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


                ROAD TO RECOVERY: PUERTO RICO AND THE 
                 U.S. VIRGIN ISLANDS AFTER HURRICANES IRMA 
                 AND MARIA

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                        EMERGENCY PREPAREDNESS,
                         RESPONSE, AND RECOVERY

                                 OF THE

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 11, 2019

                               __________

                           Serial No. 116-32

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

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        Available via the World Wide Web: http://www.govinfo.gov

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                   U.S. GOVERNMENT PUBLISHING OFFICE                    
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                     COMMITTEE ON HOMELAND SECURITY

               Bennie G. Thompson, Mississippi, Chairman
Sheila Jackson Lee, Texas            Mike Rogers, Alabama
James R. Langevin, Rhode Island      Peter T. King, New York
Cedric L. Richmond, Louisiana        Michael T. McCaul, Texas
Donald M. Payne, Jr., New Jersey     John Katko, New York
Kathleen M. Rice, New York           John Ratcliffe, Texas
J. Luis Correa, California           Mark Walker, North Carolina
Xochitl Torres Small, New Mexico     Clay Higgins, Louisiana
Max Rose, New York                   Debbie Lesko, Arizona
Lauren Underwood, Illinois           Mark Green, Tennessee
Elissa Slotkin, Michigan             Van Taylor, Texas
Emanuel Cleaver, Missouri            John Joyce, Pennsylvania
Al Green, Texas                      Dan Crenshaw, Texas
Yvette D. Clarke, New York           Michael Guest, Mississippi
Dina Titus, Nevada
Bonnie Watson Coleman, New Jersey
Nanette Diaz Barragan, California
Val Butler Demings, Florida
                       Hope Goins, Staff Director
                 Chris Vieson, Minority Staff Director
                                
                                
                              ------                                

     SUBCOMMITTEE ON EMERGENCY PREPAREDNESS, RESPONSE, AND RECOVERY

               Donald M. Payne Jr., New Jersey, Chairman
Cedric Richmond, Louisiana           Peter T. King, New York, Ranking 
Max Rose, New York                       Member
Lauren Underwood, Illinois           John Joyce, Pennsylvania
Al Green, Texas                      Dan Crenshaw, Texas
Yvette D. Clarke, New York           Michael Guest, Mississippi
Bennie G. Thompson, Mississippi (ex  Mike Rogers, Alabama (ex officio)
    officio)
              Lauren McClain, Subcommittee Staff Director
          Diana Bergwin, Minority Subcommittee Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Donald M. Payne Jr., a Representative in Congress 
  From the State of New Jersey, and Chairman, Subcommittee on 
  Emergency Preparedness, Response, and Recovery:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Peter T. King, a Representative in Congress From 
  the State of New York, and Ranking Member, Subcommittee on 
  Emergency Preparedness, Response, and Recovery:
  Oral Statement.................................................     3
  Prepared Statement.............................................     4
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security:
  Oral Statement.................................................     5
  Prepared Statement.............................................     6

                               Witnesses

Mr. Omar J. Marrero, Executive Director, Central Office for 
  Recovery, Reconstruction, and Resilience (COR3):
  Oral Statement.................................................     6
  Prepared Statement.............................................     8
Ms. Adrienne L. Williams-Octalien, Director, Office of Disaster 
  Recovery, V.I. Public Finance Authority:
  Oral Statement.................................................    12
  Prepared Statement.............................................    14
Mr. Chris P. Currie, Director, Homeland Security and Justice, 
  U.S. Government Accountability Office:
  Oral Statement.................................................    17
  Prepared Statement.............................................    18

                             For the Record

The Honorable Peter T. King, a Representative in Congress From 
  the State of New York, and Ranking Member, Subcommittee on 
  Emergency Preparedness, Response, and Recovery:
  Statement of the American Maritime Partnership.................    39
The Honorable Dan Crenshaw, a Representative in Congress From the 
  State of Texas:
  Article, Politico..............................................    42
The Honorable Donald M. Payne Jr., a Representative in Congress 
  From the State of New Jersey, and Chairman, Subcommittee on 
  Emergency Preparedness, Response, and Recovery:
  Statement of Honorable Stacey Plaskett.........................    51

                                Appendix

Question From Chairman Bennie G. Thompson for Chris P. Currie....    55

 
    ROAD TO RECOVERY: PUERTO RICO AND THE U.S. VIRGIN ISLANDS AFTER 
                       HURRICANES IRMA AND MARIA

                              ----------                              


                        Thursday, July 11, 2019

             U.S. House of Representatives,
                    Committee on Homeland Security,
                   Subcommittee on Emergency Preparedness, 
                                    Response, and Recovery,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:07 a.m., in 
room 310, Cannon House Office Building, Hon. Donald M. Payne, 
Jr. (Chairman of the subcommittee) presiding.
    Present: Representatives Payne, Green, Clarke, Thompson, 
King, Joyce, and Crenshaw.
    Mr. Payne. The Subcommittee on Emergency Preparedness, 
Response, and Recovery will come to order.
    The subcommittee is meeting today to receive testimony on 
the ``Road to Recovery: Puerto Rico and the U.S. Virgin Islands 
after Hurricanes Irma and Maria.''
    Without objection, the Chair may declare the subcommittee 
in recess at any point.
    Without objection, Members not sitting on the subcommittee 
will be permitted to participate in today's hearing.
    I now recognize myself for an opening statement.
    Good morning. The subcommittee is meeting to discuss the 
status of the disaster recovery operations in Puerto Rico and 
the U.S. Virgin Islands following Hurricanes Irma and Maria.
    First, I want to thank our witnesses from Puerto Rico and 
the U.S. Virgin Islands and the Government Accountability 
Office for being here today. Your testimony will help the 
subcommittee understand how much work is left to be done in 
Puerto Rico and the U.S. Virgin Islands after the devastating 
2017 storms.
    As everyone can see, we have a critical witness absent from 
today's hearing. FEMA is a no-show. FEMA was notified about 
this hearing nearly 2 months ago but would not confirm a 
witness. A month ago, I pressed the issue with the Acting 
Administrator Gaynor as he testified and said he would work to 
provide a witness for today's hearing. Yet we are here today 
without a FEMA witness. The agency has a personnel shortage, 
but you would think it would be able to provide a witness for a 
hearing on some of the most devastating storms our country 
experienced in modern history. If that empty chair isn't a 
perfect metaphor for the administration's response to 
Hurricanes Irma and Maria, I don't know what is.
    Unfortunately, FEMA's absence today is just the latest 
example of the administration's apathy toward Hurricanes Irma 
and Maria recovery and further underscores the need for this 
committee to provide robust oversight.
    Turning to the subject matter at hand, the unusually active 
2017 hurricane season simultaneously produced intense storms in 
Texas, Florida, and devastated Puerto Rico and the U.S. Virgin 
Islands. From the damage caused by these storms, the U.S. 
Virgin Islands is facing more than 11 billion--11 billion in 
financial impact. The impact of Hurricane Maria alone left 
Puerto Rico with a death toll of nearly 3,000, and recovery is 
estimated at over a hundred billion. Before the storms hit, 
Puerto Rico was dealing with a precarious financial situation, 
a disaster that would have severely hampered the territory's 
recovery efforts for damage at any level, let alone back-to-
back major hurricanes.
    With the recovery being such a massive undertaking, I have 
serious concerns about the blanket use of Public Assistance 
Alternative Procedures in Puerto Rico being used to rebuild the 
island. I find the pace that FEMA is administering this program 
to be troubling. Nearly 2 years have passed, and permanent work 
in Puerto Rico has yet to begin. That means American schools, 
hospitals, roads, and other public places are still damaged 
from the storms, and the time line for getting under way is 
unknown. Let that sink in for a moment. I am also concerned 
about the very real possibility that the recovery project cost 
estimates will be underestimated, which would leave Puerto Rico 
cash-strapped and on the hook for any of the overages.
    While the U.S. Virgin Islands was not required to use 
Public Assistance Alternative Procedures, the territory had 
recently opted to use this program moving forward in their 
recovery. Like Puerto Rico, the U.S. Virgin Islands has yet to 
begin work on permanent projects. And, again, critical 
community spaces are still sitting in the 2-year-old damage due 
in part to FEMA's slow pace.
    As such, I am interested to hear from our witnesses today 
the challenges associated with the use of Public Assistance 
Alternative Procedures to rebuild in Puerto Rico and the Virgin 
Islands. The extraordinary nature of the 2017 disasters and 
their impacts on our country can provide an opportunity to 
learn, grow, and to make the Federal Government's disaster 
response and recovery efforts better. For that, it is truly a 
shame that FEMA has decided not to participate in this hearing.
    On a personal note, as someone who dealt with the aftermath 
of Hurricane Sandy, I cannot imagine how much more difficult 
recovery would have been if FEMA had not refused to show up and 
talk to the American public about the recovery. Despite FEMA 
not being here today, I am heartened by the witnesses who did 
come to discuss the incredibly important matter. Thank you 
again for being here, and I look forward to our dialog.
    [The statement of Chairman Payne follows:]
               Statement of Chairman Donald M. Payne, Jr.
                             July 11, 2019
    The subcommittee is meeting to discuss the status of disaster 
recovery operations in Puerto Rico and the U.S. Virgin Islands 
following Hurricanes Irma and Maria. First, I want to thank our 
witnesses from Puerto Rico, the U.S. Virgin Islands, and the Government 
Accountability Office for being here today. Your testimony will help 
the subcommittee understand how much work is left to be done in Puerto 
Rico and the U.S. Virgin Islands after the devastating 2017 storms. As 
everyone can see, we have a critical witness absent from today's 
hearing. FEMA is a ``no-show.'' FEMA was notified about this hearing 
nearly 2 months ago but would not confirm a witness.
    A month ago, when I pressed the issue, Acting Administrator Gaynor 
testified he would work to provide a witness for today's hearing. Yet, 
here we are today without a FEMA witness. The agency has a personnel 
shortage, but you would think it would be able to provide a witness for 
a hearing on some of the most devastating storms our country 
experienced in modern history. If that empty chair isn't a perfect 
metaphor for this administration's response to Hurricanes Irma and 
Maria, I don't know what is. Unfortunately, FEMA's absence today is 
just the latest example of the administration's apathy toward 
Hurricanes Irma and Maria recovery and further underscores the need for 
this committee to provide robust oversight.
    Turning to the subject matter at hand, the unusually active 2017 
hurricane season simultaneously produced intense storms in Texas and 
Florida and devastated Puerto Rico and the U.S. Virgin Islands. From 
the damage caused by these storms, the U.S. Virgin Islands is facing 
more than $11 billion financial impact. The impact of Hurricane Maria 
alone left Puerto Rico with a death toll of nearly 3,000 and recovery 
is estimated over $100 billion. And before the storms hit, Puerto Rico 
was dealing with a precarious financial situation, a disaster, that 
would have severely hampered the territory's recovery efforts for 
damage at any level, let alone back-to-back major hurricanes. With 
recovery being such a massive undertaking, I have serious concerns 
about the blanket use of Public Assistance Alternative Procedures in 
Puerto Rico being used to rebuild the island. I find the pace that FEMA 
is administering this program to be troubling. Nearly 2 years have 
passed, and permanent work in Puerto Rico has yet to begin. That means 
American schools, hospitals, roads, and other public places are still 
damaged from the storms and the time line for work getting under way is 
unknown. Let that sink in for a moment.
    I am also concerned about the very real possibility that the 
recovery project cost estimates will be underestimated, which would 
leave cash-strapped Puerto Rico on the hook for the overages. While the 
U.S. Virgin Islands was not required to use Public Assistance 
Alternative Procedures, the territory has recently opted to use this 
program moving forward in their recovery. Like Puerto Rico, the U.S. 
Virgin Islands has yet to begin work on permanent projects, and again, 
critical community spaces are still sitting in 2-year-old damage due in 
part to FEMA's slow pace. As such, I am interested to hear from our 
witnesses today the challenges associated with the use of Public 
Assistance Alternative Procedures to rebuild in Puerto Rico and the 
U.S. Virgin Islands. The extraordinary nature of the 2017 disasters and 
their impacts on our country provide an opportunity to learn, grow, and 
to make the Federal Government's disaster response and recovery efforts 
better. For that, it is truly a shame that FEMA has decided not to 
participate in this hearing. On a personal note, as someone who dealt 
with the aftermath of Hurricane Sandy, I cannot imagine how much more 
difficult recovery would have been if FEMA had refused to show up to 
talk to the American public about our recovery. Despite FEMA not being 
here today, I am heartened by the witnesses who did come to discuss 
this incredibly important matter.

    Mr. Payne. With that, I will now recognize the Ranking 
Member of the subcommittee, the gentleman from New York, Mr. 
King, for an opening statement.
    Mr. King. Thank you, Mr. Chairman.
    I would like to also welcome today's witnesses and thank 
them for their time. After being here, it is not always easy. 
So I appreciate you being here. Thank you.
    Today marks the fifth time the subcommittee or the full 
committee has met to discuss recovery efforts in Puerto Rico 
and the U.S. Virgin Islands. In March, we heard testimony on 
how the Federal Government could improve its response to 
disasters. In April, we assessed how climate change impacted 
National security. In May, we reviewed FEMA's contracting and 
the lessons learned from Hurricanes Irma and Maria. Last month, 
we looked at FEMA's readiness for future disasters. We have 
heard from officials in Puerto Rico and the U.S. Virgin Islands 
on the state of recovery in these territories. We have received 
reports from the Government Accountability Office, from the IG. 
FEMA has testified before our subcommittee on the challenges it 
has faced in responding to these catastrophic storms. It 
submitted shortcomings and made clear what they need to 
complete the mission, and yet we have convened another hearing.
    While recovery in Puerto Rico and the U.S. Virgin Islands 
is incredibly important, it is important that we move past 
discussion and act.
    I recently cosigned onto Chairman Thompson's house 
companion to Senator Rubio's FACE Act which codifies the GAO 
recommendations with regards to FEMA contracting. I agree with 
those recommendations and support improving FEMA's contracting 
practices. This bill, however, was not referred to this 
committee which illustrates our limited jurisdiction in this 
sphere.
    I support continued oversight of disaster recovery, 
including implementation of the Disaster Recovery Reform Act 
which was signed into law last year and emphasizes investment 
in mitigation, reducing risk, and increasing a State or 
territory's capacity to manage disaster recovery. I also 
support strong oversight of FEMA Homeland Security Grant 
Programs. Federal funds through programs such as the State 
Homeland Security Grant Program, Urban Areas Security 
Initiative, and Port Security Grant enable local communities to 
support their first responder work force and to harden their 
defenses against potential attacks.
    In New York City, Federal grants have allowed the 
Department of Emergency Management, the NYPD, and FDNY to 
conduct training and exercises, provide public education and 
outreach, and develop response protocols and safety initiatives 
to significantly increase security preparedness.
    Again, I want to express my appreciation to the witnesses 
for being here today.
    Mr. Chairman, I yield back.
    [The statement of Ranking Member King follows:]
               Statement of Ranking Member Peter T. King
                             July 11, 2019
    Thank you, Mr. Chairman. I'd like to welcome today's witnesses and 
thank them for their time.
    Today marks the fifth time this subcommittee or the full committee 
has met to discuss recovery efforts in Puerto Rico and the U.S. Virgin 
Islands. In March, we heard testimony on how the Federal Government 
could improve its response to disasters. In April, we assessed how 
climate change impacted National security. In May, we reviewed Federal 
Emergency Management Agency contracting and the lessons learned from 
Hurricanes Irma and Maria. Last month, we looked at FEMA's readiness 
for future disasters.
    We have heard from officials from Puerto Rico and the U.S. Virgin 
Islands on the state of recovery in each territory. We have reviewed 
reports from the Government Accountability Office and from the Office 
of the Inspector General. FEMA has testified before our subcommittee on 
the challenges they have faced in responding to these catastrophic 
storms. They've admitted their shortcomings and made clear what they 
need to complete their mission. And yet we have convened another 
hearing.
    While the recovery of Puerto Rico and the U.S. Virgin Islands is 
incredibly important, we must move past discussion and we must act. I 
recently cosigned on to Chairman Thompson's House companion to Senator 
Rubio's FACE Act, which codifies the recommendations of GAO with 
regards to FEMA contracting. I agree with GAO's recommendations and 
support improving FEMA's contracting practices.
    This bill, however, was not referred to this committee, which 
illustrates our limited jurisdiction in this sphere.
    I support continued oversight of disaster recovery including 
implementation of the Disaster Recovery Reform Act, which was signed 
into law last year, and emphasizes investment in mitigation, reducing 
risk, and increasing a State or territory's capacity to manage disaster 
recovery.
    I also support strong oversight of FEMA Homeland Security Grants 
programs. Federal funds through programs such as the State Homeland 
Security Grant Program, Urban Area Security Initiative, and Port 
Security Grant enable local communities to support their first 
responder workforce and to harden their defenses against potential 
attacks.
    In New York City, Federal grants have allowed the Department of 
Emergency Management, the NYPD, and the FDNY to conduct training and 
exercises, provide public education and outreach, and develop response 
protocols, and safety initiatives to significantly increase security 
preparedness.
    I want to again express my appreciation for our witnesses being 
here today. Mr. Chairman, I yield back.

    Mr. Payne. Thank you, sir.
    With that, I will recognize the Chairman of the full 
committee, the gentleman from Mississippi, Mr. Bennie Thompson, 
for an opening statement.
    Mr. Thompson. Thank you very much, Mr. Chair, and Ranking 
Member for holding this hearing.
    However, I do want to share your dismay about FEMA's 
decision not to send a witness to today's hearing. So much of 
what I have heard and seen in my visit to Puerto Rico, 
especially, in many instances FEMA has been missing in action. 
So their absence today is dually noted.
    FEMA's refusal undermines the work of this committee, which 
is exercising its oversight responsibilities to ensure Federal 
recovery assistance is being allocated appropriately and tax 
dollars are being spent wisely. It is disrespectful to our 
witnesses from Puerto Rico and the U.S. Virgin Islands who have 
traveled here today to inform Congress about the recovery 
challenges they still face at home. I might add these are 
American citizens; they deserve no less. It is unfortunate that 
they are not here to listen to testimony from our Government 
Accountability Office witness, which has done yeoman's work 
reviewing FEMA's response to 2017 hurricane season in order to 
improve the agency's work on this and future disasters.
    I am particularly disappointed in FEMA's refusal to send a 
representative after Acting Administrator Peter Gaynor 
testified at a previous hearing that he would see to it that 
the agency provided a witness for this hearing. Now we have an 
empty chair where someone from FEMA should be sitting.
    Nonetheless, I appreciate Chairman Payne and Ranking Member 
King holding today's hearing on Puerto Rico and the U.S. Virgin 
Islands' recovery from the 2017 hurricane season. I might add 
some of us have been put on notice that Mississippi and 
Louisiana is facing not as big a situation as Puerto Rico and 
the Virgin Islands, but, obviously, we are on notice, too.
    The challenge for us is whether or not the response to 
Mississippi, my home State, and Louisiana will be comparable to 
Puerto Rico and Virgin Islands, or will it be better? But, 
nonetheless, we are all Americans. There shouldn't be Puerto 
Rico and Virgin Islands response. There should be an American 
response, and I look forward to the information we glean from 
this hearing.
    I yield back.
    [The statement of Chairman Thompson follows:]
                Statement of Chairman Bennie G. Thompson
                             July 11, 2019
    I share Chairman Payne's dismay about FEMA's decision not to send a 
witness to today's hearing. Their refusal undermines the work of this 
committee, which is exercising its oversight responsibilities to ensure 
Federal recovery assistance is being allocated appropriately and 
taxpayer dollars are being spent wisely.
    It is disrespectful to our witnesses from Puerto Rico and the U.S. 
Virgin Islands who traveled to be here today to inform Congress about 
the recovery challenges they still face at home. And it is unfortunate 
they are not here to listen to testimony from our Government 
Accountability Office witness, which has done yeoman's work reviewing 
FEMA's response to the 2017 hurricane season in order to improve the 
agency's work on this and future disasters.
    I am particularly disappointed in FEMA's refusal to send a 
representative after Acting Administrator Peter Gaynor testified at a 
previous hearing that he would see to it that his agency provided a 
witness for this hearing. Now we have an empty chair where someone from 
FEMA should be. Nonetheless, I appreciate Chairman Payne and Ranking 
Member King holding today's hearing on Puerto Rico and the U.S. Virgin 
Islands' recovery from the 2017 hurricane season.
    This hearing continues the committee's longstanding oversight work 
on the Federal response to major disasters, and it comes at a critical 
juncture in recovery for Puerto Rico and the USVI.
    Thanks to the witnesses present today for taking time to lend us 
your perspectives. I hope you will share your stories and offer 
insights into what Congress can do to help ensure a speedy and 
efficient recovery from Hurricanes Irma and Maria. I look forward to a 
good discussion today on that topic and to future oversight of FEMA's 
recovery efforts.

    Mr. Payne. I thank the gentleman.
    Other Members of the committee are reminded that, under the 
committee's rules, opening statements may be submitted for the 
record.
    I welcome our panel of witnesses. Our first witness is Mr. 
Omar J. Marrero, the executive director of the Central Office 
for Recovery, Reconstruction, and Resilience, or COR3, in 
Puerto Rico.
    Our second witness is Ms. Adrienne L. Williams-Octalien, 
Octalien--I am sorry--and she is the director of the Office of 
Disaster Recovery in the U.S. Virgin Islands.
    Our third and the final witness is Chris P. Currie, the 
director of homeland security and justice at the Government 
Accountability Office.
    Without objection, the witnesses' full statements will be 
inserted into the record.
    I now ask each witness to summarize his or her statement 
for 5 minutes, beginning with Mr. Marrero.

   STATEMENT OF OMAR J. MARRERO, EXECUTIVE DIRECTOR, CENTRAL 
   OFFICE FOR RECOVERY, RECONSTRUCTION, AND RESILIENCE (COR3)

    Mr. Marrero. Thank you, sir.
    Good morning, Chairman Payne, Ranking Member King, and 
Members of the committee, particularly Mr. Thompson, Chairman 
of the full committee.
    Thank you for the opportunity to be here today as we 
discuss the status of recovery in Puerto Rico caused by 
Hurricanes Irma and Maria. On behalf of the Governor, Ricardo 
Rossello, it is my honor and privilege to here today.
    As Members of this committee have seen first-hand through 
their visits to Puerto Rico, Hurricanes Irma and Maria were 
catastrophic. On September 6, 2017, Hurricane Irma skirted the 
northern coast of Puerto Rico as a Category 5 storm. While 
response teams were still mobilizing, Hurricane Maria is 
slamming to Puerto Rico as a Category 4 just 2 weeks later. 
These hurricanes cost over $100 billion in damages, 
representing the worst natural disaster our island has ever 
seen.
    As a survivor, I saw first-hand the destruction of our 
communities: Homes, infrastructure, and power grid. Nearly 
every American living on the island, including my family, 
friends, neighbors, our people were faced with a humanitarian 
crisis that defied anyone's expectations. Even now, nearly 2 
years later, over 300,000 children attend schools which have 
not been repaired, and many of them have to still go to home to 
houses with blue tarp roof. It has been life-changing for 
everyone on the island.
    There is no question that decades of underinvestment and 
lack of adequate maintenance contributed greatly to the great 
deal of damage to the island. Indeed, with respect to our most 
critical infrastructure, the decision by this body to allow a 
one-time rebuild without regard to preexisting conditions will 
go a long way toward setting Puerto Rico up to be not only more 
resilient but also economically and fiscally responsible.
    Let me assure you that the taxpayer investment in the 
island will not be wasted. Governor Rossello and his entire 
administration, we are committed to make sure that we are wise 
and transparent as to the use of the Federal funding existing 
for the disaster with the goal of restoring our ability to 
contribute to the economic success of our Nation.
    This hurricane taught us that the lives, safety, and 
security of our residents depend as much on our local capacity 
to respond to immediate emergency as it does on the capacity to 
muster a proportionate and timely response from the Federal 
Government.
    We continue to build and develop these capabilities in 
coordination with FEMA, HUD, EPA, DOE, HHS, and many other 
Federal agencies. Twenty-two months into our recovery, we are 
clearly in a world that climate change is making natural 
disasters more frequent and more damaging, further underscoring 
the need to build back in a more resilient way. Puerto Rico 
remains especially vulnerable to the impact of climate-change-
enhanced disasters due to our geographical composition, as it 
does to the USVI as well. Unfortunately, this unique 
disadvantage has been exacerbated by a series of Federal agency 
decisions slowing our post-disaster recovery compared to those 
of other jurisdictions State-side.
    Principal among these inconsistencies are FEMA's guidance 
with respect to the implementation of the section 428 for 
permanent work, a lack of timely decision making, and a better 
recent change in the way FEMA will perform its role in the 
management of recovery funds.
    These distinctions in the Public Assistance process 
implementation are causing additional delays, reducing Puerto 
Rico's ability to lead the recovery and, more importantly, 
impeding our ability to meet the FEMA's October deadline for 
the completion and agreement of the close estimates.
    A failure to agree on the definition of industry standards, 
cost factors, and a refusal to allow Puerto Rico to use its own 
licensed engineers previously authorized in New York and New 
Jersey, and a host of other less significant obstacles 
perpetrate the notion that we are neither trusted nor permitted 
to lead our own recovery.
    FEMA always says that recovery is a Federally-supported, 
State-managed, and locally-executed process. Unfortunately, 
that has not been our experience. The island depends on FEMA 
and the good will of this hallowed body while we remain an 
independent territory. Despite every effort of Congress to help 
us recover, Puerto Rico has only had approximately 122 projects 
approved of the 1,475 PWs, or project worksheets, submitted in 
the last 22 months. In contrast, in the same time frame, over 
13,000 projects were approved for Louisiana and Mississippi in 
the wake of Hurricane Katrina.
    Our goal is to re-imagine, revitalize, and rebuild Puerto 
Rico so it can develop its full capacity for the benefit of the 
3.5 million of U.S. citizens who live there and the 5 point--
million Puerto Ricans who live in the mainland while we want 
them go back to Puerto Rico as well.
    While we have a long road ahead of us, as we say in Puerto 
Rico, ``Puerto Rico se levanta,'' ``and Puerto Rico will 
rise.''
    Thank you. I look forward to your questions, as well as to 
the further collaborations that the Federal Government and the 
State government of Puerto Rico will continue to do.
    Thank you, sir.
    [The prepared statement of Mr. Marrero follows:]
                   Prepared Statement of Omar Marrero
                             July 11, 2019
    Chairman Payne, Ranking Member King, and Members of the committee: 
Thank you for the opportunity to appear before you today on behalf of 
the 3.2 million American citizens of Puerto Rico to discuss our 
recovery from Hurricanes Irma and Maria. In the 22 months following the 
devastation of these two Hurricanes, we have made significant progress 
toward building back Puerto Rico. This progress is, in part, the result 
of the tremendous and often bipartisan support we have received from 
this committee and Congress more broadly; as well as the support we 
have received from the Federal Emergency Management Agency (FEMA) and 
other Federal agencies.
    I would like to take this opportunity to express our appreciation 
for passage of the Additional Supplemental Appropriations for Disaster 
Relief Act, H.R. 2157, Pub. L. 116-20, which included critical 
Nutrition Assistance Program (NAP) dollars as well as legislative fixes 
to the Bipartisan Budget Act (BBA) of 2018, Pub. L. 115-123, which will 
enable a more thorough recovery for Puerto Rico. Although much remains 
to be done, this support will help speed recovery a great deal.
    As Members of this committee have seen through their visits to 
Puerto Rico--Hurricanes Irma and Maria wrought catastrophic damage to 
Puerto Rico in September 2017. Hurricane Irma skirted the northern 
coast of Puerto Rico from September 6, 2017-September 7, 2017 as a 
Category 5 storm, causing significant flooding and regional power and 
water outages. Only 13 days later, on September 20, 2017, Hurricane 
Maria slammed into Puerto Rico as a Category 4 storm. Hurricane Maria 
caused all power to be lost across the island as Puerto Rico descended 
into the longest blackout in U.S. history--328 days until the entire 
island regained power. The powerful winds, storm surge, and localized 
flooding of Hurricane Maria led to the significant damage or 
destruction of more than 472,000 housing units across the island; and, 
as we were unable to provide shelter to all of the victims of the 
Hurricanes, tens of thousands of Puerto Rican residents were forced to 
flee to the continental United States to seek reprieve.\1\ The storms 
caused a humanitarian crisis for those who remained in Puerto Rico--
particularly surrounding public health and safety. Nearly all water and 
wastewater treatment plants were rendered inoperable and millions of 
gallons of untreated waste were leaked into the environment.\2\ 
Hospitals and primary care facilities were forced to close due to lack 
of power, resources, or clean and potable water. Not only were food, 
and medicines scarce, but a lack of power meant a total breakdown of 
wireless networks and cellular signals; what food and medicine remained 
could only be purchased with cash. For the 1.3 million Puerto Rican NAP 
recipients, this meant that they could not purchase food or other 
supplies.\3\ For context--of the 1.3 million Puerto Rican NAP 
recipients, 45 percent include households with children younger than 
18, and nearly 330,000 elderly people.\4\
---------------------------------------------------------------------------
    \1\ Ricardo Rossello, Governor of Puerto Rico, ``Build Back Better 
Puerto Rico'', November 13, 2017; https://www.governor.ny.gov/sites/
governor.ny.gov/files/atoms/files/Build_Back_Better_PR.pdf.
    \2\ Ricardo Rossello, Governor of Puerto Rico, ``Build Back Better 
Puerto Rico'', November 13, 2017; https://www.governor.ny.gov/sites/
governor.ny.gov/files/atoms/files/Build_Back_Better_PR.pdf.
    \3\ Washington Post, ``More than 670,000 Puerto Rico residents have 
received cuts to food'', June 24, 2019; https://www.washingtonpost.com/
us-policy/2019/03/08/puerto-rico-starts-cutting-food-stamp-benefits-
used-by-more-than-million-people-amid-congressional-impasse/?noredir- 
ect=on&utm_term=.98e2e5d0567f.
    \4\ Washington Post, ``More than 670,000 Puerto Rico residents have 
received cuts to food'', June 24, 2019; https://www.washingtonpost.com/
us-policy/2019/03/08/puerto-rico-starts-cutting-food-stamp-benefits-
used-by-more-than-million-people-amid-congressional-impasse/?noredir- 
ect=on&utm_term=.98e2e5d0567f.
---------------------------------------------------------------------------
    Despite all of this, Governor Ricardo Rossello has chosen to view 
our recovery from the seemingly insurmountable devastation at the time 
of the storms, as a moonshot opportunity for bold transformation. We 
can--and we will--build Puerto Rico back better. We cannot only prepare 
for the disasters of tomorrow and mitigate against this level of 
devastation and tragedy from happening again; but also unlock the 
potential of Puerto Rico for the 3.2 million U.S. citizens who call our 
island, ``La Isla del Encanto'' or ``the Island of Enchantment'' home. 
The Governor and his administration are dedicating every waking moment 
to the progress and success of our recovery in Puerto Rico. It is not 
an overstatement to say that this body has the power to open the doors 
needed for Puerto Rico to achieve a future that is strong, resilient, 
and prosperous.
    As we look to the future--we recognize that the island's past 
remains a weight on our recovery. Long before the 2017 Hurricanes, 
Puerto Rico was reeling from decades of fiscal mismanagement, economic 
distress, and demographic challenges, all of which resulted in our man-
made disasters--our fiscal and economic crises. Governor Rossello 
campaigned, and was elected on, a commitment to address those 
challenges, including over $72 billion in public debts and $50 billion 
in unfunded pension liabilities forcing the island into bankruptcy. As 
we build back Puerto Rico, we cannot forget where our island was in 
2017, on the eve of Hurricanes Irma and Maria.
    In the aftermath of the Hurricanes, Governor Rossello initially 
laid out his vision for our recovery in the Build Back Better document, 
which was developed with the support and assistance of the Governor's 
Office for Storm Recovery of State of New York, and later ratified it 
in our recovery plan required by Congress: ``Transformation and 
Innovation in the Wake of Devastation: Economic and Disaster Recovery 
Plan for Puerto Rico.''\5\ This plan envisions a future for Puerto Rico 
beyond recovery--we see a future Puerto Rico that is resilient, 
economically vibrant, and the economic hub for the United States' 
investment in Latin America. Puerto Rico will be competitive within the 
global economy and expand its contribution to the United States. 
Government reform, integrated planning, digitization, and public 
engagement are all keys to Puerto Rico maximizing investment in 
recovery, renewal, and future growth. Toward this end, the Governor's 
Recovery Plan identifies 276 Courses of Action (COAs) in support of 
Puerto Rico's recovery and reconstruction.
---------------------------------------------------------------------------
    \5\ Central Office for Recovery, Reconstruction and Resiliency, 
``Transformation and Innovation in the Wake of Devastation: Economic 
and Disaster Recovery Plan for Puerto Rico,'' August 8, 2018, https://
cor3.pr/assets/documents/pr-transformation-innovation-plan-
congressional-submission-080818.pdf.
---------------------------------------------------------------------------
    The COAs are grouped into Capital Investments and Strategic 
Initiatives. The Capital Investments focus on the following 
foundational areas: Energy; Communication/Information Technology; 
Water; Transportation; Housing; Public Buildings; Education; Health and 
Social Services; and, Natural and Cultural Resources. The Strategic 
Initiatives are designed to move beyond infrastructure recovery and 
focus on the following areas of long-term social and economic growth: 
Enhancing the Ocean and Visitor Economies; Modernization of Emergency 
Services; Agricultural Transformation; Digital Transformation; 
Transition to a 21st Century Workforce; Entrepreneurship Expansion; 
and, Reduction of Policy and Structural Barriers to Support Advanced 
Manufacturing.
    As an example, the Capital Investments surrounding Energy include 
our Electronic Grid Modernization (GridMod) Plan. There is no question 
that a reliable and efficient power grid is key to the future success 
of Puerto Rico. The GridMod Plan is our proposal to repair, restore, 
and harden our power system, to ultimately improve the quality of life, 
trust, and reliability in energy services. The GridMod Plan emphasizes 
three key areas: (1) Increased reliance on renewable energy resources, 
such as wind and solar power, to reduce dependence on fossil fuels; (2) 
new distributed energy resource technologies, such as energy storage 
and microgrids, to improve resilience; and (3) affordability and 
sustainability to improve the quality of life for U.S. citizens in 
Puerto Rico.
    As we continue to move toward affordable energy, the Puerto Rico 
Electric Power Authority (PREPA) recently executed a San Juan natural 
gas conversion contract, which should provide a framework for future 
fuel supply conversion. The fuel conversion project involves upgrading 
Units 5 and 6 of the San Juan Combined Cycle Power Plant so that those 
units can operate on liquefied natural gas (LNG). The transaction, 
announced in December 2018, is one of the most flexible LNG/gas 
agreements in the world and undeniably the most flexible fuel supply 
agreement in PREPA's portfolio. This transaction should produce 
material savings for PREPA customers.
    Last year, we took the first steps to achieving our vision by 
assigning the COAs to State government agencies for implementation. A 
total of 30 agencies were selected to be COA leads. Each of the 
selected agencies will develop specific action plans to achieve the 
goals identified in the COAs. Action plans will describe the projects 
and related steps that must be taken, identify the funding sources, and 
lay out a time line for completion.
    To ensure proper oversight, coordination, and execution of the 
COAs, the Governor established the Central Office of Recovery, 
Reconstruction, and Resiliency (COR3) in December 2017 with all 
necessary authority, powers, and resources to manage the post-disaster 
reconstruction. Recognizing the need for expert support to ensure the 
success of COR3, we underwent an extensive proposal process to contract 
a group of highly-qualified third-party specialists with years of 
disaster recovery and reconstruction experience. In the last 6 months, 
COR3 established a comprehensive and effective digital information 
system designed to manage Federal funding while also promoting 
accountability and transparency to all stakeholders. The Disaster 
Recovery System (DRS) is owned and operated by COR3 and is designed to 
provide an independent data source, protections for data integrity, and 
a system of record that can be used to reconcile discrepancies and push 
accountability as both Federal and State partners work toward effective 
coordination and collaboration in the execution of all recovery 
programs. To increase the accessibility of the complex data within DRS 
as well as to support public awareness, COR3 has established a 
Transparency Portal website (https://www.recovery.pr/en/home.aspx) with 
the purpose of documenting and demonstrating the status of the 
recovery.
    We are now 22 months into our recovery and making significant 
progress toward the upwards of $100 billion in damages that Hurricanes 
Irma and Maria caused. Earlier this year, Governor Rossello submitted 
to Congress, in compliance with Pub. L. 115-123, a detailed status 
report on our Federally-Mandated Economic and Disaster Recovery Plan 
for Puerto Rico.\6\ The status report detailed both the progress and 
challenges of our recovery.
---------------------------------------------------------------------------
    \6\ Gov. Ricardo Rossello to Leaders of U.S. House and Senate, 
``Progress Report on Economic and Disaster Recovery Plan,'' February 
14, 2019.
---------------------------------------------------------------------------
    Despite our successes, we continue to struggle with obsolete 
policies and ever-changing rules governing the use of Federal funds on 
the island. While we welcome Federal oversight as appropriate for the 
expenditure of tens of billions of taxpayer dollars, I am concerned 
that the recovery of Puerto Rico is not proceeding at the same pace as 
those recoveries on the mainland. While some of these delays can be 
attributed to magnitude of destruction on the island and the logistical 
challenges associated with that, other delays appear to be as a result 
of an emphasis on the amount of money expended instead of the outcomes 
being achieved. The Puerto Rico Department of Education (PRDE) is a 
victim of this. PRDE infrastructure was decimated by Hurricane Maria 
when over 6,000 buildings on 1,109 campuses island-wide were impacted. 
More than just places of learning, our schools serve as shelters of 
last resort. They are often the only community building for miles and 
provide the only recreational facilities for many of our communities. 
In light of the need to rapidly rebuild in order to try to provide 
stability to the youth of our island, we prioritized the consolidation 
of several of our schools and focused on the rebuilding of 64. Since 
initial estimates were completed nearly 8 months ago, FEMA has changed 
the amount of money available for this project from over $1 billion 
dollars to less than $400 million. Each time the estimate changes, 
reviews and scopes of work must be redone delaying even further the 
commencement of work. Six hundred fifty-nine days after Maria hit, over 
300,000 students attend school each day in hurricane-damaged buildings 
with no recreational facilities, leaking roofs, and patched-together 
windows and doors. Of course, even when many of these children do go 
home, it is to homes still partially repaired, often with temporary 
``blue roofs''. Today, on the island, we still have nearly 20,000 homes 
that have damaged or destroyed roofs, and as such, people are relying 
on blue tarps to provide coverage over their homes. While we are not 
arguing that the Federal Government should rebuild every damaged home 
on the island, we do believe it is incumbent upon both Puerto Rico and 
the Federal Government to ensure our schools are repaired to current 
standards so our children at the very least have a safe, clean, and 
comfortable place to learn and thrive.
    While this is one example, we have also contended with: 
Inconsistencies in FEMA's guidance with respect to the implementation 
of Section 428 Alternative Procedures for permanent work Public 
Assistance; significant delays in fixed-cost estimate approvals by 
FEMA; unnecessary requirement of duplication in damage description and 
dimension analysis by FEMA; refusal to define industry standards; 
refusal to allow Puerto Rico to use its own licensed engineers such as 
was done in New York and New Jersey; until recently the onerous 
requirements of what FEMA refers to as the 270 process; and now another 
change in the way FEMA will perform its roles in the management of 
recovery funds. The island's reconstruction depends on completing these 
processes as diligently and quickly as possible, but we can do little 
without FEMA. Puerto Rico has only had approximately 117 projects 
approved of the 1,475 Project Worksheets submitted in the 22 months 
that have followed the Hurricanes. In stark contrast, in the same time 
frame, over 13,000 projects were approved for Louisiana and Mississippi 
in the wake of Hurricane Katrina. The discrepancy is startling.
    An additional--and looming--threat to our recovery and 
reconstruction efforts is the upcoming October 2019 deadline for 
finalizing our Fixed Cost Estimates (FCE). On April 30, 2019, COR3 
formally requested a blanket extension to the FCE deadline from FEMA, 
because at the current pace of approvals by FEMA, it will be impossible 
to meet the October 11, 2019 deadline. On May 13, 2019, FEMA responded 
to our request stating that extensions would be approved on a case-by-
case basis and only if Puerto Rico demonstrates it is trying to 
complete its portion of the FCE. This is impossible to achieve--FEMA 
has yet to determine which industry standards we are building toward, 
which in and of itself prevents anyone from determining how much 
rebuilding will cost. It is important to note that even the State of 
New York required 3 years to complete some of their FCEs, and our ask 
for an extension is neither unique nor unprecedented in the history of 
FEMA's relationship with the States and Territories.
    Throughout the recovery process, a key function of COR3 has been to 
work collaboratively with FEMA. Yet, on May 13, 2019, FEMA introduced a 
new operating model to COR3, the National Delivery Model. While, in the 
broadest sense, we support the implementation of the National Delivery 
Model, we are concerned that the model as currently envisioned by FEMA 
for Puerto Rico is not addressed within the framework FEMA and Puerto 
Rico agreed to. By ``framework''--I refer to framework articulated in 
the FEMA-State agreement and in FEMA implementation guidance for the 
Section 428 pilot program. The National Delivery Model has never before 
been used on a disaster where Section 428 alternative procedures are 
governing nearly all of the disaster grant funding. Additionally, 
because it is different from the delivery model Puerto Rico has been 
using since September 2017, it inserts another change in procedures, 
which raises concerns over impacts to the already glacial pace of 
recovery on the island. We continue to work with FEMA as it implements 
this new program on the island to understand how FEMA will adjust the 
program to account for the current FEMA-State agreement and look 
forward to FEMA's response to our request to amend the FEMA-State 
agreement to account for the implementation of this new program. Most 
critically, we look forward to ensuring Puerto Rico leads its own 
recovery--just as every other State in the Union is able to do, such as 
the ability to decide whether traditional PA or the 428 process is best 
for each individual recovery project.
    Puerto Rico will forever be grateful to the Federal Government for 
its contributions to the island in the aftermath of Hurricanes Irma and 
Maria. The Federal Government has been critical to the progress we 
achieved, but I must emphasize--it is our recovery. I ask that moving 
forward any decisions or processes made surrounding our recovery be 
discussed with the government of Puerto Rico because we know the island 
and its needs best. As FEMA says frequently, all disasters are 
Federally-Supported, State-Managed, and Locally-Executed--Governor 
Ricardo Rossello and I expect nothing less in Puerto Rico.
    The question of Puerto Rico's ultimate political status and 
relationship with the Federal Government is intimately linked to the 
island's prospects for economic growth, fiscal stability, and 
successful disaster recovery. By allowing Congress and the Federal 
Executive branch to treat Puerto Rico differently and in ways that 
discriminate against the island and its nearly 3.2 million U.S. 
citizens, the current territorial status inherently limits our chances 
of success. It does this by allowing the propagation of Federal laws 
and policies toward the territory that lack the coherence and 
consistency required to provide for the island's sustained 
socioeconomic development and growth. We have roughly the same number 
of U.S. citizens living in Puerto Rico as live in Utah or Iowa, yet we 
do not have an equal representation in Congress for ourselves.
    The unfortunate reality is that Federal policy toward Puerto Rico 
is oftentimes executed as an afterthought and without a proper 
understanding of the circumstances of the island and its residents. 
There are countless examples of Federal policies and practices that 
harm or limit Puerto Rico's economic development potential. Among these 
are the disparate treatment and sometimes-outright exclusion of Puerto 
Rico from a variety of Federal programs, the island's exclusion from a 
multitude of Federal studies and statistics, the disproportionately low 
level of Federal procurement from businesses in Puerto Rico, and 
unnecessary regulations that limit interstate commerce, such as the 
Electronic Export Information requirement.
    The current reform process happening in Puerto Rico under Governor 
Rossello's leadership, the debt-restricting tools contained in PROMESA, 
and the post-disaster recovery and reconstruction, present an ideal 
opportunity to finally define the ultimate political future of Puerto 
Rico, and to begin a transition toward that end. Congress must act 
definitively to resolve Puerto Rico's future political status, because 
maintaining the status quo will only further delay the island's 
recovery and reconstruction. Congress should implement the 
democratically-expressed will of voters who have expressed twice in the 
last 6 years a clear desire to end the current territory status and to 
achieve Statehood for Puerto Rico. Indeed, for America and Puerto Rico 
both, Statehood is the best possible answer and the best path forward 
out of this century-old issue and into a new century of economic growth 
and prosperity.
    Despite our many challenges, the U.S. territory of Puerto Rico is 
optimistic, determined, and full of potential. In the 22 months 
following the Hurricanes of 2017, we have been challenged by both 
significant population loss and an island-wide recession. Despite this, 
Puerto Rico continues to endure and recover. Our goal is to re-imagine, 
revitalize, and rebuild Puerto Rico in a way that we reach our full 
capacity for the benefit of our island residents and America as a 
whole. To do this, we must recognize and acknowledge our past mistakes 
and work together diligently to correct them. If the most challenged 
jurisdiction in America, Puerto Rico, can turn itself around and be 
transformed into a place of thriving prosperity and sustainability, it 
can serve as a beacon of hope for all Americans, and a sign to the 
world that the best is yet to come. Together, with the support of 
Congress, we can achieve this vision. We owe the American Citizens who 
make Puerto Rico their home nothing less.

    Mr. Payne. Thank you, sir.
    I will now recognize Ms. Williams-Octalien to summarize her 
statement for 5 minutes.

STATEMENT OF ADRIENNE L. WILLIAMS-OCTALIEN, DIRECTOR, OFFICE OF 
        DISASTER RECOVERY, V.I. PUBLIC FINANCE AUTHORITY

    Ms. Williams-Octalien. Good morning, Chairman Payne, 
Ranking Member King, and the Members of the subcommittee.
    I am Adrienne Williams-Octalien, director of the Office of 
Disaster Recovery in the U.S. Virgin Islands; and I thank you 
for holding this hearing today and for the opportunity to 
provide testimony on the status of the recovery in the Virgin 
Islands.
    The territory is fragile. With a population of a little 
under 110,000 people, the recovery from 2 back-to-back Category 
5 storms has been slow and painful. If you ask how the Virgin 
Islands is doing, I will report we are banged-up, but we are 
bandaged-up, and we are vulnerable.
    Our only hospital on the island of Saint Croix is 
functioning with one operating room with portions of the 
hospital rendered unusable. A temporary hospital modular unit 
is erected but still has to be outfitted with furniture, 
fixtures, and equipment. Residents are still being flown off 
island to access critical care that otherwise cannot be 
provided by our health care facilities. This has a detrimental 
financial impact on the territory's public health system, as 
much-needed revenue to support our institutions leave with 
these patients. Many of our roads remain in disrepair. Our 
schools still have temporary fixes with no permanent solutions 
for the upcoming school year. Many of our public buildings 
offer less-than-optimum working conditions for our staff due to 
hurricane damage. Housing remains an area of great concern, as 
still we have families with compromised roofs covered with 
tarpaulins that have exceeded their life expectancy.
    Through the FEMA STEP program, the territory has been able 
to repair 7,200 homes, but there are still 3,500 homeowners are 
still in need of repair, and we are moving deeper into 
hurricane season. Yet almost 2 years after the storms, $1.8 
billion have been obligated to the territory, but only $654 
million has been permitted work. The territory is grateful that 
Congress has recognized the complexities of the recovery in the 
Caribbean. The efforts through the Disaster Recovery Reform Act 
of 2018, the Bipartisan Budget Act of 2018, and the Disaster 
Act of 2019 are well received.
    The consternation comes with the implementation of these 
laws. The Bipartisan Budget Act allows for the use of industry 
standards in the repair of pre-disaster damages and undamaged 
components. It took 222 days from the passage of the law for 
FEMA to issue the guidance that allows the territories to 
access these new authorities.
    The Disaster Reform Act of 2018 allows for the use of 
consensus-based industry standards. While we understand that 
FEMA's guidance is forthcoming, it has been 279 days and 
counting.
    In April 2019, FEMA denied the U.S. Virgin Islands' request 
for a territory-managed 408 Permanent Housing Construction 
Pilot Program because the policy was not ready, even though 
Congress gave FEMA the authority for pilot programs until 
policy was developed.
    We are also waiting on FEMA guidance in the disaster 
supplemental passed in June 2019. The real-life implementations 
are dozens of critical infrastructure projects that were close 
to meeting the 50 percent threshold for replacement under the 
old rules are on hold, pending FEMA guidance. The time frames 
for the guidance to be issued are lengthy for both the HUD 
CDBG-DR program, as well as the FEMA-funded programs, but we 
have no choice. We have to wait for the guidance because the 
territory is fragile in its economic State and unable to risk 
expending funds that could be denied reimbursement. So, to the 
extent possible, we recommend that time frames, deadlines be 
included in legislation for the administering entities to 
produce guidance.
    The 2017 hurricane seasons not only wreaked havoc on our 
critical infrastructure but to the treasury of the Virgin 
Islands as well. The financial impact of back-to-back storms is 
$11.25 billion, and the projected revenue loss from the storms 
is approximately $576 million. Projects funded under FEMA's 
Public Assistance Program are estimated to cost $5 billion with 
a 10 percent match requirement, totaling approximately $500 
million. The identification of funds to meet the match 
requirements is concerning, considering the territory's fragile 
condition.
    It is our deepest hope that consideration be given to this 
request. If the 10 percent cost share is waived, the Virgin 
Islands can instead redirect those funds to help rebuild the 
thousands of homes damaged by the hurricanes and to protect the 
Federal investment in reconstructed critical infrastructure and 
lessen the need for taxpayer-funded disaster assistance in the 
future.
    We remain grateful for the hardworking men of FEMA who have 
dedicated their time to assist in the recovery of our beloved 
islands. We express our appreciation for their willingness to 
address the pervasive issues of the recovery and their 
commitment to providing resolutions. The good news is the new 
Public Assistance model has reduced the steps to obligation. 
The not-so-good news is it is still 47 steps. The lack of 
resources and qualified manpower to complete the detailed 
damage description by the March 2020 deadline is also of great 
concern. After this time frame, the territory will be subject 
to FEMA's discretion on a project-by-project basis to grant an 
extension. Unless the pace increases, we are fearful that all 
the DDDs will not be completed by the deadline, despite our 
best efforts.
    We are not insensitive to the challenges of FEMA with 
multiple disasters across the Nation, but we do not want that 
concern to affect the territory negatively. Despite these 
challenges, the resilient people of the Virgin Islands and our 
resilience is alive and well. We must ensure that Federal 
relief is not distributed with the heavy hand of bureaucracy 
where we focus more on the PDMGs and the DDDs and the NDRFs and 
forget the p-e-o-p-l-e. We are still suffering from the effects 
of these unprecedented storms.
    On behalf of the Governor, Albert Bryan, Jr., of the Virgin 
Islands and the residents, we thank you for the opportunity to 
provide this testimony.
    [The prepared statement of Ms. Williams-Octalien follows:]
                Statement of Adrienne Williams-Octalien
                             June 12, 2019
    Good Morning, Chairman Payne, Ranking Member King, and Members of 
the subcommittee. I am Adrienne Williams-Octalien, director of the 
Office of Disaster Recovery in the U.S. Virgin Islands. Thank you for 
the holding this hearing and for the opportunity to provide testimony 
on the status of the recovery in the Virgin Islands.
    The Territory is fragile. With a population of a little under 
110,000 people, the recovery from 2 back-to-back Category 5 storms has 
been slow and painful.
    If you ask, how is the Virgin Islands doing? I report that we were 
banged-up pretty badly, but bandaged-up with temporary fixes that have 
left our infrastructure very vulnerable.
    Our only hospital on the island of St. Croix is functioning with 
one operating room with portions of the hospital rendered unusable. A 
temporary hospital modular unit is erected but still has to be 
outfitted with furniture, fixtures, and equipment. Residents are still 
being flown off-island to access critical care that otherwise cannot be 
provided by our health care facilities. This has a detrimental 
financial impact on the territory's public health system, as much 
needed revenue to support our institutions leave with these patients.
    Many of our roads remain in despair. Ours schools still only have 
temporary fixes with no permanent solutions before the upcoming school 
year. Many of our public buildings offer less-than-optimum working 
environments due to hurricane damage.
    Housing remains an area of great concern as we still have families 
with compromised roofs covered with tarpaulins which have more than 
exceeded their life expectancy. Through the FEMA STEP Program, the 
Territory has been able to repair 7,200 homes but 3,563 homeowners are 
still in need of repairs as we move deeper into the hurricane season.
    Yet almost 2 years after the storms, of the $1.8 billion that have 
obligated to the territory only $654 million has been obligated to 
permanent work.
    The territory is grateful that Congress has recognized the 
complexities of the recovery in the Caribbean. The efforts through the 
Disaster Recovery Reform Act of 2018, the Bipartisan Budget Act of 2018 
and the Disaster Relief Act of 2019 are well received.
    The consternation comes with the implementation of these 
legislation. The Bipartisan Budget Act allows for use of Industry 
Standards and repair of pre-disaster damages and undamaged components. 
It took 222 days from the passage of the legislation for FEMA to issue 
the guidance that allows the territories to access these new 
authorities.
    The Disaster Reform Act of 2018 allows for use of Consensus-Based 
Industry Standards. While we understand that FEMA guidance is 
forthcoming, the wait is 279 days and counting.
    In April 2019, FEMA denied the USVI's request for a territory-
managed 408 Permanent Housing Construction Pilot Program because the 
policy was not ready (even though Congress gave FEMA the authority for 
Pilot Programs until policy was developed).
    We are also awaiting the FEMA guidance on the Disaster Supplemental 
passed in June 2019. The real-life implications are dozens of critical 
infrastructure projects that were close to meeting the 50 percent 
threshold for replacement under the old rules are on hold pending FEMA 
guidance.
    The time frames for the guidance to be issued are lengthy for both 
the HUD CDBG-DR and the FEMA-funded programs. We have no choice but to 
wait for the guidance because the territory in its fragile economic 
state is unable to risk expending funds that could be denied 
reimbursement. To the extent possible, we recommend that time frames/
deadlines be included in the legislation for the administering agencies 
to produce the implementing guidance.
    The 2017 hurricanes not only wreaked havoc on our critical 
infrastructure but to the treasury of the Virgin Islands as well. The 
financial impact of the back-to-back storms was $11.25 billion; and the 
projected revenue loss from the storms is approximately $576 million. 
Projects funded under FEMA's Public Assistance program are estimated to 
cost $5 billion with a 10 percent match requirement totaling 
approximately $500 million. The identification of funds to meet the 
match requirements is concerning considering the territory's fragile 
financial condition.
    The territory requested that the President direct FEMA to utilize 
the authorities of the Insular Areas Act to waive the non-Federal cost 
share for the FEMA Public Assistance program. We are grateful for the 
decision to invoke the authorities under the Act to waive the cost 
share for the Hazard Mitigation Grant Program.
    It is our deepest hope that consideration be given to this request. 
If the 10 percent cost share is waived, the USVI can instead redirect 
those funds to help rebuild the thousands of homes damaged by the 
hurricanes and to protect the Federal investments in reconstructed 
critical infrastructure to lessen the need for taxpayer-funded disaster 
assistance in the future.
    We remain grateful for the hard-working men and women of FEMA who 
have dedicated their time to assist in the recovery of our beloved 
islands. We express our appreciation to FEMA for their willingness to 
address the pervasive issues of the Recovery and their commitment to 
providing resolutions. The good news is the new PA model has reduced 
the steps to obligation. The not-so-good news is it still is 47 steps.
    The lack of resources and qualified manpower to complete the Detail 
Damage Description by the March 2020 deadline is also of concern. After 
this time frame, the territory would be subject to FEMA's discretion on 
a project-by-project basis to grant an extension. Unless the pace 
increases, we are fearful that all the DDDs will not be completed by 
the deadline despite our best efforts.
    We are not insensitive to the challenges that FEMA faces with 
multiple disasters across the Nation and the challenges with the human 
capital to meet the demand. We do however remain concerned that the 
Territory does not bear the brunt of this shortcoming.
    Despite these challenges the resilient spirit of the people of the 
Virgin Islands is alive and well. We must ensure that the Federal 
relief is not distributed with the heavy hand of bureaucracy where we 
focus more on the PDMG, the DDD, and the NDRF and forget the PEOPLE who 
are still suffering from the effects of these unprecedented storms.
    I thank you for the opportunity to provide this testimony.
    Thank you.
      ATTACHMENT.--U.S. VIRGIN ISLANDS--WAIVER OF FEMA COST SHARE
    REQUEST.--The U.S. Virgin Islands requests that the President 
direct FEMA to utilize the authorities of the Insular Areas Act to 
waive the non-Federal cost share for the FEMA Public Assistance 
program.
    BACKGROUND.--In recognition of the persistent economic challenges 
in the Insular Areas of the U.S., which include the USVI (but not 
Puerto Rico), the Insular Areas Act (48 USC  1469a) authorizes that 
``any department or agency, in its discretion, may (i) waive any 
requirement for matching funds otherwise required by law to be provided 
by the Insular Area involved.''
    Waiving various non-Federal matching funds using the Insular Areas 
Act authority has been a common practice in disaster recovery for more 
than two decades, especially after catastrophic events. In fact, in 
recognition of the severity of Hurricanes Irma and Maria, FEMA has 
already invoked the Insular Areas Act authority to waive the 25 percent 
non-Federal matching requirement for the Hazard Mitigation Grant 
Program in the USVI.
    RATIONALE FOR THE REQUEST.--The USVI fully appreciates that one of 
the lessons learned from the 100 percent Federal cost share granted 
after Hurricane Katrina is that when a State has no ``skin in the 
game'' in the form of a local match the recovery can be delayed and the 
cost of Federal disaster assistance can increase significantly. 
Nonetheless, as Congress recognized in enacting the Insular Areas Act, 
Insular Areas usually do not have the resources available to come up 
with the local match in order to access Federal funds. Further, in the 
aftermath of these two unprecedented hurricanes, the USVI is in a very 
difficult financial position, with significant loss of revenues and 
significant previously-unbudgeted costs projected over several years 
attributable to the hurricanes, including sizable tourism-related 
losses. Indeed, the USVI has been required to rely on substantial 
Community Disaster Loan (CDL) funding in order to maintain basic 
governmental services.
    Furthermore, as ``skin in the game,'' the USVI has already 
committed to using FEMA's Section 428 Alternative Public Assistance 
Program Procedures to the maximum extent possible to develop capped, 
fixed grants which have been proven to be the most cost-effective 
approach, even though these projects carry substantive potential 
financial risk for the territory.
    PROPOSED SOLUTION.--The USVI respectfully requests that FEMA waive 
the 10 percent non-Federal cost share on all FEMA Public Assistance 
Program Work (Categories A-G), including Direct Federal Assistance, and 
Other Needs Assistance under the Individual Assistance program.
    BENEFICIAL OUTCOMES.--If the 10 percent cost share is not waived, 
the USVI will have to dedicate a substantial portion of its HUD CDBG-DR 
funds--more than $500 million--to cover the non-Federal share. If the 
10 percent cost share is waived, the USVI can instead redirect those 
funds to help rebuild the thousands of homes damaged by the hurricanes 
and to protect the Federal investments in reconstructed critical 
infrastructure to lessen the need for taxpayer-funded disaster 
assistance in the future.
    COSTS.--Based upon current projections of $4.5-5.5 billion of 
eligible FEMA Public Assistance program costs, the amount of non-
Federal matching funds to be waived at 10 percent would be 
approximately $500 million.

    Mr. Payne. Thank you very much.
    I now recognize Mr. Currie to summarize his statement for 5 
minutes.

 STATEMENT OF CHRIS P. CURRIE, DIRECTOR, HOMELAND SECURITY AND 
         JUSTICE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Currie. Thank you, Chairman Payne, Ranking Member King, 
Chairman Thompson, other Members of the committee.
    It is an honor to be here today to talk about GAO's work, 
looking at the recovery in Puerto Rico and the Virgin Islands. 
Since Hurricanes Irma and Maria, GAO has been conducting 
extensive oversight in both locations of the Federal funding 
that is being spent there. Frankly, the recovery so far has 
been slow and very challenging and challenges at all levels of 
government.
    I think everyone on this committee today has had a 
catastrophic disaster in their jurisdiction. So you are 
familiar that recovery is a very complex, frustrating process 
often. Federal recovery programs are complicated and can be 
frustrating for State and locals to deal with. We have seen 
this across the country in California, Texas, Florida, New 
York, New Jersey. If States like that that have high levels of 
preparedness and tremendous emergency management capacity have 
struggled, it is not a surprise that Puerto Rico and the Virgin 
Islands have also struggled with these processes, too.
    However, there are some things that are very unique in 
these locations that I think are worth pointing out. First of 
all, the damage across the jurisdiction was complete. Unlike 
other States like Texas, Florida, where non-affected counties 
and jurisdictions could help out those that were affected, that 
was not the case here. All resources and assistance and 
recovery aid had to come from outside. That has complicated 
things.
    Because of the fiscal position and the bankruptcy situation 
of the territories, unlike other States, there was no seed 
money, and appropriations couldn't be diverted to jump-start 
recovery. All of the assistance had to be provided, most of it 
by the Federal Government, which has also caused some delays, 
too.
    Also, the recovery capacity is a very important thing. It 
is not easy to just be ready to manage $10 billion to $50 
billion as a territory. Some of these--in the case of Puerto 
Rico and Virgin Islands, this is more money than their annual 
budget 2 times over, and that is a huge challenge. So that had 
to be built over time. Adrienne and Omar's offices have been--
had to build their capacity over time, and that has taken some 
time to address as well.
    So, in terms of the status of recovery, what we have 
reported is that so far FEMA has provided about $7.4 billion in 
Public Assistance grants. This is the main program that is used 
to build infrastructure back on the islands. Most of that, 
though, it is really important to understand, is for emergency 
work. What I mean by that is things that have already occurred 
like debris removal, power restoration, reimbursements. That is 
just a small down payment on what is going to be spent over the 
long haul on more permanent work projects.
    So now let me turn to FEMA because they have absolutely 
been some major challenges on the FEMA side. I want to also 
divorce some of those challenges from the FEMA work force. I 
have been to Puerto Rico and the Virgin Islands many times. The 
work force is dedicated. They work hard. They are making 
sacrifices every day. They care about this recovery, too. But 
that is separate from programmatic and policy challenges that 
we have seen.
    A big area that Mr. Payne talked about was the challenge in 
implementing new approaches to the Public Assistance Grant 
Program. The Alternative Procedures have never been used on the 
scale they are being uses, for example, in Puerto Rico. They 
have been used on certain projects around the country but not 
territory-wide, system-wide, and sector-wide. Frankly, that has 
caused major challenges, not just for the territories but 
FEMA's own staff. Many of these challenges we have identified 
are FEMA officials telling us these things, not just our 
discussions with folks at the local level.
    The fixed-cost estimate is another massive challenge. Under 
the alternative procedures--and I am going to show you some 
pictures as we go here of pictures we have taken recently, as 
recent as just March in both locations--but the fixed-cost 
estimates have to be agreed on by FEMA and the territories 
before projects can move forward. So far, there are, in Puerto 
Rico, there are 4 agreed-upon permanent work fixed-cost 
estimates. In Virgin Islands, we reported there are two. Just 
keep in mind this is thousands--there are thousands of 
potential projects. So, this is where we are in recovery. There 
is a long way to go in this area.
    To be clear, FEMA is working to try to address these issues 
as they come up and is trying to issue additional guidance but 
the scale and the complexity is so challenging, it is a major 
problem and challenge.
    I would like to end really quickly with just a positive 
note moving forward. Because we are still early in recovery, 
there is still a huge opportunity to make sure that these 
dollars are invested smartly. When I say ``smartly,'' I mean 
invested in a way that is going to rebuild the infrastructure 
in both places to be resilient to the future disasters they are 
going to face. Both of these are islands in the Caribbean. They 
are going to be hit with more hurricanes and potential 
earthquakes moving forward.
    I think it is extremely important that we monitor and 
oversee the investment and funding to make sure that we are not 
spending Federal dollars later on down the road to rebuild the 
same infrastructure.
    I look forward to the questions. Thank you very much.
    [The prepared statement of Mr. Currie follows:]
                 Prepared Statement of Chris P. Currie
                             July 11, 2019
                             gao highlights
    Highlights of GAO-19-662T, a testimony before the Subcommittee on 
Emergency Preparedness, Response, and Recovery, Committee on Homeland 
Security, House of Representatives.
Why GAO Did This Study
    In September 2017, two major hurricanes--Irma and Maria--struck 
Puerto Rico and the USVI, causing billions of dollars in damage to 
infrastructure, housing, and the economy. FEMA--a component of the 
Department of Homeland Security--is the lead Federal agency responsible 
for assisting Puerto Rico and the USVI to recover from these natural 
disasters. Among other responsibilities, FEMA is administering the 
Public Assistance program in partnership with the governments of Puerto 
Rico and the USVI, providing them grant funding for response and 
recovery activities, including debris removal efforts, life-saving 
emergency protective measures, and the repair, replacement, or 
restoration of public infrastructure.
    This statement describes: (1) The status of FEMA's Public 
Assistance grant funding in Puerto Rico and the USVI in response to the 
2017 hurricanes as of April 2019, (2) the establishment of recovery 
offices in Puerto Rico and the USVI, and (3) challenges in implementing 
the Public Assistance program and actions FEMA has taken to address 
them. This statement is based on GAO reports issued in February, March, 
and June 2019, and includes preliminary observations from on-going GAO 
reviews of FEMA operations. For on-going work, GAO analyzed program 
documents and data on obligations and expenditures; interviewed agency 
officials; and visited disaster-damaged areas in Puerto Rico and the 
USVI, where GAO also interviewed FEMA and local officials.
    GAO will continue to monitor the progress of Puerto Rico's and the 
USVI's recovery as part of its on-going work.
emergency management.--fema's disaster recovery efforts in puerto rico 
                      and the u.s. virgin islands
What GAO Found
    GAO's prior and on-going work found that the Federal Emergency 
Management Agency (FEMA) obligated about $7.4 billion in Public 
Assistance grant funding to Puerto Rico and the U.S. Virgin Islands 
(USVI) as of April 2019, in response to the 2017 hurricanes. FEMA 
obligated about $6.2 billion in Public Assistance grants for emergency 
work--debris removal activities, power restoration, and other emergency 
measures--and about $965 million in Public Assistance grants for 
permanent work--including the repair or replacement of public 
infrastructure such as roads, electrical utilities, and damaged 
buildings. Further, FEMA is continuing to work with Puerto Rico and the 
USVI to develop additional permanent work projects to repair damaged 
public infrastructure, such as schools and hospitals (see figure).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    In 2017, Puerto Rico established the Central Office for Recovery, 
Reconstruction, and Resilience and in 2019 the USVI established the 
Office of Disaster Recovery to coordinate and oversee Federal recovery 
efforts. Among other things, these recovery offices are responsible for 
monitoring and overseeing the Public Assistance program and developing 
internal controls to ensure it is implemented in accordance with 
applicable laws, regulations, and FEMA requirements.
    GAO's prior and on-going work highlighted challenges with the 
Public Assistance program including concerns about the clarity of 
FEMA's guidance, and the time and resources needed to transition to a 
new Public Assistance delivery model in Puerto Rico. Further, Puerto 
Rico and USVI officials reported difficulties understanding FEMA's 
implementation of new flexibilities authorized by law as well as delays 
in jointly developing cost estimates for long-term recovery projects 
such as the repair or replacement of hospitals, buildings, and other 
public infrastructure. FEMA has taken some actions to help address 
these issues, including developing additional guidance and specific 
training. However, it is too soon to determine the effectiveness of 
FEMA's actions. GAO will continue to evaluate the Public Assistance 
program in the USVI and Puerto Rico and plans to report its findings in 
late 2019 and early 2020, respectively.
    Chairman Payne, Ranking Member King, and Members of the 
subcommittee: Thank you for the opportunity to discuss our work on the 
Federal Emergency Management Agency's (FEMA) recovery operations in 
Puerto Rico and the U.S. Virgin Islands (USVI).
    In the span of 14 days in September 2017, 2 major hurricanes--Irma 
and Maria--struck Puerto Rico and the USVI, severely damaging critical 
infrastructure and causing tens of billions of dollars in damage. 
Specifically, on September 6, 2017, Hurricane Irma passed just north of 
the USVI islands of St. Thomas and St. John and Puerto Rico as a 
Category 5 hurricane, causing severe wind and rain inundation.\1\ Less 
than 2 weeks later, on September 19, 2017, Hurricane Maria struck the 
USVI island of St. Croix as a Category 5 hurricane and, hours later on 
September 20, 2017, made a direct hit as a Category 4 hurricane on the 
main island of Puerto Rico (see fig. 1).
---------------------------------------------------------------------------
    \1\ The National Oceanic and Atmospheric Administration (NOAA) 
measures hurricanes on a scale from 1 to 5 with a Category 1 being the 
least intense and a Category 5 being the most intense. NOAA defines a 
Category 5 hurricane as one with winds above 157 miles per hour.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    The storms caused extensive damage to roads, bridges, and other 
public infrastructure. Further, the hurricanes devastated Puerto Rico's 
electrical system--it took roughly 11 months for power to be restored 
to all of the customers able to receive power, the longest blackout in 
U.S. history. In its recovery plan, Puerto Rico estimated that $132 
billion will be needed from 2018 through 2028 to repair and reconstruct 
the infrastructure damaged by the hurricanes.\2\
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    \2\ Central Office for Recovery, Reconstruction and Resiliency, 
Government of Puerto Rico, Transformation and Innovation in the Wake of 
Devastation: An Economic and Disaster Recovery Plan for Puerto Rico 
(August 8, 2018).
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    In the USVI, the storms damaged more than half of the territory's 
housing units as well as its hospitals, schools, and water and 
wastewater facilities, according to a 2018 report from the USVI 
Hurricane Recovery and Resilience Task Force.\3\ Overall, this report 
estimated that the hurricanes caused approximately $10.7 billion in 
total damages across the USVI.
---------------------------------------------------------------------------
    \3\ In October 2017, the Governor of the USVI called for the USVI 
Hurricane Recovery and Resilience Task Force to draft a report 
assessing the USVI's hurricane response and guiding its efforts during 
the rebuilding process. The report was released in September 2018 and 
details recovery initiatives across 14 sectors, including the economy, 
energy, communications, transportation, and more. The report can be 
found at https://www.usvihurricanetaskforce.org/. We reported our 
observations on Federal support for electricity grid restoration in 
Puerto Rico and the USVI as a result of the 2017 hurricanes in a 
separate report. See GAO, 2017 Hurricane Season: Federal Support for 
Electricity Grid Restoration in the U.S. Virgin Islands and Puerto 
Rico, GAO-19-296 (Washington, DC: Apr. 18, 2019).
---------------------------------------------------------------------------
    The storms exacerbated the financial situations in the territories, 
which were operating under severe fiscal constraints prior to the 
hurricanes.\4\ See figure 2 for examples of hurricane damage to Puerto 
Rico and the USVI.
---------------------------------------------------------------------------
    \4\ The USVI's total public debt outstanding increased between 
fiscal years 2005 and 2015 from $1.4 billion to $2.7 billion. The 
balance subsequently declined to $2.6 billion in fiscal year 2016--the 
most recent year for which data were available--due to the repayment of 
existing debt. Further, the USVI has not been able to access capital 
markets at favorable interest rates since January 2017, when investors 
began to demand higher rates to compensate for what they perceived as 
increased risks in the territory. See GAO, U.S. Territories: Public 
Debt Outlook--2019 Update, GAO-19-525 (Washington, DC: June 28, 2019).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    FEMA--a component of the Department of Homeland Security (DHS)--is 
the lead Federal agency responsible for disaster preparedness, 
response, and recovery, which includes assisting Puerto Rico and the 
USVI as they recover from these natural disasters.\5\ Among other 
responsibilities, FEMA administers the Public Assistance program 
through a partnership with the governments of Puerto Rico and the USVI 
to provide grant funding for a wide range of eligible response and 
recovery activities. These activities include debris removal efforts; 
life-saving emergency protective measures; and the repair, replacement, 
or restoration of disaster-damaged publicly owned facilities, 
electrical utilities, roads and bridges; and more.
---------------------------------------------------------------------------
    \5\ See 6 U.S.C.  313.
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    My testimony today discusses our prior and on-going work on 
disaster recovery efforts in Puerto Rico and the USVI following 
Hurricanes Irma and Maria in 2017, including:
    1. the status of Public Assistance grant funding in Puerto Rico and 
        the USVI, as of April 2019;
    2. the recovery offices Puerto Rico and the USVI have established 
        to manage recovery efforts; and
    3. the challenges FEMA, Puerto Rico, and the USVI have faced in 
        implementing the Public Assistance program, and the actions 
        FEMA has taken to address them.
    My statement is based on reports we issued in February, March, and 
June 2019 as well as data and preliminary observations from our on-
going reviews of FEMA's recovery activities in Puerto Rico and the USVI 
for a number of Congressional committees and subcommittees. To perform 
our prior work, we reviewed Federal laws related to emergency 
management, analyzed FEMA data and documentation, and interviewed 
relevant agency officials. More detailed information on the scope and 
methodology for our prior work can be found in the issued reports 
listed in appendix I.
    To develop our preliminary observations from on-going work, we 
reviewed Federal laws and documentation from FEMA, Puerto Rico, and the 
USVI, including policies, procedures, and guidance specific to 
emergency management. We also obtained and analyzed data from FEMA's 
Emergency Management Mission Integrated Environment and Integrated 
Financial Management Information System on Public Assistance program 
obligations and Puerto Rico's and the USVI's expenditures as of April 
2019.\6\ We reviewed existing information about these systems, 
interviewed data users and managers responsible for these data, and 
cross-checked data across sources to ensure consistency. We determined 
these data to be reliable for the purposes of this statement. Moreover, 
we conducted site visits to Puerto Rico and the USVI to meet with 
Federal, territorial, and local government and emergency management 
officials to discuss disaster recovery efforts and associated 
challenges. For a list of our on-going emergency management reviews, 
see appendix II.
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    \6\ An obligation is a definite commitment that creates a legal 
liability of the Government for the payment of goods and services 
ordered or received. For the purposes of this statement, obligations 
represent the amount of grant funding FEMA provided through the Public 
Assistance program for specific projects in the USVI and Puerto Rico. 
An expenditure is an amount paid by Federal agencies, by cash or cash 
equivalent, during the fiscal year to liquidate Government obligations. 
For the purposes of this statement, an expenditure represents the 
actual spending by the USVI and Puerto Rico governments of money 
obligated by the Federal Government.
---------------------------------------------------------------------------
    We conducted the work on which this statement is based in 
accordance with generally accepted Government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
                               background
FEMA's Public Assistance Program
    FEMA's Public Assistance program provides grant funding to State, 
territorial, local, and Tribal governments as well as certain types of 
private nonprofit organizations to assist with responding to and 
recovering from Presidentially-declared major disasters or 
emergencies.\7\ As shown in figure 3, Public Assistance grant funds are 
categorized broadly as ``emergency work'' or ``permanent work.'' Within 
these broad categories are separate subcategories. In addition to the 
emergency work and permanent work categories, the program includes 
category Z, which represents indirect costs, direct administrative 
costs, and any other administrative expenses associated with a specific 
project.
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    \7\ In accordance with the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (Stafford Act), as amended, the President of 
the United States may declare that a major disaster or emergency exists 
in response to a Governor's or Tribal chief executive's request if the 
disaster is of such severity and magnitude that effective response is 
beyond the capabilities of a State, Tribe, or local government and 
Federal assistance is necessary. See 42 U.S.C.  5170-5172. The Public 
Assistance program represents the largest share of the Disaster Relief 
Fund, which is the primary source of Federal disaster assistance for 
State and local governments when a disaster is declared.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    FEMA's Public Assistance program also provides grant funding for 
cost-effective hazard mitigation measures to reduce or eliminate the 
long-term risk to people and property from future natural and man-made 
disasters and their effects.\8\ For example, a community that had a 
fire station damaged by a disaster could use Public Assistance grant 
funding to repair the facility and incorporate additional measures such 
as installing hurricane shutters over the windows to mitigate the 
potential for future damage.
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    \8\ FEMA may fund hazard mitigation measures related to the damaged 
facilities receiving Public Assistance grant funding pursuant to 
section 406 of the Stafford Act, as amended. 42 U.S.C. 5 172; 44 
C.F.R.  206.226.
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    FEMA, the State or territorial government (the recipient), and 
local or territorial entities (the subrecipient) work together to 
develop projects under the Public Assistance program. After a project 
has completed FEMA's review process and is approved, FEMA obligates 
funding for the project by placing money into an account where the 
recipient has the authority to draw down--or withdraw--funding to pay 
the subrecipient for eligible work upon completion.
The Public Assistance Alternative Procedures Program in Puerto Rico and 
        the USVI
    The Sandy Recovery Improvement Act of 2013 authorized the use of 
alternative procedures in administering the Public Assistance program, 
thereby providing new flexibilities to FEMA, States, territories, and 
local governments for debris removal, infrastructure repair, and 
rebuilding projects using funds from this program.\9\ Unlike in the 
standard Public Assistance program where FEMA will fund the actual cost 
of a project, the Public Assistance alternative procedures allow awards 
for permanent work projects to be made on the basis of fixed-cost 
estimates to provide financial incentives for the timely and cost-
effective completion of work.
---------------------------------------------------------------------------
    \9\ The Sandy Recovery Improvement Act of 2013 amended the Stafford 
Act by adding Section 428, which authorized FEMA to approve Public 
Assistance program projects under the alternative procedures provided 
by that section for any Presidentially-declared major disaster or 
emergency. This section further authorized FEMA to carry out the 
alternative procedures as a pilot program until FEMA promulgates 
regulations to implement this section. Pub. L. No. 113-2, div. B,  
1102(2), 127 Stat. 39, amending Pub. L. No. 93-288, tit. IV,  428 
(codified at 42 U.S.C.  5189f). The stated goals of the alternative 
procedures are to reduce the costs to the Federal Government, increase 
flexibility in the administration of the Public Assistance program, 
expedite the provision of assistance under the program, and provide 
financial incentives for recipients of the program for the timely and 
cost-effective completion of projects.
---------------------------------------------------------------------------
    Under these procedures, if the actual cost of the project exceeds 
the fixed-cost estimate agreed upon by FEMA and the recipient, the 
recipient or subrecipient is responsible for the additional costs at 
the time of the close-out process. However, if the actual cost of 
completing eligible work for a project is below the estimate, the 
recipient may use the remaining funds for additional cost-effective 
hazard mitigation measures to increase the resilience of public 
infrastructure. In addition, these funds may also be used for 
activities that improve the recipient's or subrecipient's future Public 
Assistance operations or planning.
    In October 2017, Puerto Rico requested, and FEMA approved, the use 
of the alternative procedures program for all large-project funding for 
Public Assistance permanent work projects in categories C through 
G.\10\ Although FEMA had approved alternative procedure grants in 30 
States as of April 2018, in these cases, alternative procedures were 
used on a project-by-project basis. Puerto Rico's recovery from the 
2017 hurricanes is the first recovery to use alternative procedures for 
all large permanent work projects. In addition, in July 2018, FEMA 
approved a request from the Governor of the USVI to transition to using 
the Public Assistance alternative procedures program for permanent work 
in the territory. Unlike in Puerto Rico, the USVI may pursue the 
alternative procedures on a project-by-project basis.
---------------------------------------------------------------------------
    \10\ According to a November 2017 amendment to Puerto Rico's major 
disaster declaration, due to the extraordinary level of infrastructure 
damage caused by Hurricane Maria, as well as the financial status of 
Puerto Rico, officials chose to use the alternative procedures for all 
large-project funding for Public Assistance categories C through G 
pursuant to section 428 of the Stafford Act. Puerto Rico; Amendment No. 
5 to Notice of a Major Disaster Declaration, 82 Fed. Reg. 53,514 (Nov. 
16, 2017). For fiscal year 2018, the large project threshold was 
$125,500.
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 fema had obligated $5.6 billion and $1.8 billion in public assistance 
 grant funding in puerto rico and the usvi, respectively, as of april 
                                  2019
    As of April 2019, FEMA had obligated a total of about $7.4 billion 
in grant funds for Public Assistance projects in both Puerto Rico and 
the USVI.\11\ Specifically, as shown in figure 4, FEMA obligated 
approximately $5.6 billion for 1,264 Public Assistance projects in 
Puerto Rico, including approximately $5.1 billion (90 percent) for 
emergency work (categories A and B) and $377.7 million (7 percent) for 
permanent work in categories C through G).\12\
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    \11\ These data include Public Assistance grant funding only and do 
not include obligations and expenditures for, among other Federal 
disaster assistance programs, direct Federal mission assignments, in 
which a Federal agency is tasked with providing eligible emergency work 
or debris removal services to a territory or State, or for other 
categories of mission assignments. In April 2019, we reported that FEMA 
had obligated an additional $2 billion in Puerto Rico and $63 million 
in the USVI for direct Federal assistance through mission assignments 
for temporary emergency power and grid restoration efforts as of July 
2018. See GAO, 2017 Hurricane Season: Federal Support for Electricity 
Grid Restoration in the U.S. Virgin Islands and Puerto Rico GAO-19-296 
(Washington, DC: April 18, 2019).
    \12\ An additional $136 million (3 percent) was obligated for 
management and direct administrative costs.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Puerto Rico had expended approximately $3.5 billion--about 61 
percent of total Public Assistance grant obligations in Puerto Rico--as 
of April 2019. Ninety-six percent of the expended amount went toward 
emergency work projects in categories A and B while just over 1 percent 
went toward permanent work projects. The majority of FEMA's obligations 
and the funding Puerto Rico expended as of April 2019 are for emergency 
work because these projects began soon after the disasters struck and 
focused on debris removal and providing assistance to address immediate 
threats to life and property. In contrast, permanent work projects take 
time to identify, develop, and ultimately complete as they represent 
the longer-term repair and restoration of public infrastructure.
    In the USVI, FEMA had obligated approximately $1.8 billion for 583 
Public Assistance projects across the territory, as of April 2019. 
Similar to Public Assistance grant funding in Puerto Rico, the majority 
of funding FEMA obligated and the USVI expended was in emergency work 
categories A and B. Specifically, FEMA obligated approximately $1.1 
billion (63 percent) for emergency work (categories A and B) and $587.3 
million (33 percent) for permanent work (categories C through G) in the 
territory (see fig. 5).\13\
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    \13\ An additional $66.0 million (4 percent) was obligated for 
management costs.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Of the $1.8 billion FEMA obligated for Public Assistance projects, 
the USVI had expended approximately $982.4 million as of April 2019. 
Specifically, the USVI had expended about $808.1 million (82 percent) 
for emergency work projects in categories A and B and $163.1 million 
(17 percent) for permanent work projects in categories C through G.\14\
---------------------------------------------------------------------------
    \14\ The USVI also expended about $11.2 million for management 
costs under category Z. As noted above, this category represents any 
indirect cost, any direct administrative cost, and any other 
administrative expense associated with a specific project.
---------------------------------------------------------------------------
    Emergency work.--As of April 2019, FEMA had obligated a total of 
approximately $6.2 billion for emergency work projects in Puerto Rico 
and the USVI--including about $5.1 billion in Puerto Rico and $1.1 
billion in the USVI. These projects focused on debris removal 
activities and providing assistance to address immediate threats to 
life and property. For example, as of April 2019, FEMA had obligated 
$138.9 million for projects focused on debris removal activities in the 
USVI under category A. This included $45.9 million to the USVI 
Department of Public Works for USVI-wide debris removal efforts and 
$39.1 million to the USVI Water and Power Authority for these 
activities in St. Croix (see fig. 6).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    In another example, FEMA obligated more than $140.0 million to the 
Puerto Rico Aqueducts and Sewer Authority under category B to fund 
emergency protective measures, including using back-up generators to 
supply water to the island after Hurricane Maria, among other things. 
Further, as of April 2019, FEMA had obligated $1.1 billion in Puerto 
Rico and $278 million in the USVI to fund the Sheltering and Temporary 
Essential Power pilot program. This program, which is implemented as a 
subprogram under Public Assistance program category B, is intended to 
provide essential repairs or restore power to private residences to 
allow affected individuals to return or remain in their homes, thereby 
reducing the demand for other shelter options. We are continuing to 
assess this program as part of our on-going work on recovery efforts in 
the USVI.
    Permanent work.--As of April 2019, FEMA had obligated approximately 
$965.0 million for permanent work projects in Puerto Rico and the 
USVI--including about $377.7 million in Puerto Rico and $587.3 million 
in the USVI. These projects focused on the restoration of disaster-
damaged infrastructure or systems. For example, under category C, FEMA 
obligated $137.6 million for projects in Puerto Rico focused on the 
permanent repair of roads and bridges, such as the severely-damaged 
road shown in figure 7 below.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    In addition, under category E, FEMA obligated $39.2 million and 
$67.7 million for projects in Puerto Rico and the USVI, respectively, 
focused on repairing and rebuilding damaged public buildings and 
equipment, such as the schools shown in figure 8 below.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Further, under category F, FEMA obligated $504.9 million for 
projects in the USVI to repair damaged utilities. Specifically, FEMA 
obligated $481.8 million--or 95 percent of this total--through the 
standard Public Assistance program for projects focused on territory-
wide permanent electrical distribution system repairs. This includes 
replacing damaged wooden utility poles with more resilient composite 
fiberglass poles that can withstand 200 mile per hour winds as well as 
power transmission lines and transformers (see fig. 9).\15\
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    \15\ In April 2019, we reported that the 2017 hurricanes caused 
wide-spread devastation to both Puerto Rico's and the USVI's electrical 
grid and that Federal agencies--including FEMA--provided both 
traditional support to restore electricity in the territories as well 
as unprecedented support in Puerto Rico in coordinating and assisting 
with the territory's grid restoration. See GAO, 2017 Hurricane Season: 
Federal Support for Electricity Grid Restoration in the U.S. Virgin 
Islands and Puerto Rico GAO-19-296 (Washington, DC: April 18, 2019).
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

 puerto rico and the usvi have established recovery offices to oversee 
                      and monitor recovery efforts
    As the recipients of Federal disaster funding, Puerto Rico and the 
USVI are responsible for monitoring and overseeing the Public 
Assistance program to ensure it is implemented in compliance with 
applicable laws, regulations, and requirements as well as FEMA policies 
and guidance. To address these responsibilities, Puerto Rico and the 
USVI established recovery offices to manage recovery activities and 
funding, including through the Public Assistance program.
Puerto Rico's Central Office for Recovery, Reconstruction, and 
        Resilience Has Developed Internal Controls to Oversee Recovery 
        Funds
    In March 2019, we reported that Puerto Rico, in accordance with 
Amendment 5 to the President's disaster declaration, established the 
Central Office for Recovery, Reconstruction, and Resilience (COR3) to 
oversee Federal recovery funds.\16\ We also reported that COR3 was 
developing an internal controls plan to help ensure better management 
and accountability of the funds.\17\ According to FEMA officials, FEMA 
instituted a manual reimbursement process due to Puerto Rico's 
financial situation, weaknesses in internal controls, and the large 
amount of recovery funds, among other things, to mitigate risk and help 
ensure financial accountability. However, from our on-going work on 
Puerto Rico's disaster recovery efforts, we have learned that, on April 
1, 2019, FEMA removed the manual reimbursement process and began a 
transition to allow the central recovery office to take responsibility 
for the review and reimbursement approval of Federal recovery funds.
---------------------------------------------------------------------------
    \16\ Puerto Rico; Amendment No. 5 to Notice of a Major Disaster 
Declaration, 82 Fed. Reg. 53,514 (Nov. 16, 2017).
    \17\ GAO-19-256.
---------------------------------------------------------------------------
    We have also learned from our on-going work that, in March 2019, 
COR3 released the Disaster Recovery Federal Funds Management Guide. 
Among other things, the guide outlines COR3's roles and 
responsibilities and the internal controls COR3 put in place to oversee 
the recovery. For example, COR3 will identify, procure, and administer 
all Federal, territorial, and private resources available to Puerto 
Rico related to recovery. In addition, it will provide oversight of 
subrecipients using risk-based monitoring, offer technical assistance, 
and advise Puerto Rico's governmental agencies and municipalities 
regarding any matter related to recovery. COR3 continues to update its 
on-line transparency portal intended to provide a breakdown of FEMA 
Public Assistance and other Federal funding obligated for disaster 
recovery in Puerto Rico.
The USVI Established the Office of Disaster Recovery to Monitor and 
        Oversee Recovery Efforts
    According to our preliminary observations, in February 2019, the 
USVI established the new Office of Disaster Recovery. This office 
serves as the primary territorial agency responsible for overseeing all 
disaster recovery efforts and funding in the territory, and coordinates 
across all USVI governmental agencies and other pertinent entities.\18\ 
According to USVI officials, following the 2017 hurricanes, key USVI 
agencies did not have enough employees with the knowledge and expertise 
necessary to staff recovery-related positions and effectively manage 
the implementation of recovery efforts. To address this challenge in 
the short term, the USVI government hired two contractors in December 
2017--Witt O'Brien's, LLC and Ernst & Young Puerto Rico, LLC--to assist 
the territory in planning, developing, implementing, and overseeing 
Public Assistance program projects, among other responsibilities. The 
director of the Office of Disaster Recovery told us that while 
contractor personnel had been valuable in augmenting the USVI's 
management capacity in the short term, the territory's longer-term 
vision included the establishment of the Office of Disaster Recovery to 
centrally manage all aspects of Federal recovery in the territory.
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    \18\ Prior to the Office of Disaster Recovery's establishment in 
February 2019, the U.S. Virgin Islands Territorial Emergency Management 
Agency was responsible for managing and overseeing the implementation 
of Federal recovery programs in the USVI, including the Public 
Assistance program.
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    Among other things, the Office of Disaster Recovery is responsible 
for taking on the USVI's monitoring and oversight responsibilities for 
the Public Assistance program in the long term. This includes tracking 
and reporting on the progress of projects and overseeing reimbursement 
requests for completed work to ensure compliance with applicable laws 
and FEMA policies. As of March 2019, the director of the Office of 
Disaster Recovery told us the priority is to quickly hire and train 
qualified individuals to staff the new agency. FEMA officials in the 
USVI stated that the establishment of the Office of Disaster Recovery 
and the USVI's on-going efforts to hire local residents into recovery-
related positions represented a positive step forward in increasing the 
territory's capacity to oversee recovery efforts. We will continue to 
review the monitoring and oversight of recovery efforts in Puerto Rico 
and the USVI in our on-going work.
 public assistance challenges remain in puerto rico and usvi, however 
     fema has taken some actions to improve program implementation
    Our prior and on-going work highlight the challenges with 
implementing the Public Assistance program--and the alternative 
procedures--in Puerto Rico and the USVI. In particular, our prior and 
on-going work have identified challenges related to: (1) The clarity of 
FEMA's guidance for the Public Assistance program, (2) the time and 
resources needed to transition to FEMA's new Public Assistance program 
delivery model in Puerto Rico, (3) the implementation of flexibilities 
provided by the Bipartisan Budget Act of 2018, and (4) developing 
fixed-cost estimates. FEMA has taken some actions, including issuing 
additional guidance and developing specific training, among other 
things, to improve Public Assistance implementation in Puerto Rico and 
the USVI. However, it is too soon to assess their effectiveness in 
addressing these issues.
    Clarity of Guidance.--In March 2019, we reported that officials 
from FEMA, COR3, and municipalities said they experienced initial 
challenges with the recovery process, including concerns about lack of 
experience and knowledge of the alternative procedures; and concerns 
about missing, incomplete, or conflicting guidance from FEMA on the 
alternative procedures.\19\ In addition, in our June 2019 testimony 
statement we continued to report on these challenges and preliminary 
observations from our on-going work indicate that these challenges 
continue.\20\ For example, officials from Puerto Rico's government 
agencies told us they did not feel they had sufficient guidance on the 
FEMA Public Assistance program and where they did, written and verbal 
FEMA guidance was inconsistent or conflicting. For instance, officials 
from one agency expressed their desire for more FEMA guidance 
communicated in writing as FEMA officials would frequently interpret 
existing guidance differently. Similarly, officials from two agencies 
described situations where they had initially been directed to follow 
one interpretation of a policy, only to be directed to follow a 
different, conflicting interpretation in the subsequent months. Puerto 
Rico agency officials also stated that the lack of sufficient 
instruction led to a ``back and forth'' with FEMA for clarifications, 
which led to delays in the phases of project development. For example, 
officials from one Puerto Rico government agency stated that 
conflicting verbal instructions from several FEMA officials contributed 
to delays in opening the bidding process for recovery-related 
contracts. FEMA officials in Puerto Rico stated that the agency has 
developed specific guidance for disaster recovery in Puerto Rico and 
that there are various ways, such as in-person meetings, where 
officials from Puerto Rico can obtain clarification. FEMA officials 
also reported that they developed additional training for new FEMA 
employees. We are continuing to examine this issue as part of our on-
going review of Puerto Rico's recovery.
---------------------------------------------------------------------------
    \19\ See GAO-19-256.
    \20\ GAO, Emergency Management: FEMA Has Made Progress, but 
Challenges and Future Risks Highlight Imperative for Further 
Improvements, GAO-19-594T (Washington, DC: Wednesday, June 12, 2019).
---------------------------------------------------------------------------
    FEMA's new delivery model in Puerto Rico.--In May 2019, FEMA's 
Federal Disaster Recovery Coordinator for Puerto Rico announced that 
FEMA was transitioning to using the new Public Assistance program 
delivery model in Puerto Rico beginning on June 3, 2019. Among other 
things, the implementation of the new delivery model establishes a new 
Consolidated Resource Center in Puerto Rico to support grant 
development for disaster recovery across all recovery sectors and 
geographic branches.\21\ Following the hurricanes, FEMA implemented a 
program delivery model developed specifically for Puerto Rico which 
included, among other things, a sector-based approach which coordinated 
recovery resources across the Federal interagency, private sector, and 
nongovernmental organizations to identify and complete proposed work. 
According to FEMA officials, the decision to transition from the 
initial delivery model to the new delivery model in Puerto Rico was due 
to improvements made since its Nation-wide deployment in 2017. In 
response, COR3 officials raised concerns about the scope of the changes 
and potential challenges with the amount of time and resources needed 
to transition to the new delivery model.
---------------------------------------------------------------------------
    \21\ In 2015, FEMA awarded a contract for program support to help 
Public Assistance officials implement a redesigned Public Assistance 
program, known as the new delivery model. This included a new process 
to develop and review grant applications, and obligate program funds to 
States affected by disasters; new positions, such as a new program 
delivery manager who is the single point of contact throughout the 
grant application process; a new Consolidated Resource Center to 
support field operations by supplementing project development, 
validation, and review of proposed Public Assistance project 
applications; and a new information system to maintain and share Public 
Assistance grant application documents.
---------------------------------------------------------------------------
    The Bipartisan Budget Act of 2018.--We reported in June 2019 that 
in both Puerto Rico and the USVI, FEMA and local officials have 
reported challenges with the implementation of the flexibilities 
authorized by section 20601 of the Bipartisan Budget Act.\22\ This 
section of the Act allows for the provision of assistance under the 
Public Assistance alternative procedures to restore disaster-damaged 
facilities or systems that provide critical services--such as medical 
and educational facilities--to an industry standard without regard to 
pre-disaster condition.\23\ Officials from Puerto Rico's central 
government stated that they disagreed with FEMA's interpretation of the 
types of damages covered by section 20601 of the Bipartisan Budget Act 
of 2018. In response, FEMA officials in Puerto Rico stated they held 
several briefings with Puerto Rico's central recovery office to explain 
FEMA's interpretation of the section.\24\ In addition, FEMA officials 
in the USVI told us that initially, they had difficulty obtaining 
clarification from FEMA headquarters regarding how to implement key 
components of section 20601 of the Act. Further, USVI officials stated 
that at times, the appropriate process for implementing components of 
the Act was not clear and that ensuring program participants understood 
its key components was difficult. However, FEMA officials in the USVI 
stated that they continue to move forward with developing alternative 
procedures projects. USVI officials also told us that FEMA had been 
responsive and helpful in identifying its options for using the new 
flexibilities the Act provides.
---------------------------------------------------------------------------
    \22\ GAO-19-594T.
    \23\ The Bipartisan Budget Act of 2018 authorized FEMA, when using 
the Public Assistance alternative procedures, to provide assistance to 
fund the replacement or restoration of disaster-damaged infrastructure 
that provide critical services to industry standards without regard to 
pre-disaster condition. Pub. L. No. 115-123,  20601(1), 132 Stat. 64 
(2018). Critical services include public infrastructure in the 
following sectors: Power, water, sewer, wastewater treatment, 
communications, education, and emergency medical care. See 42 U.S.C.  
5172(a)(3)(B). Section 20601 applies only to assistance provided 
through the Public Assistance alternative procedures program for the 
duration of the recovery for the major disasters declared in Puerto 
Rico and the USVI following Hurricanes Irma and Maria. Further, the 
Additional Supplemental Appropriations for Disaster Relief Act of 2019, 
which was signed into law on June 6, 2019, provides additional 
direction to FEMA in the implementation of section 20601. Pub. L. No. 
116-20, tit. VI,  601, 133 Stat. 871, 882 (2019). For the purposes of 
our report, discussion of the Bipartisan Budget Act of 2018 refers 
specifically to section 20601.
    \24\ In September 2018, FEMA issued guidance for implementing 
section 20601 of the Bipartisan Budget Act of 2018 through the Public 
Assistance alternative procedures program.
---------------------------------------------------------------------------
    Developing Fixed-Cost Estimates.--Preliminary observations from our 
on-going work indicate that as of May 2019, FEMA had obligated funding 
for 4 alternative procedures program projects in Puerto Rico and 2 
projects in the USVI. FEMA officials in Puerto Rico and the USVI stated 
that the on-going development of a ``cost factor'' for use in the 
fixed-cost estimating process has slowed the pace of FEMA obligations 
for permanent work projects. Specifically, these factors are intended 
to ensure that the costs associated with implementing projects in 
Puerto Rico and the USVI are sufficiently captured when developing the 
fixed-cost estimates for alternative procedures projects. Since 
incorporating the cost factor into the fixed-cost estimating process 
will increase the amount of funding obligated for any given permanent 
work project, FEMA officials explained that Puerto Rico and the USVI 
have an incentive to delay the obligation of individual projects until 
this factor is finalized. For example, FEMA officials in the USVI told 
us in May 2019 that obligations for permanent work projects in the 
territory were mostly on hold until the USVI-specific cost factor was 
finalized. As of June 2019, the cost factors for use in both Puerto 
Rico and the USVI had not yet been finalized.
    According to FEMA guidance, the Puerto Rico-specific cost factor is 
being developed by a third-party center of excellence comprising 
personnel selected by FEMA and Puerto Rico, through COR3.\25\ In March 
2019, we reported that while FEMA had identified and chosen personnel, 
COR3 had not yet finalized its hiring of personnel to staff the center 
of excellence, which resulted in delaying the cost estimation 
process.\26\ Through our on-going work we learned that, as of June 
2019, COR3 had identified and hired personnel to staff the center; 
however, FEMA and COR3 have not come to agreement on a cost estimation 
approach. Further, according to FEMA officials, no time line has been 
established for the completion of the center of excellence's standard 
operating procedures for developing fixed-cost estimates for permanent 
work projects in Puerto Rico. In addition, according to FEMA officials, 
the USVI-specific factor is being developed by an independent 
contractor. FEMA officials told us that territorial officials disagreed 
with the initial cost factors this contractor proposed and contended 
the factors were insufficient in accurately capturing the unique 
circumstances that influence construction costs in the territory, such 
as the limited availability of local resources and the need to import 
materials and labor. As of June 2019, these officials told us the 
contractor was developing a third and final cost factor for potential 
incorporation into the fixed-cost estimation process in the USVI. 
Despite these delays, FEMA officials in the USVI stated that they 
continue to work with territorial officials to develop alternative 
procedures projects in the territory. They added that once the cost 
factor is finalized and incorporated into FEMA's fixed-cost estimating 
process, FEMA and the USVI will be well-positioned to quickly finalize 
these projects and obligate funding. However, we reported in June 2019 
that the territory plans to take a cautious approach in pursuing 
permanent work projects using the Public Assistance alternative 
procedures program. Specifically, USVI officials we interviewed told us 
that developing fixed-cost estimates for alternative procedures 
projects that accurately incorporate the future impact of inflation and 
increases in materials and labor costs for certain projects was 
difficult. Further, these officials stated that since the territory is 
financially responsible for any costs that exceed these fixed-cost 
estimates, the USVI plans to pursue alternative procedures projects 
that do not include high levels of complexity or uncertainty to reduce 
the risk of cost overruns, especially given its already difficult 
financial situation.\27\
---------------------------------------------------------------------------
    \25\ According to FEMA guidance, as part of the alternative 
procedures process in Puerto Rico, FEMA and Puerto Rico must agree on a 
group of personnel with cost estimation expertise who will serve as 
part of a center of excellence.
    \26\ GAO-19-256.
    \27\ Under the standard Public Assistance program, FEMA will 
reimburse the USVI for the actual cost of completed work for any given 
project.
---------------------------------------------------------------------------
    As established in FEMA guidance, Puerto Rico's deadline for 
finalizing fixed-cost estimates for permanent work projects using the 
alternative procedures--and the Bipartisan Budget Act, as applicable--
is October 2019.\28\ Since Puerto Rico must use the alternative 
procedures for all large permanent work, all fixed-cost estimates for 
Public Assistance program permanent work projects in Puerto Rico must 
be finalized by this date, or, according to FEMA officials, Puerto Rico 
must request that FEMA extend this deadline on a project-by-project 
basis. In contrast, the USVI has the flexibility to pursue either the 
alternative procedures or the standard procedures on a project-by-
project basis. As the USVI's deadline for finalizing these projects is 
in March 2020, it is too early gauge the extent to which the 
alternative procedures will play a role in the USVI's long-term 
recovery strategy.
---------------------------------------------------------------------------
    \28\ FEMA, Public Assistance Alternative Procedures (Section 428) 
Guide for Permanent Work FEMA-4339-DR-PR (April, 2018).
---------------------------------------------------------------------------
    We will continue to evaluate these identified challenges and any 
efforts to address them, as well as other aspects of recovery efforts 
in the USVI and Puerto Rico, and plan to report our findings in late 
2019 and early 2020, respectively.
    Thank you, Chairman Payne, Ranking Member King, and Members of the 
subcommittee. This concludes my prepared statement. I would be happy to 
respond to any question you may have at this time.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    Mr. Payne. Thank you, sir.
    I would like to thank all the witnesses for their testimony 
and remind each Member that he or she will have 5 minutes to 
question the panel.
    I will now recognize myself for questions.
    Mr. Marrero, could you remind the subcommittee on how many 
cost estimates are completed and how many need to be completed?
    Mr. Marrero. Well, right now, the total amount of fixed-
cost estimates agreed with FEMA is 48. Of those, only 4 has 
been obligated. So they are ready for actual work. Of the 
universe, even though, initially, it was estimated between 
70,000 to 90,000 sites, had a meeting 2 days ago with Jonathan 
Hoyes with FEMA who is the temporary FCO. He told me that that 
will be revised to 50,000. But the number--he just gave me this 
2 days ago--essentially it should look around 5,000 to 7,000 
projects. So, once we have those projects, we will determine if 
we aggregate the fixed-cost estimate into a single PW. So we 
are talking about thousands of estimates that have to be 
developed and agreed by October--deadline. We only have 48 
agreed, 4 of those obligated.
    Mr. Payne. Thank you.
    I understand that if all cost estimates are not completed 
by October 2019, FEMA will evaluate whether to allow extensions 
for remaining cost estimates on a project-by-project basis. Yes 
or no, has FEMA shared the criteria for this review with COR3?
    Mr. Marrero. They responded to our request for extension, 
including a general overview of how it would be considered, and 
we are already working on that. Yes, the answer is, yes, sir.
    Mr. Payne. OK. Thank you.
    What are Puerto Rico's options, should any cost estimates 
extend--extensions be denied?
    Mr. Marrero. Appeal, sir. We will have to appeal.
    Mr. Payne. Let's see. By October 2019, how many cost 
estimates do you predict will be remaining?
    Mr. Marrero. Thousands, sir. To give you some perspective, 
we have already submitted to FEMA 171 cost estimates that are 
ready to be agreed and signed. Unfortunately, we are still 
waiting for them to finalize. We need--right now, they haven't 
finalized what they call the industry standards and the cost 
factors which the cost factors are very important because those 
are the factors that will determine how much it costs to 
rebuild in Puerto Rico as opposed to the mainland.
    So they haven't finalized that and without that, sir, we 
not be able to agree on the cost estimate because we will be 
running--we will be facing the risk that, within the CAP grant, 
we will not be able to revise it becomes a factor. Right now, 
we are talking about thousands. We are working with our team. 
Right now, to give you some perspective, we already have 2,000 
fixed-cost estimates being developed by our team.
    Mr. Payne. OK.
    Mr. Marrero. Fortunately, we are a little bit ahead than 
FEMA. That is why we have been requesting to allow Puerto Rico 
licensed engineers, as it happened in New York, after Sandy, 
and New Jersey, to expedite the process.
    Mr. Payne. OK.
    Mr. Marrero. Our reasoning is, if licensed engineers are 
willing to put the licenses at risk to certify the cost 
estimates, that should have some weight.
    Mr. Payne. Thank you.
    Mr. Currie, according to information provided to the 
committee from staff from FEMA in May, only 32 percent of its 
Public Assistance work force are deemed qualified for the jobs. 
That is really a shockingly low number. This is especially 
troubling in Puerto Rico and the UVI, which are using the pilot 
section 428 Public Assistance programs, which has never been 
done before on this scale.
    Can you discuss how the lack of qualified workers may 
hinder the recovery process in the territories, and has GAO 
seen FEMA do anything to address this issue specifically in 
Puerto Rico and the Virgin Islands?
    Mr. Currie. Yes, sir. Thanks for your question.
    So we have reported on a couple of different occasions that 
FEMA has been stretched thin, frankly, since the 2017 
disasters. I think Mr. Gaynor at the last hearing testified 
they had 600 open disasters they were managing. So that is 600 
disasters they have to spread their people across to manage 
response and long-term recovery. What we see happens oftentimes 
in recovery is they bring in their most qualified people with 
expertise and experience right after the disaster. Over time, 
they transition out, and they try to rely on temporary and 
local hires.
    For example, in Puerto Rico, most of the work force there 
is local hires now. They have hired almost 2,000 people locally 
to manage the recovery. So these are people that are new to 
FEMA, first of all, and are being trained on FEMA processes to 
begin with, and on top of that, they are implementing these new 
procedures, which they have to be retrained on and the existing 
FEMA staff have to be retrained on, too, and they don't have 
experience doing this because it has not been done.
    So the work force challenges are a huge issue. I know the 
way it plays out in recovery is that there is, a lot of times, 
folks don't know what guidance to give people at the territory 
level, or they give different guidance, and they have to go up 
to headquarters to get a final resolution, which causes delays 
after delays.
    Mr. Payne. OK. Thank you.
    My time has expired.
    We will now have the Ranking Member, Mr. King, at 5 minutes 
of questioning.
    Mr. King. Thank you, Mr. Chairman.
    Gentlemen, again, I want to thank all the witnesses for 
your testimony.
    Mr. Currie, in your testimony you pretty much laid out the 
fact that Puerto Rico is unique because of its total 
devastation. Now, my district on Long Island with Sandy was 
very much devastated. But, again, upstate people were able to 
come down and assist. Mr. Payne, I know, in New Jersey went 
through it. The first week I was Chairman back in 2005, I went 
to Mississippi with Chairman Thompson at the time to see the 
terrible damage of Katrina. It does seem that Puerto Rico is a 
different level for a number of reasons, including the lack of 
infrastructure and the fact that the entire area was decimated.
    So I ask these questions in that tone to try to avoid this 
in the future or to mitigate future issues, and in that 
context, I saw that earlier this week the IG issued a report, 
saying that FEMA had reimbursed a company--I believe it was 
Cobra Acquisitions--for millions of dollars in contract costs 
that officials in Puerto Rico had ordered based on unsound 
information. Also, just yesterday, there was a story I guess in 
The Washington Post that the FBI arrested 6 people, including 2 
senior officials in the Governor's administration, for 
illegally directing Federal funding to politically-connected 
contractors.
    I am not trying to assess blame here. When you have 
millions of dollars going out, things like this can happen. It 
is wrong. We have to stop it. I want to know, especially 
considering how weakened and inadequate the infrastructure is 
in Puerto Rico, looking at the entire, looking at the totality 
of contract procedures, rebuilding infrastructure, training 
local officials, what position are we in if, God forbid, 
another hurricane hits Puerto Rico of this magnitude anytime in 
the next several years?
    So, I guess, Mr. Marrero, I will go first with you and then 
Mr. Currie.
    Mr. Marrero. Well, thank you, sir, for the question.
    First of all, since the hurricanes hit, we knew that, 
because of the magnitude and the scope of the devastation, that 
we will have to do things differently, that we will have to 
follow best practices, that we could not reinvent the wheel. 
That is why we have to make sure that we study what other 
States did in the past.
    I avail myself of this opportunity to thank you because of 
the help of NYPA, LIPA, and the people of New York that helped, 
myself, one of the first trips I did after the hurricane was to 
meet with Governor Cuomo and his staff and see how we could 
learn of the lessons learned that you had after Sandy. By the 
way, what we did was that we created a centralized oversight 
authority. We designed the controls, the policies based on the 
ERP, which are quite strict. We made sure we had stricter 
controls. We made sure that we brought technology. Actually, 
the technology that we are using, it was used in New Jersey 
after Sandy, the disaster recovery system. That is the only 
system that has been used for this scale of disaster. It 
brings, not only visibility, transparency, and accountability 
and, most importantly, sir, has supported many, many audits.
    So what I am trying to say is, since Day 1, we knew this 
would be one of the most audited process in the Nation, and 
that is why to make sure that not only we--the money flows to 
the people it has to go, we want to make sure that we can 
reciprocate the commitment of the Federal Government with 
transparency, accountability, and full compliance. That is what 
with have done. That is why we feel we are in a better position 
that, if that something happens tomorrow, we not only are we 
going to be able to withstand the impact once again because, as 
the USVI and Puerto Rico, we are resilient, but we will make 
sure we are able to bounce back in a quicker fashion because we 
have the structure, we have the policies, we have the 
knowledge, and we are collaborating with the Federal agency to 
make sure that we fine-tune and any tweaking we have to do to 
make sure we have the best controls in place, we will do that.
    Mr. Currie. Yes, sir. From a response perspective, I mean, 
I am very concerned about still about if a large-category 
hurricane hit Puerto Rico again because, as we talked about, 
the permanent work repairs have not been done yet. So the 
repair to the electric grid, for example, has not been done. So 
those things would happen again. I think the difference is----
    Mr. King. Who is going to do that?
    Mr. Currie. Well, who is going to repair the 
infrastructure?
    Mr. King. Yes.
    Mr. Currie. Well, I think--well, eventually it is going to 
be done, Puerto Rico is going to do it using FEMA dollars, 
Federal public assistance dollars. So hopefully we don't have 
another situation like that before that stuff can be rebuilt in 
a resilient way.
    I think the unfortunate side effect when one of these large 
disasters happen--and every State represented here knows this--
is that everyone company gets pretty familiar and pretty good 
at managing recovery and managing these programs.
    So I do have a lot more confidence, if something like this 
happens, that Puerto Rico would be in a much different position 
in terms of their ability to manage the response and the 
recovery. But they are still going to need extensive Federal 
support if another large hurricane or earthquake was to happen.
    Mr. King. Thank you.
    Mr. Chairman, if I may just ask unanimous consent to 
introduce into the record for the American Maritime 
Partnership.
    Mr. Payne. Without objection.
    [The information follows:]
             Statement of the American Maritime Partnership
                             July 11, 2019
                    hurricane maria and puerto rico
Jones Act Industry Relief Efforts
    The Jones Act fleet has been essential to the recovery effort in 
Puerto Rico. In the immediate aftermath of Hurricane Maria, Jones Act 
carriers promptly delivered thousands of containers of relief and 
commercial cargoes. (Unfortunately, due to damaged surface 
infrastructure, many of those cargoes could not move inland promptly). 
Jones Act carriers also added vessels beyond their regular service, 
staged critical supplies in San Juan for immediate delivery when the 
port reopened, and acquired additional containers and chassis to 
support increased deliveries to the island. In the 6 months after 
Hurricane Maria, Jones Act carriers delivered well over 100,000 
containers of cargo, including infrastructure materials essential for 
rebuilding and repairing damaged bridges, roads, and the electrical 
grid.
    There is wide-spread agreement that the Jones Act did not impede 
the Puerto Rico recovery effort. The U.S. Committee on the Marine 
Transportation System, an interagency group, highlighted the 
``reliability of U.S. domestic shipping services despite the worst of 
conditions'' while FEMA called the response ``the largest sea-bridge 
operation of Federal disaster aid in FEMA history.'' Jones Act carriers 
continue to be dedicated to the needs of Puerto Rico--Jones Act 
carriers provide reliable, regular service to the island and the 
carriers have invested more than $1 billion to support their operations 
there, including building 4 new LNG-powered container ships 
specifically for the Puerto Rico trade.

    Mr. Payne. The Chair now recognizes the gentleman from 
Mississippi, the full committee Chair, Mr. Thompson.
    Mr. Thompson. Thank you very much.
    Mr. Currie, based on your analysis, do you think FEMA's 
decision to change its policy for a fixed-cost estimate added 
to Puerto Rico and the Virgin Islands' dilemma?
    Mr. Currie. I think the decision to use the alternative 
procedures on such a large scale has had a massive impact on 
the speed of the recovery and has slowed that.
    Mr. Thompson. And that--well, you answered it.
    Mr. Marrero, the hospital at Vieques.
    Mr. Marrero. Yes, sir.
    Mr. Thompson. Just tell me the status of it.
    Mr. Marrero. It is as you saw it. It is as Maria destroyed 
it. We are still waiting for the permanent work to be made. So, 
right now, the 10,000 residents of the island of Vieques are 
still receiving medical treatment in temporary facilities. We 
just got 2 days, a couple--2 days ago the final determination 
memo or determination letter from FEMA that they have finally 
decided that this hospital entails a full replacement 
particularly because of the BBA fix that this hallowed body 
approved. So thank you for that. However, they haven't 
finalized the cost factors. So we don't have a cost estimate. 
So, right now, we don't know much.
    Mr. Thompson. So, for 2 years almost, they have been 
without health care. Now, is it FEMA's problem? Or is it Puerto 
Rico's problem, the reason that people don't have the health 
care they need?
    Mr. Marrero. I think it is an American problem, sir. I 
think that we both have the responsibility to make sure. We 
believe that we have----
    Mr. Thompson. Is it an American FEMA problem or American 
Puerto Rico problem?
    Mr. Marrero. Sir, yes, sir. That at the time way I--we are 
in this together. We believe that we have provided every single 
document and every single cost estimate since Day 1. We had an 
estimate, original estimate, within 2 months after the 
hurricane. Unfortunately, it was now that FEMA just took the 
decision because initially it was cleared----
    Mr. Thompson. I am just trying to get the folks health care 
on the island.
    Mr. Marrero. Yes, sir.
    Mr. Thompson. That is all.
    Mr. Marrero. I thank you for that.
    Mr. Thompson. Ms. Williams, I am going call you Ms. 
Williams. I can't read that other name.
    You got a problem with medical care on Saint Croix.
    Ms. Williams-Octalien. Yes, we do.
    Mr. Thompson. So explain that problem to me as to why of, 
after all this time, we are still without it.
    Ms. Williams-Octalien. So we have received--it is number of 
issues, one being the cost escalation factors are necessary for 
us to determine the fixed-cost estimate. That allows us to move 
forward by getting the funds obligated. We have a problem where 
we are currently in the damaged building. Our temporary 
facilities are not up because the fixed--the furniture, 
fixtures, and equipment were not included in the PW. Therefore, 
we are not using the temporary facilities as well. So we have--
--
    Mr. Thompson. So you got----
    Ms. Williams-Octalien [continuing]. No resolution at this 
point.
    Mr. Thompson. So, Mr. Currie, is this a sampling of the 
problem we just talked about in my first question?
    Mr. Currie. The hospital in Saint Croix, which we have been 
to and I think we displayed some pictures of, is a perfect 
example of one large, complicated permanent work project and 
all the complexity that goes into it. It is just one out of 
thousands.
    Mr. Thompson. Uh-huh. But also it is because of the new 
policy that FEMA decided to implement.
    Mr. Currie. Yes, well, it is multiple things, but at both 
levels, yes. It is confusion in the steps that are necessary as 
part of the new program to get to a fixed-cost estimate before 
work can actually begin.
    Mr. Thompson. OK. So, I think the committee is concerned 
about how long it has taken to get to this point with so little 
actually in some of our minds being done. I went through 
Katrina, and I saw, well, a system like ours that at times we 
built the capacity and started moving. I am not convinced at 
this point that we are anywhere near a capacity in Puerto Rico 
or the Virgin Islands.
    Have you made some assessment of where you think they 
should be at this point?
    Mr. Currie. We haven't assessed that. It is really 
difficult for us to compare disaster to disaster, but I will 
tell you this. So, in other States, where the traditional 
public system's model is used, they estimate--they go project 
by project basically which in some ways is easier because you 
are just doing one project, approving it, and moving on. The 
goal of going to this process was to wrap all of this up 
together to try to get to general agreement. So, years down the 
road we are not going back and forth because, as you know, they 
are still obligating projects in Mississippi and Louisiana 
after Katrina. So that was the goal.
    So I don't think the goal was wrong to try to make this 
more efficient. The problem is, is no one has done this before. 
Then you overlay this on top of recovery, both of these places, 
that is more complicated than any recovery in our history.
    Mr. Thompson. Let me give a good example. We talked to a 
number of mayors in Puerto Rico, and they are challenged 
because they don't have the money to front the cost. So they 
are kind-of in a Catch-22 situation, and they are saying: Look, 
we just need to get city hall fixed and the streets fixed and 
some other things, but the process is so cumbersome, and now 
they are requiring two evaluations or inspections of the same 
project. That duplication of effort is just adding to the load.
    But this is part of what I think we have to eventually get 
to FEMA that this probably was not a wise choice to implement 
this in a situation so far away from the mainland.
    I yield back, Mr. Chair.
    Mr. Payne. Thank you, Mr. Chairman.
    The Chair now recognizes the gentleman from Texas, Mr. 
Crenshaw.
    Mr. Crenshaw. Thank you, Chairman Payne and Ranking Member 
King, for holding this hearing.
    Thank you all for being here.
    As a Representative of Kingwood, Spring, and Houston, I am 
also familiar with hurricanes and the struggles of disaster 
recovery. As we meet today, the Gulf Coast is bracing for rain 
and wind of what will likely become Hurricane Barry.
    In 2017, Hurricane Harvey devastated many of the 
communities I represent. We continue to rebuild and guard 
against future events through mitigation efforts. In Texas, we 
proactively approached some of the problems we frequently faced 
in disaster recovery. As a response transition to recovery, 
Texas Governor Greg Abbott appointed Texas Land Commissioner 
George P. Bush to be the lead for State efforts in coordination 
with FEMA on short-term disaster housing. Then, in my limited 
time, I want to focus on housing.
    In a recent political article, Commissioner Bush 
highlighted a few of the issues he encountered. I ask unanimous 
consent to enter into the record this article from Politico 
entitled ``What We Learned in Texas After Harvey.''
    [The information referred to follows:]
       Article Submitted For the Record by Honorable Dan Crenshaw
            What we learned in Texas after Hurricane Harvey
7/11/2019, POLITICO, The Agenda
            By GEORGE P. BUSH / 07/02/2019 05:05 AM EDT
    Texas Land Commissioner George P. Bush has two fixes Washington 
should make before the next superstorm.
    The 2019 hurricane season in the Atlantic is underway and with it 
brings the threat of dangerous winds, storm surges and flooding to many 
coastal States. But hurricanes are not the only natural disasters that 
devastate American communities. President Dwight D. Eisenhower issued 
the first Federal disaster declaration in 1953 after a tornado 
devastated four counties in Georgia. Since then, more than 4,000 
disasters have received this designation. This year, 44 Federal 
disaster declarations have been issued for 26 States and one U.S. 
territory. Since June 1, Louisiana, South Dakota, North Dakota, Idaho 
and Vermont have all received major disaster declarations. Responding 
to and recovering from disasters concerns everyone elected to protect 
and serve others.
    But as I discovered leading the housing assistance mission after 
Hurricane Harvey, even though we are a nation of innovation, the 
Federal disaster recovery process remains outdated, cumbersome and 
costly.
    Hurricane Harvey was the second-largest storm in U.S. history, and 
it devastated my home State of Texas. About 30 percent of Texans were--
directly affected, and more than 750,000 people evacuated their homes. 
The scale of the disaster recovery was made even worse by the fact that 
two other major hurricanes struck American territory within 39 days: 
Harvey was followed 5 days later by Irma hitting Florida and then Maria 
decimating Puerto Rico.
    I was in Houston mucking out homes with a group of military veteran 
volunteers, when I got a call from Texas Gov. Greg Abbott. The Governor 
said he was tapping me and my agency, the Texas General Land Office, to 
partner with the Federal Emergency Management Agency on the short-term 
disaster housing mission. Traditionally, FEMA had sole responsibility 
for temporarily housing displaced residents, but the scale of this 
disaster was enormous. In addition to the deadly storms, wildfires 
burned more than half-a-million acres of California in 2017. With 
available Federal recovery resources stretched extremely thin, this 
operation called for more direct oversight at the State level and we 
were eager to serve. For the first time in history, a State agency 
would partner with FEMA in carrying out a disaster housing mission. 
Over the next 2 years, my State agency and FEMA would help more than 
60,000 Texans return home after the storm through assistance programs 
that provided both temporary housing units and repairs.
    As I tackled this new mission, I quickly encountered two problems 
that impeded the short-term recovery process.
    FIRST. WE LEARNED that Federal law limits FEMA to providing 
``temporary'' and travel trailers predominantly used by FEMA after 
natural disasters are extremely costly. After purchasing the unit, 
transportation, installation, recertification, other administrative 
costs, disconnection and removal, the costs per unit typically incur 
between $125,000 to $200,000.
    A plethora of alternative housing options are available now that 
were not on the market when the Stafford Act passed in 1988, replacing 
the Disaster Relief Act of 1974. Some of these innovative housing 
solutions were developed in Texas, where we have a history of repeat 
disasters such as hurricanes, tornadoes, wildfires and floods. These 
options include stackable shipping containers, small modular homes and 
expandable ``core unit'' housing utilized under an initiative called 
RAPIDO, a temporary-to-permanent housing strategy that provides a safe, 
``core'' home that is customizable to meet the family's needs for about 
$60,000. Owners can add on to these units as needed later on. An 
Austin-based 3D home technology company, ICON, can print sturdy, 600- 
to 800-square-foot homes in less than 24 hours for $4,000. These homes 
can be placed quickly and left permanently for a fraction of the cost 
of a temporary FEMA trailer. They can also withstand subsequent 
hurricane or flooding events.
    Even though many of these innovative options are cheaper, more 
durable and quickly deployable, ``permanent'' housing is ineligible 
under the Stafford Act. The manufactured housing units and travel 
trailers traditionally utilized by FEMA sit on axles, meaning you can 
haul it away after use--therefore passing the ``temporary'' housing 
test. After use, FEMA refurbishes former temporary housing units in 
good enough condition and the General Services Administration auctions 
them off, but typically for a small fraction of their cost. We can 
agree that the current disaster recovery process is not cost-effective.
    SECOND, FEDERAL LAW prevented coordination with local officials to 
help displaced residents. With nearly 1 million applications for FEMA 
assistance submitted, county judges, mayors and other local leaders 
asked repeatedly for information on who needed help. FEMA controlled 
the application process and provided my team the names of only those 
deemed eligible for short-term disaster housing assistance. The Federal 
assistance application process is daunting. It requires survivors to 
submit the same onerous application whether they need simple financial 
assistance, a small business loan, or short-term housing. Further, we 
had no information on who was found ineligible; therefore, community 
leadership had no ability to explain to constituents why.
    Additionally, we were prohibited by the Federal Privacy Act of 1974 
from providing any ``personally identifiable information'' of eligible 
applicants to anyone outside the program. Local leaders trying to 
coordinate volunteer groups and potentially distribute donated 
resources were baffled by the unnecessary barriers to helping survivors 
at a time when expediency was critical. County judges and mayors from 
affected areas all along the Texas coast, such as Rockport/Fulton, 
Kingwood, Dickinson, Port Arthur and more, were calling me daily asking 
for help connecting those who needed help with the volunteer 
organizations that were showing up on the doorsteps of their county 
courthouses and city halls. I personally attended more than a hundred 
hearings, briefings, meetings and events in affected communities to 
relay information and answer questions, but I couldn't provide a simple 
list of names and phone numbers for those needing help. During this 
time of crisis, Federal privacy laws choked the flow of information and 
recovery resources to those in need and there was nothing those of us 
on the ground could do to fix it.
    There are two relatively easy steps Federal leaders could take to 
drastically improve the short-term disaster housing mission:
    1. Congress should amend the Stafford Act to remove the word 
``temporary'' from the requirements, therefore allowing cost-effective, 
permanent resources to house displaced residents.
    2. FEMA should amend the application for assistance to allow people 
to voluntarily make their data available shareable with their State and 
local government authorities.
    The lessons Texas learned in the aftermath of Hurricane Harvey can 
help all States facing natural disasters. Congress should learn these 
lessons from Texas now, before catastrophic events hit Americans in 
other parts of the country. On the 1-year anniversary after landfall, I 
released a lessons-learned report, Hurricane Harvey: Texas at Risk, 
with policy recommendations for local, State and Federal officials to 
improve the disaster recovery process.
    We can't stop natural disasters from happening, but we can innovate 
the way in which we respond and rebuild.
George P. Bush is commissioner for the Texas General Land Office, the 
        State agency tasked with leading the disaster recovery housing 
        mission after Hurricane Harvey, the second-most destructive 
        storm in American history.

    Mr. Crenshaw. I want to focus today on the limitations of 
providing only temporary solutions. These are usually travel 
trailers because their axles and wheels make them temporary, 
and they fit FEMA's criteria. In my view the focus on temporary 
housing without consideration for long-term benefits wastes 
taxpayer dollars. On the one hand are these trailers which 
carry an incurred unit cost of $125,000 to $200,000. On the 
other hand, we actually have more modern solutions, more cost-
effective solution. I brought some of those solutions with me 
today. It is like show and tell.
    One solution is a 3D-printed structure. It is quick. This 
600-, 800-square-feet structure can be made in less than 24 
hours. It is permanent, water- and corrosive-resistant and 
cost-effective, sometimes as little as $4,000 per unit. There 
is a company called Genesis Dimensions in Houston that makes 
these things. I think they pull a truck out there. All of a 
sudden are you creating a strong structure.
    If FEMA is still required to abide by the conditions of the 
1988 Stafford Act, when 3D printing, small modular homes, and 
expandable, core unit housing wasn't a reality, these 
developments could be temporary to permanent transition options 
for families devastated by the storms, looking to return to 
some sense of normalcy, if we allow it.
    So, in Houston, our recovery has been incredibly 
frustrated, as yours has, by such restrictions and unnecessary 
and unreasonable burdens. In my limited time, that is what I 
want to get at both for Mr. Marrero and for Ms. Williams.
    Can you speak to the policies and rules specifically 
dealing with FEMA that slowed or hindered efforts when trying 
to provide short- and long-term housing solutions?
    Ms. Williams-Octalien. Well, one of the very first issues 
that we have had was the STEP program where the lack of 
guidance in the beginning of the program has us to a point 
where our contractors are unable to be paid on a timely basis 
when we consistently ask for clarifications within the PWs. 
Therefore, it would guide exactly how we would administer the 
program. We continue to have those kinds of assistant issues.
    We also have issues we the lack of capacity and resources 
there to manage the STEP program and housing in general where 
the FEMA resources on the ground were very unfamiliar with the 
building technologies and the construction processes in the 
Virgin Islands, and we spent an inordinate amount of time going 
back and forth on how do we build resiliently here in the 
territory.
    Those concerns continue to hamper us as we get to this 
point where we still have over 3,000 families that are without 
permanent housing for our upcoming storm season.
    Mr. Marrero. I will only to add the fact that, even though 
we were able to deliver what has been the largest temp program 
in the Nation, it was--we spent $1.2 billion, along with FEMA, 
and we helped 108,000 families. Unfortunately, it was just 
temporary repairs. Even though we requested permanent 
reconstruction homes during the emergency phase as it was done 
in Louisiana, because we thought it would make sense to make 
sure that people were able to have a not only safe place to 
protect their family but in order to weather the storm. 
Unfortunately, that was denied. So, that was why we would only 
end up with temporary fixes with houses.
    Today, we still have 20,000 homes with blue tarps. We still 
have 20,000 families waiting for a decent housing solution. 
What we are going to do is that we are going to use the CDBG 
funding that is already available to help them repair in a 
final way and in a permanent way their homes. But definitely 
the policies and the restrictions and the denials to several 
requests that we made during the response phase. Unfortunately, 
it was the reason why today we still have many families 
without.
    Mr. Crenshaw. If I may conclude, you know, in Texas, we 
have a very long lessons learned report from the GLO office, as 
I think both Puerto Rico and the U.S. Virgin Islands have 
recently set up these coordination offices to deal with 
disaster recovery in particular. I hope we can expect a very 
detailed lessons learned report so that we can fix a lot of 
these issues going forward.
    Thank you.
    Mr. Payne. Thank you.
    The Chair now recognizes the gentlelady from New York, Ms. 
Yvette Clarke.
    Ms. Clarke. Thank you very much, Mr. Chairman.
    I thank our Ranking Member.
    I thank our panelists for bringing your expertise to bear 
today. As a Member of the subcommittee and the co-chair of the 
Congressional Caribbean Caucus, I have been dismayed by the 
White House's response to Irma and Maria. We all remember how 
the President demeaned Puerto Rico on Twitter.
    Today, the White House has added insult to injury. When 
this subcommittee asked FEMA to testify about their response to 
hurricanes in Puerto Rico and the USVI, they refused to even 
send a witness. This hearing isn't the first time that FEMA has 
refused to show up. When Irma and Maria made landfall, FEMA 
also didn't show up. They weren't prepared.
    Though the storms were nearly 2 years ago, the recoveries 
for Puerto Rico and the U.S. Virgin Islands essentially are 
still and remain at a beginning stage. We are talking to the--
we are talking about U.S. citizens here, and we cannot allow 
our fellow Americans to languish any longer.
    Having said that, I find it interesting that just about 
everyone who sat on this panel today have had and have been 
victims of hurricanes, extreme weather events. It would seem to 
me that, given the decades-long experience that we have had 
with this, that there would be some level of best practices. 
There would be some level of adjustment and modification of 
policy and procedure that enables us to expedite things. I 
don't adhere to the idea that, oh, this is new. It is a new 
environment, but it is not new in terms of what has taken 
place.
    So I would like to ask Mr. Marrero and Ms. Octalien, as we 
enter the heart of hurricane season once again, another storm 
could hit both Puerto Rico and the U.S. Virgin Islands at any 
time. Not only could another hurricane devastate the islands, 
but it could set back existing recovery efforts.
    If another hurricane were to strike your territories 
tomorrow, do you believe that the administration has set aside 
the necessary resources to ensure that we do not see a repeat 
of what has occurred previously?
    Ms. Williams-Octalien. Well, one of the very first things 
that we must acknowledge is that we have really built some 
capacity in our understanding. The lessons that have been 
learned from Irma and Maria, there was never a time where we 
believed that, on our islands or in our region, that the entire 
region would be wiped out, because we normally help each other.
    We are at the point now where we have built in a lot of the 
practices, but our infrastructure is so vulnerable that, if we 
are hit with another storm, we will know what to do, but it 
will still cost a lot because we are not ready with our 
infrastructure because a lot of the permanent work has not been 
done. Everything is temporary. Everything is bandaged up, and 
we are just very fragile.
    Mr. Marrero. I will definitely have to second that, ma'am. 
That is our biggest fear. This is the second hurricane season 
that we are entering, both USVI and Puerto Rico, the second 
hurricane season without no permanent work being done. So 
landslides that were created by the storm are still waiting to 
be fixed. Roads waiting to be fixed. Schools, that are shelter 
of last resort for the most vulnerable families in Puerto Rico, 
are still waiting to be rebuilt.
    Not only that, we are prone to earthquakes as well. So we 
think that, without getting into the debate of climate change, 
but the reality is that we are facing more frequent and 
stronger natural disasters. So that is our biggest fear, ma'am. 
If something happens, even though we have made some progress--
and, as I agree with Ms. Williams, we are resilient and we will 
help each other, as we have done in the past and we will do it 
every single day, the same way that we did after Irma. When 
many American citizens needed to return to the mainland, we 
served--from Puerto Rico, we opened our doors without thinking 
that we were in the middle of a fiscal and economic crisis. We 
helped them because that is what we could. Unfortunately, that 
is our biggest fear. If something happens, we have to be fully 
cognizant that the challenge will remain pressing.
    Ms. Clarke. Very well. Can you discuss the disparities 
between how Puerto Rico and the USVI have been treated, in 
terms of recovery funding, compared to other places that have 
been hit by hurricanes? Have you been able to do that analysis?
    Ms. Williams-Octalien. Well, there are some concerns that--
I am not sure if we can actually substantiate them, but we are 
concerned that the fact that we do not have the money. Typical 
States are able to pay for all of their work and then fight 
with FEMA for reimbursement if there is any discrepancy. We are 
unable to do that because we cannot pay for millions or 
billions of dollars' worth of projects up front; and if there 
is a concern, then we spend months fighting back and forth with 
FEMA.
    So we are very, very vulnerable. We are unable to move a 
lot of our projects forward because we do not have the cash. I 
think on that level, then we--and there are some concerns with 
our financial solvency that we are not given the benefit of the 
doubt.
    Ms. Clarke. Absolutely.
    Ms. Williams-Octalien. I think we are not given the benefit 
of the doubt upfront. I think there are just some concerns that 
going right off the bat that we are doing things illegally or 
there is some cloud of wrongdoing. That is not where we wanted 
to be. We want to be given the benefit of the doubt that we are 
doing everything that we need to do to manage our Federal 
funding, and that way we can move our projects forward.
    Ms. Clarke. Very well. I accept what you have said.
    Mr. Chairman, I yield back. Thank you.
    Mr. Payne. I thank the gentlelady. It is pretty interesting 
how in dealing with the territories and attempts through this 
Nation to support, while these are Americans, but any type of 
aid, that there is some suspicion always around them receiving 
funding. So I find that interesting. I remember a little 
company in the early 2000's by the name of Halliburton that did 
pretty well around the world in terms of getting contracts and 
what have you, but that is another day.
    It also would have been great if FEMA was here, a clear 
example of the questions that Mr. Crenshaw posed to be here to 
help. But here we are.
    The Chair now recognizes the gentleman from Texas, Mr. 
Green.
    Mr. Green. Thank you, Mr. Chairman.
    I thank the witnesses for appearing.
    I thank the Ranking Member as well.
    Mr. Chairman, FEMA's absence from this hearing is further 
evidence of how the chief executive officer of the United 
States, how the President has corrupted the political process. 
I say this after having given much thought to it because we now 
see that the President has encouraged witnesses not to appear 
before other committees. He has encouraged persons not to 
respond appropriately to subpoenas. He has refused to cooperate 
himself.
    This level of disrespect is contagious, and it is infecting 
the body politic in the United States of America. This is not 
something that we should take lightly, having a President who 
is now making the acid test for the success of the process be 
whether you suck up to him, whether you kiss up to him, whether 
you give him the impression that you like him. If you don't and 
you are someone other than Putin, you don't get respect.
    This is not a good day for our country. It is a sad day 
when we see this kind of disrespect. This President went to 
Puerto Rico and for some reason decided that he would just toss 
paper towels out to people, sort-of like being in a basketball 
arena and where they throw out those small rubber balls and 
people are grasping, trying to catch a rubber ball. These are 
human beings. It is not a game. Why would you do such a thing? 
Then to imply that Puerto Rico is not a part of our country, 
that these are not citizens in some way in need of the same 
respect that other citizens get.
    It is a sad day for our country. I believe that if we don't 
take some sort of affirmative action, show the President that 
there are some guardrails, it won't get better. He seems to 
take advantage of any person or entity that will not stand up 
to him. We have to stand up to the President. We cannot allow 
him to believe that he can do all of these things with 
impunity.
    Nobody sitting in that seat--we didn't ask that you send us 
the top person. Send us a witness. Send someone. A clarion call 
for help from Puerto Rico and the Virgin Islands, unanswered. 
It is a sad day for our country. So my hope is that this 
Congress will get a backbone and stand up to this President. 
Political expediency is no longer the order of the day. When it 
comes to helping these countries, there has to be a moral 
imperative to do so.
    We don't just disregard other places. Made the comment that 
Puerto Rico is getting too much help. Texas didn't get too much 
help. I am from Texas. We fought hard and made demands. It took 
us a while, but we weren't disrespected to this extent.
    So, Mr. Chairman, I thank you for allowing me to make these 
comments, and I have but one question to the Representatives 
from these two great, great, representing great bodies of 
people, great, great places to live.
    Do you believe that you are an American entitled to the 
same benefits, a citizen entitled to the same benefits and 
rights as other citizens?
    Mr. Marrero. Yes, sir. That is my belief under the same 
U.S. Constitution that applies to every corner of the island of 
Puerto Rico.
    Mr. Green. Ma'am.
    Ms. Williams-Octalien. Yes, we do. We are proud citizens of 
the United States.
    Mr. Green. I am proud to be associated with you as 
citizens.
    I yield back the balance of my time. Thank you.
    Mr. Payne. Thank you. We will just quickly want to ask one 
more question, a second round to the panel, but we won't be 
very long.
    Mr. Currie, I understand that the GAO is currently working 
on reports surrounding recovery in Puerto Rico and the USVI. 
What are the biggest recovery challenges in the USVI and Puerto 
Rico, if you can briefly answer that?
    Mr. Currie. The biggest recovery challenges are dealing 
with the obstacles to getting to the fixed-cost estimates and 
agreements about permanent work projects because, until we get 
to that point, we can't actually start moving forward with the 
hard work of rebuilding those projects.
    Mr. Payne. Thank you.
    To Mr. Marrero and Ms. Williams-Octalien, I appreciate you 
really appearing here before us today in your official 
capacities, but I recognize that you are both survivors of 
these historic hurricanes.
    Putting aside your official roles, can you talk about your 
experience as a survivor, and what are some of the challenges 
people are still experiencing in their everyday lives and 
yours?
    Ms. Williams-Octalien. So, as we navigated our way through 
recovery, my family was one of the last families to receive 
power, and we did not get power until January. You know the 
storm was in September. Just the overall challenges that we had 
with keeping our food preserved.
    My mother is bedridden, and the challenges were making sure 
that we have electricity to operate the bed, the hospital bed, 
to move her around. Even now, you know, a year and a half 
later, there are concerns with the hospital. We recently had to 
take her into the hospital, and I saw first-hand just the 
overall challenges that we have with health care.
    I stood there and I said: You know, we are responsible for 
this. We are responsible for the fact that people cannot get 
good health care on our island because we are unable to 
navigate through the process so that we can rebuild our 
hospitals.
    So the recovery is real. I worked at FEMA at the time 
during the storm, and, you know, everyone operated as if we 
were recovered. To realize that I still didn't have power, but 
every day we were out there for 12 hours, 13 hours, making sure 
that other families are recovering and that we are bringing 
relief to those who really need it.
    So this is the first time that I would say every single 
generation in the Virgin Islands understands the damage and the 
hardships that storms bring, and we no longer approach just the 
news that a storm is bearing down by just apathy. It is really 
very concerned. We mobilize.
    The other side of that, there is so much psychological 
angst that is associated with the storm and overall recovery 
that just the mention of it is hurricane season brings a lot of 
stress. So we are really working diligently to be able to move 
forward and get to recovery, because it is not really about 
processes, procedures. It is really about people.
    Mr. Payne. I am sure that that psychological angst is 
something that really hasn't been addressed. We can't even get 
the medical issues addressed, forget the psychological impact 
that it has had on an entire country--territory; I am sorry.
    Mr. Marrero.
    Mr. Marrero. Yes, Mr. Chairman. Well, as a survivor, I had 
to wait 90 days for the energy to be restored at my home. I 
live in San Juan. I don't live in Vieques. I don't live in 
Mayaguez or Patillas. I live in San Juan. It was almost 90 
days. I had to go--as any other Puerto Rican, I had to go to a 
gas station, buy gas for the generator, the emergency generator 
that I have in my place.
    I saw many families and friends left the island, the island 
that we love and that we wanted to live until our last day. I 
saw family and friends also leaving the island because they 
weren't able to get the medicines that they needed for their 
children. Today, we still see, as I said, 20,000 families on 
their blue roof, because they were denied benefits because they 
didn't have title or they live in a flood-prone area.
    We still see 300,000 children. I have an 8-year-old kid who 
goes to private school and have many, many activities and many 
recreational time to do. Unfortunately, that is not the same 
case for 300,000 children that goes to public schools today; 
1,000 schools are still waiting to be repaired with no 
recreational facilities. People forget all that.
    But this playground area, simple as it can be for these 
children, sometimes is the only recreational facility that 
community will have miles by miles. Not only that, those are 
the same children that they see the school as the shelter of 
last resort. Those are the same children that they go to homes 
with blue tarps, people that are still waiting. We have 45 
percent of the people of Puerto Rico on the SNAP program. We 
are talking about 1.3 million American lives that depend on 
this. That is the problem.
    Unfortunately, the hurricanes will hit worse to the most 
vulnerable. That is a reality. Unfortunately, 2 years after 
Maria, those same people are in the same vulnerable position as 
they were since Day 1.
    Mr. Payne. Thank you. Thank you. I will turn to the Ranking 
Member of this subcommittee.
    Mr. King. I have no further questions other than I am sure 
Ms. Clarke would agree, in New York, even though we had a 
better infrastructure and we had more resources available, our 
districts are still going through recovery. So I can only 
imagine what is happening in Puerto Rico and the Virgin 
Islands.
    Again, I thank you for your efforts, and I appreciate your 
testimony here today. Thank you very much.
    I yield back.
    Mr. Payne. Thank you, sir. The gentleman yields back.
    The Chair recognizes the gentlelady from New York, Ms. 
Clarke.
    Ms. Clarke. Yes, I would like to drill down a little bit on 
the idea of the impact of population loss. Mr. Marrero, even 
before Hurricane Maria, Puerto Rico was experiencing a 
population decline. Can you discuss how Hurricane Maria 
affected the pattern of out-migration and discuss how that 
affects the recovery process?
    Likewise, Ms. Williams-Octalien, can you tell the committee 
how Hurricanes Irma and Maria has affected population migration 
in the USVI, and what does that mean for the recovery process?
    Mr. Marrero. Thank you, ma'am. Well, as you said, before 
Hurricane Maria, we were already dealing with two man-made 
hurricanes, the fiscal and economic crisis. Both crises 
exacerbated the out-migration of Puerto Rico. So many Puerto 
Ricans, including family members of myself, left the island for 
a better quality of life. Many of them moved to Florida, to New 
York and Texas, as well as many other States.
    That is a reality. Obviously, when we were able to 
understand the scope of the magnitude of Maria--and this was 
before it slammed into Puerto Rico. I remember 48 hours before 
that, many Puerto Ricans asked--the same in the USVI. Many 
Puerto Ricans, they didn't understand what a hurricane was. 
This was the first hurricane for many of them for many 
generations.
    It was a worst-case scenario. It was a worst-case scenario. 
Because it was a worst-case scenario, people left the island 
before the hurricane hit. People were really concerned how we 
are going to be able--in the fiscal and economic situation that 
we were, how we are going to be able to recover. How long will 
it take for businesses to recover? How will the Government be 
able to address the needs of the people? So that is the 
reality.
    We have lost almost 300,000 folks from Puerto Rico after 
the storm. Many of them are returning. Obviously, many of them 
were impeded to come back because many of the students enrolled 
so they have to wait. It is really difficult to pack and go 
back. But we are seeing people going back to Puerto Rico, and 
that is the most opportunity that we have seen. That is the 
silver lining, the great momentum, the great opportunity that 
we have to rebuild Puerto Rico and the USVI in a stronger way, 
in a more resilient way, and in a more intelligent way.
    This is not only about disaster recovery; it is also about 
economic recovery. That is why when the Congress passed the BBA 
and required us to develop a disaster recovery/economic 
recovery plan, we delivered, we excelled, within the time 
frame, and we also made it consistent with the fiscal plan that 
it would certify.
    So that is the reality. We are making sure that every 
opportunity that we can seize to make those transformative 
changes, to make sure the people want to go back, we are doing 
it. We have seen people going back. But, obviously, to the 
extent that the funds are delayed, to the extent that the 
recovery is delayed, also the hope of the people are delayed.
    Ms. Williams-Octalien. We have had a similar experience, 
maybe not to the extent of Puerto Rico, but, of course, early 
on after the disaster that there are a lot of families that 
really could not deal with the situations. I mean, some 120 
days without power is not really what you want to put your 
children through and your families. So we did see some 
migration off the island.
    I think the second flow of that was our businesses, where 
your businesses were damaged and the employees were laid off. 
We still were unable to provide employment early on. We are 
seeing a resurgence of some of the families returning.
    We had--let's go back to health care--where a lot of the 
physicians left the island. The inability to practice. I would 
say, from a personal stance, where all of our regular 
practitioners left the island. So we did not have doctors 
there.
    So we continue to see people return. There is a lot to do. 
The technical expertise, the capacity. We are really hoping 
that Virgin Islanders abroad will come back to help us rebuild. 
The harvest is plentiful right now, and the laborers are few. 
We really want to be able to get our local Virgin Islanders 
back home so we can get the territory back to what we know it 
should be.
    Ms. Clarke. Thank you.
    Mr. Payne. Thank you.
    Ms. Clarke. I yield back.
    Mr. Payne. Thank you. I ask unanimous consent for 
Congresswoman Stacey Plaskett's testimony for the record to be 
entered into the record.
    Without objection.
    [The statement of Ms. Plaskett follows:]
                 Statement of Honorable Stacey Plaskett
                             July 11, 2019
    Chairman Payne, Ranking Member King, and Members of the 
subcommittee, I appreciate the opportunity to present a written 
statement for this hearing on the recovery of my district, the U.S. 
Virgin Islands.
    This is very important to me. The Virgin Islands is American 
territory still reeling from the devastation caused by the 2017 
hurricane season, and still at early stages of working through the 
process provided by law to not only recover, but to permanently 
rebuild.
    It is very unfortunate that despite repeated requests, months of 
notice and flexibility provided to accommodate a potential witness, the 
Federal Emergency Management Agency (FEMA) has chosen not to have any 
representation at this hearing and not to respond to questions about 
the issues and challenges that nearly 4 million Americans continue to 
face with its programs.
    Among the hardest places hit by Hurricanes Irma and Maria was the 
Virgin Islands, where homes, possessions, and businesses along with 
essential facilities like hospitals and schools were lost. We all saw 
on television--many saw it personally--the walls and roofs that were 
blown out of homes, apartment buildings and facilities from the force 
of wind alone.
    Energy systems and other vital infrastructure were completely 
destroyed, leaving our communities without electricity or access to 
health care and clean drinking water. Large swaths of the revenue base 
necessary for normal operations collapsed.
    With the level of destruction that occurred, lawmakers on both 
sides of the aisle became more supportive of modifying how the Federal 
Government responds to such disasters, as well as how the United States 
builds and maintains infrastructure in order to mitigate against future 
natural disasters.
    While the Bipartisan Budget Act of 2018 provided enormous 
assistance for the immediate and long-term recovery efforts; not only 
in terms of funds procured, but also through special provisions put in 
law for the Virgin Islands that make additional mechanisms available 
for rebuilding, rather than just clean-up. For example, it allows the 
Virgin Islands, along with Puerto Rico, to utilize FEMA assistance to 
rebuild critical infrastructure to industry standards and more 
resilient than before the hurricanes. It doesn't make sense for the 
Federal Government to pay to rebuild communities after disaster back to 
a standard that will only see those facilities destroyed in the next 
disaster; when the Federal Government will find itself again having to 
come in and build back to an original, deficient standard, as opposed 
to a more resilient and more robust standard.
    In addition, through passage of the Disaster Recovery Reform Act of 
2018, Congress again recognized the importance of getting smarter about 
how we respond after disasters, and building in resilience to minimize 
loss to lives and property. The Act is a transformative modernization 
of the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act--intended to provide more significant and regular investment in 
pre-disaster mitigation activities, and to hasten recoveries in 
communities impacted by disasters. It encourages communities to build 
back to the most recent strongest consensus-based standards.
    Finally, the most recent disaster supplemental, passed into law 
last month, strengthened the resiliency provision of the Bipartisan 
Budget Act of 2018 by requiring FEMA to include all pre-disaster 
related costs in determining whether to repair or replace critical 
infrastructure in the Virgin Islands to industry standards. The real-
life implications will be that dozens of more critical infrastructure 
projects that were close to meeting the threshold for replacement under 
the old rule could now be rebuilt to incorporate resilient design and 
features.
    Despite positive steps, much more work remains to be done, 
particularly with FEMA's implementation of the programmatic changes 
Congress has made. One of the most pressing outstanding issues is the 
massive amounts of Federal assistance that continues to sit idle. There 
is a great disparity of what has been approved and what is actually on 
the ground. As you look at all of the after-action reports, from FEMA, 
to GAO, and others, you see this as a constant theme.
    The Virgin Islands still faces numerous challenges with FEMA's 
implementation of the provisions discussed above, which the testimony 
of Ms. Adrienne Williams-Octalien for this hearing, along with that of 
the GAO, articulates in detail.
    FEMA's treatment of the insular areas of the United States is of 
great concern to me because it continues to hold back the full and 
resilient recovery of the Virgin Islands. As the GAO testimony 
discusses, at times, the appropriate process for implementing 
resiliency provisions was not clear, and therefore ensuring program 
participants understood its key components was difficult. In addition, 
numerous critical infrastructure projects are on hold pending FEMA 
guidance.
    Given the current fiscal state of the Virgin Islands following the 
hurricanes, FEMA guidance and assistance in seeing the fixed-cost 
estimates required for projects to receive additional resiliency 
assistance are as accurate as possible will be critical.
    Most egregiously, FEMA continues to refuse to exercise its 
statutory discretion under the Insular Areas Act to waive local cost-
sharing requirements on debris removal, emergency protective measures, 
and permanent infrastructure repair--forcing the Virgin Islands to 
divert precious little funds that it needs to use for community 
development and the rebuilding of the energy grid.
    It is the Federal Government that under-funds the territories to 
begin with, putting arbitrary caps on our access to Federal safety net 
programs, and persistently under-funds them in terms of infrastructure 
costs and in other areas. Then, when a disaster strikes, and the 
territories are unable to meet those costs, it becomes a question of 
why the territories aren't being responsible. That is fundamentally 
unfair to these Americans. To date, the Virgin Islands has received far 
less than what was requested in 2017.
    As we execute our rebuilding and our long-term recovery, we must do 
so cognizant of other long-standing challenges specific to the insular 
areas. While we have made significant strides and will continue to do 
so, we must continue to confront the difficult reality that the island 
territories of the United States, and their U.S. citizen residents, 
have been neglected and allowed to fall behind.
    Thank you for considering this testimony and for your support of 
your fellow Americans in the Virgin Islands.

    Mr. Payne. I want to thank the witnesses for their valuable 
testimony and the Members for their questions. The Members of 
the subcommittee may have additional questions for the 
witnesses, and we ask that you respond expeditiously in writing 
to those questions.
    Pursuant to committee rule VII(D), the hearing will be held 
open for 10 days.
    Without objection.
    Hearing no further business of the subcommittee, it stands 
adjourned. Thank you.
    [Whereupon, at 11:26 a.m., the subcommittee was adjourned.]



                            A P P E N D I X

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     Question From Chairman Bennie G. Thompson for Chris P. Currie
    Question. Mr. Currie, the June 12 hearing, where you were also a 
witness, FEMA's Acting Administrator Peter Gaynor testified before the 
Committee on Homeland Security that FEMA was short ``a few thousand'' 
workers. How does this shortage impact current recovery efforts in the 
territories?
    Answer. FEMA's workforce shortages hamper the agency's ability to 
respond to future hurricanes and other disasters, particularly because 
of FEMA's massive workload and unprecedented demand for FEMA staffing 
following the 2017 and 2018 disasters. The agency's workforce 
challenges specifically affect recovery efforts in Puerto Rico and the 
U.S. Virgin Islands in two ways. First, maintaining and deploying a 
sufficient and adequately-trained FEMA workforce is critical to 
recovery efforts after any disaster, in any location. We have 
previously reported on FEMA's long-standing workforce management 
challenges in this area. In our June 2019 testimony,\1\ we reported our 
preliminary observations from our on-going review of FEMA's workforce 
capacity and training efforts during the 2017 and 2018 disaster 
seasons. Specifically, we reported challenges in FEMA's ability to 
deploy staff with the right kinds of skills and training at the right 
time to best meet the needs of various disasters. According to FEMA 
field leadership we interviewed, for some of the functions FEMA 
performs in the field, FEMA had too few staff with the right technical 
skills to perform their missions--such as inspections of damaged 
properties--efficiently and effectively. For example, FEMA staff in 
Puerto Rico stated that there has been a shortage of experienced staff 
to support the agency's Public Assistance and Hazard Mitigation 
programs, which provide funding to repair damaged public 
infrastructure, such as hospitals and schools, and take actions to 
reduce future losses. Staff said this has hampered the agency's ability 
to inspect damaged properties and process program applications.
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    \1\ GAO, Emergency Management: FEMA Has Made Progress, but 
Challenges and Future Risks Highlight Imperative for Further 
Improvements, GAO-19-594T (Washington, DC: June 12, 2019).
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    Second, recovery efforts depend on effective implementation of 
FEMA's Public Assistance program, among other assistance programs. 
However, in our July 2019 testimony,\2\ we reported challenges in 
implementing this program in Puerto Rico and the U.S. Virgin Islands. 
Specifically, our prior and on-going work identified challenges related 
to: (1) The clarity of FEMA's guidance for the Public Assistance 
program, (2) the time and resources needed to transition to FEMA's new 
Public Assistance program delivery model in Puerto Rico, (3) the 
implementation of flexibilities provided by the Bipartisan Budget Act 
of 2018,\3\ and (4) developing fixed-cost estimates under the Public 
Assistance alternative procedures. Ensuring that FEMA identifies the 
necessary staff with the right technical skills to address 
implementation challenges with the Public Assistance program will be 
key to the recovery of Puerto Rico and the U.S. Virgin Islands. We will 
continue to evaluate these identified challenges and any efforts to 
address them, and plan to report our findings in late 2019 and early 
2020.
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    \2\ GAO, Emergency Management: FEMA's Disaster Recovery Efforts in 
Puerto Rico and the U.S. Virgin Islands, GAO-19-662T (Washington, DC: 
July 11, 2019).
    \3\ See Pub. L. No. 115-123, 1A 20601, 132 Stat. 64, 85 (2018).
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