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20–214 PDF 2017

CONTROLLING THE RISING COST OF FEDERAL 

RESPONSES TO DISASTER 

(114–40) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

MAY 12, 2016 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

ROB WOODALL, Georgia 

TODD ROKITA, Indiana 

JOHN KATKO, New York 

BRIAN BABIN, Texas 

CRESENT HARDY, Nevada 

RYAN A. COSTELLO, Pennsylvania 

GARRET GRAVES, Louisiana 

MIMI WALTERS, California 

BARBARA COMSTOCK, Virginia 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

LEE M. ZELDIN, New York 

MIKE BOST, Illinois 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

LOU BARLETTA, Pennsylvania, Chairman 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RYAN A. COSTELLO, Pennsylvania 

BARBARA COMSTOCK, Virginia 

CARLOS CURBELO, Florida 

DAVID ROUZER, North Carolina 

BILL SHUSTER, Pennsylvania (Ex Officio) 

ANDRE ́ CARSON, Indiana 

ELEANOR HOLMES NORTON, District of 

Columbia 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

DINA TITUS, Nevada 

PETER A. DEFAZIO, Oregon (Ex Officio) 

VACANCY 

(III) 

CONTENTS Page 

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

TESTIMONY 

PANEL 1 

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

PANEL 2 

Hon. Joseph L. Nimmich, Deputy Administrator, Federal Emergency Management Agency ......................................................................................................... 10 

Hon. Sallie Clark, Commissioner, El Paso County, Colorado, on behalf of 

the National Association of Counties ................................................................. 10 

Bryan Koon, Director, Florida Division of Emergency Management, on behalf 

of the National Emergency Management Association ...................................... 10 

Eric Nelson, Senior Vice President of Catastrophe Risk Management, Travelers Insurance, on behalf of the BuildStrong Coalition ................................... 10 

Kevin Mickey, GISP, CTT, Chair, Multihazard Mitigation Council, National 

Institute of Building Sciences, and Director of Professional Development 

and Geospatial Education, The Polis Center, Indiana University Purdue 

University Indianapolis ....................................................................................... 10 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

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

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. Carlos Curbelo 1

Hon. Joseph L. Nimmich ......................................................................................... 41 

Hon. Sallie Clark ..................................................................................................... 47 

Bryan Koon .............................................................................................................. 57 

Eric Nelson ............................................................................................................... 65 

Kevin Mickey, GISP, CTT ....................................................................................... 73 

SUBMISSIONS FOR THE RECORD 

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

ADDITIONS TO THE RECORD 

Press release of May 10, 2016, ‘‘Curbelo and Sires Introduce Disaster Mitigation Bill’’ ................................................................................................................ 88 

H.R. ll, a bill to improve disaster mitigation programs, and for other 

purposes ................................................................................................................ 89 

Letter of May 12, 2016, from Mary Ellen Sprenkel, President and CEO, 

Corps Network, to Hon. Lou Barletta, Chairman, and Hon. Andre ́ Carson, 

Ranking Member, Subcommittee on Economic Development, Public Buildings, and Emergency Management ..................................................................... 106 

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

iv 


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(1) 

CONTROLLING THE RISING COST OF 

FEDERAL RESPONSES TO DISASTER 

THURSDAY, MAY 12, 2016 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, 

PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:10 a.m. in room 

2167, Rayburn House Office Building, Hon. Lou Barletta (Chairman of the subcommittee) presiding. 

Mr. BARLETTA. The subcommittee will come to order. At our first 

hearing in the 114th Congress, I stated that my top emergency 

management priority was pursuing life-saving and cost-reducing 

disaster legislation and launching a public policy debate about the 

costs of disasters, in the terms of both the loss of property and 

human life. 

We followed that hearing with several roundtables to help us understand what disasters cost this country, who pays those costs, 

and whether the problem is getting better or worse. Early last 

year, Ranking Member Carson and I introduced the FEMA Disaster Assistance Reform Act to call for the first comprehensive assessment of disaster costs and losses in over 20 years. We also 

wanted to reform several disaster assistance programs to make 

them more efficient and more effective. In February the House 

passed this FEMA [Federal Emergency Management Agency] legislation and we hope the Senate will take up H.R. 1471 and pass it 

soon. 

The purpose of today’s hearing is to discuss what we have 

learned so far and begin exploring potential solutions, particularly 

the principles that should be driving those solutions. While there 

are significant variations from year to year, we have found that 

disaster losses have grown considerably over the past three decades. As a result, the private sector and Government are spending 

an ever increasing amount of money on disasters. FEMA alone has 

obligated more than $178 billion since 1989 for over 1,300 Presidential disaster declarations. 

In addition, the number of Federal disasters is going up. 

Take a look at this graph that shows the steady increase in the 

number of Presidential disaster declarations since 1953. 

2 

Mr. BARLETTA. Many have suggested, including the Government 

Accountability Office, that the growth in the number of disaster 

declarations may be causing the increase in Federal disaster costs. 

But when we had the Congressional Research Service look more 

closely at the data, they found the growth in declaration is driven 

by small disasters and they represent a very small part of Federal 

disaster spending. 


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3 

Mr. BARLETTA. In fact, 75 percent of all declared disasters account for only 7 percent of costs. In other words, we could eliminate 

three-quarters of all federally declared disasters and barely cut 7 

percent of Federal disaster spending. I would argue the amount 

saved by eliminating those disaster declarations certainly would 

not outweigh the benefit those declarations provide to helping our 

smaller, remote communities respond to and recover from disasters. 

In order to understand why disaster costs are going up, we need 

to look at the big disasters, since that is where over 90 percent of 

the money goes. Since we started looking into this issue, we have 

also found the role of the Federal Government in covering disaster 

losses has increased. 

As we can see here, Federal disaster spending as a share of total 

disaster losses has grown from 23 percent during Hurricane Hugo 

in 1989 to 80 percent during Hurricane Sandy in 2012. 


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Mr. BARLETTA. In recent years, significant disaster aid has been 

provided outside of FEMA’s disaster assistance programs. 

The charts show how disaster aid programs outside FEMA have 

grown. In fact, for Hurricane Sandy, there was less FEMA assistance than from either the Department of Housing and Urban Development or the Department of Transportation. We found that 

these additional disaster aid programs don’t have the same requirements and restrictions as the FEMA assistance. 


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5 

Mr. BARLETTA. FEMA assistance is tied to actual disaster damage, and is for individuals, governmental entities or certain nonprofits performing government-like functions. FEMA only spends 

money on eligible items for eligible applicants, no matter how much 

money FEMA receives. FEMA mitigation funds must be used on 

cost-beneficial projects to ensure the Federal investment is a wise 

one. FEMA makes every effort to get money into the hands of applicants as fast as possible to enable rapid recovery from disaster 

impacts. 

In the most recent data provided by the Sandy Program Management Office from March 2016, it appears that these agencies have 

been slow in awarding and especially paying out funds. 


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6 

Mr. BARLETTA. Based on this data, only one-third of the CDBG– 

DR [Community Development Block Grant Disaster Recovery] 

funds have been dispersed and only 13 percent of the FTA [Federal 

Transit Administration] funds have been paid out. Now, this may 

be worth looking into in greater detail, and it certainly shows why 

a comprehensive look into disaster spending, as well as costs and 

losses, is needed. In an era of growing Government debt, we need 

to ensure Federal spending is necessary and cost-effective. 

Right after I became a Member of Congress in 2011, my own district was hit hard by Hurricane Irene and Tropical Storm Lee. I remember in Bloomsburg a family stayed in their home to try to 

move their possessions to an upper floor. But Fishing Creek rose 

too quickly. The house next to theirs was knocked from its foundation. Water started gushing through their front windows as they 

called for help. They had to be saved by a helicopter. The woman 

there told me she can never live in that home again. 

I will never forget that preparing for natural disasters is about 

more than the loss of possessions; it’s our friends’ and neighbors’ 

lives that could be at stake if we do not plan in advance. As we 

were rebuilding, I was amazed that much of the Federal assistance 

was to rebuild in the same place in the same way, leaving people 

vulnerable to the next storm. 


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7 

The Federal Government has a responsibility to respond after a 

disaster, but we also have a duty to be good stewards of the taxpayer dollar. I look forward to the conversations we will have 

today, the ideas we are going to hear about, and taking the next 

steps to reduce the costs of disasters, and I thank you all for being 

here. 

I ask unanimous consent that Members not on this subcommittee 

be permitted to sit with the subcommittee at today’s hearing, offer 

testimony, and ask questions. 

And with that, I now call on the ranking member of the subcommittee, Mr. Carson, for a brief opening statement. 

Mr. CARSON. Thank you, Chairman. Great words. Good morning, 

everyone, and welcome to today’s hearing. While we have several 

prominent witnesses today, I would especially like to welcome a fellow Hoosier, Mr. Kevin Mickey, from the great Hoosier State. Mr. 

Mickey is the director of The Polis Center at Indiana University 

Purdue University Indianapolis. He is also the new chair of the 

Multihazard Mitigation Council at the National Institute of Building Sciences. 

I look forward to my colleagues learning about the work being 

done in the great Hoosier State, particularly Indianapolis, to address rising disaster costs and losses, plus the latest report from 

the Multihazard Mitigation Council. 

Mr. Mickey’s national leadership and his local work are terrific 

examples of what Indianapolis is doing in the field of emergency 

management. 

I yield back, Mr. Chairman. 

Mr. BARLETTA. Thank you, Ranking Member Carson. We will 

have two panels of witnesses today. On our first panel we have our 

fellow subcommittee member, Carlos Curbelo from Florida. As 

someone from south Florida, Representative Curbelo knows all too 

well the risks posed by natural hazards, the rising cost of disasters, 

and the efforts that have proven successful in Florida to incentivize 

mitigation measures and smart behaviors. Congressman Curbelo 

has been a leader in this area and a great advocate for his constituents in south Florida. 

On our second panel we will be joined by the Honorable Joseph 

Nimmich, the Deputy Administrator of the Federal Emergency 

Management Agency, or FEMA, who has been working on ways to 

reduce the cost of disasters and build resilience in communities to 

avoid disaster losses. 

Ms. Sallie Clark, commissioner of El Paso County, Colorado; she 

is here in her capacity as president of the National Association of 

Counties. 

Mr. Bryan Koon, director of the Florida Division of Emergency 

Management, and the president of the National Emergency Management Association; he is here to talk with us about his experience, as well as help us see things from a State perspective. 

Mr. Eric Nelson, senior vice president, catastrophe risk management for the Travelers Companies, Inc., representing the 

BuildStrong Coalition. 

Mr. Kevin Mickey, chair of the Multihazard Mitigation Council 

of the National Institute of Building Sciences. 

8 

I ask unanimous consent that our witnesses’ full statements be 

included in the record. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. We had hoped that 

Chief David Paulison, the former Administrator of FEMA, would be 

able to join us, but he had other commitments. I do have a written 

statement for the record from Administrator Paulison. I thank him 

and the BuildStrong Coalition for their input on these important 

topics, and I ask unanimous consent that this statement be included for the record. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. 

For our witnesses here, since your written testimony has been 

made a part of the record, the subcommittee would request that 

you limit your oral testimony to 5 minutes. 

Congressman Curbelo, you may proceed. 

TESTIMONY OF HON. CARLOS CURBELO, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. CURBELO. Chairman Barletta, Ranking Member Carson, 

members of the committee, thank you for the opportunity to testify 

before you today. This is my first time testifying before Congress, 

and I am glad to do it here, at the Committee on Transportation 

and Infrastructure’s Subcommittee on Economic Development, Public Buildings, and Emergency Management, especially to discuss 

the important topic of disaster mitigation. I am honored to serve 

with all of you. 

I would like to take the opportunity to share some thoughts on 

controlling the rising costs of the Federal Government when responding to disasters. I am a native of south Florida. And my good 

friend, Mr. Sires, who is working with me on this issue, is from 

New Jersey. We both have a deep and personal understanding of 

the devastating impacts of natural disasters on families and communities, and have seen firsthand what happens when homes, 

schools, and businesses aren’t built to withstand the forces of nature. My family and I lived through Hurricane Andrew back in 

1992. Fortunately, in my part of town, the damage was not extreme. But just a few miles south, where some of my family members lived, the devastation was horrifying. 

Being a Floridian, I know that we have pretty strong State building codes already on the books. But at the national level it is time 

to fix the broken Federal system that is riddled with red tape, 

waste, fraud, and abuse. There is some great work already being 

done in the field of pre-disaster mitigation, and I would like to 

thank Chairman Barletta for being a strong leader on the issue. 

Over the last 30 years we have seen a significant increase in federally declared natural disasters. But instead of taking additional 

steps to focus more on preparing for these disasters with enhanced 

building codes to make communities safer, the Federal Government 

typically waits until after a disaster occurs to react. This is incredibly dangerous and costly, especially with the increase in extreme 

weather events. 

According to the Weather Channel, this hurricane season is supposed to be the most active since 2012. So this hearing and these 

9 

issues are of the utmost importance, and very timely. For these 

reasons, my friend, Mr. Sires, who knows firsthand in New Jersey 

just how costly cleanup is after a disaster, has introduced legislation to work towards promoting stronger building codes at the national level by introducing H.R. 5177, the National Mitigation Investment Act of 2016. 

This legislation works to alleviate losses to resident and commercial property following a natural disaster through preventative 

measures. It would provide incentives for the adoption and achievement in enforcing State building codes. We do this by allowing the 

President to increase mitigation assistance following a natural disaster by 4 percent, based off of the price of cleanup, but only if the 

State is enforcing building codes. This incentive can encourage 

States and localities to be proactive in future building, and also 

save a lot of funds in the long run. 

The bill would also create a pilot program to award grants to 

State and local governments to encourage the adoption and enforcement of nationally recognized building codes. The goals of the grant 

program are to reduce disaster response and recovery costs by increasing resilience of buildings and reducing the amount of damage 

that occurs due to disaster and chronic flooding. Grant awardees 

will be required to accomplish these goals with non-Federal matching funds no less than 25 percent, and FEMA will be required to 

provide reports back to Congress on the success of the program. 

Mr. Chairman, the residents of both Florida and New Jersey 

have had to rebuild communities after the devastating effects of 

catastrophic natural disasters. Returning to a life of normalcy is 

tremendously difficult, and can take many years. Furthermore, 

chronic tidal flooding poses a significant threat to real estate along 

our waterfront communities, especially in my south Florida district 

and the constituents that Mr. Sires represents, as well. This undoubtedly affects insurance rates, property values, clean water supplies, and general public welfare. 

We believe that, through preemptive methods of incentivizing 

State and local governments to adhere to stronger building codes, 

we will alleviate the burdens and costs of the Federal Government 

after a natural disaster. 

I thank my friend, Mr. Sires, for working with me on this legislation. I look forward to hearing from other experts on the issue of 

disaster mitigation in the next panel. This is a topic that requires 

perspectives from diverse geographical locations and multiple industries, and I appreciate being able to discuss my bill today. 

Thank you very much, Mr. Chairman. 

Mr. BARLETTA. Thank you for your testimony, Congressman 

Curbelo. I will now begin the first round of questions, limited to 5 

minutes for each Member. If there are any additional questions following the first round, we will have additional rounds of questions, 

as needed. 

While we usually do not have questions for Members of Congress, Mr. Sires is an original cosponsor of Mr. Curbelo’s legislation, and has a few questions. 

Mr. SIRES. I would really thank you, Mr. Chairman. I am not 

going to ask Mr. Curbelo questions, because we have been working 

on this for a while. 

10 

But I do want to thank you. You and I have firsthand experience 

on how devastating some of these catastrophes are, how it impacts 

life, how it impacts community, how it impacts the economy. And 

I really want to thank you for taking a strong lead on this. New 

Jersey got hit hard, Florida has been hit hard. And I just want you 

to know that I think this is the way to go, you know. Investing in 

mitigation, especially on a national level, where we can put some 

real strong codes has always been on my mind for many years. 

So I just want to thank you for your hard work, and I look forward to continuing, and am proud to work with you on this legislation. Thank you very much. 

Thank you, Mr. Chairman. 

Mr. BARLETTA. Thank you. Are there any questions? Mr. 

Costello? No. 

Ranking Member Carson? 

Mr. CARSON. No, sir. 

Mr. BARLETTA. If not, then we thank you very much for your testimony. Your comments have been helpful to today’s discussion. 

We will now call our second panel. I remind you of the subcommittee’s request to limit your oral testimony to 5 minutes. And 

we will give everyone the chance to be seated. 

[Pause.] 

Mr. BARLETTA. Thank you very much. Deputy Administrator 

Nimmich, you may proceed. 

TESTIMONY OF HON. JOSEPH L. NIMMICH, DEPUTY ADMINISTRATOR, FEDERAL EMERGENCY MANAGEMENT AGENCY; 

HON. SALLIE CLARK, COMMISSIONER, EL PASO COUNTY, 

COLORADO, ON BEHALF OF THE NATIONAL ASSOCIATION 

OF COUNTIES; BRYAN KOON, DIRECTOR, FLORIDA DIVISION 

OF EMERGENCY MANAGEMENT, ON BEHALF OF THE NATIONAL EMERGENCY MANAGEMENT ASSOCIATION; ERIC 

NELSON, SENIOR VICE PRESIDENT OF CATASTROPHE RISK 

MANAGEMENT, TRAVELERS INSURANCE, ON BEHALF OF 

THE BUILDSTRONG COALITION; AND KEVIN MICKEY, GISP, 

CTT, CHAIR, MULTIHAZARD MITIGATION COUNCIL, NATIONAL INSTITUTE OF BUILDING SCIENCES, AND DIRECTOR 

OF PROFESSIONAL DEVELOPMENT AND GEOSPATIAL EDUCATION, THE POLIS CENTER, INDIANA UNIVERSITY PURDUE 

UNIVERSITY INDIANAPOLIS 

Mr. NIMMICH. Good morning, Chairman Barletta, Ranking Member Carson, and the members of the subcommittee. As you know, 

my name is Joe Nimmich. I am the Deputy Administrator for the 

Federal Emergency Management Agency. Thank you for this opportunity to testify about the efforts FEMA is undertaking to reduce 

the rising cost of disasters. 

With the continued trend towards urbanization, particularly in 

large cities located in high-risk areas, and the increasing severity 

of weather events, the Nation faces the potential for ever-increasing costs in responding to and recovering from disasters. 

During a disaster response, FEMA’s primary goal is to support 

the survivors through effective, efficient operations. Though FEMA 

has procedures in place to control costs during a response, one of 

the most effective ways to reduce disaster costs is to invest in comVerDate Aug 31 2005 11:44 Jan 06, 2017 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\5-12-1~1\20214.TXT JEAN
11 

munity resilience before a disaster strikes, thereby reducing the 

physical and financial and particularly the human impacts of the 

event. 

Preparedness and mitigation investments made before a disaster 

strikes significantly lessen the financial impacts on communities, 

States, and the Nation. One of the most effective mitigation tools 

is establishing stringent building codes and standards that ensure 

the property is built to insurable levels. Let me repeat that: Building codes and standards that ensure the property is built to insurable levels. 

You will hear multiple times today that for every dollar invested 

in mitigation, a savings of $4 is achieved, due to the reduced impacts post-disaster. Mitigation programs reduce costs to the American public by an estimated $3.4 billion annually. 

I have to move off my prepared comments to thank this committee and the Congress for taking action such as the post-Sandy 

legislation, where we were able to move the recovery costs forward 

based on assessments, but add the mitigation costs at that time so 

that the building back is better and reduces the future potential. 

FEMA has made significant strides in the last few years, bringing the larger emergency management community together around 

a National Preparedness System. This provides communities a 

common approach to managing the risks, and provides communities the information, tools, and funding they need to make informed, data-driven decisions. This is just one step FEMA takes in 

promoting resilience. 

The National Flood Insurance Program serves as the foundation 

for the national efforts to reduce loss of property from floods, the 

most costly and frequent disaster in the United States. The program identifies areas at risk for flooding, and makes flood insurance available to participating communities. Within the NFIP, the 

Community Rating System to incentivize communities to implement flood plain management practices, offering lower NFIP insurance premiums to participating communities. 

Additionally, FEMA provides hazard mitigation assistance 

through programs such as Pre-disaster Mitigation, Flood Mitigation 

Assistance, Hazard Mitigation Grant Programs. These provide 

funding to communities to implement hazard mitigation measures 

pre- and post-disasters. 

Programs such as the NFIP and the Community Rating System 

and hazard assistance invest in community resilience before the 

disaster strikes. This year FEMA went a step further, developing 

the disaster deductible concept, which encourages States, tribal, 

and territorial investment in resiliency mitigation programs. I 

strongly believe this program will be critical to any effort to reduce 

future disaster costs in a significant way. 

As you have indicated, Congressman Barletta, Congress, the 

GAO [Government Accountability Office], and others have indicated that the Federal cost of disasters continues to rise. The solution of moving the threshold higher merely distributes the cost differently, but does not reduce the cost of potential disasters. With 

the disaster deductible concept, States would have to meet a predetermined financial commitment, similar to meeting an insurance 

12 

deductible, as a condition of receiving Federal funds to rebuild 

damaged facilities and infrastructure. 

Additionally, FEMA would provide credits for those States’ investments in resiliency measures, such as adopting the building enhanced codes or funding preparedness and mitigation projects. 

Using these credits, a State’s deductible could be reduced, thereby 

ensuring that communities have an incentive for investing in resilience. 

During a 60-day comment period, FEMA received 150 responses. 

We are currently evaluating those to provide input from the advanced notice of proposed rulemaking to develop a proposed rulemaking for later this year. While preparedness and mitigation efforts can help us to reduce the costs in many areas, we must continue to acknowledge that demographic patterns are not something 

we can easily or readily influence, but we can take steps to account 

for these patterns by improving building codes, promoting preparedness. 

FEMA strives to invest in our Nation’s resilience and support 

disaster survivors, while being good stewards of the taxpayers’ dollars. We continue to look for innovative ways to encourage risk reduction, promote preparedness and mitigation planning, and efficiently implement the recovery programs in order to reduce both 

the risks and cost to the American taxpayer. 

Thank you for this opportunity today to testify, and I look forward to any questions the subcommittee may have. 

Mr. BARLETTA. Thank you for your testimony, Deputy Administrator Nimmich. 

Commissioner Clark, you may proceed. 

Ms. CLARK. Thank you, Chairman Barletta, Ranking Member 

Carson, and members of the subcommittee, for the opportunity to 

testify before you today on the cost of disasters. My name is Sallie 

Clark, and I am a county commissioner from El Paso County, Colorado, and also serve as the president of National Association of 

Counties, which represents all of America’s 3,069 county governments. 

Although all parts of Government play a role in disasters, counties often serve as the first line of defense when a disaster strikes, 

and are responsible to help our communities recover in the aftermath. Whether it is our emergency managers or sheriffs or 911 call 

centers, county hospitals, or public health departments, or the fact 

that we own the majority of our Nation’s infrastructure, like roads, 

bridges, and airports, Federal policy decisions regarding disasters 

have a major impact on counties. 

My county is no stranger to disasters, and the topic of this hearing is personal for me. Over the past several years, El Paso County 

and our surrounding areas have been devastated by a series of 

wildfires and flash floods that have upended our residents’ lives, 

strained our local economy, and caused enough damage to prompt 

four Presidential disaster declarations over a 3-year period. 

Our county, which long ago inspired Katharine Lee Bates to 

write the famous hymn, ‘‘America the Beautiful,’’ is now home to 

charred, barren hillsides. And the vegetation that once protected 

the area from stormwater runoff has disappeared, paving the way 

for dangerous flash floods. 

13 

But we have been working diligently to help our community recover and become more resilient in the future. Today I respectfully 

submit three principles for your consideration, as you continue to 

discuss Federal disaster spending. 

First, Federal disaster spending should be viewed in the context 

of corresponding spending by State and local governments and the 

capacity of each level to fund disaster recovery efforts. Thousands 

of disasters strike our Nation each year, and the vast majority of 

long-term recovery costs are carried on the backs of State and local 

governments. 

According to NACo’s [National Association of Counties’] analysis 

of FEMA data, over the last 10 years 92 percent of counties across 

the Nation had at least one FEMA-declared disaster. And according 

to materials published by FEMA, the number of disasters successfully handled without request for Federal assistance is estimated 

at 3,500 to 3,700 annually, while only about 35 disasters per year 

received major declarations triggering Federal assistance between 

1953 and 2014. 

Furthermore, it is important to consider the respective fiscal capacity of Federal, State, and local governments when assessing contributions to our Nation’s recovery from disasters. County governments in more than 40 States operate under restrictive revenue 

constraints imposed by State policies, including caps on property 

taxation that limit counties’ ability to raise additional funds in the 

face of rising disaster costs. Local governments spend significantly 

on disasters. And changes to Federal disaster spending should not 

be assessed without consideration of this. 

Second, decreases in Federal disaster spending should not come 

at the expense of State and local governments. The ultimate result 

of shifting Federal disaster costs to State and local governments 

will further deplete resources available for proactive disaster mitigation and resiliency work, resulting in even costlier disasters in 

the future. 

FEMA’s disaster deductible proposal presents some serious challenges for local governments. For example, El Paso County has 

spent many millions of dollars on mitigation projects in the last 

several years, as we have worked to recover from the wildfires and 

flash floods that have ravaged our community, including loss of life. 

But under the disaster deductible proposal, if the State of Colorado 

fails to sufficiently invest in mitigation efforts, public assistance 

funds could be withheld from our county at times when we are in 

most need of Federal assistance. 

In this way we could be punished because of the inaction of an 

entity over which we have no control, despite our best efforts in 

mitigation. And this is just one of the many issues with this proposal that thus far have not been sufficiently addressed. 

Because of this, FEMA has not given local governments confidence that a disaster deductible could be implemented without 

the significant risk that it would simply shift disaster costs from 

the Federal Government to State and local governments. 

And finally, local disaster mitigation efforts bring down the overall cost of disasters, and should be supported by the Federal Government. Counties are uniquely positioned to implement mitigation 

efforts through our regulatory authorities and convening powers. 

14 

Collaboration with the Federal Government helps counties better 

utilize our authorities and resources to mitigate the damage caused 

by disasters, increasing community resiliency, and decreasing impact and cost of future disasters for all levels of Government. 

FEMA’s Hazard Mitigation Grant Program and the other Federal 

programs enable counties to undertake large mitigation projects 

that may otherwise be out of their reach and have tremendous potential to drive down the cost of disasters for all levels of Government. 

Mr. Chairman, Ranking Member Carson, and members of the 

subcommittee, I want to thank you again for inviting the local perspective on this important conversation. And I would welcome any 

questions. 

Mr. BARLETTA. Thank you for your testimony, Ms. Clark. 

Mr. Koon, you may proceed. 

Mr. KOON. Thank you, Mr. Chairman, Ranking Member, and 

members of the subcommittee. My name is Bryan Koon, and I am 

the director of the Florida Division of Emergency Management. I 

am here on behalf of the National Emergency Management Association, which represents the State emergency management directors of the 50 States, territories, and the District of Columbia. 

As the frequency, intensity, and variability of disasters increase, 

it is imperative to reduce risk wherever possible. This will ensure 

that our scarce personnel and financial resources are focused on 

life safety, and those aspects of the built environment where the 

risk cannot be reduced. 

NEMA believes the following. Meaningful cost reduction should 

impact all levels of Government and the private sector, and not 

simply shift the cost between stakeholders. The Government practice of spending more money on disaster recovery than risk reduction must be changed. Hazard mitigation is a cost-effective effort 

with a documented return on investment. Mitigation reduces response costs and speeds recovery. Integrating mitigation meaningfully into recovery can be the catalyst for a communitywide focus 

on preparedness in the future. 

Mitigation and resilience activities by State, local, and tribal governments should be recognized and incentivized by the Federal 

Government. In the long term, cost savings will be realized at all 

levels. 

Much of the legal authority and responsibility for risk reduction 

decisions and activities resides at the local level, such as adoption 

and enforcement of building codes, zoning, and land use decisions. 

Local and tribal governments are critical partners in creating and 

sustaining disaster-resilient communities, and must be engaged in 

this conversation. 

All stakeholders must utilize the best available science and predictive analysis tools to illustrate data-driven result on investment 

calculations. This can only be done when data is made available to 

all stakeholders, and when calculations are not done in a vacuum. 

We must leverage data to support our risk reduction priorities. 

At the urging of Congress, FEMA has undertaken various efforts 

over the last decades to reduce cost and streamline operations. Reengineering of the Public Assistance Program is an excellent example of FEMA working to improve and maximize existing programs. 

15 

While it is still too early to determine the effectiveness of the 

change, we are pleased with the effort, and urge that similar reforms be considered in other Federal programs. 

Investment into the Emergency Management Assistance Compact, or EMAC, leverages Federal grant dollars that have already 

been invested in State and local emergency management programs. 

We must encourage greater investments, as States work with one 

another to reduce the need for Federal assistance, Federal administrative costs, property damage, and, most importantly, save lives. 

In January, FEMA proposed a concept to create a State deductible for federally declared disasters. While there was no consensus 

opinion among the States, many expressed these common beliefs 

about any new proposal: the concept should drive real reduction in 

costs at all levels, and not merely a shift in costs; an appropriate 

amount of time must be given to ensure successful implementation, 

including internal education for FEMA, and training and guidance 

for States; States must also be given adequate time to ensure that 

any budgeting requirements are understood and acted upon by 

State legislatures; the proposal should utilize the opportunity to decrease administrative burden and associated costs; and the deductible cannot result in delayed assistance to those in need. 

Regardless of what happens with the disaster deductible or any 

other current initiative, real progress will be achieved when all 

critical stakeholders are engaged. I would like to wrap up with a 

few thoughts on where we go next. 

The Federal Government should continue to offer incentive programs that allow States to pursue innovative ways to strengthen 

their communities. We recommend FEMA and other agencies continually evaluate these programs to better understand the things 

that deter or prevent communities from fully leveraging these opportunities. 

NEMA also recommends that a study to determine the true cost 

of disasters be conducted that captures not only those direct financial costs borne by FEMA, but also those costs, both direct and indirect, that are paid by other Federal agencies, State, local, and 

tribal governments, and the private sector. 

Position FEMA as a partner in developing a more resilient Nation. FEMA’s focus must transcend response and the agency must 

make advancements in all phases of the disaster cycle. Mitigation 

and long-term recovery are societal investments, not a cost. 

Many of the functions that FEMA fulfills during a disaster could 

be done in a more cost-effective manner by using personnel deployed from tribal, State, or local government through EMAC. Invest in the infrastructure necessary to achieve this goal. 

In addition to improving currently existing Federal programs, 

FEMA and others should recognize outstanding efforts done by 

State and local entities and encourage their adoption, nationwide. 

While many stakeholders approach the issue of increasing disaster 

costs differently, we all have a common goal. As Government officials, private-sector business leaders, and community members, we 

all have a role to play in reducing the cost and impact of disasters. 

I appreciate the opportunity to testify before you today and stand 

ready to answer any questions the committee may have. 

Mr. BARLETTA. Thank you for your testimony, Mr. Koon. 

16 

Mr. Nelson, you may proceed. 

Mr. NELSON. Good morning. Chairman Barletta, Ranking Member Carson, and members of the subcommittee, thank you for holding this important hearing today to examine solutions to controlling the increased costs of natural disasters. My name is Eric Nelson, and I am senior vice president of catastrophe risk management at Travelers Insurance. I am testifying today on behalf of the 

BuildStrong Coalition, a group of businesses and consumer organizations dedicated to reducing human and economic losses from natural disasters. 

As one of the largest property casualty companies in the U.S., 

Travelers provides a unique private-sector expertise that can add 

value to the Federal Government’s mission to manage its own risk 

and losses from natural disasters. 

I would first like to thank Chairman Barletta and the members 

of the subcommittee for their continued leadership in conducting a 

series of roundtables on this topic beginning in January of last 

year. I begin today by outlining three major takeaways from those 

roundtables. And before I do that—that is—the main question we 

want to ask ourselves is what actionable steps can Congress take 

to mitigate risk, lessen the impact of families and communities 

across America, and reduce Federal losses from natural disasters? 

The first takeaway from the roundtables is that, by almost every 

measure, Federal disaster spending is increasing on an 

unsustainable path. Dr. Erwann Michel-Kerjan from Wharton 

showed that Federal cost-share of natural disasters exploded over 

the last 60 years, increasing from roughly 6 percent in 1955 to 77 

percent in 2015. 

The second takeaway from the roundtable is that the States, 

communities, and individuals have little incentive to undertake 

loss prevention measures before a disaster occurs. We are going to 

hear in a minute the Multihazard Mitigation Council conducted a 

study documenting how every dollar spent on mitigation saves the 

Nation approximately $4 in post-disaster relief costs. A new study 

by Wharton indicated that a $1 increase in the Individual Assistance grant program reduces disaster insurance demand by $6. 

These findings represent compelling evidence that the Federal Government is inadvertently fostering short-sighted behavior throughout State and local governments and with individual homeowners. 

The third point from the roundtable is that eliminating disincentives and replacing them with the appropriate incentives for mitigation can benefit all parties involved. The Federal Government 

would benefit by lowering its cost share for disaster assistance. 

States would benefit by alleviating the budget constraint caused by 

disasters, and easing their dependency on Federal aid. Families 

would benefit by reducing personal disaster costs and protecting 

loved ones. Communities and local economies would benefit by enabling citizens and businesses to recover more quickly after an 

event. 

While the benefits are clear, the question remains: What specific 

actions can Congress take? 

The National Mitigation Investment Strategy is based on the latest science and engineering research from world-class research institutions, such as the Insurance Institute for Business and Home 

17 

Safety, or IBHS. IBHS and other research institutions conduct research on building performance standards and simulated disaster 

conditions and controlled environments. Research from these institutions demonstrates that statewide adoption and enforcement of 

building codes can reduce long-term risk. Studies conducted in the 

wake of major disasters also support this finding. 

Another fact. According to IBHS, at least 25 percent of all businesses that close down for 24 hours or more during a disaster 

never reopen. That is staggering stats. And think about the businesses and the jobs. 

Another stat we looked at was the LSU [Louisiana State University] Hurricane Center estimated that stronger building codes 

would have reduced wind damage in Hurricane Katrina by 80 percent, or $8 billion. 

So thank you for your leadership, Congressman Curbelo and 

Congressman Sires. I am pleased to report that the core principles 

from this report have been turned into legislation and introduced 

in H.R. 5177, the National Mitigation Investment Act. This act provides a powerful incentive for States to adopt and enforce statewide 

building codes and authorize a first-of-its-kind competitive grant 

program to improve building code enforcement. 

Further, the legislation includes a provision authorized by the 

chairman in H.R. 1471, authorizing Congress to look at the first 

comprehensive assessment of Federal disaster spending by Congress in over 20 years. Congressional leaders, policy experts, and 

GAO all agree strong building codes, and enhanced pre-disaster 

mitigation would provide life and cost-saving benefits. 

I urge you and your colleagues to support the National Mitigation Investment Act in order to rein in Federal Government’s exploding costs. Chairman Barletta, Ranking Member Carson, and 

the subcommittee, I applaud you for your efforts, and thank you for 

taking up this issue. I would be happy to answer any questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Nelson. 

Mr. Mickey, please proceed. 

Mr. MICKEY. Chairman Barletta, Ranking Member Carson, and 

members of the subcommittee, thank you for the opportunity to 

provide testimony on approaches for reducing the cost of natural 

disasters. My name is Kevin Mickey, director of professional development and geospatial education at The Polis Center at Indiana 

University Purdue University Indianapolis, which has the mission 

of linking academic and community expertise to create strong and 

resilient communities. 

I am here today as the chairman of the Multihazard Mitigation 

Council of the National Institute of Building Sciences, introducing 

a new and unique approach we have proposed for the 

incentivization of private property owners throughout the United 

States. 

The United States Congress established the National Institute of 

Building Sciences in 1974 to serve as an authoritative source for 

both the public and private sectors to improve the built environment. To achieve its mission, the institute has established 18 councils that engage building industry experts in examining and developing tools, technologies, and practices to meet identified needs. 

The institute and its Multihazard Mitigation Council, or MMC, and 

18 

Council on Finance, Insurance, and Real Estate [CFIRE] have been 

particularly focused on opportunities to advance resilience and encourage the most cost-effective approaches to reducing the impacts 

of natural, as well as man-made, disasters. 

As you are aware, there have been numerous efforts at developing increased building codes and standards, mitigation programs, 

scientific studies of best practices, and definitions of resilience. And 

yet we continue to find that the penetration of hazard mitigation 

into the private sector is spotty and woefully incomplete. 

Now, this is not to say that these efforts have not been effective. 

As has already been pointed out, a 2005 MMC study showed that 

implemented mitigation strategies do indeed save on the order of 

$4 for every $1 spent. And currently, the institute is discussing 

with Federal agencies and the private sector a project to revisit 

this 2005 study and expand it to consider all Federal programs, the 

role of model building codes, and the benefits that mitigation provides to the private sector. 

Recognizing the significant benefits achieved through proactive 

investments in mitigation, the limited funding available to support 

disaster mitigation response and recovery, as well as the anticipated increase in disaster events, a new approach is necessary. 

The most cost-effective manner to achieve resilience is through a 

holistic and integrated set of public, private, and hybrid programs 

that capture opportunities available through investment and mortgages and equity real estate, insurance, finance, tax incentives and 

credits, grants, regulations, and enhanced building codes and their 

application. This focus on leveraging private-public sector opportunities to induce corrective action is called incentivization. 

The incentivization approach calls for input, consensus, leadership, and action from a broad spectrum of stakeholders representing the financial, regulatory, and economic processes that 

need to be developed and coordinated to make incentivization part 

of the Nation’s economic fabric. Participants should include those 

who offer incentives such as insurance and finance-related companies, lenders, and foundations, as well as forward-thinking communities and Government agencies and important decisionmakers 

that most definitely need to include homeowners, businesses, and 

utilities. 

The MMC and CFIRE jointly published and developed a white 

paper entitled, ‘‘Developing Pre-Disaster Resilience Based on Public 

and Private Incentivization,’’ which provides a catalog of existing 

programs for different hazards that private and public sector stakeholders can evaluate and then modify or expand to develop incentives. The specifics of incentivization need to be tailored for new 

and existing construction, using optimal resilience measures beyond current law or custom, and to account for hazard risk, locality, business size, and the value of resilient strategies. One size 

cannot fit all. 

Incentivizing the means to achieve resilience before disasters 

occur focuses on monetizing the benefits for incorporating risk mitigation practices in the ordinary course of business. Participating 

stakeholders need sufficient confidence that using incentives to 

achieve resilience will justify investments, underwriting, and loan 

and grant programs. The private sector will not undertake resilVerDate Aug 31 2005 11:44 Jan 06, 2017 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\5-12-1~1\20214.TXT JEAN
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ience investments just because it is sensible, but because it is economically prudent. 

While my written testimony describes many opportunities for 

congressional action, I offer a few specific recommendations here. 

First, every Federal dollar associated with construction, community development, and infrastructure must include a requirement 

that the latest building codes be met or exceeded. 

Second, Congress and Federal agencies should examine all programs, particularly grant-making programs, to identify opportunities to support resilience. 

And finally, Federal investments and programs should require 

investment in mitigation. 

Thank you for the opportunity to testify before you today. Please 

consider The Polis Center, as well as the National Institute of 

Building Sciences as resources as you look to address challenges related to the built environment. 

I look forward to your questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Mickey. 

I will now begin the first round of questions, limited to 5 minutes 

for each Member. If there are additional questions following the 

first round, we will have additional rounds of questions, as needed. 

Deputy Administrator Nimmich, why are the big disasters costing so much money now, and what factors do you think are driving 

this change? 

And then I would also like to hear Mr. Koon and Mr. Nelson’s 

thoughts on that. 

Mr. NIMMICH. Congressman Barletta, I think the biggest challenge is the continued movement of populations into high urban 

areas that happen to have been developed from historic perspectives in very dangerous areas along our rivers for flooding, along 

our coastlines for major storms, and on earthquake faults. The reality of people moving to the cities is one that we are going to face 

for the foreseeable future, and that only increases the potential of 

costs. 

Additionally, the value of property has gone up substantially over 

time. And therefore, the recovery costs continue to go up. What it 

cost to build a mile of roads 30 years ago is very different than 

what it takes to build a mile of roads today. The only solution is, 

in fact, building for those future States that we look at, in terms 

of culverts that can maintain the flow of water, bridges that are 

better maintained, all of the infrastructure that needs to be there, 

as well as public buildings built to standards that allow for the potential of future disasters to be minimized. 

Mr. BARLETTA. Mr. Koon, Mr. Nelson? 

Mr. NELSON. Yes. Just to add to that, the wealth effect that has 

happened in America since the 1970s, clearly, the average home 

size has increased by about 1,000 square feet. 

Echoing the comment more and more Americans moving to areas 

that have higher risk, but adding on top of that—we see it in our 

statistics—if you are growing in an area with poor building codes 

versus good building codes, we see it in the claims data, we see it— 

where we shouldn’t be seeing claims we see claims at low wind 

speeds, at small hail sizes. There is a better way forward, and we 

see it for States like Florida that have had very good adoption of 

20 

building codes. There are proven studies that have shown how 

much it has benefitted. So just to add that to the conversation. 

Mr. BARLETTA. Mr. Koon? 

Mr. KOON. Thank you, Mr. Chairman. I concur with both Mr. 

Nimmich and Mr. Nelson. 

I would also add I believe that, over time, there has been a better 

understanding and better utilization of the funding that is available to communities after those types of disasters. And so perhaps 

we are fully recognizing all of the ways that we can use those Federal, State, and local dollars to help the community recover. 

I believe there is also probably an additional cost on the administrative oversight of those programs, and the program requirements 

to effect the recovery and subsequent mitigation. Those recovery 

programs can often stretch into the decades for some of our larger 

disasters. And so the administrative costs associated with those 

also add to those higher costs. 

Mr. BARLETTA. Deputy Administrator Nimmich, we continue to 

see new disaster aid programs emerge ad hoc in reaction to disasters. They all seem to have different rules and requirements and 

do not seem well coordinated or focused on obtaining the best outcomes. 

Don’t FEMA programs contain strict requirements on eligibility, 

use, and cost effectiveness? And are you aware if other agency disaster programs include such requirements? And is this something 

that Congress should take a look at, so that we can streamline 

these programs and ensure that they are cost effective? 

Mr. NIMMICH. Congressman Barletta, you are absolutely correct 

that we have very stringent codes and requirements in order to 

qualify for Federal dollars. And, as Mr. Koon pointed out, they 

often take a great deal of oversight to ensure that they are effectively and correctly implemented. 

I can speak through the Sandy legislation, that there was a requirement to capture all of the different agencies, including HUD 

[U.S. Department of Housing and Urban Development] and Federal 

Transit Administration, to ensure we had a more complete understanding of where the different investments in recovery were going. 

That is not consistent across all of the different disasters that exist. 

I will tell you that this year, for the first time, the administration passed the Federal Flood Risk Management Standards that require every agency, for every Federal dollar that is invested in recovery, to meet a standard for the first time. That includes the Department of Defense, as well as all the other agencies. So there are 

activities going on to try to ensure that we all build to a high 

standard. But the capture of those costs is not something that we 

currently do. 

Mr. BARLETTA. Now I recognize Ranking Member Carson for 5 

minutes. 

Mr. CARSON. Thank you, Chairman. 

Mr. Mickey, in terms of community buy-in, various reports have 

been released about the rising costs of disaster, benefits of mitigation and the need to take steps to mitigate for disasters. So Congress has also acted to incentivize mitigation. 

So, for example, Congress authorized FEMA to provide additional 

Hazard Mitigation Grant Program funding to States with enhanced 

21 

plans, yet only 12 States have adopted these. So, even with incentives, it is very difficult to get States to take action. 

How do we get the ideas in your report to the public and private 

sectors, and what is needed to actually get ideas implemented? 

Mr. MICKEY. Well, I am happy to say that we have already taken 

some steps in that direction. Just this past January, the institute 

held a symposium here, in Washington, DC. That institute brought 

together experts in the industries that I identified in my testimony 

for the purpose of discussing exactly what was presented and, more 

importantly, to share their own ideas for how to incentivize resilience in their respective sectors. 

The next step that the institute is currently pursuing is to develop a stakeholder leadership council that consists of the leaders 

of the various stakeholder groups to include insurance, loan organizations, bond writing organizations, businesses, utilities, homeowners, and, of course, local, State and Federal Government. The 

goal of that council is going to be to work on formulating the mechanisms for incentivization. 

The idea that we have is that, by getting the buy-in of these 

stakeholders directly—because they will be the ones coming up 

with these incentive strategies—that others will then follow. And 

they are going to be incentivized to help build an enhanced economy that does not currently exist for writing insurance, originating 

loans and bonds, and generating construction activity. 

Ultimately, the goal, as we see it, is to produce a set of products 

that consumers want. Let me give you a couple of examples that 

you will find in our full study. 

State Farm Insurance offered a premium discount in Texas for 

installation of impact-resistant roofs. The result was that products 

related to impact-resistant roofs went from 10 in 1998 to more than 

1,000 in the year 2003. And that program has now expanded out 

into 26 additional States. According to State Farm Homeowners, 

the IRR product, or the impact-resistant roof product, is something 

that they now want. 

And then, just earlier this week in Washington, the mayor of the 

city of Fairhope, Alabama, Tim Kant, was attending the Resilience 

Building Codes Forum, and he made a statement that his community is now considered one of the most desirable places to live, specifically because their homes are recognized as being more resilient. 

And that community is one of the places where the fortified program is found. 

The institute is planning to serve the role of identifying these solutions that I have mentioned. We recognize that there are plenty 

of best practices out there. What we want to do is bring together 

the stakeholders to identify those best practices and see them replicated across the industry. We recognize that costs are high, and 

we are looking for ways to reduce them, and we believe this is a 

creative approach. 

Ultimately, we believe that activities such as implementing 

building codes need to be started to be viewed as a carrot, not as 

a stick. And if the incentives are appropriate, we think that can 

happen. 

Mr. CARSON. Thank you. 

22 

Mr. Koon, you have mentioned FEMA’s new customer servicecentric focus for the Public Assistance Program as a positive step 

forward. Are there other actions FEMA could take with respect to 

the Public Assistance Program in order to reduce disaster costs and 

even losses? 

Mr. KOON. Thank you, Ranking Member Carson. I believe that 

continued implementation of some of the procedures that were 

highlighted in the Sandy Recovery Improvement Act in ways that 

will help us expedite funding to the locals could result in cost savings and improved recovery, as we move forward. 

We are eager to continue to work with FEMA on this PA [public 

assistance] reengineering process, to make sure that they are as 

customer-centric as possible in this situation, so that we can help, 

again, get those communities back up on their feet as quickly as 

possible, at a minimal cost to the Federal Government. 

With regards to the question you asked Mr. Mickey earlier, with 

regard to incentives, if I may, we have done a very good job on providing incentives for programs. You mentioned the enhanced mitigation program, there are incentives offered through the National 

Flood Insurance Program, Community Rating System, there are incentives offered through the Sandy Recovery Improvement Act for 

debris removal. None of those, I believe, have fully met what they 

intended to do. 

And so, continual reevaluation of those incentive programs to determine why they are not being taken up at the level we anticipate 

would be necessary, and then go back and improve the processes 

by which we implement those programs, would help them meet the 

maximum good they were designed to—intended to effect. 

Mr. CARSON. Thank you. And Administrator Nimmich, earlier 

this week the White House hosted a conference on resilient building codes. Included in the fact sheet issued by the White House it 

stated that FEMA is developing a more detailed plan to be put 

forth for additional public discussion in a notice of proposed rulemaking. 

Has FEMA finished reviewing all the comments and arrived at 

determining that it will definitely go forward with rulemaking on 

disaster deductible concepts, if so? 

When can Congress and stakeholders expect the proposed rule to 

even be issued? 

Mr. NIMMICH. Representative Carson, thank you for the question. 

The deductible process has been one where we have reached out 

heavily to the user group. And, as Ms. Clark indicated, we have received over 150 very detailed responses to the advanced notice of 

proposed rulemaking. And we went through the advanced notice of 

a rulemaking process in order to get that type of feedback that Ms. 

Clark indicated, where there are concerns that this might just be 

the ability to transfer costs from the Federal Government to State 

and then to local communities. 

The intent here is exactly what we have been talking about, to 

incentivize and make more consistent the ability for communities 

to invest in mitigation and preparedness capabilities. We are now 

going through those 150 comments to be able to come up with an 

actual proposed rule that will have details in it that we will then 

go out through the proposed rulemaking process to get specific comVerDate Aug 31 2005 11:44 Jan 06, 2017 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\5-12-1~1\20214.TXT JEAN
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ments back on those rules. We anticipate that that will be out some 

time this calendar year, sir. 

Mr. CARSON. Thank you. And I don’t know where we are on time, 

Mr. Chairman, but I yield back. 

Mr. BARLETTA. Thank you, Ranking Member Carson. 

Mr. Graves, you have 5 minutes. 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Chairman. 

Administrator Nimmich, who is in charge within the Federal 

Government of our national efforts in terms of community resilience? Which agency? 

Mr. NIMMICH. So, as you would expect, Congressman, FEMA, 

through the National Preparedness Program, provides the guidance 

for the Federal Government to be able to assist State and locals in 

developing their preparedness programs. And FEMA, working with 

the States through their threat estimating program, as well as 

their preparedness reports, captures that information, as well as 

for the Federal Government—— 

Mr. GRAVES OF LOUISIANA. OK. 

Mr. NIMMICH [continuing]. But each agency themselves are responsible for their support to the preparedness plan. 

Mr. GRAVES OF LOUISIANA. Got it. Administrator Nimmich, do 

you acknowledge the statistics that Mr. Nelson referenced in regard to studies indicating that proactive investments in hazard 

mitigation generate cost savings? 

Mr. NIMMICH. Yes, sir. I said it in my opening statement, and 

that is what the deductible—— 

Mr. GRAVES OF LOUISIANA. Great. 

Mr. NIMMICH [continuing]. Process is trying to—— 

Mr. GRAVES OF LOUISIANA. Thank you. Do you see any of the 

work of the U.S. Army Corps of Engineers as being efforts to reduce hazards or address mitigation strategies? 

Mr. NIMMICH. Sir, we work closely with the Army Corps of Engineers, and—— 

Mr. GRAVES OF LOUISIANA. If you could just—if you don’t mind, 

just a yes or no. I would appreciate—— 

Mr. NIMMICH. Sir, I am not comfortable answering just a yes or 

no, but would do so for the record. We work very closely with the 

Army Corps of Engineers, and I do believe that an awful lot of 

their efforts go to reducing the impacts of potential future disasters. In North Dakota, they have worked very closely with the city 

of Fargo to be able to develop—— 

Mr. GRAVES OF LOUISIANA. All right. 

Mr. NIMMICH [continuing]. Capabilities—— 

Mr. GRAVES OF LOUISIANA. Thank you. I will go ahead and answer these so I don’t burn through all the time. 

So you have the U.S. Army Corps of Engineers that spends 

money in addressing flood damage reduction projects, hurricane 

protection. The administration has budgeted, I believe it was, $1 

billion competition, resiliency competition, through HUD. You have 

a climate resiliency fund the Department of the Interior is trying 

to establish under the last budget request. I think it was $2 billion. 

FEMA has a Hazard Mitigation Grant Program and a Pre-disaster 

Mitigation Program. Does it really make sense for us to have five 

different programs out there, all attempting to address various asVerDate Aug 31 2005 11:44 Jan 06, 2017 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\HEARINGS\114\ED\5-12-1~1\20214.TXT JEAN
24 

pects? Are these properly coordinated? Are they properly 

prioritized? 

And, you know, the reason I bring this up, I am from south Louisiana and we have had more than our share of disasters, whether 

it be Hurricanes Katrina and Rita coming up from the south, we 

had record high water on the Mississippi River in 2011 and again 

this year in January for the first time ever, in January of this year. 

We had Hurricanes Gustav and Ike in 2008, Hurricane Isaac in 

2012. We have had more than our share of disasters. 

And watching over and over again, as we come in and we have 

FEMA come in and pick up the pieces after a disaster, together 

with millions and millions of dollars spent by our parishes and 

spent by our State government, the Corps of Engineers in some 

cases—I can think of a project in St. John Parish, St. Charles Parish affecting Ascension, Livingston, and St. James Parishes, that 

that project has been in the study phase with the U.S. Army Corps 

of Engineers now for over 40 years, over 40 years. 

Mr. Chairman, Mr. Ranking Member, my point here is that, look, 

everyone wants us to reduce disaster spending. Everyone does. The 

solution here, as I think Ms. Clark noted, Mr. Koon noted, the solution here is making the principal proactive investments in making 

our communities more resilient. 

In recent years we have had FEMA, with their 500-year flood 

risk management regulations. We have had Biggert-Waters in 

2012, the revisions in 2014. We have proposals now to increase the 

cost share associated with disaster response on our counties, on our 

parishes, and our State governments. 

Mr. Chairman, my point is that making proactive investments is 

the solution to reduce our overall disaster expenses. We estimated 

that if we had spent somewhere around $8 billion or $9 billion, 

simply finished authorized projects in south Louisiana that were 

supposed to be built by the U.S. Army Corps of Engineers, we could 

have saved an estimated 90 percent of the about—and you can justify numbers—anywhere from about $120 billion to $150 billion 

that were spent in response to those 2005 hurricanes. We could 

have saved that. And not to mention—and very, very important— 

in fact, more important, Mr. Chairman, we think we could have 

saved over 90 percent of the 1,200 lives that were lost in south 

Louisiana. 

So, all of these efforts by FEMA I think are being done in a vacuum. We need to be coordinating, better coordinating our efforts to 

be proactive, to protect and make our communities and our ecosystem more resilient, and stop all this coming in after the fact and 

spending exponentially more dollars. There are studies, there are 

models. Yet all we are seeing, rather than following the data, following the recommendations and the outcomes of these studies and 

these experiences following these catastrophic disasters, instead we 

are further making disparate investments in programs that aren’t 

really contributing or heeding the recommendations of these reports. I am very concerned about what—this trend that we are seeing. 

And lastly, Mr. Chairman, I just want to say that in south Louisiana much of our vulnerability is actually attributable to the actions of the Federal Government. We have lost 1,900 square miles 

25 

of our coast. The majority of that is because of how the Corps of 

Engineers manages the water resources in this Nation. That is why 

we have lost, that is why we have become more vulnerable. 

Arkansas doesn’t care when hurricanes come because Louisiana 

is their buffer. Our buffer is disappearing, and that is why you are 

seeing these costs. 

And so I just want to urge the committee, Mr. Chairman, Mr. 

Ranking Member, as we move forward on legislation we need to 

make sure we don’t get too myopic in this view, and that we are 

looking comprehensively at all of these efforts that are underway 

that, quite frankly, should be under this subcommittee’s jurisdiction. I yield back. 

Mr. BARLETTA. Thank you. 

Mr. Sires? 

Mr. SIRES. Thank you, Mr. Chairman. You know us. We learn 

from all these disasters. 

Mr. Nimmich, we picked up how to better construct, do better 

codes, everything else. Why do you think some of these States are 

so reluctant to do this mitigation codes and reinforcement? Why do 

you think that is? 

Mr. NIMMICH. Sir, I think the decision on building codes is almost always local, and those decisions based on other economic factors, desires for certain development. 

But I do think that we, as the Federal Government, need to continue to ensure that when we invest, it is invested to codes. Currently, FEMA has out for comment with our stakeholder groups 

changes to our Public Assistance Program that would require 

whether a State has or a community has code or doesn’t have code. 

If they don’t, if they want us to build back their infrastructure, it 

will have to be built back to either a national or an international 

code. 

So we are taking it very seriously to say even if a community 

doesn’t feel that codes are of value, we do. And when we invest 

Federal dollars, we will build back to a code. 

Mr. SIRES. You know, one of the things that bothers me about 

New Jersey is the fact that 3 years later we still have people that 

have not gone back to their homes. And there is plenty of blame 

to go around, you know. 

I think that, in terms of these disasters, you not only have to 

mitigate it before, but I think there has got to be some sort of postdisaster, where you are ready to come in and watch over some of 

these guys that are the fraudulent applications and everything 

else, and not take years before we can come up with the people 

who are perpetrating a fraud. 

And to me, I think you have to be ready right after the disaster. 

Can you talk to that? 

Mr. NIMMICH. Yes, sir. And I can proudly say that we have 

moved rapidly since Katrina to ensure that we have programs that 

have as much protection as possible. 

But I will tell you, sir, that if we have to err on the side of supporting a valid requirement and a fraudulent requirement, we are 

likely to support that requirement. But it takes time to go back and 

relook. 

26 

And as you know, in New Jersey now you are seeing the first 

cases of prosecution of fraudulent—where people have taken money 

from those that need to recover in their primary homes, claiming 

that their secondary home was a primary home, and taking those 

dollars away from those people that need it. 

It does take time, and we have to realize that during that immediate post-disaster we want to make sure that those people that 

need the money get it. And there will be people that take advantage of it, but we don’t give up. And as you said, sir, it may take 

too long, but we don’t stop. We continue to go back and recoup 

those monies from people that fraudulently or accidentally applied 

for resources that they didn’t deserve. 

We are down below the national standard—from financial institutions in recovering money, down below 1 percent. So I think we 

do a pretty good job of ensuring that the money goes to those people who deserve it and need it. 

Mr. SIRES. You know, I come around—I used to be one of these 

guys that you have to require certain things. And I come around 

a lot to providing incentives. Because if the Federal Government is 

going to give you some money, I think that mitigation codes or 

storm codes should be part of it. 

I look at these disasters in the Midwest. I see these tornadoes, 

Oklahoma—I am not trying to single out Oklahoma, but it just 

seems that they get more than anybody else. And I see where 

schools are even damaged. You know, to me, if the Federal Government is going to give a State money to build a school, you should 

require a stronger code to build the schools. And I understand that 

these schools were built before. But, you know, going forward, I 

think that is something that we should look into, because some of 

the schools always—they serve as shelters, too, in some of these 

communities. And I see the damage in some of these schools and 

some of these homes. 

So I think—I am coming around to the idea of incentives, Mr. 

Chairman, to provide these people so they can build the kind of 

codes that they need to deal with some of these disasters. Thank 

you. 

Mr. BARLETTA. Thank you. I will now begin a second round of 

questions. 

Commissioner Clark, I understand your district had major 

wildfires that destroyed a tremendous number of homes and property. Can you explain some of the challenges you have had trying 

to mitigate the risk of post-fire flooding? And do you have any recommendations for Congress to improve our mitigation programs? 

Ms. CLARK. Thank you, Mr. Chairman. Yes, we have, obviously, 

had—and I don’t know what fair share is, but we have had more 

than our fair share of disasters in El Paso County, Colorado. What 

I would like to talk about specifically is the things that I think we 

can do from the standpoint of local community resiliency. 

And I think that what tends to happen—and it happens at the 

local level, at the State level, and particularly at the Federal level, 

is we have silos built up between agencies. The fire that happened 

in Waldo Canyon was almost more than 95 percent on Federal forest land. That pre-mitigation needs to happen from the Federal 

level, because that is Forest Service, and the Forest Service is now 

27 

spending more than 50 percent of its budget on—frankly, on responding to wildfires, versus pre-mitigating ahead of time. We have 

no control over that at the local level. 

What we do have control over is working with fire-adapted communities, community wildfire protection plans, and providing incentives, as some have said up here, which is very important, but 

for individuals to be able to mitigate ahead of time, to provide 

firewise communities. 

I was just up in, actually Crystal Park, which is a one-way-in, 

one-way-out community built up on the mountainside. And they 

have taken steps to do that. And some of those programs that help 

them buy fire equipment to be prepared locally, to take that ability 

to look at, from a personal standpoint, to be able to provide that 

mitigation, will be helpful. We tend to be really—you know, when 

we look at an ounce of prevention is worth a pound of cure, doing 

that pre-mitigation ahead of time. 

I also think it is important to note that we have—when there is 

a disaster—and I have a small business, when the fire happened 

I lost thousands of dollars of reservations, and then we have this 

rolling disaster that keeps happening—to try and make sure that 

those that may not live in wildland interface areas, where the 

drainage all comes down into a small community, to be able to look 

at the fact that that mitigation immediately following the fire will 

provide the resiliency to slow down the debris and the large flash 

floods that happen as a result. And it is hard to understand, if you 

are not from Colorado, because—if you are not from a Western 

State that has those drainages that drain right down into it. 

So I think tearing down the silos, understanding there is an impact on small business and how devastating that can be—one-third 

of small businesses go out of business after a major incident, and 

I think that that is really important, and looking at the flexibility 

in the requirements. Even though we want—we definitely want accountability, but sometimes the requirements preclude you from 

even asking for the particular money that you may otherwise need. 

Mr. BARLETTA. We talked a lot today about how much the Federal Government pays out for disasters. But the other major payers 

in disasters are insurance companies. 

Mr. Nelson, can you discuss how insured losses generally compare to the Federal assistance provided in the wake of a disaster? 

Mr. NELSON. In the wake of a disaster it is the role of the insurance company to make that insured whole again. And so we are 

paying for the building, we are paying for the contents. If you are 

a small business, we are giving you business income interruption 

coverage. We are also providing additional living expense. And so 

significant dollars, compared to—you know, usually individual 

grants are small grants to consumers. They are not going to make 

you whole again. They are not going to be enough to rebuild your 

home, in general speaking. 

So, it is important. The insurance industry plays a major role in 

natural disasters. And our trends, because of the weather volatility, 

we have been seeing those trends go up. And so this is an important concept because what do insurance companies do? We spread 

the risk over people and over time. And as the risk changes, the 

28 

prices change. And so it is important that we bend the cost curve 

for the Federal Government and bend the cost curve for consumers. 

Mr. BARLETTA. Every one of you mentioned the importance of mitigation and how evidence shows that for every $1 invested, $4 

is saved. Most Federal mitigation funding is provided through the 

Hazard Mitigation Grant Program after a disaster declaration. 

I ask this of every one of you on the panel, if you could give a 

brief answer. How can we more proactively address the mitigation 

and shift the investment to before the catastrophe? 

Mr. NIMMICH. Congressman Barletta, I think the first thing I 

need to do is again thank the committee and the Congress for the 

post-Sandy legislation that allows that mitigation money, that postdisaster mitigation money, to be identified much earlier in the 

process, and then be applied as part of the recovery process. 

Clearly, as we look at all of the different mitigation programs we 

have—pre-disaster, in 2015 Congress gave us the authority to do 

post-mitigation or hazard mitigation for fire grants, to be able to 

restore those burned areas in a much more robust way. I would ask 

that we could consider reauthorizing that ability to use the fire 

mitigation grants as a hazard mitigation grant developer. 

But the reality for us comes back to how do you incentivize every 

level, from the individual, through insurance programs, to the local 

to the county to the State and the Federal Government to be able 

to invest in that. We believe that the deductible offers that opportunity. We continue to need to work with our stakeholders to define 

what the reasonable level of a deductible should be, and then how 

do those building codes and the investments that Ms. Clark has indicated that the counties and the communities do reduce that deductible in order to be able to support those communities that have 

invested in their own well-being. 

I do believe that it is mitigation that ultimately reduces the cost 

of a disaster, and we need to find proactive ways, as you have all 

indicated, to incentivize that approach. 

Mr. BARLETTA. Ms. Clark? 

Ms. CLARK. Thank you, Mr. Chairman. As it relates to the Hazard Mitigation Grant Program, it is a very important component of, 

I think, what communities need to be provided for. There are some 

issues, I think, within the HMGP programs that need more flexibility, however, in order to be able to utilize those funds best at the 

local level. We see sometimes that there is not an understanding 

of unique situations, and I will give an example 

In 2012 was the Waldo Canyon fire. We just closed on three 

houses 2 weeks ago for several homes that were in the floodway 

as a result of a fire that happened on Federal forest land. They had 

never had flooding ever before, and it has taken us, really, that 

length of time to get that completed. 

As it relates to, additionally, the Hazard Mitigation Grant Program, we at our Office of Emergency Management appreciate being 

able to utilize those dollars, but sometimes the accountability, 

where you may see it as accountability, the paperwork is so extreme for such a small amount of money that it makes it really unusable for us to even apply for the grants. 

And so, we do take it very seriously, but I think sometimes those 

programs need to be looked at as how can those dollars actually get 

29 

to the folks that need the help and provide some additional assistance for those individuals who want to take personal responsibility 

for trying to reduce mitigation—to reduce the disaster, eventual 

disaster declarations, by looking at being proactive on their own 

personal property. 

The Black Forest fire was almost entirely on private property. 

That was the second fire. So we have two different fires, and we 

have seen different problems in each of those. 

Mr. BARLETTA. Thank you. 

Mr. Koon? 

Mr. KOON. Thank you, Mr. Chairman. The—as a director of the 

Florida Division of Emergency Management, I have the luxury of 

a fairly large staff and adequate funding. And so, every time there 

are new programs out there, every time there are new incentives, 

I have personnel whom I can assign to that to make sure that we 

take full advantage of that program. 

However, a good number of States do not share that luxury, and 

a good number of the counties across the country do not have that 

same luxury. So every time a new program is put into place, they 

have to determine how they can help meet the needs of that program, because they are using current staffing, current year budgeting and the potential for a payoff down the road. 

So I think a few things would assist in this effort. What would 

be—as Mr. Graves suggested, consider clarifying, consider consolidating, consider streamlining existing programs today, rather than 

creating just additional new programs, which would enhance the 

administrative burden on already overworked officials at the State 

and local level. 

I think a better data analysis of the true costs of disasters and 

how they impact all levels will help us calculate the true return on 

investment for our participation in these programs, and help us 

make those decisions. 

And finally, moving the mitigation cycle, moving the mitigation 

program forward, and so that it is not something we start thinking 

about on day one of the recovery, it is something that is done 

ahead of the disasters, so that if the funding comes along with that 

disaster, we are ready on day one with actionable mitigation plans 

to help—implementing those programs, and we don’t rebuild exactly as we were before. 

Mr. BARLETTA. Thank you. 

Mr. Nelson? 

Mr. NELSON. First, I just want to start with we have to get the 

word out about mitigation. There is a perception that mitigation 

costs so much money to consumers. Travelers, we are a proud supporter of Habitat for Humanity. We went out and we built a dozen 

fortified homes along the coast of America, and I personally participated in building one in New Haven, Connecticut. The average cost 

is only 2 to 5 percent on new construction. And so, we just have 

to make sure that consumers understand this. And so that is first. 

Second, clearly, you got a difficult decision in front of us. You 

know, spending is so difficult in Congress today, everyone understands that. But we have to consider spending more at pre-disaster 

mitigation funds—again, proven techniques with IBHS and other 

30 

studies—and evaluate that, and evaluate streamlining some of 

these FEMA programs. Thank you. 

Mr. BARLETTA. Mr. Mickey? 

Mr. MICKEY. I think just as importantly, we have to understand 

that the action of mitigation is not simply something you do to 

check a box and get FEMA to sign a check over and move on. It 

is something that needs to be a proactive, positive investment to 

incentivize, again, those communities we are promoting through 

the institute to take positive actions. 

Mr. BARLETTA. Thank you. 

Ranking Member Carson? 

Mr. CARSON. Thank you, Chairman. 

Ms. Clark, disaster assistance reformed under the act of 2015, 

the committee calls for a very comprehensive study on trends and 

disaster costs and losses. As you mentioned earlier, local government bears a large portion of the disaster costs, yet data is very 

scarce. What is NACo doing to collect the information so that the 

data can be considered as part of the comprehensive study, and ensure that current Federal disaster costs are not just being shifted 

to local communities? 

Ms. CLARK. I am assuming that is for me. I wanted to say that 

I think that that brings up a very—— 

Mr. CARSON. Or Mr. Koon. 

Ms. CLARK. OK. I will start and then—I think that the—that 

local government really is here from the Government, and here to 

help. We want to know from you how we can best provide you the 

data and the information. 

For those of us who have done this before—and in my case we 

have had four declared disasters, so we have got a lot of information. And I think it would be helpful to sit down with those communities that have been through the processes, and all the different 

silos, and to be able to have feedback from us on how to change 

things that—policies that may not be working in the best interest, 

first of all, of our communities and, secondly, of our local governments. 

Mr. CARSON. OK. 

Mr. KOON. Ranking Member Carson, the question you asked is 

a question that many of the folks asked as they were responding 

to the proposed deductible concept from FEMA, which is how do we 

capture all of those costs? What is the methodology? What is going 

to apply in that situation? Is it you go out and remove a tree that 

just fell in the road overnight, or do you—is there a certain threshold at which you start measuring those dollars? We still are having 

those kind of conversations to figure out exactly what costs do we 

need to capture. 

But I do agree that it is very important that we do so because, 

again, that helps feed the return on investment calculations that 

we need to do in this situation. 

The flip side of what I offered earlier—and the fact that I have 

a fairly large agency and a fairly adequate budget, is that the 

threshold for Florida to receive a Presidential declaration is also 

fairly high. And so, we can have a $10 million or $20 million or 

even a $25 million disaster in the State of Florida that will not be 

eligible for a Federal declaration. So every year the State of Florida 

31 

spends hundreds of millions of dollars internally at the State and 

local level to help us recover from those situations. 

So I concur that we should develop methodology by which we can 

all operate off the same sheet of music when understanding what 

these costs are. 

Mr. CARSON. Yes, sir. Thank you. 

Mr. Nelson, you mentioned in your testimony that the Insurance 

Institute for Business and Home Safety simulating disaster conditions on homes and businesses in a controlled environment, you 

mentioned that. What types of adjustments to building codes has 

the institute found to be most effective in keeping a structure 

standing after a disaster? And how much would these changes cost 

during new construction? 

Mr. NELSON. You know, IBHS, we have come out with a program 

called FORTIFIED. There’s a bronze program. The bronze program 

concentrates on the roof coverings. And so we have looked at taping 

the roofs, the seams on the roof deck. And maybe that is about 

$500 to $1,000. And that prevents water intrusion in case you lose 

your shingles. So that is the first step. 

The second step that is a proven technique is really bolstering all 

your openings, either covering your openings or putting some other 

reinforcements in place. And then the gold standard is looking at 

the building kind of end to end, looking how it is anchored at your 

foundation, through the walls, and to the roof. 

And so, these are techniques that we are very happy to say some 

States have embraced. Alabama, coast of Alabama has now embraced the FORTIFIED standards within their codes and their 

coastal counties. And they have also put in a program to try and— 

for mitigation grants. 

And so, we are seeing a lot of success with this program. We are 

even seeing some builders voluntarily building these homes. 

Mr. CARSON. Thank you. 

And lastly, for a fellow Hoosier, Mr. Mickey, The Polis Center 

provides valuable services necessary to understanding the disaster 

threat and risk. How does The Polis Center help us understand, 

make its services known to others, and can you expand on some of 

the successful collaborative projects with State and local entities 

that the center has taken? 

Mr. MICKEY. Thank you for the opportunity to talk both about 

The Polis Center and, quite honestly, the State that I am very 

proud of, the State of Indiana. 

Polis has been around since 1989. We have had 27 years of successfully linking community and academic expertise. Our goals are 

to build capacity in the State’s agencies, the volunteer associations, 

the citizens of the State of Indiana, and so forth. 

We have done a lot of work in emergency management, but the 

reason that we have been successful is not because uniquely of the 

resources in our center, but because of the atmosphere that exists 

in the State of Indiana. 

Case in point, within Indiana we have had the privilege of working with the Indiana Department of Homeland Security to complete 

mitigation plans in close collaboration with the counties and cities 

and towns of the State of Indiana. The approach we take is highly 

collaborative. So, unlike many situations that we hear about where 

32 

a plan is created and set aside on a shelf, if you would—which, unfortunately, I think does often happen—that plan becomes a living 

document, something that the community is engaged in, that people are brought to the table to discuss and be a part of. And I think 

that is a critical component of making mitigation a success. 

Part of the reason that we are also successful—and something I 

am exceedingly proud of—is in the State of Indiana we understand 

the importance of information. FEMA created a tool that I am sure 

many of you are aware of a few years ago called Hazus-MH. And 

Hazus has become a very significant part of the portfolio of resources in the State of Indiana that we use, the technology that allows communities to estimate the impact of hazards, specifically 

floods, earthquakes, and hurricanes, and they are able to do that 

in a more profound and successful way by integrating local resources. 

In my State I am happy to say that we have 100 percent of the 

counties that, even though they have disagreements, to be sure, 

they have managed to find a way to agree to share information. So 

anyone, anywhere, any time can go out to the IndianaMAP and 

download every single parcel in the State of Indiana: road information, hydrology information, and of course, hazard information. 

That information, combined with other resources in the State, 

makes it possible for our citizens to be much better protected and 

much better able to respond to disasters than others might be. 

We have taken that success story, I am proud to say, to other 

States as well. We are very much about building capacity. We have 

worked extensively in the States of Georgia, in West Virginia, in 

many other areas. In total, we have worked in over 36 States, including, I believe, every one represented by members of this committee, and over 100 cities. 

Building capacity means building tools, it means building work 

flows, it means, very importantly, education. And not just in how 

to do hazard analysis, but also what that means to a community, 

in terms of its long-term resiliency. 

We believe firmly in connecting the fabric of the community to 

the solution. So hunger, homelessness, issues like that are just as 

important in understanding how a community will or will not be 

resilient to a disaster as understanding whether a building is going 

to fall down or stay upright. And we look at all of those things and 

try to bring them together in a synergistic way in conversations 

with a lot of people to take advantage of that knowledge. 

Mr. CARSON. Thank you, sir. 

Thank you, Mr. Chairman. I yield back. 

Mr. BARLETTA. OK. Mr. Graves? 

Mr. GRAVES OF LOUISIANA. Thank you, Mr. Chairman. 

Mr. Nimmich, the Biggert-Waters 12 directs FEMA to incorporate simulations of climate change into some of the estimates 

that you develop in regard to premiums. Could you discuss how 

FEMA is doing that, and how you are addressing uncertainties in 

regard to climate models? 

Mr. NIMMICH. So through Biggert 12 we have been required to 

use the best science possible to determine the flood risk map, sir, 

and we continue to work with the scientific community and local 

communities to be able to identify what those potentials might be 

33 

in the future, in terms of climate adaptation, particularly with the 

rising tides in flood zones. 

Mr. GRAVES OF LOUISIANA. Yes. And so the question is how do 

you plan to address the uncertainties in regard to the models of future sea rise and potential for storm intensity changes and things 

along those lines? 

Mr. NIMMICH. Sir, I will answer that for the record. 

Mr. GRAVES OF LOUISIANA. Thank you. Another question. The 

Technical Mapping Advisory Council that was established, they indicated in a recent report that they believe that there was about 

a 40-percent uncertainty rate associated with some of the flood 

models that were used. 

If you take that degree of uncertainty, which is extraordinary, 

and you put on top of it trying to estimate future changes in sea 

rise, future changes in the potential for storm intensity and frequency, it seems like we are getting to a range of uncertainty 

that—it is just no longer helpful to even use those types of models 

and predictive information. Could you comment on that? 

Mr. NIMMICH. Yes, sir. I don’t think you can go to the extent of 

not using some sort of a model or a predictive capability when you 

are trying to determine whether mitigation and preventative actions need to be taken. So, while there is a certain degree of uncertainty, we continue to use the best available information, based on 

a wide range of scientific data that is available. 

Is there uncertainty? There is always uncertainty in it. But we 

have to start somewhere to be able to create a basis on which the 

risk exists in the community. 

As you well know, sir, in your area we have just experienced 

floods in northern Louisiana that no one would have expected, 

based on the science that was there. So there is a great deal of uncertainty when you deal with any weather event. So we need to 

continue to find the best science at the time that we create the risk 

map and then, as often as possible, come back and reevaluate that 

science. 

Mr. GRAVES OF LOUISIANA. Yes, and I certainly concur that we 

need to be using the best information we can in regard to informing decisions. The concern is that, as you know, there are significant consequences of determining flood maps and NFIP premiums. 

And with your 500-year flood risk management, there could be significant and severe financial implications. 

My point is that, having such severe implications, yet having so 

much uncertainty with the predictive models, that is not necessarily a very comfortable combination of issues. And I just want 

to urge, as you move forward, that you keep that in mind, that— 

you need to keep in mind the reliability of the information and 

models, and take into account the consideration of financial implications on counties, parishes, and others, moving forward. 

Director Koon, first I want to say that I know a number of people 

that know you, and you have a great reputation. Thank you for 

being here. And I appreciate your testimony. 

A week before last, Congress—the House of Representatives 

passed H.R. 2901, which was legislation—and Mr. Nelson, excuse 

me, I am going to ask you a question on this, as well—that bill, 

what it does is it begins—or it allows for private flood insurance 

34 

to serve effectively as a surrogate for the NFIP. Sounds like a good 

idea. Private sector, in many instances, could be more efficient 

than Government can. 

So, face value, sounds like it is a good idea. However, being from 

your area, being from the area where I was born and live, I am 

very concerned that what we are going to see is we are going to 

see private insurers that come in that start cherry-picking the policies that have the lowest risk. 

And so, what ends up happening under Biggert-Waters 12 and 

the reforms in 2014 is you are left with the policies that have higher risk. 

Now, Biggert-Waters 12 and the revisions from 2014 require that 

the loan that was given to NFIP following the 2015 floods, that it 

be repaid. It requires that a reserve fund be established. It requires 

that actuarial rates be charged under flood insurance. 

So my point is that the private sector insurance companies aren’t 

going to have those same financial burdens. All they are going to 

have is whichever policies they choose. The NFIP is going to have 

now a smaller pool of ratepayers because the private sector is pulling some of those off. So you are going to have the higher risk, 

small pool that are still going to be subjected to establishing a reserve fund, paying off this debt of, whatever it is, $17 billion. 

Are those concerns—am I—should I not be concerned about this? 

Is there something there that we should be concerned about, and 

should NFIP reform be more comprehensive than just doing H.R. 

2901? 

Mr. KOON. Thank you for the question, Congressman. And I think, actually, the debt is closer to $23 billion on the National 

Flood Insurance Program. 

Mr. GRAVES OF LOUISIANA. Thank you. 

Mr. KOON. I think they would like to get to $17 billion. 

The answer—my opinion is that there needs to be more comprehensive reform of the National Flood Insurance Program. And 

I would urge this committee to become engaged with that conversation next year, when it is up for reauthorization, to work with the 

Committee on Financial Services on that, because there is lots of 

components of the National Flood Insurance Program that I think 

directly relate to the conversation we are having here today with 

regards to mitigation activities that can take place across the country. 

One of the things that I express quite frequently in the State of 

Florida—and did so just yesterday before the Governor’s Hurricane 

Conference general session—as a result of some of the actions during Biggert-Waters of 2012, we have seen a significant reduction in 

the number of flood insurance policies across the country, and specifically in the State of Florida. The State of Florida has lost over 

10 percent of the flood insurance policies. We have gone from just 

north of 2 million flood insurance policies in the State to about 1.8 

million. 

What that means is those citizens, the next time they have a disaster, next time they have a flood in their community, they are not 

going to be able to recover like they would have, had they had flood 

insurance, and there will be additional costs imposed upon the Federal Government because they may now be eligible for assistance 

35 

from FEMA. They may be eligible for assistance from the State, et 

cetera. So those costs are going to be borne by the individuals, 

those costs are going to be borne by Government. 

So a comprehensive analysis and reform of the National Flood 

Insurance Program, I believe, is completely appropriate at this 

point. 

Florida, last year in the legislative cycle, did do some things to 

reduce some of the regulatory burdens on private flood insurance 

in the State of Florida. And so now there are private insurers offering flood insurance policies in the State. It is very nascent at this 

point. There is probably 2,000 to 3,000 private flood insurance policies in the State, but it is a start. 

I do share your concern about some of the cherry-picking aspects, 

and I am not an insurance expert, and I will defer to Mr. Nelson 

on that, but we have had a similar situation in the State of Florida 

with the Citizens Insurance Company and the wind-borne insurance. They have depopulated a large segment of their policies to 

the private market, and still remained financial feasible. So I believe Mr. Nelson may be able to elaborate on that a little bit. 

But I believe, again, comprehensive reform of the National Flood 

Insurance Program is absolutely appropriate at this point, and can 

tie in some of the mitigation activities that we have discussed thus 

far. 

Mr. NELSON. Thank you. First, let me say I would echo your concerns that you are raising. I think those are profound issues that 

we have to evaluate. So—— 

Mr. GRAVES OF LOUISIANA. Mr. Chairman, for the record, I just 

want to note that he called me profound. 

[Laughter.] 

Mr. NELSON. So the—I do think, if you just step back for a 

minute, Travelers—let me just back up. Travelers, we do write 

flood insurance on a commercial basis for commercial insurance. 

We do not write homeowners flood insurance and we have no plans 

to enter that market. We also do not have a formalized position on 

this, I will just express my own points of view. 

So when you look at it—I have looked at a lot of the FEMA rate 

plans—I think they need to modernize their rate plans. The private 

industry should not be able to compete with FEMA on price. Remember, we have to buy reinsurance. We have to have enough capital to meet our obligations. That means we have to have a pool 

of money. Typically, that is our shareholders’ money, so they have 

to get a return on that. We should not be able to compete with 

FEMA. 

And so you step back, their plan needs to be modernized. Their 

rate plan, I have looked at it, it is not at all consistent with how 

the private sector looks at insurance, sells insurance, and has a 

rating plan. So let’s start with that, let’s modernize the program, 

and then let’s evaluate how we can privatize to think about that 

cherry-picking aspect. Thank you. 

Mr. GRAVES OF LOUISIANA. Thank you. 

Thank you, Mr. Chairman, for your generosity. 

Mr. BARLETTA. Thank you. And I think Mr. Graves made a good 

point earlier, that Congress needs to look across the Federal Government, including levees and flood control projects, when we try 

36 

to bend the cost curve of disasters. The disaster cost study in our 

FEMA authorization bill should help and make such recommendations to Congress. 

And I also want to thank Administrator Fugate for the disaster 

deductible proposal. I don’t know if it is the right solution, but we 

need a vigorous debate and innovative ideas if we are to drive 

down losses and not just shift costs between payers. 

And I want to thank you all for your testimony. Your comments 

today have been helpful in our discussion. If there are no further 

questions, I would ask unanimous consent that the record of today’s hearing remain open until such time as our witnesses have 

provided answers to any questions that may be submitted to them 

in writing, and unanimous consent that the record remain open for 

15 days for any additional comments and information submitted by 

Members or witnesses to be included in the record of today’s hearing. 

[No response.] 

Mr. BARLETTA. Without objection, so ordered. 

I would like to thank our witnesses again for their testimony 

today. If no other Members have anything to add, this subcommittee stands adjourned. 

[Whereupon, at 11:47 a.m., the subcommittee was adjourned.] 

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