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26–805 PDF 2018

BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR 

AMERICA: ECONOMIC DEVELOPMENT STAKEHOLDERS’ PERSPECTIVES 

(115–24) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 13, 2017 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: https://www.govinfo.gov/committee/house-transportation?path=/ 

browsecommittee/chamber/house/committee/transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

FRANK A. LOBIONDO, New Jersey 

SAM GRAVES, Missouri 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

BOB GIBBS, Ohio 

DANIEL WEBSTER, Florida 

JEFF DENHAM, California 

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 

GARRET GRAVES, Louisiana 

BARBARA COMSTOCK, Virginia 

DAVID ROUZER, North Carolina 

MIKE BOST, Illinois 

RANDY K. WEBER, SR., Texas 

DOUG LAMALFA, California 

BRUCE WESTERMAN, Arkansas 

LLOYD SMUCKER, Pennsylvania 

PAUL MITCHELL, Michigan 

JOHN J. FASO, New York 

A. DREW FERGUSON IV, Georgia 

BRIAN J. MAST, Florida 

JASON LEWIS, Minnesota 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

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 

JOHN GARAMENDI, California 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

ANDRE ́ CARSON, Indiana 

RICHARD M. NOLAN, Minnesota 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut, Vice 

Ranking Member 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

JARED HUFFMAN, California 

JULIA BROWNLEY, California 

FREDERICA S. WILSON, Florida 

DONALD M. PAYNE, JR., New Jersey 

ALAN S. LOWENTHAL, California 

BRENDA L. LAWRENCE, Michigan 

MARK DESAULNIER, California 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

LOU BARLETTA, Pennsylvania, Chairman 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

BARBARA COMSTOCK, Virginia 

MIKE BOST, Illinois 

LLOYD SMUCKER, Pennsylvania 

JOHN J. FASO, New York 

A. DREW FERGUSON IV, Georgia, 

Vice Chair 

BRIAN J. MAST, Florida 

BILL SHUSTER, Pennsylvania (Ex Officio) 

HENRY C. ‘‘HANK’’ JOHNSON, JR., Georgia 

ELEANOR HOLMES NORTON, District of 

Columbia 

ALBIO SIRES, New Jersey 

GRACE F. NAPOLITANO, California 

MICHAEL E. CAPUANO, Massachusetts 

PETER A. DEFAZIO, Oregon (Ex Officio) 

(III) 

CONTENTS Page 

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

TESTIMONY 

William C. Seigel, Assistant Executive Director, SEDA-Council of Governments ..................................................................................................................... 6 

Justin Hembree, Executive Director, Land of Sky Regional Council, on behalf 

of the National Association of Development Organizations ............................. 6 

Brett Doney, CEcD, SCLA, AICP, President and CEO, Great Falls Montana 

Development Authority, on behalf of the International Economic Development Council ........................................................................................................ 6 

Steve Linkous, President and CEO, Harford Mutual Insurance Company, 

and Chairman, National Association of Mutual Insurance Companies, on 

behalf of the BuildStrong Coalition .................................................................... 6 

Jessica Grannis, J.D., LL.M., Adaption Program Director, Georgetown Climate Center .......................................................................................................... 6 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

William C. Seigel ..................................................................................................... 27 

Justin Hembree ........................................................................................................ 30 

Brett Doney, CEcD, SCLA, AICP ........................................................................... 39 

Steve Linkous, President and CEO ........................................................................ 49 

Jessica Grannis, J.D., LL.M. ................................................................................... 55 

SUBMISSIONS FOR THE RECORD 

Report submitted by witness Brett Doney, CEcD, SCLA, AICP, ‘‘Critical Condition: Infrastructure for Economic Development,’’ February 11, 2016, by 

Emily J. Brown, et al., published by the International Economic Development Council ........................................................................................................ 63 

iv 


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Insert offset folio 2 here 26805.002
vi 


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(1) 

BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: ECONOMIC DEVELOPMENT STAKEHOLDERS’ PERSPECTIVES 

WEDNESDAY, SEPTEMBER 13, 2017 

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 a.m. in room 

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

Mr. BARLETTA. The committee will come to order. The purpose of 

this hearing is to examine how we build a 21st-century infrastructure for America in the context of economic development and disaster resilience. 

First, as the chairman of the subcommittee with oversight over 

FEMA [Federal Emergency Management Agency], we are working 

closely with the Members, States, and communities devastated by 

Hurricanes Harvey and Irma. Our thoughts and prayers go out to 

the families and the communities that are impacted. 

I also want to acknowledge the brave and tireless work of the 

thousands of first responders, volunteers, and members of the Federal family that are helping respond to these catastrophic storms 

and pave the way for recovery. 

I have seen firsthand how disasters can upend and devastate 

communities: the loss of homes, jobs, cherished belongings, and, 

most tragically, lives. 

We must work to ensure the States and communities impacted 

by these hurricanes recover, and recover quickly. And, in recovering, it becomes even more critical to ensure that we rebuild 

smarter and better. It will not serve anyone well if we simply rebuild without incorporating mitigation measures that will minimize 

the impact of future disasters. 

Investment in mitigation ensures the wise investment of taxpayer dollars because mitigation strengthens infrastructure, saves 

lives, and reduces future disaster costs and losses. 

Today I hope we can find ways to ensure mitigation is built into 

our building and rebuilding process so that we can save lives and 

property. 

Critical in the recovery following a disaster is ensuring businesses and jobs return. Agencies like the Economic Development 

2 

Administration, or EDA, provide critical assistance to help with 

economic recovery following a disaster. 

For example, in the district I represent, many businesses were 

impacted by floodwaters during Tropical Storm Lee, threatening 

businesses and hundreds of jobs. EDA’s investment of $15 million 

for flood control systems in Bloomsburg, Pennsylvania, leveraged 

an additional $10 million in private investment and saved nearly 

900 jobs. 

Today we also want to explore how we can strengthen economic 

development programs to more effectively leverage private investment in infrastructure and create jobs. And we want to examine 

how we can build and rebuild better to save lives, strengthen our 

communities, and reduce disaster costs and losses. 

But the mission of agencies like EDA and the Appalachian Regional Commission, or ARC, extend well beyond natural disasters. 

Federal economic development programs often provide the last 

piece of the puzzle distressed communities need to attract private 

investment, businesses, and jobs. 

For example, ARC’s Partnerships for Opportunity and Workforce 

and Economic Revitalization, also known as the POWER Initiative, 

invested $9 million in Pennsylvania that will attract $33 million in 

private investment and create over 600 jobs in coal-impacted communities. 

The grants from these agencies are usually tied to specific outcomes that increase their impact in distressed communities and ensure jobs are actually created and other goals achieved. 

I look forward to hearing from our witnesses how these programs 

work and what programs exist to improve upon them. 

In rebuilding our Nation’s infrastructure, we cannot do it alone. 

It takes all levels of Government and the private sector. How do 

we maximize these economic development and disaster response 

programs to ensure good outcomes and quick recovery, while creating lasting jobs and economic growth? I am sure our witnesses 

today will help us answer these questions. I thank you all for being 

here. 

I now recognize the ranking member of the subcommittee, Mr. 

Johnson, for a brief opening statement. 

Mr. JOHNSON. Thank you, Mr. Chairman, and good morning. I 

wish to extend my condolences to those who have lost loved ones 

during the recent hurricanes. And my thoughts and prayers are 

with the survivors of both hurricanes. I wish them a successful recovery. 

Given the recent back-to-back hurricanes, which also went 

through Atlanta and other parts of Georgia as a storm, today’s 

hearing on the importance of resilient infrastructure and promoting 

strong economic development is timely. 

The American Society of Civil Engineers, ASCE, has noted that 

the Nation has an infrastructure deficit. In fact, the ASCE has 

graded the Nation’s infrastructure a D-plus. Between 2016 and 

2025, ASCE found that households will lose $3,400 each year in 

disposable income due to infrastructure deficiencies. 

Loss of individual income affects the ability of businesses to provide well-paying jobs, which in turn further reduces incomes. If 

this investment gap is not addressed by 2025, ASCE determined 

3 

that the economy is expected to lose almost $4 trillion in gross domestic product, resulting in a loss of 2.5 million jobs by 2025. 

While the sorry state of infrastructure has a devastating impact 

on our national economy and its citizens in ordinary times, during 

times of disasters it also increases costs. Hurricane Harvey damage 

estimates range from $100 billion up to $180 billion. Swiss RE, a 

private reinsurance company, estimates that Hurricane Irma damage could cost $100 billion to $300 billion. The infrastructure damage caused by these hurricanes will negatively impact and affect 

the local economies with business disruptions and workers left jobless, or at least temporarily unemployed. 

The Nation cannot afford to continue on this path. We must rebuild, but it must be stronger, safer, and smarter. While devastating, these hurricanes provide the affected areas with an opportunity to be more resilient, going forward. For those communities 

that are not affected, this should be a wake-up call to invest in resilient infrastructure before disaster strikes. 

Studies have shown that investments in mitigation before dis- aster strikes saves $3 to $4 for every dollar spent on mitigation. 

FEMA’s Pre-disaster Mitigation Program provides grants specifically for this purpose. By all accounts, FEMA’s PDM program is 

working, which is why it is so baffling that President Trump proposed to reduce PDM funding by over $60 million in his fiscal year 

2018 budget. He wants to build a wall, rather than put America’s 

infrastructure and the American taxpayers first. 

But President Trump has gone further. Instead of requiring communities to build back stronger, last month he revoked the Federal 

Flood Risk Management Standard. This standard would have required infrastructure projects built with Federal funds such as 

those the hurricane-impacted communities are about to undertake, 

be built back more resilient. 

This standard would have required projects to be rebuilt to one 

of three standards: the 500-year flood standard, a reasonable requirement, given that Texas suffered its third 500-year flood in 3 

years; using climate science-informed data; or constructing critical 

infrastructure 3 feet above the base flood elevation, and other infrastructure 2 feet above the base flood elevation. 

President Trump would be wise to follow the old adage: If something isn’t broke, don’t fix it. We have an opportunity to diminish 

future losses. Let’s not throw it away. Congress needs to look out 

for all taxpayers and require these impacted communities to recover smarter and stronger where Federal funds are used. This is 

the only way to end the cycle of build, damage, rebuild. 

After a disaster, all sectors need to recover. FEMA estimates that 

up to 40 percent of small businesses do not return after a disaster. 

This means we need to invest in economic development activities 

in those areas and elsewhere. The Economic Development Administration, EDA, has a disaster assistance recovery program that affords local communities the flexibility necessary to recover economically after a disaster. 

As Congress looks at supplemental appropriations for disaster-affected areas, this committee must ensure that funding is provided 

for this program. For years, regional organizations in other parts 

of the country have successfully assisted local communities in 

4 

achieving economic development through infrastructure investments. While Congress has authorized the Southeast Crescent Regional Commission, Congress has only appropriated minimal funding, and the President has yet to appoint a Federal cochair that 

would allow the Commission to become operational. 

My district, which is within the Commission’s boundaries, has an 

unemployment rate of 8.9 percent, and a poverty rate of 15 percent. 

We are already behind, and my district cannot afford to lose $3,400 

per year due to infrastructure deficiencies. 

It is time for EDA to be reauthorized and adequately funded, and 

the Southeast Crescent Regional Commission must be stood up so 

that my district can experience desperately needed economic development. Investment in resilient infrastructure works, and is one of 

the best tools to address unemployment and poverty, and reduce 

disaster costs and losses. 

President Trump has called for infrastructure investments, yet 

has not provided a plan forward. Not only that, he has proposed 

to eliminate EDA and the only regional organizations despite their 

success. Congress needs to ignore President Trump’s ill-conceived 

proposals and support local communities by reauthorizing funding 

for these proven programs. 

Thank you, and I look forward to today’s testimony. 

Mr. BARLETTA. Thank you. At this time, I would like to recognize 

the chairman of the full committee, Mr. Shuster. 

Mr. SHUSTER. Thank you, Chairman Barletta. And thank you 

and Ranking Member Johnson for holding this important hearing 

today exploring what our Nation needs to build a 21st-century infrastructure. 

I want to welcome Mr. Seigel, whose SEDA–COG [Susquehanna 

Economic Development Association-Council of Governments] encompasses counties that are near and dear to my heart: Mifflin, Juniata, Snyder, Perry County, great places that I used to represent, 

and now I know—I believe Mr. Barletta and Mr.—no. Perry has a 

piece of that, too, but so does Marino. Yes. So again, great part of 

the State of Pennsylvania. And I miss them very much because 

they are strong Republican bastions. 

[Laughter.] 

Mr. SHUSTER. So, anyway, I was happy that Mr. Perry and Mr. 

Barletta and Mr. Marino got that part of the world. 

Again, before we start, also I want to offer my condolences to 

those who have lost loved ones, and to the families that were affected by Hurricanes Harvey and Irma, and our thoughts and prayers are with them. 

I also want to recognize the professionals at FEMA who are 

working night and day to manage the disaster response to those 

hurricanes, as well as, you know, across the States; the responders 

as well as the folks in the local communities. It has been a terrible 

tragedy. But again, watching America pull together, it is always— 

makes you feel proud and renews your strength and belief that 

America is the greatest nation in the history of the world. 

When these tragedies strike, as we have learned with Katrina, 

Rita, and Sandy, we need to be able to effectively help the people 

and those communities impacted. And from a policy perspective, we 

can never stop exploring ways to improve and invest in those disasVerDate Aug 31 2005 15:11 Mar 19, 2018 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\ED\2017\9-13-2~1\26805.TXT JEAN
5 

ters, in the preparedness, response, and recovery, and how these 

programs and capabilities can be improved. 

I know the folks from the BuildStrong Coalition are here today, 

and they are doing great work on—I have been to their facility in 

South Carolina. I think they burned a building the day I was there. 

But, you know, they can blow a building up, but it is a great facility, I would encourage everybody to go down there and see it—and 

the work they are doing is really great work—so that as we rebuild 

these communities, we are learning the lessons from what those 

folks are doing and that that industry is doing to make sure that 

we are doing the right thing as we rebuild these communities. 

I expect our witnesses today to address the critical issues. I know 

we got a great panel here today. 

But investment in infrastructure goes beyond disasters. On the 

economic development side, we have communities all across this 

Nation: struggling coal communities, small Appalachian towns, 

communities that are suddenly hit by disasters, and businesses are 

closing. And I know where I come from in Pennsylvania, it is all 

small, small and rural communities. So this is an incredibly important aspect of what we do. 

For many of these communities, agencies like the EDA and ARC 

provide the technical expertise and the seed money they need to 

spur the economic growth and create and save jobs. So it is incredibly important, I know, across the country. But certainly, I know 

in my district and Congressman Barletta’s district and Mr. Johnson’s district and the State, there is a great need for it. 

So I look forward to hearing from our witnesses today. And 

again, I want to—everyone affected by the hurricanes that have 

just occurred, we know that, as I said earlier, they are in our 

thoughts and our prayers. And we stand ready to help rebuild and 

recover those areas. So thank you very much. 

Mr. BARLETTA. Thank you, Mr. Chairman. We now welcome our 

witnesses. On our panel we have Mr. Bill Seigel, assistant executive director of SEDA-Council of Governments; Mr. Justin 

Hembree, executive director, Land of Sky Regional Council, representing the National Association of Development Organizations; 

Mr. Brett Doney, president and CEO, Great Falls Montana Development Authority, representing the International Economic Development Council; Mr. Steve Linkous, president and CEO of Harford 

Mutual Insurance Company, and chairman of the National Association of Mutual Insurance Companies, representing the BuildStrong 

Coalition; and Ms. Jessica Grannis, adaption program director, 

Georgetown Climate Center. 

I ask unanimous consent that our witnesses’ full statements be 

included in the record. 

Without objection, so ordered. 

For our witnesses, 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. 

Mr. Seigel, you may proceed. 

6 

TESTIMONY OF WILLIAM C. SEIGEL, ASSISTANT EXECUTIVE 

DIRECTOR, SEDA-COUNCIL OF GOVERNMENTS; JUSTIN 

HEMBREE, EXECUTIVE DIRECTOR, LAND OF SKY REGIONAL 

COUNCIL, ON BEHALF OF THE NATIONAL ASSOCIATION OF 

DEVELOPMENT ORGANIZATIONS; BRETT DONEY, CECD, 

SCLA, AICP, PRESIDENT AND CEO, GREAT FALLS MONTANA 

DEVELOPMENT AUTHORITY, ON BEHALF OF THE INTERNATIONAL ECONOMIC DEVELOPMENT COUNCIL; STEVE 

LINKOUS, PRESIDENT AND CEO, HARFORD MUTUAL INSURANCE COMPANY, AND CHAIRMAN, NATIONAL ASSOCIATION 

OF MUTUAL INSURANCE COMPANIES, ON BEHALF OF THE 

BUILDSTRONG COALITION; AND JESSICA GRANNIS, J.D., 

LL.M., ADAPTION PROGRAM DIRECTOR, GEORGETOWN CLIMATE CENTER 

Mr. SEIGEL. Thank you, and good morning. Good morning, Chairman Barletta, subcommittee members, and guests. I am Bill Seigel, 

I am the assistant executive director of SEDA-Council of Governments, a regional local development agency serving 11 counties in 

central Pennsylvania. On behalf of SEDA–COG and the nearly 

three-quarters of a million residents of our region, we thank you 

for the opportunity to share our perspectives on infrastructure 

needs and the role of the Federal Government in our region. 

We are a rural region, historically defined by agriculture, anthracite coal, and manufacturing. Today we are challenged to redefine 

ourselves by maintaining and growing our manufacturing sector, 

while building our service industries. 

We look to the Federal Government to partner with us as we 

confront these challenges. Roads, bridges, and rail are important, 

but not to the exclusion of flood resiliency and technology in our 

18th- and 19th-century communities. The funds offered through the 

Economic Development Administration, the Community Development Block Grant program, the Appalachian Regional Commission, 

and the Federal Emergency Management Agency, to name a few, 

are critical catalysts for our infrastructure projects. 

How do we build a 21st-century infrastructure in America? In 

central Pennsylvania it is through Federal, State, local, and private 

partnership, partnerships that protect and enhance the infrastructure in which we have already invested, and by complementing 

that investment with new infrastructure that allows the region and 

its industries to remain competitive. 

Allow me to share a success story. The town of Bloomsburg, as 

the chairman made reference, is located on the banks of the Susquehanna River and, until recently, was the only municipality on 

the Susquehanna without flood protection. 

Autoneum North America, a manufacturer of automotive carpet, 

today employs over 650 workers with an annual payroll of over $30 

million. If you traveled here today by car, you likely placed your 

feet on their carpet. Autoneum faced a serious dilemma. Located in 

the special flood hazard area, their 100-year-old plant flooded every 

several years. 

If they chose to remain at this location, they placed themselves 

at risk of financial devastation, as is evidenced by their $60 million 

loss in 2011. The entire automotive manufacturing system and supply chain was slowed by the unavailability of automotive carpet 

7 

while Autoneum struggled through shutdown and recovery. It affected the entire Nation. 

Relocation out of the flood hazard area had similar impacts, due 

to lost production time ripping through Detroit. They could not 

stay, they could not leave. But after Hurricane Lee and Tropical 

Storm Sandy, long-term customers began to waffle at contract renewal, and to investigate alternative suppliers, including foreign 

suppliers, to avoid the cost of flood-induced shutdowns. 

In 2014, SEDA–COG and the Columbia County commissioners were successful in obtaining a $15 million EDA grant to construct 

a flood protection system around Autoneum. With the EDA commitment, we leveraged $12 million from the Commonwealth of 

Pennsylvania, along with $2.5 million of private funds to construct 

a $30 million flood control system. SEDA–COG staff managed the 

funding and the project. We broke ground in 2015 and completed 

the project last year under budget and ahead of schedule. 

I recently learned that several of Autoneum’s major customers 

had placed contract renewals on hold until we broke ground for 

that project. Without the partnership of the Federal Government 

through EDA, it is with near certainty that I can say we would 

have lost this manufacturer, leaving the town of Bloomsburg without the employment and with a 42-acre vacant manufacturing facility falling into blight and generating little to no taxes. 

Protecting the existing infrastructure, in this example Autoneum 

North America, is a priority of SEDA–COG. Using the Federal 

tools such as EDA, CDBG, and FEMA pre-disaster mitigation, 

SEDA–COG is able to incentivize public and private partners. EDA 

support of LDDs [local development districts] allows us to develop 

and maintain a caliber of staff that otherwise would not exist in 

rural Pennsylvania, and which is critical to leading the economic 

and community development activities. 

In deference to time I would conclude by saying in order to build 

a 21st-century infrastructure, we must continue to partner at all 

levels of Government and business to address all three legs of this 

stool. We need to first maintain what exists. We need to protect it 

from the new threats. 

And we need to expand it to become globally competitive. 

Thank you very much. 

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

Mr. Hembree, you may proceed. 

Mr. HEMBREE. Thank you, Chairman Barletta, Ranking Member 

Johnson, members of the subcommittee, for the opportunity to testify this morning on infrastructure and the EDA’s role in aiding 

rural and distressed communities. My name is Justin Hembree. I 

am the executive director of Land of Sky Regional Council. We are 

a public entity dedicated to economic and community development 

headquartered in Asheville, North Carolina. 

I am also a board member of the National Association of Development Organizations, known as NADO. NADO is a member-based 

association of more than 350 regional development organizations 

throughout the country. 

NADO provides advocacy, education, research, and training to 

members, including 368 EDA funded and designated economic development districts, or EDDs. NADO members support local govVerDate Aug 31 2005 15:11 Mar 19, 2018 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\ED\2017\9-13-2~1\26805.TXT JEAN
8 

ernments, communities, and economies through regional collaboration, comprehensive planning, and program implementation. 

I come before the committee to speak on EDA’s role as a key 

facilitator of economic opportunity for distressed and underperforming communities. Since its creation under the Federal Public 

Works and Economic Development Act of 1965, EDA has provided 

direct financial and technical assistance, resulting in business and 

job growth, especially for small and rural communities. From fiscal years 2012 to 2016, EDA steered $2 billion towards local and regional initiatives, leveraging nearly $39 billion in private investment, while helping to create and retain 321,000 jobs. 

Infrastructure investments are a major part of EDA’s assistance 

to communities. A good example is the agency’s recent investment 

of nearly $400,000 into a sewer line expansion and wastewater system upgrade for the small town of Mars Hill, North Carolina. 

The funding addressed additional capacity needs for the town’s 

wastewater treatment plant, due to an expansion of Mars Hill University as well as the creation of a new industrial site. 

The sewer line also contributed to business expansion along the 

I–26 corridor. Overall, EDA’s investment leveraged at least 

$585,000 in local and State funding. The project helped to create 

and retain 95 jobs with a private investment of $35 million. 

The project also shows how EDA serves as an integrator of public 

and private resources. EDA identifies and invests in projects, in 

part, based upon participation from local and State partners. EDA 

investments also combine with resources from other Federal agencies such as HUD, Department of Agriculture, and the Appalachian 

Regional Commission. 

EDA also offers loan servicing for small businesses. EDA’s revolving loan fund responds to the challenge of cost and access to 

capital involved with small business startup and expansion. EDA 

loan funding is often the last resort for small businesses seeking 

resources to launch and grow operations. Loans are managed by 

economic development districts to provide direct local oversight and 

compliance between lenders and loan recipients. 

To improve local processes, NADO has recommended the suspension of RLF [revolving loan fund] burdensome reporting requirements following loan repayment. A defederalization of the loan 

would cut unnecessary requirements currently endured by local administrators. 

As Congress considers a proposal to rebuild our Nation’s infrastructure, EDA remains a strong resource to assist in Federal, 

State, and local economic development activities. Strategic movement of Federal resources will be key to ensuring taxpayer dollars 

are directed to the greatest infrastructure needs. EDA offers both 

a successful record and structure responsive to local and regional 

needs in infrastructure development, especially in rural areas. 

Again, thank you for the opportunity to address the subcommittee, and I look forward to answering your questions. 

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

Mr. Doney, you may proceed. 

Mr. DONEY. Good morning. On behalf of the International Economic Development Council, our board of directors, and over 5,000 

members, thank you, Chairman Barletta and Ranking Member 

9 

Johnson, for inviting me here today to share our perspective on 

this critical issue. 

Before delivering my prepared remarks, I would like to note that 

our full testimony includes a report written by our economic development research partnership of IEDC, titled, ‘‘Critical Condition: 

Infrastructure for Economic Development.’’ 

[The IEDC report entitled ‘‘Critical Condition: Infrastructure for Economic Development’’ is available on pages 63–150.] 

I would also like to take a moment to thank you for your kind 

remarks and appreciation of disaster recovery and response workers and volunteers. Across Montana and the West, we are fighting 

thousands of fires right now, and there are a lot of people this 

morning working out there, protecting lives and community. 

As economic developers, every day we work with businesses of all 

sizes to help them start up, expand, address adversity, and take 

advantage of new opportunities. Infrastructure is often a dealbreaking challenge to overcome. Iconic projects, such as the Erie 

Canal, the Hoover Dam, and the Interstate Highway System reflect 

investments that revolutionized the economic futures of the people 

and regions they touched. 

In economic development, more often we are challenged with 

smaller but no less critical infrastructure needs. Gaps in our local 

infrastructure that prevent businesses from creating the higher 

wage jobs desperately needed in too many of our communities and 

regions. 

EDA has been a critical partner in overcoming these deal-killing 

infrastructure gaps. Our challenges today are greater than ever before. We need your help to ensure that EDA remains an instrumental resource and partner in helping those of us on the ground 

at the local level get things done. 

In my submitted testimony, in addition to the detailed report on 

how economic developers work with infrastructure, I provide a few 

examples of successful projects that have taken place in my community. I am happy to discuss these and answer questions about 

them, as well as our statewide Montana Infrastructure Coalition, 

but I will use my time to discuss suggestions for how economic developers might like to see this committee proceed as it addresses 

our infrastructure crisis. 

There are two opportunities we would like to highlight for EDA 

to advance infrastructure for the purpose of economic development. 

First, as has been discussed by this committee in the past, and 

by Mr. Hembree, the defederalization of revolving loan funds will 

allow communities to leverage existing funding with State and private-sector funding to potentially great impact. 

Second, the advancement of the division of economic development 

integration at EDA would result in streamlined processes and leveraged Federal investments, with the outcome of a better, more 

coordinated Federal engagement in local economic development efforts. 

I would also like to point out one other opportunity for your consideration. Economic recovery following disaster is a critical component to restoring communities. The national disaster recovery 

framework identifies the Department of Commerce, via EDA, as 

10 

the lead Federal agency on economic recovery. Yet the Department 

was left out of Sandy’s supplementals. We encourage the members 

of this committee to ensure the Department is included in future 

supplemental related to Hurricanes Harvey and Irma, hopefully 

also the western fires, as well as any future legislation regarding 

the role of the Federal agencies in disaster response and recovery. 

It has been suggested an explanation for calling for the elimination of the Economic Development Administration that the Department of Transportation could fulfill EDA’s role in infrastructure. This demonstrates a lack of understanding of the type of infrastructure that EDA supports. The most straightforward description would be to consider it as ‘‘last 100 yards’’ infrastructure. 

These are the sewer lines and rail spurs running into industrial 

parks and manufacturing plants that DOT money does not cover. 

These are the renovations of existing buildings that take the idea 

of a business incubator in a small town to reality. These are the 

expansion of broadband capacity that allows a Rust Belt city to 

move into the 21st century. These, to put it a different way, are 

the targeted, locally driven, strategically planned investments in 

infrastructure that EDA makes that no other Federal agency does 

on a national scale. 

We encourage this committee to look to the strengths of EDA and 

the regional development agencies, their institutional knowledge of 

local economic needs and abilities, and invest in them. Thank you. 

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

Mr. Linkous, you may proceed. 

Mr. LINKOUS. Good morning. Thank you, Chairman Barletta, 

Ranking Member Johnson, and members of the subcommittee. 

Thank you for inviting me today to testify. My name is Steve 

Linkous, and I am the president and chief executive officer of the 

Harford Mutual Insurance Company. I also serve as chairman of 

the board of directors of the National Association of Mutual Insurance Companies. NAMIC is a founding and executive committee 

member of the BuildStrong Coalition, on whose behalf I am testifying today. 

Founded in 1842, Harford Mutual Insurance Company has grown 

from a small, local insurer serving homeowners and farmers in 

rural Bel Air, Maryland, to a regional company protecting policyholders in seven States and the District of Columbia. 

One of the reasons we have been providing property and casualty 

insurance products to our policyholders for over 175 years is the 

mutual insurance model, where policyholders are put first. 

Harford Mutual is a member of NAMIC, the largest property and 

casualty insurance trade association in the country, with more than 

1,400 member companies. As we have seen in recent days, now is 

more important than ever to consider the devastating and growing 

impact of severe disasters. And during this critical time for everyone in the path of these hurricanes, we commend the leadership of 

Chairman Barletta, who has never wavered in his mission to reduce disaster losses and better protect communities ahead of the 

next storm. 

As victims recover from the massive destruction left behind in 

the wake of Hurricanes Harvey and Irma, we should remember 

that the storms have not only destroyed lives and homes, but will 

11 

have a devastating effect on the local economies for years to come. 

According to FEMA, 40 to 60 percent of small businesses never reopen their doors after a disaster. And 90 percent of smaller companies fail within a year if they cannot resume operation within 5 

days. 

But it is not just small businesses that suffer the long-term effects of extreme weather. Rather, catastrophes have lasting ramifications on entire communities. A recent study by the National Bureau of Economic Research shows that counties hit by severe disasters experience greater out-migration, lower home prices, and higher poverty rates. 

As they wreak havoc on our economies and communities, natural 

catastrophes are also drastically increasing in frequency and severity, and creating an enormous burden on the Nation’s taxpayers. 

Between 1976 and 1995, there were an average number of only 39 

annual Federal disaster declarations. 

This number has skyrocketed to 121 between 1996 and 2015, 

during which we experienced Hurricane Katrina and Superstorm 

Sandy, storms that resulted in almost $180 billion in combined 

Federal aid. And many expect the combined aid sent to victims of 

Harvey and Irma could reach $200 billion. 

While victims of catastrophes like Harvey and Irma should always be the first priority, we owe it to America to drastically 

change our approach. We will always help victims get back on their 

feet. But I believe we should be doing more to keep them from becoming victims in the first place. 

Research has shown repeatedly that pre-disaster mitigation and 

more resilient construction is our best line of defense in the face 

of disasters. But the Federal Government has taken a reactive posture, spending 14 times more on rebuilding communities after, instead of preparing before the catastrophes strike. We have the 

science and the ability to do better, and we must implement a national strategy for investing in disaster mitigation in order to protect lives, communities, and taxpayer dollars. 

First, we must incentivize States to adopt and enforce safe construction standards. As part of this critical reform, essential assistance made available to communities after disasters could be used 

to develop and enforce such standards. 

Next, we must shift reactive post-disaster mitigation dollars to a 

new national Hazard Mitigation Grant Program, where funds could 

be used by communities to protect homes and mitigate risk before 

a disaster strikes. 

Additionally, Congress should adjust the Federal minimum cost 

share following a major disaster, based upon a State’s resiliency. 

We should not treat States that put responsible mitigation measures in place the same as those that needlessly leave lives and 

homes vulnerable. 

Finally, the Federal Government should respond more efficiently 

to victims of disasters like Harvey and Irma by consolidating all 

Federal disaster assistance programs under FEMA. 

As Congress and the President work together to help the victims 

of disasters and improve the Nation’s infrastructure, the time has 

never been more urgent to adopt a national strategy for investing 

12 

in disaster mitigation, which will save lives, property, and billions 

of taxpayer dollars. 

Chairman Barletta, Ranking Member Johnson, and members of 

the subcommittee, thank you again for holding today’s critical hearing. I look forward to answering any of your questions. 

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

Ms. Grannis, you may proceed. 

Ms. GRANNIS. Thank you to the distinguished members of the 

House Transportation and Infrastructure Committee for inviting 

me to testify on this important topic. My name is Jessica Grannis, 

I manage the adaptation program for the Georgetown Climate Center, an institute based at Georgetown University Law Center that 

supports State and local efforts to reduce carbon pollution and prepare for the impacts of climate change. Part of my work focuses on 

how Federal programs can better support State and local efforts to 

prepare for future climate impacts. 

This year of record-breaking weather and devastating impacts 

provides a sobering preview of what we can expect with greater frequency and intensity as the climate changes. Sea-level rise, more 

intense heavy downpour events, and more extreme heat will increasingly affect people, property, and infrastructure. 

These events have also had significant economic and fiscal impacts. According to NOAA [National Oceanic and Atmospheric Administration] data adjusted for inflation, we saw an average of two 

billion-dollar disaster events per year in the 1980s. That number 

has risen to 10 per year since 2010. And 2017 is likely to break yet 

another record as the most costly year for natural disasters that 

this Nation has ever experienced. 

It is essential to talk about resilience now, as Congress makes 

billion-dollar decisions about how to fund long-term recovery. A fiscally responsible approach does not put communities back to the 

status quo and in harm’s way. Congress should require that Federal investments account for anticipated future conditions and provide incentives to encourage communities to take proactive steps to 

reduce their own risks. 

Many cities and States are already taking action. Miami Beach, 

Florida, is investing $500 million to elevate roads and install new 

pumping systems, which the mayor reported helped the city avoid 

some flood losses during this week’s Irma storm surge. After impacts from Hurricane Sandy, Fort Lauderdale rebuilt Highway A1A 

to provide additional flood protection. And cities in the Midwest 

like Chicago are upgrading their sewer systems and deploying 

green infrastructure to better manage the increasing rainfall that 

is already overwhelming their antiquated systems. 

Federal agencies have also been developing commonsense measures that ensure that taxpayer dollars are not being wasted. After 

Hurricane Sandy, disaster-affected communities were required to 

build back stronger. FEMA is also requiring States to consider climate change and hazard mitigation plans. Congress should support 

and encourage these types of proactive Federal agency actions. 

Although promising resilience practices are being developed at 

all levels of Government, much more needs to be done to help our 

communities respond to the increasing threats, and Congress 

should lead these efforts. 

13 

First, Congress can reform and modernize Federal disaster recovery programs under the Stafford Act. Rebuilding to replace exactly 

what was damaged or destroyed to the pre-storm standards is not 

the responsible nor the fiscally prudent thing to do in an era of climate change. Congress can require recipients of disaster recovery 

funds to consider climate projections when reconstructing infrastructure with disaster recovery funds. Reinstating the Federal 

Flood Risk Management Standards that required projects using 

Federal funds to build to higher standards would be a good start. 

Congress should fund the programs that provide science and 

technical assistance that help State and local governments understand their risks and design assets to be more resilient to future 

changes, including supporting FEMA’s flood plain mapping program. 

Congress can also simplify and harmonize administrative requirements for deploying disaster recovery funds to enable State 

and local grantees to more easily combine funding streams and reduce redtape for both grantees and administering agencies. 

Second, Congress should fund and encourage communities to 

proactively implement measures to reduce risks by funding 

FEMA’s Pre-disaster Mitigation Program. More help is needed for 

communities preparing for other impacts, like extreme heat, 

droughts, and wildfires. 

Congress could also consider FEMA’s proposal to create a disaster deductible, which would allow communities to be rewarded 

for the mitigation measures that they are already implementing on 

the ground. 

Finally, much more investment is needed in sound infrastructure, even without disasters. Congress could create and fund and 

consider infrastructure banks that are being deployed at the State 

level, or even look at a national infrastructure bank to enable private-sector investment in upgrading and enhancing the resilience 

of U.S. infrastructure systems. 

Thank you for the opportunity to discuss some commonsense actions that Congress can take to build the resilience of our communities and our Nation. More information about these examples is 

available in my written testimony and on our website. And I welcome your questions. Thank you. 

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

I ask unanimous consent that Members not on this subcommittee 

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

ask questions. 

With that, I will begin the first round. Mr. Seigel, as you point 

out in your testimony, economic development funding was critical 

in saving hundreds of jobs in Bloomsburg, Pennsylvania. Can you 

talk about the challenges small and distressed communities have 

in attracting private investment? And how do economic development programs help address those challenges? 

Mr. SEIGEL. Certainly, Mr. Chairman. The challenges we have in 

the small and rural communities of the SEDA–COG region begins 

with the fact that many of our communities have very limited staff. 

14 

One of the important things that the Economic Development Administration as well as the Appalachian Regional Commission provides is support to organizations such as SEDA-Council of Governments to actually step in and serve as virtual staff to these communities in pursuing and in administering the Federal funds that are 

available. 

That is the same service that we provide to small businesses as 

they try to develop. We not only support communities, but we support the individual businesses and provide financing and assistance 

in pursuing and obtaining the funding that is necessary to move 

their projects forward. 

Mr. BARLETTA. Mr. Seigel, as you know, there are many coal-impacted communities in Pennsylvania. How have EDA and ARC 

helped in getting these communities back on their feet? 

Mr. SEIGEL. Thank you. Currently, the Northumberland County 

and SEDA–COG are working jointly on a project that was actually 

funded through the POWER Initiative that you referenced earlier. 

That program is to assist coal-impacted communities. And while 

the program is aimed principally at current coal-impacted communities, the reality is that within the SEDA–COG region, the anthracite coal was key to the development of this country many 

years ago. They are still impacted communities, with the loss of the 

anthracite coal industry that has declined. 

The POWER Initiative has provided us an opportunity to utilize 

over 6,000 acres of coal-damaged land located in Lower Northumberland County in the anthracite fields. And that acreage was 

virtually vacant. It was destroyed through many of the mining operations and disposal operations. And today we have converted 

that, and are in the process of converting that into the Anthracite 

Outdoor Adventure Area. We are sponsoring Jeep jamborees, fourwheel drive off-road jamborees, and it has turned into an outstanding economic development engine for that otherwise distressed community. 

Currently, the projects include the construction of communications towers, so that we have connectivity. An earlier comment was 

made about broadband and the importance of that in our region, 

and I have many examples of that critical need: roadways, camping, and spin-off businesses associated with the Anthracite Outdoor 

Adventure Area, which was funded through the POWER Initiative. 

So I offer that as an example of the tools we use. 

Mr. BARLETTA. Mr. Linkous, I know it is too early to tell the full 

extent of the devastation caused by Hurricane Irma, but we have 

heard about the many changes Florida made following Hurricane 

Andrew to reduce the damages, losses, and costs from future disasters. Are we able to gain any lessons learned from Florida as to 

how we, as a Nation, can strengthen our infrastructure to withstand the next disaster? 

Mr. LINKOUS. Thank you. Absolutely. As we have seen from some 

of the terrible images coming out of Florida, there has been a dramatic shift, due to the building codes and seeing the resiliency to 

the storm that hit, compared to Hurricane Andrew some 25 years 

ago. 

Senator Nelson recently, as he flew over the State, commented 

to CNN that he was able to clearly distinguish between buildings 

15 

that were build pre-Andrew and post-Andrew. So it went to prove 

very dramatically that sensible and strong building codes can have 

a dramatic impact on protecting lives and the building properties 

that are all around them. 

Unfortunately, events like Andrew come along every now and 

then, and we are devastated by their impact. But we certainly 

learn from them. And Florida certainly shines as an example in 

this country, where they took the opportunity to increase their 

building codes, enforce their building codes in order to make their 

State far more resilient. 

In many ways Florida was lucky with Irma in the way she took 

her path; a direct strike on Miami that is at a very low flood level 

already could have been devastating. And I think that, as the State 

continues to see more disasters head their way, enforcing these 

building codes across the State—and as we migrate these across 

the country—will be extremely important to saving lives and property. 

Mr. BARLETTA. Thank you. The Chair now recognizes Ranking 

Member Johnson for 5 minutes. 

Mr. JOHNSON. Thank you. 

Ms. Grannis, what is the long-term funding impact of rescinding 

the Federal Flood Risk Management Standard? And has your organization studied the long-term fiscal impact of implementing the 

standard versus not implementing the standard? 

Ms. GRANNIS. We have not studied the long-term fiscal impact of 

implementing the standard or not implementing the standard. I 

think what we do know is, from the figures that you pointed out 

earlier, $1 in mitigation saves us $4 in cost avoided. 

And the Federal Flood Risk Management Standard was to implement a commonsense mitigation approach to make sure that when 

we were building infrastructure with Federal dollars it would be either elevated to account for the future flood risk that we are seeing 

in our communities now and that we expect to see with greater intensity and frequency in the future, and to encourage people to 

think about relocating infrastructure out of flood plains and out of 

high hazard areas so that they are not as exposed to those flood 

risks in the first place. So that would be a good metric to look for 

when you are funding disaster recovery dollars this time around. 

Mr. JOHNSON. Thank you. What is the order of magnitude of 

funding necessary to fund resilience in a manner that bends the 

cost curve on disaster funding? 

Ms. GRANNIS. Another great question. As a lawyer, I don’t have 

as good a sense of the economic case for some of these investments 

that we need to make, in terms of pre-disaster mitigation. But I 

would say again the numbers that have come out of studies in the 

past that $1 saves $4 are a good metric. And we have other studies 

that look at other mitigation approaches, like restoring and enhancing natural flood plains. And the amount that that can help 

communities reduce their flood impacts are a good benchmark to 

look to when looking at Federal investments. 

Mr. JOHNSON. Thank you, Ms. Grannis. 

Mr. Linkous, do you think that there will be a difference in property damage between Florida and Texas, due to the different emphasis on the use of building codes? 

16 

Mr. LINKOUS. Thank you. Most certainly. We saw that in Houston, especially with the flood impact, that it is estimated that only 

20 percent of the flood victims actually have flood insurance, 

whereas flood insurance is owned by nearly 80 percent of those affected in Florida. I think this speaks to the State’s preparation of 

not only their own infrastructure, but also communicating to the 

citizens of their States the importance of having those protections 

at their disposal. 

Mr. JOHNSON. What about the use of building codes in Florida, 

versus lack thereof in Texas? 

Mr. LINKOUS. Well, certainly, as I mentioned earlier, we have 

seen that, in Florida, it is very clear, the distinction between those 

homes and buildings that are built to the newer standards. 

In various parts of the country, the building codes are mandated 

either at the State level or even at a county level, and they can 

vary widely. 

On top of the building codes, an important factor is the enforcement of those codes, especially in rapidly developing communities. 

The resources at the county and State level are so limited that it 

makes it difficult to even enforce the higher standards that are 

there. Florida has put forth money to make sure that the enforcement is in place. And certainly, what we have proposed to Congress 

in our BuildStrong Coalition is that there are funds available to 

those communities to make sure that they are trained, licensed, 

and enforced when dealing with these building codes. 

Mr. JOHNSON. Thank you. 

Mr. Hembree, in 2009 the American Recovery and Reinvestment 

Act provided funding for the Economic Development Administration. Are there any lessons learned from implementation of that act 

that could be incorporated into an infrastructure bill so that members of your organization could use funds more efficiently? 

Mr. HEMBREE. Absolutely. I think if you look at the lessons 

learned from our implementation of those funds through that program, we found that a lot of times construction ready doesn’t really 

mean construction ready. I think what we found through that process was that there needs to be more flexibility at the Federal level, 

working with EDA’s regional offices, to move those funds through 

quicker to help us implement the projects that we know are in 

place. 

I think the other thing that is important with that is an understanding that sometimes, from the Federal level with these programs, one size doesn’t fit all when it comes to the types of projects 

that funds are dedicated to or being directed to. Mainly, when you 

are talking about rural and distressed communities, there are various different needs and different capacity at the local level for the 

ability for organizations to effectively administer that type of program. There was such a large amount of funds trying to be moved 

out in such a short period of time. 

Mr. JOHNSON. Thank you, and I yield back. 

Mr. BARLETTA. Thank you. The Chair now recognizes Mr. Ferguson for 5 minutes. 

Mr. FERGUSON. Thank you, Mr. Chairman, and thank you all for 

your testimony today. 

17 

One of the things I want to comment on is my experience as a 

mayor in using EDA funding. In two examples that I have, we had 

a revolving loan fund that we used to stabilize buildings in our 

downtown. And it was pretty effective in closing the economic viability gap in some of those instances, going in and providing funding that a traditional lender simply would not touch. And what we 

found, we had a high level of success with that. 

And then we also had success using EDA grants for that last 

mile of infrastructure on water and sewer projects. The net result 

is that we were able to create about 16,000 manufacturing jobs in 

our community, and revitalize the downtown. And these were two 

important tools that we used. 

One of the things I would like to get you all’s thoughts on, it 

was—we touched on rural broadband. One of the things that I have 

seen going into rural areas—and my part of Georgia certainly has 

a very rural component to it—have you all ever thought about 

rural broadband development, and how a revolving loan fund or a 

grant program might be used for that? 

And, Mr. Hembree, I will start with you on that. 

Mr. HEMBREE. Thank you. I have actually not given any specific 

thought to the revolving loan fund program as part of a broadband 

initiative. But just in terms of my knowledge of the way that that 

program works, and some opportunities that are there, I think it 

could certainly work. 

Particularly, at least in North Carolina, we have to take the approach, based on some State statutes, all broadband projects have 

to be public-private partnerships. Localities can’t control or operate 

broadband systems as a utility. So, an RLF program or a grant program can certainly provide funds that would facilitate those types 

of partnerships to make it work. 

The challenge that we face—and I think all of us face across the 

country when we are talking about rural broadband—is that, in 

terms of our economic competitiveness, in terms of us being able 

to have the ability to compete on the national and global market, 

we have got to have that connection. But the flip side of that is the 

density is not high enough in rural areas for the market to drive 

deployment of those resources and those infrastructures to the 

area—so that is sort of the catch-22—and where EDA and other 

programs could step in to fill that gap. 

Mr. FERGUSON. And that is my point in that, is that, you know, 

a lot of times we will use either the grant program or the revolving 

loan fund program to close the economic viability gap in these 

other types of economic development projects. And I think that we 

all recognize that the rural broadband infrastructure is really critical to really making sure that we stay competitive on a global 

stage. 

But, quite candidly, it is really the best way forward for rural 

America. It is the way that we connect young people in those communities to economic opportunities in the metropolitan areas. And 

I would say that using—now beginning to change our model for 

economic development may be moving away from traditional infrastructure projects to putting a heavy emphasis for the next few 

years into broadband development and tie that directly to our eduVerDate Aug 31 2005 15:11 Mar 19, 2018 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\ED\2017\9-13-2~1\26805.TXT JEAN
18 

cation system to develop students that can use this to earn a living. 

I think it is pretty important to do. 

So, whether it is a revolving loan fund, or a grant program, or 

whatever it is, I think we need to look at this maybe the same way 

that we have traditionally, putting in water and sewer lines for an 

economic development project. 

So, with that, Mr. Chairman, I will yield back. 

Mr. BARLETTA. Thank you. The Chair now recognizes Ms. Norton 

for 5 minutes. 

Ms. NORTON. Thank you very much, Mr. Chairman. And I thank 

you for this hearing, which I am going to say, unfortunately, is 

very timely, in light of recent events. 

I think this question is really for Mr. Linkous—am I pronouncing 

your name correctly—because of a suggestion in your testimony. 

And in my own district, the Nation’s Capital, the threat of not 

hurricanes—although that does happen here—but certainly of 

floods on the Mall are imminent. And we just finished working 

through this committee, constructing a levee there. And I have two 

bills where construction is underway now, literally on the water, 

the Southeast Waterfront, the Southwest Waterfront. This is fairly 

typical of building in the United States. So the notion of protections 

not only against disasters like hurricanes, but of surges, of floods 

is nationwide. 

Now, in your testimony, Mr. Linkous, you proposed something 

very interesting. First of all, you say in your testimony that only 

15 percent of those affected by Harvey were covered by insurance. 

That ought to shake us up. I can’t imagine how we are going to 

rebuild, when you pile on Irma and the rest. 

And you are making a suggestion that I would like to have you 

justify. It is perfectly understandable that you would focus—as the 

Congress has not sufficiently—on pre-disaster funding. And so you 

proposed that 10 percent—and here I am reading from your testimony—of all funds appropriated for the existing post-disaster Hazard Mitigation Grant Program be allocated to a new program, a 

new mitigation program, where funds would be available with regards to whether a disaster occurred and could be used for 

strengthening homes and businesses. 

So essentially, you want to take funds from disaster funds. It is 

kind of tough love to make perhaps the Congress and maybe even 

the States do what they haven’t done in the past. Is it—have you 

concluded that the only way to get sufficient attention on pre-disaster funds is this kind of tough taking from Peter to pay Paul, as 

some would say? If you say to Sandy, for example, which is still 

going on, the rebuilding there, that part of those funds, which I 

must tell you they had a harder time getting than it looks like we 

are having getting for the Texas and Florida disasters, if you were 

to, say, take away 10 percent of the funds that are being used to 

rebuild New York and New Jersey and set them aside for whoever 

needs funds, we are likely to get members from those delegations 

saying, ‘‘Really?’’ 

So, would you explain why you come to that conclusion, and if 

you think it would be successful here in the Congress. 

Mr. LINKOUS. Thank you. You know, a wise person once said that 

an ounce of prevention is worth a pound of cure. And, as we know, 

19 

that was Benjamin Franklin, who also happens to be a Founding 

Father of our mutual insurance industry, and his company continues 265 years later in Philadelphia. I think we need to take that 

sage wisdom when we go into addressing our Nation’s disaster recovery. As we have heard, $1 equals $4 on the back end. And if we continue to—— 

Ms. NORTON. But everybody in the Congress will give lipservice 

to what you have just said. But you have cited in your own testimony that sometimes 80 percent—I think one of your figures, the 

amount—go in to post-disaster than Congress has been willing to 

put in to pre-disaster. 

So they—everybody believes it, but it is in our DNA to help people when disasters occur. But cannot be found anywhere, apparently among Democrats or Republicans to take a big chunk of 

money and use it for pre-disaster, even though you won’t find any 

Member who disagrees with what you just said. 

So I am really looking for the remedy. Do you think this notion 

of saying, OK, you are willing to generate funds after disaster, because you have no—you really have no alternative. So if there is 

a provision that says some of that money has to go into pre-disaster, then maybe we will build up a pre-disaster mitigation fund. 

That is what you seem to be proposing. 

And I am asking—this is taking away from a disaster to pay for 

the next disaster, whoever gets it—it might not even be the particular jurisdiction—I am asking you do you think that that is really all that is left to do now to get Congress focused on the importance of pre-disaster funding. 

Mr. LINKOUS. I agree with you, that we must focus on recovering 

those that are impacted by Harvey and Irma, or whatever the 

major disaster that may be striking in the Nation. Our priority 

must be, first and foremost, there. 

That being said, what we have laid out is simply incentivizing 

States to take measures to prevent the damage that would come 

from the next hurricane. Whether we like it or not, the frequency 

and severity of weather events are increasing on a dramatic pace. 

Our funding of these events from a disaster situation on a post-disaster basis is unsustainable. We will not have the funds to—— 

Ms. NORTON. Well, people who lose funds—let’s say people in 

New York and New Jersey—— 

Mr. LINKOUS. One—— 

Ms. NORTON [continuing]. By having these funds taken from 

their post-disaster funds, would they be available to them for predisaster mitigation? 

Mr. LINKOUS. Yes. What we are recommending is taking a set 

percentage of the annual funds that are coming out of disaster relief, and setting them aside for pre-disaster mitigation. As you 

mentioned, 10 percent. So, if $200 billion was in the package for 

1 year, we would be setting aside $20 billion for the States to recover. One key element of what we are proposing is also having 

FEMA oversee all dollars that are being spent on a disaster basis. 

Billions of dollars were set aside for Sandy. Most of that should 

have gone to New Jersey and New York, where the disaster actually happened. But as we know, slush funds were created across 

20 

the board that impacted 25 States that got Sandy relief funds. So 

we believe that there is sufficient dollars within the disaster recovery funds that can be utilized toward pre-disaster mitigation. 

Ms. NORTON. I think it should be considered. As tough as it is, 

I think that the gentleman’s proposal should be considered. Thank 

you very much. 

Mr. BARLETTA. Thank you. The Chair now recognizes Mr. Faso 

for 5 minutes. 

Mr. FASO. Thank you, Mr. Chairman. 

Mr. Linkous, I recently met with a mutual insurance company located in my district. And, as you know, we had significant damage 

due to Irene and Lee back in 2011, as did the State of Vermont. 

And all through the Catskills we had serious flooding and property 

damage. And one of the things that the folks from the mutual company told me was that, ironically, the people who did not have flood 

insurance, they received compensation quicker than the people who 

had flood insurance. And I am wondering if you could comment on 

that, and what your experience and the opinion of your association 

and your coalition is on that topic. 

Mr. LINKOUS. Thank you. Well, certainly, when we are proposing 

recommendations to Congress, one of them is not to have insurance 

programs run by the Federal Government. We know that the large 

bureaucracy that is created around FEMA creates problems when 

it ultimately takes place in delivering a check to an affected business owner or homeowner. 

We, as mutual insurance companies, are based in the community. We were formed because of the community. And we are there 

to closely monitor their impact, and can have a far quicker and 

more responsive mitigation of their disasters because we are there. 

When you take it to a Federal level, you are inherently going to 

build in some lag of time as the Government is dealing not only 

with the flooding, but also the impacts of the hurricane and infrastructure, gas shortages, and everything else that inherently get in 

the way. 

We would call for more privatization of the National Flood Insurance Program. We have put forth key elements to revitalizing the 

National Flood Insurance Program, one of them being allowing 

data to be supplied by the National Flood Insurance Program to 

the private market, so companies like us could assess that information. Right now that information is only in the hands of FEMA. In 

order for us to adjust the rates according to the exposure, so that 

it does not jeopardize our companies, we need that information at 

our level in order to do that. 

Mr. FASO. So streamlining the information, making it accessible, 

in your view, would allow for quicker compensation for those that 

are adversely affected by these events. 

Mr. LINKOUS. Absolutely. 

Mr. FASO. And I don’t know if Ms. Grannis or another member 

of the panel would like to comment. One of the things I hear consistently from people in my district is the dissatisfaction with the 

FEMA mapping process, and that this process is often convoluted, 

filled with mistakes, et cetera. Could the panelists, Ms. Grannis or 

any of the other panelists, care to comment on that issue? 

21 

Ms. GRANNIS. Sure, I would be happy to. I think that is a common critique in many communities, that the flood plain maps are 

underpredicting what actually floods during these events, that 

FEMA is underfunded to update the maps. Many communities 

have maps that are, you know, many decades old. 

We have looked at solutions to try to have Federal agencies work 

better together. You have a multitude of different Federal agencies 

that are collecting data relevant to flood risk: USGS [United States 

Geological Survey], FEMA, NOAA. So, creating a facility that allows those different data sets to be combined and used to more easily update flood plain maps and give communities better flood risk 

information. 

So I think, when looking at the National Flood Insurance Program, looking at options for improving FEMA’s flood plain mapping 

program is going to be really key, and also giving FEMA the funds 

they need to make sure that those maps are up to date and accurate, and including future conditions information for communities. 

Mr. FASO. Any of the other panelists have a thought on this 

issue? 

Mr. LINKOUS. If I could just add, as well, myself, as a company, 

we are looking at multiple exposures: hurricanes, severe convective 

storms, tornadoes, severe weather events. We utilize modeling companies in the industry—RMS, AIR—to provide us data. They 

change their models, if not once a year, multiple times a year, 

based on the information they are receiving from the disasters. The 

more disasters we have, unfortunately, provide more data to us to 

be able to deal with those. 

When flood plains are changed on a multiyear basis, we know 

immediately that they are out of date. And so they cannot be used 

as a basis to adequately charge a rate to the consumer or a business that is in a flood plain, or even for them to determine are they 

truly in a flood plain to begin with. And so, we need to update the 

data, as Ms. Grannis said, and that would certainly go a long way 

to supporting the Federal insurance flood program. 

Last thing I would say on flood is that we all have to understand 

that the rates being charged by the NFIP [National Flood Insurance Program] are pre-subsidized. So the dollars that are determined internally to charge for a risk is already subsidized when it 

reaches the consumer. We are giving them a false sense of security 

by them thinking, oh, it only costs me $500 for my flood policy, it 

must not be a big risk, when really it has been subsidized by 90 

percent by the Federal Government. 

More importantly, we know that there are some living in those 

flood-affected areas that can’t afford the higher flood rates, but 

there are many that can afford the higher flood rates, but we are 

pre-subsidizing across the board, and not looking at this in the 

proper way. NAMIC has called for many changes in the NFIP that 

we would look for Congress to passing. 

Mr. FASO. Thank you, Mr. Chairman. I yield back. 

Mr. BARLETTA. Thank you. The Chair now recognizes Mr. 

Smucker for 5 minutes. 

Mr. SMUCKER. Thank you, Mr. Chairman. I thank you for holding 

this hearing, which, of course, is timely in regards to disaster relief 

and mitigation, and also I think it is timely in terms of the Federal 

22 

role in infrastructure, as we talk about an infrastructure package 

that we hope to see come forward in the next few months or so. 

And I want to target at least my first two questions in that regard, and this is specifically to Mr. Doney. And just to provide just 

a little context, or background, a community that I represent is the 

city of Lancaster, about 60,000 people, in Pennsylvania. And if you 

visit Lancaster now—again, this is happening in many areas, but 

specifically in my district—it is a vibrant, downtown area that is 

important to the entire county. 

And that didn’t just happen by accident. It was really the result 

of, you know, a lot of community leaders who focused on that for 

several decades. And we now see the outcome of that. And people 

recognize, you know, that that is a very important development to 

the region, as well as to the downtown. 

And it didn’t come about entirely by private investment. It really 

was targeted—in this case it was mostly State dollars that—if you 

look back specifically, a baseball stadium and a convention center, 

which would not have happened without targeted investment. It 

was a public-private partnership. 

And that is why I am excited about what we are talking about, 

in terms of our infrastructure package. We are talking about spurring private investment dollars, which—neither of those projects 

that I mentioned would have happened without a public-private 

partnership, but neither would have a lot of other ancillary businesses and development occur that didn’t require any State dollars, 

but was all private investment driven by the initial investment into 

the community. 

I am not—you know, I am new here, I am not as familiar with 

the Federal role. And so I guess I am interested in hearing from 

you about the role of the Economic Development Administration. 

What specifically can the Economic Development Administration 

provide that other agencies cannot? If you would, speak to that. 

Mr. DONEY. Well, I think in two respects. And it approaches the 

need for economic opportunity and healthy, vibrant communities 

and regions, as well as emergency preparedness. 

One is capacity on the ground. EDA invests in building that capacity. One thing about economic development is we cross just 

about every area. So we develop the relationships with our 

healthcare, with housing, with transportation, certainly with the 

business community, with education. Those relationships help us 

address things and creatively package things together. So capacity 

is one. 

Two is that last bit of money to make something happen. EDA 

tends to focus on those catalytic projects that you get one thing 

going and it gets the ball rolling. We have a revolving loan fund 

that is 20 years old. We have recycled that money many times. We 

average 17 percent into a deal, so that we push the conventional 

lenders to do as much as possible, we push the business to raise 

as much equity as possible, and then we fill that gap. 

It is frustrating at times, when we come here to Washington, 

that we don’t think the role of that is as greatly appreciated. We 

are the dealmakers there, and we are trying to close that last gap. 

Mr. SMUCKER. I wonder if you—do you have—as we look at spurring additional public-private partnerships, do you have suggesVerDate Aug 31 2005 15:11 Mar 19, 2018 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 P:\HEARINGS\115\ED\2017\9-13-2~1\26805.TXT JEAN
23 

tions for improvements, based on your experience, to that agency 

or other Federal agencies? 

Mr. DONEY. Well, two things. One, streamlining things at EDA. 

They have much lower staff than they used to have. The regulatory 

burdens certainly don’t go away, environmental review and things 

like that. That is one of the reasons we have suggested the 

defederalization of the revolving loan funds. Again, our loan fund 

is 20 years old, and we still have to file regular reports, and then 

EDA staff have to review those. 

The proposal that was before the House last year would have removed that for revolving loan funds that had proven themselves 

over a number of years to be performing well. So that would give 

them the flexibility there. 

The other is let EDA play its congressionally mandated role of 

being the lead agency in economic development, and developing 

those relationships to eliminate stovepipes between other agencies. 

Usually, when we are working on something, whether it be 

broadband, disaster recovery, or just trying to put a deal together, 

as you know from being mayor, we are cobbling together a whole 

variety of public and private resources. 

EDA is the one agency that has the flexibility to fill whatever 

gap that we have. It is really the only resource that we have that 

has that flexibility to fill that last gap. 

Mr. SMUCKER. Thank you. I see I am out of time. 

Mr. BARLETTA. Thank you. I am now going to begin a second 

round of questions, if any other Members want to participate. 

Mr. Hembree, are there ways in which we can ensure agencies 

like EDA and ARC encourage mitigation when funding disaster-related projects? 

Mr. HEMBREE. Absolutely, I think there are. I think there are 

probably both some requirements—maybe regulatory-type requirements—that could be put in place tied to funding levels. Well, I 

guess you would call that probably the stick approach. 

Probably what your local communities and we would like to see 

more is sort of the carrot approach. And from that, what I mean, 

and traditionally what has been successful with some programs in 

the past when we have dealt with similar issues, is identifying 

what those communities’ needs are, in terms of potential mitigation, what happens, what if, and encourage that planning process 

beforehand. 

I think we, as a nation and as regional development organizations, and even as local governments, have become much better at 

doing that. I think there is still a lot of work to go. So, I guess 

what the bottom line could be, one of the things that could be done 

is that could be tied to funds, sort of getting back to the same thing 

we are talking about, you know, in terms of the actual recovery 

funds to put in place, if that makes sense. 

Mr. BARLETTA. Yes, thank you. That is—thank you very much. 

Mr. Doney, in recent years, as you point out, EDA has served as 

an integrator of Federal economic development programs working 

with other agencies and streamlining the application process for 

distressed communities. Can you talk about why this role is important, and how it can be strengthened? 

24 

Mr. DONEY. Certainly. EDA plays the—again, that last-gap role. 

When it comes to infrastructure, it has the flexibility that if our 

need on a project is a sewer line or a water line—maybe it is a 

building renovation, maybe it is broadband, a whole variety of different things usually at the scale that won’t reach the level of other 

Federal programs, EDA can fill that gap. 

The programs of economic adjustment have been particularly 

critical in my region. The U.S. economy, the global economy, is so 

dynamic that the economic adjustment program allows us to develop plans and implement plans at the local level to react and 

take advantage of new market opportunities and address market 

challenges that come up. 

So, the public works program is that last gap of infrastructure. 

I don’t know where else to turn to, if it is not EDA. It is not like 

we have choices. We turn to EDA because there is nothing else that 

we can do, we have exhausted everything at the local, regional, and 

State level. We are very creative at getting everything we can to 

put something together. We turn to EDA when there is no other 

resource left. 

Mr. BARLETTA. Thank you. 

Mr. Seigel, you highlight the significance of disaster mitigation 

in your testimony. Mitigation not only saves lives and reduces 

property damage, but it can also save jobs. Can you talk more 

about how mitigation is critical in economic development? 

Mr. SEIGEL. We have just completed a very intense community 

education and outreach program in the SEDA–COG region, and we 

are actually going to be taking that across the local development 

districts through 52 counties and Pennsylvania. And the purpose of 

that was to hear from the businesses and the citizens about how 

we can plan for resiliency. 

It is a critical element of job retention and job creation. In terms 

of the retention, we have actually proposed and rolled out some 

concept ideas, suggesting offering tax credits, targeting revolving 

loan funds, revenues to businesses in order to build resiliency into 

their facilities. 

The types of things we are looking at are relocation, flood proofing, those types of things, all of those things that would allow a 

business to come back into operation quickly after an event occurs. 

And we are utilizing the EDA revolving loan funds for that, as well 

as advocating for certain interests and tax credit benefits for those 

purposes. 

Mr. BARLETTA. Thank you. The Chair now recognizes Ranking 

Member Johnson. 

Mr. JOHNSON. Thank you. 

Mr. Linkous, what aspects of the National Flood Insurance Program, if privatized, or—let me ask the question like this. 

You recommend that the National Flood Insurance Program be 

privatized, but what would the current market for flood insurance—or would that current market for flood insurance be served 

under a privatization model? 

Mr. LINKOUS. Thank you. We are calling for increased privatization of the National Flood Insurance Program, not necessarily the 

complete elimination of the flood. Flood is a very difficult loss to 

25 

model. That being said, I think the appetite of carriers and reinsurers would be quite healthy. 

We know that there is a significant capital surplus in both the 

reinsurance and carrier markets. Carriers are looking for areas to 

deploy that capital in order to serve markets, grow their market 

share. So I think it would be quite extensive. 

That being said, insurance companies are not going to take that 

first step to entering that risk until they understand fully the risk. 

And so that information coming to us being allowed to set actuarially sound rates for the risk that is there needs to be part of the 

reforms that—to the overall protection of flood in the Nation. 

Mr. JOHNSON. Would the private market be amenable to assuming the FEMA mapping process, along with this privatization proposal? 

Mr. LINKOUS. Well, certainly, because we know that the better 

data we have, the better we can manage the overall risk. If we 

don’t manage properly the risk of our company, small or large, we 

ultimately will go out of business. That is why we have been 

around for 175 years, because we look at the risk appropriately. 

Our owners are our policyholders. So I am not the owner of the 

company, I am the steward of the company. So the policyholders 

expect me to make sure that I am mitigating the risks that ultimately protects their surplus, the policyholders’ surplus. 

So I would see that the industry would enjoy engaging with the 

NFIP to make sure that the maps are correct, that they are updated on a frequent basis, and adapt to the changing climate that 

we see all around us that are driving more and more floods into 

these programs. 

I think there is an opportunity with the insurance industry coming in with its massive infrastructure of data, that it can supplement and help not only policyholders at the home and business 

level, but also communities that are looking for ways to improve 

their infrastructures. 

Mr. JOHNSON. Ms. Grannis—thank you, Mr. Linkous—Ms. 

Grannis, what would privatization look like if it were to become the 

policy of the country? 

Ms. GRANNIS. I think there would be a couple things that I would 

look to in thinking about how the private insurance market would 

play a role within and to complement the NFIP. 

The first is the flood plain mapping program. You know, we want 

that information to be public, we want that information to be updated and accurate, because it drives so many decisions about how 

we set insurance prices, where we build, how we build, who has to 

purchase insurance. So, you know, we want that information to be 

maintained as a public good. 

There has been proposals to include, like, a surcharge on policies 

to make sure that the flood plain mapping program continues to 

have the resources it needs. The second component that I would 

want to preserve is the role of the NFIP in encouraging communities to mitigate risk, and to do things like have better land-use 

practices in flood plains, have better codes and standards on the 

books. So we want to make sure that that public good is still preserved with a private role, as well. 

26 

And then I think the third prong of the National Flood Insurance 

Program that really has to be managed carefully is the affordability 

of flood insurance. This is the last line of defense for people if they 

are affected by flood insurance. This is the only money they have 

to rebuild. And so, if those insurance prices go through the roof and 

lower income homeowners are not able to continue to maintain coverage, or are priced out of their home, that will have significant resilience effects on communities and the ability of households to recover in the event of these extreme storms. 

Mr. JOHNSON. Thank you. I yield back. 

Mr. BARLETTA. Thank you, Mr. Johnson. And I thank you all for 

your testimony today. 

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. 

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 11:30 a.m., the subcommittee was adjourned.] 

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