Transcripts For CSPAN3 House Committee Examines Cost Of Federal Disaster Response 20160513

In 1989 to 80 during Hurricane Sandy in 2012. In recent years, significant disaster aid was provided outside the fema Disaster Assistance programs. These charts show how aid programs outside fema have grown. In fact, for Hurricane Sandy, there was less fema assistance from the department of housing and urban development or the department of transportation. We found these additional disaster aid programs dont have the same requirements and restrictions as the fema assistance. Fema assistance is tied to actual disaster damage and is for individuals, governmental entities or certain nonprofits performing governmentlike 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 and official projects to ensure the federal investment is a wise one. Fema makes every effort to get money in the hands of applicants as fast as possible to enable rapid recovery from disaster impacts. From the sandy Program Management office from march, 2016, it appears these agencies have been slow in awarding and especially paying out funds. Based on this data, only onethird of the cdbg dr funds have been dispursed and 13 of the fta funds have been paid out. Now, this may be worth looking into in greater detail and certainly shows why a comp sensitive look into disaster spending as well as cost and loss 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. A family stayed in their home to try to move their possessions to an upper floor. The Fishing Creek rose too quickly. The house next to theirs was knocked from their foundation. Water started rushing through their windows as they called for help. They had to be saved by a helicopter. The woman told me she could never live in that home again. I will never forget that. Preparing for a Natural Disaster is about more than the loss of possessions. Friends and neighbors lives could be at stake if we do not plan in advance. As we were rebuilding, i was amazed at much of the federal assistance was to rebuild in the same place, in the same way, leaving people vol nesulnerablee next storm. The federal government has a responsibility to respond but a duty to be good stuarts. I look forward to the conversations we have today, the ideas we are going to hear about and taking the next steps to reduce the cost of the disasters. I thank you all for being here. I ask you newunanimous members questions. With that, i now call on Ranking Member of the subcommittee, mr. Canson for a brief Opening Statement. Thank you, chairman. Great words. Good morning, everyone. Welcome to todays hearing. While we have several prominent witnesses today, i would like to welcome a fellow hoosier, mr. Mickey. He is the director of the institute at indiana university, Purdue University in indianapolis. Hes the new chair of the Multihazard Mitigation Council of Building Sciences. I look forward to my colleagues learning about the work being done in the great hoosier state, particularly in indianapolis to address rising disaster costs and losses and the report from the multihazard counsel. His leadership and local work are terrific examples of what indianapolis is doing in the field of university management. I yield back. Thank you, Ranking Member carson. We will have two panels. The first is Carlos Curbelo from florida. Someone from south florida, he knows all too well the risks posed by natural hazards, the rising costs of disasters and the efforts proven successful in florida to incentivize. Congressman curbelo has been a leader in this area and a advocate for constituents in florida. The second panel joined by joseph. The debty administrate eor of f working on ways to reduce the cost of disasters and build resilience. Sally clark, commissioner of el paso county, colorado, she is here in her capacity as the president of the National Association of counties. Brian coomb from the National Emergency Management Association is here to talk with us about his experience as well as help us see things from a state perspective. Mr. Eric nelson, Vice President of strategy and analysis for the Travelers Company incorporated rep sending the build Strong Coalition. Kevin mickey, chair of the National Institute of Building Sciences. I ask unanimous consent their statements be included in the record without objection as so ordered. We hope chief David Paulson would be able to join us, but he had other commitments. I have a written statement for the record from him. I thank him and the build Strong Coalition for the input on these topics and ask consent that this statement be included. For the witnesses here, since your written testimony is made a part of the record, the subcommittee requests you limit your oral testimony to five minutes. Congressman curbelo, you may proceed. 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 im glad to do it here at the transportation subcommittee on Economic Development to discuss the important topic of disaster mitigation. Im honored to serve with all of you. I would like to take the opportunity to share thoughts on controlling the rising costs of the federal government when responding to disasters. Im a native of south florida. My good friend 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 arent 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. A few miles south, where some of my family members lived, the devastation was horrifying. Being from florida, i know that we have pretty strong state Building Codes already on the books. 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 being done in the field of predisaster mitigation. 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. Instead of taking additional steps to focus more on preparing for the 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 on very timely. For these reasons, my friend, from siers who knows firsthand how costly clean up is after a disaster introduced legislation to work tw toward stronger Building Codes introducing hr5177, the national mitt indication investment act of 2016. This legislation works to alleviate losses to resident and commercial property following a Natural Disaster through preventive measures. Out would provide incentives and enforcing state Building Codes. We do this allowing them to increase mitigation following a National Disaster by 4 based on the price of clean up, only if the state is enforcing Building Codes. This incentive can encourage states to be proactive in future building and save a lot of funds in the long run. The bill would 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 are to reduce Disaster Response and recovery increasing resilience of buildings and reducing the amount of damage that occurs due to disaster and chronic flooding. Grant awardees will give nonmatching federal funds, no less than 25 and fema 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 threat to real estate along the waterfront communities. This undoubtedly affects insurance rates, property values, clean Water Supplies and general public welfare. We believe that through preemptive methods of insent vising local states and governments to adhere to stronger Building Codes, we alleviate the costs after a Natural Disaster. I thank my friend for working with me on this legislation and look forward to hearing from other expects on the next panel. This is a topic that requires diverse, geographical locations and multiple industries. I appreciate being able to discuss my bill today. Thank you very much, mr. Chairman. Thank you for your testimony, congressman curbelo. I will begin the first round of questions, limited to five minutes. If there are additional questions, we will have an additional round of questions. Why we usually do in the have questions for members of congress, we have an original cosponsor of mr. Curbelos legislation and has a few questions. I really thank you mr. Chairman. Im not going to ask mr. Curbelo questions because we have been working on this for a while. I do want to thank you. We have firsthand experience in how devastating some of these catastrophes are, how it impacts life, the community and the economy. I really want to thank you for taking a strong lead on this. You and i, new jersey got hit hard, florida has been hit hard. I want you to know that i think this is the way to go. You know, investigating in mitigation at a National Level where we put real strong codes, its always been on my mind for years. I want to thank you for your hard work. I look forward to continue and proud to work with you on this legislation. Thank you, mr. Chairman. Thank you. Any questions . Mr. Costello . No. Ranking member carson . No, sir. If not, we thank you very much for your testimony. Your comments have been helpful to todays discussion. We will now call the second panel, i remind you of the subcommittees request to your oral testimony to five minutes. Well give everyone a chance to be seated. Thank you very much. Deputy administrator you may proceed. Good morning, chairman, Ranking Member carson and members of the committee. Im with the federal Emergency Management agency. Thank you for the opportunity to testify about the efforts fema is taking to reduce the costs of disasters. With the trend toward urbanization, large cities located in high risk areas and the increasing severity of weather events, the nation faces the ever increasing costs in responding to and recovering from disaster. Femas primary goal is to support the survivors. Fema has procedures in place, one of the most effective ways to reduce disaster costs is to invest in Community Resilience before disaster strikes. Therefore reducing the physical and financial and particularly the human impacts of the event. Preparedness 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 astringent Building Codes and standards, ensuring the property is built to insurable levels. Let me repeat. Standards that ensure it is built to insurable levels. A savings of 4 is achieved. Mitigation programs reduce cost to the American Public by an estimated 3. 4 billion annually. I have to move off my prepared comments to thank this committee and congress for taking actions 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 the building is better and reduces the future potential. Fema has made significant strides in the past few years bringing the larger Emergency Management committee together around a National Preparedness system. It provides a common approach to managing the risks and provides community information, tools and funding they need to make informed data driven decisions. This is one step fema takes in promoting resilience. The Flood Insurance program serves as a foundation to the 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. Within the Community Rating system initiatives, communities who implement floodplain Management Practices offering lower nfip insurance premiums to participating communities. Fema provides Hazard Mitigation assistance through predisaster mitigation, Flood Disaster mitigation and flood prarms providing funding to communities for measures pre and post disasters. They invest in Community Resilience before the disaster strikes. I strongly, this year, fema went a step further with a disaster deductible concept. States, tribal and territoryial investment in programs. I strongly believe this program will be critical to any effort to reduce disaster costs in a significant way. As you indicated, congressman bar leto, they have indicated the federal cost of disasters continue to rise. The solution does not reduce the cost of potential disasters. With the disaster deductible concept, states reach a financial committee, similar to an insurance deductible to get federal funds to rebuild. Additionally fema provides credits for those states such as adopting the building enhanced codes or funding the mitigation project. Using the credits, a states deductible could be reduced, ensuring they have an incentive for investing in resilience. Fema received 150 responses we are evaluating those to provide input from the advanced notice we are making to develop a proposed yule. Efforts help e deuce the cost in many areas, we continue to acknowledge the demographic patterns are not something to easily influence, but we can take steps to account for the patterns, improving Building Codes, promoting preparedness. Fema strives to invest in the nations resilience being good stewards of the taxpayers dollars. Innovative ways for Risk Reduction and mitigation planning. Efficiently the recovery programs to reduce the risks and costs to the american taxpayer. Thank you for the opportunity today to testify. I look forward to questions the subcommittee may have. Thank you for your testimony. Commissioner clark you may proceed. Thank you, chairman bar llet. Im sally clark, a county commissioner from el paso county, colorado and serve as the president of National Association of counties which represent all of americas 369 county governments. All parts of government play a role in disz asters, counties are the first line of defense when disaster strikes. Whether its our Emergency Managers or sheriffs or 911 call centers, county hospitals or Public Health departments or the fact we own the majority of the nations infrastructure like roads, bridges and airports, federal policy decisions regarding disasters have a major impact on counties. My county is no stranger of disasters and the topic of this hearing is personal for me. El paso county and our surrounding areas have been devastated by wildfires and flash floods that up ended our residents lives, strained the local economy and caused enough damage to prompt four president ial disaster declarations over a tleeryear period. Our county, long ago inspired kathryn lee baits to write accou america the beautiful is home to charred hillsides and the vegetation that once protected the area disappeared, paving the way for dangerous flash floods. We have been working diligently to help the Community Recover and become more resilient in the future. Today, i respectfully submit three things for consideration and you discuss federal disaster spending. First, it should be fewed 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. The vast majority of costs are on the back of state and local governments. According to fema data, over the last ten years, 92 of counties across the nation had at least one fema declared disaster. According to materials published by fema, the number of disasters handled without request for assistance the 3500 to 3,700 annually. Only 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 when recovering from disasters. County governments operate under restrictive revenue constraints imposed by state policies, caps on Property Taxation to raise funds for disaster costs. Local government spends significantly on disasters. Changes to the spending should not be assessed without the consideration of this. Second, decreases in federal disaster spending should not come at the expense of state and local governments. The ultimate result of shifts federal disaster cost to state and local governments will further deplete Resources Available for proactive mitigation and resiliency work results in costlier disasters in the future. Femas deductible proposal has serious challenges for local governments. For example, el paso spent a lot of money to recover from the wildfires and flash floods that ravished the community, including loss of life. Under the disaster deductible proposal, if the state of colorado fails to invest in mitigation efforts, funds could be with held from our county at times we are in most need of federal assistance. In this way, we could be punished because of something we have no control. 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 government confidence that a deductible could be implemented without the risk that it would simply shift disaster costs from the federal government to state and local governments. Finally, efforts bring down the overall cost of disasters and should be supported by the federal government. Counties are uniquely positioned to imp limit mitigation through the regulatory mitigations. Collaboration helps them better utilize authorities to mitigate the damage increasing Community Resiliency and decrease the impact of future disasters. Femas Hazard Mitigation Grant Program and other programs enable counties to undertake large project that is may be out of their reach and have tremendous potential to drive down the cost for all levels of government. I want to thank you, again, for inviting a local perspective on this important conversation. I welcome any questions. Thank you for your testimony, miss clark. Mr. Coon, you may proceed. Thank you, my name is brian coon. Im here on behalf of the National Emergency Association Territories and the district of columbia. As the frequency, tendency of disasters increase, it is imperative to reduce risk. Personnel and Financial Resources are focused on life safety. We believe the following. Impact all levels of government, not shift the cost between stake holders. The government practice of spending more money on recovery must be changed. Hazard mitigation is Cost Effective with a documented return on return of investment. Reduces costs and speeds recovery. It can be the catalyst for a Community Wide focus in the future. Mitigation, resilience activity by state, local and travel should be incentivized. Cost savings will be realized at all levels. Such as adoption enforcement of Building Codes, zoning. Local and travel governments are critical in creating the communities and must be engaged in this conversation. All stake holders must use liz the analysis tools to illustrate the data driven result on calculations. This can be done when data is made available to stake holders and when they are not done in a vacuum. Risk reduction priorities. At the urging of congress, fema has undertaken reengineering of the Public Assistance Program is an example of working to improve to maximize existi inin programs. We are pleased with the effort and urged that similar reforms are considered in other federal programs. Investment into the Emergency Management compact or emac, we must encourage greater investments to reduce the need for federal assistance, administrative costs, Property Damage and most importantly, save lives. Fema there is no consensus among the states, many expressed common beliefs about the proposal. The concept should drive reduction in costs at all levels, not merely a shift in cost. Appropriate amount of time must be given to ensure implementation including training and guidance for states. Adequate time to make sure budget is understood and acted upon by state legislatures. Utilize the opportunity to decrease Administrative Burden and associated costs and the deductible cannot result in regardless of what happens, Real Progress will be achieved when stake holders are engaged. I would like to wrap up with thoughts of where to go next. The federal government allows states to pursue ways to strengthen community. We recommend fema evaluate the programs to deter the communities from leveraging the opportunities. We recommend a study of true cost of disasters studied to capture the direct costs and the costs direct and indirect paid by other federal agencies, state, local and tribal governments and the private sector. Femas focus must transcend response and the agency. Mitigation and long term recovery are investments, not a cost. Many of the functions that fema fulfills during a disaster could be done in a more Cost Effective manner. Invest in the infrastructure necessary to achieve this goal. In addition to improving existing programs, fema and others should recognize efforts by state and local entities and encourage their adoption nationwide. The issue of increasing costs we have a common goal. Private sector Business Leaders and community members, we have a role to play in the cost of disaster. I appreciate the opportunity to testify before you today and stand ready to answer any questions you may have. Thank you for your testimony mr. Koon. Mr. Nelson, you may proceed. Good morning. Chairman barletta, Ranking Member carson and members of the subcommittee. Thank you for holding this hearing for solutions of Natural Disasters. My name is eric nelson. Im senior Vice President at travelers insurance. Im testing on behalf of build strong a group of businesses dedicated to reducing human economic losses. As one of the largest Property Casualty companies in the u. S. , we provide a unique private sector in its own risk and losses from Natural Disasters. I would like to thank chairman barletta and the members for continued leadership to conduct a series of round tables beginning in january of last year. I begin today by outlining three major take aways from the round tables. Before i do that, the main question we want to ask ourselves is what actionable steps can Congress Take to mitigate risk, lessen the impact to families and communities across america and reduce federal losses from Natural Disasters. The first take away from the round table is by almost every measure, federal disaster is increasing on the path. Dr. Irwin showed that exploding cost of Natural Disasters over the last 60 years, increasing roughly 6 from 1965 to 77 in 2015. The second take away from the round table is the states, communities and individuals have little incentive for Loss Prevention measures. We are going to hear the council that conducted a study that every dollar spent saves the nation 4 in post Disaster Relief cost. The individual assistant Grant Program reduces disaster insurance demand by 6. The findings represent compelling evidence that the government is fostering shortside behavior throughout state and local government. The third point from the round table is eliminate incentives and replace them with the appropriate incentives to benefit all parties involved. The federal government would lower their cost their for Disaster Assistance. States benefit from relieving their aid. Families benefit by reducing personal disaster costs and protecting loves ones. Communities and local economies 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 the Research Institution such as the Insurance Institute of home safety. Ibhs and other Research Institutions conduct research on building standard and performan performance. Research from these institutions demonstrates that statewide adoption enforcement of Building Codes can reduce long term risk. Studies in the wake of major disasters support the finding. Another fact, according to ibhs, at least 25 of all businesses that closed down for 24 hours or more during a disaster never reopened. Thats staggering stats. Think about the business es and the jobs. Lsu Hurricane Center estimated stronger Building Codes would have reduced wind damage in Hurricane Katrina by 80 or 8 billion. So, thank you for your leadership congressman curbelo. The four principles from this report have been turned into the legislation and hr5177, the investment act. It provides a powerful incentive for states to adopt in Building Codes and authorized the first of its kind of Grant Program to have Building Code enforcement. Authorized by the chairman in hr1471 authorizing congress to look at the assessment of federal disaster spending by congress in over 20 years. Congressional leaders, policy experts all agree, strong Building Codes and predisaster provides life and cost saving benefits. I urge you and your colleagues to support the mitigation and investment act to reign in federal governments exploding costs. Chairman barletta, i applaud you for your efforts. Id be happy to answer any questions. Thank you, there nelson. Mr. Mickey, please proceed. Chairman barletta, Ranking Member carson and members of the committee, thank you for the opportunity to provide testimony on reducing the cost of Natural Disasters. Im kevin mickey. Indiana university, purdue yurnt in Indianapolis Community expertise to create strong and resilient communities. Im here as the chairman for the council of the National Institute of Building Sciences introducing a new approach with the incentivization throughout the United States. Congress established the National Institute of Building Sciences in 1974 to serve as a source for the public and private sectors to improve the environment. To achieve the mission, the institute established 18 coun l councils for examining and developing tools, technologies and practices to meet identified needs. The institute or mmc, council on finance insurance and real estate have been focused on opportunities to advance resilience and the impacts of natural as well as manmade disasters. Numerous efforts at developing increased standards and definitions of resilience. Yet, we continue to find penetration of Hazard Mitigation. This is not to say the efforts have not been effective. This has been pointed out in 2005 study shows the strategies do, indeed, save on the order of 4 for every dollar spent. They are discussing with the federal agencies project to revisit this 2005 study and expand for all programs, the Building Codes and the benefits that mitigation provide to the private sector. Recognizing the benefits, proactive investments mitigation, limited funding available to present disaster mitigation, response and recove recovery, a new approach is necessary. Most Cost Effective manner is through a holistic private, public and hybrid programs. This focus on leveraging private, Public Sector opportunities is called incentivization. That approach calls for input, consensus, leadership and action from a Broad Spectrum of state holders, the regulatory and economic processes that need to be developed and coordinated to make it part of the nations economic fabric. Participants include those who offer incentives, xecompanies, lenders and communities and Government Agencies and important Decision Makers that most definitely need to include homeowners, businesses and utilities. They jointly published a paper developing predisaster resilience which provides a catalog of existing programs for different hazards that public and private stake holders evaluate to develop incentives. The specifics need to be tailored using optimal resilience beyond current law and custom. One size cannot fit all. Incentivizing focuses on monotizing the benefits for risk mitigations and practices in the ordinary course of business. Participating stake holders need confidence that it will justify investments underwriting and loan and Grant Programs. They will not undertake it because its sensible or prudent. My written testimony has opportunities for congress gregsal action. I offer a few recommendations here. First, every federal dollar are Community Development and infrastructure require the latest Building Codes are met or exceeded. Examine all programs, particularly grant making programs to identify opportunities to support resilience. Finally, programs that require investment in mitigation. Thank you for the opportunity to testify before you today. Please consider the center as well as the National Institute of Building Sciences resources as you look to address challenges for the environment. I look forward to your questions. Thank you for your testimony. I will begin the first round of questions, limited to five minutes. If there are additional questions, we will have additional rounds of questions as needed. Deputy administrator, why are the big disasters causing so much money now and what factors do you think are driving this change . Then i would also like to hear mr. Koon and mr. Nelsons thoughts on that. Congressman barletta, the biggest challenge is the continued movement of populations into high urban areas that are developed from historic perspectives. The rivers are flooding, the coastlines for major storms and earthquake faults. The reality of people moving to the city is one we are going to face for the foreseeable future. That only increases the potential of cost. Additionally, the value of property has gone up over time. Therefore, the recovery costs are continued to go up. What it costs to build a mile of roads 30 years ago is different than what it takes to build a mile of roads today. The only solution is, in fact, building for those future states we look at in terms of culverts that maintain the flow of water, bridges that are better maintained. All the infrastructure that needs to be there, built to standards that allow for the potential of future disasters to be minimized. Mr. Nelson . Yaereah, just to add to that the wealth affect that happened since the 70s. The average home size increased by about 1,000 square feet. More and more americans moving to areas with higher risk. On top of that, we see it in 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 shouldnt see claims, slow wind speeds and small hail sizes. We see it for states like florida with very good adoption of Building Codes. Studies that show how much its benefited. Add that to the conversation. Thank you, mr. Chairman. I concur with them. I would like to add over time theres a better understanding and utilization that is available after the disasters. Perhaps we are fully recognizing all the ways we can use the federal, state and local dollars to help the Community Recover. I believe theres an additional cost on the administrative oversight on the programs and the Program Requirements to affect the mitigation. The recovery programs can stretch into the decades for larger disasters. The administrative costs add to those higher costs. Administrator, we continue to see new disaster aid programs emerge. Reaction to disasters. They seem to have different rules and requirements. They dont seem well coordinated or focused on obtaining the best outcome. Dont feel they contain strict requirements on Cost Effectiveness. Are you aware of other agency disaster programs include such requirements . Is this Something Congress should look at and streamline to make sure they are Cost Effective . Congressman barletta, you are correct, we have very stringent codes and requirements to qualify for federal dollars. They often take a great deal of oversight to ensure they are effectively and correctly implemented. I can speak for the sandy legislation that there was a requirement to capture all the different agencies including hud and federal Transit Authority to ensure we had a more complete understanding of where the different investments in recovery were going. That is not consistent across the different disasters that exit. I will tell you, this year for the first time, this administration passed the federal flood standards that require every agency for every federal dollar thats invested in recovery to meet a standard for the first time. That includes the department of defense as well as all of 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. Ill recognize Ranking Member carson for five minutes. Thank you, chair mman. In terms of community buyin, 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, we authorize fema to provide different Hazard Mitigation Program Funding for states with enhanced plans, yet only 12 states have adopted these. So even with incentives its very difficult to get states to take action. How do we get the ideas, in your report, to thepublic and private secretary rz and what is needed to get ideas implemented . Im happy to say weve already taken some steps in that direction. Just this past january the institute held a symposium here in washington, d. C. That institute brought together experts in the industries i identified in my testimony for the purposes 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 to include insurance, loan organizations bond writing organizations businesses utilities homeowners and of course local state and federal government. And 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 buyin of these stakeholders directly because they will be the ones coming up with these incentive strategies that others will then follow and theyre going to be incentivize to help build an enhanced economy that does not currently exist for writing insurance, originating loans an 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 youll find in our full study. State farm insurance offered a premium discount, for instance, for 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, 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 alabama, tim cant, 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 ive 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 were looking for ways to reduce them, and we believe that 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. Thank you. Mr. Koon, you mentioned femas new Customer Service centric focus for the Customer Service program as a positive step forward. Are there other actions fema could take in order to reduce disaster costs and even losses . And thank you, Ranking Member carson. I believe that continued implementation of some of the procedures that were highlighted in the Sandy Recovery improvement act that will help expedite funding to the locals could we are eager to continue to work with fema on the p. A. Rejeeshing processing. 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, their incentives offered through the national Flood Insurance program, through sandy none of those i believe have fully met what they intended to do. So continual reevaluation of those incentive programs to determine why they 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 and intended to affect. Thank you. And administrator nim eck, earlier this week the white house hosted a conference on resilient Building Codes. Included on 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 and a notice of proposed rule making. Has fema finished reviewing all the comments it arrived at in determining that it will definitely go forward with rule making on disaster deductible concepts . If so, when can congress and stakeholders expect a rule to be issued . Representative carson, thank you for the question. The deductible process has been one where weve reached out heavy tloi the user group and as ms. Clark indicated weve received over 150 very detailed responses to the advanced notice of rule making. And we went through the advanced notice of rule making 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 weve 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 rule making process to get specific comments back on those rules. We anticipate that that will be out sometime this calendar year, sir. Thank you. I dont know where we are on time, mr. Chairman. But i yield back. Thank you, Ranking Member carson. Mr. Graves, you have five minutes. Thank you, mr. Chairman. Administrator, who is in charge within the federal government of our National Efforts in terms of Community Resilience, which agency . 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 with the federal government. Each agency themselves are responsible for their support to the preparedness plan. Got it. So do you acknowledge, administrator, the statistics that mr. Nelson referenced in regard to studies indicating that proactive investments in Hazard Mitigation generate cost savings . Yes, sir. I said it in my Opening Statement and thats what the deductible process is trying to 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 . Sir, we work closely with the army corps of engineers. If you dont mind, just a yes or no. Id appreciate it. Im not comfortable answering just a yes or no but would do so for the record. We work very closely with the around army corps of engineers and i do believe an awful lot of their efforts go to reducing the impacts of potential future disasters. In north dakota theyve worked closely with the city of fargo to develop thank you. Ill go ahead and answer these so i dont run through all the type. So you have the u. S. Army kormz of engineers that hurricane protection. The administration has budgeted i believe it was a billion dollar competition resiliency competition through hud. You have a climate re12ki8 yenscy fund that department of interior is trying to establish under the last budget request, i believe it was 2 billion. Fema has a Hazard Mitigation Grant Program and predisaster 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, properly prioritized . You know, the reason i bring this up, im from south louisiana weve 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 miss hiss in 2011 and again this year in january for the First Time Ever in january of this year. We had hurricanes gus taf and ike in 2008 isaac in 2012. Weve 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 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 other 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 you us to reduce disaster spending. Everyone does. The solution here, as i think mtz clark noted, mr. Koon noted, the solution is making the principle proactive investments in making our communities more resilie resilient. In recent years weech had fema with their 500 year flood Risk Management regulations. Weve had bigger waters and revision of bigger waters in 2014. Bigger waters in 2012, the revisions in 2014. We have propose alz 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 proaifkt investments is the solution to reduce our overall zastorrer expenses. We estimated that if we had spent somewhere around 8 billion or 9 billion, simply finishing authorized projects in south louisiana that were suppose ed to be built by the u. Army corps of engineers we could have saved an estimated 90 of the you can justify numbers from about 120 billion to 150 billion spent in response to those twe 05 hurricanes. We could have saved that. Not to mention and very, very important in fact more important mr. Chairman we think we could have saved over 90 of the 1200 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 community and ecosystem more resilient and stop all this coming in after the fact and spending exponentially more dollars. Theyre studies, models, yet all were seeing rather than following the data, following the recommendations an outkomz of these studies and experiences following the catastrophic disasters. Instead, were further making disparate further investments and programs that arent really contributing or heegd the recommendations of the report. Im very concerned about what this trend that were 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. Thats why weve lost. Thats why weve become more vulnerable. Arkansas doesnt care when hurricanes come because lu slu their buffer. Our buffers is disappearing. Thats why youre seeing these costs. I just want to urge the committee, mr. Chairman and mr. Raivging member, as we move forward on legislation we need to make sure we dont get too myopic in this view and were looking comprehensively at all of these efforts under way that quite frankly should beer under the subcommittees jurisdiction. I yield back. Thank you. Many sires . Thank you, mr. Chairman. You know us. We learn from all of these disasters. We picked up how to better construct to better codes and 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 . 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 its 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 or community has code or doesnt have code. If they dont, 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 doesnt feel that codes are of value, we do and when we invest federal dollars we will live up to a code. You know, one of the things that bothers me about new jersey is the fact that three years later were still having people that have not gone back to their homes. Theres 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 theres got to be some sort of postdisaster where youre 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 . 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 we do, it takes time to go back and relook and as you know in new jersey now youre see o sooing the first cases of prosecution of fraud where people have taken money from those who need to recover from 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 postdisaster we want to make sure those people that need the money get it. And there will be people who take advantage of it, but we dont give up. And as you said, sir, it may take too long but we dont stop. We continue to go back and recoup those monies from people that fraudulently or accidentally applied for resources that they didnt deserve. Were down below the National Standard from Financial Institutions in recovering money, down below 1 . So i think we do a pretty good job of ensuring that the money goes to those people who deserve it and need it. You know, i come around i used to be one of these guys who had to require certain things. 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 should be part of it. I look at these disasters in the midwest, i see these tornadoes, oklaho oklahoma, im not trying to single out oklahoma, but it seems they get more than anybody else. And i see where schools are even damaged. To me, if the federal government is going to give the state money to build a school, you should require a stronger code to build a school. And i understand that the schools were built before, but Going Forward i think thats snag we should look into because some of these schools always they serve as shelters, too, in some of these communities. And i see the damage some of these schools and some of these homes. So i think im coming around to the incentives, mr. Chairman, to provide these people so they can build the kind of codes they need to deal with some of these disasters. Thank you. 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 postfire flooding and do you have any recommendations for congress to improve our Mitigation Programs . Thank you, mr. Chairman. Yes, we have obviously had and i dont know what fair share is, but weve had more than our fair share of disasters in el paso county, colorado. What id like to talk about specifically is the things that i think we can do from a relations standpoint as to local Community Resiliency. And i think that what tends to happen and it happens at the local level, the state level and particularly at the federal level is we have silos build up between agencies. The fire that happened in waldo canyon was almost more than 95 on federal forest land. That premitigation needs to happen from the federal level because thats Forest Service. And the Forest Service is now spending more than 50 of its budget on frankly responding to wildfires versus premitigated 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 set 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 crystal park actually 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 wil n 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 premitigation ahead of time. I also think its 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 doefrl dollars s reshgss. 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 komz 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 throw down the debris and the large flash floods that happen as a result. And its hard to understand if youre not from colorado because if youre not from a Western State that has those drainages that drain right down into it. So i think taeg down the silos, understand theres a aen onethird of Small Businesses go out of business of a major incident, and i think that that is really important. And looking at the flexibility in the requirements even though we definitely want accountability, but sometimes the requirements preclude you from even asking for the particular money that you may otherwise need. We talked a lot today about how much the federal government pays out for disasters, but the other major pay others 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. In the wake of a disaster its the role the Insurance Company to make that insured whole again so were paying for the building. Were paying for the contents. If youre a Small Business were giving you business income interruption coverage. Were also providing additional living expense. So significant dollars compared to usually individual grants or small grants to consumers. Theyre not going to make you whole again. Theyre not going to be enough to rebuild your home in generally speaking. So its important. Insurance industry pay as major role in the Natural Disasters. Weve been seeing the trends go up and so this is 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 sos important that we bend the cost curve for the federal government and bend the cost curve for consumers. I believe every one of you mentioned the importance of mitigation and how evidence shows for every one dollar invested four dollars is saved. Most federal mitigation funding is provided after a disaster declaration. I ask this of every one of you on the panel if we could give a brief answer. How can we more proactively address the met gaigs and shift the investment to before the catastrophe . Congressman barletta, i think the first thing i need to do is thank the committee and the congress for the postsandy litigation that allows the money, the postdisaster mitigation money, to be identified much earlier if 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 predisaster in 2015 Congress Gave us the authority to do postmitigation or hazardous 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 community thatz have invested in their own wellbeing. I do believe it is mitigation that ultimately reduces the cost of a disaster and we need to find proactive way as as youve all indicated to incentivize that approach. 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 kmoount 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 xanl am. In 2012 with the wialdo canyon fire we just closed on three houses weeks ago. For several homes that were in the flood way as a result of a fire that happened on federal forest land. They had never had flooding ever before, and its 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 paper work is so extreme for such a small amount of money that it makes it really unuseable for us to even apply for the grants. 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 spomt for trying to reduce mitigation to reduce the disaster eventual disaster declarations by looking at being proactive on their own personal property. Black forest fire was almost entirely on private property. That was the second fire. So we have two different fires and weve seen different problems in each of those. Thank you. Mr. Koon . Thank you, mr. Chairman. As a director of the Florida Division of Emergency Management i have the luxury of a fairly large staff and Adequate Funding 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 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 anytime a new program is put into place they have to determine how they can help meet the needs of that program because theyre using current staffing, current year budgeting at the potential for a payoff down the road. I think a few things would assist in this effort. One would be as mr. Gray 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 help us calculate the true return on investment for our participation in hes programs and help us make those decisions. And finally moving the mitigation cycle moving the Mitigation Program forward so its not something we start thinking about on day one of the recovery. Its something that is done ahead of the disaster so that if the funding comes along with that disaster we are ready on day one with actionable mitigation plans to help implementing those programsnd we dont rebuild exactly as we were before. Thank you. Mr. Nelson . First i just want to start with we have to get the word out about mitigation. Theres a perception that mitigation costs so much money to consumers. Travelers were a proud supporter of habitat for humanity. We went out and built a dozen fortified homes. I personally was involved in building one in new haven, connecticut. The average cost is only 2. 5 of construction. We have to make sure consumers understand this. Thats first. Second, clearly, youve got a difficult decision in front of us. You know, spending is so difficult in congress today. Everyone understands that. Wu we have to consider spend more at prezasting mitigation stunds, again proven techniques with ibhs and other studies. And evaluate that and evaluate streamlining some of these fema programs. Thank you. Mr. Mi. [ inaudible ] [ inaudible ] to take those positive actions. Thank you. Ranking member carson . Thank you, chairman. Ms. Clark, Disaster Assistance reform under the act of 2015, the Community 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 cost yet data is very scarce. What is doing to collect the information so that the data can be considered as a part of the comprehensive study and ensure that current federal disaster costs are not just being shifted to local communities . I wanted to say that i think that that brings up or mr. Koon. Okay. Ill start. I think that local government really is 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, weve had four declared disasters so weve 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 of first ever all our communities and secondly of our local governments. 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 . Whats the methodology . What is going to apply in that situation . Is it you go out and remove a tree that just fell on the road overnight or 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 rurp on investment calculations 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 president ial declaration is also fairly high. So we can have a 10 or a 20or 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 logue loek al level to help us recover from those situation. I concur we should develop methodology where we can all operate off the same sheet of music when understanding what these costs are. Yes, sir. Thank you. Mr. Nelson, you mentioned in your testimony that the Insurance Institute for business and home safety simulating disaster conditions on hoemdz an businesses in a controlled environment, you mentioned that. What type of ajumtds 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 . Ibhs has come out with a program called fortify. The Bronze Program focused on the roof coverings. Weve looked at taping the seams in the roof deck. Maybe thats about 500 to 1,000. That prevents water intrusion in case you lose your shingles. Thats the first step. The second step thats proven technique is really bolstering all your openings, either covering your openings or putting some other reinforcem t reinforcements in place. Then the Gold Standard is looking at the building kind of end to end, looking how its anchored at your foundation through the walls and to the roof. So these are techniques that we are very happy to say some states have embraced. Aalabama, coast of alabama, has now embraced the fortified standards within their codes in their coastal counties and also put in a program to try and for mitigation grants. So were seeing a lot of success with this program. Were even seeing some builders voluntarily building these homes. Thank you. And lastly for fellow hootzier mr. Mickey Center Provides valuable Services Necessary to understand the disaster threat and risk. How does the polar ar center help us understand making 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. [ inaudible ] thank you for the opportunity to talk both about the pole la center and quite honestly the state im very proud of, the state of indiana. Pulse has been around since 1989. Weve got 27 years of successfully linking community and academic expertise. Our goals are to build capacity in a states agency. The volunteer associations, the citizens of the state of indiana and so forth. Weve done a lot of work in Emergency Management, but the reason weve 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 weve had the privilege of working with the Indiana Department of Homeland Security to complete mitigation plans in close clap 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 often happen, that plan becomes a living document, something the community is engaged in, something people are brought to the table too discuss and be a part much the i think thats a critical component of making mitigation a success. Part of the reason were also successful and something im exceedingly proud of is in the state of indiana we understand the importance of information. Fema created a tool that im sure in of you are aware of a few years ago called it has become a very significant part of the portfolio in the state of indiana that we use. Technology allows communities to estimate the impact of hazards, specifically floods earthquakes and hurricanes and are able to do that in a more profound and successful way by integrating local resources. In my state, im happy to say that we have 100 of the counties that even though they have disagreements to be sure theyve managed to find a way to agree to share information. So anyone anywhere anytime can go out to the indiana map 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, im proud to say, to other states as well. Were very much about building capacity. Weve worked extensive live in the states of georgia, in west virginia, in many other areas. In total, weve worked in over 36 states including i believe everyone 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 longterm 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 together in a synergistic way the conversations to allow people to take advantage of that knowledge. Thank you sishgs. Thank you, mr. Chairman. I yield back. Mr. Graves . Thank you, ma mr chairman. Administrator, the bigger number is 12 directs fema to incorporate simulations of Climate Change into some of the effort estimates you develop in regard to premiums. Could you discuss how fema is doing that and how youre addressing uncertainties in regard to climate models . So through bigger 12s weve been required to use the best science possible to determine the flood risk maps, 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. So the question is, how do you plan to address the uncertain toyties in regard to the models of computer sea rise and potential for storm intensity changes and things along tholines . Sir, ill answer that for the record. Thank you. Another question. The Technical Mapping Advisory Committee that was established, they indicate in a recent report that they believe that there was about a 40 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 were getting to a range of uncertainty that is just no longer helpful to even use those types of models and predictive information. Could you comment on that . Yes, sir. I dont think you can go to the extent of not using some sort of a model or a predictive capability when youre trying to determine whether mitigation and preventive 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 thats available. Is there uncertainty . Theres always uncertainty in it. But we have to start somewhere to be able to create a basis on which the risk exists in a community. As you well know, sir, in your area weve just experienced floods in northern louisiana that no one would have expected based on the science that was there. So theres 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. 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 is 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 set severe implications yet having such uncertainty with the predictive models, thats not such a comfortable combination of issues. 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 an others mofg 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, house of representatives passed hr2901 which was legislation and mr. Nelson im 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 and in many instances can be more effective than government can. So face value sounds like its a good idea. However, being from your area, being from the area where i was born and live, im very concerned that what were going to see he is were going to see private insurers come in that start cherry picking the policies that have the lowest risk. So what end up happening under biggest waters 12 and the reforms in 2014 is youre 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 arent going to have the same financial burdens. All theyre going to have is whichever policies they choose. The nfip is going to have now a smaller pool of rate payors because the private sector is pilling some of those off. So youre going to have the higher rifk smaller pool that are still going to be subjected to establish will a reserve fund, paying off this debt of whatever it is 17 billion. Are those concerns . 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 hr2901 . Thank you for the question, congressman. I think actually the debt is closer to 23 billion on the national Flood Insurance program. Thank you. Theyd like to get to 17 billion. The answer in my opinion is 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 its up for reauthorization to work with the Financial Services committee on that because there are lots of components of the national Flood Insurance program that i think directly relate to the conversation were having here today with regards to mitt grace activities that can take place across the country. One of the things that i express quite frequently in the state of florida and did just so yesterday before the governors hurricane conference general session, as a result of some of the actions during bigger watters of 2012, weve seen a significant reduction in the number of Flood Insurance programs across the country and specifically in florida. Florida has lost 10 of the Flood Insurance policies, weve gone from just north of 2 million 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 if they had Flood Insurance and there will be an digsal cost from the federal government because they may be eligible for assistant from feel ma, from the state, etsdz. So the costs are going to be born by the individuals. The costs are going to be born by government. So a comprehensive analysis and reform the National Insurance Flood Program i believe is complete apply 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 so now there are private insurers offering Flood Insurance policies in the state. Its very nascent at this point. Theres 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 cherrypicking aspects and im not an insurance expert. Ill defer to mr. Nelson on that. But we have had a similar situation in the state of florida with the citizens nrns company and the win born nshlgs. They have depopulated a large segment of their policies to the private market and still remained financially 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 necessary at this point and can tie into some of the activities weve discussed thus far. Thank you. First let me say i would echo your concerns that youre raising. I think those are profound issues that we have to evaluate. So mr. Chairman, for the record, i just want to note he called me profound. So the i do think if you just step back for a minute, travelersori let me back up. Travelers we do write Flood Insurance on a commercial basis, for commercial nshls. We do not write homeowners Flood Insurance and we have no plans to enter that market. We also dont have a formalized opinion on this. Ill just suppress my points of view. Ive looked at a lot of fema rate plan plans. The remember we have to buy reinsurance. We have to be able to have enough capitol to meet ourable gaigss. That meepz we need to have a plan needs to be modernized. Their rate plan ive looked at it ace not at all consistent with how the private sector looks at insurance, sells insurance and has a rating plan. So lets start with that. Lets modernize the program and then lets evaluate how we can privatize to think about that cherry picking aspect. Thank you. Thank you mr. Chairman for your generosity. 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 money in our fema authorization bill should help. And it makes such recommendations to congress and i also want to thank add minute administrator fugate for the proposal, i dont know if its a right 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 report of todays hearing remain open until such time as our witnesses have provided answers, 20 questions that may be submitted to them in writing and unanimous consent. Let 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 todays hearing. Without objection, so ordered. Id like to thank our witnesses again for their testimony today. If no other members have anything to add, this subcommittee stand s adjourned. [ no audio ] cspans washington journal live every day with news and policy issues that impact you. Coming up friday morning, Iowa Republican congressman steve king joins us to discuss his experience as a national cochair for senator ted cruzs president ial campaign as well as his work on the task force on executive overreach. Then Ohio Democratic congressman tim ryan will talk about the start of work on the prosecujec defense spending bill. His recent trip to the middle east and his desire to see more special Operations Forces send to iraq to train iraqis. Cspans washington journal is live at 7 00 a. M. Eastern friday morning. Join the discussion. Madam secretary, we proudly give 72 of our delegate votes to the next president of the United States the Labor Department has proposed new rules governing which workers are entitled to overtime pay. The proposal would increase the income limits on employees covered by overtime rules from 20,660 a year to 50,440. The senate Small Business Committee Held a hearing on the new labor rules. Senator david vitter chairs this hour 10 minute hearing. Good morning, everybody, and thanks for joining us today for the senate Small Business and Entrepreneurship Committee hearing to examine the obama administrations proposal to more than double the current salary threshold under the fair labor standard acts overtime exemption for administrative, executive, and professional employees. Were going to hear from a Diverse Panel of experts and stakeholders on the impact this proposed rule would have an Small Businesses and organizations around the country. And i want to thank all of our witnesses for being here today. In previous hearings, this committee has focused on the need for Regulatory Reform in light of how federal agencies often issue new rules and regulations that cause extreme undue burden on Small Businesses. As one of the most controversial labor regulations pushed by the obama administration, the white collar overtime exemption from the department of labor certainly falls in this category. Under current rules, most employees making up to 23,660 a year are automatically entitled to overtime pay when working more than 40 hours per week. The proposed rule were discussing today would more than double the threshold to extend overtime requirements to earning up to 50,440. Additionally, the proposal sets the minimum threshold at the 40th percentile of Weekly Earnings for fulltime salaried workers, meaning the amount could increase every year Going Forward. While president Obamas Administration believes this is the correct way to increase pay for workers, it will actually have the opposite effect through Small Businesses. Its very likely that employers will respond to higher overtime costs in several ways that will actually reduce workers opportunities for longterm advancement and increased pay. Many employees could see their hours cut or limit to less than 40 hours per week and lose the benefit thats come with a salaried position such as Flexible Work hours and health insurance. These reactive changes would have severely negative effects in the workplace. Along with Small Businesses, several different types of employers are particularly vulnerable to the negative effects of this rule, including nonprofits, charities, state and local governments, and colleges and universities. My colleague and chair of the Senate Health education labor and Pensions Committee Lamar Alexander found that the new rule would increase operating costs for at least one Tennessee College by more than 1 million annually. The increase labor costs would ult 34589 malt have to be passed down to students in an 850