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	<title> - CONTROLLING THE RISING COST OF FEDERAL RESPONSES TO DISASTER</title>
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	[House Hearing, 114 Congress]
	[From the U.S. Government Publishing Office]




	CONTROLLING THE RISING COST OF FEDERAL RESPONSES TO DISASTER

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

	(114-40)

	HEARING

	BEFORE THE

	SUBCOMMITTEE ON
	ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

	OF THE

	COMMITTEE ON
	TRANSPORTATION AND INFRASTRUCTURE
	HOUSE OF REPRESENTATIVES

	ONE HUNDRED FOURTEENTH CONGRESS

	SECOND SESSION

	__________

	MAY 12, 2016

	__________

	Printed for the use of the
	Committee on Transportation and Infrastructure


	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


	Available online at: http://www.gpo.gov/fdsys/browse/
	committee.action?chamber=house&committee=transportation


	__________

	U.S. GOVERNMENT PUBLISHING OFFICE

	20-214 PDF WASHINGTON: 2017
	_____________________________________________________________________________
	For sale by the Superintendent of Documents, U.S. Government Publishing Office,
	Internet: bookstore.gpo.gov. Phone: toll free (866) 512-1800; DC area (202) 512-1800
	Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001




	COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

	BILL SHUSTER, Pennsylvania, Chairman
	DON YOUNG, Alaska PETER A. DeFAZIO, Oregon
	JOHN J. DUNCAN, Jr., Tennessee, ELEANOR HOLMES NORTON, District of
	Vice Chair Columbia
	JOHN L. MICA, Florida JERROLD NADLER, New York
	FRANK A. LoBIONDO, New Jersey CORRINE BROWN, Florida
	SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas
	CANDICE S. MILLER, Michigan ELIJAH E. CUMMINGS, Maryland
	DUNCAN HUNTER, California RICK LARSEN, Washington
	ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL E. CAPUANO, Massachusetts
	LOU BARLETTA, Pennsylvania GRACE F. NAPOLITANO, California
	BLAKE FARENTHOLD, Texas DANIEL LIPINSKI, Illinois
	BOB GIBBS, Ohio STEVE COHEN, Tennessee
	RICHARD L. HANNA, New York ALBIO SIRES, New Jersey
	DANIEL WEBSTER, Florida DONNA F. EDWARDS, Maryland
	JEFF DENHAM, California JOHN GARAMENDI, California
	REID J. RIBBLE, Wisconsin ANDRE CARSON, Indiana
	THOMAS MASSIE, Kentucky JANICE HAHN, California
	MARK MEADOWS, North Carolina RICHARD M. NOLAN, Minnesota
	SCOTT PERRY, Pennsylvania ANN KIRKPATRICK, Arizona
	RODNEY DAVIS, Illinois DINA TITUS, Nevada
	MARK SANFORD, South Carolina SEAN PATRICK MALONEY, New York
	ROB WOODALL, Georgia ELIZABETH H. ESTY, Connecticut
	TODD ROKITA, Indiana LOIS FRANKEL, Florida
	JOHN KATKO, New York CHERI BUSTOS, Illinois
	BRIAN BABIN, Texas JARED HUFFMAN, California
	CRESENT HARDY, Nevada JULIA BROWNLEY, California
	RYAN A. COSTELLO, Pennsylvania
	GARRET GRAVES, Louisiana
	MIMI WALTERS, California
	BARBARA COMSTOCK, Virginia
	CARLOS CURBELO, Florida
	DAVID ROUZER, North Carolina
	LEE M. ZELDIN, New York
	MIKE BOST, Illinois
	------

	Subcommittee on Economic Development, Public Buildings, and Emergency
	Management

	LOU BARLETTA, Pennsylvania, Chairman

	ERIC A. ``RICK'' CRAWFORD, Arkansas ANDRE CARSON, Indiana
	THOMAS MASSIE, Kentucky ELEANOR HOLMES NORTON, District of
	MARK MEADOWS, North Carolina Columbia
	SCOTT PERRY, Pennsylvania ALBIO SIRES, New Jersey
	RYAN A. COSTELLO, Pennsylvania DONNA F. EDWARDS, Maryland
	BARBARA COMSTOCK, Virginia DINA TITUS, Nevada
	CARLOS CURBELO, Florida PETER A. DeFAZIO, Oregon (Ex Officio)
	DAVID ROUZER, North Carolina VACANCY
	BILL SHUSTER, Pennsylvania (Ex Officio)



	CONTENTS

	Page

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

	TESTIMONY
	Panel 1

	Hon. Carlos Curbelo, a Representative in Congress from the State
	of Florida..................................................... 8

	Panel 2

	Hon. Joseph L. Nimmich, Deputy Administrator, Federal Emergency
	Management Agency.............................................. 10
	Hon. Sallie Clark, Commissioner, El Paso County, Colorado, on
	behalf of the National Association of Counties................. 10
	Bryan Koon, Director, Florida Division of Emergency Management,
	on behalf of the National Emergency Management Association..... 10
	Eric Nelson, Senior Vice President of Catastrophe Risk
	Management, Travelers Insurance, on behalf of the BuildStrong
	Coalition...................................................... 10
	Kevin Mickey, GISP, CTT, Chair, Multihazard Mitigation Council,
	National Institute of Building Sciences, and Director of
	Professional Development and Geospatial Education, The Polis
	Center, Indiana University Purdue University Indianapolis...... 10

	PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

	Hon. Andre Carson of Indiana..................................... 37

	PREPARED STATEMENTS SUBMITTED BY WITNESSES

	Hon. Carlos Curbelo \1\
	Hon. Joseph L. Nimmich........................................... 41
	Hon. Sallie Clark................................................ 47
	Bryan Koon....................................................... 57
	Eric Nelson...................................................... 65
	Kevin Mickey, GISP, CTT.......................................... 73

	SUBMISSIONS FOR THE RECORD

	Slides referenced in the opening remarks of Hon. Lou Barletta, a Representative
	in Congress from the State of Pennsylvania.....2, 3, 4, 5, 6



	ADDITIONS TO THE RECORD

	Press release of May 10, 2016, ``Curbelo and Sires Introduce
	Disaster Mitigation Bill''..................................... 88
	H.R. __, a bill to improve disaster mitigation programs, and for
	other purposes................................................. 89
	Letter of May 12, 2016, from Mary Ellen Sprenkel, President and
	CEO, Corps Network, to Hon. Lou Barletta, Chairman, and Hon.
	Andre Carson, Ranking Member, Subcommittee on Economic
	Development, Public Buildings, and Emergency Management........ 106

	----------
	\1\ Hon. Carlos Curbelo did not submit a prepared statement for the
	record.


	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



	CONTROLLING THE RISING COST OF FEDERAL RESPONSES TO DISASTER

	----------


	THURSDAY, MAY 12, 2016

	House of Representatives,
	Subcommittee on Economic Development,
	Public Buildings, and Emergency Management,
	Committee on Transportation and Infrastructure,
	Washington, DC.
	The subcommittee met, pursuant to notice, at 10:10 a.m. in
	room 2167, Rayburn House Office Building, Hon. Lou Barletta
	(Chairman of the subcommittee) presiding.
	Mr. Barletta. The subcommittee will come to order. At our
	first hearing in the 114th Congress, I stated that my top
	emergency management priority was pursuing life-saving and
	cost-reducing disaster legislation and launching a public
	policy debate about the costs of disasters, in the terms of
	both the loss of property and human life.
	We followed that hearing with several roundtables to help
	us understand what disasters cost this country, who pays those
	costs, and whether the problem is getting better or worse.
	Early last year, Ranking Member Carson and I introduced the
	FEMA Disaster Assistance Reform Act to call for the first
	comprehensive assessment of disaster costs and losses in over
	20 years. We also wanted to reform several disaster assistance
	programs to make them more efficient and more effective. In
	February the House passed this FEMA [Federal Emergency
	Management Agency] legislation and we hope the Senate will take
	up H.R. 1471 and pass it soon.
	The purpose of today's hearing is to discuss what we have
	learned so far and begin exploring potential solutions,
	particularly the principles that should be driving those
	solutions. While there are significant variations from year to
	year, we have found that disaster losses have grown
	considerably over the past three decades. As a result, the
	private sector and Government are spending an ever increasing
	amount of money on disasters. FEMA alone has obligated more
	than $178 billion since 1989 for over 1,300 Presidential
	disaster declarations.
	In addition, the number of Federal disasters is going up.
	Take a look at this graph that shows the steady increase in
	the number of Presidential disaster declarations since 1953.

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

	Mr. Barletta. Many have suggested, including the Government
	Accountability Office, that the growth in the number of
	disaster declarations may be causing the increase in Federal
	disaster costs. But when we had the Congressional Research
	Service look more closely at the data, they found the growth in
	declaration is driven by small disasters and they represent a
	very small part of Federal disaster spending.

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

	Mr. Barletta. In fact, 75 percent of all declared disasters
	account for only 7 percent of costs. In other words, we could
	eliminate three-quarters of all federally declared disasters
	and barely cut 7 percent of Federal disaster spending. I would
	argue the amount saved by eliminating those disaster
	declarations certainly would not outweigh the benefit those
	declarations provide to helping our smaller, remote communities
	respond to and recover from disasters.
	In order to understand why disaster costs are going up, we
	need to look at the big disasters, since that is where over 90
	percent of the money goes. Since we started looking into this
	issue, we have also found the role of the Federal Government in
	covering disaster losses has increased.
	As we can see here, Federal disaster spending as a share of
	total disaster losses has grown from 23 percent during
	Hurricane Hugo in 1989 to 80 percent during Hurricane Sandy in
	2012.

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

	Mr. Barletta. In recent years, significant disaster aid has
	been provided outside of FEMA's disaster assistance programs.
	The charts show how disaster aid programs outside FEMA have
	grown. In fact, for Hurricane Sandy, there was less FEMA
	assistance than from either the Department of Housing and Urban
	Development or the Department of Transportation. We found that
	these additional disaster aid programs don't have the same
	requirements and restrictions as the FEMA assistance.

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

	Mr. Barletta. FEMA assistance is tied to actual disaster
	damage, and is for individuals, governmental entities or
	certain nonprofits performing government-like functions. FEMA
	only spends money on eligible items for eligible applicants, no
	matter how much money FEMA receives. FEMA mitigation funds must
	be used on cost-beneficial projects to ensure the Federal
	investment is a wise one. FEMA makes every effort to get money
	into the hands of applicants as fast as possible to enable
	rapid recovery from disaster impacts.
	In the most recent data provided by the Sandy Program
	Management Office from March 2016, it appears that these
	agencies have been slow in awarding and especially paying out
	funds.

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

	Mr. Barletta. Based on this data, only one-third of the
	CDBG-DR [Community Development Block Grant Disaster Recovery]
	funds have been dispersed and only 13 percent of the FTA
	[Federal Transit Administration] funds have been paid out. Now,
	this may be worth looking into in greater detail, and it
	certainly shows why a comprehensive look into disaster
	spending, as well as costs and losses, is needed. In an era of
	growing Government debt, we need to ensure Federal spending is
	necessary and cost-effective.
	Right after I became a Member of Congress in 2011, my own
	district was hit hard by Hurricane Irene and Tropical Storm
	Lee. I remember in Bloomsburg a family stayed in their home to
	try to move their possessions to an upper floor. But Fishing
	Creek rose too quickly. The house next to theirs was knocked
	from its foundation. Water started gushing through their front
	windows as they called for help. They had to be saved by a
	helicopter. The woman there told me she can never live in that
	home again.
	I will never forget that preparing for natural disasters is
	about more than the loss of possessions; it's our friends' and
	neighbors' lives that could be at stake if we do not plan in
	advance. As we were rebuilding, I was amazed that much of the
	Federal assistance was to rebuild in the same place in the same
	way, leaving people vulnerable to the next storm.
	The Federal Government has a responsibility to respond
	after a disaster, but we also have a duty to be good stewards
	of the taxpayer dollar. I look forward to the conversations we
	will have today, the ideas we are going to hear about, and
	taking the next steps to reduce the costs of disasters, and I
	thank you all for being here.
	I ask unanimous consent that Members not on this
	subcommittee be permitted to sit with the subcommittee at
	today's hearing, offer testimony, and ask questions.
	And with that, I now call on the ranking member of the
	subcommittee, Mr. Carson, for a brief opening statement.
	Mr. Carson. Thank you, Chairman. Great words. Good morning,
	everyone, and welcome to today's hearing. While we have several
	prominent witnesses today, I would especially like to welcome a
	fellow Hoosier, Mr. Kevin Mickey, from the great Hoosier State.
	Mr. Mickey is the director of The Polis Center at Indiana
	University Purdue University Indianapolis. He is also the new
	chair of the Multihazard Mitigation Council at the National
	Institute of Building Sciences.
	I look forward to my colleagues learning about the work
	being done in the great Hoosier State, particularly
	Indianapolis, to address rising disaster costs and losses, plus
	the latest report from the Multihazard Mitigation Council.
	Mr. Mickey's national leadership and his local work are
	terrific examples of what Indianapolis is doing in the field of
	emergency management.
	I yield back, Mr. Chairman.
	Mr. Barletta. Thank you, Ranking Member Carson. We will
	have two panels of witnesses today. On our first panel we have
	our fellow subcommittee member, Carlos Curbelo from Florida. As
	someone from south Florida, Representative Curbelo knows all
	too well the risks posed by natural hazards, the rising cost of
	disasters, and the efforts that have proven successful in
	Florida to incentivize mitigation measures and smart behaviors.
	Congressman Curbelo has been a leader in this area and a great
	advocate for his constituents in south Florida.
	On our second panel we will be joined by the Honorable
	Joseph Nimmich, the Deputy Administrator of the Federal
	Emergency Management Agency, or FEMA, who has been working on
	ways to reduce the cost of disasters and build resilience in
	communities to avoid disaster losses.
	Ms. Sallie Clark, commissioner of El Paso County, Colorado;
	she is here in her capacity as president of the National
	Association of Counties.
	Mr. Bryan Koon, director of the Florida Division of
	Emergency Management, and the president of the National
	Emergency Management Association; he is here to talk with us
	about his experience, as well as help us see things from a
	State perspective.
	Mr. Eric Nelson, senior vice president, catastrophe risk
	management for the Travelers Companies, Inc., representing the
	BuildStrong Coalition.
	Mr. Kevin Mickey, chair of the Multihazard Mitigation
	Council of the National Institute of Building Sciences.
	I ask unanimous consent that our witnesses' full statements
	be included in the record.
	[No response.]
	Mr. Barletta. Without objection, so ordered. We had hoped
	that Chief David Paulison, the former Administrator of FEMA,
	would be able to join us, but he had other commitments. I do
	have a written statement for the record from Administrator
	Paulison. I thank him and the BuildStrong Coalition for their
	input on these important topics, and I ask unanimous consent
	that this statement be included for the record.
	[No response.]
	Mr. Barletta. Without objection, so ordered.
	For our witnesses here, since your written testimony has
	been made a part of the record, the subcommittee would request
	that you limit your oral testimony to 5 minutes.
	Congressman Curbelo, you may proceed.

	TESTIMONY OF HON. CARLOS CURBELO, A REPRESENTATIVE IN CONGRESS
	FROM THE STATE OF FLORIDA

	Mr. Curbelo. Chairman Barletta, Ranking Member Carson,
	members of the committee, thank you for the opportunity to
	testify before you today. This is my first time testifying
	before Congress, and I am glad to do it here, at the Committee
	on Transportation and Infrastructure's Subcommittee on Economic
	Development, Public Buildings, and Emergency Management,
	especially to discuss the important topic of disaster
	mitigation. I am honored to serve with all of you.
	I would like to take the opportunity to share some thoughts
	on controlling the rising costs of the Federal Government when
	responding to disasters. I am a native of south Florida. And my
	good friend, Mr. Sires, who is working with me on this issue,
	is from New Jersey. We both have a deep and personal
	understanding of the devastating impacts of natural disasters
	on families and communities, and have seen firsthand what
	happens when homes, schools, and businesses aren't built to
	withstand the forces of nature. My family and I lived through
	Hurricane Andrew back in 1992. Fortunately, in my part of town,
	the damage was not extreme. But just a few miles south, where
	some of my family members lived, the devastation was
	horrifying.
	Being a Floridian, I know that we have pretty strong State
	building codes already on the books. But at the national level
	it is time to fix the broken Federal system that is riddled
	with red tape, waste, fraud, and abuse. There is some great
	work already being done in the field of pre-disaster
	mitigation, and I would like to thank Chairman Barletta for
	being a strong leader on the issue.
	Over the last 30 years we have seen a significant increase
	in federally declared natural disasters. But instead of taking
	additional steps to focus more on preparing for these disasters
	with enhanced building codes to make communities safer, the
	Federal Government typically waits until after a disaster
	occurs to react. This is incredibly dangerous and costly,
	especially with the increase in extreme weather events.
	According to the Weather Channel, this hurricane season is
	supposed to be the most active since 2012. So this hearing and
	these issues are of the utmost importance, and very timely. For
	these reasons, my friend, Mr. Sires, who knows firsthand in New
	Jersey just how costly cleanup is after a disaster, has
	introduced legislation to work towards promoting stronger
	building codes at the national level by introducing H.R. 5177,
	the National Mitigation Investment Act of 2016.
	This legislation works to alleviate losses to resident and
	commercial property following a natural disaster through
	preventative measures. It would provide incentives for the
	adoption and achievement in enforcing State building codes. We
	do this by allowing the President to increase mitigation
	assistance following a natural disaster by 4 percent, based off
	of the price of cleanup, but only if the State is enforcing
	building codes. This incentive can encourage States and
	localities to be proactive in future building, and also save a
	lot of funds in the long run.
	The bill would also create a pilot program to award grants
	to State and local governments to encourage the adoption and
	enforcement of nationally recognized building codes. The goals
	of the grant program are to reduce disaster response and
	recovery costs by increasing resilience of buildings and
	reducing the amount of damage that occurs due to disaster and
	chronic flooding. Grant awardees will be required to accomplish
	these goals with non-Federal matching funds no less than 25
	percent, and FEMA will be required to provide reports back to
	Congress on the success of the program.
	Mr. Chairman, the residents of both Florida and New Jersey
	have had to rebuild communities after the devastating effects
	of catastrophic natural disasters. Returning to a life of
	normalcy is tremendously difficult, and can take many years.
	Furthermore, chronic tidal flooding poses a significant threat
	to real estate along our waterfront communities, especially in
	my south Florida district and the constituents that Mr. Sires
	represents, as well. This undoubtedly affects insurance rates,
	property values, clean water supplies, and general public
	welfare.
	We believe that, through preemptive methods of
	incentivizing State and local governments to adhere to stronger
	building codes, we will alleviate the burdens and costs of the
	Federal Government after a natural disaster.
	I thank my friend, Mr. Sires, for working with me on this
	legislation. I look forward to hearing from other experts on
	the issue of disaster mitigation in the next panel. This is a
	topic that requires perspectives from diverse geographical
	locations and multiple industries, and I appreciate being able
	to discuss my bill today. Thank you very much, Mr. Chairman.
	Mr. Barletta. Thank you for your testimony, Congressman
	Curbelo. I will now begin the first round of questions, limited
	to 5 minutes for each Member. If there are any additional
	questions following the first round, we will have additional
	rounds of questions, as needed.
	While we usually do not have questions for Members of
	Congress, Mr. Sires is an original cosponsor of Mr. Curbelo's
	legislation, and has a few questions.
	Mr. Sires. I would really thank you, Mr. Chairman. I am not
	going to ask Mr. Curbelo questions, because we have been
	working on this for a while.
	But I do want to thank you. You and I have firsthand
	experience on how devastating some of these catastrophes are,
	how it impacts life, how it impacts community, how it impacts
	the economy. And I really want to thank you for taking a strong
	lead on this. New Jersey got hit hard, Florida has been hit
	hard. And I just want you to know that I think this is the way
	to go, you know. Investing in mitigation, especially on a
	national level, where we can put some real strong codes has
	always been on my mind for many years.
	So I just want to thank you for your hard work, and I look
	forward to continuing, and am proud to work with you on this
	legislation. Thank you very much.
	Thank you, Mr. Chairman.
	Mr. Barletta. Thank you. Are there any questions? Mr.
	Costello? No.
	Ranking Member Carson?
	Mr. Carson. No, sir.
	Mr. Barletta. If not, then we thank you very much for your
	testimony. Your comments have been helpful to today's
	discussion.
	We will now call our second panel. I remind you of the
	subcommittee's request to limit your oral testimony to 5
	minutes. And we will give everyone the chance to be seated.
	[Pause.]
	Mr. Barletta. Thank you very much. Deputy Administrator
	Nimmich, you may proceed.

	TESTIMONY OF HON. JOSEPH L. NIMMICH, DEPUTY ADMINISTRATOR,
	FEDERAL EMERGENCY MANAGEMENT AGENCY; HON. SALLIE CLARK,
	COMMISSIONER, EL PASO COUNTY, COLORADO, ON BEHALF OF THE
	NATIONAL ASSOCIATION OF COUNTIES; BRYAN KOON, DIRECTOR, FLORIDA
	DIVISION OF EMERGENCY MANAGEMENT, ON BEHALF OF THE NATIONAL
	EMERGENCY MANAGEMENT ASSOCIATION; ERIC NELSON, SENIOR VICE
	PRESIDENT OF CATASTROPHE RISK MANAGEMENT, TRAVELERS INSURANCE,
	ON BEHALF OF THE BUILDSTRONG COALITION; AND KEVIN MICKEY, GISP,
	CTT, CHAIR, MULTIHAZARD MITIGATION COUNCIL, NATIONAL INSTITUTE
	OF BUILDING SCIENCES, AND DIRECTOR OF PROFESSIONAL DEVELOPMENT
	AND GEOSPATIAL EDUCATION, THE POLIS CENTER, INDIANA UNIVERSITY
	PURDUE UNIVERSITY INDIANAPOLIS

	Mr. Nimmich. Good morning, Chairman Barletta, Ranking
	Member Carson, and the members of the subcommittee. As you
	know, my name is Joe Nimmich. I am the Deputy Administrator for
	the Federal Emergency Management Agency. Thank you for this
	opportunity to testify about the efforts FEMA is undertaking to
	reduce the rising cost of disasters.
	With the continued trend towards urbanization, particularly
	in large cities located in high-risk areas, and the increasing
	severity of weather events, the Nation faces the potential for
	ever-increasing costs in responding to and recovering from
	disasters.
	During a disaster response, FEMA's primary goal is to
	support the survivors through effective, efficient operations.
	Though FEMA has procedures in place to control costs during a
	response, one of the most effective ways to reduce disaster
	costs is to invest in community resilience before a disaster
	strikes, thereby reducing the physical and financial and
	particularly the human impacts of the event.
	Preparedness and mitigation investments made before a
	disaster strikes significantly lessen the financial impacts on
	communities, States, and the Nation. One of the most effective
	mitigation tools is establishing stringent building codes and
	standards that ensure the property is built to insurable
	levels. Let me repeat that: Building codes and standards that
	ensure the property is built to insurable levels.
	You will hear multiple times today that for every dollar
	invested in mitigation, a savings of $4 is achieved, due to the
	reduced impacts post-disaster. Mitigation programs reduce costs
	to the American public by an estimated $3.4 billion annually.
	I have to move off my prepared comments to thank this
	committee and the Congress for taking action such as the post-
	Sandy legislation, where we were able to move the recovery
	costs forward based on assessments, but add the mitigation
	costs at that time so that the building back is better and
	reduces the future potential.
	FEMA has made significant strides in the last few years,
	bringing the larger emergency management community together
	around a National Preparedness System. This provides
	communities a common approach to managing the risks, and
	provides communities the information, tools, and funding they
	need to make informed, data-driven decisions. This is just one
	step FEMA takes in promoting resilience.
	The National Flood Insurance Program serves as the
	foundation for the national efforts to reduce loss of property
	from floods, the most costly and frequent disaster in the
	United States. The program identifies areas at risk for
	flooding, and makes flood insurance available to participating
	communities. Within the NFIP, the Community Rating System to
	incentivize communities to implement flood plain management
	practices, offering lower NFIP insurance premiums to
	participating communities.
	Additionally, FEMA provides hazard mitigation assistance
	through programs such as Pre-disaster Mitigation, Flood
	Mitigation Assistance, Hazard Mitigation Grant Programs. These
	provide funding to communities to implement hazard mitigation
	measures pre- and post-disasters.
	Programs such as the NFIP and the Community Rating System
	and hazard assistance invest in community resilience before the
	disaster strikes. This year FEMA went a step further,
	developing the disaster deductible concept, which encourages
	States, tribal, and territorial investment in resiliency
	mitigation programs. I strongly believe this program will be
	critical to any effort to reduce future disaster costs in a
	significant way.
	As you have indicated, Congressman Barletta, Congress, the
	GAO [Government Accountability Office], and others have
	indicated that the Federal cost of disasters continues to rise.
	The solution of moving the threshold higher merely distributes
	the cost differently, but does not reduce the cost of potential
	disasters. With the disaster deductible concept, States would
	have to meet a predetermined financial commitment, similar to
	meeting an insurance deductible, as a condition of receiving
	Federal funds to rebuild damaged facilities and infrastructure.
	Additionally, FEMA would provide credits for those States'
	investments in resiliency measures, such as adopting the
	building enhanced codes or funding preparedness and mitigation
	projects. Using these credits, a State's deductible could be
	reduced, thereby ensuring that communities have an incentive
	for investing in resilience.
	During a 60-day comment period, FEMA received 150
	responses. We are currently evaluating those to provide input
	from the advanced notice of proposed rulemaking to develop a
	proposed rulemaking for later this year. While preparedness and
	mitigation efforts can help us to reduce the costs in many
	areas, we must continue to acknowledge that demographic
	patterns are not something we can easily or readily influence,
	but we can take steps to account for these patterns by
	improving building codes, promoting preparedness.
	FEMA strives to invest in our Nation's resilience and
	support disaster survivors, while being good stewards of the
	taxpayers' dollars. We continue to look for innovative ways to
	encourage risk reduction, promote preparedness and mitigation
	planning, and efficiently implement the recovery programs in
	order to reduce both the risks and cost to the American
	taxpayer.
	Thank you for this opportunity today to testify, and I look
	forward to any questions the subcommittee may have.
	Mr. Barletta. Thank you for your testimony, Deputy
	Administrator Nimmich.
	Commissioner Clark, you may proceed.
	Ms. Clark. Thank you, Chairman Barletta, Ranking Member
	Carson, and members of the subcommittee, for the opportunity to
	testify before you today on the cost of disasters. My name is
	Sallie Clark, and I am a county commissioner from El Paso
	County, Colorado, and also serve as the president of National
	Association of Counties, which represents all of America's
	3,069 county governments.
	Although all parts of Government play a role in disasters,
	counties often serve as the first line of defense when a
	disaster strikes, and are responsible to help our communities
	recover in the aftermath. Whether it is our emergency managers
	or sheriffs or 911 call centers, county hospitals, or public
	health departments, or the fact that we own the majority of our
	Nation's infrastructure, like roads, bridges, and airports,
	Federal policy decisions regarding disasters have a major
	impact on counties.
	My county is no stranger to disasters, and the topic of
	this hearing is personal for me. Over the past several years,
	El Paso County and our surrounding areas have been devastated
	by a series of wildfires and flash floods that have upended our
	residents' lives, strained our local economy, and caused enough
	damage to prompt four Presidential disaster declarations over a
	3-year period.
	Our county, which long ago inspired Katharine Lee Bates to
	write the famous hymn, ``America the Beautiful,'' is now home
	to charred, barren hillsides. And the vegetation that once
	protected the area from stormwater runoff has disappeared,
	paving the way for dangerous flash floods.
	But we have been working diligently to help our community
	recover and become more resilient in the future. Today I
	respectfully submit three principles for your consideration, as
	you continue to discuss Federal disaster spending.
	First, Federal disaster spending should be viewed in the
	context of corresponding spending by State and local
	governments and the capacity of each level to fund disaster
	recovery efforts. Thousands of disasters strike our Nation each
	year, and the vast majority of long-term recovery costs are
	carried on the backs of State and local governments.
	According to NACo's [National Association of Counties']
	analysis of FEMA data, over the last 10 years 92 percent of
	counties across the Nation had at least one FEMA-declared
	disaster. And according to materials published by FEMA, the
	number of disasters successfully handled without request for
	Federal assistance is estimated at 3,500 to 3,700 annually,
	while only about 35 disasters per year received major
	declarations triggering Federal assistance between 1953 and
	2014.
	Furthermore, it is important to consider the respective
	fiscal capacity of Federal, State, and local governments when
	assessing contributions to our Nation's recovery from
	disasters. County governments in more than 40 States operate
	under restrictive revenue constraints imposed by State
	policies, including caps on property taxation that limit
	counties' ability to raise additional funds in the face of
	rising disaster costs. Local governments spend significantly on
	disasters. And changes to Federal disaster spending should not
	be assessed without consideration of this.
	Second, decreases in Federal disaster spending should not
	come at the expense of State and local governments. The
	ultimate result of shifting Federal disaster costs to State and
	local governments will further deplete resources available for
	proactive disaster mitigation and resiliency work, resulting in
	even costlier disasters in the future.
	FEMA's disaster deductible proposal presents some serious
	challenges for local governments. For example, El Paso County
	has spent many millions of dollars on mitigation projects in
	the last several years, as we have worked to recover from the
	wildfires and flash floods that have ravaged our community,
	including loss of life. But under the disaster deductible
	proposal, if the State of Colorado fails to sufficiently invest
	in mitigation efforts, public assistance funds could be
	withheld from our county at times when we are in most need of
	Federal assistance.
	In this way we could be punished because of the inaction of
	an entity over which we have no control, despite our best
	efforts in mitigation. And this is just one of the many issues
	with this proposal that thus far have not been sufficiently
	addressed.
	Because of this, FEMA has not given local governments
	confidence that a disaster deductible could be implemented
	without the significant risk that it would simply shift
	disaster costs from the Federal Government to State and local
	governments.
	And finally, local disaster mitigation efforts bring down
	the overall cost of disasters, and should be supported by the
	Federal Government. Counties are uniquely positioned to
	implement mitigation efforts through our regulatory authorities
	and convening powers. Collaboration with the Federal Government
	helps counties better utilize our authorities and resources to
	mitigate the damage caused by disasters, increasing community
	resiliency, and decreasing impact and cost of future disasters
	for all levels of Government.
	FEMA's Hazard Mitigation Grant Program and the other
	Federal programs enable counties to undertake large mitigation
	projects that may otherwise be out of their reach and have
	tremendous potential to drive down the cost of disasters for
	all levels of Government.
	Mr. Chairman, Ranking Member Carson, and members of the
	subcommittee, I want to thank you again for inviting the local
	perspective on this important conversation. And I would welcome
	any questions.
	Mr. Barletta. Thank you for your testimony, Ms. Clark.
	Mr. Koon, you may proceed.
	Mr. Koon. Thank you, Mr. Chairman, Ranking Member, and
	members of the subcommittee. My name is Bryan Koon, and I am
	the director of the Florida Division of Emergency Management. I
	am here on behalf of the National Emergency Management
	Association, which represents the State emergency management
	directors of the 50 States, territories, and the District of
	Columbia.
	As the frequency, intensity, and variability of disasters
	increase, it is imperative to reduce risk wherever possible.
	This will ensure that our scarce personnel and financial
	resources are focused on life safety, and those aspects of the
	built environment where the risk cannot be reduced.
	NEMA believes the following. Meaningful cost reduction
	should impact all levels of Government and the private sector,
	and not simply shift the cost between stakeholders. The
	Government practice of spending more money on disaster recovery
	than risk reduction must be changed. Hazard mitigation is a
	cost-effective effort with a documented return on investment.
	Mitigation reduces response costs and speeds recovery.
	Integrating mitigation meaningfully into recovery can be the
	catalyst for a communitywide focus on preparedness in the
	future.
	Mitigation and resilience activities by State, local, and
	tribal governments should be recognized and incentivized by the
	Federal Government. In the long term, cost savings will be
	realized at all levels.
	Much of the legal authority and responsibility for risk
	reduction decisions and activities resides at the local level,
	such as adoption and enforcement of building codes, zoning, and
	land use decisions. Local and tribal governments are critical
	partners in creating and sustaining disaster-resilient
	communities, and must be engaged in this conversation.
	All stakeholders must utilize the best available science
	and predictive analysis tools to illustrate data-driven result
	on investment calculations. This can only be done when data is
	made available to all stakeholders, and when calculations are
	not done in a vacuum. We must leverage data to support our risk
	reduction priorities.
	At the urging of Congress, FEMA has undertaken various
	efforts over the last decades to reduce cost and streamline
	operations. Reengineering of the Public Assistance Program is
	an excellent example of FEMA working to improve and maximize
	existing programs. While it is still too early to determine the
	effectiveness of the change, we are pleased with the effort,
	and urge that similar reforms be considered in other Federal
	programs.
	Investment into the Emergency Management Assistance
	Compact, or EMAC, leverages Federal grant dollars that have
	already been invested in State and local emergency management
	programs. We must encourage greater investments, as States work
	with one another to reduce the need for Federal assistance,
	Federal administrative costs, property damage, and, most
	importantly, save lives.
	In January, FEMA proposed a concept to create a State
	deductible for federally declared disasters. While there was no
	consensus opinion among the States, many expressed these common
	beliefs about any new proposal: the concept should drive real
	reduction in costs at all levels, and not merely a shift in
	costs; an appropriate amount of time must be given to ensure
	successful implementation, including internal education for
	FEMA, and training and guidance for States; States must also be
	given adequate time to ensure that any budgeting requirements
	are understood and acted upon by State legislatures; the
	proposal should utilize the opportunity to decrease
	administrative burden and associated costs; and the deductible
	cannot result in delayed assistance to those in need.
	Regardless of what happens with the disaster deductible or
	any other current initiative, real progress will be achieved
	when all critical stakeholders are engaged. I would like to
	wrap up with a few thoughts on where we go next.
	The Federal Government should continue to offer incentive
	programs that allow States to pursue innovative ways to
	strengthen their communities. We recommend FEMA and other
	agencies continually evaluate these programs to better
	understand the things that deter or prevent communities from
	fully leveraging these opportunities.
	NEMA also recommends that a study to determine the true
	cost of disasters be conducted that captures not only those
	direct financial costs borne by FEMA, but also those costs,
	both direct and indirect, that are paid by other Federal
	agencies, State, local, and tribal governments, and the private
	sector.
	Position FEMA as a partner in developing a more resilient
	Nation. FEMA's focus must transcend response and the agency
	must make advancements in all phases of the disaster cycle.
	Mitigation and long-term recovery are societal investments, not
	a cost.
	Many of the functions that FEMA fulfills during a disaster
	could be done in a more cost-effective manner by using
	personnel deployed from tribal, State, or local government
	through EMAC. Invest in the infrastructure necessary to achieve
	this goal.
	In addition to improving currently existing Federal
	programs, FEMA and others should recognize outstanding efforts
	done by State and local entities and encourage their adoption,
	nationwide. While many stakeholders approach the issue of
	increasing disaster costs differently, we all have a common
	goal. As Government officials, private-sector business leaders,
	and community members, we all have a role to play in reducing
	the cost and impact of disasters.
	I appreciate the opportunity to testify before you today
	and stand ready to answer any questions the committee may have.
	Mr. Barletta. Thank you for your testimony, Mr. Koon.
	Mr. Nelson, you may proceed.
	Mr. Nelson. Good morning. Chairman Barletta, Ranking Member
	Carson, and members of the subcommittee, thank you for holding
	this important hearing today to examine solutions to
	controlling the increased costs of natural disasters. My name
	is Eric Nelson, and I am senior vice president of catastrophe
	risk management at Travelers Insurance. I am testifying today
	on behalf of the BuildStrong Coalition, a group of businesses
	and consumer organizations dedicated to reducing human and
	economic losses from natural disasters.
	As one of the largest property casualty companies in the
	U.S., Travelers provides a unique private-sector expertise that
	can add value to the Federal Government's mission to manage its
	own risk and losses from natural disasters.
	I would first like to thank Chairman Barletta and the
	members of the subcommittee for their continued leadership in
	conducting a series of roundtables on this topic beginning in
	January of last year. I begin today by outlining three major
	takeaways from those roundtables. And before I do that--that
	is--the main question we want to ask ourselves is what
	actionable steps can Congress take to mitigate risk, lessen the
	impact of families and communities across America, and reduce
	Federal losses from natural disasters?
	The first takeaway from the roundtables is that, by almost
	every measure, Federal disaster spending is increasing on an
	unsustainable path. Dr. Erwann Michel-Kerjan from Wharton
	showed that Federal cost-share of natural disasters exploded
	over the last 60 years, increasing from roughly 6 percent in
	1955 to 77 percent in 2015.
	The second takeaway from the roundtable is that the States,
	communities, and individuals have little incentive to undertake
	loss prevention measures before a disaster occurs. We are going
	to hear in a minute the Multihazard Mitigation Council
	conducted a study documenting how every dollar spent on
	mitigation saves the Nation approximately $4 in post-disaster
	relief costs. A new study by Wharton indicated that a $1
	increase in the Individual Assistance grant program reduces
	disaster insurance demand by $6. These findings represent
	compelling evidence that the Federal Government is
	inadvertently fostering short-sighted behavior throughout State
	and local governments and with individual homeowners.
	The third point from the roundtable is that eliminating
	disincentives and replacing them with the appropriate
	incentives for mitigation can benefit all parties involved. The
	Federal Government would benefit by lowering its cost share for
	disaster assistance. States would benefit by alleviating the
	budget constraint caused by disasters, and easing their
	dependency on Federal aid. Families would benefit by reducing
	personal disaster costs and protecting loved ones. Communities
	and local economies would benefit by enabling citizens and
	businesses to recover more quickly after an event.
	While the benefits are clear, the question remains: What
	specific actions can Congress take?
	The National Mitigation Investment Strategy is based on the
	latest science and engineering research from world-class
	research institutions, such as the Insurance Institute for
	Business and Home Safety, or IBHS. IBHS and other research
	institutions conduct research on building performance standards
	and simulated disaster conditions and controlled environments.
	Research from these institutions demonstrates that statewide
	adoption and enforcement of building codes can reduce long-term
	risk. Studies conducted in the wake of major disasters also
	support this finding.
	Another fact. According to IBHS, at least 25 percent of all
	businesses that close down for 24 hours or more during a
	disaster never reopen. That is staggering stats. And think
	about the businesses and the jobs.
	Another stat we looked at was the LSU [Louisiana State
	University] Hurricane Center estimated that stronger building
	codes would have reduced wind damage in Hurricane Katrina by 80
	percent, or $8 billion.
	So thank you for your leadership, Congressman Curbelo and
	Congressman Sires. I am pleased to report that the core
	principles from this report have been turned into legislation
	and introduced in H.R. 5177, the National Mitigation Investment
	Act. This act provides a powerful incentive for States to adopt
	and enforce statewide building codes and authorize a first-of-
	its-kind competitive grant program to improve building code
	enforcement.
	Further, the legislation includes a provision authorized by
	the chairman in H.R. 1471, authorizing Congress to look at the
	first comprehensive assessment of Federal disaster spending by
	Congress in over 20 years. Congressional leaders, policy
	experts, and GAO all agree strong building codes, and enhanced
	pre-disaster mitigation would provide life and cost-saving
	benefits.
	I urge you and your colleagues to support the National
	Mitigation Investment Act in order to rein in Federal
	Government's exploding costs. Chairman Barletta, Ranking Member
	Carson, and the subcommittee, I applaud you for your efforts,
	and thank you for taking up this issue. I would be happy to
	answer any questions.
	Mr. Barletta. Thank you for your testimony, Mr. Nelson.
	Mr. Mickey, please proceed.
	Mr. Mickey. Chairman Barletta, Ranking Member Carson, and
	members of the subcommittee, thank you for the opportunity to
	provide testimony on approaches for reducing the cost of
	natural disasters. My name is Kevin Mickey, director of
	professional development and geospatial education at The Polis
	Center at Indiana University Purdue University Indianapolis,
	which has the mission of linking academic and community
	expertise to create strong and resilient communities.
	I am here today as the chairman of the Multihazard
	Mitigation Council of the National Institute of Building
	Sciences, introducing a new and unique approach we have
	proposed for the incentivization of private property owners
	throughout the United States.
	The United States Congress established the National
	Institute of Building Sciences in 1974 to serve as an
	authoritative source for both the public and private sectors to
	improve the built environment. To achieve its mission, the
	institute has established 18 councils that engage building
	industry experts in examining and developing tools,
	technologies, and practices to meet identified needs. The
	institute and its Multihazard Mitigation Council, or MMC, and
	Council on Finance, Insurance, and Real Estate [CFIRE] have
	been particularly focused on opportunities to advance
	resilience and encourage the most cost-effective approaches to
	reducing the impacts of natural, as well as man-made,
	disasters.
	As you are aware, there have been numerous efforts at
	developing increased building codes and standards, mitigation
	programs, scientific studies of best practices, and definitions
	of resilience. And yet we continue to find that the penetration
	of hazard mitigation into the private sector is spotty and
	woefully incomplete.
	Now, this is not to say that these efforts have not been
	effective. As has already been pointed out, a 2005 MMC study
	showed that implemented mitigation strategies do indeed save on
	the order of $4 for every $1 spent. And currently, the
	institute is discussing with Federal agencies and the private
	sector a project to revisit this 2005 study and expand it to
	consider all Federal programs, the role of model building
	codes, and the benefits that mitigation provides to the private
	sector.
	Recognizing the significant benefits achieved through
	proactive investments in mitigation, the limited funding
	available to support disaster mitigation response and recovery,
	as well as the anticipated increase in disaster events, a new
	approach is necessary.
	The most cost-effective manner to achieve resilience is
	through a holistic and integrated set of public, private, and
	hybrid programs that capture opportunities available through
	investment and mortgages and equity real estate, insurance,
	finance, tax incentives and credits, grants, regulations, and
	enhanced building codes and their application. This focus on
	leveraging private-public sector opportunities to induce
	corrective action is called incentivization.
	The incentivization approach calls for input, consensus,
	leadership, and action from a broad spectrum of stakeholders
	representing the financial, regulatory, and economic processes
	that need to be developed and coordinated to make
	incentivization part of the Nation's economic fabric.
	Participants should include those who offer incentives such as
	insurance and finance-related companies, lenders, and
	foundations, as well as forward-thinking communities and
	Government agencies and important decisionmakers that most
	definitely need to include homeowners, businesses, and
	utilities.
	The MMC and CFIRE jointly published and developed a white
	paper entitled, ``Developing Pre-Disaster Resilience Based on
	Public and Private Incentivization,'' which provides a catalog
	of existing programs for different hazards that private and
	public sector stakeholders can evaluate and then modify or
	expand to develop incentives. The specifics of incentivization
	need to be tailored for new and existing construction, using
	optimal resilience measures beyond current law or custom, and
	to account for hazard risk, locality, business size, and the
	value of resilient strategies. One size cannot fit all.
	Incentivizing the means to achieve resilience before
	disasters occur focuses on monetizing the benefits for
	incorporating risk mitigation practices in the ordinary course
	of business. Participating stakeholders need sufficient
	confidence that using incentives to achieve resilience will
	justify investments, underwriting, and loan and grant programs.
	The private sector will not undertake resilience investments
	just because it is sensible, but because it is economically
	prudent.
	While my written testimony describes many opportunities for
	congressional action, I offer a few specific recommendations
	here.
	First, every Federal dollar associated with construction,
	community development, and infrastructure must include a
	requirement that the latest building codes be met or exceeded.
	Second, Congress and Federal agencies should examine all
	programs, particularly grant-making programs, to identify
	opportunities to support resilience.
	And finally, Federal investments and programs should
	require investment in mitigation.
	Thank you for the opportunity to testify before you today.
	Please consider The Polis Center, as well as the National
	Institute of Building Sciences as resources as you look to
	address challenges related to the built environment.
	I look forward to your questions.
	Mr. Barletta. Thank you for your testimony, Mr. Mickey.
	I will now begin the first round of questions, limited to 5
	minutes for each Member. If there are additional questions
	following the first round, we will have additional rounds of
	questions, as needed.
	Deputy Administrator Nimmich, why are the big disasters
	costing so much money now, and what factors do you think are
	driving this change?
	And then I would also like to hear Mr. Koon and Mr.
	Nelson's thoughts on that.
	Mr. Nimmich. Congressman Barletta, I think the biggest
	challenge is the continued movement of populations into high
	urban areas that happen to have been developed from historic
	perspectives in very dangerous areas along our rivers for
	flooding, along our coastlines for major storms, and on
	earthquake faults. The reality of people moving to the cities
	is one that we are going to face for the foreseeable future,
	and that only increases the potential of costs.
	Additionally, the value of property has gone up
	substantially over time. And therefore, the recovery costs
	continue to go up. What it cost to build a mile of roads 30
	years ago is very different than what it takes to build a mile
	of roads today. The only solution is, in fact, building for
	those future States that we look at, in terms of culverts that
	can maintain the flow of water, bridges that are better
	maintained, all of the infrastructure that needs to be there,
	as well as public buildings built to standards that allow for
	the potential of future disasters to be minimized.
	Mr. Barletta. Mr. Koon, Mr. Nelson?
	Mr. Nelson. Yes. Just to add to that, the wealth effect
	that has happened in America since the 1970s, clearly, the
	average home size has increased by about 1,000 square feet.
	Echoing the comment more and more Americans moving to areas
	that have higher risk, but adding on top of that--we see it in
	our statistics--if you are growing in an area with poor
	building codes versus good building codes, we see it in the
	claims data, we see it--where we shouldn't be seeing claims we
	see claims at low wind speeds, at small hail sizes. There is a
	better way forward, and we see it for States like Florida that
	have had very good adoption of building codes. There are proven
	studies that have shown how much it has benefitted. So just to
	add that to the conversation.
	Mr. Barletta. Mr. Koon?
	Mr. Koon. Thank you, Mr. Chairman. I concur with both Mr.
	Nimmich and Mr. Nelson.
	I would also add I believe that, over time, there has been
	a better understanding and better utilization of the funding
	that is available to communities after those types of
	disasters. And so perhaps we are fully recognizing all of the
	ways that we can use those Federal, State, and local dollars to
	help the community recover.
	I believe there is also probably an additional cost on the
	administrative oversight of those programs, and the program
	requirements to effect the recovery and subsequent mitigation.
	Those recovery programs can often stretch into the decades for
	some of our larger disasters. And so the administrative costs
	associated with those also add to those higher costs.
	Mr. Barletta. Deputy Administrator Nimmich, we continue to
	see new disaster aid programs emerge ad hoc in reaction to
	disasters. They all seem to have different rules and
	requirements and do not seem well coordinated or focused on
	obtaining the best outcomes.
	Don't FEMA programs contain strict requirements on
	eligibility, use, and cost effectiveness? And are you aware if
	other agency disaster programs include such requirements? And
	is this something that Congress should take a look at, so that
	we can streamline these programs and ensure that they are cost
	effective?
	Mr. Nimmich. Congressman Barletta, you are absolutely
	correct that we have very stringent codes and requirements in
	order to qualify for Federal dollars. And, as Mr. Koon pointed
	out, they often take a great deal of oversight to ensure that
	they are effectively and correctly implemented.
	I can speak through the Sandy legislation, that there was a
	requirement to capture all of the different agencies, including
	HUD [U.S. Department of Housing and Urban Development] and
	Federal Transit Administration, to ensure we had a more
	complete understanding of where the different investments in
	recovery were going. That is not consistent across all of the
	different disasters that exist.
	I will tell you that this year, for the first time, the
	administration passed the Federal Flood Risk Management
	Standards that require every agency, for every Federal dollar
	that is invested in recovery, to meet a standard for the first
	time. That includes the Department of Defense, as well as all
	the other agencies. So there are activities going on to try to
	ensure that we all build to a high standard. But the capture of
	those costs is not something that we currently do.
	Mr. Barletta. Now I recognize Ranking Member Carson for 5
	minutes.
	Mr. Carson. Thank you, Chairman.
	Mr. Mickey, in terms of community buy-in, various reports
	have been released about the rising costs of disaster, benefits
	of mitigation and the need to take steps to mitigate for
	disasters. So Congress has also acted to incentivize
	mitigation.
	So, for example, Congress authorized FEMA to provide
	additional Hazard Mitigation Grant Program funding to States
	with enhanced plans, yet only 12 States have adopted these. So,
	even with incentives, it is very difficult to get States to
	take action.
	How do we get the ideas in your report to the public and
	private sectors, and what is needed to actually get ideas
	implemented?
	Mr. Mickey. Well, I am happy to say that we have already
	taken some steps in that direction. Just this past January, the
	institute held a symposium here, in Washington, DC. That
	institute brought together experts in the industries that I
	identified in my testimony for the purpose of discussing
	exactly what was presented and, more importantly, to share
	their own ideas for how to incentivize resilience in their
	respective sectors.
	The next step that the institute is currently pursuing is
	to develop a stakeholder leadership council that consists of
	the leaders of the various stakeholder groups to include
	insurance, loan organizations, bond writing organizations,
	businesses, utilities, homeowners, and, of course, local, State
	and Federal Government. The goal of that council is going to be
	to work on formulating the mechanisms for incentivization.
	The idea that we have is that, by getting the buy-in of
	these stakeholders directly--because they will be the ones
	coming up with these incentive strategies--that others will
	then follow. And they are going to be incentivized to help
	build an enhanced economy that does not currently exist for
	writing insurance, originating loans and bonds, and generating
	construction activity.
	Ultimately, the goal, as we see it, is to produce a set of
	products that consumers want. Let me give you a couple of
	examples that you will find in our full study.
	State Farm Insurance offered a premium discount in Texas
	for installation of impact-resistant roofs. The result was that
	products related to impact-resistant roofs went from 10 in 1998
	to more than 1,000 in the year 2003. And that program has now
	expanded out into 26 additional States. According to State Farm
	Homeowners, the IRR product, or the impact-resistant roof
	product, is something that they now want.
	And then, just earlier this week in Washington, the mayor
	of the city of Fairhope, Alabama, Tim Kant, was attending the
	Resilience Building Codes Forum, and he made a statement that
	his community is now considered one of the most desirable
	places to live, specifically because their homes are recognized
	as being more resilient. And that community is one of the
	places where the fortified program is found.
	The institute is planning to serve the role of identifying
	these solutions that I have mentioned. We recognize that there
	are plenty of best practices out there. What we want to do is
	bring together the stakeholders to identify those best
	practices and see them replicated across the industry. We
	recognize that costs are high, and we are looking for ways to
	reduce them, and we believe this is a creative approach.
	Ultimately, we believe that activities such as implementing
	building codes need to be started to be viewed as a carrot, not
	as a stick. And if the incentives are appropriate, we think
	that can happen.
	Mr. Carson. Thank you.
	Mr. Koon, you have mentioned FEMA's new customer service-
	centric focus for the Public Assistance Program as a positive
	step forward. Are there other actions FEMA could take with
	respect to the Public Assistance Program in order to reduce
	disaster costs and even losses?
	Mr. Koon. Thank you, Ranking Member Carson. I believe that
	continued implementation of some of the procedures that were
	highlighted in the Sandy Recovery Improvement Act in ways that
	will help us expedite funding to the locals could result in
	cost savings and improved recovery, as we move forward.
	We are eager to continue to work with FEMA on this PA
	[public assistance] reengineering process, to make sure that
	they are as customer-centric as possible in this situation, so
	that we can help, again, get those communities back up on their
	feet as quickly as possible, at a minimal cost to the Federal
	Government.
	With regards to the question you asked Mr. Mickey earlier,
	with regard to incentives, if I may, we have done a very good
	job on providing incentives for programs. You mentioned the
	enhanced mitigation program, there are incentives offered
	through the National Flood Insurance Program, Community Rating
	System, there are incentives offered through the Sandy Recovery
	Improvement Act for debris removal. None of those, I believe,
	have fully met what they intended to do.
	And so, continual reevaluation of those incentive programs
	to determine why they are not being taken up at the level we
	anticipate would be necessary, and then go back and improve the
	processes by which we implement those programs, would help them
	meet the maximum good they were designed to--intended to
	effect.
	Mr. Carson. Thank you. And Administrator Nimmich, earlier
	this week the White House hosted a conference on resilient
	building codes. Included in the fact sheet issued by the White
	House it stated that FEMA is developing a more detailed plan to
	be put forth for additional public discussion in a notice of
	proposed rulemaking.
	Has FEMA finished reviewing all the comments and arrived at
	determining that it will definitely go forward with rulemaking
	on disaster deductible concepts, if so?
	When can Congress and stakeholders expect the proposed rule
	to even be issued?
	Mr. Nimmich. Representative Carson, thank you for the
	question. The deductible process has been one where we have
	reached out heavily to the user group. And, as Ms. Clark
	indicated, we have received over 150 very detailed responses to
	the advanced notice of proposed rulemaking. And we went through
	the advanced notice of a rulemaking process in order to get
	that type of feedback that Ms. Clark indicated, where there are
	concerns that this might just be the ability to transfer costs
	from the Federal Government to State and then to local
	communities.
	The intent here is exactly what we have been talking about,
	to incentivize and make more consistent the ability for
	communities to invest in mitigation and preparedness
	capabilities. We are now going through those 150 comments to be
	able to come up with an actual proposed rule that will have
	details in it that we will then go out through the proposed
	rulemaking process to get specific comments back on those
	rules. We anticipate that that will be out some time this
	calendar year, sir.
	Mr. Carson. Thank you. And I don't know where we are on
	time, Mr. Chairman, but I yield back.
	Mr. Barletta. Thank you, Ranking Member Carson.
	Mr. Graves, you have 5 minutes.
	Mr. Graves of Louisiana. Thank you, Mr. Chairman.
	Administrator Nimmich, who is in charge within the Federal
	Government of our national efforts in terms of community
	resilience? Which agency?
	Mr. Nimmich. So, as you would expect, Congressman, FEMA,
	through the National Preparedness Program, provides the
	guidance for the Federal Government to be able to assist State
	and locals in developing their preparedness programs. And FEMA,
	working with the States through their threat estimating
	program, as well as their preparedness reports, captures that
	information, as well as for the Federal Government----
	Mr. Graves of Louisiana. OK.
	Mr. Nimmich [continuing]. But each agency themselves are
	responsible for their support to the preparedness plan.
	Mr. Graves of Louisiana. Got it. Administrator Nimmich, do
	you acknowledge the statistics that Mr. Nelson referenced in
	regard to studies indicating that proactive investments in
	hazard mitigation generate cost savings?
	Mr. Nimmich. Yes, sir. I said it in my opening statement,
	and that is what the deductible----
	Mr. Graves of Louisiana. Great.
	Mr. Nimmich [continuing]. Process is trying to----
	Mr. Graves of Louisiana. Thank you. Do you see any of the
	work of the U.S. Army Corps of Engineers as being efforts to
	reduce hazards or address mitigation strategies?
	Mr. Nimmich. Sir, we work closely with the Army Corps of
	Engineers, and----
	Mr. Graves of Louisiana. If you could just--if you don't
	mind, just a yes or no. I would appreciate----
	Mr. Nimmich. Sir, I am not comfortable answering just a yes
	or no, but would do so for the record. We work very closely
	with the Army Corps of Engineers, and I do believe that an
	awful lot of their efforts go to reducing the impacts of
	potential future disasters. In North Dakota, they have worked
	very closely with the city of Fargo to be able to develop----
	Mr. Graves of Louisiana. All right.
	Mr. Nimmich [continuing]. Capabilities----
	Mr. Graves of Louisiana. Thank you. I will go ahead and
	answer these so I don't burn through all the time.
	So you have the U.S. Army Corps of Engineers that spends
	money in addressing flood damage reduction projects, hurricane
	protection. The administration has budgeted, I believe it was,
	$1 billion competition, resiliency competition, through HUD.
	You have a climate resiliency fund the Department of the
	Interior is trying to establish under the last budget request.
	I think it was $2 billion. FEMA has a Hazard Mitigation Grant
	Program and a Pre-disaster Mitigation Program. Does it really
	make sense for us to have five different programs out there,
	all attempting to address various aspects? Are these properly
	coordinated? Are they properly prioritized?
	And, you know, the reason I bring this up, I am from south
	Louisiana and we have had more than our share of disasters,
	whether it be Hurricanes Katrina and Rita coming up from the
	south, we had record high water on the Mississippi River in
	2011 and again this year in January for the first time ever, in
	January of this year. We had Hurricanes Gustav and Ike in 2008,
	Hurricane Isaac in 2012. We have had more than our share of
	disasters.
	And watching over and over again, as we come in and we have
	FEMA come in and pick up the pieces after a disaster, together
	with millions and millions of dollars spent by our parishes and
	spent by our State government, the Corps of Engineers in some
	cases--I can think of a project in St. John Parish, St. Charles
	Parish affecting Ascension, Livingston, and St. James Parishes,
	that that project has been in the study phase with the U.S.
	Army Corps of Engineers now for over 40 years, over 40 years.
	Mr. Chairman, Mr. Ranking Member, my point here is that,
	look, everyone wants us to reduce disaster spending. Everyone
	does. The solution here, as I think Ms. Clark noted, Mr. Koon
	noted, the solution here is making the principal proactive
	investments in making our communities more resilient.
	In recent years we have had FEMA, with their 500-year flood
	risk management regulations. We have had Biggert-Waters in
	2012, the revisions in 2014. We have proposals now to increase
	the cost share associated with disaster response on our
	counties, on our parishes, and our State governments.
	Mr. Chairman, my point is that making proactive investments
	is the solution to reduce our overall disaster expenses. We
	estimated that if we had spent somewhere around $8 billion or
	$9 billion, simply finished authorized projects in south
	Louisiana that were supposed to be built by the U.S. Army Corps
	of Engineers, we could have saved an estimated 90 percent of
	the about--and you can justify numbers--anywhere from about
	$120 billion to $150 billion that were spent in response to
	those 2005 hurricanes. We could have saved that. And not to
	mention--and very, very important--in fact, more important, Mr.
	Chairman, we think we could have saved over 90 percent of the
	1,200 lives that were lost in south Louisiana.
	So, all of these efforts by FEMA I think are being done in
	a vacuum. We need to be coordinating, better coordinating our
	efforts to be proactive, to protect and make our communities
	and our ecosystem more resilient, and stop all this coming in
	after the fact and spending exponentially more dollars. There
	are studies, there are models. Yet all we are seeing, rather
	than following the data, following the recommendations and the
	outcomes of these studies and these experiences following these
	catastrophic disasters, instead we are further making disparate
	investments in programs that aren't really contributing or
	heeding the recommendations of these reports. I am very
	concerned about what--this trend that we are seeing.
	And lastly, Mr. Chairman, I just want to say that in south
	Louisiana much of our vulnerability is actually attributable to
	the actions of the Federal Government. We have lost 1,900
	square miles of our coast. The majority of that is because of
	how the Corps of Engineers manages the water resources in this
	Nation. That is why we have lost, that is why we have become
	more vulnerable.
	Arkansas doesn't care when hurricanes come because
	Louisiana is their buffer. Our buffer is disappearing, and that
	is why you are seeing these costs.
	And so I just want to urge the committee, Mr. Chairman, Mr.
	Ranking Member, as we move forward on legislation we need to
	make sure we don't get too myopic in this view, and that we are
	looking comprehensively at all of these efforts that are
	underway that, quite frankly, should be under this
	subcommittee's jurisdiction. I yield back.
	Mr. Barletta. Thank you.
	Mr. Sires?
	Mr. Sires. Thank you, Mr. Chairman. You know us. We learn
	from all these disasters.
	Mr. Nimmich, we picked up how to better construct, do
	better codes, everything else. Why do you think some of these
	States are so reluctant to do this mitigation codes and
	reinforcement? Why do you think that is?
	Mr. Nimmich. Sir, I think the decision on building codes is
	almost always local, and those decisions based on other
	economic factors, desires for certain development.
	But I do think that we, as the Federal Government, need to
	continue to ensure that when we invest, it is invested to
	codes. Currently, FEMA has out for comment with our stakeholder
	groups changes to our Public Assistance Program that would
	require whether a State has or a community has code or doesn't
	have code. If they don't, if they want us to build back their
	infrastructure, it will have to be built back to either a
	national or an international code.
	So we are taking it very seriously to say even if a
	community doesn't feel that codes are of value, we do. And when
	we invest Federal dollars, we will build back to a code.
	Mr. Sires. You know, one of the things that bothers me
	about New Jersey is the fact that 3 years later we still have
	people that have not gone back to their homes. And there is
	plenty of blame to go around, you know.
	I think that, in terms of these disasters, you not only
	have to mitigate it before, but I think there has got to be
	some sort of post-disaster, where you are ready to come in and
	watch over some of these guys that are the fraudulent
	applications and everything else, and not take years before we
	can come up with the people who are perpetrating a fraud.
	And to me, I think you have to be ready right after the
	disaster. Can you talk to that?
	Mr. Nimmich. Yes, sir. And I can proudly say that we have
	moved rapidly since Katrina to ensure that we have programs
	that have as much protection as possible.
	But I will tell you, sir, that if we have to err on the
	side of supporting a valid requirement and a fraudulent
	requirement, we are likely to support that requirement. But it
	takes time to go back and relook.
	And as you know, in New Jersey now you are seeing the first
	cases of prosecution of fraudulent--where people have taken
	money from those that need to recover in their primary homes,
	claiming that their secondary home was a primary home, and
	taking those dollars away from those people that need it.
	It does take time, and we have to realize that during that
	immediate post-disaster we want to make sure that those people
	that need the money get it. And there will be people that take
	advantage of it, but we don't give up. And as you said, sir, it
	may take too long, but we don't stop. We continue to go back
	and recoup those monies from people that fraudulently or
	accidentally applied for resources that they didn't deserve.
	We are down below the national standard--from financial
	institutions in recovering money, down below 1 percent. So I
	think we do a pretty good job of ensuring that the money goes
	to those people who deserve it and need it.
	Mr. Sires. You know, I come around--I used to be one of
	these guys that you have to require certain things. And I come
	around a lot to providing incentives. Because if the Federal
	Government is going to give you some money, I think that
	mitigation codes or storm codes should be part of it.
	I look at these disasters in the Midwest. I see these
	tornadoes, Oklahoma--I am not trying to single out Oklahoma,
	but it just seems that they get more than anybody else. And I
	see where schools are even damaged. You know, to me, if the
	Federal Government is going to give a State money to build a
	school, you should require a stronger code to build the
	schools. And I understand that these schools were built before.
	But, you know, going forward, I think that is something that we
	should look into, because some of the schools always--they
	serve as shelters, too, in some of these communities. And I see
	the damage in some of these schools and some of these homes.
	So I think--I am coming around to the idea of incentives,
	Mr. Chairman, to provide these people so they can build the
	kind of codes that they need to deal with some of these
	disasters. Thank you.
	Mr. Barletta. Thank you. I will now begin a second round of
	questions.
	Commissioner Clark, I understand your district had major
	wildfires that destroyed a tremendous number of homes and
	property. Can you explain some of the challenges you have had
	trying to mitigate the risk of post-fire flooding? And do you
	have any recommendations for Congress to improve our mitigation
	programs?
	Ms. Clark. Thank you, Mr. Chairman. Yes, we have,
	obviously, had--and I don't know what fair share is, but we
	have had more than our fair share of disasters in El Paso
	County, Colorado. What I would like to talk about specifically
	is the things that I think we can do from the standpoint of
	local community resiliency.
	And I think that what tends to happen--and it happens at
	the local level, at the State level, and particularly at the
	Federal level, is we have silos built up between agencies. The
	fire that happened in Waldo Canyon was almost more than 95
	percent on Federal forest land. That pre-mitigation needs to
	happen from the Federal level, because that is Forest Service,
	and the Forest Service is now spending more than 50 percent of
	its budget on--frankly, on responding to wildfires, versus pre-
	mitigating ahead of time. We have no control over that at the
	local level.
	What we do have control over is working with fire-adapted
	communities, community wildfire protection plans, and providing
	incentives, as some have said up here, which is very important,
	but for individuals to be able to mitigate ahead of time, to
	provide firewise communities.
	I was just up in, actually Crystal Park, which is a one-
	way-in, one-way-out community built up on the mountainside. And
	they have taken steps to do that. And some of those programs
	that help them buy fire equipment to be prepared locally, to
	take that ability to look at, from a personal standpoint, to be
	able to provide that mitigation, will be helpful. We tend to be
	really--you know, when we look at an ounce of prevention is
	worth a pound of cure, doing that pre-mitigation ahead of time.
	I also think it is important to note that we have--when
	there is a disaster--and I have a small business, when the fire
	happened I lost thousands of dollars of reservations, and then
	we have this rolling disaster that keeps happening--to try and
	make sure that those that may not live in wildland interface
	areas, where the drainage all comes down into a small
	community, to be able to look at the fact that that mitigation
	immediately following the fire will provide the resiliency to
	slow down the debris and the large flash floods that happen as
	a result. And it is hard to understand, if you are not from
	Colorado, because--if you are not from a Western State that has
	those drainages that drain right down into it.
	So I think tearing down the silos, understanding there is
	an impact on small business and how devastating that can be--
	one-third of small businesses go out of business after a major
	incident, and I think that that is really important, and
	looking at the flexibility in the requirements. Even though we
	want--we definitely want accountability, but sometimes the
	requirements preclude you from even asking for the particular
	money that you may otherwise need.
	Mr. Barletta. We talked a lot today about how much the
	Federal Government pays out for disasters. But the other major
	payers in disasters are insurance companies.
	Mr. Nelson, can you discuss how insured losses generally
	compare to the Federal assistance provided in the wake of a
	disaster?
	Mr. Nelson. In the wake of a disaster it is the role of the
	insurance company to make that insured whole again. And so we
	are paying for the building, we are paying for the contents. If
	you are a small business, we are giving you business income
	interruption coverage. We are also providing additional living
	expense. And so significant dollars, compared to--you know,
	usually individual grants are small grants to consumers. They
	are not going to make you whole again. They are not going to be
	enough to rebuild your home, in general speaking.
	So, it is important. The insurance industry plays a major
	role in natural disasters. And our trends, because of the
	weather volatility, we have been seeing those trends go up. And
	so this is an important concept because what do insurance
	companies do? We spread the risk over people and over time. And
	as the risk changes, the prices change. And so it is important
	that we bend the cost curve for the Federal Government and bend
	the cost curve for consumers.
	Mr. Barletta. Every one of you mentioned the importance of
	mitigation and how evidence shows that for every $1 invested,
	$4 is saved. Most Federal mitigation funding is provided
	through the Hazard Mitigation Grant Program after a disaster
	declaration.
	I ask this of every one of you on the panel, if you could
	give a brief answer. How can we more proactively address the
	mitigation and shift the investment to before the catastrophe?
	Mr. Nimmich. Congressman Barletta, I think the first thing
	I need to do is again thank the committee and the Congress for
	the post-Sandy legislation that allows that mitigation money,
	that post-disaster mitigation money, to be identified much
	earlier in the process, and then be applied as part of the
	recovery process.
	Clearly, as we look at all of the different mitigation
	programs we have--pre-disaster, in 2015 Congress gave us the
	authority to do post-mitigation or hazard mitigation for fire
	grants, to be able to restore those burned areas in a much more
	robust way. I would ask that we could consider reauthorizing
	that ability to use the fire mitigation grants as a hazard
	mitigation grant developer.
	But the reality for us comes back to how do you incentivize
	every level, from the individual, through insurance programs,
	to the local to the county to the State and the Federal
	Government to be able to invest in that. We believe that the
	deductible offers that opportunity. We continue to need to work
	with our stakeholders to define what the reasonable level of a
	deductible should be, and then how do those building codes and
	the investments that Ms. Clark has indicated that the counties
	and the communities do reduce that deductible in order to be
	able to support those communities that have invested in their
	own well-being.
	I do believe that it is mitigation that ultimately reduces
	the cost of a disaster, and we need to find proactive ways, as
	you have all indicated, to incentivize that approach.
	Mr. Barletta. Ms. Clark?
	Ms. Clark. Thank you, Mr. Chairman. As it relates to the
	Hazard Mitigation Grant Program, it is a very important
	component of, I think, what communities need to be provided
	for. There are some issues, I think, within the HMGP programs
	that need more flexibility, however, in order to be able to
	utilize those funds best at the local level. We see sometimes
	that there is not an understanding of unique situations, and I
	will give an example
	In 2012 was the Waldo Canyon fire. We just closed on three
	houses 2 weeks ago for several homes that were in the floodway
	as a result of a fire that happened on Federal forest land.
	They had never had flooding ever before, and it has taken us,
	really, that length of time to get that completed.
	As it relates to, additionally, the Hazard Mitigation Grant
	Program, we at our Office of Emergency Management appreciate
	being able to utilize those dollars, but sometimes the
	accountability, where you may see it as accountability, the
	paperwork is so extreme for such a small amount of money that
	it makes it really unusable for us to even apply for the
	grants.
	And so, we do take it very seriously, but I think sometimes
	those programs need to be looked at as how can those dollars
	actually get to the folks that need the help and provide some
	additional assistance for those individuals who want to take
	personal responsibility for trying to reduce mitigation--to
	reduce the disaster, eventual disaster declarations, by looking
	at being proactive on their own personal property.
	The Black Forest fire was almost entirely on private
	property. That was the second fire. So we have two different
	fires, and we have seen different problems in each of those.
	Mr. Barletta. Thank you.
	Mr. Koon?
	Mr. Koon. Thank you, Mr. Chairman. The--as a director of
	the Florida Division of Emergency Management, I have the luxury
	of a fairly large staff and adequate funding. And so, every
	time there are new programs out there, every time there are new
	incentives, I have personnel whom I can assign to that to make
	sure that we take full advantage of that program.
	However, a good number of States do not share that luxury,
	and a good number of the counties across the country do not
	have that same luxury. So every time a new program is put into
	place, they have to determine how they can help meet the needs
	of that program, because they are using current staffing,
	current year budgeting and the potential for a payoff down the
	road.
	So I think a few things would assist in this effort. What
	would be--as Mr. Graves suggested, consider clarifying,
	consider consolidating, consider streamlining existing programs
	today, rather than creating just additional new programs, which
	would enhance the administrative burden on already overworked
	officials at the State and local level.
	I think a better data analysis of the true costs of
	disasters and how they impact all levels will help us calculate
	the true return on investment for our participation in these
	programs, and help us make those decisions.
	And finally, moving the mitigation cycle, moving the
	mitigation program forward, and so that it is not something we
	start thinking about on day one of the recovery, it is
	something that is done ahead of the disasters, so that if the
	funding comes along with that disaster, we are ready on day one
	with actionable mitigation plans to help--implementing those
	programs, and we don't rebuild exactly as we were before.
	Mr. Barletta. Thank you.
	Mr. Nelson?
	Mr. Nelson. First, I just want to start with we have to get
	the word out about mitigation. There is a perception that
	mitigation costs so much money to consumers. Travelers, we are
	a proud supporter of Habitat for Humanity. We went out and we
	built a dozen fortified homes along the coast of America, and I
	personally participated in building one in New Haven,
	Connecticut. The average cost is only 2 to 5 percent on new
	construction. And so, we just have to make sure that consumers
	understand this. And so that is first.
	Second, clearly, you got a difficult decision in front of
	us. You know, spending is so difficult in Congress today,
	everyone understands that. But we have to consider spending
	more at pre-disaster mitigation funds--again, proven techniques
	with IBHS and other studies--and evaluate that, and evaluate
	streamlining some of these FEMA programs. Thank you.
	Mr. Barletta. Mr. Mickey?
	Mr. Mickey. I think just as importantly, we have to
	understand that the action of mitigation is not simply
	something you do to check a box and get FEMA to sign a check
	over and move on. It is something that needs to be a proactive,
	positive investment to incentivize, again, those communities we
	are promoting through the institute to take positive actions.
	Mr. Barletta. Thank you.
	Ranking Member Carson?
	Mr. Carson. Thank you, Chairman.
	Ms. Clark, disaster assistance reformed under the act of
	2015, the committee calls for a very comprehensive study on
	trends and disaster costs and losses. As you mentioned earlier,
	local government bears a large portion of the disaster costs,
	yet data is very scarce. What is NACo doing to collect the
	information so that the data can be considered as part of the
	comprehensive study, and ensure that current Federal disaster
	costs are not just being shifted to local communities?
	Ms. Clark. I am assuming that is for me. I wanted to say
	that I think that that brings up a very----
	Mr. Carson. Or Mr. Koon.
	Ms. Clark. OK. I will start and then--I think that the--
	that local government really is here from the Government, and
	here to help. We want to know from you how we can best provide
	you the data and the information.
	For those of us who have done this before--and in my case
	we have had four declared disasters, so we have got a lot of
	information. And I think it would be helpful to sit down with
	those communities that have been through the processes, and all
	the different silos, and to be able to have feedback from us on
	how to change things that--policies that may not be working in
	the best interest, first of all, of our communities and,
	secondly, of our local governments.
	Mr. Carson. OK.
	Mr. Koon. Ranking Member Carson, the question you asked is
	a question that many of the folks asked as they were responding
	to the proposed deductible concept from FEMA, which is how do
	we capture all of those costs? What is the methodology? What is
	going to apply in that situation? Is it you go out and remove a
	tree that just fell in the road overnight, or do you--is there
	a certain threshold at which you start measuring those dollars?
	We still are having those kind of conversations to figure out
	exactly what costs do we need to capture.
	But I do agree that it is very important that we do so
	because, again, that helps feed the return on investment
	calculations that we need to do in this situation.
	The flip side of what I offered earlier--and the fact that
	I have a fairly large agency and a fairly adequate budget, is
	that the threshold for Florida to receive a Presidential
	declaration is also fairly high. And so, we can have a $10
	million or $20 million or even a $25 million disaster in the
	State of Florida that will not be eligible for a Federal
	declaration. So every year the State of Florida spends hundreds
	of millions of dollars internally at the State and local level
	to help us recover from those situations.
	So I concur that we should develop methodology by which we
	can all operate off the same sheet of music when understanding
	what these costs are.
	Mr. Carson. Yes, sir. Thank you.
	Mr. Nelson, you mentioned in your testimony that the
	Insurance Institute for Business and Home Safety simulating
	disaster conditions on homes and businesses in a controlled
	environment, you mentioned that. What types of adjustments to
	building codes has the institute found to be most effective in
	keeping a structure standing after a disaster? And how much
	would these changes cost during new construction?
	Mr. Nelson. You know, IBHS, we have come out with a program
	called FORTIFIED. There's a bronze program. The bronze program
	concentrates on the roof coverings. And so we have looked at
	taping the roofs, the seams on the roof deck. And maybe that is
	about $500 to $1,000. And that prevents water intrusion in case
	you lose your shingles. So that is the first step.
	The second step that is a proven technique is really
	bolstering all your openings, either covering your openings or
	putting some other reinforcements in place. And then the gold
	standard is looking at the building kind of end to end, looking
	how it is anchored at your foundation, through the walls, and
	to the roof.
	And so, these are techniques that we are very happy to say
	some States have embraced. Alabama, coast of Alabama has now
	embraced the FORTIFIED standards within their codes and their
	coastal counties. And they have also put in a program to try
	and--for mitigation grants.
	And so, we are seeing a lot of success with this program.
	We are even seeing some builders voluntarily building these
	homes.
	Mr. Carson. Thank you.
	And lastly, for a fellow Hoosier, Mr. Mickey, The Polis
	Center provides valuable services necessary to understanding
	the disaster threat and risk. How does The Polis Center help us
	understand, make its services known to others, and can you
	expand on some of the successful collaborative projects with
	State and local entities that the center has taken?
	Mr. Mickey. Thank you for the opportunity to talk both
	about The Polis Center and, quite honestly, the State that I am
	very proud of, the State of Indiana.
	Polis has been around since 1989. We have had 27 years of
	successfully linking community and academic expertise. Our
	goals are to build capacity in the State's agencies, the
	volunteer associations, the citizens of the State of Indiana,
	and so forth.
	We have done a lot of work in emergency management, but the
	reason that we have been successful is not because uniquely of
	the resources in our center, but because of the atmosphere that
	exists in the State of Indiana.
	Case in point, within Indiana we have had the privilege of
	working with the Indiana Department of Homeland Security to
	complete mitigation plans in close collaboration with the
	counties and cities and towns of the State of Indiana. The
	approach we take is highly collaborative. So, unlike many
	situations that we hear about where a plan is created and set
	aside on a shelf, if you would--which, unfortunately, I think
	does often happen--that plan becomes a living document,
	something that the community is engaged in, that people are
	brought to the table to discuss and be a part of. And I think
	that is a critical component of making mitigation a success.
	Part of the reason that we are also successful--and
	something I am exceedingly proud of--is in the State of Indiana
	we understand the importance of information. FEMA created a
	tool that I am sure many of you are aware of a few years ago
	called Hazus-MH. And Hazus has become a very significant part
	of the portfolio of resources in the State of Indiana that we
	use, the technology that allows communities to estimate the
	impact of hazards, specifically floods, earthquakes, and
	hurricanes, and they are able to do that in a more profound and
	successful way by integrating local resources.
	In my State I am happy to say that we have 100 percent of
	the counties that, even though they have disagreements, to be
	sure, they have managed to find a way to agree to share
	information. So anyone, anywhere, any time can go out to the
	IndianaMAP and download every single parcel in the State of
	Indiana: road information, hydrology information, and of
	course, hazard information. That information, combined with
	other resources in the State, makes it possible for our
	citizens to be much better protected and much better able to
	respond to disasters than others might be.
	We have taken that success story, I am proud to say, to
	other States as well. We are very much about building capacity.
	We have worked extensively in the States of Georgia, in West
	Virginia, in many other areas. In total, we have worked in over
	36 States, including, I believe, every one represented by
	members of this committee, and over 100 cities.
	Building capacity means building tools, it means building
	work flows, it means, very importantly, education. And not just
	in how to do hazard analysis, but also what that means to a
	community, in terms of its long-term resiliency.
	We believe firmly in connecting the fabric of the community
	to the solution. So hunger, homelessness, issues like that are
	just as important in understanding how a community will or will
	not be resilient to a disaster as understanding whether a
	building is going to fall down or stay upright. And we look at
	all of those things and try to bring them together in a
	synergistic way in conversations with a lot of people to take
	advantage of that knowledge.
	Mr. Carson. Thank you, sir.
	Thank you, Mr. Chairman. I yield back.
	Mr. Barletta. OK. Mr. Graves?
	Mr. Graves of Louisiana. Thank you, Mr. Chairman.
	Mr. Nimmich, the Biggert-Waters 12 directs FEMA to
	incorporate simulations of climate change into some of the
	estimates that you develop in regard to premiums. Could you
	discuss how FEMA is doing that, and how you are addressing
	uncertainties in regard to climate models?
	Mr. Nimmich. So through Biggert 12 we have been required to
	use the best science possible to determine the flood risk map,
	sir, and we continue to work with the scientific community and
	local communities to be able to identify what those potentials
	might be in the future, in terms of climate adaptation,
	particularly with the rising tides in flood zones.
	Mr. Graves of Louisiana. Yes. And so the question is how do
	you plan to address the uncertainties in regard to the models
	of future sea rise and potential for storm intensity changes
	and things along those lines?
	Mr. Nimmich. Sir, I will answer that for the record.
	Mr. Graves of Louisiana. Thank you. Another question. The
	Technical Mapping Advisory Council that was established, they
	indicated in a recent report that they believe that there was
	about a 40-percent uncertainty rate associated with some of the
	flood models that were used.
	If you take that degree of uncertainty, which is
	extraordinary, and you put on top of it trying to estimate
	future changes in sea rise, future changes in the potential for
	storm intensity and frequency, it seems like we are getting to
	a range of uncertainty that--it is just no longer helpful to
	even use those types of models and predictive information.
	Could you comment on that?
	Mr. Nimmich. Yes, sir. I don't think you can go to the
	extent of not using some sort of a model or a predictive
	capability when you are trying to determine whether mitigation
	and preventative actions need to be taken. So, while there is a
	certain degree of uncertainty, we continue to use the best
	available information, based on a wide range of scientific data
	that is available.
	Is there uncertainty? There is always uncertainty in it.
	But we have to start somewhere to be able to create a basis on
	which the risk exists in the community.
	As you well know, sir, in your area we have just
	experienced floods in northern Louisiana that no one would have
	expected, based on the science that was there. So there is a
	great deal of uncertainty when you deal with any weather event.
	So we need to continue to find the best science at the time
	that we create the risk map and then, as often as possible,
	come back and reevaluate that science.
	Mr. Graves of Louisiana. Yes, and I certainly concur that
	we need to be using the best information we can in regard to
	informing decisions. The concern is that, as you know, there
	are significant consequences of determining flood maps and NFIP
	premiums. And with your 500-year flood risk management, there
	could be significant and severe financial implications.
	My point is that, having such severe implications, yet
	having so much uncertainty with the predictive models, that is
	not necessarily a very comfortable combination of issues. And I
	just want to urge, as you move forward, that you keep that in
	mind, that--you need to keep in mind the reliability of the
	information and models, and take into account the consideration
	of financial implications on counties, parishes, and others,
	moving forward.
	Director Koon, first I want to say that I know a number of
	people that know you, and you have a great reputation. Thank
	you for being here. And I appreciate your testimony.
	A week before last, Congress--the House of Representatives
	passed H.R. 2901, which was legislation--and Mr. Nelson, excuse
	me, I am going to ask you a question on this, as well--that
	bill, what it does is it begins--or it allows for private flood
	insurance to serve effectively as a surrogate for the NFIP.
	Sounds like a good idea. Private sector, in many instances,
	could be more efficient than Government can.
	So, face value, sounds like it is a good idea. However,
	being from your area, being from the area where I was born and
	live, I am very concerned that what we are going to see is we
	are going to see private insurers that come in that start
	cherry-picking the policies that have the lowest risk.
	And so, what ends up happening under Biggert-Waters 12 and
	the reforms in 2014 is you are left with the policies that have
	higher risk.
	Now, Biggert-Waters 12 and the revisions from 2014 require
	that the loan that was given to NFIP following the 2015 floods,
	that it be repaid. It requires that a reserve fund be
	established. It requires that actuarial rates be charged under
	flood insurance.
	So my point is that the private sector insurance companies
	aren't going to have those same financial burdens. All they are
	going to have is whichever policies they choose. The NFIP is
	going to have now a smaller pool of ratepayers because the
	private sector is pulling some of those off. So you are going
	to have the higher risk, small pool that are still going to be
	subjected to establishing a reserve fund, paying off this debt
	of, whatever it is, $17 billion.
	Are those concerns--am I--should I not be concerned about
	this? Is there something there that we should be concerned
	about, and should NFIP reform be more comprehensive than just
	doing H.R. 2901?
	Mr. Koon. Thank you for the question, Congressman. And I
	think, actually, the debt is closer to $23 billion on the
	National Flood Insurance Program.
	Mr. Graves of Louisiana. Thank you.
	Mr. Koon. I think they would like to get to $17 billion.
	The answer--my opinion is that there needs to be more
	comprehensive reform of the National Flood Insurance Program.
	And I would urge this committee to become engaged with that
	conversation next year, when it is up for reauthorization, to
	work with the Committee on Financial Services on that, because
	there is lots of components of the National Flood Insurance
	Program that I think directly relate to the conversation we are
	having here today with regards to mitigation activities that
	can take place across the country.
	One of the things that I express quite frequently in the
	State of Florida--and did so just yesterday before the
	Governor's Hurricane Conference general session--as a result of
	some of the actions during Biggert-Waters of 2012, we have seen
	a significant reduction in the number of flood insurance
	policies across the country, and specifically in the State of
	Florida. The State of Florida has lost over 10 percent of the
	flood insurance policies. We have gone from just north of 2
	million flood insurance policies in the State to about 1.8
	million.
	What that means is those citizens, the next time they have
	a disaster, next time they have a flood in their community,
	they are not going to be able to recover like they would have,
	had they had flood insurance, and there will be additional
	costs imposed upon the Federal Government because they may now
	be eligible for assistance from FEMA. They may be eligible for
	assistance from the State, et cetera. So those costs are going
	to be borne by the individuals, those costs are going to be
	borne by Government.
	So a comprehensive analysis and reform of the National
	Flood Insurance Program, I believe, is completely appropriate
	at this point.
	Florida, last year in the legislative cycle, did do some
	things to reduce some of the regulatory burdens on private
	flood insurance in the State of Florida. And so now there are
	private insurers offering flood insurance policies in the
	State. It is very nascent at this point. There is probably
	2,000 to 3,000 private flood insurance policies in the State,
	but it is a start.
	I do share your concern about some of the cherry-picking
	aspects, and I am not an insurance expert, and I will defer to
	Mr. Nelson on that, but we have had a similar situation in the
	State of Florida with the Citizens Insurance Company and the
	wind-borne insurance. They have depopulated a large segment of
	their policies to the private market, and still remained
	financial feasible. So I believe Mr. Nelson may be able to
	elaborate on that a little bit.
	But I believe, again, comprehensive reform of the National
	Flood Insurance Program is absolutely appropriate at this
	point, and can tie in some of the mitigation activities that we
	have discussed thus far.
	Mr. Nelson. Thank you. First, let me say I would echo your
	concerns that you are raising. I think those are profound
	issues that we have to evaluate. So----
	Mr. Graves of Louisiana. Mr. Chairman, for the record, I
	just want to note that he called me profound.
	[Laughter.]
	Mr. Nelson. So the--I do think, if you just step back for a
	minute, Travelers--let me just back up. Travelers, we do write
	flood insurance on a commercial basis for commercial insurance.
	We do not write homeowners flood insurance and we have no plans
	to enter that market. We also do not have a formalized position
	on this, I will just express my own points of view.
	So when you look at it--I have looked at a lot of the FEMA
	rate plans--I think they need to modernize their rate plans.
	The private industry should not be able to compete with FEMA on
	price. Remember, we have to buy reinsurance. We have to have
	enough capital to meet our obligations. That means we have to
	have a pool of money. Typically, that is our shareholders'
	money, so they have to get a return on that. We should not be
	able to compete with FEMA.
	And so you step back, their plan needs to be modernized.
	Their rate plan, I have looked at it, it is not at all
	consistent with how the private sector looks at insurance,
	sells insurance, and has a rating plan. So let's start with
	that, let's modernize the program, and then let's evaluate how
	we can privatize to think about that cherry-picking aspect.
	Thank you.
	Mr. Graves of Louisiana. Thank you.
	Thank you, Mr. Chairman, for your generosity.
	Mr. Barletta. Thank you. And I think Mr. Graves made a good
	point earlier, that Congress needs to look across the Federal
	Government, including levees and flood control projects, when
	we try to bend the cost curve of disasters. The disaster cost
	study in our FEMA authorization bill should help and make such
	recommendations to Congress.
	And I also want to thank Administrator Fugate for the
	disaster deductible proposal. I don't know if it is the right
	solution, but we need a vigorous debate and innovative ideas if
	we are to drive down losses and not just shift costs between
	payers.
	And I want to thank you all for your testimony. Your
	comments today have been helpful in our discussion. If there
	are no further questions, I would ask unanimous consent that
	the record of today's hearing remain open until such time as
	our witnesses have provided answers to any questions that may
	be submitted to them in writing, and unanimous consent that the
	record remain open for 15 days for any additional comments and
	information submitted by Members or witnesses to be included in
	the record of today's hearing.
	[No response.]
	Mr. Barletta. Without objection, so ordered.
	I would like to thank our witnesses again for their
	testimony today. If no other Members have anything to add, this
	subcommittee stands adjourned.
	[Whereupon, at 11:47 a.m., the subcommittee was adjourned.]

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