[Senate Hearing 117-594]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 117-594


                 DISASTER RECOVERY ASSISTANCE: AUTHORIZA-
                   TION OF THE COMMUNITY DEVELOPMENT 
                   BLOCK GRANT-DISASTER RECOVERY PROGRAM

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

                                HEARING

                              BEFORE THE

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                   ON

 EXAMINING THE AUTHORIZATION OF THE COMMUNITY DEVELOPMENT BLOCK GRANT-
                       DISASTER RECOVERY PROGRAM

                               __________

                           DECEMBER 15, 2021

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs
                                
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                


                Available at: https: //www.govinfo.gov /

                             __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
51-188 PDF                 WASHINGTON : 2023                    
          
-----------------------------------------------------------------------------------     

            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director

                 Brad Grantz, Republican Staff Director

                       Elisha Tuku, Chief Counsel

                Corey Frayer, Professional Staff Member

                 Dan Sullivan, Republican Chief Counsel

                      Cameron Ricker, Chief Clerk

                      Shelvin Simmons, IT Director

                    Charles J. Moffat, Hearing Clerk

                      Jason T. Parker, GPO Detail

                                  (ii)


                            C O N T E N T S

                              ----------                              

                      WEDNESDAY, DECEMBER 15, 2021

                                                                   Page

Opening statement of Chairman Brown..............................     1
        Prepared statement.......................................    23

Opening statements, comments, or prepared statements of:
    Senator Toomey...............................................     3
        Prepared statement.......................................    24

                               WITNESSES

Michael A. Sprayberry, Senior Advisor for Emergency Management, 
  Hagerty Consulting.............................................     6
    Prepared statement...........................................    25
    Responses to written questions of:
        Senator Sinema...........................................    44
Matt Mayer, President, Opportunity Ohio..........................     7
    Prepared statement...........................................    27
    Responses to written questions of:
        Senator Toomey...........................................    44
Carlos Martin, Rubenstein Fellow, Metropolitan Policy Program, 
  Brookings Institution..........................................     7
    Prepared statement...........................................    31
    Responses to written questions of:
        Senator Warren...........................................    45

              Additional Material Supplied for the Record

Letter submitted by the Bipartisan Policy Center.................    47
Letter submitted by the Disaster Housing Recovery Coalition......    50

                                 (iii)

 
     DISASTER RECOVERY ASSISTANCE: AUTHORIZATION OF THE COMMUNITY 
           DEVELOPMENT BLOCK GRANT-DISASTER RECOVERY PROGRAM

                              ----------                              


                      WEDNESDAY, DECEMBER 15, 2021

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:03 a.m., via Webex and in room 538, 
Dirksen Senate Office Building, Hon. Sherrod Brown, Chairman of 
the Committee, presiding.

          OPENING STATEMENT OF CHAIRMAN SHERROD BROWN

    Chairman Brown. The Senate Committee on Banking, Housing, 
and Urban Affairs will come to order.
    This hearing is in a hybrid format. Our Members will be 
here both in person--Senator Rounds and the Ranking Member are 
here now. Others will be joining online.
    The witnesses are all appearing virtually. I think we had 
to because of Senator Dole's--the celebration of his life last 
week. We had to change the hearing date. So some that were 
going to join us in person could not.
    So for those who have done this, the witnesses, once you 
start speaking, there will be a slight delay before you are 
displayed on the screen. To minimize background noise, please 
click the mute button until it is your turn to speak or ask 
questions. You should have a box on your screen labeled 
``clock'' that will show how much time is remaining. At 30 
seconds, you will hear a beep, then when your time is up. So 
stick to the 5 minutes, please, if you can. Any technology 
issue, Cameron and all of us will move to the next witness 
until he can resolve it.
    As we are here in a hybrid format, our speaking order, as 
always, will be by seniority of the Members who checked at the 
gavel either in person or online. So then we go back and forth 
by party.
    This morning the Banking, Housing, and Urban Affairs 
Committee looks at the authorization of the Community 
Development Block Grant-Disaster Recovery program known as, 
sorry for the acronyms, CDBG-DR.
    We meet today in the wake of devastating tornadoes that 
have taken the lives of more than 80 people, torn apart 
families, destroyed homes and businesses and infrastructure 
across multiple States, including Kentucky, Illinois, and our 
colleague, our new colleague, Senator Hagerty's State of 
Tennessee. We have heard heartbreaking and infuriating stories, 
lives torn apart, workers put in danger, unnecessarily 
apparently. I want to express my sincere condolences to the 
families and communities affected by these storms.
    Even before this weekend's tragic events, we had already 
seen 18 natural disasters; 538 people lost their lives in 
calendar year 2021; losses exceeded a billion dollars. From 
drought to flooding to severe storms, from wildfires to 
tropical cyclones to winter storms, these events touched all 
kinds of communities across the country, homes and businesses 
destroyed, local economies devastated.
    None of our States are immune. The people of Dayton and 
Trotwood are still working to recover from tornadoes that 
destroyed their neighborhoods in 2019. Senators Menendez' and 
Kennedy's States, though, more than 1,000 miles apart, were 
both devastated by Hurricane Ida this summer.
    With a changing climate and, frankly, Congress' failure to 
do much about addressing that climate change, our country will 
continue to face extreme weather events and natural disasters. 
We must be better prepared to recover from these disasters 
quickly, efficiently, and equitably. We must rebuild to make 
our homes and communities more resilient in the future.
    Today's hearing will look at the critical role CDBG-DR 
plays in offering disaster relief and long-term recovery 
assistance to communities affected by disasters. We will 
discuss how we can improve that aid, I hope, through a 
permanent authorization of the program. Since 1993, Congress 
has provided $95 billion--with a ``b''--95,000 million 
dollars--in disaster relief, recovery assistance to States and 
territories and communities through supplemental CDBG-Disaster 
Recovery appropriations. The aid is particularly critical to 
low-income and middle-class families usually hit the hardest by 
natural disasters and always have the fewest resources to fight 
back.
    While Congress has relied on CDBG-DR to provide flexible, 
long-term recovery assistance to communities in need, we have 
never provided a permanent authorization for this program. 
CDBG-DR is a valuable tool in the Federal response--Federal 
disaster response tool kit to help communities across the 
country pick up the pieces and rebuild following disasters. The 
program has helped families and communities address needs that 
have been unmet by insurance and Federal assistance from FEMA 
and the SBA.
    But as valuable as this aid has been, we have also heard 
from survivors and from State and local governments, GAO, HUD, 
and others that we can and should do better. In the absence of 
a permanent, long-term or permanent authorization, HUD must 
issue new regulations with each appropriation. We have heard 
the delays and lack of predictability stemming from the 
process, delays in getting assistance out to families, 
communities prevented from doing the kind of early planning 
that would be most effective, confusion created for States and 
localities and families over what resources are available.
    Think about what these families deal with. Your home has 
been flooded. The business your family built for two 
generations was destroyed. You are trying to deal with 
insurance claims. Bills are piling up. Debt collectors are 
calling. Just getting day to day through your personal life, 
the last thing you want to do is deal with more delays, more 
red tape, more confusion. That is where we come in to fix that.
    Variations in appropriations and regulatory requirements 
between disasters can impose administrative and operational 
challenges for HUD and grantees, particularly smaller 
communities or those administering multiple grants, and hinder 
efforts to build capacity. We must do more to ensure that the 
most vulnerable members of our community are not displaced and 
they can help their community recover.
    In response to recommendations from GAO, HUD, and others, 
Republican Senators Collins and Young, Democratic Senators 
Schatz, Van Hollen, and Tester have offered S. 2471 to 
authorize and improve this program, something that should be an 
opportunity for bipartisan, commonsense solutions, how we make 
Government more efficient, actually do the job it is supposed 
to do for the people whom we serve.
    We will hear from our witnesses about authorizing CDBG-DR, 
how authorizing the program could help our communities recover 
and deliver resources in a more timely, effective, and 
equitable manner.
    And without objection, Senator Toomey, I would like to 
enter into the record a letter from the Disaster Housing 
Recovery Coalition in support of 2471. Without objection, so 
ordered.
    Chairman Brown. Senator Toomey.

         OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY

    Senator Toomey. Thank you, Mr. Chairman. I, too, want to 
start off by acknowledging the horrific destruction that we 
witnessed over the weekend in Kentucky. I saw a headline this 
morning that 12 children were among the 74 killed by that 
storm. Of course, the death toll is expected to only rise in 
the coming days. It is just unbelievably tragic news. My heart 
goes out to the families who are experiencing this devastating 
loss of their lives, their families. All of our thoughts are 
with them.
    I would suggest that today's hearing is about HUD's 
Community Development Block Grant-Disaster Recovery program or 
the CDBG-DR. This is about something different. Since 1993, 
Congress has spent nearly $90 billion through CDBG-DR to 
support disaster recovery efforts. Initially, CDBG-DR was used 
in rare cases when the billions of dollars that Congress spent 
annually on disaster recovery through other programs was 
considered insufficient to meet the needs of serious disasters.
    Unfortunately, since Superstorm Sandy in 2012, CDBG-DR 
spending has become routine. In the past 4 years alone, we have 
appropriated almost $40 billion for CDBG-DR. And we have done 
this though billions of CDBG-DR funds appropriated for prior 
disasters, including the 9/11 attacks and disasters that 
occurred more than a decade ago, remain with grantees and 
remain unspent. So I worry that making CDBG-DR a permanent 
program without a more comprehensive review of disaster 
assistance will only ensure that this wasteful trend continues.
    In my view, we ought to be discussing whether such spending 
through HUD is appropriate in the first place, not making it 
permanent, because we already have an agency whose sole mission 
is ``to help people before, during, and after disasters.'' That 
agency is called FEMA. Through the normal appropriations 
process, Congress provides billions every year to FEMA and 
other agencies so that the Federal Government can provide 
assistance to support communities struck by disaster.
    In addition to those regular channels, Congress makes 
emergency supplemental disaster appropriations almost every 
single year. Let us consider some key examples of existing 
programs. The Army Corps of Engineers and FEMA deploy boots on 
the ground to help survivors and repair damage to communities. 
FEMA funds repairs and replacement of homes for displaced 
families; Small Business Administration does as well, including 
replacement of personal property. Given all of this support, 
why do we also need CDBG-DR?
    Now theoretically, CDBG-DR is supposed to support longer 
term recovery needs that are not met by other sources, and I 
acknowledge there may be some circumstances where it is useful 
for the Federal Government to help meet those needs. But we 
need to remember that States and local governments are 
primarily responsible for addressing these needs. Currently, 
States and local governments are not lacking for financial 
resources at all. In 2020, State and local tax collection set 
an all-time record. On top of their record tax collections, 
Congress sent another $900 billion to State and local 
governments for COVID relief over the course of the year. This 
included $5 billion specifically for CDBG, a significant 
portion of which remains unspent and is available for purposes 
such as disaster relief.
    And then in November, Congress just passed a $1.2 trillion 
infrastructure bill that will send billions more dollars to 
State and local governments while States are sitting on record 
budget surpluses and have more money on the way now thanks to 
this recently passed bill. Why shouldn't they plan and save 
some of that money for long-term disaster recovery and 
mitigation?
    We also should not ignore the fact that CDBG-DR has long 
been plagued by waste, fraud, and abuse through the years. Let 
us consider some examples of that waste. Two years after 
Hurricane Katrina hit, HUD allowed Louisiana to use CDBG-DR 
funds to pay college professors stipends to stay in the State 
post-Katrina because that was an urgent need activity. In 
Mississippi, HUD allowed a county to use $9.6 million CDBG-DR 
funds to build a wastewater treatment facility for an 
undeveloped plot of land where nobody lived. As bad as these 
cases of waste are, the examples of fraud in the CDBG-DR may be 
even worse.
    HUD's Inspector General has repeatedly identified and 
referred for prosecution cases of fraud and abuse in CDBG-DR, 
including public corruption, embezzlement, bid rigging, 
bribery, and kickback schemes. So given this track record, it 
makes one wonder how well does HUD respond to fraud risks in 
the CDBG-DR program?
    Well, we know the answer to that. This year, HUD officials 
admitted to GAO that HUD, and I quote, does not consider fraud 
risks in programs managed by grantees to be direct risks to HUD 
itself, end quote. In other words, HUD's responsibility to root 
out fraud ends when it sends CDBG-DR money to States. Well, 
that is concerning since Congress recently appropriated nearly 
$20 billion through CDBG-DR to Puerto Rico that the Biden 
administration has been eager to quickly distribute to a 
Government with rampant fiscal mismanagement, to say the least.
    Today we will hear from Matt Mayer, a former DHS official 
and an expert on disaster recovery, who has concerns with 
proposals to permanently authorize the CDBG-DR program. As Mr. 
Mayer notes, the over-Federalization of disaster assistance for 
virtually every disaster has allowed States to just reduce 
their own emergency management programs, knowing that Federal 
taxpayers will be forced to bail them out. He also sensibly 
notes that Congress should step back and consider whether it 
should continue to Federalize virtually all long-term disaster 
recovery well after the crisis has passed since that has 
traditionally been a State and local function.
    I look forward to hearing from today's witnesses about the 
CDBG-DR program. I recognize that improvements are needed in 
how the Federal Government provides disaster assistance, but 
for the reasons I have mentioned I am concerned that creating a 
permanent authorization for the CDBG-DR program is not the 
right way to go. As President Reagan wisely noted, Government 
programs are the nearest thing to eternal life we will ever see 
on this earth. So we should tread carefully before we create a 
new one.
    Chairman Brown. Thank you, Senator Toomey.
    I will introduce the three witnesses, all remote, calling 
from, I assume, their homes or offices. Mr. Michael Sprayberry 
joins us from North Carolina. He is a Senior Advisor for 
Emergency Management at Hagerty Consulting, previously served 
in emergency management roles in the State of North Carolina 
for 42 years. He led the State emergency response teams' 
recovery efforts through State and federally declared 
disasters. He served as President of the National Emergency 
Management Association from 2017 to '18.
    Mr. Sprayberry, welcome.
    Mr. Matt Mayer is the President of Opportunity Ohio in my 
State and is joining us remotely from our home State. Prior to 
his current position, Mr. Mayer has written on national 
security issues as a visiting fellow with the American 
Enterprise Institute and a visiting scholar for the Heritage 
Foundation. Mr. Mayer also serves as a senior official at the 
U.S.--served, past tense, as a senior official at the U.S. 
Department of Homeland Security under Secretaries Ridge and 
Chertoff.
    Mr. Mayer, welcome.
    Dr. Carlos Martin is joining us remotely also. He is a 
fellow at the Brookings Institute and Director of the 
Remodeling Futures Program at Harvard's Joint Center for 
Housing Studies. Dr. Martin previously led the Urban 
Institute's Built Environment practice area, leading all 
research on energy efficiency, climate adaptation, 
environmental governance, the housing industry, and 
construction regulations.
    Thanks to all three of you for joining. Again, apologies 
for moving the hearing from last week to this morning.
    Each of you will speak for 5 minutes, and then you will 
take questions. We will start with you, Mr. Sprayberry.

    STATEMENT OF MICHAEL A. SPRAYBERRY, SENIOR ADVISOR FOR 
            EMERGENCY MANAGEMENT, HAGERTY CONSULTING

    Mr. Sprayberry. Good morning, Chairman Brown, Ranking 
Member Toomey, and Members of the Committee. My name is Mike 
Sprayberry, and I am the Senior Advisor for Emergency 
Management with Hagerty Consulting, Incorporated, a firm which 
specializes in emergency management and disaster recovery. I 
appreciate the opportunity to appear today to discuss and 
support permanent authorization for the Community Development 
Block Grant-Disaster Recovery program administered by the U.S. 
Department of Housing and Urban Development.
    Prior to joining Hagerty 2 months ago, I served the State 
of North Carolina for 15 years in leadership roles with the 
State's Division of Emergency Management, including 8 years as 
Director, while also leading the State's Office of Recovery and 
Resiliency and serving as the State's Deputy Homeland Security 
Advisor. I also served as President of the National Emergency 
Management Association in 2017 and '18. In this context, I 
gained familiarity with both the value of the CDBG-DR program 
as well as the difficulties in deploying that funding.
    Since 2017, North Carolina received more than $778 million 
in the CDBG-DR funding plus $202 million in CDBG mitigation 
funding in response to Hurricanes Matthew and Florence. That 
funding has enabled a stronger focus on housing recovery needs 
and has assisted low and moderate-income populations that have 
the fewest resources to recover.
    At the same time, the lack of a permanent authorization for 
CDBG-DR has hampered its effectiveness. The most critical issue 
is the ad hoc nature of CDBG-DR due to the lack of a formal 
statutory and regulatory structure. This fact contributes to 
unnecessary delays across the board, delays in Federal 
appropriation, delays in HUD's allocation process, delays in 
developing Federal Register notices that govern the use of the 
funds, and ultimately, delays in delivering assistance to 
disaster survivors and impacted jurisdictions. My written 
statement cites how, after Florence made landfall in September 
2018, it took 500 days for HUD to publish a Federal Register 
notice governing available CDBG-DR assistance. While the 
process will never be instantaneous, timelines can 
significantly be reduced with permanent authorization.
    Let me also make the important case for small CDBG-DR 
planning allocations shortly after a major disaster is 
declared. This step would provide a clear message to 
jurisdictions that further assistance is likely and that 
implementation efforts should be launched to prepare for that 
possibility. Again, actions of this nature should be viewed as 
helping to reduce the overall time it will take households and 
communities to recover from disaster events.
    I am aware that there are concerns as to whether CDBG-DR 
should be authorized on a permanent basis. As we evaluate those 
concerns, we can see the reality of 32 appropriations totaling 
$95 billion over the past 3 decades. These facts seem 
instructive that CDBG-DR is likely to be funded in the future 
and it would be valuable in delivering aid to disaster 
survivors if that funding were deployed more effectively. 
Permanent authorization of CDBG-DR is a large step in that 
direction, and for that reason I would support enactment of 
Senate 2471, the Reforming Disaster Recovery Act.
    Thank you for this opportunity, and I look forward to 
addressing your questions.
    Chairman Brown. Thank you, Mr. Sprayberry.
    Mr. Mayer is with us from Ohio. Mr. Mayer, welcome.

      STATEMENT OF MATT MAYER, PRESIDENT, OPPORTUNITY OHIO

    Mr. Mayer. Thank you, Chairman Brown, Ranking Member 
Toomey, and Committee Senators. Thank you for the opportunity 
to appear before the Committee to testify on the issue before 
us today. My name is Matt Mayer. I am President of Opportunity 
Ohio. In lieu of reading my statement, written statement, and 
taking all of my 5-minute allocation, I will briefly summarize 
my concerns with the legislation and leave more time to answer 
any questions you might have for me.
    My largest concern with the proposed legislation is that it 
continues the Federalization of natural disasters that started 
in 1993 and has accelerated each decade as more natural 
disasters that used to be considered inherently State and local 
disasters have received Federal declarations and, therefore, 
Federal funding.
    Secondarily, it creates a permanent program, including 
permanent staff and regulatory control, outside of the Federal 
Emergency Management Agency to deal with elements following a 
natural disaster, which I believe causes delays, gaps, 
inefficiencies, and waste.
    Another concern is that my research has shown that Federal 
funds tend to supplant, rather than supplement, State and local 
funds which is what occurred with Homeland Security grants 
following 9/11.
    Finally, the well-established patterns of where natural 
disasters occur results in the vast majority of States 
subsidizing States where the bulk of FEMA-HUD funding flows, 
which is inequitable to State--to taxpayers in, quote, safer 
States.
    Thank you for the opportunity to testify to this Committee. 
Please let me know if there is anything I can do as you debate 
the proposed legislation. Thank you.
    Chairman Brown. Thank you. It is good to see somebody from 
Ohio come in way under the time limit. We are usually not that 
good. So it does not happen every time.
    Dr. Martin, welcome. Thank you for joining us.

  STATEMENT OF CARLOS MARTIN, RUBENSTEIN FELLOW, METROPOLITAN 
             POLICY PROGRAM, BROOKINGS INSTITUTION

    Mr. Martin. Good morning and thank you, Chairman Brown and 
Ranking Member Toomey and Members of the Committee, for this 
opportunity to present my findings from my research. The views 
expressed are my own and should not be attributed to any of the 
institutions, the research organizations, with which I have 
collaborated.
    So my work explores many aspects of CDBG-DR, and there are 
several findings that I can share today. Among the most 
critical is simply that CDBG-DR works. It fills the needs that 
remain after a disaster and after other assistance is 
exhausted. These are needs that persist particularly for 
residents that cannot recover on their own.
    My work shows that disasters have a long-term negative 
financial impact on the housing and the household finances of 
survivors for years after the event. Without assistance, that 
impact is longer and deeper. The depth of impact holds true 
across jurisdictions regardless of their size or populations or 
the severity of disaster damages or of the political 
composition of their State and local leaders. CDBG-DR has made 
a qualitative and quantitative difference in many survivors' 
lives.
    That does not mean there is not room for improvement. HUD 
CPD has been forthcoming with regards to the improvements 
identified by staff and from past and current grantees, and 
they have acted on them. One study I conducted for HUD's Policy 
Development and Research Office noted an increased speed in 
HUD's process over a decade of disasters beginning with 
Hurricane Katrina in 2005. I believe that HUD has squeezed out 
many improvements in the process under its staff purview, that 
is, after congressional appropriations. And as you know, these 
are special appropriations, and they often lead to change in 
program rules that lead to delays and uncertainty for the 
survivor communities and complexity for the local officials.
    Remaining opportunities exist for consistency, for 
efficiency and speed, for comprehensively serving the most 
severely affected communities and households, and for 
monitoring compliance with all Federal statutes.
    On the first count, CDBG-DR's lack of permanent statutory 
authority has impeded consistency. Codifying the program could 
yield consistent rules, standardized and more sophisticated 
reporting and recordkeeping, and more uniform technical 
assistance offerings. There are also benefits for HUD and its 
grantees in their planning and timing from the consistency 
established through permanent authorization.
    Next, speed is impeded by the uncertainty and delayed 
access to funds. In my study, the length of time between the 
disaster and HUD's allocation, that is the Federal activity 
before State and local grantees are directly involved, shapes 
the time after in which grantees design, launch, and ramp up 
their programs. I have encountered numerous cases of 
jurisdictions being unable to plan, act, and inform households 
of their options because of the lack of knowing whether and 
when funds would come. This omission leads to suboptimal 
recovery for everyone. Efficient and early resources and 
knowledge make a difference in lives and livelihoods.
    HUD's general CDBG program has a requirement to serve low 
to moderate-income households. That could be pursued even more 
deeply with permanently authorized CDBG-DR. Our research shows 
that survivor households continue to slip through the cracks 
because they lack the resources to wait or to absorb delay or 
change. Extremely low-income households and low to moderate 
income renters are particularly vulnerable. These groups suffer 
from even modest financial hits and personal damages. They 
could benefit from other changes I have already mentioned 
simply because clearer roles and faster funding can help 
jurisdictions catch them before they slip through the cracks.
    But with these changes, there is an increased 
responsibility to make it easier for the most vulnerable to 
apply, qualify, and access assistance. So last, HUD and its 
grantees could aggressively expand the robust, consistent, and 
transparent data about the household beneficiaries once given 
the breathing space of permanent authorization and early fund 
disbursals. Ensuring that data gaps are filled will help HUD 
and the Federal Government confirm that grantees will both use 
funds effectively and in ways that target households with the 
most severe and ongoing vulnerabilities.
    CDBG-DR serves as a bridge between the immediate crisis and 
long-term community development. Yet, that bridge has been 
temporary and ephemeral without the stability of statutory 
program authorization or the security of resources to let 
households and communities decide their path to becoming whole. 
Future disasters are certain. We must respond with equal 
certainty and purposeful clarity.
    Thank you for your attention.
    Chairman Brown. Thank you, Dr. Martin.
    I will start with Mr. Sprayberry. Thank you for your 
comments. I especially appreciate--and I mentioned it to the 
Ranking Member--what you said about the ad hoc situation and 
the problems that causes. From your experience in North 
Carolina, how would authorization of CDBG-DR, for which you 
advocate, how would it help deliver efficient and effective 
disaster assistance to survivors contrasted with what we do 
now?
    Mr. Sprayberry. Yes, sir, and thank you for that question. 
So you know, it will allow States to effectively plan to 
receive the funds, and that is critical. You know, if it is 
codified and we know that it is coming, the team can begin 
planning. We know that is going to reduce delays in the 
implementation. As I mentioned, during Hurricane Florence, we 
waited for 500 days before we got our Federal Register notice, 
and so that was--you know, when you have people standing by, I 
mean, to get that type of information, it slows everything up. 
So I think that that would help us out.
    I think also we want to talk about establishing a front-end 
fund for CDBG-DR, a mechanism so that we can begin to procure 
staffing and have contracts in place so that when the funding 
is actually allocated from HUD and hits the State we are well 
prepared to basically pivot and start getting that money to the 
people that need it most when disasters----
    Chairman Brown. Did that--so sorry to interrupt. Did that 
500 days--did that surprise you, or we see that everywhere more 
or less?
    Mr. Sprayberry. It surprised me, sir. And so I can tell you 
that in Hurricane Matthew we were hit in October. I think the 
8th and 9th of October. Congress appropriated the funding in 
December, and we got the Federal Register in January. And so 
that was just a couple of months. And we were not prepared for 
Florence which was our storm of record in North Carolina. Go 
ahead.
    Chairman Brown. It is so clear to me, listening to you, Mr. 
Sprayberry, and listening to the other two witnesses, that 
communities could use help in thinking through long-term 
housing and community recovery needs and we do better when we 
have a Federal law sort of directing as we, I would hope, could 
write it bipartisanly, as we direct this agency and others on 
what to do.
    Let me shift to Dr. Martin. Based on your research, Dr. 
Martin, what policy changes through authorization could ensure 
that HUD disaster recovery dollars are distributed more 
equitably, more quickly, to the hardest by these natural 
disasters?
    Mr. Martin. Certainly. And we are talking about different 
pieces of what a permanent authorization allows, right? One is 
the actual knowing that there is going to be resources coming 
down and the actual amounts of the resources and the program 
rules. And all of these expedited and clear, with clear 
expectations on the State and local grantees, will be able to 
make much more robust, much more clearly addressing the most 
vulnerable communities in their regions that are affected. And 
that is particularly true of the most vulnerable, extremely 
long term folks that you are asking me about.
    I think in particular those folks are the least likely to 
be able to survive waiting for a longer period. They are the 
ones who slip the cracks. And so the earlier and more 
consistent amount of funding the easier it is for State and 
local grantees to target and do outreach for those communities 
to ensure that they are applying and that they are eligible for 
the assistance that they are due.
    Chairman Brown. Thank you. Let me pursue that. As you know, 
this Senate for the last 10 months is known in part for 
actually addressing issues of poverty. The child tax credit, 90 
percent of families in my State with children under 18 getting 
at least a $3,000 tax cut--at least a $3,000 tax cut--and that 
is life changing for so many.
    We know prepandemic--you mentioned a moment ago, renters. 
Prepandemic, 25 percent of renters in this country paid more 
than half their income in rent. One thing goes wrong. 
Forgetting a natural disaster. Put that aside. But one thing 
goes wrong, and their life turns upside down. Their car breaks 
down. Their child gets sick. They miss 3 days of work for a 
minor workplace injury.
    What barriers do renters specifically face in accessing 
housing recovery funding? Answer that. And I am sorry. In the 
last few seconds, answer that please and then what we should do 
about it in reauthorization.
    Mr. Martin. Sure. So there are two of the strongest 
vulnerabilities. One is that renters tend to be lower income 
than homeowners. They have obviously less built-in wealth to be 
able to recover and establish. And so they cannot access funds 
like the Small Business Administration loan program because 
they do not have a home to hold the loan against. And so 
financially they are the hardest hit. That is the most 
important.
    Second, though, is oftentimes in these communities the 
rental housing is lost. Rental housing is damaged. Just a 
single-family house is damaged, but it takes much longer to 
rebuild affordable rental housing in these communities. In my 
written testimony, I have a graph showing the different ranges 
of activities that CDBG-DR provides, and the construction of 
new, affordable rental housing is second longest of all the 
activities. So the earlier that that starts the likelier it 
will be that you keep these people within the community and 
give them housing as quickly as possible. And making sure that 
that rental housing is built as quickly as possible is 
absolutely critical.
    Chairman Brown. Thank you.
    Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. So theoretically, 
CDBG-DR is only available when it becomes clear that all the 
other resources the Federal Government provides for a 
particular emergency are insufficient.
    The Federal support for a declared emergency seems fairly 
comprehensive. I mean, FEMA immediately arrives, along with the 
Army Corps, to clear debris and other damage. Volunteer 
organizations and charities also support those efforts. FEMA 
and SBA also support repair and replacement of homes damaged as 
a result of disasters. SBA also supports recoveries for 
businesses and even funds replacement of personal property. 
Then of course, these programs are designed to supplement 
insurance policies, which families and small businesses should 
carry to protect against catastrophic events. And the IRS 
allows deductions for casualty losses resulting from disasters. 
So this is a pretty big network of support.
    Mr. Mayer, you have suggested--well, we know there are some 
State and local contributions. Sometimes they go in the form of 
a percentage of a matching grant. But, Mr. Mayer, you suggested 
that the CDBG-DR probably tends to supplant, rather than 
supplement, State and local money. And so I wonder if you could 
give us some of your thoughts on why does that matter. Are 
there issues of moral hazard that arise? Are there issues about 
whether a State and local government is better equipped to make 
judgments about longer-term investments? What about 
accountability of how this money is spent? Could you elaborate 
at all on why you think it is a bad idea to supplant State and 
local money with Federal money?
    Mr. Mayer. Yeah. Sure, Ranking Member Toomey. Thank you for 
the question. So what we learned after 9/11 with the Homeland 
Security grant funding and then the--we also learned this with 
the Federalization through FEMA of natural disasters as more 
and more disasters that historically were not Federalized, that 
remained State and local issues to deal with entirely. As we 
Federalized more of those in both the Homeland Security grant 
world as well as the FEMA world, what the research showed is 
that when States and localities began to have that 
predictability that there will be Federal funds they started to 
defund those kind of programs and move the money elsewhere so 
that they could spend it differently.
    And so the concern that I guess I have is, you know, when 
you step back, right, you know, nobody probably disagrees that 
substantively getting help to people is critical and we should 
do that as often and as much as we can. That goes without 
question. I guess the key is where does that help come from.
    And you know, given the fact that State coffers are--you 
know, are high right now. All the funds that have come in 
through the pandemic and through the infrastructure legislation 
that you guys passed, there is a lot of money out there. And so 
you know, when we get into this issue of creating new permanent 
Federal programs, States and localities, like any other 
creatures, will act in their own self-interest, and they will 
see that as a way that they can then shift funds elsewhere, do 
other things, because they can kind of have that handout from 
the Federal Government to have those funds come in.
    So again, my broad concern on the supplementation issue is 
history has shown us that both the Homeland Security grants and 
FEMA, as it Federalized more and more inherently State and 
local disasters, historically, that emergency management funds 
went down. And then preparedness, terrorism, all that activity 
then got shifted down because they could just, you know, wait 
for the annual, you know, influx of funding from the Feds. And 
then I think that that is not where we want to go because it 
inherently means you are always looking toward Washington for 
the solution rather than building the capacity there in the 
State and local communities where things occur.
    And again, you have the occasional Kentucky tornado event 
happen. We all know that. But typically, there is some 
regularity to natural disasters. We know where they occur, 
which ones will occur, and historically tend to know what is 
going to happen. So creating that predictability is important 
for States and locals to do and not rely on the Federal 
Government to sweep in and kind of come to the rescue. We need 
to build that at the State and local levels and save Federal 
funds for some of the most important stuff, especially as we 
pass $3 trillion in debt.
    Senator Toomey. Yeah. And just to follow up on this issue 
of the concentration. I do not think anybody disputes the idea 
of when a disaster strikes you want to immediately flood the 
zone with resources to ameliorate the situation as much as you 
can.
    But in terms of long-term projects and construction and 
even future mitigation, as you point out, these kinds of events 
do not occur uniformly across the country. There are certain 
regions that are more prone than others. It also happens that 
the nature of the damage is mostly on property and it tends to 
be very valuable property. So Florida is particularly at risk, 
and Florida, of course, has some of the most valuable property 
in America. Both coasts tend to be--have a higher concentration 
of these risks.
    So federalizing it, federalizing this long-term mitigation, 
seems to be a subsidy from the interior of the country to the 
coasts, and I am sure there are exceptions to that. But is that 
a fair generalization in your mind, Mr. Mayer?
    Mr. Mayer. It is not only a fair generalization; it is a 
fact. I went through and did the research where I looked at 
where all the funding had gone over the course of time and 
where there was the occurrence of natural disasters. And what 
you saw is exactly that, that States like Ohio, Pennsylvania, 
Indiana, Michigan, you know, the interior part of the country, 
the Great Plains, New England, the Midwest, the Mountain West, 
tended not to have that many declared disasters in any given 
period of time compared to your kind of southern, East Coast, 
the Gulf Coast, and the California area.
    And as a result, what ended up happening is taxpayers in 
those other States that are ``safer,'' their funding that goes 
to these programs gets essentially shifted down to taxpayers in 
those other places. So we are seeing a subsidization occur, 
which to me is just somewhat inequitable.
    And when you think about--you know, again, many of these 
things are typically stuff historically that were inherently 
State and locally handled, but we have Federalized them over 
the last 30 years. And if we could step back from that, I think 
we might see a bit better resiliency and performance at the 
State and local levels than we tended to see as we ramp these 
things up to the Federal Government.
    Chairman Brown. Thank you, Mr. Mayer.
    Senator Reed from Rhode Island is recognized for 5 minutes, 
remote.
    Senator Reed. Thank you very much, Mr. Chairman, and thank 
you, gentlemen, for your testimony.
    Mr. Martin, in your testimony, you noted that the capacity 
and experience of the State and local governments and the 
amount of early resources makes a significant difference.
    And I think, Mr. Sprayberry, your experience in North 
Carolina would reinforce that.
    How can we help HUD work with local communities to buildup 
technical capacity for these disasters? And I would think 
authorizing this legislation would give HUD the incentive and 
legal authority to do so. But, Mr. Martin, your comments first.
    Mr. Martin. Correct. So there are two benefits from the 
authorization for that specific issue about State and local 
capacity. And one is having clarity of rules in multiple 
activities. Everything becomes less of an appropriation-based 
directive and understanding the predictability of what the 
program is going to be expecting. So that is number one.
    The second is actual technical assistance offerings can 
then be standardized, and the jurisdiction can be trained on 
how to prepare, how to roll out the programs more quickly. I 
mean, the biggest challenge, particularly for housing recovery, 
as HUD has been in--these are block grants. And so let us be 
clear about the issue of Federalization is that the State and 
local governments get to decide how to use the money within 
statutory requirements. So they--there has always been a goal 
of being able to sort of roll out packages as quickly as 
possible so that you do not have that time gap between early 
assistance that occurs and the later CDBG-DR funding.
    So having clear--clarity around what those programs are 
going to be allows the technical assistance providers to be 
that much more clear and specific and help those programs 
launch more quickly.
    Senator Reed. Your comments, Mr. Sprayberry, please.
    Mr. Sprayberry. Yes, sir. I agree with Dr. Martin that, you 
know, the predictability is going to allow HUD to build those 
technical assistance teams that we rely on so heavily and have 
relied on here in North Carolina. As part of this bill, it will 
create an Office of Disaster Management and Resiliency within 
HUD, which I think is just going to even increase more 
standardization of how they deploy the program. So I think that 
this legislation is actually going to enhance the efficiency.
    And I know I heard earlier about maybe some issues in the 
past. I can tell you that in North Carolina, you know, we are 
constantly audited, not just by HUD but also by the State 
auditor, and to make sure that we are staying within the rails 
and make--and that we are looking at all the eligibility 
criteria to make sure that everything is ``dress right dress.''
    So I believe that this type of legislation is only going to 
enhance that and making sure that everybody is staying, you 
know, within the criteria, the eligibility criteria, and 
getting the funding out to those disaster survivors who need it 
so badly.
    Senator Reed. Thank you. One of the issues--one of the 
existential issues that we face is climate change. And in the 
old days you could simply go back and build what you had and, 
you know, pat yourself on the back. Now we have to prepare for 
a future in which climate risk is going up. We have to respond 
differently. And a similar question, how can this proposal help 
us to ensure that local communities are not just building the 
same thing but building for the future, Mr. Sprayberry?
    Mr. Sprayberry. Well, this legislation requires that the 
funding that is spent by the local jurisdictions is spent so 
that it meets those requirements and that you are, in fact, 
building back in a resilient way. That is a requirement. It 
also allows for up to 30 percent funding--plus for activities 
that reduce repetitive loss. And you know, HUD has already 
started to move in this direction by providing CDBG mitigation, 
and so I think that you can see where, you know, this 
legislation incorporates all of that together.
    Senator Reed. Well, thank you very much.
    Mr. Martin, a quick comment, I think. I cannot see the 
clock, so I am imposing I am sure.
    Chairman Brown. Continue, Senator Reed.
    Senator Reed. Mr. Martin, your comments.
    Mr. Martin. That is completely correct. Because HUD has a 
specific role in the recovery program to be a bridge to long 
term community planning and long-term community development, 
there is an awareness of where the high exposed areas are, 
where the most vulnerable communities are, and that is the only 
way you are going to be able to plan for long-term adaptation.
    Senator Reed. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Reed.
    Senator Menendez from New Jersey is recognized.
    Senator Menendez. Thank you, Mr. Chairman. It has been 9 
years since Hurricane Sandy devastated New Jersey, New York, 
and the Northeast, and despite some members' efforts to block 
disaster relief for our region we succeeded in securing 
billions of dollars of CDBG-DR funding. Nine years later, HUD 
is attempting to claw back from New Jerseyans the money they 
used to repair their homes and get back on their feet, and the 
reason some New Jerseyans are facing these clawbacks is because 
CDBG grant money is considered to have duplicated a benefit 
which is SBA loan money. Of course, loan money you have to pay 
back; grant money you do not.
    So Mr. Sprayberry, can you explain why it was important 
that the Disaster Recovery Reform Act of 2018 ended the policy 
of SBA loans duplicating CDBG-DR?
    Mr. Sprayberry. Well, you know, for--you know, CDBG-DR is 
targeted for low to moderate-income population, and so if they 
are--if they qualify for CDBG-DR, it is unclear to me why you 
would want to claw back the funding from an SBA loan.
    I know that that clawback is not consistent with I think it 
is Section 1210 of the Disaster Recovery Reform Act of 2018, 
which calls HUD to revise their VOD policies and allow them 
from the first of 2016 to the end of this month. You do not 
have to pay back your SBA loans, the ones that you declined or 
only received a part of. But I understand that does not cover 
you, sir----
    Senator Menendez. Yeah.
    Mr. Sprayberry. ----in New Jersey.
    Senator Menendez. Well, I just wanted the principle. I 
mean, an SBA loan you have to pay back, and that is fine. A 
CDBG-DR you get a grant.
    And so first of all, with, I think, horrible messaging to 
the potential victims in terms of what they could and could not 
do--so I appreciated that Congress prevented this issue for 
survivors from 2016 on. I hope my colleagues will work together 
with me to pass relief that the House of Representatives passed 
earlier this year in its appropriations bill so that the Sandy 
victims can close this dark chapter of their lives.
    I hear from some colleagues that CDBG-DR spending should be 
curbed, that the recovery process should be left to the States. 
You would be hard pressed to find a place in the country that 
is not impacted by these natural disasters. Whether it be 
flooding in my State, wildfires in the West, chronic droughts 
across the Heartland, every single State inevitably needs 
assistance, and it would be incredibly difficult for a State to 
meet those challenges. Look at what is happening now in 
Kentucky and other States.
    We know that for every dollar invested in mitigation, the 
Federal Government saves 6 dollars in disaster relief spending. 
Mr. Martin, shouldn't Congress direct some CDBG-DR funds toward 
mitigation of risk so that we can protect our communities, 
reduce the fiscal damage to our local economies, and ultimately 
prevent more Federal spending in the future?
    Mr. Martin. Mitigation activities, I would agree with, 
should certainly be allowed. And the reality is that so many of 
the activities that have occurred in the long-term recovery, 
particularly for housing and community infrastructure, are also 
mitigation-related activities because they come in much longer 
in the sequence of events.
    Designated, specific quantities of recovery versus 
mitigation for a jurisdiction is going to be a little 
complicated because it is the nature of the hazard frequency, 
hazard type that will vary in each place. And the kind of 
mitigation activities or the cost differential between the two 
will be a little more complicated. But I would certainly say I 
think that mitigation activities should be encouraged in many 
of these jurisdictions as they rebuild in the long term.
    Senator Menendez. Thank you. By the way, according to a HUD 
Inspector General report, the Trump administration 
intentionally stalled roughly $20 billion of CDBG-DR funds for 
Puerto Rico's recovery from Hurricane Maria, a storm that 
killed more than 3,000 people and more by some estimates. To 
make matters worse, the previous Administration tried to 
obstruct the IG's investigation into the unprecedented 
stonewalling of congressionally appropriated disaster aid to 
Puerto Rico. I am pleased to see that President Biden has freed 
the funding to the island, but the many harms of a delayed 
recovery linger. The island still faces a beleaguered power 
grid. Some families still have FEMA blue tarps over their 
homes, which were supposed to be only temporary.
    Mr. Martin, shouldn't the CDBG-DR grant-making and 
rulemaking process be standardized so that future 
Administrations cannot arbitrarily block disaster aid for 
political or other reasons?
    Mr. Martin. Certainly. And the holding back of money was 
after the allocation had already been made. And our study had 
shown that in the previous 10 years prior to, that ended in 
2015, 2005 to 2015 disaster CDBG-DR grant-making, that HUD had 
actually expedited that, had reduced the time from 
appropriation through allocation and delivery of first funds. 
So I think in many ways that was an anomaly. And one would 
assume that left to HUD's own purview that that would 
continuously be standardized and shrunk, and certainly with 
permanent authorization that would allow clear transparency.
    Senator Menendez. Yeah, it was a nefarious anomaly.
    Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Menendez.
    Senator Tester is joining us from his office for 5 minutes, 
from Montana. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman, and I appreciate 
the folks who are here to provide testimony today. I do come 
from Montana, and we have dealt with Mother Nature, the good, 
the bad, the ugly. And because of our connection with the great 
outdoors and our connection to agriculture and nature, it is 
something that--it is why many folks move to Montana, because 
of this connection.
    Just this year, we faced incredible drought, and it could 
be said--the same thing could be said for most of the ground 
west of the Mississippi. And of course, with drought also comes 
some pretty significant wildfire, which Montana was a part of 
also. Many of these are climate-triggered disasters. There are 
farmers who, in recent years, have struggled with excess 
moisture--I am one--and this year faced with drought, in fact 
the worst drought we have had maybe since my grandparents 
homesteaded the land but certainly in the 44 years that I have 
been on the farm. But that is another topic for another 
hearing, probably in a different committee.
    When these disasters happen in our rural and frontier 
communities, they often do not get the attention or response of 
disasters like hurricanes hitting population centers, and 
because of that these so-called smaller disasters in smaller 
communities are held hostage by the political process. They 
have to wait for a larger crisis to occur to be able to get the 
assistance that they need.
    So, Dr. Martin, could you talk about how these delays 
impact the Federal Government's ability to effectively respond 
to disasters?
    Mr. Martin. Certainly. And the huge challenge--some of the 
challenge, in particular for more rural communities in what we 
call medium or smaller scale disasters, which obviously have as 
much impact on those households as happens in larger scale 
disasters--the impact for the individual household is just as 
severe, I should say--is Congress appropriating for a year's 
worth of disasters, making a variety of disasters eligible, 
that still have unmet need at the point of the appropriation 
process. So there are ways to sort of be more generous and 
considerate of different communities.
    I agree that it would be helpful for Congress to think a 
little more strategically about what the triggers are, to 
ensure that there are a range of disasters that would be 
included because it is the smaller scale disasters that do not 
get the large appropriation. But certainly a permanent 
authorization allows for a little more consistency in the 
appropriations process and allowing a certain amount of funds 
to be disbursed earlier on for communities that are going to be 
in need regardless of their size and complexity.
    Senator Tester. Thank you.
    Mr. Sprayberry, what do these delays in assistance mean 
practically on the ground in these communities?
    Mr. Sprayberry. Well, what happens is--you know, something 
that I think that a lot of people forget is most of the United 
States of America is still rural and there is just not a lot of 
capacity or capability even once you receive the disaster 
programs. And so I think as soon as you can get it and 
understand that you are getting it and there is a degree of 
consistency and you know that you are going to be getting the 
funding, that is only going to help our smaller communities 
execute and implement those disaster programs because the way I 
used to say as a director: We need to be fast, and we need to 
be aggressive. And I think that the Federal Government needs to 
do that all the way down through, you know, your municipalities 
and so through the counties, the States, everybody.
    And so I think that the faster that we can be the better it 
is because if you slow it down, you know, we all have to keep--
we are all here for one reason today. That is disaster 
survivors, real people. And so I think that that is what we all 
need to keep in mind and understand, that the faster that we 
can deploy the programs the better it will be.
    Senator Tester. I appreciate that.
    I am a cosponsor of a bill that we are actually considering 
today, the Reforming Disaster Recovery Act. Dr. Martin, I think 
it is fair to say our current system is inefficient. How would 
this legislation improve this process for the Federal 
Government?
    Mr. Martin. Thank you, Senator Tester. Certainly, the 
authorization and some of the other program requirements that 
are proposed in the legislation go a long way to making a sense 
of security and stability in the CDBG-DR process for State and 
local grantees, both in terms of the security of knowing the 
kind of appropriation that is coming as well as that the fact 
that some of the funding can occur earlier on in planning.
    Senator Tester. I appreciate that. I would just say that I 
know all our hearts go out to the folks in Kentucky and that 
whole region that got hit by that massive tornado, but it seems 
like everything is more massive these days. When I grew up--and 
I have spent 65 years on the farm I am on--I never, ever 
remember having smoke for 2 or 3 months out of the year, and I 
live in eastern Montana, east of the Rocky Mountain front. But 
that happens almost every year now. And then we are seeing 
these horrendous hurricanes and incredibly damaging tornadoes.
    I think this is a really important hearing today, and I 
certainly appreciate the Chairman and Ranking Member for having 
it and all of you for testifying. Thank you, Mr. Chairman.
    Chairman Brown. Thank you, Senator Tester.
    Senator Smith from Minnesota is recognized from her office 
or home.
    Senator Smith. Thank you very much. Thank you, Chair Brown, 
and thanks to all of our panelists today. I am really 
appreciating this.
    I would like to start with Mr. Sprayberry. So in Minnesota, 
flooding disasters have received the most CDBG-DR funds. With 
what we know is happening, which is climate change, which is 
increasing the frequency of these flooding disasters across the 
Midwest, how can programs like CDBG-DR and permanently 
reauthorizing them--how would that help communities to be able 
to prepare better, be more resilient to these ongoing 
disasters?
    Mr. Sprayberry. Thank you for that question, ma'am. And 
again, this legislation actually requires communities for their 
projects to make sure that they are being resilient as they 
build those projects, and so that is really critically 
important. I think that, again, HUD would create an Office of 
Disaster Management and Resiliency so that they can keep 
pushing out projects.
    We have the CDBG mitigation. Here in North Carolina, what 
we do is we loop up our CDBG-DR folks with our FEMA folks, and 
we have a resiliency office. And so we all work together to 
make sure that HUD allocations, FEMA money, and State 
appropriations--that we are as efficient as possible so that we 
take a look at different projects and whoever is eligible for 
which project. Then we can fit them in that slot so that nobody 
gets dropped between the cracks.
    And so I think that this legislation is going to really 
push the fact that we need to--when we build and have projects 
and when we--we just do not put a house back in the floodplain.
    Senator Smith. Right.
    Mr. Sprayberry. We buy it out and move it out, or we 
elevate it, and so we create more green space. And I think that 
that is what this will do--help us do. It will be standardized, 
and I think it is going to also minimize risk and fraud.
    Senator Smith. Yeah. Thank you for that. I totally agree.
    Dr. Martin, some are arguing that State and local 
governments should pay for this kind of disaster recovery and 
mitigation efforts that CDBG-DR was designed to do. Now I have 
worked at the State level, and I have worked at the city level. 
And I have worked at both of those places when my State was 
dealing with significant disasters, and I just do not see the 
capacity there.
    The last time that Minnesota received these funds was in 
2008, when city and State budgets were hit incredibly hard by 
massive flooding. And of course, at the same time, those 
budgets were being impacted by--you know, were soon to be 
impacted by the Great Recession. And a lot of this was 
happening in rural communities where, you know, these smaller 
towns were really hard hit and not in a position.
    So can you address this issue? Is it really reasonable or 
realistic to say that local communities can sort of fill this 
gap if we were not doing this?
    Mr. Martin. Those, Senator--thank you for that question, 
Senator Smith. And I think those questions about local capacity 
are absolutely critical, particularly when we are talking about 
rural communities. Our study--the qualitative components of our 
study actually looked at the local capacity issues, and clearly 
there are persistent issues with the level of emergency 
managers in the rural counties and in townships that just 
simply cannot either afford and do not have the resources to be 
able to do this.
    And by definition, we are talking about CDBG-DR being 
required where there are unmet needs; continuing, ongoing unmet 
needs. So there are tranches of other assistance programs, 
including those at the State and local levels, that are filling 
that immediate need of relief and response already, and those 
are exhausted by the time CDBG-DR comes in.
    Senator Smith. That is exactly right. It is not as if those 
local communities are just sitting on the sidelines. They have 
already done so much.
    Dr. Martin, I just want to quickly ask you one other 
question. You know, when--because I am thinking about the 
interplay between the role of this CDBG-DR program and the 
broader challenges, system challenges, that we have in our 
country around a shortage of housing, a shortage of 
particularly affordable housing, both rental and home 
ownership. And so, you know, what we know is happening in this 
country is working families are paying more and more of their 
housing--you have addressed this. More and more for their 
housing and/or they are living farther and farther away from 
schools or their jobs, where housing is more affordable, and 
then that puts additional costs on their family budgets.
    And you know, I want to point out that the President's 
Build Back Better bill, which we are going to pass, would make 
a significant difference in addressing this systemic housing 
shortage.
    But, Dr. Martin, could you just quickly talk a little bit 
about how permanent reauthorization of this program would 
connect with the broader systemic problems we have in this 
country around a housing shortage?
    Mr. Martin. Certainly. And I will be quick, knowing the 
time concerns. That is exactly why CDBG-DR plays such a 
critical role in disaster recovery. It is because it is a 
housing and community development agency. So it is aware of the 
local housing constraints, the local housing markets. So in 
these cases, where the housing market is already in a crisis, a 
natural hazard--or, excuse me. In many cases, a non-natural 
hazard breaks the back of these communities. So there is not 
any availability.
    In many of these cases, after a hazard event, you will see 
price gouging, rent gouging. You will see--and of course, there 
are units that are off the market completely because they have 
been damaged and they are no longer there. So the ability 
particularly to build affordable rental housing as quickly as 
possible is probably the most immediate benefit of this 
proposed legislation, but also just being able to prepare and 
plan for and appropriate longer-term community housing plans 
into a recovery framework is absolutely critical.
    Senator Smith. Thank you so much.
    Thank you, Mr. Chair.
    Chairman Brown. Thank you, Senator Smith.
    Senator Cortez Masto from Nevada, from her office.
    Senator Cortez Masto. Thank you, Mr. Chairman. Thank you to 
the panelists joining us today. I think we were all horrified 
by the tornadoes that we have seen that have devastated 
families and communities last week. I along, I know, with all 
my colleagues express my deepest regrets to the families and 
friends of those who died, lost homes or businesses. But we are 
also seeing disasters are becoming more frequent and more 
devastating. When they occur, it is imperative that the Federal 
Government comes to the aid of people who have lost everything.
    So, Dr. Martin and Mr. Sprayberry, let me ask you this. I 
introduced the Western Wildfire Support Act, which would allow 
communities in Nevada and across the West to access training, 
equipment, and funding they need to combat the increasing 
amount of land at risk of burnup. We are seeing wildfires that 
are no longer seasons. They are hotter. They are longer. And 
they have a devastating impact on our communities.
    But here is my question. Can you both talk about what a 
reauthorization of the Community and Development Block Grant 
Disaster Recovery program means for frontline communities in 
States like Nevada that need help to combat wildfires 
frequently on land owned by the Federal Government? Remember 
about 85 percent of the land in Nevada is owned by the Federal 
Government.
    And can you also address how important the program is to 
take into account the critical habitat and ecosystems at risk 
of disaster as well because of the wildfires that we are 
seeing? Dr. Martin and Mr. Sprayberry, I ask you both if you 
could address that.
    Mr. Martin. Certainly. Thank you, Senator. Certainly, 
frontline communities are first and foremost in CDBG-DR's 
planning and the eligible activities and beneficiaries that are 
allowed in the program. And so looking at those that are going 
to be suffering from particularly kinds of hazard events that 
may or may not get a Presidential declaration is part of the 
long-term community benefit or community planning that CDBG-DR 
provides as a benefit to incorporate into the recovery 
framework. So I certainly appreciate that comment and focus on 
that specific kind of frontline community.
    And I will pass it to my colleague first before I respond 
to the second question.
    Mr. Sprayberry. Well, so we do not have a whole lot of 
wildfires here in North Carolina. We have had some. But I would 
say that, you know, anything that, you know, is going to help a 
frontline community, any program, you know, we have all got to 
take a look at it, take a holistic view, and make sure that we 
are doing whatever we can because even though, you know, maybe 
you did not have so many wildfires back in the 2000s we know 
that now it is a normal course of action. You are going to have 
wildfires from year over year just like hurricanes here in 
North Carolina. We saw the wind event in Iowa.
    So what are we going to do as a Nation to take a look at 
the existing programs to help our frontline communities? So I 
think that it is something that we should look at and maybe 
understand what the hazard is, what the threat is, and how we 
can address it with the programs that are existing.
    Senator Cortez Masto. Thank you.
    Mr. Martin. And the other comment around the land use 
planning, for example, the land that is controlled by the 
Federal Government versus others. That is, again, because it is 
in HUD and HUD has a very specific role in managing and 
understanding the local planning issues and the housing 
development issues HUD can certainly use its resources to 
ensure that people are trained about where not to build, not to 
further build, as well as what kind of protections should be 
made for communities that are already on a hazard's edge.
    Senator Cortez Masto. Thank you. And let me--I have only 
got a few minutes. Let me touch on the bill that Senator Tester 
talked about, Reforming Disaster Recovery Act of 2021. I know 
there were several recommendations for how to improve the 
funding that comes from CDBG-DR. Dr. Martin or Mr. Sprayberry, 
can you speak to the data sharing provisions in the bill and 
why is accurate data so important to have? Clearly, there is a 
concern it is not accurate data we have and need right now.
    Mr. Sprayberry. Well, thank you for that question. And I 
can tell you that, you know, we need to make sure before the 
bill is passed that those data sharing provisions have been 
well vetted. It is so critical that FEMA and HUD share that 
information so that, you know, there is not a duplication of 
benefits and--as we move forward because duplication of 
benefits and how we actually check on those takes a lot of time 
and it costs a lot of money. And so the more data that can be 
shared between FEMA and HUD the better it will, and it will 
make for a more efficient operation. So that is one thing.
    I am glad you asked that question because we certainly need 
to make sure that that is in the legislation, and it is, but we 
just need to make sure that before it gets passed that it is 
well vetted and good to go with both agencies.
    Mr. Martin. When you ask a question about data, Senator, 
that is music to a researcher's ear. So I am happy to say that 
there are probably two kinds of data. One is the kind of data 
that my colleague panelist was mentioning, sort of the 
operational data. That would include everything from details 
about the beneficiaries that have been coming from other parts 
of the Federal Government.
    FEMA individual assistance, for example, is the first 
Federal intervention in these communities' lives. And so 
understanding the demographics about that community, 
understanding any requirements that have occurred 
operationally, including mapping and environmental review, to 
answer--to add onto the previous question that you had. That is 
required for every property. So there are so many pieces of 
data that have occurred operationally. That is helpful for HUD 
to receive and to operationalize.
    But in the legislation, the data that is being referred to 
is more granular demographic data about the beneficiaries. And 
certainly that is--would be helpful for HUD to have, as well as 
the Federal Government to have, because other statutory 
requirements, constitutional requirements on civil rights, et 
cetera. So making sure that HUD is able to collect that data 
and do analysis and, in some cases, share it at an aggregate 
level to the public to confirm that the right people are being 
served.
    Senator Cortez Masto. Thank you again.
    Chairman Brown. Thank you, Senator Cortez Masto.
    Thanks to the witnesses for joining us today. Everyone, 
thank you. Everybody following--you know, every day following a 
disaster is 1 day too many and what has happened in this 
country. So we have a lot of work to do.
    I ask unanimous consent to enter into the record a letter 
from the Bipartisan Policy Center sent to Senator Toomey and to 
me. Without objection, so ordered.
    For Senators who wish to submit questions for the record, 
those questions are due 1 week from today, Wednesday, December 
22nd.
    To our witnesses, thank you, Mr. Sprayberry, Mr. Mayer, and 
Dr. Martin. To the witnesses, per our Committee rules, we ask 
that you respond to any questions from Members of this 
Committee within 45 days of your receipt of them. Thank you 
again.
    The Committee is adjourned.
    [Whereupon, at 11:13 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
              PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
    This morning the Banking, Housing, and Urban Affairs Committee 
looks at the authorization of the Community Development Block Grant-
Disaster Recovery Program, known as CDBG-DR.
    We meet today in the wake of devastating tornadoes that have taken 
the lives of more than 80 people, torn apart families, and destroyed 
homes, businesses, and infrastructure across multiple States--including 
Kentucky, Illinois, and our colleague Senator Hagerty's State of 
Tennessee.
    We have heard heartbreaking and infuriating stories, of lives torn 
apart, and workers put in danger.
    I want to express my sincere condolences to the families and 
communities affected by these storms.
    Even before this weekend's tragic events, we had already seen 18 
natural disaster events. 538 people lost their lives. Losses exceeded 
$1 billion in 2021.
    From drought to flooding to severe storms, from wildfires to 
tropical cyclones to winter storms, these events touched all kinds of 
communities, all across the country. Homes and businesses were 
destroyed. Local economies were devastated.
    None of our States is immune.
    The people of Dayton and Trotwood are still working to recover from 
tornadoes that destroyed their neighborhoods in 2019.
    Senator Menendez' and Senator Kennedy's States, though thousands of 
miles apart, were both devastated by Hurricane Ida this summer.
    With a changing climate, our country will continue to face extreme 
weather events and natural disasters. We must be better prepared to 
recover from these disasters quickly, efficiently, and equitably. And 
we must rebuild to make our homes and communities more resilient in the 
future.
    Today's hearing will look at the critical role CDBG-DR plays in 
offering disaster relief and long-term recovery assistance to 
communities affected by disasters. And we'll discuss how we can improve 
that aid, through a permanent authorization of the program.
    Since 1993, Congress has provided over $95 billion in disaster 
recovery assistance to States, territories, and communities through 
supplemental CDBG disaster recovery appropriations.
    This aid is particularly critical to low-income and middle class 
families, who are often hit the hardest by natural disasters, and who 
have the fewest resources to recover from them.
    While Congress has relied on CDBG-DR to provide flexible, long-term 
recovery assistance to communities in need, we have never provided a 
permanent authorization for the program.
    CDBG-DR is a valuable tool in the Federal disaster response toolkit 
to help communities across the country pick up the pieces and rebuild 
following disasters.
    The program has helped families and communities address needs that 
have been unmet by insurance and Federal assistance from the Federal 
Emergency Management Agency and Small Business Administration.
    But as valuable as this aid has been, we have also heard from 
disaster survivors and from State and local governments, the General 
Accountability Office, and the Department of Housing and Urban 
Development itself--that we can and should do better.
    In the absence of a permanent authorization, HUD must issue new 
regulations with each appropriation.
    We have heard that the delays and lack of predictability stemming 
from the current process:

    Delays in getting assistance out to families,

    Communities prevented from doing the kind of early planning 
        that will be most effective,

    Confusion created for States, localities, and families over 
        what resources are available to them.

    Think about what these families are dealing with: Your home has 
been flooded or the business your family built was destroyed. You're 
trying to deal with insurance claims. Bills are piling up. Debt 
collectors are calling.
    The last thing you want to deal with is more delays, more red tape, 
more confusion.
    Variations in appropriations and regulatory requirements between 
disasters can impose administrative and operational challenges for both 
HUD and grantees--particularly smaller communities or those 
administering multiple grants--and hinder efforts to build capacity.
    We also must do more to ensure that the most vulnerable members of 
our communities are not displaced, and that they can help their 
community recover.
    In response to recommendations from GAO, HUD, and others, Senators 
Schatz, Collins, Young, Van Hollen, and Tester have offered the 
Reforming Disaster Recovery Act of 2021 (S. 2471) to authorize and 
improve the CDBG-DR program.
    This is something that should be an opportunity for bipartisan, 
commonsense solutions--how we make Government more efficient, and 
actually do the job it's supposed to do for the people we serve.
    Today, we will hear from our witnesses about how authorizing the 
CDBG-DR program could help our communities recover, and deliver 
resources in a more timely, effective, and equitable manner.
    Without objection, I would like to enter into the record a letter 
from the Disaster Housing Recovery Coalition in support of S. 2471.
                                 ______
                                 
            PREPARED STATEMENT OF SENATOR PATRICK J. TOOMEY
    Mr. Chairman, thank you.
    I want to start off by acknowledging the horrific destruction that 
we witnessed over the weekend in Kentucky. I saw a headline this 
morning that 12 children were among the 74 killed by the storms. And 
the death toll is only expected to rise in the coming days. What tragic 
news.
    My heart goes out to the many families experiencing such 
devastating loss--loss of life and their families. Our thoughts are 
with them this morning.
    Today's hearing is about HUD's Community Development Block Grant-
Disaster Recovery Program, or CDBG-DR. Since 1993, Congress has spent 
nearly $90 billion through CDBG-DR to support disaster recovery 
efforts.
    Initially, CDBG-DR was used in rare cases when the billions of 
dollars that Congress spent annually on disaster recovery through other 
programs was considered insufficient to meet the needs of serious 
disasters. Unfortunately, since Superstorm Sandy in 2012, CDBG-DR 
spending has become routine.
    In the past 4 years alone, we've appropriated almost $40 billion 
for CDBG-DR. And we've done this even though billions of dollars of 
CDBG-DR funds appropriated for prior disasters--including the 9/11 
attacks and disasters that occurred more than a decade ago--remain with 
grantees, sitting unspent.
    I worry that making CDBG-DR a permanent program without a more 
comprehensive review of disaster assistance will only ensure that this 
wasteful trend continues. In my view, we should be discussing whether 
such spending through HUD is appropriate in the first place, not making 
it permanent.
    We already have an agency whose sole mission is ``to help people 
before, during and after disasters.'' It's called FEMA.
    Through the normal appropriations process, Congress provides 
billions every year to FEMA and other agencies so that the Federal 
Government can provide assistance to support communities struck by 
disasters. In addition to regular channels, Congress makes emergency 
supplemental disaster appropriations almost every single year.
    Let's consider some key examples of existing programs. The Army 
Corps of Engineers and FEMA deploy boots-on-the-ground to help 
survivors and repair damage to communities. FEMA funds repairs and 
replacement of homes for displaced families. The Small Business 
Administration does as well, including replacement of personal 
property. Given all of this support, why do we also need CDBG-DR?
    Theoretically, CDBG-DR is supposed to support longer term recovery 
needs that aren't met by other sources. I acknowledge there may be 
circumstances where it's useful for the Federal Government to help meet 
these needs. But we need to remember that States and local governments 
are primarily responsible for addressing such needs.
    Currently, States and local governments are not lacking for 
financial resources to do that. In 2020, State and local tax 
collections set a new record. On top of their record tax collections, 
Congress sent almost $900 billion to States and local governments for 
COVID relief over the course of a year. This included $5 billion 
specifically for CDBG, a significant portion of which remains unspent 
and is available for purposes such as disaster relief. And in November, 
Congress passed a $1.2 trillion infrastructure bill that will send 
billions of dollars to States and local governments.
    States are sitting on record budget surpluses and have more money 
on the way thanks to the recently passed infrastructure bill. Why 
shouldn't they plan and save for long-term disaster recovery and 
mitigation?
    We also can't ignore the fact that CDBG-DR program has long been 
plagued by waste, fraud, and abuse through the years. Let's consider 
some examples of that waste.
    Two years after Hurricane Katrina hit, HUD allowed Louisiana to use 
CDBG-DR funds to pay college professors stipends to stay in the State 
post-Katrina because it was an ``urgent need activity.'' In 
Mississippi, HUD allowed a county to use $9.6 million CDBG-DR funds to 
build a wastewater treatment facility for an undeveloped plot of land--
where nobody lived.
    As bad as these cases of waste are, the examples of fraud in the 
CDBG-DR may be even worse. HUD's Inspector General has repeatedly 
identified and referred for prosecution cases of fraud and abuse in 
CDBG-DR, including public corruption, embezzlement, bid-rigging, 
bribery, and kickback schemes.
    Given this track record, it makes one wonder how well does HUD 
respond to fraud risks in the CDBG-DR program? Well, we know the answer 
to that.
    This year HUD officials admitted to GAO that HUD ``does not 
consider fraud risks in programs managed by grantees to be direct risks 
to HUD itself.'' In other words, HUD's responsibility to root out fraud 
ends when it sends CDBG-DR funds to States. That's concerning since 
Congress recently appropriated nearly $20 billion through CDBG-DR to 
Puerto Rico that the Biden administration has been eager to quickly 
distribute to a Government with rampant fiscal mismanagement.
    Today, we will hear from Matt Mayer, a former DHS official and 
expert on disaster recovery, who has concerns with proposals to 
permanently authorize the CDBG-DR program. As Mr. Mayer notes, the 
over-federalization of disaster assistance for virtually every disaster 
has allowed States to reduce their own emergency management programs 
knowing that Federal taxpayers will be forced to bail them out. He also 
sensibly notes that Congress should step back and consider whether it 
should continue to federalize long-term disaster recovery well after 
the crisis has passed, which is a traditionally inherent State and 
local function. I look forward to hearing from today's witnesses about 
the CDBG-DR program.
    I recognize that improvements are needed in how the Federal 
Government provides disaster assistance. But for the reasons I've 
mentioned, I'm concerned that creating a permanent authorization for 
the CDBG-DR program is not the right way to go about that.
    As President Reagan wisely noted, Government programs are ``the 
nearest thing to eternal life we'll ever see on this earth.'' So we 
should tread carefully before we create new ones.
                                 ______
                                 
              PREPARED STATEMENT OF MICHAEL A. SPRAYBERRY
      Senior Advisor for Emergency Management, Hagerty Consulting
                           December 15, 2021
    Chairman Brown, Ranking Member Toomey, and Members of the 
Committee, my name is Mike Sprayberry and I am the Senior Advisor for 
Emergency Management with Hagerty Consulting, Inc., a firm which 
specializes in emergency management and disaster recovery--simply put, 
we help diverse communities nationwide prepare for, respond to, recover 
from, and mitigate disasters. I appreciate the opportunity to appear 
before the Committee today to discuss and support permanent 
authorization for the Community Development Block Grant-Disaster 
Recovery (CDBG-DR) program administered by the U.S. Department of 
Housing and Urban Development (HUD).
    Prior to joining Hagerty Consulting 2 months ago, I served the 
State of North Carolina for more than more than 15 years in various 
leadership roles within the State's Division of Emergency Management 
including 8 years as the Division's Director while also leading the 
State's Office of Recovery and Resiliency (NCORR) and serving as the 
State's Deputy Homeland Security Advisor. I also served as President of 
the National Emergency Management Association in 2017-2018. It is in 
this context that I gained familiarity with both the value of CDBG-DR 
program as well as the difficulties in deploying that funding.
    During my tenure as North Carolina's Emergency Management Director, 
the State was impacted by two significant hurricanes--Matthew in 2016 
and Florence in 2018--which generated a total of $778 million of CDBG-
DR allocations to the State (plus an additional $202 million from HUD 
for mitigation activities). These storms both struck the southeastern 
corner of the State and created overlapping damage, most notably in the 
form of extensive inland flooding which inundated low lying areas.
    CDBG-DR funding ultimately proved to be an invaluable complement to 
other recovery resources available from public and private entities, 
most notably funding available through various programs administered by 
the Federal Emergency Management Agency (FEMA). It has enabled a 
stronger focus on housing recovery needs and has assisted the low- and 
moderate-income population that has the fewest resources to recover. At 
the same time, the lack of a permanent authorization for CDBG-DR has 
hampered its effectiveness.
    Let me focus on a few impacts arising from that reality. First, the 
ad hoc nature of CDBG-DR means that it is difficult to effectively plan 
to receive the funding. CDBG-DR exists only when funds are appropriated 
for the purpose. Using information available on the HUD exchange 
website, it appears there have been thirty-two (32) CDBG-DR 
appropriations since the early 1990s for a total of almost $95 billion 
if we include the most recent $5 billion enacted on September 30 of 
this year. This track record indicates it has become reasonably 
predictable that CDBG-DR will be appropriated in the wake of the most 
catastrophic events but there is little certainty as to the timing or 
scope of that action.
    Prior to the CDBG-DR allocation in response to Hurricane Matthew, 
North Carolina had not received CDBG-DR funding since 2004 when it was 
awarded $4.5 million. As such, there was a very limited understanding 
within the State as to the evolution of CDBG-DR during the intervening 
12 years and the concurrent expectations that would be placed upon the 
State.
    We learned on the fly and ultimately Governor Roy Cooper 
established NCORR to effectively manage CDBG-DR funding and improve 
coordination across the spectrum of recovery and resilience efforts. 
The problem was that we lost critical time in our recovery while 
attempting to understand how to deploy the funding, a delay that could 
have been reduced with a more structured implementation of CDBG-DR via 
permanent authorization.
    Second, delays in implementation of CDBG-DR must be reduced if the 
program is to be of the greatest value to jurisdictions as they attempt 
to recover from major disasters. Without a permanent legislative 
authorization and implementing regulations, CDBG-DR timelines will 
likely be negatively impacted by the recurring need to develop Federal 
Register notices to govern the use of the funds. The upper half of this 
graphic from the NCORR website demonstrates the elongated timeline 
associated with Federal actions on the Hurricane Florence allocation:
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    In describing this timeline, NCORR notes that 500 days elapsed 
between Florence's landfall until HUD was able to issue the Federal 
Register notice governing the CDBG-DR funds allocated to address 
recovery needs associated with that disaster. Half that time was 
associated with the period from landfall until enactment of an 
appropriation and the other half from appropriation to Notice issuance.
    Focusing on the second half of that equation, permanent 
authorization of CDBG-DR will enable HUD to issue standing regulations 
which should reduce delays arising from the internal Federal 
``friction'' that arises in the development of these Notices. Further, 
permanent regulations will give CDBG-DR recipients confidence to begin 
planning more quickly post-disaster based on an assurance that there 
will not be policy changes that could negate planning efforts in 
support of a rapid program launch. While HUD recently indicated that it 
intends to issue a CDBG-DR ``universal notice,'' it seems like a soft 
alternative to a well-structured, publicly reviewed regulatory 
structure.
    Third, establishment of a front-end CDBG-DR funding mechanism that 
provides, at a minimum, early planning funding as a predicate to a 
larger award would be exceptionally useful as a component of any 
permanent authorization. This would enable grantees to begin the 
necessary procurement and staffing efforts that are necessary to 
successfully implement a CDBG-DR program. It is important to understand 
that many States do not have an appropriate structure to effectively 
manage CDBG-DR allocations which may total hundreds of millions of 
dollars and thereby dwarf annual CDBG allocations. Extensive back-end 
operations must be put in place rapidly to ensure a successful CDBG-DR 
launch and it would be best to fund these actions with CDBG-DR funds. 
In sum, early planning funding paired with aggressive technical 
assistance efforts through HUD seem like essential tools in delivering 
CDBG-DR benefits to disaster-stricken communities and households.
    One final point that is important to me based on my experience in 
North Carolina is to recognize that some areas of the Nation are 
repeatedly impacted by disasters. This was the case in North Carolina 
regarding hurricanes Matthew and Florence and the appropriations 
language got in the way of being able to use the Matthew-related CDBG-
DR funding to help deliver a rapid response to Florence. Any 
authorization bill should take care to allow a degree of fungibility 
between qualifying events to address emerging post-disaster needs in 
real time and to minimize standards that require attributing repetitive 
damage to particular events and their respective funding stream.
    This hearing has been triggered by the introduction of S. 2471, the 
Reforming Disaster Recovery Act, by a bipartisan group of senators. In 
the absence of a broader examination of long-term disaster recovery 
policies at the Federal level, it is important to deal with the reality 
that CDBG-DR has been funded continually over the past three decades. 
Overall, S. 2471 addresses the points I have raised in this statement 
and deserves your consideration as a significant step forward that will 
address the timing problems that have plagued CDBG-DR implementation.
    Congress may choose not to fund CDBG-DR in the future but 
considering the track record, we should assume that it will continue to 
be part of Federal disaster recovery efforts. The prudent move would be 
to create a permanent structure for CDBG-DR in pursuit of better and 
more responsive performance for the Nation's disaster impacted 
communities.
    Thank you for this opportunity to appear before the Committee and I 
look forward to addressing any questions that you might have.
                                 ______
                                 
                    PREPARED STATEMENT OF MATT MAYER
                      President, Opportunity Ohio
                           December 15, 2021
    My name is Matt Mayer. I am the President of Opportunity Ohio. From 
2007 to 2016, I served as a Visiting Fellow at the American Enterprise 
Institute and The Heritage Foundation where I focused on national 
security issues, including disaster preparedness, response, and 
recovery. I also served as the Counselor to the Deputy Secretary and 
the Acting Executive Director of the Office of State and Local 
Government Coordination and Preparedness (SLGCP) (formerly the Office 
for Domestic Preparedness) at the U.S. Department of Homeland Security 
(DHS) under President George W. Bush.
    My time at DHS included the Department's response and recovery to 
the four successive hurricanes (Cat 4 Charley, Cat 2 Frances, Cat 3 
Ivan, and Cat 3 Jeanne) that struck Florida in August and September 
2004 and Cat 5 Hurricane Katrina in 2005. Finally, I oversaw the 
TOPOFF3 full-scale national exercise that occurred in New London, 
Connecticut, and Newark, New Jersey, which tested several issues 
including the overlap in authority among Federal departments and 
agencies. In 2009, my book, Homeland Security and Federalism: 
Protecting America From Outside the Beltway, was released by the 
publisher. The second edition of that book came out in 2016. My 
experience at DHS and my years of research provide me with insights I'd 
like to share with the Committee.
    Thank you for the opportunity to appear before the Committee today. 
At no time have I received funding from any Federal, State, local, or 
tribal department, agency, or office on matters covered by this 
hearing. In lieu of restating the research I've done over the last 15 
years and from my book, I would respectfully direct you to my research 
publicly available at the websites of the American Enterprise Institute 
and The Heritage Foundation. Should any Members want a copy of my book, 
I'd be happy to provide that Member with a copy. I'd rather spend my 
brief time framing the issues I see with the proposed legislation and 
answer any questions you might have during our time together.
    My largest concern with the proposed legislation is that it 
continues the federalization of natural disasters that started in 1993 
and has accelerated each decade, as more natural disasters that used to 
be considered inherently State and local disasters have received 
Federal declarations and, therefore, Federal funding. As noted below, 
this federalization has led to supplanting State and local funds, an 
underinvestment in mitigation and preparedness by States and 
localities, and a forced subsidization of a minority of disaster-prone 
States by the majority of ``safer'' States.
    It doesn't appear Congress ever steps back for a moment and 
considers whether it ``should'' federalize a traditional inherent State 
and local function. With the national debt surpassing $30 trillion and 
the flood of Federal funds that have been appropriated over the last 2 
years in response to the pandemic, it may be time for Congress to pause 
and reprioritize Federal spending. Of course, States will ``want'' the 
``free'' Federal funds given most States are restricted by balance 
budget amendments, so must prioritize spending annually. As we've seen 
in the last year, the significant flow of Federal spending executed by 
the printing of money is driving inflation to record highs. Failure to 
restrain spending going forward will only make taming that inflation 
more painful for the men and women in the communities you are intending 
to help due to higher prices on everything they buy.
    Secondarily, it creates a permanent program, including permanent 
staff and regulatory control, outside of the Federal Emergency 
Management Agency (FEMA) to deal with elements following a natural 
disaster. In theory, the interagency process and cohesiveness between 
Federal departments, including data sharing, should ``work,'' but 
theory rarely becomes the reality in practice. My experience both 
inside of the Federal Government and as a policy ``expert'' outside of 
Government is that the creation of a program results in the political 
and career personnel in that program seeing it as an opportunity to 
grow their importance and roles. As a result, fiefdoms arise that 
inhibit rather than encourage interagency coordination.
    Following Hurricane Katrina, Congress intentionally consolidated 
preparedness, response, and recovery functions in FEMA due to the 
failures revealed in the response to that historical natural disaster. 
Prior to that consolidation, several departments had roles in disaster 
response that didn't necessarily require coordination with FEMA. My 
former office, SLGCP, controlled several billion dollars worth of 
homeland security grants, as well as training and exercise programs. In 
the years and months leading up to Hurricane Katrina, we spent 
countless hours in conflict with FEMA personnel, including with 
Administrator Mike Brown, as FEMA wanted to control the grants. Our 
concern with FEMA having control over the grants centered on the 
likelihood that a natural disaster focus would overwhelm the goal of 
the grants to strengthen America for a terrorist attack (i.e., given 
how many natural disasters strike America in a given year, the 
inclination at FEMA would be to focus on those incidents instead of 
terrorism).
    Similar ``territorial'' squabbles occurred within DHS with other 
entities over FEMA's role and across the interagency. Even FEMA 
circumvented DHS when it wanted to by cutting out the Secretary and 
going directly to White House staffers or simply ignoring information 
requests to keep the Secretary in the dark.
    The post-Hurricane Katrina legislation that consolidated everything 
under FEMA appears to have been successful at enhancing the Federal 
response and decreasing interagency tension. Given the existence of 
various FEMA programs aimed at housing and community redevelopment, 
including its Individual and Households Program and its Public 
Assistance Program, I'm unclear of why what exists today at FEMA is not 
sufficient to address the concerns of Congress to ensure post-disaster 
needs are met as efficiently and as effectively as possible. If 
concerns exist, then it seems to me the more efficient and effective 
approach would be to fix what isn't working at FEMA versus creating a 
permanent separate, siloed program elsewhere.
    Obviously, the U.S. Department of Housing and Urban Development 
(HUD) should work closely with FEMA to provide its expertise on housing 
and community redevelopment issues, but granting it permanent powers 
and funding outside of FEMA likely will lead to territorial issues down 
the road and run the risk of vital aspects falling through the cracks 
that inherently exist when authorities and responsibilities exist with 
two or more entities. Perhaps the wiser course of action at this 
inflection point is to build upon the post-Hurricane Katrina reforms 
that consolidated disaster activities within FEMA and consider moving 
the Community Development Block Grant-Disaster Recovery (CDBG-DR) 
program from HUD to FEMA.
    As Senator Collins may recall from our time together with former 
Senator Joe Lieberman during TOPOFF3 in 2005, one of the core issues we 
discovered during that full-scale national exercise was which Federal 
entity decided how clean was clean enough following a mustard gas 
release at a pier. Both the U.S. Coast Guard and the Environmental 
Protection Agency had roles and standards on that issue. The respective 
standards on ``clean enough'' differed and both agencies insisted they 
had the primary role. As a result, having multiple fiefdoms created 
issues when it came to the Federal response.
    Moreover, research has shown that multiple programs focused on the 
same area result in benefit duplication and delay, including with CDBG-
DR. As someone who worked closely with States, localities, and tribal 
areas on grants, the reality is many jurisdictions lack the personnel, 
expertise, and bandwidth to deal with numerous Federal agencies on 
issues. Given that disasters are inherently unpredictable as to timing 
and location, most State, local, and tribal areas won't have existing 
staff available to deal with the influx of a multiheaded Federal 
bureaucracy. Thus, consolidating CDBG-DR in FEMA will allow the Federal 
Government to streamline the various threads dealing with housing and 
community redevelopment under one roof and leverage the existing 
emergency management personnel existing in State, local, and tribal 
areas, with assistance from whatever local housing and community 
redevelopment expertise exists.
    In the rollout of DHS, some within it argued for the creation of 
``fusion centers'' in which DHS grant funds would support the creation 
and operation of State and local intel centers. Already existing 
performing much of the same function were Joint Terrorism Task Forces 
(JTTF). DHS didn't like JTTFs because those entities were controlled by 
the U.S. Department of Justice/Federal Bureau of Investigation. This 
Federal territorial scrum forced States and locals to try to staff both 
entities, which they simply lacked the personnel to do effectively. 
Unfortunately, this bifurcated effort still exists, which may partially 
explain some of the failures our domestic intelligence system has 
experienced in connecting the dots to detect and stop attacks (i.e., 
items fall through the cracks or don't get shared between the fusion 
centers and JTTFs). Having two Federal entities involved in funding 
housing and community redevelopment after a disaster simply may results 
in similar mistakes, such as delays, duplication, and waste.
    Next, while I understand there may be housing and community 
redevelopment issues after historically significant natural disasters 
like Hurricane Katrina and the Northridge earthquake, I haven't been 
successful in locating data showing that there are broader issues 
existing predisaster that is destroyed or rendered unusable after 
natural disaster strike. In any given year, certain locations deal with 
flooding, other locations cope with tornadoes, coastal areas handle 
hurricanes, western States fight wildland fires, and California must 
remain ever vigilant regarding earthquakes. The regularity of these 
occurrences tended to result in most communities being adept at 
handling housing and redevelopment issues.
    FEMA continues to provide assistance and, in some cases, housing to 
victims of natural disasters while their homes and apartments are 
rebuilt or fixed. FEMA also is heavily involved in larger community 
development activities. Thus, what is missing in FEMA's portfolio that 
justifies a permanent Federal program elsewhere? Is the goal to 
prebuild affordable housing in safer locations that would remain 
uninhabited unless a natural disaster struck? With poverty largely 
located in urban centers and rural areas where few large-scale natural 
disasters actually occur--most natural disasters that can destroy large 
amounts of housing impact tourist zones along coasts, such an approach 
would be highly inefficient and difficult to ``get right.''
    Moreover, it also would warp the private market for land, 
materials, and housing. We analyzed such an approach during TOPOFF3 in 
regards to the health care elements that would be needed after a mass 
terrorist attack. The elements included more hospitals, more supplies, 
more nurses, more doctors, and more pharmaceuticals. As I recall, the 
price tag for adding this post-disaster capacity that would remain in 
reserve was in the tens of billions and deemed grossly inefficient 
given the other pressing funding needs of the Federal Government.
    Another concern is that my research has shown that Federal funds 
tend to supplant rather than supplement State and local funds. 
Following the influx of homeland security grants, States and localities 
moved funds from their preparedness and emergency management programs 
to other more pressing needs and replaced those funds with the Federal 
homeland security grants. Thus, there wasn't a net increase in funding, 
but a wash in funding in many cases. To stop this supplanting, I 
strongly pushed for a hard matching requirement so that States and 
localities maintain skin in the game.
    Should you proceed with this legislation, I would strongly urge you 
to include a matching element that cannot be waived. After all, housing 
and community redevelopment are inherently State and local functions. I 
also would urge measures are added to more effectively deal with waste, 
fraud, and abuse and to shorten the time in which funds must be used to 
a period of time consistent with the recovery operations following a 
natural disaster. Lastly, I would urge greater restrictions on when 
waivers can be granted, as experience from FEMA shows the exceptions 
unfortunately become the rules.
    Keep in mind, States and localities are (or will be) already flush 
with Federal funds from the COVID pandemic and the infrastructure 
package recently passed, as well as their own strong tax receipts. If 
there is such a need as you envision, this new program will only 
disincent States and localities from stepping up and meeting the needs 
of their communities. With the infrastructure funds recently approved, 
States and localities should have sufficient funds to deal with 
whatever issues they face or could face after a natural disaster.
    Finally, you must keep in mind that America is an enormous country 
physically. Natural disasters don't happen uniformly across the 
country. My research analyzing decades of natural disasters shows that 
most nonroutine natural disasters (i.e., Category 3 or higher 
hurricanes and 7.0 or higher Richter Scale earthquakes) occur along the 
southern Atlantic coast, the Gulf Coast, and in California. Yes, the 
States in the Great Plains, Mountain West, Midwest, and New England 
experience natural disasters, but those disasters typically are routine 
and well-planned for given the regularity of flooding, snowstorms, 
wildland fires, and tornadoes in those communities year-after-year. 
Obviously, the Mayfield, Kentucky, tornado is an exception, especially 
given its timing and ferocity on the Enhanced Fujita scale.
    As a result of these well-established patterns, the vast majority 
of States end up subsidizing the States where the bulk of FEMA/HUD 
funding flows. An occasional flood in Findlay, Ohio, is about all that 
happens in my State that triggers FEMA funding, but, as the seventh 
largest State in America, the proportion of Federal taxes Ohioans pay 
to support FEMA end up subsidizing Floridians, Texans, and 
Californians. The same goes for taxpayers in Pennsylvania, Rhode 
Island, New Jersey, Idaho, Montana, Virginia, Maryland, Nevada, 
Tennessee, Minnesota, Wyoming, Arizona, Kansas, North Dakota, and 
Montana, as well as the other subsidizing States that aren't 
represented on this Committee. Why should Ohioans be forced to 
subsidize Floridians even more through another permanent Federal 
disaster program?
    As my testimony indicates, there are several concerns this 
legislation creates that don't appear to be justified by the size of 
the problem attempting to be solved and by the continued federalization 
of natural disasters. If there is a need for what this legislation aims 
to meet, fix it within FEMA or create it within FEMA so it is aligned 
with FEMA's decades of experiences and programs related to housing and 
community redevelopment issues post-disaster. Any legislation should 
ensure that Federal funds aren't supplanting State, local, and tribal 
area funds and that those entities have ``skin in the game.'' From a 
pure equity position, Congress should ensure that States in which few 
Stafford Act-eligible natural disasters occur aren't forced to 
subsidize those States where big events occur regularly.
    Thank you for the opportunity to testify to this Committee. Please 
let me know if there is anything else I can do as you debate the 
proposed legislation.
                                 ______
                                 
                  PREPARED STATEMENT OF CARLOS MARTIN
 Rubenstein Fellow, Metropolitan Policy Program, Brookings Institution
                           December 15, 2021
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        RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
                   FROM MICHAEL A. SPRAYBERRY

Q.1. Grantees under the CDBG-DR Program are required to present 
an action plan for approval by HUD before they receive funding. 
The COVID-19 pandemic has had a significant impact on many of 
our supply chains, including on the availability of certain 
construction materials. Have these supply chain disruptions 
adversely affected the ability of grant recipients to fulfill 
their approved action plans? If so, what implications does this 
have for grantees' current and future access to funding?

A.1. Supply chain disruptions occurring since March 2020 have 
certainly impacted the ability of CDBG-DR grant recipients to 
make progress on programs and activities to be implemented 
under their approved Action Plans. CDBG-DR is primarily a 
construction-oriented funding source as the majority of funds 
go to construction costs associated with housing and 
infrastructure/public facilities. Localized shortages and 
delays in obtaining materials and skilled labor are always 
present post-disaster and have been exacerbated on a nationwide 
basis by COVID-related disruptions. This reality has a negative 
impact on grantee program execution timelines, but evidence 
would have to collected on grantee-by-grantee basis to 
determine the true impacts.
    There are other factors which have likely impacted the pace 
of implementation. First, for many grantees and their 
subrecipients, staff attention to long-term recovery efforts 
has been diverted to address the use of several trillion 
dollars of Federal assistance appropriated in response to COVID 
needs. Second, accounting for workflow changes due to increase 
remote work had a negative impact on timelines, particularly in 
the early months of the pandemic.
    Grantee access to current CDBG-DR funds does not appear to 
be at risk as it appears all CDBG-DR funds appropriated since 
2015 are statutorily available until expended. HUD has imposed 
administrative deadlines for use of the funds, but HUD has the 
ability to move those deadlines if it chooses to do so. As for 
access for future funds, that will be an issue to be decided 
jointly by Congress and the Administration in the future.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR TOOMEY
                        FROM MATT MAYER

Q.1. Duplication of Benefits--At the Senate Banking Committee 
hearing on December 15, 2021, Mr. Michael Sprayberry testified 
that ``it's so critical that FEMA and HUD share information so 
that there isn't a duplication of benefits.''
    Do you agree with Mr. Sprayberry that HUD should not 
duplicate FEMA or other Federal assistance programs?

A.1. First, I found it odd in his testimony and at the hearing 
that Mr. Sprayberry didn't disclose a glaring conflict of 
interest given that his current employer actively pursues and 
receives HUD contracts funded by the Community Development 
Block Grant-Disaster Recovery Program. Such a disclosure 
doesn't take away from his experience and insights running 
disasters in North Carolina, but it certainly adds critical 
context to his support for HUD receiving disaster relief funds, 
especially given my experience that FEMA/State emergency 
managers typically strongly oppose disaster relief programs 
outside of FEMA's domain.
    Regardless, I agree that HUD funding should not duplicate 
FEMA or other Federal assistance programs.

Q.2. Do you think it is appropriate to waive a requirement 
prohibiting the duplication of benefits, as allowed in the 
Reforming Disaster Recovery Act (S. 2471)?

A.2. I do not think it is appropriate to waive a requirement 
prohibiting the duplication of benefits, as the entire point of 
the requirement is to ensure benefits aren't duplicated, which 
has been a significant problem in HUD-run disaster relief.

Q.3. Do you think it is appropriate to establish penalties for 
grantees failing to protect against the duplication of benefits 
but permit waivers from the requirement that the Federal 
Government pursue remedial action concerning such duplication 
of benefits?

A.3. Yes, there should be penalties for grantees failing to 
protect against the duplication of benefits, as consequent-free 
bureaucracy rarely benefits taxpayers or recipients of aid. 
Similarly, waivers of the requirement that the Federal 
Government pursue remedial action should not be permitted.
                                ------                                


        RESPONSES TO WRITTEN QUESTIONS OF SENATOR WARREN
                       FROM CARLOS MARTIN

Q.1. In response to an April 2019 request from myself and 
Representative Bennie G. Thompson, Chairman of the House 
Committee on Homeland Security, \1\ the Government 
Accountability Office (GAO) recently released a study on the 
extent to which the structure and administration of Federal 
disaster programs, including CDBG-DR, exacerbate racial and 
socioeconomic inequities in the United States, and the extent 
to which they have a disparate impact on tribal nations. \2\
---------------------------------------------------------------------------
     \1\ Office of Senator Elizabeth Warren, ``Warren, Thompson Seek 
GAO Review of Federal Disaster Aid Programs' Impact on Inequality'', 
press statement, April 18, 2019, https://www.warren.senate.gov/
oversight/letters/warrenthompson-seek-gao-review-of-federal-disaster-
aid-programs-impact-on-inequality.
     \2\ GAO, ``Disaster Recovery: Additional Actions Needed To 
Identify and Address Potential Recovery Barriers'', GAO-22-104039, 
December 15, 2021, https://www.gao.gov/products/gao-22-104039.
---------------------------------------------------------------------------
    GAO found that our Federal disaster programs ``lack key 
information--data and analysis--that would allow them to 
examine patterns and indicators of potential access barriers 
and disparate recovery outcomes. Moreover, the programs have 
not taken action to determine (1) the universe of data needed 
to support this kind of analysis; and (2) sources and methods 
to obtain those data when the programs do not already collect 
them, including overcoming key challenges. Systematic efforts 
to collect and analyze data, and routine, interagency processes 
to address any identified access barriers or disparate 
outcomes, would help ensure equal opportunity to participate in 
disaster recovery in a meaningful way.'' \3\
---------------------------------------------------------------------------
     \3\ Id.
---------------------------------------------------------------------------
    Based on your research, what specific data are needed in 
order to ensure that all communities--particularly communities 
of color, low-income communities, and tribal nations--benefit 
from Federal disaster relief programs?

A.1. Response not received in time for publication.

Q.2. The GAO report also found that while the Department of 
Housing and Urban Development (HUD) officials who administer 
CDBG-DR ``can access the demographic data that their grantees 
are required to collected on beneficiaries . . . they do not 
routinely and systematically use the data to identify access 
barriers, because it is difficult to conduct analyses across 
grants because of the flexibility given to each grant in its 
administration of funds.'' \4\
---------------------------------------------------------------------------
     \4\ Id, p. 32.
---------------------------------------------------------------------------
    How can HUD best utilize and augment the demographic data 
it collects for CDBG-DR to identify and address potential 
barriers to accessing program funds and evaluate the 
potentially disparate impact of the program across racial 
groups, socioeconomic groups, and tribal communities?

A.2. Response not received in time for publication.

Q.3. How would permanent authorization of CDBG-DR facilitate 
HUD's ability to ensure that aid administered in the wake of 
natural disaster do not exacerbate existing racial and 
socioeconomic inequities in affected communities?

A.3. Response not received in time for publication.
              Additional Material Supplied for the Record
            LETTER SUBMITTED BY THE BIPARTISAN POLICY CENTER
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

      LETTER SUBMITTED BY THE DISASTER HOUSING RECOVERY COALITION
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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