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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.






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MAY 7, 1998

Printed for the use of the

Committee on Transportation and Infrastructure


BUD SHUSTER, Pennsylvania, Chairman

THOMAS E. PETRI, Wisconsin
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HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
JOHN L. MICA, Florida
SUE W. KELLY, New York
RAY LaHOOD, Illinois
FRANK RIGGS, California
CHARLES F. BASS, New Hampshire
JACK METCALF, Washington
ROY BLUNT, Missouri
JOSEPH R. PITTS, Pennsylvania
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JOHN R. THUNE, South Dakota
CHARLES W. ''CHIP'' PICKERING, Jr., Mississippi
JON D. FOX, Pennsylvania
J.C. WATTS, Jr., Oklahoma

NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
ROBERT E. WISE, Jr., West Virginia
BOB CLEMENT, Tennessee
ROBERT E. (BUD) CRAMER, Jr., Alabama
ELEANOR HOLMES NORTON, District of Columbia
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PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
BOB FILNER, California
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi
BILL PASCRELL, Jr., New Jersey
JAY W. JOHNSON, Wisconsin
JAMES P. McGOVERN, Massachusetts
TIM HOLDEN, Pennsylvania

Subcommittee on Water Resources and Environment

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SHERWOOD L. BOEHLERT, New York, Chairman

JOHN R. THUNE, South Dakota Vice Chairman
THOMAS E. PETRI, Wisconsin
JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
SUE W. KELLY, New York
FRANK RIGGS, California
BUD SHUSTER, Pennsylvania
  (Ex Officio)

ROBERT A. BORSKI, Pennsylvania
JAY JOHNSON, Wisconsin
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ROBERT E. WISE, Jr., West Virginia
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi
BILL PASCRELL, Jr., New Jersey
JAMES P. McGOVERN, Massachusetts
NICK J. RAHALL II, West Virginia
  (Ex Officio)





    Armstrong, Mike, Associate Director, Mitigation Directorate, Federal Emergency Management Agency, accompanied by Lacy Suiter, Executive Associate Director, Response and Recovery Directorate
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    Cleland, Barbara, Council Member, Aurora, CO, and Vice-Chair, Public Safety and Crime Prevention Steering Committee, National League of Cities

    Gregory, Michael R., Deputy Coordinator, Emergency Management, Newport News, VA, on behalf of the International Association of Emergency Managers

    Quinn, Rebecca, Legislative Officer, Association of State Floodplain Managers, Inc

    Shipley, Dale, Deputy Director, Emergency Management Agency, on behalf of the National Emergency Management Association


    Lampson, Hon. Nick, of Texas

    Poshard, Hon. Glenn, of Illinois


    Armstrong, Michael

    Cleland, Barbara

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    Gregory, Michael R

    Quinn, Rebecca

    Shipley, Dale


Armstrong, Mike, Associate Director, Mitigation Directorate, Federal Emergency Management Agency:

Stafford Act Revisions Estimated Savings by Section of the Proposed Act



    Clizbe, Dr. John, Vice President, Disaster Services, American Red Cross

    National Governors' Association, statement



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U.S. House of Representatives,

Subcommittee on Water Resources and Environment,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to notice, at 10:05 a.m., in Room 2167, Rayburn House Office Building, Hon. Sherwood Boehlert (chairman of the subcommittee) presiding.

    Mr. BOEHLERT. Good morning. The subcommittee will come to order.

    The purpose of today's hearing is to receive testimony relating to a draft bill, the Mitigation and Cost Reduction Act of 1998, which would amend the Stafford Act. Two previous hearings held by the subcommittee highlighted two important issues that need to be addressed by Congress.

    First, more emphasis needs to be placed on hazard mitigation. There is an old baseball adage, ''There is no defense for a walk.'' Well, there is no defense for an earthquake or a hurricane or a flood, either, but we can lessen the damage these disasters cause through hazard mitigation.
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    FEMA and the States already recognize the need for an increased focus on mitigation. For example, between 1992 and 1996, a period of only 4 years, State spending on mitigation measures increased by 440 percent, to an average of $16 million per State.

    However, the Stafford Act provides virtually no authority for Federal predisaster mitigation assistance. We need to align the law with current and future priorities. The fact is, we will need far less assistance after a disaster if we provide a small amount of assistance before a disaster.

    The second issue Congress needs to address is the rising cost of natural disaster assistance.

    In the last 5 years alone, Federal disaster expenditures have risen from $3.3 billion to more than $13 billion. At our hearing in March, we heard testimony that these costs can be expected to continue to increase. Under existing budget rules, these rising costs are uncapped and largely uncontrollable.

    The draft bill that we are receiving testimony on today addresses both of these issues.

    The draft bill would, for the fist time, authorize Federal funding for cost-effective predisaster mitigation projects. The draft bill would also adopt various streamlining and cost-cutting measures.

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    The subcommittee has been working closely with the administration and other interested parties on this bill. As recently as yesterday, I met with Director James Lee Witt to discuss some of the details of the bill.

    It is my hope and expectation that today's examination of this draft bill will provide a foundation for the introduction of legislation that can move swiftly through the Congress with broad bipartisan support.

    It is now my pleasure to turn to the ranking member, my colleague, Congressman Borski from Pennsylvania.

    Mr. BORSKI. Thank you, Mr. Chairman. I want to thank you for taking the lead in developing a proposal to address the very serious need to undertake mitigation in advance of natural disasters. I look forward to the comments of today's witnesses on the proposal.

    As our earlier hearings have demonstrated, the cost of disaster assistance in this country continues to grow, and that is likely to continue until the Nation emphasizes advance mitigation measures.

    Clearly, avoidance of loss is preferred over payment for loss. This is true, not only economically, but also to preserve lives and quality of life.

    The more we learn about disaster programs, the more apparent it is that we need to invest once today in predisaster mitigation, rather than invest again and again tomorrow, in post-disaster assistance. We should not be paying, time and time again, for the same losses to the same structures in the same area. At some point, enough is enough.
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    We need to get people and structures out of harm's way. Where that cannot be done, we should do all we can to reduce loss of life and property. That is our responsibility, not only to the disaster victims, but also to the remainder of the Nation which pays for disaster assistance.

    Director Witt is to be commended for recognizing the great need for predisaster mitigation efforts. I know that you, Mr. Chairman, share my desire that any legislation which this subcommittee might approve, build upon his efforts and not undermine them.

    I am committed to working with you to accomplish what I believe is our shared goal, and I look forward to today's testimony.

    Mr. BOEHLERT. Thank you very much. Does anyone else care to make any opening statement? Mr. Blumenauer?

    Mr. BLUMENAUER. I appreciate your continued efforts to work with FEMA to address disaster preparedness. I identify strongly with the comments that you and Mr. Borski just made about getting ahead of the curve.

    I was struck by your notion of this hearing, that the legislation might serve as a foundation, as opposed to the legislation per se. That, to me, is very critical.

    This is one of the few areas where I think everybody acknowledges the leadership of the Federal agency is setting the Nation on the right course.
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    This subcommittee is in a key position to help acknowledge and accelerate that effort, and I hope that anything that happens is done in an orderly fashion because, frankly, many States aren't ready, I think, to be moving too far ahead.

    Many States continue to permit activities that put people and property in harm's way. Some States have come before us, this subcommittee, at that table, requesting the Federal Government throw more money, within the last couple of weeks, on things that I think most of us know are a little tenuous, at best.

    So I like your emphasis on the foundation and trying to work it through, but I hope that the final product will retain, for the foreseeable future, the leadership and oversight of FEMA and the work that Congress is doing, so that we can increase State control in an orderly fashion, rather than getting ahead of ourselves.

    Mr. BOEHLERT. Thank you. I appreciate those comments. I think we would all acknowledge that there are various levels of competence at the State level. Different States are in a different position to do different things, and some are doing better than others, and some have room for improvement.

    The important thing is we recognize that we have, in FEMA, an agency that is operating very efficiently, is being very innovative, is reaching out, and we encourage that reaching out.

    My overall view is that Washington is not the source of all wisdom. But if I were going to point to one agency where I think that most of the wisdom is vested in Washington, it would be FEMA. So we are not going to be precipitous, and we are going to work cooperatively with the agency as we move forward.
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    In the final analysis, we all want essentially the same thing. We want a program that is going to work in the best interests of all the people. The foundation analogy is very correct. I thank you for your comments.

    Does anyone else care to make an opening statement? We always reserve the right for Mr. Taylor to have the first opening statement, because he's always the first one here. Thank you, Mr. Taylor.

    [The prepared statement of Mr. Poshard follows:]

    [Insert here.]

    Mr. BOEHLERT. All right, we'll go forward. Our first panel consists of the Federal Emergency Management Agency, associate director for the Mitigation Directorate, Mr. Michael J. Armstrong, accompanied by Mr. Lacy Suiter, associate director, response and recovery, of the FEMA agency.

    Mr. Armstrong, you may proceed in the manner which you deem appropriate. We try to adhere to the 5-minute rule. We're not arbitrary, because what you have to say is important, and we need to listen. Thank you very much.

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    Mr. ARMSTRONG. Good morning, Mr. Chairman and Mr. Borski, and members of the committee. Thank you for having us here today and thank you in advance of your kind comments.

    In a sense, you've given some of our testimony already but, nevertheless, I would like to take this opportunity to highlight some of my submitted written testimony and focus specifically on some of the proposed draft language.

    I am Michael Armstrong. I'm the associate director for mitigation at the Federal Emergency Management Agency. I am pleased to be joined by my colleague, Lacy Suiter, who is our Executive Associate Director for Response and Recovery.

    Lacy and I are pleased to be appearing before you. James Lee Witt, our director, regrets he can't be with you here today. He asked me to convey his best to you, since you have given him so much support and have been a real friend during his time at FEMA.

    We are also pleased to appear before a committee that has provided so much leadership in the area of mitigation and disaster response and recovery.

    Let me also mention that the administration appreciates this opportunity to provide its preliminary views on this legislation. The administration's review of the bill is continuing, and additional views may be supplied to the subcommittee at a later date.

    I want to focus specifically on the parts of the draft that reference predisaster mitigation. There are three areas in particular: the section regarding the predisaster mitigation fund; the existing 404 Hazard Mitigation Grant Program; and the section regarding mapping and technology.
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    As background, let me just State to all of you on the committee that I have a history of 10 years in local government as an assistant city attorney, and I am very familiar with the issues that face local government in making decisions at the city council level, at the county commissioner level, at the planning commission level, and that most mitigation in this country, by law, happens at the local level. That's why our approach to predisaster mitigation has such a strong flavor of local involvement.

    As ironies would have it, today, testifying for the National League of Cities, is one of my former bosses, Barbara Cleland, who is on the Aurora City Council, the council that I served for 10 years as an assistant city attorney.

    I have learned, both in my experience as a city official, as well as a regional director in the field for FEMA for 3 1/2 years, that mitigation is key to the future of emergency management and how we conduct ourselves in responding to disasters.

    As the Chairman said, we can't stop the weather, we can't negotiate with the forces of nature, or legislate away acts of God, but we can lessen their impact on our friends, our families, our schools, and our communities. We can do that, and we need to do it in a better fashion.

    We think that this legislation regarding predisaster mitigation is very important to ensure that mitigation is not an afterthought to disasters, but that it also goes into the whole issue of sustainable development in the pre and post-disaster environment.

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    We believe that this legislation could more strongly zero in on local involvement. If you did that with this legislation, you would ensure that predisaster mitigation would be driven by local leadership from all parts of the community, from the business sector to schools to the community as a whole.

    If mitigation is not embraced at the local level, where most of America's vital decisions occur, as a way of doing business and increasing public safety, it cannot occur. The idea of looking at risks and taking actions to reduce those risks has to be ingrained in our daily public life.

    Just as seat belts and smoke alarms are now second nature, we have to make mitigation a part of our thinking, as we approach the development and redevelopment of our communities.

    As you are aware, we have been piloting a new concept called Project Impact, the idea that predisaster mitigation, through a public-private partnership approach driven at the local level, with communities that will be in the future, designated by our States, is really the best way to drive an implementation strategy for predisaster mitigation.

    We think that this involvement has been unique. It has involved FEMA's expertise and technical assistance, both at the national and the regional level. Other Federal agencies have been involved in this as well as States.

    We want to also State that, if we are to continue to have the success that I think we are starting to see in predisaster mitigation, that we would object to section 204 of the proposed draft, ''The Implementation of predisaster Hazard Mitigation Programs.''
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    For us, it is vitally important that predisaster mitigation be not just another grant program. I'm referring to some programs that tend to reward a talented grant-writer far more than they reward community initiative or public and private sector partnerships.

    Project Impact is a program that leverages private sector commitments alongside new public sector approaches.

    We have submitted a report to our Appropriations Committee that I would like, if the Chairman would, to adopt into the record today, that references our plan for predisaster mitigation, and it talks about how we would like to involve local government, the private sector, and make sure that what we're doing at FEMA fits what we believe to be our implementation mission.

    We believe that we will have to maximize public and private investment at the local level, that this delivery mechanism of dollars and technical support needs to be unfiltered. It needs to be leveraged by the contribution of resources by the private sector, other Federal agencies, State agencies, nonprofit groups, and the recipient locality itself.

    Director Witt conducted a number of roundtables with a spectrum of groups, including those represented in the panels today. He has met with insurance groups, environmental interests, city and county officials, realtors, and floodplain managers. We've also consulted extensively with our State partners in emergency management.

    We would like you to also reflect on the last 5 years, to see the consistent progress we have made in working toward this point today.
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    I think it is an exciting time for us as a country, that we can actually be talking today in the Congress and at FEMA and at other Federal agencies at the State and local government, about what we can do to promote predisaster mitigation.

    This is a new conversation we're having in this country. This is not something that has been historically part of public policy, until very recently, and I think it's exciting that the focus has now turned to the way that we can best protect our citizens in the future and live compatibly with our environment.

    In 1993, James Lee Witt created the Federal Government's first Mitigation Directorate. In 1994, the Congress amended the Stafford Act to set aside 15 percent of funds allocated to each disaster for hazard mitigation grants.

    In 1995, FEMA funded new hazard mitigation officers for each State. In 1996, the Congress supported and FEMA fully implemented the Flood Mitigation Assistance Program. In 1997, FEMA began piloting Project Impact.

    Thanks to your support, FEMA's leadership in the area of promoting mitigation concepts to State and local governments, the private sector, and individual citizens has been steadily increasing and clearly unprecedented.

    I believe only now we are beginning to see a ripple effect in an increased commitment to mitigation throughout this country. We are keenly interested in accelerating and magnifying the success that we have been able to foster.
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    I have more information that I can share with you if you wish regarding the specific successes we've seen to date in our Project Impact pilot communities.

    The two other areas of predisaster mitigation that you're addressing today have to do with the 404 Program and also mapping and technology.

    Regarding the 404 Program, very briefly, we have already commenced creating at FEMA what we call a managing grantee concept for States, the idea that the 404 Program should be devolved to State administration at a pace that the States are comfortable with, based on their ability to receive this devolution.

    We want to experiment with things like cost/benefit analysis being done at the State level, to move the process more quickly. That's already underway.

    While your bill recognizes the benefit of State involvement in this program, we think that the way the language is written in Section 205 doesn't necessarily improve the current reality and may, in fact, slow down the rapid progress that's being made.

    Finally, under the area of mapping, we appreciate the attention you've given this matter, and we think that good maps mean informed decision making for homeowners, for businesses, and for local and State and Federal officials. FEMA maps are frequently a focal point, as I know you're all aware.

    We have under consideration a mapping modernization initiative, and we would like to have further discussions about your proposed Section 207 and see how that can marry up with what we're trying to do regarding mapping modernization.
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    I would like now to turn this over to my esteemed colleague, Mr. Suiter, who is the former head of FEMA's Office of Policy and Regional Operations.

    Prior to that, he served for more than 30 years as director of emergency management in the State of Tennessee and, during that time, he was an active member of the National Emergency Management Association, serving a term as its president.

    Lacy will address several other provisions of the proposed legislation.

    Mr. SUITER. Thank you, Mr. Chairman, and members. I appreciate the opportunity to be here in this historic room with you today.

    I know many of us would like to have James Lee here testifying before you today. I know that he has had the opportunity to either meet or talk to a lot of you in the last several days, and we appreciate your giving him that much time.

    I think the proposals in your legislation contain some pretty important issues. I think most of those issues are in the predisaster activities which you, yourselves, have highlighted here in this process.

    In terms of the post-disaster assistance activity, the Director is enthusiastic about those parts of the bill which will allow FEMA to work with the States and the sub-grantees, the local governments, and the public assistance programs, in terms of settling these things based on estimates, as opposed to whatever the final cost might be.
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    It would allow us to complete the repairs based upon these estimates and would create, or more readily expedite, the concept of Federal supplementary assistance.

    It would enhance our redesigned public assistance program through effective partnering, which we're already doing with the States and with the local governments in this process. Quite frankly, we think this process will reflect the needs of the victims more accurately.

    As an example, in the Walton Village issue, that we've been dealing with you, Mr. Boehlert, if we had had the community sitting with us at the table, perhaps we could have gone faster in that particular instance.

    The new PA program will clarify eligibility and policies. It will simplify the process. It will help communities recover faster. It will credentialize the training for the inspectors, who will be more adaptable to new technology. It will establish single points of accountability. It will agree with industry standards. It will accelerate the entire process of governmental accountability, as well as governmental responsibility in the process.

    This new process, which the Director is very involved in on a day-to-day basis, along with our partners, will emphasize a horizontal form of management, where all the players are at the table, as opposed to the traditional top-down, FEMA to State to local approach. More importantly, the victim would be at the table themselves.

    Having had the experiences that I have had over the years, it seems to me that the Stafford Act and the activities of this body, and the previous predecessors in this room, have established very clearly, that the sense of Congress is that response and recovery to major disasters or catastrophic disasters is, indeed, a shared responsibility, and that the primary responsibility lies with individuals, it lies with local governments, with State governments, and that the Federal Government has a very appropriate role in that activity, in supplementing those activities.
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    The first objective of the Stafford Act, by the very nature of its activity, is that the governor certifies to the President that all of his resources have been expended, and that he doesn't have the capability to respond and recover in an appropriate amount of time, and that Federal assistance, which you have provided to the President to do this, is there to help him to recover.

    I think this is a unique and an important Federal responsibility that goes beyond just passing a check or making it simpler in that activity.

    The Federal family—not just FEMA, but the entire Federal family—acting under your direction, must provide, continue to provide, the leadership and the accountability to our partners and, as you know, to you, the Congress, which is why we're here today, which is why the Director has directed that we streamline and refine our processes in the activity.

    We are lessening our appeals burden, if that indeed is a burden, in the process. There is not much red tape in this program right now. Whatever red tape we find, we will cut, if we determine it to be unnecessary, but not because the Federal responsibility to assist the families in America, and the victims in America, has been abdicated in the process.

    I'm not sure that it would be good, through devolution or whatever we might call it, to transition this remarkably enormously generous program that the family of Americans has in place to help both communities and victims when they need help the most, when these types of things have happened, to transition this almost, if we're not really careful in the process, to an entitlement program.
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    Such would be a major shift in the philosophy of the Federal role, from providing extraordinary financial and technical assistance and leadership when major or catastrophic disasters have struck the American families and their communities.

    As the Director has said, we are working with these partners. We are trying to put these things together. I think the processes you have in mind in a number of your activities will come about through evolution.

    We think that we seriously need the estimating process. The other activities we think will happen through evolution, and that would be the more appropriate way to get to it.

    I'll try to answer whatever questions you have. Thanks again, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much. Let me start by asking, FEMA has adopted a goal of having at least two Project Impact communities in every State. I think, as James Lee said yesterday, you hoped to have at least one in every State by the end of this fiscal year, but the goal initially was at least two in every State.

    What amount of additional appropriations will be needed to accomplish this goal, and does the draft bill provide adequate funding to accomplish this goal?

    Let me point out that you're on a roll. You started out with an initial request, where you're talking in terms of 5 years, $250 million. We're already up to $500 million, so I think you've got our attention. But I want to know where we go from here.
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    Mr. ARMSTRONG. Well, with the appropriations to date, we've tried to use as wisely as possible. We received $2 million in the past fiscal year, $30 million in the current year. The administration is asking for $50 million next year.

    Certainly, the more appropriations that are received, the more communities we plan to designate. But I really don't think that we want to focus necessarily on the money aspect of this program. What is important is that we're trying to instill in local governments a change in the way they build and rebuild their environment before and after disasters.

    What we want to do with bringing both money and technical assistance, as well as the expertise of our State partners and the private sector and everyone else we can get around the table, is how do we tackle this whole issue of mitigation? How do we work on prevention and risk reduction in a way that's smart, through public demonstration projects, through public education initiatives?

    The Federal Government can't, and I don't think should, carry this ball by itself. As I said earlier, it's at the local level where most land use decisions are made. And so there has to be an investment made at all levels of government, as well as outside the government.

    The appropriation that the administration is asking for for next fiscal year, of $50 million, will certainly move this initiative along, from the seven pilots that we're currently finishing, to the one in every State by the end of this fiscal year.

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    We hope the program will grow exponentially, that it will replicate itself and, in coming years, you will have dozens of Project Impact communities in every State in the country.

    Mr. BOEHLERT. Well, you know, the problem is not going to be so much with the authorization, because I think you've convinced us, and we like the direction in which you're proceeding. The problem is going to be with the appropriators. So you've got your work cut out for you, and we'll be as helpful as we can.

    The draft bill would place in a predisaster hazard mitigation fund all post-disaster mitigation funds that have not been obligated within 2 years of the original disaster declaration.

    Do you have a rough estimate—and I don't expect you to be precise—a rough estimate of the amount of post-disaster funds that would be credited to the predisaster hazard mitigation fund if this legislation went into effect today?

    Mr. ARMSTRONG. Well, I have a feeling that, when pushed, the States will make every effort they can to obligate all of those post-disaster dollars, so that none will be left to put into predisaster mitigation.

    Mr. BOEHLERT. I think you're probably right. Let me ask you another question.

    Many of the cost-cutting measures included in this bill were proposed by the administration last year. So, you know, we pay attention, and this is a give-and-take, and an instructive process all along the way, so we're trying to codify some of the recommendations from the administration.
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    Does the administration have an estimate of the cost savings of this, of the provisions that are common in this bill and the administration's proposals of last year?

    In other words, they made some suggestions on how we could save some money, cost cutting. We said, ''Yeah, we agree with you, and we're going to put them in bill.'' Do you have any guesstimate on what that would bring us?

    [The information received from Mr. Armstrong follows:]

    [Insert here.]

    Mr. ARMSTRONG. Well, I think the Director has told this committee and others that, where we've been able to measure the cost/benefit efficiently, we've been able to show a two-to-one savings in terms of investing in things like elevation, buyout, and relocation of properties.

    What is hard is that cost/benefit is somewhat of an elusive and amorphous sort of term to use in mitigation. When you have a flood hazard, you can tell with some certainty that flooding is going to occur again in several years in the exact same place, in the exact same location, and you know that, if you elevate or remove or retrofit that property, you're going to save money.

    A hurricane is a little bit harder, and an earthquake, you're really out there in terms of predictability and knowing that a seismic retrofit today will save X number of dollars down the road.
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    All we can tell you is that, where people have—and I'm talking about individual responsibility, even without Federal Government expenditure—when they've taken it upon themselves to retrofit or locate in an efficient fashion, and the hazard has occurred, they have saved money.

    I would also suggest, as a matter of public policy, that this isn't that far from our immunization program. We inoculate children across this country against a variety of diseases. If we don't inoculate them, will they all get sick? No. But we do it because it's good policy.

    Similarly, I think of this as a disaster inoculation policy. We're doing mitigation because it's good public policy, because we know, in high hazard areas, where we've assessed the risk, that we're going to save money and we're going to save lives and property.

    Mr. BOEHLERT. Great answer—I see the red light is on—but it's not really an answer, it's a non-answer. You don't really have any guesstimate, then?

    Mr. ARMSTRONG. We know, for example, in the aftermath of the Mississippi floods, that where we have gone in, in different parts of Missouri and other parts of the Mississippi Valley, and relocated portions or entire communities, when the floods have occurred again, and there's been no damaged property, the average savings has been two to one. For ever dollar invested, we've saved $2.00.

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    Mr. BOEHLERT. Lacy?

    Mr. SUITER. Yes, sir. The issues that are in your proposal haven't been costed out yet on our side, but we can present them for the record for you, if you would like.

    Mr. BOEHLERT. Okay.

    Mr. SUITER. What was sent over to you about a year ago, or sent over to one of the committees about a year ago, indicated a savings of about $1 billion. Some 5 million of that would have come through whatever Section 201 was at the time, just in management expenses.

    Some of it would have been through the repair, restoration, and replacement of damaged facilities by causing private nonprofits, in terms of public restoration—not emergency restoration but public restoration—to go through the Small Business Administration first. There's some $100 million of savings there.

    Then the Federal Financial Assistance to Individuals, by consolidating it all, we think it would have been considerably more efficient to go through it as you have proposed in some of your legislation now, to have a single program, rather than a federally-run program and a State-run program to do it, combine it; and then the fact that our own inspector general has said that we probably ought to be having people in need of limited home repair to go through the Small Business Administration first, for some of those things.

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    And then the final thing, which represented about $100 million, would have been the community disaster loans. The community disaster loans have been given primarily to one jurisdiction in the country.

    Mr. BOEHLERT. I appreciate that response, and also your offer to provide more details for the record.

    I think this is very important for all of us, because so often, those who are only exposed to what we do in this town by C-Span have the impression that the administration and the Congress never work together.

    The administration has made some proposals. We have considered some of those proposals. We've agreed that they make a lot of sense and will save a lot of dollars, so we've put them in our draft legislation. And I think the beneficiaries will be the American people and the taxpayers.

    So we like to brag when we do some things right, and I think there are a lot of things we do right, in terms of this subcommittee and its relationship with your agency.

    Mr. Borski.

    Mr. BORSKI. Thank you, Mr. Chairman, and Mr. Armstrong.

    Let me ask you, do you believe that there is the opportunity to spend more money for post-disaster mitigation than we currently spend, and would it be helpful if Congress were to increase the percentage of the disaster funds available for post-disaster mitigation from 15 to 20 or 25 percent?
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    Mr. ARMSTRONG. Yes. I think that we've had a lot of success since the Act was amended to create the Hazard Mitigation Grant Program.

    We have relocated, to date, 25,000 properties in this country since that amendment occurred several years ago, and we've determined that there are roughly 75,000 properties right now in the country that are subject to repetitive loss. An estimated 35,000 of these repetitive loss properties are currently insured.

    If we could increase the percentage of the set-aside from the disaster total for post-disaster mitigation, we could really focus in on this repetitive loss issue, which I think right now, quite frankly, is hurting all of our credibility as a Federal government, until we can get our hands around properties that are repeatedly damaged by floods, in particular. Certainly increasing this percentage would give us more leverage in this area.

    Mr. BORSKI. Do you know what areas are most often hit, particularly in floods? Do we know with any certainty where they are?

    Mr. ARMSTRONG. Yes, we do. And we would be glad to give specific information to this committee. We have statistics that are broken down by most frequently hit communities, most frequently hit States. We have a map where we can show areas of the country.

    Primarily, certainly the Gulf Coast is a high repetitive loss area, especially in the States of Texas and Louisiana. We've also had some areas in New York that have high repetitive loss, as well as California.
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    Mr. BORSKI. When we have these repetitive losses, are the payments made even when there's no Federal disaster declared?

    Mr. ARMSTRONG. We're talking specifically in the area of floods and flood insurance. And repetitive loss means that, when a property is damaged, that the National Flood Insurance Program reimburses them.

    Mr. BORSKI. Do you have any cost estimates, what it would cost to buy out these repetitive loss areas?

    Mr. ARMSTRONG. We think approximately $300 million.

    Mr. BORSKI. $300 million would buy out everyone who is in an area that's going to be flooded out again, we're going to be paying——

    Mr. ARMSTRONG. Well, it would buy out the properties that we've seen have had repetitive loss claims. It wouldn't necessarily buy out every property in high hazard areas. And some properties may not need to be bought out. Through elevation or retrofitting, they also could be in a better position to protect themselves.

    Mr. BORSKI. If we were to spend that $300 million, I assume in a one-time deal, do you have any estimate of how much we would save, in the long run?

    Mr. ARMSTRONG. Well, again, if we go back to our Mississippi flood example, and for every dollar spent to save $2.00, we would probably save double on the investment.
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    Mr. BORSKI. Do you know how much money we've spent in repetitive losses?

    Mr. ARMSTRONG. I do have information on it. I'm being told it's roughly $2.8 billion.

    Mr. BORSKI. We've already spent about $2.8 billion——

    Mr. ARMSTRONG. Yes.

    Mr. BORSKI. ——in repetitive losses. We will continue to spend large sums of money, I take it. And, for $300 million, we could——

    Mr. ARMSTRONG. We could relocate the worst offenders.

    Mr. BORSKI. How much discretion should be given to States in where the money is spent?

    Mr. ARMSTRONG. Well, what we've done so far is, as we've evolved the 404 Program, we've funded a State hazard mitigation officer. We have our 409 plans, which every year the State issues, which says if a disaster occurs, here's how we will prioritize these funds.

    So we have partnered closely with the States to try to focus on key areas that need to be addressed in the post-disaster environment.
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    I think the States—and I don't want to put words in their mouth—they certainly have developed a lot of new programs at their level and really evolved their own processes in the last several years.

    I think that, in the post-disaster environment, I think we're at the point now where the program has become mature enough where we can give increasing discretion to the States, but we also need to focus as well, with existing FEMA programs, on repetitive loss.

    However, I think in the predisaster area, we aren't at a mature enough level with these new programs to give as much discretion.

    Mr. BORSKI. Mr. Suiter, let me ask you, if I may, do States have the capacity to run the public assistance program? And I know that my State, in particular, has expressed some interest. Do you support Pennsylvania's efforts and, if not, why not?

    Mr. SUITER. Some States probably would have the capacity to run it, after we got into some of the activities that are involved and went through the credentialing process. I couldn't specifically say about the State of Pennsylvania.

    In my own State of Tennessee, who does not have a large number of disasters that occur, it would be kind of foolish to set up a system and a program to have a number of experts and all these other folks on payroll all the time to be ready to respond to this event immediately.

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    I would not recommend it if I were still the State director of Tennessee to my governor or to my legislature. I would recommend that they continue with the program as it exists.

    Mr. BORSKI. Mr. Chairman, I know that the State of Pennsylvania is preparing questions that I want to submit for the record at the appropriate time.

    Mr. SUITER. And we would be delighted to answer them, Mr. Borski.

    Mr. BOEHLERT. Mr. Taylor.

    Mr. TAYLOR. Mr. Chairman, I really have no questions at this point, other than an observation, in that I would encourage the folks from FEMA to remind the citizens, when you undertake these efforts, that there is a certain amount of resentment out there or, you know, the Federal Government playing big brother when it comes to determining, in my part of the country, the minimum heights above sea level for buildings and whatnot.

    I don't think you can ever say often enough, either as FEMA or the Corps of Engineers or the EPA, that in a totally free market, you're right, you citizens go out there and build wherever you want to build whenever you want to build it.

    But, on the flip side, if you are going to count on us to insure your property, which we do—and in most instances we do because no private sector insurer will do it—then, like any private sector insurer, we're going to take some steps to minimize the potential for losses, because we, in effect, are the insurers. 270 million Americans are that insurance company.
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    That insurance company has the right to try to minimize our losses. If you want to buy insurance from us, you're going to take some steps to see to it that this isn't occurring every year. I think you cannot say that often enough.

    I come from an extremely flood-prone and hurricane-prone district, and I just think it makes good common business sense that, when you say this is what we're doing, this is why we're doing it.

    I really don't see it often enough. I'm amazed when I go talk to different business groups, different civic groups that, when I explain it in those terms, every head in the room nods but, until you say it in those terms, everybody says, ''Oh, it's just Big Brother trying to tell us how to manage our property.''

    Mr. SUITER. At the same time, you know, it's taken 222 years to get to where we are right now. We got into this problem incrementally. We're going to get out of it incrementally in the process, as we work through it.

    Certainly, we ought to be in a position to say that no new construction built in harm's way will be eligible for Federal disaster assistance, or something along that line.

    Mr. TAYLOR. Absolutely. And again, I would just encourage you to couch it in those terms. You are doing this because it is in the best interest of the American people who are, in effect, carrying the insurance policy for those people who own those properties.
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    Mr. SUITER. Prior to this, in a number of cases, we didn't know the hazard existed and the people in the communities might not have known the hazard existed. They now know, in most cases, and we have to do something.

    Mr. TAYLOR. It's just an observation, and I would encourage you to do that. Thank you, Mr. Chairman.

    Mr. ARMSTRONG. I would add, too, that I think you make a good point, that we can do a better job of getting that message out.

    Joann Howard, who is the new Federal Insurance Administrator, and I have formed a work group at FEMA to focus specifically on the repetitive loss issue.

    One of the things we want is to do a better job of getting the message out as to where these properties exist, where these communities are, getting this data out to you on the Hill, as well as the local governments and to State governments, and doing some public things that say we are there to protect your investment in the National Flood Insurance Program.

    I think your comments are right in tune with what we're trying to work on.

    Mr. TAYLOR. Thank you very much, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much, Mr. Taylor. Mr. Blumenauer.
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    Mr. BLUMENAUER. Thank you, Mr. Chairman. I would just like to focus for a moment on the conversation between Mr. Taylor and Mr. Suiter, because I think the subject that you were pursuing gets to the heart of how we're going to successfully partner with States and local communities.

    Mr. Taylor's point about how we communicate with the public about what Government will do, and the limits to the generosity of 270 million Americans to continually bail out, literally and figuratively, people who continue to build where God doesn't want them is sound. The notion that this was an incremental development over almost a quarter of a millennium—actually more; in some communities, it predates the establishment of the United States is important. I would like it if either of you gentleman would perhaps elaborate on how we could most appropriately deal with this incremental development.

    One thought was that anybody who the States or municipalities permit to build in harm's way becomes the responsibility from this point forward, of the municipality, the State, in their wisdom. That might be an approach.

    The States and local governments, can do that communication that Mr. Taylor is talking about. He may be a unique Federal official who has credibility in talking about delivering the message.

    I think it's better delivered by State and local officials, and they may take their responsibilities more seriously.

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    Do you have some notions of ways this subcommittee can move forward comprehensive legislation so that, 10 years from now, we're not having this conversation but, instead, we're celebrating, or our successors are celebrating, the success of the activity?

    Mr. SUITER. Actually, I think you are better than you were 10 years ago. I think the Stafford Act the and things that have happened are remarkably better.

    We have had more disasters. They have been more intense than they were in the past. But I think the local governments, as hazards have become identified for them, and there's been more education in the process, are stepping up to the plate.

    They have to deal every day with that, with the developer in wanting to further handle these things.

    I think we're stepping up to the plate in post-disaster activities where, when we go back in and build a water system, for example or repair one, we're adding mitigation under my program, the 406 Program, to build or, to replace those things out of harm's way, so we don't go back and at least do that one all over again.

    I think the real issue here is that the local governments have primary responsibility in land-use management. They have primary responsibility in the codes and these other activities. Once they understand what the challenges are and what the threats are, which Mike Armstrong's side of the house helps them identify, they're stepping up to the plate and they're moving out.

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    I certainly think the State governments want to reduce these costs, just as much as we do, in this process.

    But certainly, those areas that we ought to help are brand new construction, where we clearly know that we have something that's in harm's way. We shouldn't be participating in future disaster assistance from there, nor should we be doing it a second time, if it is a repairable activity, through either the 406 Mitigation Program or Mr. Armstrong's program.

    Mr. ARMSTRONG. Well, just to add to that, one of the reasons we're trying to do Project Impact as a different type of Federal Government initiative is that we have to be able to show people that are at the decision-making level at State, county, municipal, and local government levels, that there is a win-win here, that politically and economically, they can pursue a more aggressive policy, public policy regarding mitigation, and still have a healthy local economy, that both can occur.

    Because, as Mr. Suiter stated, and as I faced and others in the room have faced, when you have developers pushing you in one direction to preserve that fragile local treasury and, at the same time, you have homeowners groups or environmental organizations or others pushing in the other direction, it puts a county commissioner or a city council member or a planning commission member in a very tough spot.

    What Project Impact is doing, I believe, it's showing that you can create a momentum with the private sector saying it's okay to pursue mitigation, and all these other folks, that they can adopt local legislation that really helps push this.
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    Mr. BLUMENAUER. I'm sympathetic to that, and I've been supportive, and I commend your work.

    My specific request is for recommendations that we can put in the statute, so that those communities that don't get it are helped to get it, and those local officials who feel like they're in the crossfire, where they're being pushed by people who want them to do unrealistic things, that they have a hammer that says, ''No way, we're not going to do that'' or, ''Sure, but you're not going to be able to get financing with this in the deed.''

    It seems to me that you can help us craft some things that will make that job easier, spotlight those who aren't doing the job and, for God's sake, keep the Federal Treasury from bailing them out in the future.

    Mr. ARMSTRONG. Well, I referenced a moment ago the work group that Joann Howard and I had formed.

    We would like to get back to this committee with some specific recommendations regarding the flood insurance program and also the retailoring of existing FEMA mitigation programs where we would create incentives for good behavior and disincentives for bad behavior. And I know that, in Response and Recovery as well, we are trying to refashion a number of things.

    So we would like to let this work group finish its work and get back to you, and also clarify the figures that I gave to you earlier, the $300 million versus the $2.8 billion.
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    Some of those things, we're just in the process now of giving some close scrutiny to. But I do think that we can do some things together to create the right kind of environment for progress.

    Mr. BLUMENAUER. Super. Well, I look forward to that and I hope that maybe you would consider giving us some of the off-the-wall stuff on the butcher paper that some of the renegades down three and four levels in the bureaucracy come up with, ''What if,'' so that we can at least see the parameters, the brackets.

    Before it's massaged and artfully brought forward to become legislative sausage, I'd like to see what the policy brackets are.

    Mr. ARMSTRONG. Certainly.

    Mr. BLUMENAUER. I think it would be interesting.

    Mr. ARMSTRONG. Well, I also would commend to you some of your own communities in Oregon that are starting to stand up and say no, and that's why I realize the earlier comments may not have been directly on point.

    But I have to emphasize that the Federal Government alone can't turn this around, that local government has to step up to the plate in their responsibility and their purview as the purveyor of building codes, zoning, and planning ordinances. They, in many cases, hold the key to all this.
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    Mr. SUITER. I'll give you my butcher paper if Ms. Braddock will let me.

    Mr. BOEHLERT. Thank you very much. Mr. Thune.

    Mr. THUNE. Thank you, Mr. Chairman. Gentlemen, I want to welcome you here this morning and just say that this hearing kind of comes at a time for us in South Dakota where people in our State are again focused on the impact of natural disasters.

    In fact last week, flooding in the northeastern part of our State prompted the governor to declare four counties a disaster area. I have subsequently contacted director James Lee Witt and asked him to consider Federal disaster declaration there and, as always, your organization has been very helpful with respect to that issue.

    Just a couple of questions, if I might. Mr. Armstrong, I direct this to you.

    In my State, FEMA buyouts provide the opportunity to move numerous homes and businesses out of the floodplains across the State.

    I guess the question I would have for you is, is there specific authority that FEMA would need to continue or expand upon the buyout program, with a few toward eliminating repetitive losses down the road, and how you view the cost-effectiveness of that.

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    And then I have a followup to that. But if you answer that question, that would be great.

    Mr. ARMSTRONG. I would add, Congressman Thune, we've talked before. I was the regional director in the area that included South Dakota, so I've made many visits to your State during my tenure.

    I think your comments come somewhat back to Congressman Borski's comments earlier, about where the FEMA authority is and could we use more flexibility.

    The buyout process is part of the 404 program which, as you know right now, is assigned up to 15 percent of the disaster total. If that percentage was increased, then that would give us a larger pool of money to focus on buyouts, and that's where the money comes from.

    So, yes, we could do more if we had more, but we're limited right now to only go to 15 percent.

    Mr. THUNE. That's something, though, that you would not be averse to exploring, how we might expand that authority?

    Mr. ARMSTRONG. We would welcome a discussion in that area.

    Mr. THUNE. In your judgment, are those, again in terms of the whole range of options that we have out there—and this is a problem that's prompted this hearing, and that is that the cost continues to go up of disasters.
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    And fact number two is that's not likely to change, and we're trying to look at ways we can become more efficient in all of this.

    But are there savings that could be achieved in terms of the repetitive losses that occur down the road as a result of not having more authority for buyouts in the current law?

    Mr. ARMSTRONG. I'm sorry. I was distracted. Can you repeat the question?

    Mr. THUNE. It was just a question about, again, the benefit cost and whether or not the buyout provisions, the authority for that, if they were expanded upon, might eliminate or allow us to make better use of the dollars and resources that with have, knowing that they are limited, and yet the cost of disasters continues to increase, and a lot of it is repetitive losses.

    Mr. ARMSTRONG. Sure.

    Mr. THUNE. And if you had that additional authority, might we, in the long run, not save dollars?

    Mr. ARMSTRONG. I think it would. But I would add that a buyout is what we consider to be the last resort approach in our tool box of 404 options.

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    The buyout program is voluntary. In other words, the owner of the property has to agree to this. It's not something we can mandatorily do.

    Once the property is bought out, it's converted to open space, and no new construction can occur on that area. So it's a fairly radical approach.

    I think that it certainly will produce cost savings. As I said before, if we're investing $300 million into something to remove a $2.8 billion cost, that certainly is a huge cost savings.

    Buyouts aren't the only option. If you expand that 15 percent cap, then you're expanding all of the options under 404, including buyouts.

    Mr. THUNE. If I could just direct a question to Mr. Suiter, in your testimony you raised concerns about Section 206 of the proposed legislation. Through FEMA's guidance, there are already several areas of the hazard mitigation program that are administered through the States.

    The question I would have, I guess, is that my understanding is that these programs and pilots have worked very well and, if FEMA were to work with the States in implementing a limited pilot for public assistance, why would it be your view that these States could not duplicate the successes that we've had in the hazard mitigation programs?

    Mr. SUITER. Well, as you know, the director is adamantly opposed to that particular perspective in there, simply because we're devolving a primarily Federal responsibility to States, which we think is an inappropriate way to do it in terms of the Federal supplementary role to this process.
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    We already share with the States an enormous capability to do all the emergency activities, to pass that money through as quickly as possible, those things that are involved in the smaller projects.

    We think those things that are involved in the large permanent restoration projects are appropriately a shared responsibility between the State and the Federal Government and the local governments involved, and we believe that our new re-engineering process will achieve the same objectives at much less cost with more controls to protect the Federal interest in this over a longer period of time if we retain that responsibility at the Federal level.

    Mr. THUNE. Briefly, a quick followup on that. I guess my question is, this is, as proposed, a limited pilot-type program; tt's not a total, as you criticize it, devolution.

    I'm just curious as to why that might not be attempted on a limited basis to see how it would work.

    Mr. SUITER. Well, we would just simply like to finish what the Director has started, in terms of re-engineering the program that's in existence right now, which we believe will achieve essentially the same results and in the best interests of the taxpayers.

    Mr. THUNE. Thank you, and I thank the Chairman.

    Mr. BOEHLERT. Thank you, Mr. Thune. Mr. Johnson.
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    Mr. JOHNSON. Thank you, Mr. Chairman.

    I'm a little concerned about some of the public facilities and infrastructure. My understanding is a lot of the Federal disaster costs are arising from damage to these other facilities and, if we are serious about controlling the Federal disaster costs which, I know you are every day, we need to pay attention to these costs.

    What are the strategies that FEMA has in controlling the costs of damage to public facilities and infrastructure and are these proposals covered sufficiently in this draft bill that's before us that we're talking about?

    Mr. SUITER. Well, of course, there's the Code of Federal Regulations which establishes what is eligible for reimbursement under the Stafford Act, and that outlines the specific activities and the specific things which are eligible.

    They basically have to meet immediate public health and safety activities in terms of the emergency response and in terms of the permanent restoration of these facilities in there to make sure that, as we replace those things or rebuild those things, that we rebuild them out of harm's way to prevent future loss.

    Mr. JOHNSON. In the draft, though, of the bill, are you satisfied that it would have sufficient proposals to have a significant impact on controlling costs associated with flood damage or other damage to public facilities and public infrastructure?
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    Mr. SUITER. We are, at this point in time, reviewing all of the things that are in this particular activity.

    Our current 406 mitigation policy that goes with the permanent restoration of publicly owned facilities envisions a complete, comprehensive look at this whole activity to see what is essential and what is not essential, as well as rebuilding out of harm's way.

    I don't know that I can give you a specific answer whether or not we're that comfortable with what is in there right now. We just got this ourselves within the last few days, but we are examining it, and I'll be glad to get back to you.

    Mr. JOHNSON. Thank you. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much. Dr. Horn?

    Mr. HORN. Thank you very much, Mr. Chairman. We're delighted to have both our witnesses here. Let me ask a couple of questions.

    How many years has Project Impact been in effect?

    Mr. ARMSTRONG. We're just finishing our pilot phase. We announced the pilot communities in the spring of 1997, so we've been piloting them now for about a year.

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    We anticipate next month that we will be announcing the first year of the post-pilot phase, where we're going to start up initiatives in the rest of the country.

    Mr. HORN. So is it 2 years or 1 year?

    Mr. ARMSTRONG. It was allocated during fiscal year 1997 and we've used part of fiscal year 1997 and the current fiscal year. So it's been, in calendar months, about a year, but it straddled 2 fiscal years.

    Mr. HORN. How many areas have been affected by Project Impact, in a geographic sense that's manageable to analyze?

    Mr. ARMSTRONG. We selected seven pilot communities, and they are in Washington State, in West Virginia, in Maryland, in Florida, in California, in North Carolina, and Mississippi.

    Mr. HORN. Since you've had this impact work, have any disasters occurred since that time?

    Mr. ARMSTRONG. We have, as you know, because of El Niño been spared from hurricanes in the past year, and a number of those communities normally would have been hit by hurricanes.

    So in a normal year, we probably would have been affected, but we've dodged the bullet. And we've not had another serious earthquake in the Oakland area or in the Seattle area yet.
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    Mr. HORN. Well, of the six you named, of the seven communities, did a natural disaster hit any of them in the last year?

    Mr. ARMSTRONG. Not of any significance.

    Mr. HORN. Okay. So there's no way we can see what the effect of Project Impact is in the last year?

    Mr. ARMSTRONG. We can't see the effect in terms of cost/benefit, because we're still in the process of investing money in these demonstration projects.

    We spent a long time working with the private sector and local and State government just to bring the right people to the table.

    Because it was a pilot, we wanted to do it the right way and also learn from it so we could adjust the program as we went into the first full year.

    Mr. HORN. Now, as I understand it, the post-disaster mitigation grant program is run through the State agencies. Why are you opposed to running the predisaster mitigation program the same way?

    Mr. ARMSTRONG. Well, the post-disaster mitigation program has now, as I said earlier, reached a level of maturity, where we've been able now to give the States a position, called the State hazard mitigation officer, and they are helping implement the 404 program; and we've now had a number of disasters that have occurred, where we can see how the 404 program works.
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    Project Impact hasn't even completed its pilot phase, and we believe that we need some more time now to really start this initiative up nationally in every State in the union and look at solidifying this private sector approach, where we bring money in from sources other than the Government, that we get the money directly to the local level, where it can have the most impact in terms of a changed environment.

    We are involving the States. In the post-pilot phase, we're asking the States to designate the communities that will be selected, and we're offering administrative funds to each of the States to support the initiative. So they are partnered with us in this process.

    Mr. HORN. So, as I understand that sentence, the States will decide where the pilots are within their States?

    Mr. ARMSTRONG. Well, they won't be pilots anymore. They'll be the actual communities.

    Yes, they have already referred to us their recommendations, and we are now getting ready to make those announcements sometime in the next year.

    Mr. HORN. So you're deciding or the State is deciding?

    Mr. ARMSTRONG. The States are referring to us their recommendations. We're making the actual announcement, but it's based on their recommendation.

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    Mr. HORN. In other words, has there been any difference of opinion between FEMA and the States as to what should be a pilot community?

    Mr. ARMSTRONG. I've been instructed by Director Witt to go with whatever the State wants.

    Mr. HORN. Very good. How long do you think this particular phase where every State would have at least one community under project, how long do you think we need to watch those to see what, if any, impact occurs?

    Mr. ARMSTRONG. Well, it's back to what I said earlier about the frequency of different types of disasters.

    Floods tend to occur with the most regularity, with the most predictability. Hurricanes and earthquakes, you get further out on the continuum, in terms of repeated disasters.

    But I think that, unfortunately, we've seen in our country a plethora of natural disasters in the past decade, so I am afraid it won't be too many more years before we'll start to see the results.

    Mr. HORN. You mentioned, in an answer to one of the questions, the cost/benefit ratio situation and how relevant or maybe effective or even accurate that is.

    And with you placing greater emphasis on mitigation, do you have an estimate or a theoretical one, let's say, of the cost/benefit ratio of mitigation measures that you typically fund through the post-disaster mitigation program or Project Impact?
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    Is there any theorizing in an economic sense of what the optimum ought to be, once you invest resources in Project Impact in a particular community?

    Mr. ARMSTRONG. I can't give you specific figures today. I could get some information to you on that, because I know a number of my staff have worked on that issue. I can give you some anecdotal information.

    For example, as I think you recall, after the fires in Laguna Beach, we had some houses that remained standing while the rest were burned down.

    That's because the owners of those homes took the time to study their local topography, their local environment. They used different types of building materials. And, through their own initiative, without governmental funds, they were able to resist the disaster.

    The same thing occurred in parts of Los Angeles, after the Northridge earthquake. People who had seen FEMA videotapes and read FEMA-produced manuals retrofitted their homes, and they were seismically safe. They didn't know when the earthquake was going to occur, but they knew they lived in a seismically active area.

    Part of it involves risk assessment and identifying the hazard, and then telling folks out there what the hazard is and make sure the people understand how to live in that hazard.

    So it's a public education goal of ours, as well as getting the specific statistics.
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    Mr. HORN. Thank you very much. One last question, if I might, Mr. Chairman.

    I would just like to know, are you varying the types of education to see if there's a great payoff in one area of communication as opposed to another? Is that part of your pilot projects, nationwide?

    Mr. ARMSTRONG. Are you referring, sir, in terms of different types of media——

    Mr. HORN. Right.

    Mr. ARMSTRONG. ——and different types of approaches?

    Mr. HORN. Yes, sir.

    Mr. ARMSTRONG. We're certainly approaching bilingual or multilingual approaches in diverse communities. We are not strictly restricting our message to print media versus electronic media.

    We are also trying to meet, again, with chambers of commerce and local opinion leaders because we think the message needs to come from people that are of the community as much as, or more than, it needs to come from Federal officials.

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    Mr. HORN. Thank you.

    Mr. BOEHLERT. Thank you very much. Mr. Lampson.

    Mr. LAMPSON. Thank you, Mr. Chairman. I would ask consent to submit my opening remarks for the record.

    Mr. BOEHLERT. Without objection, so ordered.

    [The prepared statement of Hon. Nick Lampson follows:]

    [Insert here.]

    Mr. LAMPSON. Thank you. Just one simple question.

    About 50 years ago, the city of Texas City had a considerable problem there. The whole city blew up. And they are one city who has used, in more recent times, warning devices, such as emergency sirens. They feel it's an effective tool to signal the community the advise them of impending danger.

    Some of the devices in towns similar to Texas City—small, either rural, or just small communities—are old and outdated and in need of some kind of replacement.

    Do you have any idea what average costs for such a system might be? Are you familiar with cities who use them, and is it a recommended use at this point in time?
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    Mr. ARMSTRONG. Actually, Director Witt asked me, 2 weeks ago, to set up a special meeting with representatives of the building industry, as well as our staffs in Region 4 out of Atlanta and Region 6 out of Denton, Texas, to talk about ways that we can promote safer structures in this country, and look at the ways that we can mitigate against things like the horrible tornadoes that we've had recently.

    Specific to the issue of warning systems, we now have in our 404 Program what we call a 5 percent set-aside within the 404 Program that gives flexibility for States to spend money on other things besides the standard mitigation approaches, and many States are using that 5 per cent to spend money on warning systems.

    I don't have with me specific information on cost. I don't know if Mr. Suiter, coming from Tennessee, has any information on that.

    Mr. SUITER. Actually, I used to, when I was State director, but I've been so far removed from it now, I couldn't give you any specifics on cost. I can tell you the outcome of recent events that have occurred, in terms of the tornadoes.

    The city of Nashville, which is my hometown, had an excellent warning system, and nobody was killed.

    There weren't even serious injuries, and the schools were open when this occurred, and there were a lot of people in congregate facilities.

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    But there was a great warning system. It worked all across the State. Northern Alabama has an incredible warning system in place, to warn people of tornadoes, and severe weather.

    Along the coast in hurricane zones there's obviously all types of warning systems in place for those types of things. The cost of it, I can't answer.

    I can respond that it's awfully important and, yes, we ought to be focusing on that, and we'll be glad to try to answer for the record if we can, but I can't do it myself.

    Mr. LAMPSON. But through those programs, those funds are available, whether it's grants or what have you. You just mentioned—

    Mr. SUITER. I think most of these people, in the instances I'm talking about, have built their own systems. They've determined that it's important for the community to be able to warn.

    The Federal Government's responsibility, at this point in time, in terms of the weather service, has been to tell them that there is a tornado coming through, and the National Weather Radio System gets that to the local government and to many individuals.

    The local governments have then picked it up and developed warning systems within their own schools, their hospitals, in some cases maybe outdoor warnings systems, and that type of thing.
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    In the old days, when I first got into this program, and we were in the nuclear attack program, the Federal Government did fund warning systems. We no longer do that, because the nuclear attack issue is different now than it was then.

    Mr. LAMPSON. Thank you very much. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Mr. Kim.

    Mr. KIM. Thank you, Mr. Chairman. I have one small question of you.

    I remember some time ago, a letter was written, signed by 35 members of a California delegation, simply recommending you to look into this possibility to delegate more decision- making responsibility to individuals closest to the disaster area, instead of Washington knows best kind of mentality, which causes a lot of problems in the past.

    Even small things, we have to wait for your decision. Sometimes it takes weeks, back and forth. Sometimes you wait until you arrive in the area, and then we give you a helicopter tour and hope you can make the decision soon which, again, costs money and is time-consuming.

    I understand Section 203 of this bill allows you to test this idea, and I was wondering, you have not responded to us yet on what the status is.

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    Mr. ARMSTRONG. You're referencing 203, sir?

    Mr. KIM. Section 203 of the bill. I understand that——

    Mr. ARMSTRONG. We think Section 203 is——

    Mr. KIM. ——the pilot projects.

    Mr. ARMSTRONG. Section 203—are you referring to Section 203 regarding predisaster or referring to the individual family grants?

    Mr. KIM. I'm referring to the letter that we wrote to you sometime ago recommending you to delegate more responsibility to the people and the individuals out there closest to the disaster area.

    For example, Ontario and Chino, in California, we have some problem because of lack of responsibility by the local individuals, and having trouble waiting for your decision, even in small things.

    And I understand that Section 203 allows you to test this idea.

    Mr. ARMSTRONG. Well, the——

    Mr. KIM. I don't know if it's a major policy change to you, or what.
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    Mr. ARMSTRONG. First of all, we'll make sure that we find your letter and, if we have not responded fully, we will certainly do so.

    But let me talk a little bit about where I think you're headed, which is in the area of predisaster mitigation, that yes, we have been piloting working directly with local governments in promoting predisaster mitigation, and that's the program that we're calling Project Impact.

    We are hoping that this committee will authorize future predisaster mitigation initiatives that will continue to deal directly with counties and cities, bringing the States in as partners, but getting the finances and the resources to local governments, as you suggest, as quickly as possible.

    But in the post-disaster environment, I would add that we're very aware that we need to do a better job at FEMA in moving more quickly.

    Mr. Suiter's area, of the Response and Recovery Directorate, has done a lot to redesign and re-engineer its programs. And in my area, we have also begun to streamline our 404 Program.

    As I mentioned earlier, we now have funded a State hazard mitigation officer in every State to help with these programs.

    I am now in the process of redesigning our 409 planning process, which will improve the way that we, on a yearly basis, talk with our States about targeted projects should a disaster occur.
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    We also now are financing environmental officers in each of our 10 regional offices to move 404 applications through the NEPA review more quickly. We also have created a list of categorical exclusions to the National Environmental Protection Act so that we don't have anything slow down the process of getting those disaster dollars in the area of mitigation out to local governments.

    We also conduct local applicant briefings, and we're working more closely with other organizations, such as the Association of State Floodplain Managers and local groups, to make sure that they fully understand how FEMA programs can be activated before and after disasters.

    But we will also make sure that we get a specific answer for the record regarding the letter that you sent. I don't know if Mr. Suiter has anything to add on that.

    Mr. SUITER. No.

    Mr. BOEHLERT. Thank you. Thank you, Mr. Kim. Mr. Poshard.

    Mr. POSHARD. Mr. Chairman, I do not have any questions. I wanted to come to the committee this morning to especially comment upon my experience over the last 5 or 6 years with FEMA.

    I represent a district that's about 260 miles long in Illinois, in Central and Southern Illinois. We have had floods, as you know, along the Mississippi River, the Ohio River. We had tornadoes through the central part of my district, that have torn up communities.
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    I just—FEMA has just been superb. The reaction time has been quick. The cooperation with the State and local agencies has not missed a mark at all. I have just been extremely pleased in the way that you folks are operating.

    I've also been pleased with the fact that, in some of our areas, you have been very firm but very fair in indicating to people, ''This is the last time we're coming here. If you don't get in the program, you know, you're going to have to experience the consequences of those irresponsible decisions in the future.''

    I think that's appropriate. I think it's needed. I think we need that stick sometimes, at the Federal level, to push people along. And you certainly have done that in a very fair, firm way, and I wanted to thank you for that, too.

    But I just—you know, I don't want us to do anything here to mess up something that is working well.

    I just want you folks to know that sometimes we don't credit agencies enough who are doing their work well, and I want to make sure that you know that the people in the 19th Congressional District really appreciate the way you've reacted and what you've done over the past several years in responding to our emergencies. Thank you.

    Mr. SUITER. Thank you very much. That's very kind. I would also like to comment that the local governments, local directors, and the State directors in your State have made it possible for us to do as good a job, perhaps, as we have done in some of these cases. It wouldn't happen, without them.
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    Mr. BOEHLERT. Thank you very much for that testimonial, Mr. Poshard. We should note for the record that he is seeking to expand his area of representation and, in the future, you might receive some more calls. Thank you very much.

    Mr. Gilchrest.

    Mr. GILCHREST. Thank you, Mr. Chairman.

    Mr. Armstrong, you have elaborated for a number of members the number of people that you work with in local communities.

    My question is, part of this draft bill that I guess this hearing is addressing deals with premitigation, how do we prevent the disaster from happening?

    Could you give us some idea as to the number of people and varied resources you use to determine a particular mitigation, premitigation project, for example, whether it's in a coastal area for a hurricane, or a flooded area in a coastal area, the Mississippi River, earthquakes, natural fires, you name it?

    Do you work with the scientists in the area of climatology, meteorology, geohydrologists, things of this nature, to understand the parameters of these natural disasters?

    Mr. ARMSTRONG. There are so many partners that we're working with, and so many new partners we didn't know we had, that we're meeting in this process.
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    We work with the National Science Foundation and its board on natural disasters. We certainly work with NOAA and other Department of Commerce agencies in terms of predictability. We partner with other folks at Commerce and NST that are doing research. And we don't want to overlook the good work that is being done in the university and academic community.

    We receive their reports. We advise them. And, in some cases, we give them seed money to start up research projects.

    I also would state that many of the predisaster mitigation potential projects that come to our attention are usually those that are just beyond the capability of local or State governments to underwrite.

    There are a number of good mitigation projects that occur every day around this country that aren't financed by the Federal Government at all, that go largely unnoticed, but they have made a huge difference.

    We have gone into communities across this country. In my own home State of Colorado, in the city of Fort Collins, the city and the State did some very aggressive predisaster mitigation work that, if it had not occurred we would have tripled the loss of life in that community in the flash floods that occurred last summer.

    We don't believe that our primary mission at FEMA is research or technology transfer, but we do want to address that data that is being provided, because it can help us do a better job.
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    Mr. GILCHREST. I understand that the Corps has a basic new proposal for a policy to use natural structures, natural things, instead of man-made structures to prevent flooding.

    And you mentioned a number of times—and I assume it is Section 404 of the Clean Water Act.

    Mr. ARMSTRONG. I'm sorry. Section 404 of the Stafford Act.

    Mr. GILCHREST. Oh, I'm sorry .

    Mr. ARMSTRONG. But the Army Corps' program you're referencing is called Challenge 21, and it's a watershed-based program. It has some similarities to Project Impact.

    Ours is based on political subdivisions, either county or city borders. Theirs is a watershed initiative, where they would also identify barriers to mitigating disasters in the floodplain.

    Mr. GILCHREST. When you work with the political subdivisions is there a sense of the need to understand the nature of a watershed in mitigation?

    Mr. ARMSTRONG. Absolutely. We have hydrologists that work for FEMA in each of our 10 regional offices. Each of our regional offices has roughly a dozen or so staff that focus on mitigation.
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    I have 90 people in my directorate, a fourth of which focus in on hazard identification and risk assessment.

    Mr. GILCHREST. There was a great deal of collaboration, I guess, with the private universities and Federal agencies.

    You mentioned Maryland, as one. Could you tell me where in Maryland one of these pilot projects are?

    Mr. ARMSTRONG. Yes. Allegheny County.

    Mr. GILCHREST. Was that in connection to a buyout? What was the program out there?

    Mr. ARMSTRONG. Well, the program is still being developed in Allegheny County. Allegheny County, as you may know, has suffered a lot of river flooding, and the population is not as affluent as other parts of the country, other parts of the State.

    We felt it would be a good pilot for us, as opposed to going into an area that has a strong infrastructure of State and local government to go into——

    Mr. GILCHREST. Has it been a fairly successful pilot project?

    Mr. ARMSTRONG. We think so, primarily because there's already a local task force in place in Allegheny County that the local folks created after the last disaster.
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    Mr. GILCHREST. So who selected, did the State select that area? Did you select it in collaboration with the State?

    Mr. ARMSTRONG. One of the things we learned from our pilot projects is that we needed to be more directly involved with the States. The States did not designate the pilots. They will designate all the projects here on out.

    For these pilots, Director Witt and others wanted to come up with diverse areas based on geography, population size, and hazard.

    Mr. GILCHREST. The Chairman is talking, so I might get in another question.

    Mr. BOEHLERT. Go ahead.

    Mr. GILCHREST. Thank you, Mr. Chairman.

    The other question is a little bit more colloquial. There's two areas in my district. One could possibly be designated by the governor as an area to move into this program for premitigation.

    It's a small, little community that a local delegate asked me about, to see what kind of programs there were at the Federal level to collaborate with the State level. It's a little place called Snug Harbor. Some of the residents have asked about it. It sits right on one of the back bays just south of Ocean City.
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    The citizens are concerned with sea level rise, for one thing. The barrier island right in front of them has recently been washed over a number of times. So they have asked me to inquire about the potential for a buyout program.

    Now, the other question, very briefly is, this deals with something similar to Love Canal, or areas that have had chemical disasters.

    There's a small community—I have a strange district. I have predominantly agriculture, very rural, but I have the most industrialized section of Maryland, the southern piece of Baltimore City.

    There's a very small community called Wagner Point, a couple of dozen houses. They are literally surrounded by chemical factories. You walk across the street, a two-lane road, and you hit the high fence or barrier to a big chemical factory.

    Now, there was another small community not far from there that was actually bought out by the State. It was called Fairfield.

    Does FEMA have any advice for me, or are there any kinds of Federal programs that could be coordinated with State programs to buy out a small community that is literally surrounded by chemical factories, in some indirect link to premitigation proposals?

    Mr. ARMSTRONG. Well, I have several ideas for you.

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    First of all, the Environmental Protection Agency is really the lead agency to deal with most of what you're describing regarding the concerns about contamination from chemical waste and activity.

    The buyout program, as I referenced earlier, is activated by a disaster declaration, and that disaster declaration would then create the opportunity to use up to 15 percent of the total cost of that disaster at the discretion of the State.

    The State receives applications for use of our program, and then we receive that list, and the list gets reviewed and then buyouts and other options can be exercised.

    But the State prioritizes and tells FEMA how they want that money to be used, but that only happens if there is a disaster declaration.

    Mr. GILCHREST. So, without a disaster declaration, the community would not be——

    Mr. ARMSTRONG. Correct. But also, regarding Snug Harbor it's my understanding that our staff is going to meet with your staff and some others during the Memorial Day recess to talk more specifically about the concerns there.

    Mr. GILCHREST. Oh, that's great. Thank you. Thank you very much. Thank you, Mr. Chairman.

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    Mr. BOEHLERT. I admire the skilful way you got in that constituent case work.

    Mr. Wise.

    Mr. WISE. Thank you, Mr. Chairman.

    Mr. Armstrong, in your testimony, you stated that your experience with predisaster mitigation under Project Impact has been, I believe the word was, a process of discovery. Actually, I think that's true for all of us.

    Would you please elaborate on that statement?

    Mr. ARMSTRONG. This is a new way of doing business regarding the Federal Government.

    The classic Federal Government program, and one of the reasons why we object to some of the proposed legislation, is in a grant program mode. I think the way some of the proposed legislation has been written, it mimics the other legislation for other agencies.

    What we're trying to do instead is, we're trying to go out to the community, and not tell them what to do, but come out with an undefined amount of money, combined with technical assistance, bring other Federal agencies with us, invite States to join us, and invite a roundtable discussion and ask the community, ''You bring who you need to the table, bring the private sector, bring nonprofits. We'll come along, bring our partners, and together, let's shape something, and then you tell us how you think the money should be spent.''
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    That's different. That's not the normal way that we've done business as a Federal Government, and it's not the way that FEMA has always done business.

    What we have discovered in this process is that, frequently, the private sector has some very strong ideas on why they want certain things to be done, because that will ensure that their employees are getting back to work, that the local economy is staying strong, that city planners have been waiting for an opportunity like this to talk about their good ideas, and that other Federal agencies have programs that we didn't even know existed, that can be leveraged and brought into this initiative.

    We have also made some mistakes along the way. The beauty of having a pilot phase is to learn from those mistakes and improve the initiative.

    We are still in the process of finalizing the initiative in your home State of West Virginia, and we are looking forward to the signing ceremony next month.

    It will be interesting to see who we are bringing to the table. At this point, we certainly have folks from the private sector and the public sector.

    We are hoping to see how we can utilize some of our hazard identification technology. We are redesigning some of our own initiatives inside of FEMA to more closely complement Project Impact.

    So we are discovering things about our own programs internally, as well.
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    And the exciting thing for me is that this, we believe, can retain this experimental flavor as it evolves. It doesn't ever have to become a rigid process that's a predictable Federal grant program.

    Mr. WISE. Given the—and incidentally, we are very appreciative. I know part of my district is included in Project Impact, part of Congressman Mollohan's, as well.

    It would seem to me that each locality, each site of a Project Impact enterprise, would have a different set of circumstances to it.

    Mr. ARMSTRONG. It certainly does. Pascagoula, Mississippi, for example, is basically a company town. Ingall Shipyard is the reason that city exists. And every small business that exists is a spinoff, because of the shipyard.

    In Seattle, Washington, on the other hand, we have national corporations that have their headquarters in Seattle, that are partnering with us.

    In Wilmington, North Carolina, it's a regional business hub. What happens in Wilmington affects other communities up and down the coast, in both North and South Carolina.

    And then, when we go into Randolph and Tucker Counties in West Virginia, or Allegheny County in Maryland, we're dealing with rural Appalachia.

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    So it is very different, from community to community.

    Mr. WISE. I have made the—in fact, I made it just 2 weeks ago, at a FEMA function in Randolph County—the observation that I believe FEMA, because of the rash of floods that we had beginning in 1996—Randolph County alone was four times declared a Federal disaster area, in 1 year—that may be a record—that, because of that, I estimate that FEMA and related government agencies have put probably $100 million in the last year-and-a-half in flood relief into West Virginia.

    If we had spent 20 percent of that in predisaster mitigation, particularly from flooding, I think we could have saved much of that.

    Would you touch on the mapping modernization program, particularly where this is going?

    Mr. ARMSTRONG. Yes. The Director referenced, in his appropriations testimony earlier this year, that we are at a very critical stage with our mapping in this country.

    Back when flood insurance maps were created, the sole purpose was to help determine insurance rates. What has happened with our maps is that local planners and local officials are using our maps as the basis for future development decisions.

    Because of the accelerated development that has occurred across our country, and the small amount of resources we have, not only has our map inventory become inadequate in terms of how much time it takes to do new maps—sometimes as much as 10 to 15 years to do a new map—but also, we aren't staying ahead of the game with new technology.
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    Ideally, we should be getting rid of paper. We should be putting things on the Internet. We should be using all the sophisticated technology out there to not only effectively map to the degree that we need, but also to amend maps in a more timely fashion.

    Mr. BOEHLERT. If I may interject here, mapping is something that interest all of us up here, and you caught my attention in a hurry when you said 10 to 15 years.

    I mean, there is dramatic improvement, has been dramatic improvement in technology.

    Mr. ARMSTRONG. That's right.

    Mr. BOEHLERT. So this is something Mr. Wise and I and everyone on this subcommittee shares a deep and abiding interest in, and that's flood mapping.

    And I would like to know how much you're spending right now, and are you going to accelerate the expenditures, I hope, I hope? That's the direction we're going to give you from this subcommittee.

    Mr. ARMSTRONG. We would love to have the flexibility to expend more. We are somewhat capped again, on how much we can spend.

    We have identified, over a 5- to 6-year period, an $800 million modernization program that would update our mapping inventory and allow us to acquire the appropriate new technology to stay ahead of the game.
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    And I believe it's another investment. If we invest the money now, then in the future, we won't need to worry about ever being behind in mapping again, because we'll have the technology, and we'll have the upgraded inventory.

    A lot of States and local governments are willing to build upon our mapping. The state of Maryland right now is taking FEMA maps. They're adding another layer of sophistication, and then the county and local governments are doing yet another level.

    But that base that FEMA provides has to be a strong base, and right now, it's not as strong as it could be.

    Mr. WISE. Mr. Chairman?

    Mr. BOEHLERT. Yes.

    Mr. WISE. I know that we're going to have to go vote. Could I ask permission to ask some other questions in writing, particularly dealing with the communication amongst Federal agencies?

    Mr. BOEHLERT. By all means. As a matter of fact, that is the standard operating procedure of this subcommittee, that following this hearing, there will be occasion to submit some questions in writing, and we would appreciate a timely response.

    Now, we are going to take a brief recess, because we have a call. The House has a vote on an education bill. This panel is complete. I want to thank you very much for all that you have contributed.
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    We will recess for about 15 minutes to give us an opportunity to get over and vote and get back. I apologize to the next panel for the delay, but we will be back as soon as we can. Thank you.


    Mr. BOEHLERT. The committee will resume the hearing.

    The second and final panel of the day consists of Mr. Dale Shipley, director, Emergency Management, the National Emergency Management Association; Ms. Rebecca Quinn, the legislative officer for the Association of State Floodplain Managers; Ms. Barbara Cleland from the National League of Cities, vice-chair, Public Safety and Crime Prevention Steering Committee; and from the International Association of Emergency Managers, the deputy coordinator for emergency management, Mr. Michael Gregory.

    Don't think that the lack of attendance up here constitutes a lack of interest. We have several things going on here at once.

    As soon as I can find someone for the Chair, I'm going to have to go to the floor, because the International Authorization Bill is on the floor today and, as Mr. Borski knows—he served on that committee as a member—I'm obligated to be there and participate in the debate.

    The frustrating thing about it is, we are talking about something we can't talk about. So you can all understand that.
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    We will proceed, knowing full well that your statements will be considered in full by all of the committee. They will be part of the record in their entirety.

    We would ask that you try to summarize, so that we can expedite the proceeding.

    With that, let me start off with Mr. Shipley. You are first.


    Mr. SHIPLEY. Yes, sir. Mr. Chairman, thank you very much for allowing the States' directors of emergency management to come and work with you. We appreciate your interest in our position on some of these issues and that of the other stakeholders that work so closely with victims of disaster.

    We share with you the interest in reducing cost, costs in stress and frustration and lives and property, as well as dollars. Certainly, when disaster impacts people's lives, all of these things are impacted, as well.
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    We have talked before about our perception of need to identify costs. The question has appeared to have been posed in terms of how do you reduce Federal costs. We encourage you to look at existing costs and the cost sharing that goes on now.

    It's difficult. It hasn't been done before. But, in an attempt to come to grips with that, we did a survey in Ohio and indicated from that survey that local government puts billions on an annual basis into establishing the emergency services infrastructure for their communities.

    Really, when you talk disaster costs, you are talking extreme situation over and above what is already being put into those capabilities.

    In this legislation, talking about predisaster hazard mitigation, we are, I believe, talking about the ultimate disaster cost reduction program.

    We have been, and are, very supportive of the requirements that are contained therein for local and State governments to adopt comprehensive mitigation plans. We also want to ensure that the goals and the objectives of these mitigation plans are met and that the funds are maximized to the greatest extent we can.

    We believe that these mitigation activities must be coordinated with State and local governments, in efforts to deal directly at times make the process, we believe, more difficult than if it was a complete partnership with Federal and State and local governments involved.
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    Certainly, getting industry and business and community planning groups involved is important, because they have a vested interest in the viability of their communities.

    As written the Federal cost share in the predisaster mitigation grants to the States would be established as 75/25 cost share initially, moving to a 50/50 cost share in the second year and on out. It has been a 75/25 cost share in the past.

    We would recommend that the predisaster mitigation program have the same cost share provisions as the current post-disaster mitigation program, that of 75/25.

    I will talk cost share once again toward the end of my testimony, where we talk cost reduction, and yet there is a proposal to increase the Federal share in another program.

    You also call in the bill for a set-aside of 10 percent of these mitigation funds for small and impoverished communities, and we welcome that thought.

    I think that is worthwhile, because I have seen communities that could not, because of their financial situation, participate in a mitigation program.

    I would submit to you that, at 75/25, if that's a problem, it would certainly be a problem at 50/50, and I would invite you to take a look at some other provisions that we might be able to use to allow these small and impoverished communities to, in fact, take advantage of the mitigation program.
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    I think it's a great idea. I think we just need to figure out a way to ensure that they can take advantage of it.

    Most of my comments will be devoted to the streamlining and cost reduction.

    The draft bill would permit alternative projects which are now funded at only 90 percent of the Federal 75 percent share. This proposal would reduce that further to 75 percent of what would normally be a 75 percent share.

    I would invite you to look back earlier in the draft, when you promote the mitigation program and eligibilities for the mitigation program.

    This is where some of the greatest mitigation ideas come from, when we submit alternatives and say, ''We will help you fund, not at the full rate, but we will help you fund alternative projects, if it makes sense in the mitigation program.''

    We already reduced it to 90 percent of the normal cost share. Reducing it further, I think, is a disincentive, rather than an incentive.

    The call for a proposal to go to estimated costs is fine, if we can figure out a way to deal with an extreme overrun. If something happens that just grossly exceeds the estimated cost, there should be a way to deal with that, other than just say, ''It's too bad.''

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    One other point, sir, I would like to get to. Combining the Individual and Family Grant Program and the Housing Program into a single program run exclusively, 100 percent by FEMA, and paid for 100 percent by Federal dollars, as I said, does not address the idea of cost reduction.

    It does, however, take the States out of the administration of that program. It may be argued that some States do not produce checks as fast as others, and that's probably true.

    I know that my State can produce assistance to individuals as far as the Federal Government can, and I do know that we are a voice in support of victims in whatever problems they may have in getting Federal assistance.

    I would also point out that, in dealing with emergency home repairs, if we require victims whose homes are damaged to seek loans from SBA and go through the loan application procedure, we have defeated the purpose of emergency home repair capability.

    Right now, if a home has minor damage, we can offer funding to them to live in their home and fix it themselves immediately. To cause them to apply for a loan will probably cause them to leave the home and get rental assistance until they can get the home fixed.

    Housing, in time of disaster, is a tremendous problem for me. If we put people out of their homes, we've got to find housing of some type for them somewhere.

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    Staying in their home and in their community and in their schools and fixing it themselves is best for them, the community, and for the emergency management community that's trying to deal with them.

    We support the options for a hazard mitigation program that have been discussed, and were further discussed by FEMA in some of the questions that were asked earlier. That was supported also by the National Governors' Association in the policy paper that they put out, and I have a copy of that. If you would permit me to submit that for the record, I would appreciate it.

    Sir, we think that all of us are interested in the best possible delivery of assistance and services to disaster victims. I mean, we are here because of the citizens that we serve. I want us to keep them at the center of this discussion.

    They expect and deserve strong Federal and State and local partnership organizations working together in their behalf. We are committed to that as an association, and we hope that you will allow us to continue to work with you and your staff as you finalize this bill.

    Thank you, sir.

    Mr. LATOURETTE. [presiding] Thank you very much, Mr. Shipley. It's a pleasure to have someone from the Buckeye State to so ably represent us.

    Ms. Quinn.
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    Ms. QUINN. Thank you, Mr. Chairman, and members of the committee. I appreciate the opportunity to provide the Association of State Floodplain Managers' comments on the discussion draft.

    We continue to endorse a number of elements of your work to reduce future damage through mitigation. Our members work with the National Flood Insurance Program every day. This year, the NFIP marks its 30th anniversary, so we've been in the business for a long time.

    We are thrilled that so many others now realize the value of identifying hazards, incorporating hazards into land management and building decisions, learning how to build to resist damage, and working to reduce exposure of existing buildings.

    I will try to be brief, and only comment on a few provisions.

    We appreciate the encouragement for predisaster planning in the draft bill. Planning must examine current programs and policies to make sure that hazards are factored into development and redevelopment decisions. It's got to be more than a list of projects.

    Section 102 could be the opportunity to set that stage, although, as currently drafted, it essentially acknowledges just one way that disaster funding may be used. We would like to offer a slightly stronger encouragement for predisaster planning.

    Mitigation needs to be specifically focused on actions that change policies, especially, as Mr. Borski pointed out those that encourage building in harm's way, and actions that implement projects to reduce damage.
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    As vital as disaster response functions are to our society, they do not reduce future damage and loss of function of critical facilities and infrastructure.

    Consistent with the results of an ad hoc panel of experts recently convened by FEMA to respond to a request of the appropriation committees, the association concurs that the priority must be implementation at the local level.

    Therefore, the purpose of predisaster mitigation grants must not be overly broad in definition. They need to be focused on implementation.

    As you know, we were all a bit hurried in looking at this draft, and so I must respectfully request your forbearance on something. I believe our written testimony may have left an unintended impression.

    We would like to clarify our comments for the record on both Section 103 and 104, to make sure that our position is clear. I would like to follow that up within the next day or so, if I may. Thank you.

    A couple of years ago, when I was the State hazard mitigation officer for Maryland, my colleagues and I drafted a proposal to allow States to qualify to assume certain grant management responsibilities.

    As with many good ideas, it took a couple of years to mature, but we are very pleased that, as Mr. Armstrong mentioned, FEMA is moving to test and implement such a proposal with a number of States. We suggest that the committee monitor the ongoing work.
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    We also caution, though, that State assumption of grant management should not be an easy step. Great responsibility goes with fostering mitigation and assuring that taxpayer funds are used for cost-effective measures, and only some States will want this responsibility.

    So we need to make sure that a program with FEMA driving it is still in place. FEMA must serve in an oversight role, even for those States that assume the program, in order to be accountable to Congress and the taxpayers for prudent use of funds.

    Every day, floodplain managers talk to developers, builders, homeowners, and others about minimizing risk. Despite the current focus on high-tech, we believe we don't need to look much beyond one-on-one conversations with flood victims to see that low-tech works.

    There is evidence, research evidence, to back up this dissemination methodology. We are concerned that singling our dissemination activities could back States and FEMA into a corner and force them to fund those activities, regardless of the effectiveness.

    We submit that, if such activities are cost-effective and do, indeed, lead to reducing damage, then they already qualify, and don't need specific mention.

    With regard to Federal cost share, we concur with our emergency management director colleagues. We do not support dropping to 50 percent.

    Experience with the original Section 404 showed that, especially in years without a lot of disasters, communities didn't participate a great deal and, in large measure, the 50/50 provision was considered to be the most significant factor.
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    The association has always urged that mitigation focus on public infrastructure, because whole communities may be affected, not just a few property owners.

    As mentioned by both Mr. Borski and Mr. Johnson, the biggest part of the disaster dollar goes to public roads, bridges, utilities, and buildings, so we urge more focus on getting more disaster-resistant infrastructure.

    One way, or a step in that direction, we suggest that the study proposed in Section 208 be broadened to evaluate design and construction techniques that have proven, in some parts of the country, to improve resistance.

    The more we know about what works, the easier it is for FEMA and the States to factor mitigation into the post-disaster recovery programs.

    Our organization was founded on the need for more and better flood hazard maps. As we testified before this committee in March, we don't want to turn down any offers for help in funding for maps.

    However, we feel that any mapping program must be linked to FEMA's current hazard mapping program, in order to ensure consistency. We have two suggestions for you.

    One, we appreciate any support you can give FEMA's modernization program. You can do this by making known to the Banking Committee your recognition of the need for more funding to improve the maps.
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    Specifically, we hope next year to see in the administration's proposal as much as $10 million in general funds to augment the mapping budget, which is currently paid 100 percent by flood insurance policyholders. It is not general funded.

    Our second suggestion addresses the need to validate and improve flood maps after flood disasters.

    We ask that you consider creating in the Stafford Act the authorization to use disaster relief funds, with exactly what formula, I'm not sure, to allow FEMA's NFIP mapping program to target verification after floods. That's often when some of the map deficiencies are pointed out.

    This will help ensure that any post-flood map work is consistent with the flood insurance program maps.

    We greatly appreciate your insightful comments and questions about repetitive losses. As Mr. Armstrong mentioned, both the Federal insurance administrator and his staff have been working on this issue, and we are very anxious to see the solutions that they're coming forward with.

    The idea of additional funding to augment an existing grant program that is supposed to be targeted to repetitive loss is appealing.

    Another issue. Mr. Blumenauer suggested that perhaps we need something specific in the statute to help communities ''get it,'' if you will, to help them understand mitigation better. We still feel the key is the planning process: hold up a mirror to the community, so that they can see how their past decisions have actually compounded some of their hazard problems.
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    Infrastructure design is part of it. Planning is part of it. Basically, do it right the first time. Sometimes, even if it seems more expensive, maybe it's better to put that water treatment plant out of the floodplain, rather than in the floodplain.

    Finally, I would like to remind the committee that FEMA is a small agency. It does a tremendous job with all it has on its plate, including initiatives to work with States and communities to do the right thing.

    However, because it is small, and because its first priority must be helping States and communities when disasters exceed their capabilities, FEMA can quickly be stretched so thinly that some basic functions suffer.

    Again, thank you. And I appreciate the opportunity to answer any questions.

    Mr. LATOURETTE. Thank you, Ms. Quinn, for your very fine and thoughtful statement.

    Ms. Cleland.

    Ms. CLELAND. Good morning, Mr. Chair, and members of the subcommittee. I want to thank you for inviting me to testify on behalf of the National League of Cities, NLC, this morning.

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    I'm a member of the Aurora, Colorado city council and vice-chair of the Public Safety and Crime Prevention Steering Committee. The committee has the responsibility for developing NLC policy on all issues related to public safety, including man-made and natural disasters.

    The NLC was founded in 1926 by State municipal leagues seeking to establish a voice for the Nation's cities at a Federal level. Today, NLC represents 49 States leagues, 135,000 local elected officials, and 16,000 direct and indirect member cities.

    Before I give NLC testimony on the Mitigation and Cost Reduction Act of 1998, I would like to take this opportunity to thank you and your staff for your outreach to cities and other stakeholders with roles in disaster preparedness, response, recovery, and mitigation.

    When disaster occurs, it is imperative that we coordinate our efforts, so it is logical that we should do the same as we work with you to develop authorizing language for a State, Federal, and local mitigation partnership.

    NLC is committed to a balanced Federal budget and deficit reduction which requires us to work with all levels of Government to actually reduce fFderal costs.

    We believe this must be done without simply shifting Federal responsibilities and costs to State and local governments, as was attempted by the Senate appropriators last fall.

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    We believe an increased number of severe disasters, as well as increased urbanization and other factors, are largely responsible for escalating Federal, State, and local disasters.

    Your proposed legislation presents important opportunities to establish productive, long-term partnerships to reduce, through mitigation, the costs of disasters.

    NLC believes those proposed amendments could foster State and local cooperative approaches to reducing disaster costs. We also agree that there could be significant benefits over time from a federally-authorized predisaster mitigation program with Federal financial incentives and State matching requirements.

    We commend you for acknowledging the importance of cooperation between localities and State governments to develop comprehensive Statewide mitigation plans.

    To ensure lasting partnerships between State and local governments we recommend you include language in these amendments to require a State comprehensive plan to provide ongoing consultation between State emergency managers and local responsible officials.

    Authorizing a dedicated predisaster mitigation fund is a good approach to funding this new program. However, in reality, I believe we will have great difficulty getting any appropriations, despite its potential to reduce Federal disaster costs.

    We would like to suggest to you that you consider seeking an agreement to add 1 percent increase to all disaster-related appropriations, even the supplementals, to ensure steady funding for what will be long-term, often construction-related mitigation projects.
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    NLC supports the requirements that enable States to have minimum standards for a maintenance effort for disaster mitigation activities when initiating new predisaster mitigation activities funded by the Federal predisaster Mitigation Fund.

    Under eligible activities, we believe that FEMA should be required to provide minimum standards for basic mitigation activities and technical assistance to States and municipalities on cost-effective mitigation activities.

    We strongly support recognizing local governments as eligible sponsors when they are qualified to receive mitigation funding.

    We urge our members to include in their comprehensive funding processes all pertinent public sector entities, as well as nonprofits and their local business community. It was the private business community in Oklahoma City that furnished the equipment needed to carry out the initial search and rescue efforts after the bombing there.

    Among the minimum requirements for State programs should be included consultation and cooperation with responsible municipal officials in development of a program for disbursement of the predisaster mitigation funds.

    We believe the Federal cost share of the predisaster Mitigation Program should begin at 75 percent, as proposed in the legislation, but we think its reduction to 50 percent should be much more gradual.

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    We recommend maintaining it at 75 percent for 2 years, and then reducing it by 5 percent each year thereafter, until a 50 percent Federal cost share is reached. We suggest this because of limited funding available and needed time to generate local understanding and interest.

    The repeal of the Community Disaster Loan Program could cause great hardship in local communities. These loans to local government were authorized in the Stafford Act to help when local taxes and revenues plummeted as a result of disaster devastating economy.

    In our March 27th testimony before this subcommittee and in our meetings with your subcommittee staff, we have discussed authorizing three studies to provide all of us dependable information on disasters, as we work to limit and reduce their cost.

    We fully support the study you proposed to determine insurance availability for public infrastructure. We urge you to request a study to analyze disaster declarations since 1974, to determine quantitative and qualitative descriptions of the implied criteria for making declarations and how they have changed over time.

    As many Members of Congress assume, the Federal Government picks up the total bill for all disasters at State and local levels. We would like to see a GAO study completed to determine actual non-Federal costs.

    According to some experts, the Federal Government assumes about 10 percent of all overall disaster costs. We know the costs borne by State and local governments are considerable.
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    I would like to point out that, on November 14, 1993, a new regulation went into effect which prohibits reimbursing local governments for the dedication of city employees to response activities.

    Mr. Chair, I again want to thank you for inviting me to testify on behalf of NLC, and I urge you to look to the league for continued cooperation as we work together to launch a national mitigation partnership program to reduce disaster costs.

    If we not do this, we expect to have repeated battles with appropriators similar to the ones we had last September. Thank you.

    Mr. BOEHLERT. Thank you, Ms. Cleland. Mr. Gregory.

    Mr. GREGORY. Thank you, Mr. Chairman, and members of the subcommittee for the invitation to be here today. I'm privileged to speak on behalf of the International Association of Emergency Managers.

    Our 1,700 members are committed to improving local emergency management and to improving the emergency management system across the country.

    I can summarize my comments very briefly, in one statement, and I cannot emphasize this statement enough: all emergency management is local. That's what it comes down to.

    I'm from Newport News, Virginia. I'm very lucky that my city manager, assistant city managers, the mayor, and the city council support us.
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    We don't wait for someone to come and help us, for example, we are building our own EOC with local funds. We're not looking for somebody else to help us. We've recognized the need for improving our emergency management program.

    Newport News is in the Hampton Roads region of Virginia and, in Hampton Roads, with its independent cities and counties, the emergency managements have formed the Hampton Roads Emergency Management Committee. We have done this to join together, to work better, so that we can tackle these emergency management issues.

    Obviously, when we get together and talk about local emergency managers, we are providing a service to the local citizens. That is obvious. That's why emergency management is local.

    Other members we have, though, as has been talked about over here before, we try and bring everybody in, in a partnership. For example, in Hampton Roads, we have a large military presence. We have everything there. We have Navy, Army, Air Force, Marines, Coast Guard, everybody is there.

    These installations, we look upon them as other local jurisdictions. We bring them to the table in our Hampton Roads Emergency Management Committee, and ask them to join us to talk about these issues.

    They may be military but, in essence, they become local in that respect, because they live in the community, they work in the community. And the issues we are talking about happens in our back yard.
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    I can give you examples upon examples of how we do that. Business, industry, volunteers, our State association, the Virginia Emergency Management Association—same strategy. We bring all these people to the table because, ultimately, we are trying to improve service to the citizens.

    When we ask for assistance—and, as has been pointed out, we handle most of these problems—we really need it. We don't come all the time to ask for assistance. Every day across the country, local emergency management and local government is handling these emergencies and disasters.

    When we do come and ask for assistance from the State and the Federal Government, it's because we need help and, once again, that means we need help to provide a service to the citizens.

    I think the important thing to remember here is that it all comes down to local government. As I said, the vast majority of what is going on, we are handling it already ourselves.

    Our highest priority should be supporting local emergency management and continuing to improve that across the country, and not do a cost shift which, in effect, will take us backwards from where we have been able to move the last couple of years. I think that is a critical point.

    In summary, we have submitted our written statement, and what I have tried to do today is give you a perspective on that statement from a local emergency manager that has to deal with this on a daily basis.
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    I will go back to the initial statement I made: the bottom line is, it's all local. And that's what we have to emphasize on. All the comments that have been made, I think you'll find it all goes back to that point.

    Thank you for the opportunity to speak here today. The International Association of Emergency Management remains committed to working with your subcommittee and all these partners to try to improve the situation. Thank you, Mr. Chairman.

    Mr. BOEHLERT. Thank you very much. Let me ask—and I'll start with you, Mr. Gregory—all of you. Currently, the predisaster Mitigation Program, under Section 404, is funded by authorizing 15 percent of the amount of disaster assistance to be spent on mitigation projects.

    Would you support changing the authorized amount from 15 percent to some other figure, and what other figure would you have in mind?

    Mr. GREGORY. I think the key to remember here is that we have been talking about mitigation, which is only what we do, obviously, as part of the whole cycle, but the reason we talk about improving it and maybe changing some of the structures and percentages is because I think we have finally learned, spending the money ahead of time is what is going to save us.

    Now, we don't want to talk about cost shifting. We want to talk about cost savings, and for cost savings, it has been pointed out many times, especially when you talk about a two-for-one benefit, spend the money up front.
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    As I said, I am fortunate my city recognizes that. A lot of places don't.

    I think we ought to look at those type of issues, where we can put more money into mitigation, in a partnership effort, where local government is part of the determination of where those funds go.

    Mr. BOEHLERT. So you would go higher than 15 percent, or is 15 percent all right with you?

    Mr. GREGORY. From my perspective, I think all the money you can spend on mitigation, the more you can spend on mitigation, that means that's money you don't have to spend somewhere else.

    Mr. BOEHLERT. Okay. Does anyone else care to comment on that? Ms. Quinn?

    Ms. QUINN. We certainly are not going to turn down money. But I think we need to look at how efficiently the process is working right now, before we add more money.

    There is a fair amount of mitigation money that has been set aside, you know, a year, year-and-a-half after a disaster, that hasn't been obligated. I would hate for that pot to grow faster than we can get it out the door.

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    So I would say yes, but let's also work on efficiencies. We would like to see more, certainly.

    Mr. SHIPLEY. Sir, from the flooding in Ohio last March, which was probably the most expensive disaster, possibly, in the history of Ohio—certainly in current dollars that's the case—the mitigation money that came out of that to us, the 15 percent that we were allowed, we have matched that dollar for dollar with State money, and are getting the 25 percent for the projects from the local communities that are preparing the projects.

    So in this particular case, 30 percent would have been spent. That's the amount of money that we're going to spend in mitigation projects based on that flood. So I can tell you from that experience, if 30 percent were available, and we could match those, we could have probably done every project that local governments were willing to propose.

    A lot of that is an education process, too, where we have to convince people that this is a real opportunity to do some important things, and part of that is convincing them that it is economically in their best interest. But it's coming. We're getting there.

    Mr. GREGORY. And I would like to add one more thing, Mr. Chairman. I think the point that was made about efficiency is a very good point.

    In a lot of cases, my peers maybe won't go for some of these funds, because they realize, with the current State of the system, by the time you get done with it, it's not worth the headache. That's not the right way to do this.
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    That's not an incentive to try to do things better. That's just simply ignoring the problem.

    Ms. CLELAND. Mr. Chair?

    Mr. BOEHLERT. Ms. Cleland.

    Ms. CLELAND. Knowing that there is limited funding, we would more or less like to see it stay the same way as it is.

    Mr. BOEHLERT. Okay. Let me ask you this. In talking about predisaster mitigation, would you care to comment on what I see as the consensus here—it may be unanimous, but at least a consensus—on the importance of floodplain mapping and going to some of the newer technology which can get us a quick return?

    Isn't that a valuable tool for all of you to use as you plan for the future? Does anyone care to comment on that?

    Ms. QUINN. Certainly, sir. We use the floodplain maps daily, but floodplain maps are only one tool. They do help drive better development decisions.

    We have to be careful. We can't tell people, ''Don't build in the floodplain.'' I mean, there are constitutional issues.

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    Mr. BOEHLERT. Would you repeat that again?

    Ms. QUINN. We can't tell people, ''Don't build in the floodplain.'' But the better the maps are, the better we can identify where are the most hazardous areas, and then we can do a better job of guiding development away.

    Mr. BOEHLERT. We can tell people, though—we can't tell them they can't build in the floodplain—maybe we can——

    Ms. QUINN. Well, we tell you how to build.

    Mr. BOEHLERT. ——we damn sure can tell them that if you build in the floodplain, you do so at your risk, not ours.

    Ms. QUINN. I think we need to remember that we're not just talking about people building houses in floodplains. We're talking about public infrastructure that is flood-prone.

    Roads and bridges, by necessity, have to cross waterways. That doesn't mean they have to be built in ways that almost guarantee they will be washed out.

    Improved mapping is important. We have two comments.

    One is, as Mr. Armstrong mentioned, FEMA has a map modernization program that does include some of the modern, newer technologies and networking with States and other agencies.
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    We see that funding for maps is an important investment, and we've made a few suggestions as to how your committee may support that.

    Mr. BOEHLERT. All right. Thank you. Let me turn to Mr. Taylor. We are joined by Congressman Smith of New Jersey, who was always interested in these issues.

    Mr. TAYLOR. Mr. Chairman, I think you have pretty well summed up my remarks.

    Mr. BOEHLERT. All right. Mr. LaTourette.

    Mr. LATOURETTE. Thank you, Mr. Chairman. I don't have any questions but, in your absence, Mr. Shipley asked for permission to submit some documents, and Ms. Quinn to submit some additional remarks based upon Sections 103 and 104 and, since I don't enjoy your same learned hand, I thought I would bring it to your attention, in case I screwed that up while you were gone.

    Mr. BOEHLERT. All right. Thank you. Thank you all very much, and I appreciate it. As I indicated earlier, we are going to examine your entire statement as it was submitted to us, and we will call on you as resources as the occasion presents itself.

    I want to once again express to you my appreciation, one, and number two, my apologies. The system is such that we have no control over it. We respond to the call of the House, and the bells, and all that, so we get you here and you spend too much time waiting for us. But that's beyond our control.
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    Thank you very much. Meeting adjourned.

    [Whereupon, at 12:45 p.m,, the subcommittee was adjourned.]

    [Insert here.]