the charm. I don't think so in this case. HUD's 
request includes about $39.7 billion in total budgetary 
resources. That is $9.7 billion less than fiscal 2019 enacted. 
It is a cut of 20 percent.
    Mr. Secretary, you propose in your budget to eliminate 
community development block grants. Eliminate. Eliminate the 
home program, the public housing capital fund, choice 
neighborhoods, special vouchers for homeless veterans. That 
list goes on, and I haven't even mentioned the numerous 
reductions in the request.
    On that front, it appears that your budget request could 
leave core housing assistance programs such as Section 8 
vouchers without adequate funding to continue serving all 
existing tenants. This could put thousands of families at risk 
of becoming homeless.
    These sweeping program eliminations and reductions are not 
only unacceptable but also unrealistic. It is exhibit A of this 
administration's draconian approach to budgeting, and it 
utterly fails to consider the stark human cost it would impose 
on our fellow citizens. And by the way, none of this would 
ever, ever balance the budget. But it would disinvest in our 
communities. I would call that the worst of both worlds.
    I would also like to register my serious concerns with the 
Department's so-called rent reforms, which would essentially 
shift HUD program costs on to residents. These proposals were 
rejected on a bipartisan basis last year. I expect the same 
will occur this year.
    In addition, during the last 2 fiscal years under the 
leadership of Mr. Diaz-Balart, this subcommittee provided 
significant new targeted resources for HUD programs to assist 
the disabled, the elderly, the Native Americans, so we need 
more clarity about when this funding will be awarded.
    Finally, we need to hear directly from you, Mr. Secretary, 
on a host of other topics, including the Department's actions 
to improve housing quality standards, to enforce our Nation's 
fair housing laws, and to administer disaster recovery funding 
to assist States and territories hit by recent natural 
disasters.
    The current state of housing in America should force us to 
ask tough questions about our national priorities. Those who 
live in federally assisted housing are not second-class 
citizens. They, in fact, are our neighbors, working parents, 
seniors, the disabled, and young children. They are seeking 
stability and opportunity in their lives just like the rest of 
us. They deserve a place in our communities; indeed, they are 
often serving our communities. Unfortunately, this budget 
proposal would make our affordable housing crisis even worse, 
and it would relegate vulnerable people to an even more tenuous 
and marginalized existence within our society.
    So, Mr. Secretary, HUD and its dedicated employees have a 
challenging and vital mission. I look forward to working with 
you to ensure that you have the resources you need to carry it 
out.
    I would now like to recognize my good friend and the 
ranking member of the subcommittee, Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you very much, Mr. Chairman.
    Secretary Carson, welcome back to the subcommittee. It is 
always good to see you, my friend.
    I would like to start by thanking you for always making 
sure that our lines of communication are open, are direct, 
honest and, frankly, very productive. I have now had the chance 
to work with you directly for over 2 years, and I continue to 
be impressed, continue to be impressed with your dedication to 
making sure that HUD's programs are run as effective as 
possible. The budget caps deal of fiscal year 28 and 29 set 
up--really set us up to make some significant investments to 
improve our communities and enable economic growth. When we 
made decisions for that bill, Chairman Price and I worked 
together as a team to ensure that housing programs were 
included, frankly, as infrastructure investments, which a big 
part of them are, and as a result, we increased funding for 
CDBG, home, tribal grants and other HUD programs that leverage 
affordable housing production.
    Now, we made these investments while working to ensure that 
rental assistance programs could continue to serve those in 
need. We have placed a lot of responsibility, Mr. Secretary, on 
your shoulders as you work to carry out these new, frankly, 
sometimes large investments in our communities. Much of this 
investment is carried out in the State and local level, and we 
appreciate that your relationships, sir, with governors, 
mayors, and community organizations has, frankly, been key and 
is key in getting that job done.
    Look, I have seen this commitment firsthand, Mr. Secretary, 
as we traveled together in Miami and we heard from local 
community leaders. Your attention to the local needs and local 
solution has, and I will tell you this sincerely, has really 
been felt by my constituents, and I want to thank you for that.
    We also appreciate that you have an enormous 
responsibility. As you work to carry out the over $35 billion 
in CDBG disaster recovery dollars that we provided for 
Hurricanes Harvey, Irma, and Maria in 2017, and the additional 
down payment of $1.7 billion for Hurricanes Michael and 
Florence and the California wildfires, among other disasters, 
just to name some, right?
    Obviously, we want to make sure that these funds get out to 
our communities so that they can rebuild in a way that reduces 
the impact of future storms; that is the goal. If we do this 
right, and you know because you are committed to it, we must do 
it right. The human and financial cost of future hurricanes, 
wildfires, and other disasters will be reduced, and our 
investments will bring value to the tax dollar.
    I want to thank you and your team for all you are doing in 
Florida--in and for Florida, Texas, Puerto Rico, and elsewhere 
to carry out the CDBG-DR program. There is a lot of work in 
front of us, and again, I want to thank you for your commitment 
and your hard work. Obviously, we know that you face 
constraints when you put together your budget request. That is 
just reality.
    Just like last year, we are unlikely to agree on all of the 
things that you have put forward, like eliminating, you know, 
CDBG or home and public housing capital funds. Everyone knows 
that our job in this committee has always been to review 
proposals by whatever administration happens to be in place, 
and then put together a bill that this committee believes is 
the best and that we can actually--that can actually become 
law. So I appreciate that.
    As we have restored these programs in the past, Mr. 
Secretary, you have carried them out in good faith and ensured 
that they continue to serve the intended purpose that Congress 
has put forth. I am also very pleased to see that you have 
placed a priority on homeless programs with a request of $2.6 
billion, with a continued emphasis on performance-based 
requirements. That is something that I think is key.
    This program, along with VASH vouchers, veteran vouchers, 
has been a huge success in Miami, as you know. You helped 
celebrate, you went down there to help us celebrate a major 
milestone when we effectively ended homelessness for veterans 
in Miami-Dade County.
    You know, this was a remarkable achievement, helping a 
group of people that, frankly, deserve it potentially more than 
just about anybody. And I thank you, Mr. Secretary, and I thank 
you and your staff for your dedication to those individuals and 
to this issue.
    I am also pleased to see a major emphasis on lead and 
healthy homes with a historic high request of $290 million. 
This investment reflects your deep understanding of the 
connection between housing and health.
    Mr. Secretary, your personal story is an inspiration. It is 
an inspiration to everyone in this country. You came from 
humble beginnings. You worked against all odds to become a 
world-known and respected surgeon, and now, with your service 
at HUD, you continue to show deep, deep commitment to helping 
others climb the ladder of opportunity and help those who need 
it most.
    I want to thank you for your service, Mr. Secretary. I look 
forward to your testimony, and I look forward to continuing 
working with you in an effective and, frankly, in a positive 
way. So thank you again for being here.
    Mr. Chairman, I yield back.
    Mr. Price. Thank you.
    We are happy to have with us this morning the chairman and 
ranking member of the full committee, and so for opening 
statements, I will turn first to Mrs. Lowey.
    The Chairwoman. Thank you, Mr. Chairman.
    And welcome. It is a pleasure to have you with us today. 
And I would really like to thank Chairman Price and Ranking 
Member Diaz-Balart for holding this very important hearing.
    Mr. Secretary, your budget is very similar to last year's 
request, which this committee rejected on a bipartisan basis. 
This year, your proposal contains even deeper cuts and would 
greatly reduce public housing and end most community 
development block grants. It would lead to more people 
struggling to find affordable housing and more people falling 
into homelessness. And, in fact, as I was hearing my good 
friend Mr. Diaz-Balart talking about this, I thought maybe we 
were talking about two different people, because I certainly 
have a different analysis.
    Let me give you a couple of examples. Community development 
block grants, which make successful investments in community 
development, such as affordable housing, antipoverty programs, 
home investment partnerships, which provides affordable housing 
for low and very low-income Americans, the primary source of 
funding for the development, financing, and modernization of 
public housing. I must tell you, I visit public housing on a 
regular basis. I couldn't believe that we are cutting back on 
funds to upgrade public housing.
    And some of the dramatic increases in your request would 
cause great suffering and harm, including cuts of $63 million 
for housing for people suffering from HIV and AIDS, $198 
million for tenant-based housing, $34 million for housing 
assistance for the elderly, $27 million for housing assistance 
for the disabled. Frankly, I don't see any justification for 
these harsh cuts.
    This administration often makes the argument that it has no 
choice but to cut even the most critical programs to reduce the 
deficit. But, my friends, let's remember, the Republican tax 
bill alone will add $1.9 trillion to deficits from 2018 to 
2027, and there is no honest reconciliation of the two.
    Let me be clear, these cuts do not exist in a vacuum. If 
enacted, they would cost taxpayers even more than current 
investments in the very types of assistance you propose to 
eliminate or severely cut.
    Housing, in my judgment, is really the foundation on which 
the rest of a life is built. It is nearly impossible to go to 
school, get a job, raise a family, or age in place without 
having a stable place to live. These investments play a big 
role in empowering hardworking families, giving children a good 
start in life, and providing economic opportunity for all 
Americans.
    I do hope, and I welcome you, I do hope you will take these 
concerns seriously. I look forward to a productive discussion 
today, and thank you again for appearing before us.
    Mr. Price. Thank you, Madam Chairman.
    Ms. Granger.
    Ms. Granger. Thank you, Chairman Price, for holding this 
hearing.
    Welcome, Secretary Carson. Your stewardship of the 
Department of Housing and Urban Development is important to all 
our communities. When I was mayor, I saw firsthand the 
importance of housing assistance for our most vulnerable 
citizens, including the elderly, the disabled, and our 
veterans, and we want to work with you to ensure that the 
programs you oversee are as effective as possible, while 
protecting the taxpayer, but also, to respond to those who 
badly need housing help.
    The HUD budget request for fiscal year 2020 propose some 
cuts that are concerning to members on both sides of the aisle 
in this subcommittee. The proposal to eliminate community 
development block grants could be particularly harmful because 
the program provides a critical resource for local decision 
makers to build affordable housing and generate economic 
development.
    I second the remarks by Ranking Member Diaz-Balart talking 
about disaster relief. HUD also plays an important role in 
disaster recovery, and your work is particularly important to 
communities in Texas after the devastation of Hurricane Harvey. 
As it was stated, in the last Congress, we provided more than 
$35 billion for long-term recovery from the 2017 disasters, 
along with mitigation funding to strengthen communities to 
withstand future storms and reduce the cost to rebuild. We want 
to work with you to ensure that those resources get to the 
communities, and they haven't yet, so that rebuilding can get 
under way, and we hope to hear more about that today.
    Mr. Secretary, thank you for your commitment in making 
HUD's program as effective as possible so that your agency does 
its part to lift people out of poverty and move them forward 
toward opportunity. This is important to all of us. We look 
forward to your testimony today.
    And I yield back.
    Mr. Price. Thank you, Ms. Granger.
    And, Mr. Chairman, we are happy to hear from you now if you 
could give us an oral summary of your testimony for 5 minutes 
or so. We will put your full statement in the record. We again 
welcome you.
    Secretary Carson. Thank you.
    Chairman Price, Ranking Member Diaz-Balart, and members of 
the subcommittee, thank you for the opportunity to appear 
before you today to discuss the President's proposed fiscal 
year 2020 HUD budget.
    This spending plan seeks $44.1 billion, an increase of 7 
percent over last year's request. It also seeks a record amount 
of funding to reduce lead-based paint hazards and other home 
health and safety hazards. And this budget will continue 
providing support for the nearly 5 million families HUD serves 
through its rental assistance programs.
    In short, this budget will support HUD's combined efforts 
to provide safe, decent, and affordable housing for the 
American people, while being good stewards of taxpayer money. I 
would like to touch upon each of these areas individually.
    This administration is requesting nearly $2.6 billion to 
help local communities house and serve individuals and families 
who are living in shelters or on the streets. This represents 
an increase of nearly 3\1/2\ percent over last year's levels. 
In my time in Washington, I have learned this is one area on 
which we can all agree.
    Preventing and ending homelessness remains a strategic goal 
of this administration, and working with our local partners, we 
are seeing a positive and measurable impact. HUD's fiscal year 
2020 budget includes a request for $290 million for the Office 
of Lead Hazard Control and Healthy Homes. This doubles the 
investment this administration sought last year, and is $60 
million higher than the funding enacted in fiscal year 2018.
    As a doctor, it pained me that after treating a young 
child, they often returned to a home that wasn't healthy. Quite 
simply, you cannot be healthy if your home is sick.
    This undeniable link between health and housing is also 
driving an active campaign at HUD to overhaul our 20-year-old 
inspection process. HUD will now provide advance notice of just 
14 days before an inspection because it became clear to us that 
too many PHAs and landlords were using the weeks and in many 
cases months before their inspection to make quick fixes and 
game the system.
    These actions are part of a top to bottom review of our 
inspections so we can be true to the promise of providing 
housing that is decent, safe, and healthy to the millions of 
families we serve.
    Just last week, we instructed HUD inspectors to begin 
evaluating all public housing and privately owned multifamily 
properties under contract with HUD for the presence of a 
working carbon monoxide detector. Additionally, in the coming 
weeks, HUD will send notices to PHAs and multifamily owners 
regarding the installation of carbon monoxide detectors. We 
continue to pursue every possible way to ensure detectors are 
present in units that need them.
    Across our rental assistance programs, HUD has requested 
sufficient funding to ensure that all currently served 
households continue to receive assistance. The administration's 
budget continues to support 4.7 million HUD-assisted households 
by increasing rental assistance to $38 billion. This request 
will allow HUD to maintain rent subsidies for our primary 
housing programs, including our tenant and project-based 
Section 8 programs.
    The budget also proposes $644 million for the Section 202 
program to support the rents of the elderly. In addition, the 
request includes $157 million for the Section 811 program for 
persons with disabilities.
    While we are here to talk about the administration's 
funding request, I would like to point out that not every 
challenge can be simply solved by more financial resources. One 
of my priorities as Secretary is to work with our Federal, 
State, local and tribal partners on identifying and eliminating 
regulatory barriers that unnecessarily increase the costs of 
America's housing supply.
    Despite low unemployment and strong economic growth, we 
face stiff headwinds in our efforts to increase access to 
affordable housing. This crisis is not only a Federal problem; 
it is everybody's problem. The Nation's public housing stock is 
experiencing a backlog of billions of dollars in capital needs. 
Our budget again proposes to merge the public housing capital 
fund and operating fund to give greater flexibility to PHAs to 
pay for capital improvements.
    Meanwhile, the budget expands HUD's rental assistance 
demonstration. HUD is specifically requesting $100 million in 
dedicated funding for the RAD program and that the statutory 
cap on converting units be eliminated once and for all. To 
date, RAD has placed more than 100,000 units of public housing 
on a more sustainable funding platform. These are affordable 
housing units that we may have lost forever if not for RAD.
    To support HUD's fair housing mission, the budget proposes 
$62.3 million to allow us to continue fighting housing 
discrimination, increase awareness of people's rights, and 
enhance economic opportunity. Advancing economic opportunity 
for all is perhaps the fairest thing we can do.
    I am proud to chair the White House Opportunity and 
Revitalization Council to help breathe new life into long 
forgotten corners of our country. While we can be very proud of 
the economic growth we are experiencing, there are still 
communities that have seen little or no investment in 
generations. It is our intent to support over 8,700 opportunity 
zones across the Nation, economically distressed places that 
approximately 35 million Americans call home. We estimate these 
opportunity zones will attract over $100 billion in private 
investment to spur economic development and create jobs.
    This kind of medicine is precisely what a doctor would 
prescribe to help communities where too many now live in 
poverty.
    To conclude, this budget advances our key priorities, 
including empowering HUD-assisted families to achieve self-
sufficiency. For generations, the idea of the Federal 
Government providing housing assistance meant only one thing: 
helping to pay the rent so families could have a roof over 
their head.
    However, we must also think about how we can help families 
access financial programs, educational opportunities, and 
higher paying jobs. In short, we must think beyond investing in 
bricks and mortar and think about investing in people. This 
budget does just that.
    I look forward to your questions.
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    Mr. Price. Thank you, Mr. Secretary. You are indeed 
anticipating, I expect, a number of the questions that we are 
going to have, including the account you gave of the safety of 
public housing residents and the plans to strengthen your 
inspection programs, which I want to get to. But first, I want 
to turn to a matter that I think you can answer fairly briefly, 
and I think it is important to get on the record, and it has to 
do with the priorities this subcommittee has set, particularly 
in the last 2 years, with respect to--with respect to certain 
housing programs for the first time getting back into the 
construction of some new affordable housing.

                        SECTION 202/811 VOUCHERS

    In these past 2 years, in partnership with my friend, Mr. 
Diaz-Balart, we have provided nearly a billion dollars in 
targeted resources for housing programs. We provided $400 
million for new Section 811 vouchers for people with 
disabilities, $156 million for new construction for Section 202 
housing for the elderly, $113 million for new construction for 
housing with people with disabilities, and $200 million in 
grants for travel housing, all of that by way of getting past 
just a holding pattern to actually some much needed new 
construction.
    So I would like for you to tell us this morning, if you 
will, exactly where we are on implementing these increases, 
what is the status of the Notice of Funding Availabilities, the 
NOFAs, for these programs, and when do you expect we will have 
awards for new construction and new vouchers? I appreciate your 
answering to your best ability orally and then providing any 
remaining information for the record.
    Secretary Carson. We will be happy to provide you the 
detailed information on that. Those NOFAs should be out in this 
quarter, and the appropriate documents present before the end 
of the summer.
    Mr. Price. So the NOFAs for 202 and 811 both out by June 
30, you are saying?
    Secretary Carson. Yes.
    Mr. Price. All right. And then the NGOs, the others who may 
want to apply for this would be able to do so midyear?
    Secretary Carson. I would expect so. And I should also just 
mention right here that, we have empaneled a task force at HUD 
to look at all of the grant programs that we have and to cut 
out as much unnecessary time as we can so we can get things 
done much more efficiently.
    There are some portions of the organization that work very 
effectively and get things done in a matter of days and others 
that seem to take months to do everything. That has disturbed 
me quite significantly, and we are making great progress. I 
think you are going to see some big changes there.
    Mr. Price. All right. Well, we will look forward to getting 
these programs going once again. They are very, very much 
needed in our communities, and I can promise you, from North 
Carolina, there are going to be lots of--lots of interest and 
particularly in the new opportunities for elderly housing and 
housing for people with disabilities.

                         PUBLIC HOUSING SAFETY

    All right. Now let me turn to this really tragic issue of 
deaths in public housing units and what we can do about the 
safety and security of these units. The coverage of this has 
stressed that HUD, up until now, has not required carbon 
monoxide detectors in public housing, nor has this been a 
regular object of inspection.
    Since 2003, 11 tenants in public housing, that we know of, 
have died from carbon monoxide poisoning, and this year, in a 
very widely noted case, 26 public housing properties were 
evacuated in South Carolina because of carbon monoxide leaks. 
That also, by the way, bears witness to the difficulties with 
our public housing maintenance and repair. But carbon monoxide 
leaks, two tenants died as a result in South Carolina, and 
these properties had all passed their most recent HUD 
inspections.
    Now, you have given us an account here of your intentions 
going forward. Do you have any particular assessment of how 
this happened and what is most important to fixing it? I mean, 
I am thinking about a combination of new requirements and where 
those requirements would apply, hopefully not just to public 
housing, also to rental units. What kind of plans do you have 
for integrating these matters into your regular inspection 
schedule or for an expedited inspection schedule where there is 
a perception of high risk? Could you just flesh out the plans 
here? Because this does qualify as an emergency, I think.
    Secretary Carson. Yes. Thank you for that question and for 
your attention to this. It is something that disturbs us. 
Obviously, my heart goes out to the families of those victims 
that you mentioned. We have, as of last week, already included 
in the REAC inspection carbon monoxide monitors, working carbon 
monoxide monitors, and we are notifying not only the public 
housing but to all the multifamily and housing that is 
supported in any way by any of our programs.
    Interestingly enough, most States already have regulations 
regarding carbon monoxide monitoring; however, it is not always 
enforced. And that is something that we are paying particular 
attention to right now as well.
    Mr. Price. This, from this day forward, is a part of what 
is required of the managers of public housing.
    Secretary Carson. This will be part of it, yes.
    Mr. Price. Yes. And the inspection process is--it is fine, 
I think, to integrate this into the regular inspection 
schedules, but in situations of high risk, are there plans to 
serve notice, to expedite inspections, to target inspections?
    Secretary Carson. Well, as I said, as of last week, it is 
already in process. And in addition to that, we will be working 
with Members of Congress to put some real teeth into some 
legislation requiring this, and also, looking at other areas. 
There are multiple things that affect people's health, and I 
want to be more proactive in this area, not wait until there is 
a crisis like this to bring our attention to it.
    Mr. Price. Good. Glad to hear you say that.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman.

                     VOUCHERS FOR DISABLED VETERANS

    Mr. Secretary, in our fiscal year 2018 and 2019 bills, this 
committee placed a major priority on increasing support for 
persons with disabilities. That was a key priority of Chairman 
Frelinghuysen. As we are all aware, many of these disabled 
people who face inadequate housing are veterans, and many of 
them are obviously among the working poor. We provided nearly 
$500 million for new vouchers for this program--for this 
population, I should say, over the past 2 years. HUD has 
allocated about $100 million for these new vouchers so far.
    Any idea when you anticipate that the rest of those funds, 
those vouchers will be released again to the communities?
    Secretary Carson. Well, we have a number of people working 
on that. Obviously, a very, very important initiative, the 
disabled, the elderly, the veterans, and we appreciate the 
support, the financial support that you have given and are 
committed to utilizing that in the most effective and efficient 
way and anticipate that, again, before the summer.
    Mr. Diaz-Balart. That is good to hear. And obviously, stay 
in touch with us, let us know how that is progressing.
    Secretary Carson. Absolutely.
    Mr. Diaz-Balart. That will be helpful. And obviously, we 
know that these vouchers can be challenging to lease, frankly, 
because of the unique needs of this community that we are 
trying to serve, and so interesting if you know of any steps 
that you might be taking to assist public housing authorities.
    Secretary Carson. Well, we are providing technical 
assistance to the public housing authorities because, as you 
mentioned, they are not sometimes familiar with how to enact 
these programs
    Mr. Diaz-Balart. Correct, correct, absolutely.
    Secretary Carson. And so we have devoted a lot of attention 
to getting that information out to them
    Mr. Diaz-Balart. Great. I look forward to, again, getting 
further information and to working with you to make sure, if 
there are any issues, any hiccups, to let us know.
    Secretary Carson. Okay.

                          SECTION 811 VOUCHERS

    Mr. Diaz-Balart. Also, we also provided over $110 million 
for new disabled housing units over the last 2 years. Chairman 
Price was especially instrumental in securing these new funds. 
Again, those funds have not all been made available. Any idea 
when you expect to send out your notice of funding availability 
for availability for these new funds, these new units?
    Secretary Carson. I am anticipating during the first half 
of the year and certainly before the summer is over.

                          HOMELESS ASSISTANCE

    Mr. Diaz-Balart. Good to hear that. Mr. Secretary, I 
mentioned that I was pleased to see that in your budget request 
it includes $2.6 billion for homeless assistance grants. The 
idea of ending homelessness, you know, may have once seemed 
kind of out of reach in a dream, but we are making real 
progress towards this goal. And as you have noted, general 
homelessness is down 13 percent since 2010, and veterans 
homelessness is down 49 percent. I mentioned that in my opening 
statement, part of that.
    Your emphasis on reforms in the homeless programs through 
the Housing First model and performance requirements for 
grantees has no doubt contributed to some of these recent 
positive trends in homelessness--the positive downward trends, 
I should say, in homelessness.
    I have seen firsthand the improvements brought by this 
performance-based approach. Miami's programs have adapted to 
this new model, and by the way, there were some growing pains, 
but they are performing much better as a result.
    Can you describe how your grantees are adapting their 
programs to, again, a performance-based model?
    Secretary Carson. Sure. Well, first of all, homelessness is 
a problem that, I think, we have the ability to obliterate in 
our lifetime. We have a very prosperous country, and it is 
really a matter of getting people at all levels to concentrate 
on this problem. It is not just a Federal problem, but getting 
State and the local municipalities. And one thing that has 
helped enormously is also getting the private sector involved. 
Getting the faith-based communities and the nonprofits involved 
has made a huge difference.
    Now, a lot of these organizations have been very effective 
with their programs, and they don't particularly all agree in 
terms of the philosophy that they have. You know, some say 
housing first only. Some say, no, we have to have requirements. 
And there is a whole gamut. So rather than ferret that out and 
say you are the best or you are the best, we have just said 
let's see who is getting results. Evidence. And let's support 
the programs where there is evidence that they are effectively 
getting people out of a homeless situation, getting people to a 
self-sufficient status, and making sure that the people who 
cannot be self-sufficient are taking care of in the most 
effective way.
    Mr. Diaz-Balart. Thank you. Thank you, Mr. Chairman.
    Mr. Price. Mrs. Lowey.
    The Chairwoman. Thank you, Mr. Chair.

                            HUD INSPECTIONS

    Millions of lives depend on HUD upholding its mandate of 
decent, safe, and sanitary housing. According to GAO, HUD's 
system of inspecting public housing is flawed. Media reports 
indicate numerous properties that recently passed a HUD 
inspection were uninhabitable or unsafe. GAO also recently made 
14 recommendations to address these deficiencies, and as I hope 
you know, HUD largely agreed with these recommendations.
    However, the report also noted that your department doesn't 
have sufficient resources to implement these recommendations, 
yet the budget request would result in a reduction of funds to 
carry out inspections. This amazes me.
    Mr. Secretary, given the lower funding levels in the budget 
request, how would you ensure that HUD-assisted housing is 
safe?
    Secretary Carson. Okay. Thank you. That is a very important 
question. It is something that has been of great concern and 
something which we have placed a lot of attention. You know, 
when I came in and realized that people could get different 
inspection scores within weeks from different inspectors, I 
said there is something wrong with this system, so I ordered a 
top to bottom reevaluation and revamping.
    One of the things that you have seen as a result of that 
recently as only a 14-day notice as opposed to the weeks and 
months of notice that people used to get so it would allow them 
to cover things up. Some have said that the number of people 
who are living in squalor has increased since I have been here. 
That is not the case at all. What has happened is that we have 
exposed what is going on, and we are no longer allowing it to 
be swept under the rug, so it can be dealt with full frontally.
    Those are the kinds of things that are going to make a 
difference. Can we use more inspectors? We probably can. Are we 
training them better? Absolutely. Have we realized that when we 
go with the least expensive inspectors on a contractual basis 
that you get what you pay for? Yes, we have realized that. Are 
we making appropriate changes? Absolutely. And are we hiring 
more of our own inspectors? Yes, we are.
    The Chairwoman. I just don't understand why you would ask 
for a reduction of funds to carry out inspections. So you are 
saying with the reduction of funds, you can do a better job and 
respond to the evaluations? I'm a little puzzled.
    Secretary Carson. No, I am not saying that. I am saying 
that, you know, the budgetary process is a collaborative 
effort, and whatever funding we have we will use efficiently 
and effectively to take care of that problem.
    The Chairwoman. Look, I visit public housing on a regular 
basis. I am pleased that there are inspectors that are pointing 
out deficiencies. I do hope you have the resources to improve, 
to respond to these inspections, and that is why we are here, 
to listen to you, to get your recommendations and, to the best 
of our ability, to respond.

                             LEAD ABATEMENT

    I want to mention one other thing which you addressed. You 
mentioned the seriousness of lead in public housing. And it 
seems to me you are giving with one hand, taking away with the 
other. The net result is a step backward in our effort to 
prevent childhood lead poisoning.
    Why are you cutting funding to address this very serious 
health risk?
    And I would like to follow up on Chairman Price's question 
about the execution of the Federal--of fiscal year 2018 
appropriations. I understand the fiscal year 2018 lead notice 
of funding availability is expected soon, but we are 6 months 
past the end of fiscal year 2018.
    Now, I want to say I go way back on this issue when I ran 
the antipoverty program in New York State. This has been a 
problem for a long time. We know it is a tremendous challenge. 
Why did it take so long to get the funding into the field?
    Secretary Carson. Well, first of all, let me just correct 
the record. We are not asking for less money for lead. In fact, 
we are asking for more, considerably more, twice as much as we 
asked for last year. And I do recognize that that is a very 
substantial challenge, but one that we can, in fact, overcome.
    In terms of any new grants and programs that are delayed, 
there are a number of reasons for that, one of which is making 
sure that, in fact, the programs are done in the most effective 
and efficient way. One is because we had a delay secondary to 
the shutdown. And one is because there is inefficiencies in the 
program. And as I mentioned before, we are looking at every 
aspect of our agency right now in trying to cut down on those 
inefficiencies.
    The Chairwoman. My time is up, but if I may, Mr. Chairman, 
I was just passed a statistic, which says you would modestly 
increase the funding for the Office of Lead Hazard Control and 
Healthy Homes by $11 million, while also eliminating $25 
million in the public housing capital fund, which was 
established to help public housing authorities tackle this 
problem.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Ms. Granger.

                                CDBG-DR

    Ms. Granger. Mr. Secretary, the GAO recently released a 
report on the community development block grant disaster 
recovery program and found that only a small amount of the 
funds appropriated for Texas have made their ways to 
communities and individuals. In fact, as of January, only $18 
million of the $5.6 billion allocated for 2017 storms has been 
spent.
    Can you explain why there is such a low rate of 
expenditures, and what can be done by HUD in the State of Texas 
to speed up the funds getting to grantees? Businesses have been 
closed, people have become homeless, communities are devastated 
because they haven't had those funds.
    Secretary Carson. The moneys have been appropriated. The 
spending plans have been approved. We have left it up to them 
in terms of the dissemination of those funds. In terms of the 
mitigation money that is due, that will be finished by May 1.
    Ms. Granger. The GAO recommends that a permanent 
authorization for this program would be helpful. Do you agree 
that the program needs to be authorized, and would that make it 
faster for the programs to get to communities?
    Secretary Carson. In terms of having a one-size-fits-all 
solution, could that speed things up? The answer to that is 
yes. Does it take into account the individual nature of all the 
disasters? The answer to that is no. Is it possible for us to 
work together to figure out a way that we can amalgamate the 
two and come up with a better system? The answer to that is 
yes. And are we willing to do that? The answer to that is yes.
    Ms. Granger. Good. I will work with you further on that.

                            VOUCHER MOBILITY

    Let me, while I have still got some time, the 2019 
appropriations bill included a new program that provides 
vouchers to families so they can move to neighborhoods with 
greater economic opportunities. The committee worked in a very 
bipartisan way and close with the authorizers to establish that 
voucher program. What is the current status of the program? And 
also, are there lessons that can be learned from this 
demonstration project would benefit other HUD programs?
    Secretary Carson. Sure. That program is moving along well. 
In addition to that, what we have done is authorized a study of 
why people, particularly in higher opportunity neighborhoods, 
don't accept vouchers. We have discovered a lot of very 
interesting things. We are in the process of removing a lot of 
those barriers.
    You know, for instance, in one large metropolitan area, 
people didn't want to accept vouchers because they had the 
impression that the tenants would destroy their property. And 
the city then guaranteed all the landlords that they would take 
care of any damage that the tenants would do, and consequently, 
the resistance disappeared.
    Now, it cost the city almost nothing because the tenants 
were not destroying the property. This is a misperception that 
people are going to come in and destroy property, particularly 
after they have been waiting a long time to get a voucher. But 
it means that we have to deal with perception as well as 
reality when we come up with the solutions for these programs.
    Ms. Granger. That is good news. In the community I am from, 
I have lived in all my life, Forest, Texas, there were areas 
that were very low income and they didn't have stores, they 
didn't have businesses to work in. That has changed 
significantly, and it hasn't moved people out of that 
community, but it has allowed opportunities. And it is 
fascinating to watch and really exciting to watch, having known 
them so much and having lived in some of those communities. So 
any way that we can be helpful----
    Secretary Carson. And that is very useful, because what we 
really want to do is we want to improve the communities that 
have been neglected, as well as give people the opportunity to 
move. We want to have choice in this.
    Ms. Granger. Thank you very much.
    Mr. Price. I thank you.
    Mr. Quigley.
    Mr. Quigley. Thank you, Mr. Chairman.
    Thank you Dr. Carson for being here, and thank you for 
coming to Chicago, and we appreciate your meeting with the 
LGBTQ individuals, community in Chicago about the 
nondiscrimination guidance.
    Secretary Carson. Yes.

                       NONDISCRIMINATION GUIDANCE

    Mr. Quigley. And I appreciate your listening. But I am 
obviously very disappointed that HUD's decision communicated to 
me versus via a March 6 letter from one of your deputies that 
the Department will not be replacing the guidance it took down 
shortly after you took over the helm at HUD. For the community, 
this decision hurts.
    Forty percent of homeless youth are LGBTQ. Put another way, 
LGBTQ youth are 120 percent more likely to become homeless and 
far more likely to be discriminated against at shelters. So 
that is frustrating.
    Despite this decision, a relevant HUD rule from 2012 and a 
regulation from 2016, they remain in effect. So how will these 
grantees comply with the regs without this guidance, sir?
    Secretary Carson. Well, in fact, the guidance was pretty 
much obliterated by the 2016 rule. I know we have gone back and 
studied it very carefully and concluded that putting that 
subregulatory guidance there actually confused the issue and 
made a lot more regulations necessary, and we are trying to 
simplify things. We have not removed the rules, we have not 
changed the rules at all.
    Mr. Quigley. Sir, you in Chicago asked the question about 
the difficulty--for example, a front desk shelter worker who 
were handed identification that doesn't match the presenting 
gender of the bearer. The presenting gender of the bearer. That 
was the question you asked, and I want to make sure I got it 
right, and the response was that is why you need the guidance. 
The grantees need this guidance to avoid the discrimination and 
to make clear to them what the rules are. I mean, and there are 
no inconsistencies there.
    In addition to that, HUD missed, by almost 6 months, a 
deadline that was in the appropriation report to review the 
guidance you took down. So you didn't meet the deadline, and 
you just simply decided not to put the guidance up. And if 
anything is confusing, wouldn't working on the guidance help 
resolve what you are saying is confusion?
    Secretary Carson. Well, the agreement was that the 
guidelines would be reviewed. It wasn't that they would be put 
back up. And they were reviewed, and it was concluded that the 
2016 rules obliterated the guidance that was there and confused 
the issue. The rules stand as they are. We have not made any 
attempt to change them.
    Mr. Quigley. Well, and that has incredibly confused this 
issue even further, sir, your answer today. So why don't we 
start over.
    Secretary Carson. Okay.
    Mr. Quigley. Regardless of how HUD in D.C. views this, 
across the country, people are being discriminated against, and 
they are falling victim to crime and all the other issues that 
come with being homeless and not being able to get into a 
shelter. So despite the fact that I wholly disagree with you 
that 2016 obliterates anything, there is still a lack of 
guidance. So if all you are doing is drawing guidance from 2012 
and trying to clarify 2016, doesn't it make sense to create new 
guidance and post that so the grantees know and that the youth 
of this country know that they have rights and that they can't 
be discriminated against?
    Secretary Carson. From my conversations with many legal 
experts throughout government, my suspicion is that you would 
probably dislike the subregulatory guidance that would be put 
up and that this provides you with considerably more freedom.
    Mr. Quigley. Are you suggesting that doing nothing provides 
greater protection, by putting no guidance up on the website is 
providing this----
    Secretary Carson. I am suggesting that you might not like 
the guidance--subregulatory guidance that was put up.
    Mr. Quigley. And why is that? I am a glutton for 
punishment.
    Secretary Carson. Because you probably wouldn't agree with 
it.
    Mr. Quigley. Because it goes along with allowing people to 
discriminate against LGBTQ youth?
    Secretary Carson. The rules that are there allow people to 
have a nondiscriminatory atmosphere, and that is what we are 
trying to achieve.
    Mr. Quigley. So if it says you can't have a discriminatory 
atmosphere, why don't you have guidance that posts that and 
instructs them not to discriminate?
    Secretary Carson. The rules already say that.
    Mr. Quigley. Well, where is the--even if we go around and 
around, where is the guidance for that?
    Secretary Carson. If you have a rule that tells you what to 
do, you don't need more guidance on that.
    Mr. Quigley. All right. We are all now more stupid than we 
were when we came in the room today, sir. Thank you.
    Mr. Price. Mr. Womack.
    Mr. Womack. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary. Before I get to a couple of my 
questions, just a note of personal privilege here this morning. 
I was walked over this morning by my communications director, 
Alexia Sikora, and she was telling me about her boyfriend's 
cousin, a kid named Matthew Massone, who in 1986, at a very 
young age, was riding his bicycle and was struck by a car and 
critically injured. And it was your gifted hands that saved 
that young man's life. He is a father of three today, 
successful business owner, and----
    Secretary Carson. Thank you. I appreciate that followup.
    Mr. Womack. All the work you do in HUD is as good as it 
is--
    Secretary Carson. Thank you.
    Mr. Womack [continuing]. Pales in comparison to the work 
you have done in saving lives, and I thank you for that.

                           OPPORTUNITY ZONES

    My State of Arkansas has 85 opportunity zones, many of 
which are in my district. Given your dual role as chair of the 
White House Opportunity and Revitalization Council and 
Secretary of HUD, can you discuss how advancing economic 
opportunity, such as through these opportunity zones, can help 
leverage Federal dollars to fulfill the HUD mission?
    Secretary Carson. Well, thank you. We are actually very 
excited about the opportunity zone program because it provides 
an opportunity for people to take unrealized capital gains, and 
these would be invested somewhere anyway, and this encourages 
them to be invested into economically neglected areas, deprived 
areas.
    This provides an opportunity to bring in an enormous amount 
of capital. A conservative estimate would be $100 billion. And 
that provides a lot of funding for many of the very programs 
that we have been talking about today, in terms of building 
affordable housing, in terms of general community development, 
infrastructure, economic development. All the things that all 
of these programs that we have had in place for many years are 
doing, the opportunity zones will do in spades, like it is on 
steroids, and therefore, we don't necessarily need to duplicate 
all these things.
    And I know that is going to be very difficult to wean 
people off of some of the things that have been there before, 
but we want to see real progress. We actually want to see these 
communities that have been neglected move forward. We want to 
give people opportunities who want to have real jobs, who want 
to have training programs and apprenticeships, and integrate 
all of this together, because if we develop those people in our 
community, then we strengthen that community. If we strengthen 
that community, we strengthen our Nation.
    Mr. Womack. I agree. Good segue into my next question, and 
that is the tendency for Federal programs to overlap from 
agency to agency, whether you are dealing with homelessness, 
with veterans, or trying to do something on finance with 
Treasury. Can you give to this subcommittee an idea of the 
obstacles you face with what I call stovepipe government and 
the incredible obstacles that you run into from time to time in 
overlapping of programs? Because leveraging precious resources 
like we have is pretty important.
    Secretary Carson. Well, you know, one of the reasons that 
we established the Opportunity and Revitalization Council is 
because you have all these agencies working at cross purposes, 
and they get in each other's way. And, you know, by being able 
to target our resources and our programs in a coordinated 
fashion, it will be much more efficient and also makes it 
possible for us to respond to problems as they come up very 
effectively.
    A lot of the regulations that exist, even in the Federal 
Government--even though we have gotten rid of a lot of them, 
there is still quite a few of them there--are old and really 
don't correspond to anything that is going on today. And by 
forcing everybody to take a look at those regulations at the 
Federal level as well as at the local level, that is the reason 
that we are able to speed things up. A lot of things are moving 
a lot faster--I don't know if anybody has noticed--than they 
ever have before in terms of being able to get things done. 
That is only going to improve with this.

                    APPROPRIATIONS LIAISON DIVISION

    Mr. Womack. Thank you. Very quickly, last question. Your 
budget proposes shifting HUD's Appropriations Liaison Division 
to the Office of Congressional Relations. The reason for that 
move, and can you assure this subcommittee that we will still 
have access to the information we need to do our important 
function?
    Secretary Carson. Yes. That will be essential. We will make 
sure that that happens. But it is really to align ourselves 
with all of the other Federal agencies where, in fact, that 
alignment exists. We are sort of the one who is aberrant, the 
way that we are doing it now, and we want to have--we want to 
speak with one voice. We want to have everything being 
consistent. And if we move it to the appropriate CIR, I think 
that we will be able to achieve that.
    Mr. Womack. Secretary, thank you so much.
    Secretary Carson. Thank you.
    Mr. Price. Mrs. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman, and thank 
you, Dr. Carson, for being there.
    Let me first applaud for the things that I think are right 
movement moving forward. I almost feel like this is a 
delusional or a schizophrenic budget. One side does the good 
stuff, and then on the right side, there is the really bad 
stuff that is taking away from the good stuff.

                         HOUSING DISCRIMINATION

    I applaud the decision to bring the case against Facebook 
for the housing violations and to investigate Google and 
Twitter, but I realize that there are other kinds of housing 
discrimination issues that need to be investigated. And I 
recognize that, under former President Obama, HUD Secretaries 
used their Secretary-initiated complaints on the average of 10 
times a year, and even under President Bush, they used their 
complaints sometimes 5 times a year. However, this Facebook 
investigation appears to be the only Secretary-initiated 
complaint that you have issued. Could you explain to me why 
there is such anemic action on your part?
    Secretary Carson. Yes. I would be happy to explain not why 
there is anemic action but why that is the case that we have 
only had one Secretary-initiated, although we are following up 
on several others. It is because our FHEO, the Office of Fair 
Housing and Equal Opportunity, is very active in terms of 
finding areas of discrimination and unfair housing practices 
and are pursuing those things effectively. If you have an FHEO 
that is doing that, you don't need to do a lot of Secretary-
initiated----
    Mrs. Watson Coleman. Okay. Then perhaps we need to know 
more specifically the numbers, the types of numbers of 
complaints that are actually being investigated. I understand 
that there is a cut to that particular program, Fair Housing 
and Equal Opportunity, of $3,000,000.
    As you know, segregated communities are a result of 
discrimination against minorities and others throughout the 
history, and simply combating the present-day intentional 
discrimination does not undo segregation that has prevailed and 
will not eliminate any time soon.

               AFFIRMATIVELY FURTHERING FAIR HOUSING RULE

    So it was apparent--it was particularly concerning to me 
that you have suspended the Affirmatively Furthering Fair 
Housing rule and are considering significant changes. I don't 
know what the changes are, and I don't understand the rationale 
behind doing something that has been a part of the fair housing 
text. Could you explain?
    Secretary Carson. Yes. Affirmatively Furthering Fair 
Housing is something that I very much believe in. It is a part 
of the Fair Housing Act. And the tool that was being used, 
however, is a good statistical tool, and it shows you, yes, 
there is segregation here, and there is less segregation here, 
and it costs a lot of money to do that analysis and a lot of 
manhours. I don't feel that I necessarily need a statistical 
tool to tell me that. What I need are results. And you ask 
yourself the question, why is that segregation there? The 
reason is because--not because there are people like George 
Wallace standing in the doorway saying, ``You can't come in 
here.'' It is because of economics. It is because people can't 
afford to live in other places. So what we have to do is we 
have to deal with the affordable housing crisis, and we have to 
be able to build affordable houses in all communities.
    Mrs. Watson Coleman. Thank you. Reclaiming my time.
    What is it you propose to do to ensure that these things 
happen, and under what program now and with what funding are 
you proposing that will actually realize this affirmative 
furthering fair housing?
    Secretary Carson. Say it five times. Okay. Now, what we can 
do, recognizing that the real barrier to building affordable 
housing lies largely at the local level because of the zoning 
restrictions.
    Mrs. Watson Coleman. So what is it that you think that you 
are going to do under the Fair Housing Act to facilitate this 
happening?
    Secretary Carson. I am going to tell you.
    Mrs. Watson Coleman. And I only have--I have another really 
important question so I need you to, like----
    Secretary Carson. Okay. We are going to give preference 
points to people who actually look at those things that are 
preventing the building of affordable housing. That is it in a 
nutshell.
    Mrs. Watson Coleman. Okay. One question. One statement.

                       NONDISCRIMINATION GUIDANCE

    The statement: Mr. Quigley pursued this line of questioning 
as it regards a rule and the interpretation or the guidance on 
how to apply the rule. I don't think that you answered his 
question, but you did say something very troubling to me, and 
that was you wouldn't like what the outcome would be. And that 
is--the only way I wouldn't like it is if it went against the 
intent of the rule. So I would very much like, through the 
chairman, an explanation of what it is we would be expecting so 
that I can determine whether or not----
    Secretary Carson. Okay.
    Mrs. Watson Coleman [continuing]. That it is or is not 
representative of what it should be.
    Secretary Carson. Okay. I can tell you that this is an area 
that many people disagree on. There is not just one group of 
people who----
    Mrs. Watson Coleman. It doesn't matter. I am talking about 
the law. I don't care that people disagree that the LGBTQ 
community should not be discriminated against. What I care 
about is how we enforce the law to ensure that the LBTQ 
community has access to good and affordable housing.
    Secretary Carson. And the rules take care of that.
    Mr. Price. I appreciate the gentlelady's request. If I may, 
I will formalize it the sense of asking you to elaborate in 
writing what----
    Mrs. Watson Coleman. Thank you. I yield.
    Mr. Price [continuing]. What your meaning was in response 
to Mr. Quigley. I do think that would be helpful.
    Secretary Carson. Okay.
    Mr. Price. We appreciate that and now turn to Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman.
    Mr. Carson, I am going to return to an issue that I have 
spoken to you directly about. We take, obviously, our 
responsibility to ensure that Federal housing programs give 
people an opportunity to achieve the American Dream, we take 
that serious on this committee.

                             FHA LOAN LIMIT

    I have talked with you about HUD's current FHA loan limit 
policy that locks out consumers out of competitive FHA loan 
programs, and large metropolitan statistical areas, MSAs, as we 
call them, may be distorted because an MSA covers a large 
geographic. For example, the San Bernardino-Riverside-Ontario 
MSA where my district is located is 27,000 square miles. But 
some cities are a little closer to and identify closer to Los 
Angeles County.
    And so, to be clear, the FHA loan limits in the San 
Bernardino MSA are $300,000 less than the FHA loan limits in 
Los Angeles/Orange County. Cities in my district like Upland 
and Rancho Cucamonga have loan limits far below the median home 
price, locking many potential homeowners out of the FHA market.
    The fiscal year 2018 and 2019 appropriations language 
directed HUD to study whether the county's geographic size 
distorts the FHA loan limit, and our staff has been in touch 
with your staff about this issue, and it sounds like a draft 
could be available soon. Do you have an update on the timeline 
for this report, and can you share any preliminary findings?
    Secretary Carson. Well, first of all, as I am sure you 
know, the loan limits are set by Congress, so we don't really 
have the ability to change those at all. We are happy to work 
with Congress on what they should be, taking into account all 
the factors that you have just mentioned. I think they are very 
legitimate issues.
    And particularly in the high-cost areas, and you represent 
several of those and some low-cost areas too. It makes it very 
difficult to have a one-size-fits-all type of situation.
    In terms of time limits, I would probably refer you to the 
group that is working on that issue.
    Mr. Aguilar. You mentioned policy guidance that you would 
be happy to work with us on. Does your report mention specific 
law changes or policy guidance that the Department would 
accept?
    Secretary Carson. I am sure it does.
    Mr. Aguilar. Okay. I appreciate that.

                 UNDOCUMENTED IMMIGRANTS AND FHA LOANS

    The next topic. According to the FHA handbook, mortgages 
can be offered to nonpermanent residents if the applicant is 
authorized to work in the U.S. and has a history of status 
renewals. As you know and as I have mentioned to you, the 
Deferred Action for Childhood Arrivals, the DACA program, 
allows some undocumented immigrants to work in the U.S.
    Additionally, in many cases, DACA recipients have renewed 
their status at least once, if not more times. These 
hardworking men and women pay taxes and have undergone a strict 
vetting program within the DACA program. In December, an 
article was published that revealed HUD had advised lenders to 
stop lending FHA-backed loans to DACA recipients. According to 
the article, HUD shared this information with lenders over the 
phone and at conferences. However, the agency has not put any 
policy in writing. Staff at your office has confirmed that the 
policy has not changed, but I want lenders to have the clarity 
on whether they can offer FHA-backed loans to DACA recipients.
    To your knowledge, are DACA recipients eligible for FHA-
backed loans, and has HUD made any changes to existing policy 
or interpretations?
    Secretary Carson. Yeah. When I read that report, I inquired 
of the appropriate people, including the FHA Commissioner, and 
no one was aware of any changes that had been made to the 
policy whatsoever. I am sure we have plenty of DACA recipients 
who have FHA mortgages.
    Mr. Aguilar. So it would surprise you if individuals went 
to conferences and received those--if folks in the mortgage 
industry went to----
    Secretary Carson. Yes.
    Mr. Aguilar [continuing]. Conferences and heard that 
guidance or had it over the phone but not via email; it would 
surprise you?
    Secretary Carson. That would surprise me.
    Mr. Aguilar. What would consequences be for individuals if 
that was the case, if individuals were operating outside of the 
guidance, out of the policy guidance, and engaging in that 
behavior? What would be some consequences that you would want 
to know?
    Secretary Carson. Well, I would simply say that, I have 
instructed everyone to follow the laws of the United States 
with regard to DACA, with regard to anyone who is an immigrant 
or potential immigrant to this country, and as long as you 
continue to follow the laws, it will have my approval.
    Mr. Aguilar. Is it possible someone outside of your 
Department gave that guidance?
    Secretary Carson. When you say ``is it possible,'' of 
course, it is possible. Certainly no one who was authorized by 
us.
    Mr. Aguilar. I appreciate it. Thank you Mr. Secretary.
    Thank you, Mr. Chairman.
    Mr. Price. Thank you.
    Mrs. Lawrence.
    Mrs. Lawrence. Thank you.
    Thank you, Mr. Carson, Dr. Carson, for being here. As a 
native Detroiter like myself, born and raised and educated in 
the city, affordable housing in the HUD budget is extremely 
important to me, as you know. I was appalled to see some of the 
massive cuts.

                            ENVISION CENTERS

    Last June, you traveled to our hometown, Detroit, to launch 
HUD's innovative EnVision Centers, one of your signature 
initiatives, aimed at providing a one-stop shop for social 
services. The center you visited in Detroit was one of 17 that 
HUD planned to open across the country. However, it appears 
that none of these centers are operational at this time. The 
EnVision Centers are supposed to lever public-private 
partnerships. In reality, individuals have stated that EnVision 
Centers appear to be nothing more than rebranding work that is 
already being done.
    In 2017, you talked to these centers at an event at the 
Boys and Girls Club in Detroit. However, leadership at that 
club decided the program was not a good fit. They realized, 
after due diligence to understand what resources were needed to 
make it successful, they decided not to pursue it.
    Secretary Carson, can you provide the committee with an 
update on the status of these 17 EnVision Centers? And in 
addition to that, an NBC News article cites a source close to 
you indicating, and I quote, Secretary Carson is not happy 
about the lack of progress being made in the EnVision Centers.
    If individuals close to you say they are not pleased with 
it, what is the point of continuing this initiative?
    Secretary Carson. Well, the point in continuing the 
initiative is that we want to get people out of poverty. We 
want to use a lot of the resources that are already available 
and make them accessible to people. This is something that we 
learned from the HUD VASH program, where HUD provides the 
housing; the VA provides the wraparound services.
    Mrs. Lawrence. Do you have any centers up and running as of 
today?
    Secretary Carson. Well, Detroit is up and running, and this 
summer, a large number of others will be opening.
    Mrs. Lawrence. So----
    Secretary Carson. They opened Detroit first because----
    Mrs. Lawrence. Where is it being opened? Because it is not 
at the center that you initially did the launch. So is it 
somewhere else?
    Secretary Carson. Excuse me?
    Mrs. Lawrence. It is not at the Boys and Girls Club, so is 
it at somewhere else----
    Secretary Carson. Yes.
    Mrs. Lawrence [continuing]. Because it is not--so you 
picked another site.
    Secretary Carson. Yes.
    Mrs. Lawrence. Okay. Where?
    Secretary Carson. It is--I don't remember the exact name. 
It starts with a D, but it is actually--it used to be an old 
high school, and it has been repurposed. It has places where 
young people can train to operate businesses.
    Mrs. Lawrence. Well, through the chair, if it is in my 
city, I would really like to know where it is because I--from 
my understanding----
    Secretary Carson. We will get that information for you.
    Mrs. Lawrence. So, in addition to the community, this 
EnVision Center, how much money are we budgeting, because I 
could not find it in the budget? How are you funding these 
EnVision Centers?
    Secretary Carson. Well, most of the funding comes from the 
private entities around the centers. We purposely made it 
something that wouldn't require a lot of Federal dollars 
because we wanted the communities to own these centers. And it 
takes time to put these things together. People who think that 
you declare it and it just automatically pops up have very 
little understanding of how things work.
    Mrs. Lawrence. I have a lot of understanding. I was the 
mayor, and I understand being a Member of Congress.

                                  CDBG

    I also want to put in here in 2018 and 2019, CDBG was 
funded at $3.3 billion. In our shared hometown of Detroit, we 
received $30 million for infrastructure. We know it can be used 
for rehabilitation of homes, water mains, and sewers, streets, 
but your budget states that devolving community and economic 
development activities to the State and local governments 
redirects prior Federal resources to a higher priority.
    So your initiative or your budget is saying: Reduce the 
amount of money that we give, even though it impacts these 
things, and make it a local issue.
    Those of us who have been in local government, there is no 
money there. So it is a good concept. It is like the trickle-
down tax bill that we just went through. It is a good concept, 
but it is not reality. And so can you please explain to me how 
a higher priority than--what could be a higher priority than 
providing vulnerable--valuable funding to low-income areas?
    Secretary Carson. Well, first of all, the CDBG program is 
outdated. It needs to be updated. There are 1,210 communities 
through the country who get these grants through a formula. It 
doesn't take into consideration the thousands of other 
communities who need help, and it bases it on some criteria 
that don't make sense. For instance, in some cases, you get 
more money if you have houses that were built before 1940. And 
there are a lot of very wealthy, well-maintained communities 
that get three or four or five times as much as the poor 
communities. So the program really needs to be revamped.
    I am going to continue, you know, not to be particularly 
supportive of it until Congress is willing to work with us to 
revamp that program and make it actually effective and make it 
relevant to the people who are low income for whom it was 
targeted in the first place.
    Mrs. Lawrence. That is like the debate on healthcare: We 
don't like the plan we have, so we will cut off everyone from 
healthcare until we get a new plan.
    I disagree with your philosophy. Thank you, and I yield 
back.
    Mr. Price. Mrs. Torres.
    Mrs. Torres. Thank you, Mr. Chairman.
    And thank you, Secretary, for being here today. It was nice 
to welcome you in my district. Pete and I both visited with 
you.
    Secretary Carson. I enjoyed that.

                           PROGRAM ELIMINATOR

    Mrs. Torres. You know, I have to associate my comments with 
some of the comments that have been said. I am deeply concerned 
about eliminating the CDBG, the HOME Program and the Choice 
Neighborhood Initiatives and the public housing capital. We 
have three former mayors here.
    I live in a nice house, but 90 percent of my home city 
doesn't look like my street, the four homes on my street. It is 
not unusual for me to sit there at night and hear gunshots. Not 
a very safe neighborhood.
    My home was built in 1926, but we don't get CDBG funding in 
my community simply because we have, you know, old homes. It is 
based on a formula, and it is poverty level, and these programs 
are critically important for communities at risk such as the 
community, you know, where I continue to live.

                              HOMELESSNESS

    I am also concerned about a perception that homelessness 
issues are down. In L.A. County alone, you know, the homeless 
population has surged by 75 percent from 32,000 to 55,000 
within the last 6 years. But in the last homeless count, it is 
way beyond that. We need more funding for temporary shelters, 
and we need--and our communities need funding to offset the 
cost of affordable housing units. At the same time, we have to 
hold housing authorities accountable for what they fail to do 
in our communities, for example, discrimination against 
disabled renters.

                         HOUSING DISCRIMINATION

    Secretary Carson, a recent investigation by your Department 
found that the city of Los Angeles continued to discriminate 
against persons with disabilities and was not in compliance 
with the Americans with Disability Act. Thank you for holding 
them accountable, and thank you for doing that.
    How widespread is the problem of housing discrimination 
against people with disabilities, and what is your Department's 
role in addressing this problem? Any additional resources--and 
I don't want to just throw resources at an agency that is 
failing to perform. This is the same housing authority that 
received a willful violation for dealing with asbestos tiles in 
housing units while children, babies were sleeping in cribs. So 
it is not enough, you know, to say we are going to sue you to 
come into compliance. We have to be strong about this.
    Secretary Carson. I agree with you.
    Well, first of all, I commend you on your attention to 
homelessness and particularly in L.A. And L.A. County, where 
the problem just continues to grow. Secondary to incredible 
zoning restrictions, 80 percent of the land is zoned for single 
family housing, and there are a multitude of other restrictions 
that make housing so expensive that you have people who 
actually have a job who can't afford housing there.

                         COMMUNITY DEVELOPMENT

    Now, you know, there are two possible solutions. You can 
just throw more money at it; or you can say, why is that 
happening, and why is it getting worse, and is there anything 
that we can do about those factors? And that is the tack that 
we would rather take because, as much as we would like to throw 
more money at it, we just don't have more money to throw at it.
    One of the things that is very helpful is the Opportunity 
Zones because a lot of money will be pouring into those, and a 
lot of these distressed areas are in the Opportunity Zones: 
380,000 public housing units, 340,000 PBRA units are in there. 
A third of our RAD conversions are in Opportunity Zones. These 
are places where a lot of the money that had been, you know, 
previously obtained through CDBG and HOME and other programs 
will be available through, you know, very large investments 
that are made.
    Mrs. Torres. But can I interrupt you for a minute and just 
say that the city of Pomona, you know, where I live applied for 
one of these grants. I get it. It was poorly written. We didn't 
find out until, you know, 3 days before they actually submitted 
their application. Cities like that that are in the red and 
continuing to function in the red, there just isn't enough tax 
base.
    I mean, my constituents, my neighbors are living on minimum 
wage. In L.A. County, it is nearly impossible to do that. You 
are having to work two or three jobs. So these are working poor 
people that just need a strap on their boot, right. Technical 
assistance is critical for these communities.
    But thank you for being here today, and thank you for your 
interest, and I yield back.
    Mr. Price. Thank you. As everyone knows, we are up against 
a deadline in terms of the joint session that is going to 
convene at 11, but we will go as far as we can with the second 
round.
    Mr. Secretary, we appreciate your sticking with us here, 
and we will go as far as we can because your appearance is 
important, and I think every member, as you have seen, has 
pressing questions.

                                CDBG-DR

    I will start off the second round with a very pressing 
question both to my home State and I think to the country, that 
is, the Community Development Block Grant disaster recovery 
funds and where we are in getting those funds where they need 
to be.
    We were pleased, of course, that after the shutdown ended, 
the Department began reviewing and approving State action plans 
and amendments for the DR funding. However, the Federal 
Register notice, as you know very well, governing the 
mitigation funding for 2016 and 2017 disasters has not been 
issued.
    I hope the notice will take a comprehensive approach to 
all-hazards mitigation. In my State, grantees are anxiously 
awaiting the guidance so they can finalize the plans to 
rebuild. The reports, unfortunately, that the White House may 
have intervened to slow down the distribution of funds to 
Puerto Rico, and the inspector general has recently opened an 
investigation into the matter.
    So, Mr. Secretary, I want to stress that these delays are 
very harmful, of course, to the suffering of the people in 
Puerto Rico but also constituents in my State along with 
Florida, Texas, the Virgin Islands, Georgia, Missouri, 
Louisiana, South Carolina, and West Virginia.
    So I want to ask you, when we are going to have these--when 
are we going to have this notice finalized? When will it be 
finalized? When will grantees be able to put this funding to be 
in the communities? When will HUD enter into grant agreements 
with all grantees that have an approved action plan?
    Secretary Carson. A filed Register notice will be out May 
1st, by May 1st.
    Mr. Price. May 1st you will have the much awaited notice?
    Secretary Carson. Correct.
    Mr. Price. All right. Good.
    Secretary Carson. Which is actually a couple of months 
ahead of when we had promised it was going to come.
    Mr. Price. Well, you understand very well the pressure on 
this and the reasons we are all feeling we need to get this 
notice out and get this money flowing. We are talking about 
disasters that go back to 2016 here----
    Secretary Carson. Absolutely.
    Mr. Price [continuing]. In some cases.
    Now, about this matter of possible White House 
intervention. To your knowledge, did you or anyone else at HUD 
have conversations with the President or with the White House 
or other senior administration officials about delaying or 
diverting disaster funding for Puerto Rico?
    Secretary Carson. No, but we have had conversations about 
how to make sure that the money gets there and that it is used 
in an appropriate way to really help the people of Puerto Rico. 
I feel very strongly about that. And in fact, you know, $1.5 
billion has already been assigned to Puerto Rico. All the 
paperwork has been done. All the checkoffs have been done. And 
as far as the second tranche of money for unmet needs, $8.2 
billion is concerned; that too has already--the agreement has 
already been approved.
    Mr. Price. So this talk that the White House might actually 
block or slow walk this funding, those reports are simply are 
inaccurate?
    Secretary Carson. I hope we can put an end to that rumor at 
this stage. That simply is completely inaccurate as far as HUD 
funding is concerned.
    Mr. Price. Thank you.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you very much, Mr. Chairman.
    Let me also stay on the CDBG-DR motif for second, Mr. 
Secretary, and going back to Ranking Member Granger. Just one 
of the things I would like to do is work with your staff to 
figure out--you mentioned about how obviously you are willing 
to figure out if there is a way to do it in a way that is with 
flexibility but more formalized potentially.
    Secretary Carson. That makes sense.
    Mr. Diaz-Balart. So I would like to work with you on that.
    Secretary Carson. Yes.
    Mr. Diaz-Balart. So now let me--and again, as you know, 
that is--if there seems to be a lot of interest in the 
subcommittee because that whole CDBG-DR, the mitigation part of 
it, which had been authorized but had never been funded until 
now, and that is something that this subcommittee did, and I 
think we are all very proud of.
    Secretary Carson. Absolutely.
    Mr. Diaz-Balart. But as you said many times, we have got to 
make sure it is well spent.

                 HUD OPERATIONS AND THE FEDERAL BUDGET

    Let me change the subject to CRs and the effect of CRs. We 
have seen that, for example, a couple of--whether it was 
defense and HHS, they were up and running with a full budget 
year on October 1. Their programs are being executed with a lot 
more certainty and I would probably add efficiency as a result. 
I have heard, by the way, in the Defense Subcommittee from the 
folks in the defense area that tell us how crucial it was----
    Secretary Carson. Yeah.
    Mr. Diaz-Balart [continuing]. To have that funding on time. 
So could you describe how HUD has dealt with long-term CRs in 
the past? How does that affect you? There are a lot of new 
folks in Congress. They are wonderful people, but I don't know 
if they may not understand how--you know, why there is a 
problem with doing CRs. So what is the issue with CRs? How much 
would it help you to have certainty and have the appropriations 
bills done on time?
    Secretary Carson. It is almost hard to describe how 
wonderful it would be not to have to deal with CRs and if we 
knew what our funding was going to be. And Chairman Price told 
me when I was down in North Carolina we were just sort of that 
far away to getting under the wire. We just missed it by a 
couple of days. That broke my heart.
    But, nevertheless, if there ever comes a time when people 
can sit down and recognize the uncertainty that this causes and 
how that has sort of a cascading effect, a domino effect, on 
everything else and maybe become very, very serious about 
getting these budgets out, getting them done, I think all of us 
at every agency would be extremely grateful.
    Mr. Diaz-Balart. And, Mr. Secretary, one of the things that 
I always talk about too is that one thinks or should think, at 
least, as to the impact on, you know, HUD, the departments, but 
the impact on the private sector because again, a big part of 
your money goes to local communities.
    Secretary Carson. That is true.
    Mr. Diaz-Balart. And, also, a lot of it goes to the private 
sector. And so, you know, do you hear from the private sector 
also with, you know, issues that this creates?
    Secretary Carson. Oh, yeah. Well, they are always 
wondering, you know, what is going to be the long-term impact 
on them? Are they going to get their grants? What new things 
are going to come up before the final budget is resolved? And, 
of course, that impacts their planning, and their planning 
affects their bottom line. So it is something that affects us 
far beyond just the Federal Government.
    Mr. Diaz-Balart. Well, you know, obviously, you know, if 
the chairman is given an allocation and if we are allowed to do 
our work, we will get it done, right, Mr. Chairman?
    Mr. Price. Yes.
    Mr. Diaz-Balart. If you let us get it done, we will get it 
done.
    Mr. Price. Yes, indeed, and I commend you for that very 
forthright statement about the effect on you and your work if 
we don't get it done.
    Mr. Diaz-Balart. Yeah.
    Mr. Price. We really do need to understand that all around 
in this institution going forward, and I assure, you we plan to 
get the work done. We are going to get an allocation. We are 
going to do these bills in the late spring, early summer 
timeframe and you know, work with our Senate colleagues to 
bring them across the finish line.
    Secretary Carson. Amen.
    Mr. Price. Mr. Aguilar.
    Mr. Aguilar. I didn't hear the ranking member yield back, 
but I want to make sure he is okay.
    Mr. Diaz-Balart. Mr. Chairman, if I would, you know, one of 
things I have learned is that whether I yield back or not, if 
the chairman recognizes you, you are recognized.
    Mr. Aguilar. I will speak to the ranking member and to the 
chairman on behalf of, I think, all the committee members to 
say if they are given that top line number, if you gentlemen 
are given that top line number, I feel confident that, under 
your leadership, we can get this done and offer the Secretary 
and the agencies the guidance that they--and the funding that 
they need to serve our communities.
    Mr. Secretary, you talked about some of the formulaic 
programs, and we might disagree on, you know, CDBG a little bit 
here and there. You had a lot of former mayors up on this dais 
on both sides of the aisle----
    Secretary Carson. I know.

                                 CENSUS

    Mr. Aguilar [continuing]. So that is difficult for you, but 
a lot of these programs, CDBG, home investment partnership, 
emergency solutions grants, they are all formulaic, and they 
rely on proper counts. So can you--how important is the 
accuracy of the Census to the work that the Department will do 
in the next decade in order to make sure that we have 
sustainable communities and strengthen housing for all 
Americans?
    Secretary Carson. Well, yeah. The Census count would be 
very important in anything that is a formulaic manner. So in 
terms of what we do, we are very much believers in evidence and 
having accurate counts counts as a significant part of the 
evidence. So I would give it a very high priority.
    Mr. Aguilar. The evidence of an accurate count means you 
count everybody. I don't think there is any dispute from an 
evidentiary perspective that counting everyone means counting 
everyone.
    Secretary Carson. Yeah. That is what the census is.
    Mr. Aguilar. That is what the census does. So efforts to 
undermine that, you know, you think could be problematic in the 
future to those revenue streams that provide key funding in our 
communities. Is that fair? I don't want to put words in your 
mouth.
    Secretary Carson. Yeah. Well, I certainly am not aware of 
anybody who is trying to curtail that, but----
    Mr. Aguilar. Have you been to a Cabinet meeting? I will 
move on.

                                CDBG-DR

    Following up on the chairman's comment, Puerto Rico. You 
mentioned $1.5 billion was out the door, an agreement approved 
for $8 billion?
    Secretary Carson. For the $8.2 billion for unmet needs, 
yes.
    Mr. Aguilar. For unmet needs. But that is not yet out the 
door; it is just an agreement that is approved, right?
    Secretary Carson. Correct.
    Mr. Aguilar. According to OMB, I think they said $11.2 
billion has been expended under all categories, but the 
President tweeted that Puerto Rico got much more money than 
Texas and Florida combined. Have you seen anything that would 
lead you to say that Puerto Rico has received more money than 
Texas and Florida combined?
    Secretary Carson. Well, I know from HUD, Puerto Rico has 
received about $20 billion, which is the largest grant that we 
have ever given out in the history of HUD.
    Mr. Aguilar. Received or----
    Secretary Carson. Had that much allocated to them, yes.
    Mr. Aguilar. Had that much allocated, okay. But not yet 
received?
    Secretary Carson. Correct.
    Mr. Aguilar. Okay. How would that compare to Texas and 
Florida?
    Secretary Carson. They also have not received all of the 
money for mitigation. That mitigation process again will be 
finished by the end of this month.
    Mr. Aguilar. Has Puerto Rico received more money than Texas 
and Florida?
    Secretary Carson. For this hurricane season, yes, they did.
    Mr. Aguilar. I appreciate it. Thank you, Mr. Secretary.
    I yield back, Mr. Chairman.
    Mr. Price. Mr. Secretary, just to clarify, no mitigation 
money has gone out the door?
    Secretary Carson. Correct.
    Mr. Price. All right. The money we are talking about is the 
unmet needs DR funding.
    Secretary Carson. That is correct.
    Mr. Price. All right.
    Well, welcome, Mr. Hurd. Just under the wire here, so 
please.
    Mr. Hurd. Thank you, thank you, Mr. Chairman. I appreciate 
you saving the best for last, right?
    Mr. Price. I didn't say that, but if you say so.

                           OPPORTUNITY ZONES

    Mr. Hurd. Secretary Carson, it is a pleasure to have you 
here. And in your opening remarks, you touched on two things 
that are important, RAD and Opportunity Zones, and this budget 
includes $100 million for RAD, which is going to prioritize 
redevelopment for public housing projects in areas located 
within Opportunity Zones. And could you expand on how HUD is 
going to work with cities like San Antonio and El Paso in my 
district to construct, you know, new units of affordable 
housing in Opportunity Zones?
    Secretary Carson. Yeah. We are actually going to be 
providing preference points for grants when the project is in 
an Opportunity Zone. We are going to also be providing 
technical assistance for projects in Opportunity Zones in terms 
of how to utilize what you have to get what you want because we 
really see this as a major opportunity to revitalize the 
neglected areas of our country, more so than anything that has 
ever happened before. And some people will say: Well, we have 
had enterprise zones. We have had other things before, and they 
were flashes in the pan.
    The difference here is that you have to have a long-term 
investment. So your unrealized capital gains has to be invested 
for 5 years before you get the first advantage, which would be 
a 10 percent decrement in the capital gains on the original 
investment. Two years further than that, you get an additional 
5 percent. Ten years, you have to pay no capital gains on the 
new money that was gained from the initial investment.
    So that is a great inducement, but the biggest advantage, 
of course, is that that money that would have been invested in 
something else is invested in the areas that it is most needed 
in.
    Mr. Hurd. Sure. And look. I know the city of San Antonio 
and the city of El Paso would love to be the gold star of this 
kind of cooperation with HUD, and we will definitely need the 
technical assistance and looking forward to working with you on 
this.

                         RESIDENT DISPLACEMENT

    And a related question on this. And the concern is how do 
you prevent the displacement, you know, of low-income residents 
in these zones once this investment goes in? How do we do that? 
What is the strategy there?
    Secretary Carson. Well, first of all, we will be 
encouraging people to include inclusionary zoning. And also, 
when you do, like, a RAD conversion, it is automatically a 
long-term 30-year commitment to affordable housing. The same 
thing with some of the other programs. So those things will be 
emphasized in this process.
    Mr. Hurd. That is helpful.

                                COLONIAS

    And shifting gears for probably what will be my last 
question, colonias. I have so many. I have more than--there are 
more than 2,300 colonias in Texas, primarily along our border 
with Mexico. I have over 820 miles. Over 400,000 Texans live in 
colonias, and about half of these live without water and 
sewage. El Paso County alone, which I represent part of, 80,000 
people live in over 200 known colonias built on land that was 
never zoned for residential use.
    I am interested in increasing resource allocation to the 
colonias in south and west Texas. What HUD programs would 
ideally be--should we focus, and which specific appropriations 
accounts can be addressed to enhance the activity that you all 
do in colonias?
    Secretary Carson. Well, I think the areas that you are 
talking about do fit into Opportunity Zones, and so everything 
that we just talked about, including replacement of those 
inappropriate structures with something that is, you know, 
decent, fair, and affordable would be a high priority.
    Mr. Hurd. That is a good copy.
    And, Mr. Chairman, I am going to submit for the record some 
questions on MGT.
    [The information follows:]

                         INFORMATION TECHNOLOGY

    Mr. Hurd. This is Modernizing Government Technology Act, 
which is important, and I ask senior leaders of the agencies 
questions because making sure we have a digital infrastructure 
that is going to be protect people's information but also 
allows for better digital-facing services to the community and 
some questions around MGT. And I would love, you know, how you 
are going to use that to update some of the COBOL systems that 
are currently in use.
    Secretary Carson. That is a topic we love to talk about.
    Mr. Hurd. IT procurement. I always say, when we hold that 
parade for IT procurement, you know, I will make sure you are 
invited, Mr. Secretary.
    Thank you, Mr. Chairman. I yield back.
    Mr. Price. Thank you.
    And, with that, Secretary Carson, we want to thank you for 
your time----
    Secretary Carson. Thank you.
    Mr. Price [continuing]. Your appearance today. The 
committee staff will be in contact with you about any questions 
for the record. Some you have heard in the course of the 
discussion; others will be submitted. We would appreciate your 
returning the information for the record to the committee 
within 30 days.
    Secretary Carson. Absolutely.
    Mr. Price. Thirty days from Friday, we will be able to 
publish the transcript of today's hearing.
    Mr. Diaz-Balart, any final comments?
    Mr. Diaz-Balart. Great hearing, Mr. Chairman. I appreciate 
that. Thank you very much.
    Mr. Price. Thank you. And, with that, the hearing is 
adjourned.

                                         Wednesday, April 10, 2019.

               UNITED STATES DEPARTMENT OF TRANSPORTATION

                                WITNESS

HON. ELAINE L. CHAO, SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION
    Mr. Price. The hearing will come to order. We are going to 
examine the fiscal 2020 budget request for the Department of 
Transportation today, and we welcome to help us do that, 
Secretary Elaine Chao. Welcome back. Thank you for joining us.
    Repairing and improving our infrastructure remains one of 
the top challenges facing our country. Our economy, quality of 
life, and international competitiveness depend on robust 
transportation networks that can accommodate the movement of 
people and goods. Unfortunately, we aren't keeping pace with 
the demand.
    The American Society of Civil Engineers estimates that 
there is a U.S. infrastructure funding gap of $2 trillion over 
the next decade, and the U.S. economy is expected to lose 
almost $4 trillion in GDP between now and 2025 if this 
investment gap is not addressed.
    And, by the way, infrastructure requires a broad view. What 
does infrastructure mean? It includes related investments, 
ranging from waterways and ports to drinking water systems, 
affordable housing, the electric grid, trails and greenways, 
and high speed broadband.
    Regrettably, I don't think we can count on this 
administration to be a serious partner in a major 
infrastructure effort. I say that with regret. We are still 
waiting for anything resembling a realistic plan. Right now, we 
have a $200 billion placeholder in the budget request. But the 
President has refused to engage substantively on this topic 
other than a couple of sentences during the State of the Union 
address, so Congress is going to need to step up, and I know 
this subcommittee will continue to play its part.
    Under the leadership of our friend, Mr. Diaz-Balart, we 
appropriated more than $17 billion in new targeted 
infrastructure investments over the last 2 fiscal years. It was 
bipartisan. That was bipartisan, and the budget agreement that 
made it possible was bipartisan. It let us bolster funding for 
discretionary grants across all modes and to provide billions 
more for transit, aviation, highway, and rail programs.
    While these incremental investments are significant, they 
don't constitute a massive infrastructure program. They are a 
downpayment. That is the term Mr. Diaz-Balart used, and I think 
that is accurate. They are a downpayment. We know there is much 
more work to do, and we need another bipartisan budget 
agreement to escape sequestration and to build on this 
progress. Also, Congress must find a way to rightsize the 
highway trust fund, and put our Nation on a more sustainable 
fiscal path that provides certainty to States and localities 
and other stakeholders.
    Infrastructure investments cannot wait. Major projects, and 
we are talking airports, highways, ports, and yes, we are 
talking the gateway project in New York and New Jersey. They 
only grow more expensive when needlessly delay necessary 
repairs and improvements.
    In short, we have every reason to be mindful of the cost of 
not facing up to our infrastructure crisis. Why we should be 
building runways and laying new rail; instead, it seems we are 
struggling to potholes and repair aging bridges.
    Now let's turn briefly to the Department's fiscal 2020 
request. Secretary, we know you are requesting approximately 
$83.7 billion in total budgetary resources. That is a 4 percent 
reduction from last year's enacted level. For programs funded 
through the highway trust fund, your request remains largely 
consistent with FAST Act authorized levels.
    However, on the discretionary side of the ledger, you seek 
a $5 billion reduction, or that would be a cut of almost 20 
percent. I am pleased to see you have requested funding for 
BUILD and other grant programs. That is a positive change from 
past requests, but the brunt of these funding reductions still 
would fall upon programs that advance public transit, rail, 
other intermodal projects that are critical to our Nation's 
transportation future.
    For example, you propose to cut Amtrak and force States to 
pick up the cost of the national network service. You zero out 
the Federal-State partnership rail grants, and your $1 billion 
in proposed reductions for transit grants would almost 
certainly result in construction delays for eligible projects.
    I am also concerned that you propose cutting safety 
programs, including a $9 million reduction to FAA aviation 
safety office, and a $35 million reduction to the national 
highway's safety administration's operations and research 
activities account.
    Overall, this budget is a far cry for what is necessary to 
move our country forward, and it doesn't reflect the rhetoric 
we hear from the Department about taking a safety-first 
approach. Of course, budget hearings aren't just about the 
numbers. They are also about oversight. We need to learn more 
about how the Department is executing grants, and making use of 
the funding that this subcommittee provided on a bipartisan 
basis for the last 2 fiscal years.
    We also need to hear directly from you, Madam Secretary, 
about recent incidents, involving the Boeing Max 8 and the 
FAA's certification and inspection processes. This subcommittee 
is closely following the ongoing investigation, and we are 
prepared to work with you to address and identify shortcomings. 
We need full transparency.
    At the same time, I believe the Boeing incident touches on 
larger questions about whether DOT is fully prepared to oversee 
and regulate increasingly complex technologies in this age of 
automation. Whether it is autonomous vehicles, ships, aviation 
systems, it is clear DOT has to undertake a massive effort to 
recruit and retain staff who are qualified and knowledgeable 
about automation and human behavior.
    These technologies hold enormous potential to increase 
efficiency and improve safety, but as we have seen recently, a 
single accident can cause terrible loss of life, and result in 
a crisis of confidence.
    If the Department lacks the expertise to safely regulate 
these emerging technologies, the results will be catastrophic, 
not only for consumers and passengers, but also for the 
businesses and the industries that drive innovation.
    Finally, I would like to hear more about how DOT is working 
with States, localities, and other grantees to improve 
resiliency. Every year, DOT awards tens of billions of dollars 
in competitive and formula grants, whether it is increasingly 
severe flooding, or hurricanes, or wildfires. We need to take 
an all-hazards approach and to ensure that our Federal dollars 
support projects that can withstand future threats.
    So Secretary Chao, we look forward to your testimony today, 
and working with you to ensure that DOT has the resources it 
needs to carry out its mission. And now I would like to 
recognize our distinguished ranking member, Mr. Diaz-Balart of 
Florida, for his opening statement.
    Mr. Diaz-Balart. Mr. Chairman, thank you very much for 
holding this hearing today. By the way, I also want to thank 
you for holding what I believe are a great series of meetings 
and hearings throughout this budget season. Thank you, and I 
also thank the staff. They do so much incredible work. I think 
our stakeholder meetings and hearings this year were, frankly, 
a great complement to the regular budget hearing process, and I 
know that the testimony that we have all heard in the past few 
weeks will help us work together to draft a good bill for 
fiscal year 2020. Madam Secretary, welcome back.
    Secretary Chao. Thank you.
    Mr. Diaz-Balart. It is a privilege and honor to have you 
here once again.
    I would like to begin, Madam Secretary, by thanking you and 
your staff for your attention to the issues that are of 
concerns to the members of this subcommittee. And what I found, 
whether it is a big issue, a small issue, you and your staff 
have always been exceedingly responsive and available and open 
to us. And so for that, again, I want to thank you.
    It is no small task to run a department with an annual--
with a responsibility for about $80 billion in mandatory and 
discretionary resources, and over 58,000 employees. And again, 
the country is lucky to have your service. So, again, thank you 
for that.
    Secretary Chao. Thank you.
    Mr. Diaz-Balart. We are keenly interested, Madam Secretary, 
in your plans to continue implementing the recent major 
investments in our Nation's infrastructure. In the past 2 
years, thanks to the budget caps deal, also thanks to, I think, 
a very generous allocation from then the chairman, 
Frelinghuysen, Chairman Frelinghuysen, we provided an 
additional $20 billion to improve our Nation's infrastructure. 
The vast majority of this funding went to DOT. And so I look 
forward to discussing the progress you have made in getting 
these funds out to local communities.
    These are significant bright spots for the last couple of 
years, but, also, I think they are significant bright spots in 
the budget request in front of us. We are never going to agree 
on all of it, obviously. That is part of the process.
    The request for FAA makes some, I think, key investments in 
our air traffic control system, including an historically high 
level request for facilities and equipment, and this is how we 
move NextGen programs forward. And I know that the traveling 
public will benefit from these very important investments in 
that program--those programs, I should say.
    Over the past 4 years, the chairman and I worked to ensure 
that the FAA has the resources that it needs to operate a safe 
and efficient air traffic control system. And these efforts 
have been, as the chairman said, bipartisan, and it is really 
been a partnership, and I am grateful for that partnership.
    That commitment by this subcommittee, along with a 5-year 
authorization past September, will put FAA on a path to further 
modernize the system and address the challenges and 
opportunities of unmanned aircraft systems, commercial space 
launches, and other innovations in the sky. And again, every 
day we seem to see a new innovation which is very, very 
exciting.
    I am also pleased, Madam Secretary, to see a request for $1 
billion for BUILD, and $1 billion in discretionary funding for 
INFRA grants, bringing that program to $2 billion when you also 
combine it with the FAST Act levels for INFRA. Those programs 
are key to relieving congestion, generating economic growth, 
and, frankly, just improving the quality of life of people back 
home of our communities.
    This would be an understatement, right, Mr. Chairman, as 
members of both sides of the aisle have spoken to me and others 
about the importance of these programs to their communities. I 
also hear from community leaders in Florida how important these 
programs are to help in reducing congestion and to generate 
economic growth.
    Madam Secretary, I also want to thank you for your 
willingness to travel and to go to see firsthand not only some 
of those needs, but also some of the great things that are 
happening around the country. It is particularly exciting to 
see how communities come together to develop innovative ideas 
as they plan to apply for these grants.
    I am also similarly pleased with the administration's 
request, budget request and transit programs, with, again, a 
request for new starts in 2020. While we obviously think that 
those numbers may or may not be adequate, and that is why we do 
this process, right, your request to fund new starts in 2020 is 
greatly appreciated.
    I know that you and your staff are hard at work 
implementing the transit program according to both the FAST Act 
requirements, and direction provided in the fiscal year 2018 
and 2019 THUD bills.
    And finally, as the chairman mentioned, we are keeping a 
close eye on the grounding of the Boeing 737 Max. We know that 
you have been working countless hours on this issue and 
appreciate any updates if you have any that you can provide for 
us today.
    Again, I want to thank the chairman, and I want to thank 
you, Madam Secretary, for your appearance before us today, for 
your willingness to work with us, for always being accessible, 
and for your service to the country.
    With that, I yield back, Mr. Chairman.
    Mr. Price. Thank you. Let me now recognize for any opening 
statement she may have, our full committee chair, Mrs. Lowey.
    The Chairwoman. Thank you, Mr. Chairman, and welcome. I 
really appreciate your appearing before us today.
    In a speech less than 2 weeks ago, you outlined your 
priorities for the Department of Transportation: first, safety; 
second, rebuilding and refurbishing our country's 
infrastructure; and third, preparing for the future. If a 
budget reflects values, it seems the Trump administration does 
not, unfortunately, share these priorities.
    While the Department of Transportation's primary directive 
is safety, your budget proposes FAA aviation safety cuts of $9 
million, a 20 percent cut to the National Highway Safety 
Administration vehicle safety programs such as those aimed at 
increasing resiliency in crashes, and FRA railroad research and 
development cuts of more than half. These dramatic decreases, 
in my judgment, would seriously jeopardize safety.
    Your budget requests also falls short on rebuilding and 
refurbishing our country's infrastructure. By neglecting to 
include even 1 cent for the Gateway project, the administration 
is neglecting upgrades to its own assets as the aging and 
crumbling Hudson Tunnel is owned by Amtrak.
    Your claim that New York and New Jersey are aren't 
committing enough funding for the project ignores Congressional 
direction in the fiscal year 2019 spending bill that specified 
that Federal loans, which do get repaid, count as local share 
of funding.
    Instead of paying attention to the urgent reality that an 
unplanned closure of the Hudson Tunnel would be disastrous for 
our economy, and disrupt the lives of hundreds of thousands of 
daily commuters, your administration has made a political 
decision that endangers the safety of travelers who pass 
through that tunnel every day. When our current infrastructure 
is in such desperate need of repair, preparing for the future 
must mean ensuring continuity of service, and the sustained 
safety of infrastructure right now.
    Frankly, I am unimpressed by your budget request. Twice, 
the administration has proposed cuts that would shortchange our 
national infrastructure, and twice, Congress has responded by 
passing responsible funding levels. Please, I hope you will do 
better next time. I look forward to your testimony. Thank you 
again for appearing before us.
    Mr. Price. Madam Secretary, we recognize you and ask you if 
you could limit your oral statement to 5 minutes. We will, of 
course, put any materials you want in the record.
    Secretary Chao. Thank you, Mr. Chairman.
    Chairman Price, Ranking Member Diaz-Balart, full committee 
Chairwoman Lowey, and members of the subcommittee, thank you 
for the opportunity to meet today to discuss the President's 
fiscal year 2020 budget request for the Department of 
Transportation. Before I begin, let me emphasize that safety 
is, indeed, always number one at the Department of 
Transportation. And as I have said before, a good day is when 
nothing bad happens.
    On March 10, recently, 2019, there was a tragic crash in 
Ethiopia, involving a U.S. manufactured aircraft. Our hearts go 
out to the families and loved ones of all those who perished. 
We all have a lot of important questions about this accident. 
The Ethiopian Government is in charge of the accident 
investigations, and the National Transportation Safety Board is 
the U.S. representative in the investigations.
    I have taken two key steps, actions, to help determine what 
happened and what can be improved at the FAA. First, I have 
asked the Department's inspector general to initiate an audit 
on the activities that resulted in the March 8, 2017 
certification of the Boeing 737 Max 8 involved in the accident.
    Second, I have announced the formation of a special 
advisory committee to provide independent, impartial advice on 
ways to improve the FAA's safety oversight and certification 
process.
    At this point, the FAA is it awaiting Boeing's final 
package of its software enhancement for the 737 Max. And once 
FAA receives Boeing's proposal, it will be thoroughly reviewed 
to ensure the solution has addressed all pertinent issues. Let 
me emphasize that the FAA will not approve Boeing's proposed 
changes until the FAA is satisfied that it is safe.
    The Department's goal is to ensure public trust in aviation 
safety and preserve the preeminence of the United States as the 
gold standard in aviation safety. I look forward to working 
with you and all stakeholders to help address the key questions 
surrounding this tragedy.
    Now, let me turn to the President's budget proposal for 
fiscal year 2020, which continues to emphasize the importance 
of addressing our Nation's infrastructure needs, using smart, 
effective, and modern methods that provide results and maximize 
our resources. The President's budget requests a total of $84 
billion to support transportation programs in fiscal year 2020.
    About 75 percent of this request fully funds surface 
transportation for the fifth and final year of the FAST Act, 
and FAA's authorized funding levels for AIP funding. These 
programs support infrastructure improvements that are critical 
to maintaining dependable transportation systems that support 
our growing economy. The remaining $21.4 billion of the request 
funds several high priority investments and reforms that will 
strengthen our programs and make them more effective. In fact, 
the Department's programs track closely to fiscal year 2019 
enacted appropriations with a handful of exceptions.
    For FAA, I am pleased to note that the President's budget 
includes $1.4 billion for NextGen projects and activities. This 
is the largest request in FAA's history. The budget includes 
$203 million for unmanned aircraft initiatives; $1.6 million 
for a new Office of Innovation; $65 million for commercial 
space, safety, and operations. And while FAA's operations 
account is less than the fiscal year 2017 enacted amount, it is 
still approximately $113 million above fiscal year 2018 levels.
    When evaluating the FAA funding levels, it is important to 
take into account the timing of the President's budget, which 
was developed before the omnibus bill was signed into law. The 
President's budget continues to fund the Federal Highway 
Administration at FAST Act levels. The President's budget also 
redirects $2 billion in additional resources for the BUILD and 
INFRA grant programs. It also uses $300 million of the 
remaining funds for a new competitive bridge program.
    For transit, the fiscal year 2020 funding level for CIG, as 
has been mentioned, is $1.5 billion. This request fully funds 
all existing projects for the first time, and reserves $500 
million for new projects as they are ready to advance.
    The budget funds Amtrak at $1.5 billion in total. Funding 
for the Northeast Corridor is $325 million, which fully funds 
Amtrak's needs based on traditional spending patterns. It also 
increases funding available for rail infrastructure and safety 
grants, and the project also proposes a new idea that would 
provide $550 million in rail infrastructure grants to support 
States in taking over responsibility for long haul services 
over a five-year period.
    Let me also mention that the MARAD budget request provides 
$300 million to fully fund the Maritime Security Program for 60 
ships, and an additional $205 million for a third new school 
ship. This allows the Department to continue replacing the 
aging training ships currently available at the State maritime 
academies.
    I look forward to working with all of you on these and 
other transportation issues over the coming year.
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    Mr. Price. Thank you, Madam Secretary. Well, let me launch 
the questions with a focus, as we all might expect, on the 
Boeing Max crashes. They resulted in 346 lives lost. We owe 
these victims and their survivors, of course, not only our 
condolences, but some answers as to what happened and why it 
happened and how to prevent it from happening again.
    In the time we have here this morning, I don't want to 
focus on the details of the investigation, but I want to focus 
on its broader implications for politics and policy as it is 
unfolding, and based on what we know now. That is the focus I 
know that you have as Secretary, so I want to focus on the 
perspective you have in terms of your role, your 
responsibility.
    Let me start with the consecutive decisions, March 11 and 
12, that the FAA issued, first, asserting there was no basis 
for grounding the Max, and then later that the planes would be 
grounded, would be taken from the air. These consecutive 
decisions, I am afraid, calm public fears, they really raised a 
lot of questions about the basis on which these decisions are 
made, and what the third decision now is going to look like 
when it comes, that is, to put these planes back in the air.
    So I am asking you from your position as Secretary, how did 
these decisions look to you in terms of process? Are there 
lessons learned? With the benefit of hindsight, could or should 
the FAA, perhaps, have taken a different approach? What can we 
conclude in terms of the basic confidence we have in these 
decisions, but beyond that, the process that they reflect? They 
reflect the way we are organized to evaluate such tragedies and 
to make very quick decisions. What are your reflections, and 
what are the implications going forward?
    Secretary Chao. Thank you for the questions. These are 
important questions, and you are right in saying that the 
relatives and families of those who perished, and also the 
general flying public, deserve answers.
    The FAA is a very fact-based organization, and when this 
crash occurred the morning of March 10, 2019, the FAA saw no 
basis upon which to ground these planes. They did issue what is 
called a continued air worthiness notification to the 
international community, basically putting everyone on notice 
that they need to be reviewing the aircrafts; and then 
subsequently, countries began to ground these planes.
    But the FAA, again, is independent. It is a very technical 
organization, it is data-driven, and they saw no data until the 
morning of Wednesday, March 13. At which time they received, at 
almost the same time as the Canadian Government, new 
information from satellite tracking for the first 3 minutes of 
the crash of Ethiopian Air 302, which seemed to parallel 
similar patterns to in Indonesian Air, Lion Air 610. That was 
the first piece of evidence that the FAA received that caused 
them to review their previous decision.
    Number 2: There was evidence on site, at the crash site, 
which bore debris, that had similarities to what was found at 
the crash site of Lion Air. Those two new pieces of evidence, 
presented to a fact-based organization like the FAA, prompted 
them to take immediate action, because it was based on facts, 
not speculation, that they needed to ground the planes.
    The more basic issue is, if we cannot specify why these 
planes were grounded, what were the reasons for grounding these 
737 Max 800s? What would be the reason for ungrounding them? 
And so, again, the FAA was careful and fact-based in drawing 
upon their decisions to take a very serious step.
    Mr. Price. Thank you. Of course, the first decision does 
raise larger issues about the consideration that might have 
been given, or should have been given to the fact that there 
had already been one crash, and that the manufacturer already 
had corrective efforts underway to address the supposed causes 
of that crash. And it also raises questions which I will return 
to in the second round.
    My time has expired, but it also raises questions about the 
basic certification process and the confidence we have it in 
the first place, and how it was that the 737 has gone through 
eight iterations, eight iterations, a very different plane than 
where it started, and in all those years, has never had a basic 
certification examination; it has always been subject to this 
more incremental, more limited kind of review. And so there, 
too, I want to ask for your reflections. But I will wait until 
the next round, and I will turn to my ranking member, Mr. Diaz-
Balart.
    Mr. Diaz-Balart. Mr. Chairman, thank you very much.
    Madam Secretary, one of the things I am very proud of in 
the 2019 bill is the funding that we put in for the Port 
Infrastructure Development program. That is an authorized 
program that had never been funded before, and the chairman and 
I, again, prioritized that. It is, in essence, to help the 
seaports. These ports handle $6 billion per day. Think about 
that, $6 billion per day in imports and exports, and supports 
about a quarter of the U.S. GDP.
    And so Madam Secretary, I have seen, and I know that you 
placed a great priority on implementing this program, and I 
appreciate the dedication and attention of the staff, your 
staff, at the MARAD, the Maritime Administration, in planning 
for this new funding.
    A few questions, Madam Secretary. Can you provide an update 
on your plans to release a Notice of Funding availability for 
this program? Any idea when you expect those notices might be 
released? Number one. And what benefits would you expect to see 
from projects that successfully compete for this kind of 
funding?
    Secretary Chao. Well, we understand the will of Congress. 
And this is obviously a very important program to the ranking 
member, and we, of course, pay attention to it. In fact, I just 
had a meeting yesterday to check on the status of this. We will 
get out the NOFOs as quickly as we can, and it is not our 
intention to dwaddle, to delay, or be slow in any way. We have 
a lot of these NOFOs coming out. But this is obviously a 
priority, and we want to get it out and get it awarded.
    Mr. Diaz-Balart. And again, you and your staff have been 
exceedingly, exceedingly responsive, and I mentioned this in 
the opening statement, but I think it bears stating again, and 
I want to thank you for that.
    Obviously, port infrastructure is also an important 
component of any multi-modal freight program, and we have seen 
some important investments in ports through the BUILD and INFRA 
program as well. And can you speak to us, or assure us, that 
port infrastructure will continue to be a key component of also 
these discretionary grant programs as well?
    Secretary Chao. Well, we want to fund meritorious programs.
    Mr. Diaz-Balart. Yeah.
    Secretary Chao. And when projects are worthy, are well put 
together, and are supported by the community, we will, of 
course, consider them.
    Mr. Diaz-Balart. Madam Secretary, lastly, on this issue, 
obviously while we expand capacity and technology, we want to 
make sure that it helps create jobs. And so, I just--I want to 
work with you to make sure that those upgrades, those 
infrastructure upgrades in the ports, you know, that we also 
consider the folks that are working in the ports, those 
hardworking labor folks who are there, to make sure we do as 
much as we can, again, to increase jobs, good-paying jobs, and 
I look forward to working with you on that as well.
    And, again, I want to thank you for being exceedingly 
accessible and aggressive in making sure that these issues are 
going to be implemented well, which is something, as you know, 
is a big concern of mine.
    Secretary Chao. Thank you.
    Mr. Diaz-Balart. The chairman and I continue to monitor 
efforts to recover from hurricanes, and severe flooding, 
including Irma, Michael in Florida, Matthew, et cetera. I 
understand that there are specific authorities in the highway 
program to build resiliency into planning and decision making. 
I don't have a lot of time in this round, but Madam Secretary, 
if you could describe some of your efforts in working with the 
States to incorporate resiliency into highway projects, and are 
there additional tools that maybe would be helpful to States to 
help them build resiliency into their projects when they are 
coming forward?
    Secretary Chao. Well, as you mentioned, MAP-21 does provide 
Federal Highways with the authority to consider extreme events 
so that communities can recover, so that they will have the 
resiliency with which to face these challenges.
    Based on these authorities, the Federal Highway 
Administration is actually working with the States and 
metropolitan areas to assess infrastructure vulnerabilities and 
also incorporate resiliency as part of all phases of 
transportation planning and decision making, so it is very much 
a value that we agree with as well. And in fact, FHWA, Federal 
Highways, has supported over 40 resiliency pilot projects 
across the country, and Federal Highways has initiated 11 State 
and metropolitan pilot projects focused on making 
transportation more durable, more resilient.
    Lastly, Federal Highways is coordinating with the States 
and local agencies to integrate resiliency considerations into 
existing decision-making processes. Because it can conserve 
time and energy over the life of roads and bridges, it is a 
very positive value. This will save lives. It will reduce 
service interruptions, and we will continue to work very hard 
on implementing these initiatives.
    Mr. Diaz-Balart. And I want to thank you for that. It is 
obviously something, particularly for the chairman and I, for 
obvious reasons, we are in States that are going to be 
affected. This is something we obviously care a lot about, and 
I want to thank you for, again, your leadership there.
    I yield back, Mr. Chairman.
    Mr. Price. Thank you.
    Mrs. Lowey.
    The Chairwoman. Thank you, Mr. Chairman. Thank you again 
for appearing before us, Madam Secretary. Last year, this 
committee provided an additional $14 million for the NTSA 
program, for a pilot program to address impaired driving, and 
for a paid media campaign regarding highway rail grade crossing 
safety. If you can tell me about the pilot funds and how is the 
Department using these funds, I think this could be very 
important.
    And what is the Department doing to let States know about 
the availability of funds to eliminate grade crossings? I 
checked, and I see that the committee provided $2.7 billion 
from the general fund that can be used by States to make safety 
improvements at grade railroad crossings. And I have been told 
that the States want to address these safety hazards, but don't 
know what funds they can use.
    So, again, can you tell me, what is the Department doing to 
let the States know about the availability of funds to 
eliminate grade crossings?
    Secretary Chao. Grade crossing fatalities should be all of 
our concerns, because 94 percent of all rail-related fatalities 
occur at grade crossings. This is a huge emphasis and focus 
area for the Department. We have done so many things to alert 
the public as well as State and local authorities as to what 
resources are available. Summits have been held; forums have 
been held with basically the public; we continue to fund the--
oh, gosh. I was just at the meeting, Operation Lifesavers. We 
still continue to fund them, and we have a million for, as you 
all know, the highway rail grade crossing; and we also have, by 
Federal Highways, about $245 million that is also dedicated to 
improving safety as well.
    NHTSA and FRA have worked together to relaunch one of their 
advertising spots, and it is called ``Stop. Trains Can't.'' So 
grade crossing accidents, and also the second--the first part 
of yours that you mentioned was impaired driving, but clearly, 
grade crossings is very important. We continue to focus on 
that, and, hopefully, will continue to improve.
    Also in fiscal year 2019, the media budget for the campaign 
is $5.3 million, and we will continue to run these 
internationally. It always is disturbing when someone doesn't 
know what resources are available. We try all the time to let 
States and localities and the public know what resources are 
available. We will have to double our efforts.
    The Chairwoman. Thank you. And perhaps we can work together 
on it, because if there is money available and the States don't 
know it, and we look at the lives that have been lost, I think 
there is more we can do.
    Drunk driving is another issue that I have been really 
working on. It is a very important issue for me over the years, 
including the national .08 BAC standard which saves several 
hundred lives each year. But even with the progress we have 
made, drunk driving is still the leading cause of highway 
deaths, with nearly 11,000 fatalities a year. In fact, motor 
vehicles is still high, as a result of the population, than 
they were in 2009. To see that these fatalities are still going 
up in number is just amazing to me. Do we have basic research 
on impaired driving? What is the Department doing to focus on 
drunk driving, in 33 seconds?
    Secretary Chao. I know that you are very concerned about 
this, and the DADSS program works to address this issue. So the 
issue becomes how do we save these lives? How do we prevent 
these tragedies? I think your staff and my staff, we have 
talked a lot about continuing to work along that route, and 
there are obviously breathalyzer devices, and instruments that 
will, upon touch, fail to turn on the ignition. These are all 
elements that we are working on.
    The Chairwoman. Thank you. I look forward to following up 
with you. I appreciate it.
    Mr. Price. Thank you.
    Mr. Womack.
    Mr. Womack. Thank you, Mr. Chairman, and thank you, Madam 
Secretary, for your testimony this morning.
    I am going to throw kind of a softball out there for you. 
And I know you will be preaching somewhat to the choir here 
when you answer this question, but yesterday it became apparent 
that my friends on the other side of the aisle were not going 
to be producing any kind of a budget resolution. Indeed, had a 
caps proposal that was pulled from the floor, and deemed into 
the rule yesterday. And it signals to me the very prospect that 
in just a few months, when we are winding down this fiscal 
year, and, indeed, beginning to plan as we are now for funding 
on October 1, that we could have another cliff that we are 
staring right down the nose at, and I want to know--well-
chronicled are the impacts of delayed funding, CRs, threats of 
shutdowns, and those kind of things on the national security of 
this country, but I want to know from your perch at 
Transportation, what does a financial cliff like we could be on 
here do to the Department of Transportation and the agencies 
under your purview?
    Secretary Chao. Well, it would obviously create problems. 
So many of the Department's activities were able to proceed, 
especially in the safety arena, without interruption during the 
last government shutdown, because we had separately and 
independently funded resources that were able to keep the 
Department going. So if we did not have that, that obviously 
would have an impact.
    Mr. Womack. So your message back to this committee is for 
us to be getting our work finished and getting a product out 
signed by the President well in advance of October 1, so that 
you can adequately plan and carry out the mission that you have 
been challenged to carry out?
    Secretary Chao. It is never my job to tell the committee 
what to do, but clearly, that would be ideal.
    Mr. Womack. We give you that opportunity here today.
    The President's budget moves away from the discretionary 
highway infrastructure program, and instead, puts more of the 
emphasis on the INFRA and BUILD grants that you talked about in 
your testimony this morning. Can you help me understand how 
that will impact States like mine where there is a lot of rural 
territory? How does it affect rural areas?
    Secretary Chao. Well, for the preceding 8 years before this 
administration came into place, a large amount of resources 
were going into the urban areas. So I don't think rural America 
is looking for a handout. They are looking for just their fair 
share. They are looking for equity. They are looking for 
justice. And so in this administration, we are trying to look 
at the needs of rural America and trying not to forget them in 
our analysis as to what the infrastructure needs are. In fact, 
rural America has a disproportionately high rate of accidents 
on their roads, and so, we do need to address that issue.
    Mr. Womack. Well, that will be welcome news to places that 
I represent.
    I have got a quick question about infrastructure. Can you 
describe how your Department's 2020 budget aligns with the 
administration and Congress' goal to get an infrastructure 
package across the finish line?
    Secretary Chao. Well, the administration submitted a 
proposal last February 12, 2018, hoping for bipartisan effort 
on an infrastructure initiative going forward. We strongly 
believe that infrastructure is one area where we really should 
have consensus, and this proposal of addressing our Nation's 
infrastructure should really be bipartisan.
    Obviously, there were not enough votes, and the House has a 
new majority. We look forward to working with the new chairman 
on seeing what the committee's ideas are. The good news is, 
everything's on the table, and we look forward to working on a 
bipartisan basis with the new majority.
    Mr. Womack. You began your remarks this morning by talking 
about your mission always begins with safety, and I commend you 
for that. Too often, we look at infrastructure programs as a 
jobs program, and sometimes we look at infrastructure as we 
should, from a budgetary standpoint that deferred maintenance 
always costs more, and adds to the total bill, but clearly, 
safety is one of the key reasons why we need an infrastructure 
bill, correct?
    Secretary Chao. Yes.
    Mr. Womack. I yield back.
    Mr. Price. Ms. Clark.
    Ms. Clark. Thank you, Mr. Chairman, and thank you, Madam 
Secretary, for being with us today.
    I want to go back to a line of questions raised by both the 
chairman and the ranking member and give you a chance to 
expand, if you wanted to, on resiliency, and if you can expand 
a little bit more on what the Department's doing to support 
resiliency in transportation projects. I understand some 40-odd 
projects in 11 States. It sounds like progress, but maybe not 
where we need to be, and how can this committee help support 
that work?
    Secretary Chao. Well, we are very open to receiving 
suggestions and ideas, and so, if you have specific concerns, 
or ideas, we welcome them. Pilot projects are basically test 
projects, so they are done on a small scale by definition, and 
we see how they go, what the results are, and then we kind of 
fine-tune based on that. You know all of this.
    Ms. Clark. Yeah.
    Secretary Chao. So we look forward to working with you if 
there are some special concerns that you think we are not 
covering.
    Ms. Clark. Do you see sort of unmet needs the States are 
asking for in any particular area around resiliency and 
building that into projects?
    Secretary Chao. I am sure that there are many questions, 
and there are issues that may not be captured fully by these 
pilot projects. I think FHWA has always been very open to 
working with the States when setting up these pilot projects 
that hopefully are comprehensive enough that the results can be 
shared with others, so it is a best practice kind of thing.
    Ms. Clark. Speaking of resiliency, we know that climate 
change is one of the major drivers of our concern about this, 
and the transportation sector is one of the biggest emitters of 
greenhouse gas. What is U.S. Department of Transportation doing 
to lower emissions from transportation sources?
    Secretary Chao. Well, I think there are a number of ways. 
We incorporate--I mean, it is incorporated in a lot of the 
funding requests, and clearly, we have--it might be a 
difference of opinion as to how to do it, but we have 
initiatives that are ongoing throughout the Department on that.
    Ms. Clark. Okay. Returning to a topic we have discussed in 
your last appearances before here, which is sexual assault at 
the U.S. Merchant Marine Academy. There was a report that we, 
Congress, directed the Maritime Administrator to submit by 
April 1, with recommendations on the status of the 
implementations for the IG's recommendations. Can you give us 
an update on both the status of that report, and the status of 
implementation of the IG's recommendations?
    Secretary Chao. Well, as I have said many times, the 
Department has zero tolerance for sexual harassment or assault 
of any kind. And the Maritime Administration has been 
instructed to have a very careful and close focus and attention 
on this area. I have been up there. Numerous other DOT 
officials have been up there in addition to the frequent visits 
by the administrator. There is now a new team at the Merchant 
Marine Academy.
    Ms. Clark. Do you think they understand the urgency around 
the situation?
    Secretary Chao. I certainly hope so. I don't think it has 
been lack of effort on our part. I think there is a real sense 
of urgency.
    And so, you mentioned the IG investigation. I think we are 
on target.
    Ms. Clark. And what about the status of that report? Have 
you----
    Secretary Chao. I think we are going to be on target in 
terms of complying--because the Academy, Kings Point, concurs 
with all the recommendations. They are now in the process of 
complying with them.
    Ms. Clark. Okay. And specifically, the report that was----
    Secretary Chao. We are a little bit late.
    Ms. Clark. You think we will see it----
    Secretary Chao. Oh, yeah.
    Ms. Clark [continuing]. Within the month of April?
    Secretary Chao. Yes.
    Ms. Clark. Okay. Great. Thank you very much.
    I yield back.
    Mr. Price. Mr. Rutherford.
    Mr. Rutherford. Thank you, Mr. Chairman.
    Madam Secretary, it is great to see you again, and on 
behalf of Jacksonville and the JTA, I want to thank you for 
coming down and announcing the recent BUILD grant. And I am 
glad to see that there is continued robust funding for BUILD in 
the budget.
    You know, Jacksonville is now going to be far ahead in 
their autonomous vehicle operations in this project, and I 
think it really showcases how a city can rethink their 
mobility. And one of the concerns that I have is as we move 
this new technology forward, it is going to be even more 
important that we maintain a close relationship with DOT so 
that we get that guidance on these emerging and innovative 
technologies. And I know there is $19.2 million in this budget 
just for autonomous vehicle emerging technologies. Can you talk 
about that a little bit?
    Secretary Chao. We actually have a lot of funding. It is 
not even a matter of funding. It is a matter of leadership. And 
the Department has to take the leadership in this area where 
there is such rapid change in new and emerging technologies. 
And I have always said that the Department needs to address 
legitimate public concerns about safety, security, and privacy 
of these new and emerging technologies without hampering 
innovation.
    Mr. Rutherford. Right.
    Secretary Chao. We are also particularly concerned about 
the State-by-State patchwork of regulations. That is why we 
have come out with two documents. One is a Vision for Safety 
2.0, which came out in September 2017. It was very quickly 
thereafter revised and updated with Automated Driving Systems 
3.0.
    Mr. Rutherford. In Florida, and in Jacksonville 
particularly, we share that concern with you. That is why I 
wanted to bring that up.
    In northeast Florida, we are on the JAXPORT, which 
continues to grow and has a deep dredge project going on right 
now, as you know, for the larger Panamax ships when they start 
coming. But my district is also home to a much smaller port, 
the Port of Fernandina. As you know, the Marine Highway Program 
gives smaller ports like the Port of Fernandina opportunity to 
get cargo off of our congested highways, and get it onto our 
marine highways. I was a little concerned to see that this 
program wasn't funded in this budget and that it had been 
zeroed out. Can you talk about that, how that happened, or why 
that happened?
    Secretary Chao. I don't think so. I might be wrong, but I 
don't think so. In fact, it is our expectation that we are 
going to be announcing a new Notice of Funding opportunity, 
which should be coming out later this year. So that could be 
previous year's monies, but just the other day, we announced 
$6.79 million worth of grants to three awardees.
    Mr. Rutherford. This is the American Marine Highway 
program? Well, good. I will have my staff follow up with you, 
if you don't mind.
    Secretary Chao. Of course.
    Mr. Rutherford. We have an application in right now. Well, 
I don't think we have the application in yet, but it is on its 
way. So thank you. I am very glad, very glad to hear that.
    Secretary Chao. Thank you for providing that for us.
    Mr. Rutherford. We had heard otherwise.
    Now, also, with JAXPORT, as you know, we are one of the 
main ports for transporting cargo between the United States and 
Puerto Rico. And the Jones Act plays a major role in keeping 
those shipments consistent, reliable, and economical, not to 
mention the relationship that it builds between Puerto Rico and 
my city in Jacksonville. But do you have any sense that the 
Jones Act is in jeopardy? You know, two of our main Jones Act 
movers, Crowley and TOTE, they are truly on the cutting edge of 
maritime shipping, with the newest LNG vessels having come out. 
Can you talk a little bit about whether the Jones Act is in 
danger?
    Secretary Chao. You know, periodically, the Jones Act is 
always blamed and criticized, and there are attempts to get rid 
of it. And I have been in this government service now for such 
a long time. It comes up. And this has come up, for example, in 
Puerto Rico.
    Mr. Rutherford. Uh-huh.
    Secretary Chao. But the problem with distribution of cargos 
is not the problem, due to the Jones Act, the vessels or the 
high cost. Rather, it was due to the lack of warehouses and the 
devastation of the roads, so that once the cargos were unloaded 
in Puerto Rico, they could not be distributed.
    Mr. Rutherford. Exactly. And that is why I wanted to bring 
this up, because I think a lot of people misunderstand. Listen, 
TOTE and Crowley had tens of thousands of units, container 
units, in San Juan as soon as that port was open. They are the 
first responder for Puerto Rico. And even with the waiver that 
was given some 8 days, I think it was, later, there was only 
one vessel, one foreign vessel that ever left an American port 
that sailed into San Juan. So the Jones Act had absolutely no 
impact----
    Secretary Chao. Right.
    Mr. Rutherford [continuing]. On the recovery going on in 
Puerto Rico. I just want to point that out, and I am sorry. I 
am over my time. I yield back. Thank you.
    Mr. Price. Thank you. Mrs. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman, and good day 
to you, Madam Secretary. It is good to have you.
    Secretary Chao. Thank you.
    Mrs. Watson Coleman. I hail from New Jersey, so you can 
kind of figure what I am going to ask.
    As you know, the rail connections between New York and New 
Jersey rely on infrastructure that is about a century old, and 
in desperate need of repair or replacement. Yet, the 
administration has repeatedly taken steps to prevent the 
Gateway project from moving forward.
    First, the program sponsors for the Hudson Tunnel project 
submitted the environmental impact statement to the Department 
over 14 months ago. The average length of time for a final 
decision is roughly 5 months, yet the Department has still not 
approved the environmental impact statement, and it prevents 
work on the Hudson Tunnel project from moving forward.
    So my first question to you: What is causing this delay 
now, and when will the Department issue its decision?
    Secretary Chao. Well, a project has to be ready to be able 
to receive funding.
    Mrs. Watson Coleman. I am asking about the impact 
statement. The environmental impact statement.
    Secretary Chao. The impact statement has not--I hate to 
tell you. These impact statements take a very long time, which 
is why we have been trying to speed them up. But the impact 
statement is not ready. But even if it were, this project is 
not ready.
    Mrs. Watson Coleman. Madam Secretary.
    Secretary Chao. Yes.
    Mrs. Watson Coleman. The information I have--and tell me 
that I am incorrect--is that it takes roughly 5 months to get 
an environmental impact study----
    Secretary Chao. No, that is not correct. Not at all.
    Mrs. Watson Coleman. What is the average?
    Secretary Chao. Oh, my gosh. You would be shocked to learn 
how much--how long it would take. It takes quite a long time.
    Mrs. Watson Coleman. Such as?
    Secretary Chao. Well, I just recently, last year, in 
August, went to Alaska and gave the final permitting process 
approval on behalf of the Interior Department to the Sterling 
Highway. That took 37 years. That is part of what our problem 
is. We are trying to speed up the process.
    Mrs. Watson Coleman. Yeah, but the impact statement doesn't 
have to take that long?
    Secretary Chao. No. It is not 5 months. Our goal is to have 
that.
    Mrs. Watson Coleman. May I specifically ask you----
    Secretary Chao. Yes.
    Mrs. Watson Coleman [continuing]. To tell me, if it is 
through the chairman, would be just fine. I would like to 
understand where we are in the process----
    Secretary Chao. Of course.
    Mrs. Watson Coleman [continuing]. And what you think we 
should reasonably expect in terms of a timeframe when we will 
have the impact statement.
    Secretary Chao. Well, we have--the Federal Transit 
Administration----
    Mrs. Watson Coleman. Yeah.
    Secretary Chao [continuing]. Has been in deep discussions 
with New York and New Jersey and all the stakeholders many 
times. I think they know what the real situation is.
    Mrs. Watson Coleman. I would like to hear it from you.
    Secretary Chao. Okay. Of course. Sure.
    Mrs. Watson Coleman. Thank you so much.
    Over the past couple of THUD bills, Congress has provided 
over $1 billion in funding for Amtrak's Northeast Corridor 
account, intending to allow Amtrak to fund upgrades, included 
those related to this Gateway project. Yet, it is my 
understanding the FRA has included language in its work plan 
with Amtrak, blocking Amtrak from using funds for major gateway 
projects. Is that correct?
    Secretary Chao. No, it is not correct. I am not aware of 
any such discussions.
    Mrs. Watson Coleman. All right. I need to follow up on that 
question, but I need to follow up on the information that I 
have, and then I will send to you, through the chairman, my 
understanding.
    When you became the Secretary in 2017, FTA rated the Portal 
Bridge replacement project as medium high. Then the Department 
lowered the rating to medium low, claiming that the State had 
not agreed to put up enough of its own money. Our Governor, 
Governor Murphy, then authorized $600 million in economic 
development bonds addressing this problem, yet somehow, the FTA 
still rates the project medium low. Why is this?
    Secretary Chao. Well, that rating is done by career 
officials. I don't get involved in that, and the FTA has rated 
the Hudson Tunnel as medium low, so it is not eligible to----
    Mrs. Watson Coleman. It said it had to do with the--whether 
or not there was sufficient funds from our side for this 
project, so then the Governor issues the $600 million which, 
therefore, I think addresses that issue. To whom should I be 
asking why is it still rated medium low?
    Secretary Chao. When did the $600 million occur?
    Mrs. Watson Coleman. Within the last 6 months. Enough time 
for it to be communicated to whomever.
    Secretary Chao. Because we have been in discussion with the 
Governor as well, but I will be more than glad to take another 
look.
    Mrs. Watson Coleman. Would you? Thank you very much.
    My last question is the Congress appropriated $250 million 
for Federal-State partnerships for State of Good Repair for 
fiscal year 2018 in March of last year, but the FRA did not 
issue a Notice of Funding Opportunity until November and did 
not close these applications until last month, a year after 
Congress initially passed the funding.
    When would we expect FRA to make a decision on these 
applications? And will FRA move more quickly to disburse the 
$400 million in State of Good Repair money appropriated in 
February of 2019, Madam Secretary, and is this an issue of not 
enough personnel resources?
    Thank you, Mr. Chairman.
    Secretary Chao. You know, a lot of these grants used to be 
earmarked, so they were disbursed very quickly. Now, there are 
these competitive programs, so we have had to stand up a whole 
new infrastructure, which is now in the policy shop. It is not 
actually in Highways or Transit. A lot of the grants processing 
now is in Policy. So we now have a different process, and it 
takes a long time. It was much easier the old way.
    Mrs. Watson Coleman. Thank you. Thank you, Mr. Chairman, 
and Madam Secretary, thank you for your efficiencies. I just 
would like to see that the outcomes become more time-sensitive 
and more time ready.
    Secretary Chao. That is our goal as well. Thank you.
    Mr. Price. Thank you.
    Mr. Hurd.
    Mr. Hurd. Thank you, Mr. Chairman.
    And Madam Secretary, you said in previous remarks about how 
rural America kind of has a disproportionate number of 
fatalities on the road. That is true in the Permian Basin. Two 
percent of the population of Texas, but 10 percent of all the 
traffic fatalities, that means every 36 hours, there is a 
fatality on the road in the Permian Basin.
    And the residents of the Permian Basin thank you for your 
help with the BUILD grant, $25 million from the Department of 
Transportation, $25 million from the great State of Texas to 
address this. And you know, my question on the BUILD grant, 
INFRA grant, these are competitive grants. How do we make sure 
that resources aren't spread too thin? How do we make sure that 
communities like the Permian Basin are able to continue to be 
competitive?
    Secretary Chao. That is an excellent question. We basically 
have about $1.5 billion for the BUILD grants and about $10.5 
billion to $11 billion of requests. So basically, one in 10 
projects actually get awarded, you know, the needed resources. 
And so we do try to see whether we can have greater State and 
local, and also private sector participation, because that does 
help the dollars stretch further. And then we, of course, you 
know, want to make sure that there is adequate attention being 
given to rural America.
    But for the Permian Basin, it is a top priority of ours. 
This administration, you know, understands very, very well the 
importance of energy independence, and we want to ensure that 
America is energy sufficient.
    Mr. Hurd. Well, you are welcome to the Permian Basin 
anytime. Love to get you out----
    Secretary Chao. I actually am interested.
    Mr. Hurd [continuing]. To see some of those roads, and I 
will take you to get some breakfast tacos as well.
    You are known for improving and turning around a number of 
organizations, and one of the things that I have spent my time 
in Congress dealing with is a topic that is not sexy, IT 
procurement, and part of that is making sure that we have 
efficient digital infrastructure to protect the information 
that we have, and make sure that we are providing good digital 
facing services. And that is why I was proud of the Modernizing 
Government Technology Act, which is making sure that we have--
CIOs have the tools they need in order to modernize their 
technology.
    And my question is, are you aware, or has the Department of 
Transportation established one of these information technology 
working capital funds as authorized by MGT? If so, why, why 
not? Or do you think you need additional authorities to 
establish that?
    Secretary Chao. You know, this is such an important area, 
field, but it is also very complicated. I know, Congressman, 
that you are a real expert in this area, given your background 
and experience, and I think for a lot of other people, you 
know, it is a constant struggle.
    We know that there are infractions. Cybersecurity is a huge 
issue, and I don't--I mean, we work on it all the time. But 
clearly, we could use your advice and use your, you know, 
expertise and guidance as well, because it is all--we are 
always trying to kind of keep up.
    Mr. Hurd. I would welcome on the record, or for the record, 
kind of the plans, the CIO's plans for an MGT fund.
    Secretary Chao. That is not very good.
    Mr. Hurd. I think that is the first step to do that.
    And also, in the FITARA scorecard, this is--you know, I 
would call it digital hygiene scorecard. DOT received an F when 
it comes to CIO authority enhancements, and one of the first 
steps to do is to make sure that the Federal CIO was reporting 
directly to the Director or the Secretary or the Deputy 
Secretary that would show, as in the private sector, that 
cybersecurity and those issues are C-Suite issues.
    And have you had the chance to coordinate with the CIO to 
understand why some of the low grades on the FITARA scorecard?
    Secretary Chao. It is a continual concern. In the 
Appropriations Act of 2019, Congress provided a total of $320 
million for this critical initiative. The IG recently released 
their findings, and the CIO's office has agreed with all 12 of 
the recommendations made. We hope to implement these 
recommendations shortly.
    Mr. Hurd. That is a good copy. And when you come in the 
Permian Basin, while we are having breakfast tacos, I would 
love to talk more about how the Department can be prepared in 
the future for, you know, UAVs, autonomous vehicles, commercial 
space flight. How do we make sure that various agencies are 
prepared for that, because I don't think when these agencies 
got started, we ever thought that that would be a reality, and 
I am looking forward to those conversations. And Mr. Chairman, 
I yield back.
    Secretary Chao. May I just add--I just remembered one 
thing. My able staff here. On the Permian Basin, the Department 
expects to issue the NOFO later this spring, and we hope to 
grant awards before the end of the year.
    Mr. Hurd. Thank you.
    Mr. Aguilar. Mr. Chairman, just a point of clarification. 
Is the gentleman from Texas offering breakfast tacos to the 
committee? That is a fair and relevant question.
    Mr. Hurd. I will take that under advisement.
    Mr. Diaz-Balart. Mr. Chairman, there is a bipartisan 
concern on that issue.
    Mr. Price. All right. Mrs. Torres.
    Mrs. Torres. Mrs. Lawrence.
    Mr. Price. The procedure has been to go in order in which 
people were when we gaveled in.
    Mrs. Torres. Thank you, Mr. Chairman, and thank you 
Secretary Chao, for being here. We really appreciate your 
expertise on these issues.
    I represent the 35th Congressional District. We are the 
heart of the freight system in the country. We have six freight 
corridors that split my district in every direction. We are, in 
essence, an inland port. Rail safety, as it relates to 
pedestrian fatalities, is a growing problem. Of the top 10 
identified most critical crossings, two of them are in my 
district; four of them are in the region. So we have to--I want 
to tell you that we have to do more to ensure that we are not 
just doing PSAs and forgetting about this issue.
    Secretary Chao. No, not at all. Not at all.
    Mrs. Torres. We have to invest in this infrastructure.
    Currently, we have no scientific data or impairment 
standards. There is no reliable methodology to determine 
impairment when it comes to drunk driving. We need to invest in 
ensuring that, you know, we get some data in order for us to be 
able to write policies on this issue. Why isn't there more 
being done to devote actual resources to have some research 
done on this issue?
    The other thing that I am very concerned about is in 2015, 
the FAST Act authorized small auto manufacturers to produce and 
sell up to 325 replica cars, each in the U.S. and 5,000 
worldwide. NHTSA has still not issued regulations. So it is now 
2019. When can we expect those regulations? Or for you to begin 
that process to ensure that these small manufacturers are able 
to begin building? And I hope that we can do that this year.
    When I first met you when you first came, you know, and 
took this position, I talked to you about the highway of 
things. I talked to you about leveraging Federal dollars with 
private dollars. We should be digging once. We should be doing 
one environmental impact report to ensure that we are 
maximizing resources. I call this the highway of things. If we 
are going to create more opportunities to build infrastructure, 
we need to ensure that we are working with our private partners 
to ensure that transmission lines for broadband, or electrical 
lines, or maybe purple lines, water lines, are also part of the 
infrastructure as we build more highways, highway lanes, or 
anything that we are building.
    I would like to hear from you as to what sort of programs 
can we move forward to ensure that we provide that technical 
assistance for public and private entities to come to the table 
before they put a shovel in the ground, and not after?
    Secretary Chao. We encourage that all the time.
    Mrs. Torres. I did a bill on it. We need to fund it, but I 
did a small bill, a small pilot program on this issue.
    Secretary Chao. The Federal Highways Administration, they 
try to be the convener, but a lot of this is State and local as 
well, and it was part of our infrastructure proposal that we 
also take a look at this. We will just have to continue to work 
on it.
    I don't want to--I am not switching topics, but let me go 
back to the grade crossings. I was Deputy Secretary before, 27 
years ago, so I know how important this issue is. It is not 
just ad campaigns, but it is an awareness, and also, it is 
actual physical infrastructure, which again, we have about $250 
million in Federal Highways that is working on this. And we do 
so much that is not known, and so that is part of our 
challenge.
    Mrs. Torres. Maybe it isn't working, what we are doing, so 
we need to try something else.
    Secretary Chao. We need--yes. Absolutely. We need to get 
the news out. It was Congresswoman--I think--gosh. It was 
Congresswoman Clark who asked about, you know, what are State 
and local--or was that actually Chairman Lowey who said that, 
you know, what happens if States don't know that their 
resources are available.
    But this is a constant challenge letting stakeholders and 
the public know how much we can do if we partner together. So 
this is another one.
    Let me assure you that grade crossing was among my top 
priorities when I came back to the Department 27 years later. 
We have a wonderful FRA administrator, Ron Batory, and every 
single Tuesday when we have a staff meeting, he reports on the 
stats, and we report on every single one of these fatalities. 
So we are very concerned about that. On the highway issue, we 
want to work on that with you as well.
    Mrs. Torres. I hope so. My time has expired. A great 
concern for the region is that we are applying for these grants 
and not receiving them, so I will follow up with you at some 
point on that.
    Thank you, Mr. Chairman.
    Secretary Chao. Mr. Chairman, may I just add something? As 
you can begin to see, there are so many grants, and so every 
single one of the members' requests are reasonable. We are 
under tremendous pressure, and that is our job. We are not 
complaining, and every one of these requests are reasonable, 
but there are 361 of them just in the FAA reauthorization 
alone, and all of them have to come out within 30 days, 60 
days, 90 days. We are really trying, but some of the deadlines 
are a little bit unrealistic, and that is what we are trying to 
deal with as well. Let me assure you, we are--pedal to the 
metal. We are moving ahead.
    Mr. Price. All right. Well, it is--every one of these 
queries is important to the member and to the district----
    Secretary Chao. Yes, of course.
    Mr. Price [continuing]. Involved, and so we appreciate your 
understanding that, and we will do our best, of course, to make 
the deadlines realizable.
    Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. Thank you, Madam 
Secretary. Good to see you again.
    My district in southern California is in a severe air 
quality non-attainment area. San Bernadino County, the region 
that I represent in Congress, has some of the worst air quality 
in the country. The American Lung Association gave the county 
an F for our ozone pollution. However, there are some good 
signs. Our region is working strategically with the State of 
California and with industry, and are poised to deliver the 
first zero emission passenger rail service that will provide 
more frequent service in an environmentally friendly way.
    San Bernadino County, the MPO for our region, the 
transportation authority, is analyzing hydrogen fuel cells as a 
potential system. The FRA must approve the use of this 
technology when operating on mixed freight and passenger lines. 
What are your thoughts on the use of this technology to deliver 
passenger rail service, and are there opportunities to pilot 
this type of technology within DOT more broadly?
    Secretary Chao. This is an issue that you care about, and 
as I mentioned, we are very responsive. We try to be very 
responsive to what members' concerns are. This is an issue that 
we have discussed, and there is a NOFO coming out. There is a 
grant program, and we hope to get the Notice of Funding 
Opportunity out pretty quickly.
    Mr. Aguilar. You know, this isn't about funding. This is 
about, you know, administrative review. FRA would be 
responsible when operating on a mixed line to approve the use 
of this rail technology. And, so, that is the question. This is 
actually funded. They have received Federal funding in the 
past. This is complemented extensively with local funding.
    San Bernadino County residents have taxed themselves, just 
like many communities in California have, in order to deliver 
transportation and transit improvements, and this is one of 
those projects. So this has received also State greenhouse gas 
emissions dollars.
    So the question is, what is the thought process? What do 
you feel FRA should look at when approving new technologies 
that could deliver a low or no emissions technologies in 
combination with our rail service?
    Secretary Chao. Thank you for restating the question. You 
have asked me two questions so far, and I haven't done very 
well on either one of them. I am not up to date on that, so let 
me go back and ask the FRA about that.
    Mr. Aguilar. Sure. We are happy to work with you and your 
team on it.
    Secretary Chao. Thank you.
    Mr. Aguilar. And I appreciate your willingness in my office 
to talk about the non-attainment and air quality issues within 
our region.
    My district is right next to Mrs. Torres' region, and I 
spoke with you before that the State of California has sought 
and received Federal waiver to enact stricter air quality 
standards than Federal regulations. However, pollution, as we 
know, is caused by many things, including trains, planes, and 
our port traffic, so State and localities don't have much 
control over some of those sources.
    The Alternative Fuels for General Aviation program is 
funded within your Department, and it helps find cleaner fuel 
for planes with less lead and less pollution. Your budget 
proposes to cut the program, to completely zero it out. 
Additionally, you proposed to cut the research, engineering, 
and development account under FAA by 50 percent, reducing it 
from $74 million to $31 million. Can you talk to me broadly 
about the Department's strategy to working to improve and 
continue to be a leader in testing research in fuels 
alternative, particularly replacing unleaded aviation fuels and 
more broadly, in the research and development space?
    Secretary Chao. Let me get back to you on that. I would not 
be the best person to talk about that----
    Mr. Aguilar. Sure.
    Secretary Chao [continuing]. And so if you wouldn't mind.
    Mr. Aguilar. We understand budgets are about, you know, 
priorities, but making sure that we retain our position as a 
leader in this, I think, is important for the committee and has 
been a priority in the past, and in a bipartisan way as well. 
So I appreciate--we will continue the conversation and the 
dialogue, and I appreciate your willingness to have those 
discussions with me and my staff.
    Secretary Chao. Thank you.
    Mr. Aguilar. Thank you, Mr. Chairman.
    Secretary Chao. Mr. Chairman, I found out the answer to a 
previous question about the Gateway issue. The $600 million by 
the New Jersey Governor, it is not yet committed. So I just 
wanted to answer that, but Congresswoman Clark is not here 
right now.
    Mr. Price. All right. I am sure that will be communicated--
--
    Secretary Chao. Thank you.
    Mr. Price [continuing]. And we will make an appropriate 
adjustment in the record.
    Mrs. Lawrence.
    Mrs. Lawrence. Thank you, Madam Secretary, for being here.
    The State of Michigan is a leader in the development of 
vehicle to everything communications, and the Department of 
Transportation has been an important partner in helping to 
develop this life-saving technology. Secretary, as you know, 
the future of auto safety and surface transportation is about 
connectivity, and an important piece of that is preserving the 
entire 5.9 safety spectrum ban for vehicle to everything 
services. Can you update the subcommittee on how the Department 
of Transportation is working with FCC to assure that the 
spectrum that supports these services are protected?
    Secretary Chao. Well, this is a very, very contentious and 
important issue. There are stakeholders with very fixed 
positions. What I am concerned about, obviously, is preserving 
the spectrum for vehicle-to-vehicle technologies, so it is our 
intent to try to continue to make that point, and to hold our 
ground.
    Mrs. Lawrence. Okay. So the FCC, is that the opposition, or 
is this just different voices?
    Secretary Chao. No. It is all different stakeholders 
groups, because we still represent basically the auto, you 
know, the car--the public safety.
    Mrs. Lawrence. Yes.
    Secretary Chao. The cars.
    Mrs. Lawrence. Right.
    Secretary Chao. And so there are many, many other 
stakeholders with different ideas about how to use that 
spectrum. I mean, they range from aerospace, public utilities--
--
    Mrs. Lawrence. Yes.
    Secretary Chao [continuing]. And all these other groups.
    Mrs. Lawrence. Well, I want you to know that is an area 
that I will be continuously in contact with the Department, and 
as we move in this discussion so critical to auto connectivity, 
that that is something that I will be working real closely with 
you on.
    Secretary Chao. Right.
    Mrs. Lawrence. The TIGER grants, which we now call a bill, 
has proven to be a successful cost-saving, cost-effective 
program. Cities in my district have told me how difficult it is 
to prepare large projects, and often ask for help securing 
money to assist in the initial stages of projects. But again, 
Congress allows DOT to use up to $15 million for planning 
grants in the fiscal year 2019 bill. Will you commit to 
awarding planning grants this time around?
    I was also disappointed by what appeared to be an 
overemphasis on rural projects, the vast majority of grant 
programs have a rule set aside, which I believe is important. 
The administration took it to the extreme by awarding 311 of 
the $500 million available in fiscal year 2017, and $1 billion 
of the $1.5 billion available to rural projects. Your tilt, it 
appears, towards rural projects, discounts the significant 
needs of urban communities, like those in my district.
    Can you please comment on the awarding of the grants and 
your direction, and which allows more than $450 million of the 
rural projects, and no more than $450 million for urban 
projects? Can you talk to me about that?
    Secretary Chao. It is not our intent to overlook anyone, 
but obviously, there are not enough resources. And in the 
previous eight years prior to our coming in, the emphasis was 
very much on urban projects, so, in fact, rural America was 
really overlooked. We are just trying to address some of those 
projects which have been so delayed that have been waiting to 
be funded, and so we are now making sure that they are not 
overlooked.
    Mrs. Lawrence. So we are at the point where we need to have 
a balance, and so, I can understand the neglect, possibly, 
years ago, but I am confronted with now seeing over a majority 
of the funds going toward the rural areas, and I am looking for 
a balance.
    Secretary Chao. I am too. You know, we are looking for 
meritorious projects, where they occur and where the need is 
greatest. I think we can work together because obviously, when 
things are not funded in the last eight years, there is a 
greater need because they have not been funded or they have 
been pushed back, so we have been trying to address those. But 
we always are looking for meritorious projects that really 
deserve to be funded.
    Mrs. Lawrence. Well, if we continue to just address rural, 
we are going to have an even greater problem.
    Secretary Chao. Yeah. I don't think we will.
    Mrs. Lawrence. Okay.
    Secretary Chao. You know, I think the appropriators also 
made it quite clear that they would like a balance.
    Mr. Price. We, indeed, make it clear. In fact, this year's 
bill, this subcommittee wrote in a 50/50 required balance----
    Mrs. Lawrence. Yes.
    Mr. Price [continuing]. Between rural and urban, and that 
pretty clearly expressed our view on the subject.
    Mrs. Lawrence. Yes.
    Secretary Chao. I also----
    Mrs. Lawrence. Thank you.
    Secretary Chao. Thank you. I made a mistake. It was not 
Congresswoman Clark. It was Congresswoman Coleman.
    Mr. Price. Yes.
    Secretary Chao. Thank you.
    Mr. Price. All right. Thank you. Let's go another round 
here, and let me pick up on the issues I was raising, that the 
air tragedies raise, and as I signaled, I want to ask you about 
the way we certify these crashes, particularly a craft like the 
737 that is now the Max 8. And I am told that, actually, there 
have been 12 different models over 52 years.
    The original--well, the Max 8 is 25 feet longer, it is 
37,000 pounds heavier, and it has double the range of the first 
model. You might say it, at some point, should have been 
treated as a new aircraft and subject to a more extensive 
certification process. At least that is the question, I think, 
this situation raises as we learn more about this aircraft and 
the changes that were and weren't made at each iteration, and 
the kind of reasoning that went into that, perhaps the 
preference of the airlines, perhaps cost savings, perhaps a 
desire to have a less extensive certification process.
    Whatever they were, you have ended up with a very different 
aircraft, and it seems to me that we might want to reflect on 
this process. Shouldn't, at some point, the FAA have looked at 
this aircraft's certification anew? If the FAA required 
manufacturers to seek a type certificate instead of an amended 
certificate, might the outcome of the process been any 
different? Might this plane be more airworthy at this point?
    Now, so that is the important question. I wonder what your 
reflections are at this time. Both of these levels of 
certification are subject to ODA, that is, the post 2009 
delegation of certain examination responsibilities to industry. 
That has also been much discussed in this context. Has any of 
this prompted you to reflect on how ODA currently operates?
    Secretary Chao. You have asked some really, really 
important questions, and that is why these are important 
questions which need to have answers, and that is why I have 
asked for two investigations.
    One is the audit by the IG on the certification of these 
two aircraft. The 737800: the process began on January 27, 
2012, and the certification occurred on March 8, 2017. And for 
the Max 900, the certification process began in January of 
2013, and ended on February 12. The previous FAA administrator 
left on January 8, 2018.
    I think the ODA process is one that is being discussed a 
great deal, and it is very technical. It really should be a 
process that the FAA should explain, which they are trying to, 
with Members of Congress, and also international accreditation 
bodies.
    But let me make it very clear that the ODA is not a self-
certification process, and it is a process by which--that is 
not it. I actually have a piece of paper. If you could just 
give me one second because I anticipated this, and I was hoping 
to answer--give a very full explanation on that.
    Basically, it is not a certification process. It is not a 
self-certification process. This form of delegation has been 
part of the FAA since it was formed in 1958, and it allows the 
FAA to focus on safety-critical issues. The FAA sets the 
standards that all manufacturers must meet, and the ODAs, they 
are called the Organization Designation Authority, 
authorization. The ODAs are audited on an annual basis, and the 
FAA is involved when new, novel, and high-risk design features 
are contemplated.
    But having said all of that, we always need to improve. The 
FAA itself acknowledges that they need to improve, and we all 
have to learn. And so, the special committee that I have set up 
hopefully will address some of these issues, and certainly the 
audit by the investigators, by the IG investigators, will also 
address these questions as well.
    Mr. Price. Well, I am glad you feel that way, because I 
certainly feel that way from what we are learning in the 
context of these two tragedies. No, it is not self-
certification, but it clearly----
    Secretary Chao. Yeah.
    Mr. Price [continuing]. Clearly is it a process that 
requires a certain FAA capacity, certain trained personnel. It 
requires vigorous oversight. It requires discerning judgment 
about what is delegated and what isn't, what is done in-house, 
and it requires, I would say, critical judgment about how 
this--the way this is working right now, and the extent to 
which aircraft are not being subject to the most thorough going 
kind of examination, even when there are major new components 
in the planes.
    Underneath this, are there potentials for conflicts of 
interest with respect to industry's role here? Are there 
possibilities that employees will be subject to the pressures 
in carrying out this role? Many, many questions which I would 
suggest, at the administrator's level, and at the Secretary's 
level, so----
    Secretary Chao. Well, these questions have been discussed, 
and we obviously don't have answers. I think we need to see 
what is learned from the investigations--and I am not here to 
defend anybody, you know. I am concerned about safety. That is 
the number one concern that I have, and we want to get answers. 
We want to understand fully what happened, and how do we 
prevent it from happening again.
    Mr. Price. Thank you.
    Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman.
    Madam Secretary, I have two separate issues. Let me start--
and this is not a question, but first, thanking you for the 
work that you have done and your staff on the Tamiami Trail 
project in southern Florida. That is vital for the health of 
the Everglades, and the Everglades is the lifeblood of Florida. 
And so this is a huge project, a priority for the entire 
Florida delegation, and DOT's partnership with the State of 
Florida and the National Park Service has been, frankly, key, 
key in the success of the first phase of this project which 
will be completed in May, I am glad to say. And so obviously, 
the State of Florida is committed to completing this project 
and has applied for Federal land grants to begin work on the 
second and final phase, and I would just ask you that you would 
keep me informed of the status of this project as it moves 
along.
    Secretary Chao. Of course.
    Mr. Diaz-Balart. Also, if there is anything that you need 
from us, or from the State, you know, just keep me informed is 
what I would ask. And again, you have been great at doing that 
every step of the way.
    Now, let me just throw something else at you. Switching to 
a different--you know, you have so many different issues, 
right, that you have to deal with, you know, and you get 
questions from all sides on. Let me focus you on the 
Competitive Highway Bridge program for a second.
    Secretary Chao. Yes.
    Mr. Diaz-Balart. I am pleased to see that you have expanded 
the eligibility criteria in your request for $300 million for a 
competitive bridge program. I am very pleased with that. All 
States with rural bridges will have a shot at this program now, 
which I think is hugely important, Madam Secretary, and I thank 
you for that.
    I represent a district that is urban and rural, and I have 
seen the challenges of rural bridge infrastructure in my State, 
and even in my district, the district that I represent. A State 
of Good Repair in a rural, you know, rural bridges is critical 
for the safety of our economy and obviously also everyday 
agriculture products that are produced in the district I 
represent rely on safe roads and bridges. So you have gotten a 
lot of questions about what that balance is. I will tell you 
that I am thrilled about how you have put this forward.
    Secretary Chao. Thank you.
    Mr. Diaz-Balart. I am exceedingly pleased with how you put 
this proposal forward. And so what are your specific goals for 
this platform, and how might, for example, a State like 
Florida, the State Department of Transportation in Florida 
begin to plan for this program if you have had an opportunity 
to think about that yet?
    Secretary Chao. Well, we have already begun work on this 
because there was a Notice of Funding Opportunity in December 
2018. The program received 56 grant applications, and with at 
least one application from each of the 25 eligible States. The 
pool of applicable grantees requested more than $730 million 
from a pool of funds of only 225. Federal Highways is carefully 
reviewing all these applications, and hopefully, the awarding 
of these grants will occur in the first half of this year.
    Mr. Diaz-Balart. Great. That is great news, and again, just 
want to again commend you for, I think, a very well-thought out 
proposal.
    On that, Mr. Chairman, I just want to end, you know, that 
when you hear time and time again about all these programs, you 
always have a lot more needs, and frankly, a lot more 
applications than you do funding.
    Mr. Chairman, that is something that you are going to, 
unfortunately, get to experience firsthand really soon from the 
members of the subcommittee and members of the full committee 
and Members of Congress. That is always the case, right? There 
is always a lot more requests than funding.
    But Madam Secretary, I want to thank you for your service. 
I want to thank you for appearing here today, and more 
importantly, well, not more importantly, equally as important, 
your sensitivity, obviously, to the victims of these horrible 
air crashes, to the issue of safety in general, and what I was 
going to say also is for always being accessible. Your 
leadership is greatly appreciated, and I want to thank you for 
your service to the country.
    I yield back, Mr. Chairman.
    Secretary Chao. Thank you.
    Mr. Price. Thank you.
    Mr. Rutherford.
    Mr. Rutherford. Thank you, Mr. Chairman.
    Madam Secretary, this is probably out of left field, but I 
want to talk a little bit about the Ready Reserve Force ships. 
You know, just by its name, Reserves, you know, they don't 
really get the focus, especially when economic times are tough, 
and budgets are being squeezed.
    You know, the last time we got new ships through MARAD for 
the Ready Reserve Force was, like, 1980--well, it was in the 
1980s, so they are, like, 40 years old. I am really concerned 
about whether our Reserves, and they are there to ensure that 
our military has a surge lift capacity. And whether it be for 
domestic reasons like hurricanes, or it could be foreign for 
military wars, but it is a capacity that when you need it, it 
is absolutely critical.
    And so--but I know how Reserves often don't get looked at 
like they should, and MARAD just took a really huge cut in 
their budget, and I want to make sure. Can you tell me, are you 
satisfied that the Ready Reserve ships have the maintenance 
capacity, because some of these ships----
    Secretary Chao. I don't know that the MARAD budget has been 
cut. MARAD had the best budget it has had in years because they 
have a Secretary who finally understands maritime issues.
    Mr. Rutherford. Okay.
    Secretary Chao. But anyway, I understand your issues. The 
RF is very important. When we first came in, the per ship 
reimbursement was, like, 3.7. We got that up to 5 million, and 
MARAD is basically a ship manager----
    Mr. Rutherford. Right. Right.
    Secretary Chao [continuing]. So this program is actually in 
the Navy's program.
    Mr. Rutherford. Yeah. The Navy reimburses you for managing, 
right. But what I want to make sure is you are getting your 
fair share to take care of that program.
    Secretary Chao. They are very important. Obviously some 
people would love to see the numbers grow, to have a larger 
Ready Reserve Force, and I think this is the steady State that 
I think everyone has agreed upon.
    Mr. Rutherford. I would just like to see a more 
modernized--I mean, we have some steam engines that are still 
out there, and there is some question about whether the Coast 
Guard is actually going to certify that ship.
    Secretary Chao. On March--you know, one of my first 
responsibilities was to visit the Ready Reserve fleet in 
Beaumont, Texas. It was March of 2017. Having been the Deputy 
Maritime Administrator, I am very sensitive----
    Mr. Rutherford. Okay.
    Secretary Chao [continuing]. To all these issues, and also, 
internal discussions about where these issues should go.
    Mr. Rutherford. Very good. Well, I thank you, and we will 
follow up on the other issues. Thank you very much.
    Secretary Chao. Thank you very much.
    Mr. Rutherford. I yield back.
    Mr. Price. Thank you.
    All right. Madam Secretary, we appreciate your forbearance 
here with the late start, and now, if you will, one final round 
of questions.
    I want to pick up on the theme that has been present in a 
lot of the questioning today, including the questioning about 
the Max 8 tragedies, that is, automated systems. Automated 
systems and what it takes to understand them, and to make them 
safe, and what the Department's responsibility is as these 
technologies emerge across various transportation modes.
    It includes aviation, of course, as we learned from the Max 
8. It includes cars, trucks, trains, even ships. So it is a 
dramatic shift, and it does pose challenges, as you have said, 
to safety, which has always got to be the number one focus at 
the Department. You have got to have a workforce that can 
review and analyze increasingly complex technologically based 
systems. Without this capability, you simply can't do your job.
    So I want to ask you a couple of things: One, about 
personnel and skill sets. What do you need to assess and verify 
automated systems? And to what extent do you think you are on 
top of that challenge? And secondly, the research component. 
What kind of--what can you tell us about the research you are 
conducting now about how people interact with automated 
systems? How do operators know when technology is failing and 
requires human intervention? That is clearly a major factor, or 
it seems that it might likely be in these crashes.
    Are you doing research? Is the FAA doing research about how 
technology notifies pilots that they need to take over flight 
operations, and how pilots react to such notifications? What 
does that technology need to look like in order to do what it 
is supposed to do?
    Of course, you could ask the same about trains and cars, 
but you see where I am going. I really do think the challenge 
to the research agenda, to our understanding, and then also, 
the personnel challenge that goes along with this in terms of 
how we handle these matters, is quite acute.
    Secretary Chao. There are so many issues here that you are 
addressing that I share your concern about. Let me try to go 
through them one by one.
    On the whole issue about personnel and the rapid change 
of--the rate of--the pace of change in technology, let me say 
that the FAA is an extremely professional organization. They 
are a proud organization of very competent professionals, and 
they are exempt from the personnel compensation rules that the 
rest of the Federal Government has to comply with.
    So I do believe that they have the capability, and that if 
they don't, that they have the capability and the flexibility 
to go outside to get the people and the skill sets that they 
need.
    On the second issue about research. The Department has 
about $1 billion spent on research, and a large part of that is 
through the FAA. So they are studying and evaluating, always 
trying to improve safety for the world, literally, on all these 
issues that you talk about.
    And then these larger global issues, the Office of the 
Secretary and the FAA have met non-stop ever since March 10. We 
meet in the morning. We meet at night. We have senior 
management leadership teams of both the FAA and the Office of 
the Secretary addressing this issue.
    For the Office of the Secretary, for me personally, my 
responsibility is to, once again, reassure the public and 
restore their confidence in flying. So it is to reassure the 
confidence of the flying public and the safety of these 
aircraft.
    And number two, the United States has always been the gold 
standard for safety, aviation safety, throughout the world, and 
that is why the acting FAA administrator is right now in 
Singapore attending a conference with other international 
authorities to update them, and to discuss with them on 
aviation safety standards.
    We are very much concerned with what you have discussed and 
said much more eloquently than I, because I have been very 
conscious of the time that is allotted to me. But these are all 
the issues that we will take a look at, and that is why I have 
launched two investigations, because I think we do need to get 
answers, and we can always improve.
    Mr. Price. Yes. And it does apply, of course, to all modes 
of transportation.
    Secretary Chao. Absolutely.
    Mr. Price. I am sure you would agree, and if you want to 
submit any additional material, particularly on the--how this 
has influenced the research agenda we would appreciate seeing 
that.
    It is quite disconcerting to hear these reports that the--
one of the ways in which these new models of the 737 were not 
modified, or were not modified sufficiently perhaps, is in the 
warning system and how the warning system worked, and then how 
complicated it was for the pilots to take corrective action, 
and, you know, more complex, perhaps, than it needed to be, but 
based on what? Based on a desire just to not have to make major 
new investments? Based on any kind of research findings as to 
what worked and what doesn't work?
    Secretary Chao. I hope not. That would be unacceptable.
    Mr. Price. That is the sort of thing we need to get to the 
bottom of. I am sure you agree. Mr. Diaz-Balart.
    Mr. Diaz-Balart. Thank you, Mr. Chairman. You know, heck, I 
had such great what it sounded like a closing statement in my 
last question, and I don't want to ruin that. But on a serious 
note, again, I do want to comment a little bit about what Mr. 
Rutherford talked about and, you know, MARAD and the Reserve 
ships, and I do want to thank you for your leadership, Madam 
Secretary. I think this subcommittee, if there is something--
among the things that we can be very proud of in the last 
number of years is that emphasis that we have done there, and 
as you know, we have tried to make up for many years of, 
frankly, neglect, and I think we have done a great job there. 
And I want to thank you Madam Secretary, but, in particular, I 
want to thank Mr. Rutherford for his leadership.
    We talked about ports already, and as I am so proud of 
being on this subcommittee. I love being on this subcommittee, 
and as I think a lot of folks saw today, these issues are a lot 
more complex than people think, right. When you talk about 
ports, you know, my legislative director and my chief of staff 
always like to talk about how ports are a lot more than just 
like some big crane there. There are complex entities, and 
there are so many parts----
    Secretary Chao. Engines of economic growth.
    Mr. Diaz-Balart. Absolutely, absolutely, engines of 
economic growth. But, Mr. Chairman, this being our last 
hearing, I want to verify that this is our last hearing, I do 
think, Mr. Chairman, that you have put together a number of 
really, really helpful and important hearings and meetings. I 
think this is going to make our jobs a lot better.
    Madam Secretary, again, thank you, as I mentioned before, I 
think for being the last hearing, it is a very important one, a 
crucial one, and I think you have added a lot to this 
conversation. And, Mr. Chairman, again, I thank you and you 
have your work cut out for you, and know that this subcommittee 
obviously is looking forward and me in particular is looking 
forward to working with you as you deal with, again, a lot of 
important challenges, but there is no more--there is no better 
subcommittee, there is no better committee to serve on in 
Congress than this one here, so thank you. I yield back, Mr. 
Chairman.
    Mr. Price. Thank you. I associate myself with your remarks 
as we say around here. We look forward to working with you, and 
we also, of course, want to take on the challenges that our 
subcommittee poses. It is one of the best places to be in this 
institution and work on things that really matter to our 
communities.
    Secretary Chao, thank you. I appreciate your being here 
today giving us your time, and in answering a wide array of 
queries. The committee staff will be in contact with your staff 
regarding any questions for the record. If you would return 
this information for the record within 30 days, that is 30 days 
from next Wednesday, we will be able to publish the transcript 
of today's hearing, and that will be helpful to us.
    So I think this is the final, final comments for Mr. Diaz-
Balart. Assuming that, I will thank everyone again for a good 
hearing under somewhat harried circumstances and call the 
meeting adjourned.
    Secretary Chao. Thank you.
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