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[Senate Hearing 114-733]
[From the U.S. Government Publishing Office]

 
  DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2016

                              ----------                              

                       WEDNESDAY, APRIL 22, 2015

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 4:25 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. John Hoeven (chairman) presiding.
    Present: Senators Hoeven, Shaheen, and Baldwin.

                    DEPARTMENT OF HOMELAND SECURITY

                  Federal Emergency Management Agency

STATEMENT OF HON. W. CRAIG FUGATE, ADMINISTRATOR

                opening statement of senator john hoeven

    Senator Hoeven. I call this hearing to order for the 
Department of Homeland Security (DHS) Appropriations 
Subcommittee.
    I would like to welcome Administrator Fugate, the 
Administrator of the Federal Emergency Management Agency 
(FEMA). I appreciate very much you being here.
    Also, Senator Shaheen, I appreciate you being here as well.
    We are here to discuss the fiscal year 2016 budget for your 
agency. Before I get into the substance of the budget, I would 
like to take a moment to thank you for sending Roy Wright to 
Fargo several weeks ago. It was very helpful. And actually, his 
visit there pertains to one of the subjects I will bring up 
later today, which is talking about how we coordinate flood 
mapping and flood insurance with community efforts to build 
permanent flood protection.
    He did a very fine job. He was very helpful. And I think 
that is something that could be helpful around the country.
    For today's hearing, my focus will be on three areas: 
effective stewardship of the Disaster Relief Fund, FEMA's 
effort to buy down risk before a disaster occurs, and measuring 
preparedness levels of the Nation after years of investment.
    The Disaster Relief Fund, or DRF, is FEMA's biggest tool in 
aiding disaster victims, rebuilding our communities, and 
ensuring resiliency in future disasters. Congress took a major 
step several years ago to stabilize the DRF by establishing a 
formula for its funding. As a result, FEMA must now focus on 
ensuring the funds are managed and distributed in an effective 
and efficient manner to respond to, recover from, and mitigate 
against disasters.
    Congress took steps in 2013 to help reduce the overall cost 
of disasters in the Sandy Recovery Improvement Act. Section 428 
of that act provided for alternative procedures in certain 
projects to allow grantees to receive full project funding 
upfront on agreed-to estimates.
    That option should reduce administrative costs, start 
recovery projects faster, and likely reduce some of the 
challenges currently being experienced with deobligation of 
funds after projects are closed.
    Unfortunately, there seems to be some reluctance on the 
part of grantees to embrace that program. So I want to better 
understand what that reluctance is, because I think this is an 
innovative idea to help projects move forward more 
expeditiously.
    I mentioned deobligations, because I know that this is a 
real concern to the States. Where project expenditures are 
questioned in an audit, FEMA appropriately has the ability and 
authority to deobligate funds. However, that authority has been 
exercised, in some cases, years after project approvals and 
often well after project completion in response to audits by 
the inspector general.
    So we need to find a balance between any waste, fraud, or 
abuse findings and decisions made under the pressure of 
responding to a disaster.
    So again, I applaud you for FEMA's efforts to work with 
grantees through the new procurement disaster assistance teams. 
I hope these teams will help grantees avoid some of the common 
mistakes while managing the response to the disaster. But 
clearly, there is a real concern on the part of States about 
the possibility of deobligating funds. I understand that, 
having served as a Governor for 10 years. I know that Senator 
Shaheen understands that very well, too, based on her tenure as 
Governor.
    So we do have to find ways to mitigate that concern and 
better address the challenge that it poses between States being 
able to go ahead and undertake these projects in a timely way 
with confidence that they are following the rules, but at the 
same time making sure we do not have waste, fraud, and abuse. 
We have to do both, and it is a challenge.
    Also, you and I have discussed and agreed, Administrator, 
that FEMA's hazard and Predisaster Mitigation Program, as well 
as RiskMap, are critical to buying down damage that would 
otherwise be seen in future disasters, especially flooding. The 
key is that disaster mitigation focuses on the actual hazard, 
and that the funding is effective in preventing or mitigating 
that type of disaster, whether it be flood, fire, or other 
natural disaster.
    The example that I have used in our discussions, and that I 
have worked on, I think, with you and, certainly, members of 
your agency is where we have flooding and roads get washed out, 
and FEMA provides funding to help replace those roads. You can 
replace the road exactly like it was, in a sense. But if that 
is at a level where it continues to wash out and be flooded, 
that does not make much sense, because we just repeat the 
problem. We keep stepping in the same hole.
    So the ability to replace the road in a way where you 
mitigate these problems is cost-effective for everybody 
concerned. You pay for it once instead of three, four, five 
times, and the localities are better served because they have a 
usable road.
    So I think this is an important area that we will explore 
in this hearing. And I know you have some thoughts on it.
    With respect to preparedness effort, the administration has 
again submitted its proposal to consolidate grants into the 
National Preparedness Grant Program, and NPGP. While the 
authorizing committees should consider this proposal, I believe 
that FEMA could be doing more to assess the return on the 
investment that the Government has made in our Nation's 
preparedness. What is the level of preparedness across the 
Nation? How are training and exercise efforts integrated with 
these grants? How can we better measure the effectiveness of 
grant programs in raising the preparedness level?
    So we want to talk about where we are in terms of 
preparedness as a Nation, what your opinion is in that respect, 
and what we are doing to continue to improve it.
    The fiscal year 2016 request also includes funds to start 
an IT modernization for your grant systems. So the question 
here is, will that modernization effort improve the ability of 
States to report preparedness levels?
    I think we talked about some cost savings. Always a good 
thing. But we also want to talk about the effectiveness of the 
program.
    So I look forward to hearing from you on these and other 
priorities that you have for this year.
    With that, I will turn to ranking member Senator Shaheen 
for any opening comments she may have.

                  statement of senator jeanne shaheen

    Senator Shaheen. Thank you, Mr. Chairman.
    Welcome, Administrator Fugate. And your staff members who 
are here, we appreciate you coming this afternoon.
    As Chairman Hoeven says, as a former Governor, I also 
recognize how critical FEMA's activities are when States have 
emergencies. And, even more personally, having been in a 
tornado at one point in my past, I very personally benefited 
from the efforts that FEMA has made to help people who are 
victims of disasters.
    So I appreciate that your work is critical and understand 
that currently all 50 States, including New Hampshire, and some 
tribal areas have an active disaster with FEMA, and understand 
that the costs to rebuild are growing.
    In the 1990s, FEMA was appropriated an average of $3 
billion a year for disaster costs. And yet, one decade later, 
average costs have tripled to over $9.5 billion a year.
    Disaster types are also more varied and complex. In the 
last 5 years, along with the anticipated floods, tornadoes, 
wildfires, and hurricanes, the Nation has had an earthquake on 
the east coast, Superstorm Sandy in the Northeast, landslides 
in the West, a bombing at the Boston Marathon, active shooters 
in public places, and unprecedented snow in the Northeast. And 
further impacts from a cyberattack are constantly 
materializing. So it has been a very busy time at FEMA.
    Now, because these events have become more common and more 
intense, this makes our mitigation efforts increasingly 
critical. We can't continue just to make investments in 
rebuilding after an event occurs. We must pay equal attention 
to preventing damage from occurring in the first place. These 
efforts are not only critically important to vulnerable 
communities but also to the Federal budget.
    I was pleased to see the administration's request for a 
significant increase in mitigation efforts to better prepare 
for and reduce the impacts of flooding and other types of 
natural disasters.
    For every $1 we invest in these activities, we save up to 
$4 in rebuilding costs. That is, in fact, a smart investment.
    Each State, territory, major urban area, and several tribes 
have ongoing preparedness projects with the Agency as well. 
These activities have an immediate and real impact on citizens, 
on businesses, and on our first responders.
    Administrator Fugate, I look forward to working with you to 
ensure FEMA's support role is delivered in a user-friendly way, 
both from your headquarters and your regional offices.
    So again, thank you for being here today, and I look 
forward to your testimony.
    Thank you, Mr. Chairman.
    Senator Hoeven. Thank you, Senator Shaheen.
    I also would offer the opportunity to Senator Baldwin, for 
any opening statement you may have.

                   statement of senator tammy baldwin

    Senator Baldwin. Thank you, Mr. Chairman and Ranking 
Member. I don't want to give an extensive opening statement, 
but I will, like you, Mr. Chairman, preview the focus of my 
questions following your testimony. It'll be the issue of rail 
safety and the prospect for a derailment or explosion, as we 
see a lot of train traffic through our State and particularly 
from the chairman's region of the world.
    So just with that, thank you for being here, and I look 
forward to asking you questions following your testimony.
    Senator Hoeven. With that, Administrator Fugate, we turn to 
you for your opening statement.

               summary statement of hon. w. craig fugate

    Mr. Fugate. Senators, Mr. Chairman, thank you.
    The first thing I wanted to talk about is I want to thank 
you and your staff for something that is not always seen as 
something that is glamorous, but it is a key part of the 
constitutional separation of powers. And that is the budgeting 
process. The fact that the administration comes forward with 
recommendations, but ultimately, Congress must determine where 
we apply our taxpayer dollars, is a deliberative process that 
we participate in.
    It is not easy. Our staff spent a lot of time on it. We are 
not going to agree on everything. But it is the difference 
between having continuing resolutions and uncertainty and 
knowing what the intent of Congress was with a budget that 
makes a difference in our ability to execute a mission.
    It isn't always going to be the highest priority that some 
people think we should be working. But I understand the hard 
work you put in, the staff puts in, to get to those numbers, to 
get to the budgets, to ensure that we have the resources to do 
our jobs that you have determined against all the priorities of 
Government.
    So first of all, I understand our role here is to present 
our budget. But I also understand it is your role to make those 
decisions, to figure out how we are going to fund all of 
government, and we are part of that discussion. So we just 
appreciate that.
    The second thing I want to talk about is, and I want to 
save more time for your questions because I think there are a 
lot of things we want to talk about, but when I got to FEMA, it 
was a real challenge for me to be able to talk to you and tell 
you about what we were doing. I could more easily tell you how 
much money we had spent, but I couldn't tell you what was 
actually accomplished.
    Even within the programs, I found that we were oftentimes 
doing things because we had been doing them without really 
understanding. Well, is there another way to look at this? And 
I told the staff when I got here, and I had come from the State 
of Florida, I said enjoy your budget; this is the last one that 
is going to go up.
    We knew what was happening across the country. We knew the 
economy was in trouble. In the years of budgets just 
incrementally going up each year, you were able to basically 
achieve your mission because you were going to get a little bit 
more each year when it was over.
    And it didn't mean that you didn't have needs, but you did 
have to look at your budget differently, because if you were 
going to find or free up money for the things you thought we 
needed to do, the money was going to come from things that you 
had been doing that either you were going to do differently or 
you were going to find different ways to accomplish that.
    To a certain degree, we were doing that well before 
sequestration came in. And even with that, we had focused on 
the mission and not used that as an excuse but rather looked at 
how we get more efficiencies and savings.
    But we also needed to coalesce a lot of different moving 
pieces at FEMA into something that we could articulate and tell 
people ``this is what we have to be focused on.''
    The first thing, you have to build for the catastrophic 
disaster. If you don't, the risk is we will have the next 
Katrina because systems do not scale up. If you are not 
building for the big event and you don't understand that is why 
you are putting teams together, building your programs, if you 
only build to what you are capable of doing, that larger 
disaster response will be a failure.
    That doesn't mean you have to ask for my money, but you 
have to design your systems around catastrophic disaster 
response.
    The second thing is, you have to build your programs around 
the people you serve. As Senator Hoeven points out, when that 
is not the case, we see the mismatch between trying to serve 
our communities in how they need the programs to work for them 
versus what may be easy for us to administer. So oftentimes, we 
found that we had defaulted to those that are easy to 
administer and we weren't really focused as much on the people 
we are serving. That mismatch oftentimes has played out in 
survivors' communities not getting the full support they should 
have gotten in a disaster.
    You have to go to where disasters are. I tell people, just 
because it works at 500 C Street, doesn't mean it is going to 
work out on a train derailment in the middle of nowhere with 
poor communications. You have to build the systems that go to 
where the survivors in the disaster are, not what works in 
Washington, DC.
    You have to buy down your future risk. We have to do a 
better job of understanding that we can no longer subsidize 
risk and come back to the first $1 every time there is a 
disaster, if local governments and States are not doing their 
part to reduce future risk. We just can't keep dealing with 
every disaster and building it back, as Senator Hoeven says, to 
the way it was, only to rebuild it time and time again. We have 
to do that differently. So we have to look at risk reduction.
    Then the last thing, we oftentimes, at FEMA, as your 
committee staff will tell you, have not been good stewards of 
the basic functions of our programs, whether it is IT, 
personnel, or a lot of things that may not be things people 
want to talk about in a disaster. But if you don't have the 
foundational systems of your management working right, you are 
not going to build that catastrophic disaster response team. It 
goes from how you hire people, to how you build your systems, 
to how you set up your architecture for IT.

                           prepared statement

    So we look at these five areas and draw all of our programs 
through that lens of, are we as a Nation building the 
capability to respond to catastrophic disasters, not just what 
FEMA does, but through all those grant dollars that have funded 
local and State capabilities? Are we building the capability to 
respond as a Nation to catastrophic disasters?
    So with that, Mr. Chairman, I am available to respond to 
your questions.
    [The statement follows:]

               Prepared Statement of Hon. W. Craig Fugate
                              introduction
    Good Afternoon Chairman Hoeven, Senator Shaheen and Members of the 
Subcommittee. My name is Craig Fugate, and I am the Administrator at 
the U.S. Department of Homeland Security's (DHS) Federal Emergency 
Management Agency (FEMA). It is an honor to appear before you today to 
discuss FEMA's fiscal year (FY) 2016 budget request in terms of our 
strategic goals and objectives, past progress and the future 
opportunities included in this year's submission.
    When I arrived at FEMA nearly 6 years ago, my focus was on creating 
a culture that was less reactive and more forward leaning, with a focus 
on becoming a faster, smarter, adaptable and more nimble Agency in our 
approach to disaster response and disaster assistance.
    Today, with the help of Congress and the additional authorities 
provided to FEMA to carry out its mission, and along with the 
dedication of our workforce, our Agency is positively and substantially 
different than when I first arrived 6 years ago. We are transforming 
into an Agency that is more survivor-centric in mission and program 
delivery, more expeditionary in nature, and better postured to 
effectively assist and support our State, local, tribal, and 
territorial partners. We are also making efforts to buy down risk, 
which will help to lower the costs of future disasters.
    The fiscal year 2016 budget request reflects FEMA's priority to 
continue to manage resources more effectively with an emphasis on 
fulfilling the Agency's strategic priorities. Under my direction our 
focus is to continue maintaining and strengthening the Agency's ability 
to respond to disasters while reducing costs by effectively utilizing 
available resources and improving the efficiency of our operations. The 
budget reflects lessons learned from recent disasters and overall 
trends in disaster losses that led to FEMA's enhanced focus on maturing 
plans and processes to better serve survivors and communities and the 
need to serve as a catalyst in enabling national disaster risk 
reduction. Moreover, the budget seeks to strengthen FEMA's 
organizational foundation through effective management structures that 
are not separate from our mission, but critical to supporting it--
whether through building a well-trained and capable workforce to 
execute our mission (with a focus on hiring, managing performance, and 
career development) or a secure information technology infrastructure 
that will allow us to respond uninterrupted to catastrophic disasters.
    I am pleased to report to the subcommittee that the Agency's fiscal 
year 2016 budget request is guided by the 2014-2018 Strategic Plan 
(Plan) which we released this past July. The Plan builds off of the 
Administrator's Intent for fiscal year 2015-2019 which I discussed in 
my testimony before this subcommittee last March. The Plan was 
developed with the input of hundreds of FEMA employees and a breadth 
and depth of external stakeholders who are now working together to 
execute the Plan's five strategic priorities:
  --Be survivor-centric in mission and program delivery;
  --Become an expeditionary organization;
  --Posture and build capability for catastrophic disasters;
  --Enable disaster risk reduction nationally; and
  --Strengthen FEMA's organizational foundation.
    FEMA's leadership is committed to shaping the Agency's resource 
decisions going forward on achieving outcomes defined in the Plan on a 
priority basis. I will discuss several of these initiatives in this 
testimony.
                          disaster relief fund
    The Disaster Relief Fund (DRF) provides individual and public 
assistance to help families and communities affected by declared 
disasters to rebuild and recover, as well as mitigation funds to reduce 
the impact of future disasters. Congress' continued support of the DRF 
has provided critical and timely financial resources that enable the 
Agency to be survivor-centric in the delivery of our mission and 
programs.
    The fiscal year 2016 DRF budget request is consistent with the 
Budget Control Act of 2011 (Public Law No. 112-25) and totals $7.4 
billion, in addition to carry-over and recoveries. The DRF request for 
fiscal year 2016 includes estimated costs for prior catastrophic events 
(including Hurricane Sandy), a ten-year average level for non-
catastrophic disasters, and funds for DRF Base activities (i.e., 
Emergencies, Pre-disaster Surge Support, Fire Management Assistance 
Grants, and Disaster Readiness and Support).
    The request also includes again a $1 billion set-aside for no-
notice events, which should support initial critical funding needs of a 
new catastrophic event while the Congress evaluates any additional 
funding requests. FEMA will continue to maximize the use of DRF 
resources by working closely with states, localities, territories and 
tribes and through the use of its authorities and policies, including 
Strategic Funds Management, which is FEMA's process for obligating 
Public Assistance project funding based on a subgrantee's schedule to 
execute the eligible work. The DRF request also includes a $250 million 
rescission to Base balances in anticipation of unspent carry-over 
balances and expected additional recoveries.
    Finally, to ensure sound resource management and maximize 
operational readiness at the lowest cost to taxpayers, FEMA has 
developed a methodology for tracking incident workforce cadre readiness 
and standardizing costs across the incident workforce. This initiative 
allows FEMA to link current and future Disaster Readiness and Support 
budget requests to our efforts to maximize cadre readiness. The Cadre 
Operational Readiness and Deployment Status (CORDS) report will measure 
FEMA's current state of readiness consistent with past and current 
actions based on funding and will assist in determining future resource 
needs in order to improve FEMA's readiness posture.
           continuing to implement major legislative changes
Sandy Recovery Improvement Act of 2013
    In January 2013, Congress passed and President Obama signed the 
Sandy Recovery Improvement Act (SRIA) into law, authorizing several 
significant changes to the way FEMA delivers disaster assistance. SRIA, 
and the additional authorities it provided, continues to aid recovery 
efforts associated with Hurricane Sandy and subsequent disasters.
    To date, SRIA is one of the most significant pieces of legislation 
impacting disaster response and recovery since the Post-Katrina 
Emergency Management Reform Act (PKEMRA) and builds upon the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act. For example, 
SRIA's Public Assistance Alternative Procedures provision provides 
substantially greater flexibility in the use of Federal funds for 
Public Assistance applicants. This should result in fewer 
administrative burdens and costs for all parties when participating 
applicants choose to accept grants based on fixed, capped estimates, 
which may be provided by the applicant's licensed engineer and 
validated by an independent expert panel. A number of grantees, 
including the State of New York, used alternative procedures in the 
aftermath of Hurricane Sandy to help rebuild and restore critical 
infrastructure.
Homeowner's Flood Insurance Affordability Act 2014
    In March 2014, President Obama signed the Homeowner Flood Insurance 
Affordability Act (HFIAA) of 2014 into law. This law repeals and 
modifies certain provisions of the Biggert- Waters Flood Insurance 
Reform Act of 2012 (BW-12), and makes additional program changes to 
other aspects of the program not covered by that Act. Many provisions 
of the Biggert-Waters Flood Insurance Reform Act remain and are still 
being implemented.
    FEMA's fiscal year 2016 budget request provides for the 
implementation of the new legislative mandates in BW-12 and HFIAA. 
These Acts authorized an ongoing flood mapping program with several 
major expansions in scope, enhancements to community engagement, and 
risk communications to be implemented in collaboration with a Technical 
Mapping Advisory Council comprised of key stakeholders, subject matter 
experts, and representatives of Federal agencies. The $181.2 million in 
requested funding for the National Flood Insurance Fund discretionary 
appropriation will enable FEMA to begin the implementation of these new 
requirements. This includes specific mapping, community engagement, and 
risk communication activities directed by the reforms, and the 
recommendations that the Technical Mapping Advisory Council is expected 
to begin making over the next few years.
    HFIAA also repeals certain rate increases that have already gone 
into effect and provides for refunds to those policyholders. I am 
pleased to report to the subcommittee that 100 percent of these refunds 
have now been issued. The Act also authorizes additional resources for 
theNational Academy of Sciences (NAS) to complete the affordability 
study as mandated by BW-12. We expect NAS to deliver the study later 
this year.
    Section 24 of HFIAA provides for the designation of a Flood 
Insurance Advocate to advocate for the fair treatment of policyholders 
under the National Flood Insurance Program (NFIP) and property owners 
in the mapping of flood hazards, the identification of risks from 
flood, and the implementation of the measures to minimize the risk of 
flood. FEMA's fiscal year 2016 budget proposal includes a request for 
eight positions and $1,590,000 to establish the permanent Flood 
Insurance Advocate Office. The development of the Flood Insurance 
Advocate Office supports FEMA's strategic priority of enabling risk 
reduction through enhancing stakeholder interaction to provide greater 
access to information on risk, insurance, and mitigation. With these 
thoughts in mind, I want to thank the Congress for its support of the 
Advocate's Office in the fiscal year 15 Department of Homeland Security 
Appropriations Act (Public Law No. 114-4). The establishment of this 
function will provide disaster survivors with a congressionally 
mandated representative who will help ensure fair treatment of 
policyholders under the NFIP.
    2014-2018 fema strategic plan-driving budgetary decision making
    FEMA's fiscal year 2016 budget request reflects a concerted effort 
on behalf of the Agency's leadership to link key priorities within our 
2014-2018 Strategic Plan with budgetary decisionmaking. I wanted to 
take this opportunity to provide the subcommittee with a few examples.
Strategic Priority One: Be Survivor-Centric in Mission and Program 
        Delivery
    The whole community approach to emergency management calls for 
those who manage disasters to understand and recognize both the needs 
and the capabilities of affected survivors. Hurricane Sandy and other 
recent disasters highlighted the need to make FEMA's programs and 
processes as accessible and user-friendly as possible for survivors 
rather than prioritizing FEMA's ease of administration. In delivering 
its Individual Assistance and Public Assistance programs, FEMA will 
therefore endeavor to anticipate and adapt to survivors' needs, 
maximizing the speed, efficiency, accessibility, and ease of use of our 
programs and services for individuals and communities. FEMA's fiscal 
year 2016 budget proposal reflects these efforts and for example, 
includes a request to transfer $4 million and eighteen positions from 
the Recovery Directorate to the Office of Federal Disaster 
Coordination. This transfer would ensure that the Recovery Framework 
principles are fully embraced and promoted through our field leadership 
who are working most closely with States, tribes and local communities 
both before and afterdisasters. We anticipate this will improve the 
effectiveness and efficiency of interagency coordination efforts after 
large disasters.
    The budget submission also includes a request for an increase in 
$4.3 million for the Integrated Public Alert and Warning System 
(IPAWS). If appropriated, the program would apply $1.5 million of this 
funding towards improving Primary Entry Point (PEP) station 
reliability. The PEP stations are the primary mechanism for 
disseminating a Presidential message and serves as a highly resilient 
communications resource for State, tribal and local governments. $2.8 
million of this funding would go towards improving the reliability of 
the IPAWS system by seeking alternative commercial cloud hosting 
solutions to safeguard system availability. Improving IPAWS 
availability and reliability will ensure integrated services and 
capabilities are available to Federal, State, territorial, tribal, and 
local authorities that enable them to alert and warn their respective 
communities via multiple communications methods. This investment would 
directly support our efforts to be survivor-centric in mission and 
program delivery.
Strategic Priority Two: Become an Expeditionary Organization
    The overall response to Hurricane Sandy confirmed that large and 
complex incidents will stress FEMA and the Federal Government's 
capacity to anticipate survivor needs, maintain unity of effort, and 
provide rapid support to State, local, territorial and tribal partners. 
As a result, FEMA's Response Directorate, Logistics Directorate, Office 
of Federal Disaster Coordination, and the Regional offices are working 
to build the capacity to respond rapidly and to appropriately sustain 
incident operation. FEMA will continue to expand its ability to become 
an expeditionary organization with the right people and resources in 
the right places at the right times to meet the needs of disaster-
affected communities.
    The Agency's fiscal year 2016 submission directly reflects these 
efforts. For example, the request includes $18.6 million for the FEMA 
Qualifications System (FQS) Program which ensures the Agency puts forth 
a qualified workforce based on performance standards; establishes 
minimum, consistent, and fair qualification requirements for all 
workforce positions regardless of employment status; and works to 
strengthen the training and qualification standards for all workforce 
positions by implementing improvements based on sound analysis.
Strategic Priority Three: Posture and Build Capability for Catastrophic 
        Disasters
    One of the greatest challenges in emergency management lies in 
preparing for a catastrophic disaster. FEMA leads efforts to prepare 
the Nation for a catastrophic event, engaging the whole community to 
harness and enhance the capabilities of citizens and communities. FEMA 
continues to work to deliberately identify gaps in the Nation's 
capabilities to respond to and recover from a catastrophic event, and 
to work with whole community partners to address the identified gaps 
through better planning and through continued efforts to build and 
sustain the capabilities that matter most. The centerpiece of these 
efforts is the National Preparedness System. The National Preparedness 
System outlines a structured process for the whole community to develop 
and advance our nation's security and resilience. The components of the 
National Preparedness System provide a consistent and reliable approach 
to support decision-making, allocating resources, and measuring 
progress. Through the National Preparedness System, whole community 
partners:
  --Identify and assess the risk, determine the resources required to 
        address those risks, and build and sustain the core 
        capabilities in the National Preparedness Goal, as part of the 
        Threat and Hazard Identification and Risk Assessments (THIRAs);
  --Coordinate planning across organizations through the National 
        Planning Frameworks;
  --Validate existing capabilities through the National Exercise 
        Program;
  --Continuously improve knowledge and core capabilities through the 
        National Training and Education System; and
  --Participate in the regular review and assessment of capabilities, 
        resources and plans through the National and State Preparedness 
        Reports.
    FEMA's fiscal year 2016 budget request also re-proposes the 
National Preparedness Grant Program (NPGP) that seeks to maximize the 
impact and benefit of grants for the whole community's capacity to be 
prepared based on risks.
    The primary purpose of the fiscal year 2016 NPGP is to build and 
sustain core capabilities associated with the five mission areas 
described in the National Preparedness Goal: prevention, protection, 
mitigation, response, and recovery. Particular emphasis will be placed 
on capabilities that address high consequence events that pose the 
greatest risk to the security and resilience of the United States, 
including those along its borders, and could be utilized to address 
multiple threats and hazards.
    Finally, the fiscal year 2016 budget request would also maintain 
FEMA's efforts to ensure that first responders continue to receive the 
training they need to best serve their communities. As a result, this 
year's budget submission maintains strong support for the Center for 
Domestic Preparedness (CDP) and the Emergency Management Institute 
(EMI). Moreover, the budget submission includes separate requests for 
$18 million for the Center for Homeland Defense and Security (CHDS) and 
$42 million for the National Domestic Preparedness Consortium (NDPC), 
consistent with congressional intent and authorizing statute.
Strategic Priority Four: Enable Disaster Risk Reduction Nationally
    Our country faces increasing disaster risk in the near and long 
term due to multiple interacting factors. Reducing loss of life, 
injuries, and disaster costs will require concerted action by 
individuals, businesses, and communities, as well as a range of 
Federal, state, territorial, tribal and local government agencies. To 
further enable national disaster risk reduction, FEMA identifies and 
assesses risk; reduces risk by promoting resilient land use incentives, 
building codes, and providing Hazard Mitigation Grant Program funding; 
and, spreads the risk of flood loss through the National Flood 
Insurance Program (NFIP). Through these programs, FEMA reduces the 
likelihood of future losses, enables individuals to recover more 
rapidly from floods and other disasters, and minimizes the financial 
impact of disasters on the U.S. Treasury, states, tribes, territories 
and local communities.
    FEMA's fiscal year 2016 budget request places a strong emphasis on 
funding programs that will minimize risk while increasing resiliency. 
For example, the request includes $200 million for Pre-Disaster 
Mitigation (PDM) grants. The PDM grant program provides funds for 
hazard mitigation planning and projects on an annual basis. The program 
was put in place to reduce overall risk to people and structures, while 
at the same time, also reducing reliance on the DRF if an actual 
disaster were to occur. The requested increase in funding will enable 
FEMA to provide over 600 grants to State, local, tribal and territorial 
governments while augmenting our team with additional staff resources 
needed to review, implement, monitor and closeout the grants.
    The budget request also includes $194 million in additional funding 
for FEMA's RiskMap program. Risk MAP provides high quality flood maps 
and information, tools to better assess the risk from flooding. The 
program provides planning and outreach support to communities to help 
them take action to reduce flood risk. Perhaps most importantly, 
RiskMap, like PDM, helps to build resilience so that disaster survivors 
and their communities are less reliant on the DRF.
    The requested increase in RiskMap funding would ensure that an 
additional 160,000 miles of flood maps meet the current flood mapping 
standards. In addition, FEMA would be able to initiate new Risk MAP 
projects in watersheds with high risk significant flood hazard data 
needs while enabling community actions to reduce flood risk.
    The requested increases in RiskMap and PDM would provide funding 
for the two programs at levels authorized by the Congress.
Strategic Priority Five: Strengthen FEMA's Organizational Foundation
    Mr. Chairman, FEMA must be adaptable and flexible as an 
organization in order to fulfill our mission. To achieve our strategic 
priorities, the Agency has recognized the critical importance of 
achieving excellence in human capital, data analytics, information 
technology, and other business functions. FEMA has also prioritized 
investments to strengthen the cyber-security of its systems by 
centralizing funding to ensure a focused and consistent approach within 
the Office of the Chief Information Officer.
    The fiscal year 2016 budget request includes $11.9 million to 
initiate the process of modernizing FEMA's grants management system in 
alignment with our financial management modernization efforts with DHS 
support. The current systems do not sufficiently reconcile, scale, or 
meet the current and future demands for real-time data analytics and 
reporting requirements of FEMA and its whole community partners. This 
initiative would transform the Agency's current suite of aging, stove-
piped, non-interoperable and technologically obsolete grants management 
systems into a modern grants management environment that seamlessly 
integrates with FEMA's financial systems. This investment will promote 
accountability, transparency, and standardization in accomplishing 
FEMA's mission in the regions and at headquarters while making our 
systems easier for grant recipients to use. This requested increase in 
funding would strengthen our organizational foundation and increase the 
efficiency of Agency operations.
    The budget submission also includes an increase of $5.0 million for 
the Information Technology (IT) resiliency review of FEMA's systems, 
and $917 thousand for supporting cyber-security personnel reforms. 
These investments support the ongoing security review and annual 
certification of FEMA's complete headquarters and regional IT systems 
inventory, as well as the remediation activities associated with that 
review. FEMA anticipates that these efforts will identify further 
efficiencies and savings that will be used to offset the cost of future 
IT operations, maintenance, and enhancements. Finally, FEMA also 
requests $3.2 million to modernize our financial management systems. 
The updated financial management system will be able to provide 
consistent, standardized information for program managers, financial 
managers, Agency executives, and oversight organizations including the 
Congress.
                               conclusion
    The fiscal year 2016 President's Budget provides FEMA with the 
resources we need to support readiness, increase the nation's 
preparedness posture and enhance the capabilities of our state, tribal, 
territorial and local partners. By strengthening resilience, 
maintaining robust disaster response and recovery capabilities and 
strengthening our organizational foundation we will ensure that FEMA is 
able to meet its mission while being careful stewards of taxpayer 
dollars.
    I look forward to working with the subcommittee and would encourage 
the Congress to take swift action to ensure that FEMA and the 
Department of Homeland Security are funded at the appropriate levels.

                   HURRICANE SANDY: INSURANCE CLAIMS

    Senator Hoeven. Again, thank you, Administrator, for being 
here today. We will begin the questions. We will start with 
rounds of 5 minutes.
    I want to go right to the concern that has come up in 
regard to Hurricane Sandy and claims for homeowners who have 
not received the proper resolution on their claims, that they 
have had issues with the insurance company and it appears 
particularly with engineering companies that have worked on 
adjusting their claims. And as it turns out, these claims were 
not adjusted properly, and it appears that homeowners were 
shortchanged on recovery that they were entitled to.
    My understanding is, out of the 144,000 claims that were 
made, that there is on the order of 2,200 cases where the 
engineering report may have been fraudulent or improper, where 
the insurance company didn't provide the proper reimbursement 
to the homeowner.
    This is obviously a very serious concern, and we need to 
make sure we understand exactly what happened and hold those 
responsible accountable and correct it.
    I also am aware that Mr. Roth, the DHS inspector general, 
is conducting a full investigation, and we look forward to his 
report.
    But I would like you to respond as to the actions you are 
taking. What is the current status of this matter?
    Mr. Fugate. Well, the actual cases you mentioned, I believe 
those are the cases that are actually being litigated. We are 
concerned that there may be people who did not choose to 
litigate who also had questionable engineering reports.
    So, very simply, we are approaching this from, if they are 
owed more money, we pay. If it is fraud, we refer that to the 
inspector general at the Department of Justice. If we are 
finding litigation costs are going to exceed what the claims 
were, we are willing to settle.
    So those are the cases that are in litigation that we are 
working toward settlement. There are additional hearings taking 
place as we move toward that. But we are prepared to reopen the 
other cases where there may have been engineering firms or 
concerns or allegations that involved these firms, as to how 
accurate the findings were in determining what the damages 
were.
    So we are in the process to begin this next month: opening 
up the claims process to the people that had policies served.
    If they got the full amount, the $250,000, they have gotten 
what insurance would pay. But for those who did not receive 
that who still have concerns, we are going to open a process to 
begin looking at those with the same scrutiny that we have been 
looking at those that have been in litigation.
    But this goes back to being survivor-centric. I think we 
found that through our Write Your Own and through our own 
program, that we put more emphasis on ensuring the solvency of 
the National Flood Insurance Program (NFIP) funds without 
making sure we were putting as much emphasis on servicing those 
claims.
    There shouldn't have been any reason why, if it was 
eligible damage under the policy, it wasn't paid. There is no 
incentive for anybody not to. So we are still looking at what 
was the systemic root cause. We think it comes back to, there 
was more emphasis on not making overpayments, because the 
insurance company would have to get that money back and 
reimburse FEMA. That seemed to drive more of this than making 
sure there was equal weight given to paying fully what the 
policy should have paid.
    So as we get through that, we will provide more updates. We 
are currently focused right now on resolving the current 
litigation, going back to the people who filed claims, and then 
going back to the systemic issues as both the inspector general 
is looking at it as well as attorneys general in both the 
States of New Jersey and in New York, to look at fundamental 
issues as well as any impropriety that was taking place.
    We will address the impropriety on the front end, but we 
are also looking at the structural issues that got us there. We 
want to build this program back so there is equal weight given 
to ensuring full payment on claims without the overbearing 
penalty of having to pay money back driving decisionmaking.
    Senator Hoeven. So my understanding is there are 144,000 
cases or claims that included engineering services. So you are 
saying that for those 144,000 cases, you have set up a process 
whereby policy holders can, in essence, apply to address any 
shortfall that they may have suffered and get the reimbursement 
that they are entitled to?
    Mr. Fugate. Yes, sir. We brought in people from across FEMA 
and detailed them into the flood insurance program to set this 
up. We will be announcing it coming live this next month. We 
are going to triage and start with those who were involved in 
certain firms that we saw concerns with. Then, as we get those, 
we are opening it up to anybody else.
    Again, if there were any concerns or questions about their 
claims process, we are not going to predetermine that until 
they call us and we start working at it and see what we find.
    Senator Hoeven. When will you start that process?
    Mr. Fugate. Our goal is to start next month.
    Senator Hoeven. Okay. And you have already taken steps to 
address the Administrator who was overseeing the program, I 
understand, correct? And are there going to be further changes 
in personnel or are you awaiting the inspector general's report 
at this point?
    Mr. Fugate. Right now, we had some staff changes. I brought 
in an experienced Senior Executive Service member to take over 
and lead the program. We have detailed people into the program 
to provide the initial surge help.
    We will be evaluating, with the assistance of the inspector 
general and others, what additional steps may be needed if we 
find things that suggest there was any impropriety among our 
staff.
    Senator Hoeven. Okay. Thank you.
    Senator Shaheen. Administrator Fugate, Senator Hoeven has 
asked a number of my questions around this issue. But one of 
the things that I found almost as troubling as the allegations 
of fraud by a number of the insurance companies, were 
conversations that I had with my colleagues raising concerns 
that they had heard from their constituents in New York and New 
Jersey about what was happening to them. They had raised it 
with the program and they had not gotten any attention to that 
until after the segment on 60 Minutes really highlighted what 
had happened there.
    So I wonder if you could speak to that and to the effort to 
make sure that when complaints are brought before the Agency, 
that they are taken seriously, that there is some mechanism 
whereby those are examined and responded to in a substantive 
way?
    Mr. Fugate. Yes, Senator. The personnel moves were being 
made prior to 60 Minutes. I had to free up certain staff to 
make them available to be transferred in. That took some time.
    But originally, this came to my attention as something that 
was out there, but it was like we saw one or two cases. I 
referred to staff and I said, ``look, guys, what is going on? 
We need to address this and focus on, again, if we owe more 
money, why aren't we paying them?''
    We found ourselves in a situation, because using Write Your 
Own to service policies, we were working through a Write Your 
Own. We weren't able to directly engage.
    As the process kept continuing, I became more and more 
frustrated as anybody on why we cannot get to resolving these 
cases. If we owe money, we pay. If there are allegations of 
fraud, then there is a mechanism to handle that. If we are 
having a dispute, but litigation costs are going to be greater 
than what the settlement would be, why aren't we moving to 
settle? And I wasn't getting the response I wanted.
    So prior to 60 Minutes, we were already making changes. But 
we had to free people up to make the moves. We had to reassign 
people. We had to start the process of changing out the 
leadership. The start of that probably was really right after 
the Thanksgiving holidays. We had made the decision that we 
were going to make the changes, but we had to move the 
personnel and start that process of getting them slotted, 
getting them in place, getting them up to speed, so we could 
start dealing with this.

                       DISASTER: RELIEF PLANNING

    Senator Shaheen. Well, I appreciate that. I am glad to hear 
that you were already taking action.
    One of the things that was pointed out on the 60 Minutes 
segment was that there was a class-action attorney who actually 
brought a number of these cases to the agency, and at least it 
was presented as taking that level of attention before it rose 
to the point of somebody taking action on that. So I am glad to 
hear that you were addressing it.
    And it seems to me that this is the kind of thing that we 
all ought to be on the lookout for every day, as we are trying 
to make Government work as effectively and efficiently as 
possible. So I look forward to hearing more about the reforms 
that you put in place, so that this kind of abuse doesn't 
happen again in the future.
    I want to go back now to one of the challenges that you 
pointed out in your opening statement about putting together a 
budget for FEMA that works, given all of the unknowns that you 
are dealing with.
    As you point out, you have disasters that you can't 
anticipate in advance the number, the severity, the type, so 
you have to plan for that. So I wonder if you could spend a few 
minutes just talking a little bit about you do that planning 
process, what's involved, and how you allocate resources in 
thinking about what might be coming up.
    Mr. Fugate. Well, there are two parts to this. The first 
is, we do deliberate planning with communities on the basis of 
various scenarios. Quite honestly, you are not going to have 
catastrophic disasters unless you have large vulnerable 
populations and a large risk. So it tends to geographically 
define where that is. It doesn't mean we don't prepare across 
the country, but it does tell us where we have to do that.
    So we do that. It identifies what the capabilities are. 
This helps us go back and drive some of the initiatives in our 
threat hazard reduction in areas that we need to focus on 
building capability.
    But another piece is budget. In the Disaster Relief Fund, 
one of the things that happened when you fully funded the DRF 
is that we have been able to maintain a healthy balance there. 
So when we had the Colorado flood several years ago, we weren't 
in the situation we were in 2011 with Irene when we were out of 
money, and Congress was having to very quickly do a 
supplemental.
    By maintaining a balance of $1 billion in the fund at the 
end of the year, we are prepared for those no-notice 
earthquakes or other events that are large scale. That gives us 
the funding to do the initial response and ensures that 
Congress has the time to do a deliberative process in 
determining a supplemental, versus us running out of money and 
you having to make quick decisions without all the information.
    So maintaining that balance gives us that initial push for 
our response to a catastrophic disaster. We did this in Sandy 
as well, if you remember. Although there was a lot of work 
getting to a supplemental, it was not about FEMA having to shut 
down or not doing our jobs because we didn't have immediate 
funding.
    So by maintaining that balance in the DRF and allowing for 
that balance to stay there, it protects the ability of Congress 
to do deliberative findings when supplementals are requested 
versus having to respond to what in many cases is very 
preliminary data.
    Senator Shaheen. I certainly agree with that. I think that 
makes much more sense and support that effort.
    And having had communities in New Hampshire who were 
affected by Hurricane Irene, and some of them are still 
affected by that, I appreciate it is much more important to 
have the funding there so you can continue the relief efforts 
throughout that process.
    The one thing I would say, and I understand the point that 
you are making about planning for major disasters for areas 
where they are going to hit significant populations, the one 
thing I hear from people in New Hampshire is that even though 
it may be a small community, or maybe even one farm or 
neighborhood, people that are affected just as dramatically by 
disasters as large communities like New York or some of the 
communities in New Jersey.
    So that is why the efforts of FEMA make such a difference 
and are so important.
    Mr. Fugate. I agree 100 percent.
    Senator, again, we look at where the worst, largest 
disasters may be to make sure we have enough capacity as a 
Nation. That ensures that when you do have that disaster in 
your home State, and we may have tornados in the South, and 
there is an earthquake on the west coast, we are not pulling 
resources out of your State when you still need them. So this 
goes into our planning. It actually drives some of our 
assumptions that we don't have one disaster at a time.
    Senator Shaheen. Great. Thank you.
    Thank you, Mr. Chairman.
    Senator Hoeven. Senator Baldwin.

                         ENSURING RAIL SECURITY

    Senator Baldwin. Thank you, Mr. Chairman.
    As I mentioned, I plan to focus my questions on oil train 
safety and disaster preparedness, in that regard.
    It is an issue I have been heavily involved in, as my State 
has become one of the most heavily traveled routes to bring oil 
form the Bakken to refineries on the east coast, as well as the 
gulf.
    Also, as the ranking member of the authorizing subcommittee 
with jurisdiction over FEMA, I have become very involved and a 
very enthusiastic supporter of the RESPONSE Act, which would 
establish a subcommittee at FEMA to bring together experts and 
establish best practices for responding to oil train 
derailments.
    I look forward to working with the chairman and ranking 
member of this subcommittee to ensure that FEMA grant programs 
are adequately funded to provide training and equipment for 
first responders to respond to oil train accidents.
    Mr. Fugate, in your testimony, you identify building 
capacity or capability for catastrophic disasters as a 
strategic priority. In Wisconsin, certainly my constituents who 
live on these rail corridors, along these rail corridors, and 
State emergency management personnel have identified the 
increasing frequency of oil trains passing through their 
communities as a catastrophic disaster waiting to happen.
    The growing number of oil train explosions in North America 
suggests that it is not a matter of if but when additional 
train accidents will occur. Certainly, we worry a lot about an 
incident in Wisconsin. I want to ensure that FEMA is doing all 
within its power to build its capacity to respond to such an 
incident were it to happen.
    So I would like to hear from you, first off, sort of where 
and how the growing threat of oil train accidents fit into your 
strategic priorities and what FEMA plans to do in response to 
this significantly increasing volume of oil train traffic.
    Mr. Fugate. Senator, because we are not the regulatory 
agency over the event prevention, I want to focus on 
consequences, because that is what we really find when we talk 
about specific hazards. Are we building capacity and capability 
to respond to the likely impacts, from the most immediate 
firefighting operation, which we work through at our Center for 
Domestic Preparedness and our National Fire Academy to update 
training. But also what happens if that occurs in a populated 
area? You have search-and-rescue operations. You have warning 
systems: our integrated public warning system, what most people 
think of as the emergency broadcast, emergency alert system and 
wireless emergency alerts. We work with States to make sure 
that they have those systems ready to go so they can warn and 
evacuate populations. We have teams that can support the 
States, if they need additional personnel to do search and 
rescue, and communications equipment that can be deployed at 
the request of the Governor to support those responses.
    But also look at our grant program because that is really 
where most of the resources are going to be utilized in this. 
Although the intent of the Homeland Security grants is to build 
capability for terrorism, it is also understood that the same 
type of capabilities you have to build for a bomb explosion 
would be similar to the type of capabilities you would have to 
respond to a train derailment.
    So again, we don't preclude it. We make sure that as we 
identify new threats, we look at our grant language to see if 
there are things in there that maybe would be unintentionally 
just not clear that can be used for that.
    We don't want to subtract from the attention that we have 
to prepare for those types of events such as terrorism. But it 
also means that other hazards that have capabilities that we 
are building, we want to address those from the standpoint of 
life safety, immediate response, communications, evacuation, 
and sheltering. Well, that is pretty much something you are 
going to need to do in a lot of different events.
    So it is this idea that our grant dollars that have built a 
lot of capability are looking at where we need to put more 
emphasis.
    Right now, our first work with the Department of 
Transportation (DOT) is looking at our training capabilities, 
new issues that are coming out. We want to make sure that 
senior executives in the fire service have the latest. But also 
looking at the grant programs, and again as we see these 
threats emerging, going, because this is a dual use, and we do 
have the capability, we always go to the consequences. What are 
the things we need to do, if that happens?
    Again, from a lot of their emergency management 
preparedness grants, which again I support this 
administration's recommendation and the subcommittee has done a 
lot of work here, those emergency preparedness grants that go 
to the State and local level for emergency management, those 
are some of the dollars they can be using to develop those 
community plans.
    There are other programs that are not part of FEMA that 
have supported this before--under the Superfund Reauthorization 
Act that the Environmental Protection Agency (EPA) administers, 
local emergency planning committees.
    So there are a lot of different pieces out there that we 
can apply to this. But from our standpoint, we are looking at 
the consequences, most immediately our training, then looking 
at our grant programs, and then looking at gaps that this is 
exposing across the Nation.
    Senator Baldwin. If I could just follow up briefly on the 
training aspect of that, you talked about training and reaching 
out to senior executives. I am certainly hearing from rank-and-
file emergency management personnel who feel that they are 
underprepared were an event like this to happen. Specifically, 
they feel they lack the resources to send first responders to 
required training or provide them the specialized foam that 
would be needed, for example, to put out a burning crude oil 
fired.
    And they don't feel like they are getting adequate 
information from the railroads themselves to respond quickly to 
an incident, should one occur while a train is passing through 
their jurisdiction.
    So I am curious to know how much FEMA has engaged with the 
railroads themselves. Do you believe that more action would be 
necessary from the railroads and oil producers, in order to 
properly protect the citizens who live along these rail lines?
    Mr. Fugate. We are not directly working with the railroads. 
We are working with our Federal partners who actually have that 
regulatory oversight, which is the U.S. Department of 
Transportation.
    But again, we continue to work in the interagency on this. 
That is part of the reason why a lot of our training is being 
designed to be ``train the trainer'' and independent study 
type, as we are sitting down, going, what are the training 
needs? What do we already have that we can utilize? And then 
what can we adapt?
    So we are still in the process of developing and further 
examining what additional training needs are out there. We are 
also working back through the Department of Transportation with 
the industry itself over types of training venues that industry 
has that we can also tie into all of our other training and 
make more available the visibility of what industry has out 
there on training, in addition to a lot of State fire 
academies, our National Fire Academy, and our Center for 
Domestic Preparedness, to make sure that we have consistent 
training.
    We are looking at field delivery training. We are looking 
at train the trainer. Part of this is dealing with the most 
immediate--what is the best information? How do you deal with 
this? And are we getting that ready to go? And then we look at 
all the delivery systems that may be needed to get that out to 
the local level.

                             FLOOD MAPPING

    Senator Hoeven. Administrator, one of the things I 
mentioned in my opening statement was making sure that as you 
work with flood mapping, remapping, and flood insurance you are 
coordinating with efforts by local communities to build 
permanent flood protection.
    Can you tell me what you are doing to make sure that those 
things work in tandem. It is vitally important in terms of the 
cost of flood insurance for people who live in those 
communities.
    Mr. Fugate. Yes, Senator. Again, all the way back to when 
you were Governor, we often have had this challenge that our 
regulations would not recognize future projects in calculating 
risk as we were updating maps.
    So what we would oftentimes tell a community is, well, 
that's fine, when you get it built, come back and we will 
change the maps. But then we would have the issue of having to 
change rates several times when we knew this was funding 
authorizing coming on.
    So I think you saw from Roy Wright that we are taking a 
more pragmatic approach, that if we know the commitment is 
there and projects are coming in a timely manner, does it make 
a lot of sense in the interim to change rates several times and 
not recognize that?
    So as we are going through this, what we do want to make 
sure is that the community has the commitment, they have the 
funding, they have the wherewithal, and they are actually 
moving forward with that.
    I think that, from Roy's perspective, it is much more 
pragmatic to work with that community, not issue a map until we 
know that is online. But again we also make sure that 
communities are going to be moving forward, because we don't 
want to delay that if there is risk out there that people 
aren't aware of what the maps would show.
    But if we know there is permanent work, corrective actions, 
things that are taking place that are going to fall outside of 
the updated map cycle, and if we delay it for a year, we would 
actually have the best data and we would actually recognize 
that. I think Roy is working to be more pragmatic about that, 
so that we are not unfairly penalizing communities. At the same 
time we are not waiting to identify risk for indeterminate 
periods of time.

                          ADMINISTRATIVE COSTS

    Senator Hoeven. And the ability to do that in phases is 
very important. In other words, if your process can be 
coordinated with building that permanent protection, which is 
very often done in phases, I think it makes a big difference 
for people.
    Second, the next question I have for you goes to 
administrative costs. As you know, the Government 
Accountability Office (GAO) did a study, and they analyzed your 
administrative costs over 650 major disasters between 2004 and 
2013. Their ratio was about 13 percent, in terms of 
administrative costs relative to the Disaster Relief Fund 
costs. Then they compared that to the States that had about a 
3-percent ratio, I think it was.
    So can you tell me why your administrative costs are at 13 
percent and the States are at 3 percent? First, why? And then 
what are you doing to try to make sure it is as cost-effective 
as possible?
    Mr. Fugate. Well, those administrative costs include a lot 
of the capabilities to respond to disasters that are rolled 
into that. It also means that the State is usually benefiting 
from the joint field office (JFO) that we are leasing, and a 
lot of the overhead costs that we build into our budgets so the 
States do not have to deal with that.
    But you point out something that I have oftentimes 
challenged my staff--how much does it cost me to administer one 
grant dollar in a disaster?
    It is a range, because it depends upon how many people you 
have, what is the complexity? And I am like, that is not a good 
answer.
    I am trying to look at this from the same point you are, 
why do I have to establish all of these different tools, if I 
don't need them in every disaster?
    So one of the things we have done is ask, why are we 
establishing a physical presence if it is just going to be 
public assistance. I can send staff in, work out of hotel 
rooms, write the projects. I don't need a facility. I don't 
need security. I don't need the IT hookup.
    So we are doing what we call virtual JFOs, or joint field 
offices, with the State. Many of them appreciate it, because it 
means they can stay in their workplace and get the work done 
without having to relocate to another location.
    So we are looking at, what is it costing us? Are there 
different ways of doing it? We are more inclined now to do 
virtual field offices instead of setting up a physical 
presence. We are looking to drive down that cost.
    But we also do things that are reporting requirements; 
States don't have the oversight that we have. If you look at 
the post-Katrina reform, we have a lot of oversight to ensure 
that we are delivering programs and eliminating fraud and 
waste.
    So as we go through that, we are trying to do a better job 
of accomplishing the oversight without the systems we built 
that sometimes are very cumbersome. They are not that 
efficient. But they were the initial response to how you 
provide that oversight.
    So we are looking at both maintaining fiscal accountability 
and delivering programs. But looking at the mechanisms, there 
has to be a more effective, less expensive way.
    As a State person, I was oftentimes floored by the number 
of people that FEMA would bring in for something like external 
affairs. I would have two people. They would have 200.
    Of course, we had a joint field operation in Florida before 
hurricanes that had more than 5,000 people in it. And I can 
assure you, half of that wasn't the State of Florida.
    So I am also sensitive to how much of a workforce we need 
to bring in to support a State, how much have they always done 
it that way. That is why we have really pushed back on the 
number of people deploying, setting up physical locations, and 
really focusing on the outcome of executing a disaster, not 
just going in and throwing in systems that had always been in 
place at a level that wasn't sustainable or necessarily 
required in all disasters.
    Senator Hoeven. Do you have any type of statistics that 
show what you been able to save? Or do you have any benchmarks 
as to what you feel you should achieve?
    Mr. Fugate. We are benchmarking. The challenge I keep 
running into while I try to do disasters is there is such a 
range. But I can come back and show you and show staff what it 
costs us to run a virtual joint field office versus what it 
would have been to have set up a facility, because we have to 
go in and lease a facility for so many months, and we have 
everything associated with that. The reality is, we may only 
need it for a month to do what we need to do.
    It is better if I show you some of those types of 
disasters, show you what it would've cost if we didn't do this, 
versus what we have traditionally spent.
    I think as we build better analytics, we are trying to get 
to this number of how much is actually part of the disaster 
response versus overhead to maintain the capability for 
response, and then looking at that on a case-by-case basis. Are 
we showing savings?
    Some disasters like Sandy are going to have higher 
administrative costs. It requires a lot more people, a lot more 
facilities, and it is in a very expensive area to put people up 
in hotel rooms. Other disasters would be less expensive. And 
others we are looking at, are we driving the trends down and 
are we seeing overall that we are containing overtime costs? 
Are we not doing things just because people have always done it 
that way, to really drive down the cost of each $1 we 
administer?
    So I think I can give you some of the things we are working 
toward. I can give you some case studies of disasters where we 
have done those reductions versus what we would have spent 
before, and start showing you those trends.
    [The information follows:]

    FEMA is actively working on managing administrative costs, and is 
also working on improving its ability to understand the effectiveness 
of disaster operations so that reductions in administrative costs do 
not adversely impact survivors. In July 2014, FEMA issued its Strategic 
Plan for 2014-2018, which includes a goal to reduce its average annual 
percentage of administrative costs, as compared with total program 
costs, by 5 percentage points by the end of 2018. FEMA conducted 
analysis of FEMA's historic administrative costs, and also leveraged 
the GAO's findings, to understand the agency's baseline administrative 
cost percentages for each disaster size. From that baseline. FEMA 
adopted administrative cost targets for 2018 by disaster size.
    In addition, FEMA ensures accountability at all levels because FEMA 
has created the ability to monitor performance against these goals. 
First, every major disaster is managed via a spend plan, through which 
FEMA monitors and forecasts the administrative costs of that disaster. 
In addition, FEMA has also developed an automated common operating 
picture, which is an electronic dashboard that leadership and FEMA 
employees can use to monitor the administrative costs of any FEMA 
disaster in near real time. Finally, FEMA has created a SharePoint 
database and processes for senior leaders to review the status of all 
performance measures in the strategic plan, including the performance 
goal for administrative costs.
    FEMA is also currently implementing several pilot programs that 
have a goal of reducing the costs of disasters to the American taxpayer 
and continues to research new avenues for improvement such as the 
potential of ``virtual'' joint field offices (JFOs). One such example 
is the ``debris removal pilot.'' This program has four goals: (1) 
reduce costs; (2) increase flexibility; (3) expedite assistance; (4) 
provide incentives/disincentives for timely/cost-effective completion. 
Another change being implemented by the Agency is in public assistance 
(PA) reengineering. This builds upon multiple Agency and PA strategic 
projects to deliver faster, more efficient, and more effective public 
assistance to applicants. This is yet another example where FEMA 
expects to enhance the services disaster survivors receive while 
creating a positive impact on the costs of disasters. PA reengineering 
will remove the inefficient one-size fits all approach to project 
worksheet development and will better refocus effort to the level of 
risk of each project.
    ``Virtual'' JFOs have been an effective cost saving strategy when 
appropriate for the disaster. However, ``virtual'' JFOs are only one 
potential model for delivering assistance. In some circumstances, a 
concentrated physical presence, e.g., a limited JFO, may be the most 
efficient and effective strategy to deliver assistance. Recently. FEMA 
has recognized that its Regional offices were using a variety of models 
to best meet the needs of the survivors. These models include 
``virtual'' JFOs, central processing centers, limited JFOs, and full 
JFOs. FEMA is currently conducting a thorough analysis to define the 
most efficient and effective models that capture the majority of 
response and recovery efforts for Stafford Act presidentially declared 
disasters. This includes defining the decisionmaking criteria for 
selecting a model, the setting of performance metrics within the 
models, and a quantification of cost savings.

    Senator Hoeven. So you will show us some metrics on 
outcomes?
    Mr. Fugate. Yes, sir.
    Senator Hoeven. Okay. Thank you.

                      NATIONAL PREPAREDNESS GRANTS

    Senator Shaheen. Well, thank you. I agree. I look forward 
to seeing those.
    I want to go back to your conversation with Senator 
Baldwin, because you talked about the importance of grant 
programs for preparedness and working with local first 
responders and local agencies.
    And I certainly agree with that. As Governor after 
September 11, I can tell you very directly what a difference 
the Department of Homeland Security grants have made in New 
Hampshire to our preparedness. That is why I was concerned when 
I saw in the budget that you are proposing an 18-percent cut to 
preparedness grants, a 28-percent cut to training, and a 1.5-
percent cut to firefighter grants.
    The recent FEMA preparedness report found eight areas where 
communities are still in need of improvement. I know that one 
of the proposals is to consolidate many of these grant 
programs.
    While I appreciate that there are places that there can be 
efficiencies, I can tell you that those grants, as I said, have 
made a huge difference in New Hampshire. We leverage a little 
bit of money and make it go a long way. The firefighter grants, 
the other preparedness grants, have really been critical.
    So can you explain why the proposed reductions? And my 
understanding is that the authorizing committee is probably not 
going to take up the consolidation issue, so that is probably 
not going to be an option in this budget. As I said, I probably 
wouldn't support it, if it were.
    So I wonder if you could talk a little bit about that.
    Mr. Fugate. Well, two pieces. It is very straightforward.
    Obviously, I would like to provide the maximum amount of 
funding that we could provide in the grant program. But as you 
have to make hard choices, we have to fit within our budgets. 
We have to submit on the basis of overall priorities in the 
administration. And this is a continuation of the President's 
request.
    So although Congress has been able to find more money and 
has funded these grants at higher levels, we have been pretty 
consistent in what we have asked for.
    As far as consolidation of the grants, this actually went 
back to, and both of you as Governors and my experience in 
Florida was--since the ability to leverage dollars across the 
State--some States do a better job than others, but what it 
really came back to was the Governor. You have emergency 
powers. Your constitution establishes the emergency 
authorities. The consolidation of grants was really upon the 
Governor in the State in the position to help direct where 
resources were across the State. You know your States better. 
It will give you more flexibility across grants to make 
decisions.
    We also understand a lot of stakeholders don't have the 
same trust. There are concerns that not all States may be as 
equitable in distributing funds.
    As I have said in each of my testimonies, the reason we are 
doing this is to recognize the roles that States have, 
Governors have, and what State constitutions empower. The 
emergency authorities and the creation of the political 
subdivisions are unique to each State. By consolidating these 
grants at the level of the Governor, it gives Governors more 
flexibility to determine those priorities.
    That being said, I have also said I will faithfully execute 
the budget that Congress provides us, with the direction you 
give us. That will be not up for debate.
    Senator Shaheen. Thank you. I appreciate that.
    The draft national preparedness goal that is out for review 
says that fire management and suppression was added as a core 
capability, which makes total sense to me. And yet, again, the 
request for grants for fire departments proposed a reduction.
    So can you talk about what a reduction in those grants to 
fire departments would have on the distribution of funds to 
rural communities and to volunteer departments? And how we can, 
on the one hand, talk about the goal of fire management and 
suppression, and on the other hand, talk about reducing the 
grants to those fire departments and folks who are going to 
need to make sure that we are prepared for those fires?
    Mr. Fugate. Adding the structural firefighters goes back to 
the original emergency support functions of the framework that 
were based upon wildland firefighting, because on a national 
level, wildland fires had been the ones that required a Federal 
response the most often.
    And I had come out of the fire service, so I have to be 
biased here as a structural firefighter.
    We do a lot of wildland firefighting. But in disasters, we 
also do the bulk of the search and rescue. We also provide a 
lot of the emergency capabilities at the local level. So we 
felt it was important that the fire service be recognized in 
the framework as part of the emergency support function that 
had almost always exclusively been on wildfires. So that was 
that.
    As far as the grants, again, the reduction will mean fewer 
smoke detectors, fewer pieces of equipment bought, fewer 
breathing apparatuses bought. It is just a reality that when we 
have to force into a budget everything and all the priorities, 
these were the numbers that we were able to get to make and 
represent to you what we think, as the administration, we can 
fund.
    That doesn't mean there is not more demand out there, that 
there's not more need out there. But this is based upon all the 
priorities the administration has in all of our budgets to look 
at funding everything from Health and Human Services and Ebola 
response and unaccompanied children, and a lot of other things 
I find myself dealing with.
    This is where we came out and were able to make the 
recommendation. We also understand that this is where we start 
the discussion.
    Senator Shaheen. Well, I am glad to hear you acknowledge 
that it will have an impact, if we don't have that additional 
funding.
    I want to go back to the discussion about how you put 
together your budget. Several things that you include as new--I 
shouldn't say they are new initiatives, but efforts to upgrade 
your management structure, focus on IT, on business management, 
on grant management, cybersecurity.
    I wonder, can you talk about why it is important to do 
those now and how those initiatives rose to the top of what you 
were looking at in order to be more efficient?
    Mr. Fugate. Well, again, we had started this before. Being 
in the Department of Homeland Security, we found ourselves with 
grant modernization being rolled up into a department-wide 
initiative when I got here that later did not occur.
    So we have systems that are ancient. We pay so much in just 
supporting and maintaining old systems that we think we could 
do a better job by modernizing the systems and reducing our 
recurring costs. In many cases, we think we can have 
substantial reductions by upgrading to newer systems than to 
pay legacy costs.
    This becomes a cybersecurity concern as well. When systems 
are running on old, old systems, including the fact that 
Microsoft is no longer supporting Server 2003, but your systems 
are built on that, if you are not upgrading them, you are going 
to increase your cyber vulnerabilities.
    So we have done a lot of work to look at our 
vulnerabilities on that end. We are not a poster child at all 
for that. We cleaned up our systems. We have been documenting 
our systems. We have been eliminating redundant systems that 
were no longer needed.
    But we have reached a point where if we do not start 
upgrading these systems, not only are they going to become more 
expensive to maintain, they are not going to achieve their 
purpose of being able to be transparent and share information 
with our stakeholders.
    And quite honestly, we will spend more time responding to 
your requests by creating a spreadsheet in Excel to take all 
the data the system cannot produce in a format you need to make 
your decisions.
    Senator Shaheen. So do you have estimates on how much you 
are going to save or how much the spending will balance out in 
the long term, because of the efficiencies you will be able to 
achieve?
    Mr. Fugate. Yes, Senator. We have actually taken--we are 
backing away from this idea that we are going to do one big 
major system that is going to fix everything. What we said is 
that we are going to take small incremental steps, build on 
common operating systems, use Government-owned systems, and 
move forward in the grant consolidation and modernization.
    We can show you both our timeline, if we appropriate the 
funds for this, what our milestones are, what our projected 
savings are. More importantly, I can show you what it is 
costing you right now to maintain the current systems and how 
we will see those costs go away as the new systems come on and 
replace them.
    [The information follows:]

    The Grants Management Modernization effort will consolidate 
disparate grants systems managed under multiple program areas within a 
common platform helping to reduce the overall development and 
sustainment costs (infrastructure, labor, licenses, etc.) in the out 
years. The effort will also help unify the services of FEMA grants 
programs to the recipients, enabling a more transparent and intuitive 
system. In addition, a common platform will help reduce the training 
time for the system and enable cross-training for grant managers/
administrators and recipients/subrecipients.
    In fiscal year 2015 the cost to operate the current Grant 
Management Systems is $30,511,000. Fully implementing FEMA's grant 
management modernization by fiscal year 2020 would save an estimated 
$9,277,000 (with an estimated cost to operate the current systems that 
year and modernization effort at $21,234,000). These estimates are 
based on limited information available at this time and it should be 
noted that the project does not currently have an analysis of 
alternatives (AoA) or life cycle cost estimate (LCCE).
    Please see the following tables for a breakdown on costs for both 
current systems and the modernization effort and a timeline of the 
Grant Management Modernization effort.

----------------------------------------------------------------------------------------------------------------
                                                  Fiscal                                                 Total
                                       Fiscal   year 2016    Fiscal     Fiscal     Fiscal     Fiscal     fiscal
                                     year 2015    budget   year 2017  year 2018  year 2019  year 2020    years
                                                 request    Est \1\    Est \1\    Est \1\    Est \1\   2015-2020
----------------------------------------------------------------------------------------------------------------
Current Grants Management
Systems Investments:
Planning and Development/                5,450      7,506  .........  .........  .........  .........     12,956
 Modernization/ Enhancements.......
Operations and Maintenance \2\.....     25,059     28,060     29,467     29,078     21,234     14,724    147,622
Subtotal Current Services..........     30,509     35,566     29,467     29,078     21,234     14,724    160.578
Grants Modernization:
Planning and DME \3\...............  .........     11,900     11,424      9,700      6,510  .........     39,534
Operations and Maintenance \2\.....  .........  .........  .........  .........  .........      6,510      6,510
    Subtotal Grants................  .........     11,900     11,424      9,700      6,510      6,510     46,044
    Modernization..................
    Total (Current Services and         30,509     47,466     40,891     38,778     27,744     21,234    206,622
     Grants Modernization).........
----------------------------------------------------------------------------------------------------------------
\1\ These are projections which are subject to change.
\2\ Estimated O&M of current FIEMA's Grants Management System. The Comprehensive IT Review that the Agency is
  undertaking may yield additional cost savings.
\3\ FEMA's Grants Management Integrated Environment (GMIE) effort started in 2009 was estimated at -$35 million
  (in fiscal year 2010 dollars) for 3 years.

  
  

    Senator Shaheen. That is great. If that is something you 
have not yet shared with the subcommittee, will you do that, 
please?
    Mr. Fugate. Yes.
    Senator Shaheen. We would very much like to see that. Thank 
you.

                             COST ESTIMATES

    Senator Hoeven. Administrator, as a result of Hurricane 
Sandy, you received both authority to provide upfront funding 
for public assistance projects so that entities could get that 
funding up front and then build out the project. The idea was 
both to expedite the process and hopefully give them more 
flexibility to get it done.
    And then also you were given authority to examine ways in 
which you could reduce disaster costs nationally.
    Both of those seem like really good ideas. So I would like 
you to respond in both areas. Why isn't more of the funding, 
where it could be provided upfront, being utilized more 
frequently?
    And second, talk about your strategy, as far as 
implementing the national strategy to reduce costs.
    Mr. Fugate. Yes, Senator.
    As with anything new, there was a lot of concern that by 
doing a cost estimate, what would happen if they discovered 
something later on that wasn't anticipated? They would miss 
out. They would be stuck with the bill.
    Our first success actually came out of a case that was 
still pending from Irene in the State of Vermont with the State 
government complex. Once they understood the flexibility could 
solve problems that we had not been able to resolve, they moved 
forward with it and we had our first successful project.
    We have seen initially a lot of resistance because of the 
unknowns. But as we have worked and get success, and that 
success spreads, people are starting to understand that this is 
giving them flexibility. It is giving them the ability to move 
forward with certainty on those projects. And we are 
increasingly seeing more projects come into the queue that are 
going to go this route.
    And the amount that we have already approved in dollars 
going out are in the billions.
    I am still working with the mayor of New Orleans to 
finalize some of the projects still outstanding from Katrina, 
almost 10 years later. I do not foresee that in Sandy, where we 
are in some of these very complex hospitals using this. 
Charity, we were 5 years and went to arbitration before we ever 
got an answer. We already are moving forward on funding and the 
construction and rebuilding and repair of hospitals.
    So I think this is still a concern that, what if they find 
things later? We're going, that is why we want to do the due 
diligence at the front end, bring in the engineers, get the 
contractors, put in the effort on the front end. We don't need 
to rush that. I want to make sure it is a good, solid number 
that we have identified all the stuff.
    But once we have that number and we can agree to it, do I 
really need to be there every time you change an order or you 
need to do something different, to get a review, and then I 
have to dole out money each quarter and constantly do the 
inspections?
    I think that is where the administrative cost goes up. If 
we have a good product, we have a good agreement, we have the 
fiscal tools in place, we have accounted for what was actually 
eligible, and we make that determination, then we should be 
able to move forward.
    And I think as applicants become more familiar with that 
and see the benefits of it, we are going to see increasingly, 
particularly in large, complex projects, communities turning to 
this to speed up the process.
    Senator Hoeven. What is the flexibility mechanism so their 
concerns are covered, in terms of if they take the money up 
front and then find out that there are additional costs? What 
is that flexibility mechanism?
    Mr. Fugate. In many cases, we will write a small grant to 
bring in an engineering firm. Both of you as Governors have 
been through State bid processes where you bid out a building 
and if the person bidding on it made a mistake, they own the 
mistake.
    So we basically take this all the way up there, where you 
have somebody who is ready to bid on that project. That is the 
number we want. So we have done everything. They have done the 
studies. They have done engineering. We have done all the due 
diligence. Because at that point, you should be ready to issue 
the contract.
    Now if the person didn't do due diligence, that is 
generally going to be their responsibility. We have tried to 
make this as seamless as we can to get to the final number with 
the best understanding of what it is, what all the eligibility 
is.
    And if it takes us a year to get to that on something 
complex like a hospital, we will take a year. But once we get 
to that number, we want to be able to pay you, allow you to 
move forward, and allow you to do things that we have 
historically not, such as looking at things from the standpoint 
of other Federal dollars, making decisions about increasing the 
size or capabilities of your own dollars.
    Whenever you did that with our dollars, we were so 
constrained; we could only do what was damaged. And if you need 
to do things that were going to improve that, we may not be 
able to fund it, but we shouldn't be an impediment to you doing 
the things that make sense, making a facility bigger or dealing 
with other issues, or utilizing community block development 
grant dollars to enhance something.
    Our process was always so restrictive that it was very 
difficult. This is much better. And we build the mitigation on 
the front end, because, as you point out, a lot of times we 
will build back on the basis of the past data. The problem is 
we have seen too many times that we have been back to that 
facility more than once because it got wiped out.
    We need to move beyond that. We need to build to future 
risk. We have to look at not just building back to what we have 
always looked at in cost-benefit analyses and make investments. 
And this gives us that ability to move beyond just looking at 
one set of criteria when you are rebuilding.

                           HAZARD MITIGATION

    Senator Hoeven. And that goes right to the hazard 
mitigation piece. It seems to me that your mitigation effort 
has to be focused on the actual hazard. And in this budget, you 
are looking at additional funds for hazard mitigation. But I 
would, certainly, want to know that that is based on the actual 
hazard itself and that you are trying to mitigate both the 
hazard and the long-term costs for the Federal Government and 
the locality. That that has to be the criteria for determining 
hazard mitigation.
    Mr. Fugate. Absolutely. I can show you examples where we 
have had predisaster mitigation. States have taken that, like 
in Oklahoma, to do grants to families to build safe rooms from 
tornadoes.
    Again, our goal is to drive outcome-based improvements to 
reduce risk. There are a lot of causative factors. There are a 
lot of driving factors of that in a changing environment. But 
we want to look at those things that, as taxpayers, we can 
spend money on the front and to reduce both our future cost but 
also the potential disruptions from failure of critical 
infrastructure to disasters.
    So this is very much in our predisaster mitigation, looking 
at it from the lens of outcomes that are based upon buying down 
risk, reducing risk, or building more resiliency and critical 
infrastructure that is hazard based.
    Again, as I point out, with trains and other things, there 
are a lot of things out there driving change. I have to look at 
the consequences of impact. And that is where we focus our 
mitigation dollars.
    Senator Hoeven. And then having a way to measure. Again, 
you have to have a way to measure and show the results, whether 
it is providing the funding upfront and the flexibility, 
whether it is making sure that you are mitigating. You have to 
have a system to come back and have measurable results.
    Mr. Fugate. How about lives saved?
    Senator Hoeven. Lives saved, obviously, that is a huge 
priority there.
    Mr. Fugate. I have to give you a little good news story. 
Big data get talked a lot about in DC, but very few people can 
give you a concrete example.
    Our fire administration collects fire information from fire 
departments. They call it NFIRS, the national fire reporting 
database. We have never had a good program that opens those 
that data up. We finally got the data where we are providing 
it. But what are we going to do with it?
    We have been working with Red Cross, and Red Cross decided 
to focus on smoke detector installs in areas that have had the 
highest risk to loss of life. They were able to take our data, 
match up to communities. They used fire grant dollars. They got 
volunteers to install smoke detectors. They now have, since 
they have been doing this program the last couple months, using 
data to drive where we make the installs, 13 documented cases 
of lives saved where smoke detectors went off and people got 
out of the building that historical data say we would have had 
loss of life.
    So we are using big data to leverage our limited funds, 
partnering with organizations like the Red Cross and getting 
outcomes that we can document. Those reports that people used 
to file, when I was a firefighter, I always wondered, what are 
you doing at that? We are making the data available so people 
can use the analytics and answer where the most need is? Where 
is the greatest risk? Where can we make the greatest difference 
with our limited resources?
    I was talking to Richard Reed at the Red Cross this 
morning, and he said that they now have 13 cases where they 
installed the smoke detector, it went off in a fire, and people 
got out. And the data say that was a high-risk area. Without 
that smoke detector, we probably would have had a loss of life.
    Senator Hoeven. Very good.
    Mr. Fugate. That is some of the outcome that the funds you 
provide us have produced.
    Senator Hoeven. Right. It is very important that, wherever 
you can, you are measuring that, so we can track it and know 
what it is. Thank you.
    Senator Shaheen.

                        INDUSTRY LIAISON PROGRAM

    Senator Shaheen. Thank you. As you pointed out, what you 
are always looking to do is figure out where you can spend 
money to mitigate potential risk, how you can be more effective 
in doing that. And one of the places where I think there is 
real potential is working with the private sector because, as 
you know, government doesn't respond to disasters alone. It 
often has the benefit of using the private sector.
    And FEMA's industry liaison program is one point of entry 
for vendors who would like to do business with FEMA. But I have 
to tell you that I have heard from some businesses in New 
Hampshire that have not had a good experience with that 
program.
    One of those, in particular, which I won't name because I 
haven't gotten clearance from them to use their name, but they 
have worked with the Marine Corps, the American Red Cross, the 
Navy. They were in Haiti responding, and in New Orleans 
responding to Katrina.
    They really wanted to try to market their technology to 
FEMA. Beginning in 2009, 2011, 2012, they presented to FEMA at 
three industry liaison program vendor outreach sessions. 
Appropriate policy and program staff attended only two of those 
three meetings.
    Although initially officials appeared enthusiastic, the 
procurement staff limited the meetings. They prevented agency 
employees from sharing their business cards. They regularly 
failed to respond to the company's follow-up phone calls and 
emails.
    When we tried to inquire about the process and how we could 
ensure that they were getting a fair hearing, we were told that 
they have to go through the normal procurement process. Well, 
that is what they had tried to do.
    So can you talk about how you can do more to ensure that 
when companies have good technology that can be a benefit to 
FEMA, that there is an opportunity for them to be heard and for 
you to take advantage of some of the technology where it 
exists?
    Mr. Fugate. Senator, given the timeframes, we have changed 
out the leadership of the chief procurement officer. It 
addresses some of this.
    But I also think it comes back to sometimes we are overly 
concerned about not tainting potential bid processes, and there 
are certain things that we need to be very careful about that 
we don't predetermine or give any favoritism to.
    Our new chief procurement officer has found a better way to 
do this by doing industry days where they bring in industry in 
an open setting. We did this with IT. We explained, here's what 
we are looking at; here's where we are going. We are not going 
to give anybody any preferential or one-on-one sit-downs, 
because this is going out to bid.
    But we did industry days where we brought everybody in, and 
we invited anybody who was interested in looking at our IT as a 
potential vendor. We laid out what we are thinking about doing, 
what the timeframes are, and what our outcome looks like.
    So I will have staff work with your staff, and we will work 
this. But I think sometimes we overcorrect in not trying to get 
into procurement issues that may exclude companies from being 
able to present, and then finding a better way to make sure we 
have a level playing field so we don't mess somebody up.
    As you know, if it is even seen as giving favoritism in a 
disputed bid, we have a bid protest.
    So we have a new chief procurement officer. He has brought 
sanity to the process. We are making it as transparent as 
possible. Part of the tools are, when we want to do these 
meetings, we try to set them up so we don't end up 
contaminating any future procurement process.
    One of the things we are finding is that these industry 
days where we bring in groups around our mission and our 
challenges and go, ``Here's what we are looking at. Here's what 
we're thinking. We are going to be putting bids out for this, 
but we have all the industry there.'' They hear all our 
presentations. Any questions they ask, everybody hears.
    And it keeps the system less jaded than what we have.
    I think what you were probably running into was a 
procurement office that was not where we needed it to be, but 
also a tendency to overcompensate and not always provide a 
level of service and information that we could be providing 
without jeopardizing future procurement.

                             FLOOD MAPPING

    Senator Shaheen. That is very encouraging, so we will go 
back and tell those businesses in New Hampshire that would like 
to work with FEMA that they shouldn't give up on the process, 
that there is hopefully a new process that is more transparent 
and an opportunity to be heard.
    So thank you. I look forward to hearing how that works.
    There is one issue around the flood mapping that Senator 
Hoeven has not touched on that I just wanted to raise. And it 
is I think the final issue I would like to raise, and that is 
around the new position of the flood insurance advocate, 
because one of the things that again we have heard, as I think 
Senator Hoeven said he had heard in North Dakota, is that there 
is a lot of uncertainty and not a clear understanding about how 
the new flood maps are done, what kind of community input is 
available, and how decisions are made.
    So can you talk about the new flood insurance advocate, 
what that office will be doing, and how they can help 
communities better understand the process of flood mapping?
    Mr. Fugate. Well, first of all, I have to thank you for the 
funding in the budget to stand the office up.
    We are approaching this from two ways. We think that, in 
servicing maps, we need to look at building staff capabilities 
as advocates in the regional offices, so that they can be 
closer to attend meetings and know when maps are coming out.
    These don't just happen at random. There is a whole process 
that communities are involved in. Having the advocate in the 
region, not part of that mapping process, but there to go out 
and meet with groups, get issues and bring them back.
    At headquarters, we're focusing the advocacy office on 
dealing with claims issues. We think that claims have to be 
handled centrally because we pay them centrally. We stood some 
of this up prior to getting the final budget, just basically to 
get started. We didn't want to wait.
    Now as we're building the office out, we started to take 
form. We still have detailed staff, but we are now going to the 
job descriptions to post permanent positions to start the 
program on a more permanent footing.
    They are going to be housed as part of the flood insurance 
program, but they don't report to the Federal Insurance and 
Mitigation Administration (FIMA) Administrator. They report to 
the Administrator of FEMA.
    We just put them in the office, though, so all of the 
connections, the logistical support and proximity, would be 
there. But their reporting chain, other than signing off on 
timesheets and travel, everything else comes to the 
Administrator.
    So as we moved forward and establish that, we looked 
specifically in maps, the best place to coordinate that is in 
the regions.
    What we are still looking at is workload. Do we need to 
have them full-time in each region? Or do we need to have 
people we detail to regions where we know we have significant 
map revisions coming out?
    As you know, some map revisions are not contested. They are 
small. They are not going to involve a lot of other people. So 
rather than having people in each region all the time, if the 
workload isn't there, we may be looking at deployable staff. 
That is, we know we have a large project coming in, a large 
community, or a lot of concerns about it. We have staff that 
can go in and detail for the duration of that update.
    Senator Shaheen. Well, thank you. I think this is sort like 
of an ombudsman to deal with flood issues within the office. I 
think this is a really positive development, and I look forward 
to hearing how it is working and to being helpful, if we can.
    So thank you, Mr. Chairman.
    And thank you very much, Administrator.

                      NATIONAL PREPAREDNESS GRANTS

    Senator Hoeven. Just a couple more questions and then we 
will wrap up. The first is, talk about the preparedness grants 
return on investment and really what you feel the level of 
preparedness is across the Nation. How can we measure that and 
how effective are the preparedness grants in helping improve 
that preparedness across the country?
    Mr. Fugate. Part of our preparedness report that we, again, 
struggled with early on was I could do a better job of telling 
you how much money had been spent, not really telling you what 
capabilities had been built.
    We are now seeing, through our threat and hazard reduction 
and other surveys, and the State preparedness report, that over 
time, we are now seeing emphasis change.
    I can give you some specific examples. The State of 
Mississippi had identified early in some of this that they 
needed more funding for operation, direction, control, 
communications, the type of things they need to manage 
disasters. But with that grant funding, that has actually 
matured. And on their State preparedness report, they are not 
showing that they are more into a maintenance mode. They are 
now not having to build as much capacity. So they are now 
switching to other things like cyber, which they still see that 
they need to make improvements in.
    So between the State preparedness reports and Threat and 
Hazard Identification and Risk Assessment (THIRA), we are 
actually seeing trends where people who have built capacity are 
now shifting to other areas and have gone to maintenance, or 
they are still identifying areas they have to make investments 
in.
    Part of this comes back to looking again at the types of 
threats and disasters. And as we see emerging threats, going, 
are we seeing capabilities being built out there?
    So when you look at cyber, it has been pretty consistent. 
It is one of the areas most States have identified that they 
have a lot of work to do. But it is going from we're just 
starting to we're now starting to see things coming back on 
what they are doing.
    So we can show you where the money has started that process 
of where we have built capability and what that looks like and 
how it is being used, but also how they are now shifting to 
other priorities within those areas and looking at what they 
are doing to build capacity there.
    Senator Hoeven. But then how do you turn that into some 
type of ongoing analysis where we can look and say okay, these 
grants are very effective and we are moving up the chain? And 
then what the impact is nationwide?
    How do you develop some system to truly track that and have 
a good understanding of where we are, how much progress we are 
making?
    Mr. Fugate. Again, in our national preparedness report, we 
try to use both analytics as well as anecdotal data to show 
both here's what the data and trends are doing but also 
specific case studies where people have done that.
    The question we get a lot of times is how do we know when 
we're done. And the answer is we are never done.
    One of the realities is that it is hard to explain to 
people, because we spent money building teams and capabilities, 
and you have to continue to refresh that.
    People age out. People retire. People move on. You have to 
train new team members.
    Equipment has to be updated. Technology changes. It needs 
to be replaced.
    So all those laptops that were bought in the first go-
rounds, that was 10 years ago. You've had to replace those at 
least twice. Antidotes that were bought in the first go-round, 
they have already aged out. And now maybe we don't need the 
initial game plan of having antidotes in every police car. 
Maybe we just need to have them centrally located.
    So as you go through this, and particularly as we saw the 
funding going from increasing every year to reduction and then 
being stable, which I also appreciate, we are seeing 
communities make decisions about what capacities they need to 
maintain. Sometimes they are making decisions that they are no 
longer feasible, or the change in how we do business no longer 
requires it.
    But maintaining that capability, and again, what you are 
seeing is, starting in 2011, I can point to very specific 
disasters where previously you would have had a much greater 
Federal response than the State and local that managed the 
response, because of the capability we built with the funding. 
And the Federal role was really to support recovery.
    For a lot of disasters, that is probably our best indicator 
that we are seeing preparedness take place.
    As I tell people, Sandy, when you look at what State and 
local governments did, and what they were able to manage, all 
the way from the Carolinas, all the way up, getting ready for 
the storm, a lot of that were those grant dollars that were 
built, paid for, and administered through all those Homeland 
Security grants. That was the capability that responded.
    The Federal role was really more of a support to that 
versus the primary agency, which had been what we had to do in 
previous large-scale, catastrophic disasters.
    Senator Hoeven. That's it, because, done right, I think it 
can make a huge cost difference. It is the difference between 
continuing to spend disaster recovery money repeatedly, year 
after year, versus actually building some of this 
infrastructure through the preparedness grants. So you spend 
lots. You may spend more in 1 year, but you get out of this 
repetitive spending for recovery.
    Mr. Fugate. Part of it, Senator, too, is we made some 
decisions that we were funding each jurisdiction, hoping it 
added up to being prepared. The reality is, through mutual aid 
we can bring and consolidate a lot of resources we as a Nation 
built.
    So we began changing the language in the grants to 
recognize that these are really building national capabilities 
that you use at the local level and you may use at the local 
level exclusively until there is a large disaster somewhere 
else. Then every State that receives these, the State 
administrative agency, has to certify that that State remains a 
member of the Emergency Management Assistance Compact (EMAC), 
and we look at these deployable resources as national assets.
    So that change began then leveraging. Do we need to have 
the same equipment in every jurisdiction side-by-side, or could 
we start moving toward identifying, hey, we have a lot of 
search and rescue teams here? What we don't have are mortuary 
services. Or maybe we don't have specialized communications to 
support that. Or in the case of trains and other things, we may 
have an emerging threat that we need to enhance hazmat teams 
for, but does every team or do certain teams start that 
process?
    But that, to your point, is really looking at building 
capabilities and capacity that is housed at the local level, 
used day-to-day at the local level. But in a catastrophic, 
terrorist attack or other event, they are national resources 
that can be mobilized and cross State lines.
    Again, we saw in Sandy a lot of assistance from outside the 
area where there were those that were funded with these dollars 
and built those capabilities, but shared Governor to Governor, 
State to State, in mutual aid. That is why we really talk about 
a national framework, national capabilities, national 
preparedness, not Federal, not FEMA, because the grant dollars 
are building a national system.

                EMERGENCY MANAGEMENT ASSISTANCE COMPACT

    Senator Hoeven. And through EMAC, that is working? You have 
the coordination you need, so that people feel like those 
resources are available when and where they need them?
    Mr. Fugate. Again, Senator, the ability for Governors to 
share resources, whether it is National Guard, State resources, 
local resources, is the foundation of that. Where we still work 
are some States do a better job internally of being able to 
activate and mobilize their local resources as part of that. 
Others need more work.
    So that is why we continue looking at tying back grants to 
that capability of getting communities, including the urban 
security areas, to recognize they are a national asset, not 
just for that community, that we are never going to strip away 
resources from a city or State that may need them. But I am 
also seeing that time and time again some of the fastest, most 
effective responses have come from neighbors helping neighbors, 
Governors helping Governors, and making it clear that we need 
to build that capability around what Governors do best in 
dealing with disasters.

                    NATIONAL FLOOD INSURANCE PROGRAM

    Senator Hoeven. All right, I have one more question, and 
then Senator Shaheen I think has one more, and we'll wrap up.
    Can you comment on your sense of solvency of the National 
Flood Insurance Program and the fund, in terms of how we are 
doing right now, how we are managing the program, and all the 
steps that you are taking for risk mitigation, hazard 
mitigation, preparedness, all of these steps?
    Where does that put us in terms of creating long-term 
solvency for the flood insurance fund?
    Mr. Fugate. Well, the challenge you have is, if you have 
average levels of flood events, the fund does fine. The program 
is actually fairly well adapted to reoccurring flood risk.
    What it is not designed to handle well are large flood 
events, particularly coastal areas, where you are dealing with 
such large responses like a Katrina or Sandy. There are 
numerous communities, including in my home State of Florida, 
that have significant exposure to tropical systems.
    The program does not handle that well. But if we see a 
normal level of riverine and localized flooding, the events 
that we typically experience outside of a coastal storm, the 
program has done well. It actually is paying back interest in 
debt.
    But we also want to make sure that we are looking at some 
of the practices that I think we are finding, as we look at 
what has happened in Sandy. It also concerns me that we are 
paying a lot of money to run this program. So I want to start 
driving down costs, just like we are trying to drive down costs 
in our other programs, not at the expense of the customers we 
serve, or the fiduciary responsibility we have to taxpayers.
    But I want to look at these costs, because does it make 
sense to spend this amount of money to get this product? And 
are there better ways to do things to get a better outcome at 
lower cost?
    Again, as we get into this, this is my third phase of flood 
insurance. Right now, I have to deal with the immediate issue 
of what happened in Sandy. I have to take the steps of making 
sure that doesn't happen again. My third step is to go back in 
and basically fundamentally relook at how we administer the 
program through Write Your Own, through our direct service 
policy, how we service claims. What are we spending to do that? 
What makes sense? If and how do we ensure that we have a good 
product that is stable, available, gets written timely, gets 
serviced timely, pays out what is owed at the least amount of 
administrative overhead?
    Senator Hoeven. Thank you.
    Senator Shaheen.
    Senator Shaheen. So based on something that you said, I 
have a couple of other questions.
    One, as you were talking to Senator Hoeven about where the 
risks are and how effective we have been at preparedness across 
the country, can you map where those potential high-threat 
areas are?
    So, in New Hampshire, for example, we can tell you where 
the hazmat teams are, where there are areas that need more 
coverage, where the communication systems are interoperable, 
where we have teams that can address chemical or biological 
threats. So is there a map like that that exists for the entire 
country?
    Mr. Fugate. There is an element such as data visualization, 
and part of it is grant modernization. We have to get data 
where we can do things like that. But we can do some things 
already.
    We can take all of the major fault areas of the country and 
lay those down. And then we can take the known locations where 
we have our Federal urban search and rescue teams, which you 
fund, as well as the urban search and rescue teams that States 
have identified that were built with grant funds, and overlay 
that and show what that looks like.
    So we have been doing that as we look at where threats are. 
What are the capabilities?
    As we do catastrophic planning, one example is the Cascadia 
Subduction Zone, which would result if they had a large 
earthquake.
    Senator Shaheen. Where is that?
    Mr. Fugate. It is off the northwest coast. It would involve 
from British Columbia all the way down to northern California.
    So we have to look at a lot of communities in Oregon and 
Washington State that would be vulnerable to that type of 
event, and then look at where the resources would come from. We 
do the same thing in the central United States for the New 
Madrid earthquake.
    So it isn't that we don't look at all States, but we look 
at the specific hazards that we know are geographical, whether 
they are storm-based, earthquake, volcano, or tsunami risk, and 
then go, where are the resources? Because you have to figure, 
if you are in the area, you may be as much a part of that 
disaster and not be able to be in immediate response 
capability, so where would resources come from and how would 
you build that?
    So as we do this deliberate planning, we actually go 
through the list of what the State and locals have, where the 
gaps are, how we are going to make those gaps up.
    We actually work all this to our ultimate partners in the 
Department of Defense (DOD) with NORTHCOM, so that the locals, 
the States, FEMA, and DOD are looking at the same scenarios, 
types of resources.
    But part of this is looking at the mutual aid capabilities 
across the Nation, and where they make sense, because one thing 
you don't want to do--as we saw happen in Irene, we started 
pulling a lot of units to respond to Irene, aviation units 
within the Guard, almost exclusively east of the Mississippi.
    We asked the question, what happens if we have another 
event? Now you are going to have to pull resources all the way 
from the west coast. Maybe it would make sense to start 
distributing some of the resources.
    So we were working back with Frank Grass at the National 
Guard Bureau to try to do better visibility of where our 
capabilities are. We know some places where disasters are going 
to happen. Others, we just don't know until they happen.
    Terrorist events are not going to be geographically 
specific. It depends on what they hit.
    So we look at where we have known threats, and we plan 
deliberately for that. But we also have the ability to then use 
that if we have an event occur that wasn't in an area that we 
had planned for or had not been identified; we still have the 
same tool we had been building as far as where resources are 
and the type of capabilities.
    Again, we go through disasters and we say what are the 
consequences? And what type of support are you going to need to 
deal with that?
    So a lot of times we focus less on what caused the event 
than, if you are going to do search and rescue, what are you 
doing search and rescue against population? If you have to 
treat patients, what kind of patients? How many? If you are 
going to shelter people, how many people do you need to 
shelter? What is the duration?
    If we know that, we can now apply the resources as a Nation 
against that versus waiting until it happens and going, well, 
how do we deal with this? We deal with these things all over 
the place.
    But it is really coming back and taking a step back and 
going, collectively as a Nation, there are going to be some 
events so big that if we are not bringing in all of the 
capabilities as a Nation, we are going to end up with 
shortfalls.
    Again, a lot of things happened with Katrina, but the one 
thing I saw from my vantage point in Florida is it wasn't that 
the Nation lacked the resources to respond. We did not have an 
effective way of getting resources plugged in and identifying--
--
    Senator Shaheen. Yes, clearly.
    Mr. Fugate. But you as Governors, you are probably, like, 
we have people we can send. Who do we call?
    So we don't want to have that happen again. This means that 
you have to take a step back and say, look, there are disasters 
bigger than the Federal Government. They are going to be so big 
that they are going to require that we engage the States and 
local governments that are not affected as part of that 
response.
    That goes back to the grant funding. It is building 
capacity and capability we haven't had before by using tools 
like the Emergency Management System Compact. We have a 
framework.
    And I have never known a Governor who wasn't willing to 
give everything he or she had, including sometimes probably 
more than he or she should send, to help another Governor out 
and help citizens out in a time of need.
    So when people say are we better prepared? Yes. Do we have 
a mechanism to administer it? Yes. Do we have work to do? 
Absolutely.
    But we are no longer just sitting there telling you how 
much money we allocated each year as a measurement of 
preparedness.

                             CYBERSECURITY

    Senator Shaheen. Sure. As you point out, the way we are 
most effective is when everybody mobilizes, because that 
provides more volunteers, more resources to the effort.
    I just want to close with the final issue that you raised. 
You talked about hearing from States and localities about the 
threats to cyber, the cybersecurity threats.
    I wonder if you can talk about what FEMA is doing with 
respect to grants to address cybersecurity threats? What 
percentage of the funds are actually awarded for those kinds of 
grants? And do you work with the cyber center at Homeland 
Security on how those grants are distributed? Or the technology 
that they're developing there? Explain a little bit how that 
process works.
    Mr. Fugate. Senator, I would have to go back and ask staff. 
Most of what we see with States looking at cyber using our 
funds are things like enhancements in their fusion centers. So 
I would have to go back and ask staff, because I know we have 
worked to expand eligibility on what grants can do. But there 
is also, within the cyber world, still a lot to be determined 
on what the best practice are, and how much of this is an IT 
investment versus Homeland Security grant. So I would have to 
go back and ask that.
    [The information follows:]

    For fiscal year 2012-2014, the total grant funding obligated for 
cybersecurity projects is $82,350,618 or 1 percent of all awards made 
in these 3 fiscal years.
    The State Homeland Security Program, Urban Areas Security 
Initiative and Emergency Management Performance Grants funded 396 
cybersecurity planning, equipment and training projects from fiscal 
year 2012-2014 totaling $69,285,928.89 or 2 percent of all awards made 
under these programs.
    The Port and Transit Security Grant Programs funded 36 
cybersecurity projects from fiscal year 2012-2014 totaling $13,064,689 
or 2 percent of all awards made under these programs.
    While FEMA does not directly work with the National Cybersecurity 
and Communication Center, the center, along with any other State 
resources, is available for State and local jurisdictions to use while 
determining projects that meet National Preparedness Goals.

    Mr. Fugate. But in general, our role in the grant process 
is really funding States for consequences. In fact, I met with 
the big-city emergency managers a couple of weeks ago and this 
was at the top of the list. They were talking about what we do 
during communications.
    It was kind of ironic. I was there in Los Angeles, and we 
actually went in the fire dispatch and said, guys, what would 
happen if the communications went out? They said, that is our 
earthquake plan. We expect communications to go out in an 
earthquake. We get our units to go out and start patrolling the 
area.
    If communications go down and the center can't dispatch, 
they know they're supposed to get out and start patrolling and 
get on the radios. They will actually go truck to truck and 
start relaying communications.
    So when we get to cyber, emergency management is less about 
the intrusion, the detection, and dealing with that as much as 
what happens if it affects or disrupts critical infrastructure?
    And then you are back to, we respond to power outages; we 
respond to communication outages. It is the consequence of 
that.
    What cyber does that's more unique is it is more like the 
same thing we face with illnesses. It is rarely going to be 
just geographically specific. It may be occurring in multiple 
States simultaneously, so mutual aid may not be available. But 
it is a reference point for emergency managers to get their 
head wrapped around it that our primary responsibilities are 
going to be dealing with the consequences if the disruptions 
occur while we work with the DHS and National Cybersecurity and 
Communications Integration Center (NCCIC) and others over the 
threat, the intrusion, the detection.
    Part of what we have to do at FEMA is make sure our systems 
are resilient, that we are not vulnerable to that, and that we 
can operate in a cyber event and understand that it could be 
degrading communications and other tools that we would assume 
would be available. What happens if they're not?
    So we do some pretty extreme planning of what if you cannot 
use the public switch network to communicate? How do we 
communicate with the 50 States? So we push the extreme in the 
cyber event, because we are not dealing with the event itself. 
We are going to be dealing with the consequences and trying to 
maintain response and capabilities to deal with that as other 
people deal with the actual event itself.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hoeven. This will conclude our hearing today.
    Thank you, Administrator, for being here. We look forward 
to continuing to work with you.
    Senator Hoeven. The hearing record will remain open for 2 
weeks from today. Senators may submit written questions for the 
record, and we ask that FEMA respond in a timely manner.
    [The following questions were not asked at the hearing, but 
were submitted to the Department subsequent to the hearing:]

              Questions Submitted by Senator Bill Cassidy
                         nfip policy surcharges
    Question. Administrator Fugate, The Homeowner Flood Insurance 
Affordability Act (HFIAA) stipulates that a $250 surcharge is to be 
applied to non-primary residences and non-residential properties. 
According to the law, a $25 surcharge is to be assessed to policies 
covering an individual's primary residence. In several instances, my 
constituents are receiving vague or misleading information from various 
insurance companies participating in the Write Your Own (WYO) Program 
that stipulate a $250 surcharge upon renewal versus a $25 surcharge.
    The vague information informs homeowners of the assessment of a 
$250 surcharge, even if the policy is covering a primary residence. 
Upon contacting their WYO carrier, my constituents have been informed 
that the $250 surcharge would be automatically assessed to their policy 
based upon guidance by FEMA until the homeowner proves the home is his/
her primary residence. Furthermore, the homeowner has a 30-day window 
to verify primary residency.
    What protocol is FEMA following to inform primary residential 
homeowners of assessed surcharges and their requirement to take action 
to avoid the assessment of $250?
    Answer. At the time of the enactment of Biggert-Waters, FEMA had 
never required insurers to collect data indicating whether a property 
is a primary residence. After Biggert-Waters, FEMA required insurers to 
collect this information only for policies impacted by subsidy removal.
    Biggert-Waters required that subsidized policies covering non-
primary residences should have the subsidy phased out through 25 
percent annual rate increases. Thus, at the time of the enactment of 
the Homeowners Flood Insurance Affordability Act of 2014, FEMA did not 
have primary residence information for all non-subsidized policies. 
Because this information has not been collected on all policies, FEMA 
does not currently have statistics regarding the ratio of primary 
residence to non-primary residence policies. We do know that about 8 
percent of NFIP policies cover non-residential buildings, including 
businesses.
    In order to charge the appropriate amount, FEMA developed a 
procedure of requesting primary residence status at the time of 
applications written after April 1, 2015. For existing business 
renewing on or after April 1, 2015, insurers are required to send a 
request for policyholders to indicate their status as primary or non-
primary residence. By April of 2016, we will have identified primary 
residences for all NFIP policies.
    The request for residency status must be mailed by the insurer at 
least 90 days prior to policy expiration so that a policyholder 
receives it before the first renewal notice is mailed (at 45 days prior 
to expiration). The request states that the insured may sign and return 
a form to indicate their status as a primary residence. For those who 
do not wish to sign the form, a list of alternate documentation is 
provided (such as a driver's license). The documentation is the same 
type of documentation accepted by FEMA's Individual Assistance programs 
or the Internal Revenue Service. Policyholders are advised to respond 
within 30 days of the request to avoid being charged the $250 surcharge 
in their first renewal offer. Insurers are instructed to correct the 
surcharge upon receipt of the documentation, even if the documentation 
is submitted after the renewal payment is made.
    In general, the response rate to the initial request for primary 
residence status is low. The information is generally being provided 
after the first bill has been generated. FEMA has validated with 
insurers that the request for status is being made 90 days prior to 
renewal. FEMA did identify isolated instances of failure to mail some 
of the earliest letters, but no wide-spread systemic problem with 
generation of this letter has been identified. Those policyholders 
impacted in the isolated instances identified have been contacted by 
their insurer or agent to ensure that the surcharge is corrected, if 
necessary. FEMA continues to develop additional outreach materials to 
assist policyholders with understanding the surcharge.
    Question. What steps will FEMA take to ensure primary residential 
homeowners are assessed the correct surcharge of $25?
    Answer. The primary residence status can be corrected at any time 
during the policy year, and may result in a $225 refund when corrected 
from non-primary residence to primary residence. As indicated in the 
previous response, FEMA has asked insurers to provide evidence that the 
letters are being generated 90 days prior to renewal, and has issued 
public guidance reiterating the minimum communication requirement. 
Additionally, Fact Sheets have been developed for our web sites and 
distributed to insurers and other stakeholders. We continue to 
communicate the surcharge at conferences, workshops, training sessions 
and meetings with various stakeholders in the NFIP.
    Question. What is FEMA doing to ensure this surcharge schedule 
clearly is communicated through insurance companies participating in 
the WYO Program?
    Answer. The minimum requirement is that the letter requesting 
primary residence status is to be sent 90 days prior to expiration. 
This procedure has been provided in writing and via consultation 
sessions with insurers, as recently as May 1, 2015. We have asked for 
proof of mailing from select insurers, and insurers have complied with 
FEMA's requests.
    Question. Why has FEMA provided such a short window to verify proof 
of residency? Such documentation, such as a driver's license or 
automobile registration may not be updated within the 30 day window if 
the homeowner is moving into a new property from out of state.
    Answer. The minimum requirement for insurers is to send the notice 
requesting primary residence documentation 90 days prior to the renewal 
effective date. Some insurers have elected to send notices earlier, but 
the response rates to mailings drops significantly the further the 
notice is separated from the renewal billing cycle. The minimum 90-day 
notice provides the policyholder 30 days to make a response in order to 
avoid erroneous billings. This 30-day window to respond is specifically 
aimed at trying to collect the information before the first bill is 
generated. The first bill must be generated at least 45 days prior to 
expiration. Thus, there is an unstated 15-day ``cushion'' to allow for 
contingencies. If there is no response from the policyholder to the 
request for residency status, FEMA has instructed insurers to assume 
non-primary residence status for billing until the documentation is 
received. Upon receipt of the documentation, the primary residence 
status can be corrected. This correction may be made at any time during 
the billing cycle, or even after the renewal was paid with the non-
primary residence surcharge. The correction will result in a $225 
refund when the renewal policy is corrected from non-primary residence 
to primary residence after the non-primary residence surcharge was 
already paid. The acceptable documentation is a signed form, or any one 
of the following:
  --Driver's license;
  --Automobile registration;
  --Proof of insurance for a vehicle;
  --Voter's registration;
  --Documents showing where children attend school; or
  --Homestead Tax Credit Form for Primary Residence.
                         ffrms executive order
    Question. On February 6th, 2015 I joined Senators Thad Cochran (R-
MS), David Vitter (R-LA), John Cornyn (R-TX), Johnny Isakson (R-GA), 
Roger Wicker (R-MS), Roy Blunt (R-MO) and John Boozman (R-AR) in 
sending a letter to President Obama regarding his issuance of Executive 
Order 13690, ``Establishing a Federal Flood Risk Management Standard 
(FFRMS) and a process for Further Soliciting and Considering 
Stakeholder Input.'' As I detailed in the letter I am concerned with 
the implementation of this Executive Order because its development was 
conducted with little transparency or input from the public or 
lawmakers.
    In addition, this executive order would arbitrarily expand the 
definition of ``floodplain'' well beyond the long-accepted 100-year 
floodplain historical definition and there is a great deal of 
uncertainty over the scope of this executive order and how it would 
apply to a variety of Federal government programs that interact 
directly with the private sector on construction-related issues.
    Does FEMA intend for the recent Executive Order on the Federal 
Flood Risk Management Standard to apply to private construction 
projects that need Federal permitting (i.e. Clean Water permits, 
Endangered Species Act permits)? If this executive order essentially 
requires every Federal agency to create a new definition for a 
floodplain this order would thus apply to all Federal activity and 
would also apply to private development that receives a Federal permit. 
I find that troublesome and disconcerting and feel that it is an 
expansive Federal overreach that will create confusion and conflict in 
the private market. Is your agency aware of all the chaos and confusion 
that will be caused if this executive order is implemented?
    Answer. The question posed above regarding the scope of the Federal 
Flood Risk Management Standard (FFRMS) was also raised during the 
recent public comment period. Following the public comment period, FEMA 
and the Federal interagency community, through the Mitigation Framework 
Leadership Group (MitFLG) will analyze the comments received to 
determine edits to the draft Guidelines including clarification to 
scope of the Executive Order.
    The MitFLG was formed in 2013 to coordinate mitigation efforts 
across the Federal government and to assess the effectiveness of 
mitigation capabilities as they are developed and deployed across the 
Nation. Executive Order 13690 directed FEMA to publish, on behalf of 
the MitFLG, Revised Guidelines for Implementing Executive Order 11988, 
Floodplain Management (Guidelines) for public comment, and to host 
public meetings with stakeholders to solicit input.
    The MitFLG is committed to considering the input of the individuals 
and organizations that provided their perspective on the issue. The 
MitFLG will provide public feedback on the types of comments received 
and how those were considered, adjudicated, and used to inform the 
policy decisions.
    After the Guidelines are released, each Federal agency will 
carefully consider how to appropriately apply the FFRMS to their 
programs, and agency processes may include additional opportunities for 
the public to provide input before making final decisions about 
implementing the FFRMS.
    Question. Which non-government organizations or individuals that 
had a role in composing, editing, drafting, reviewing or developing any 
part of the FFRMS, the draft version of the Implementing Guidelines 
published in a Federal Register Notice on February 5, 2015, pursuant to 
EO 13690. Who were the individuals, their organizations, and were their 
roles in the process, including any individuals or organizations that 
worked through a contractual relationship with any office, agency or 
department of the Executive Branch?
    Answer. Executive Order 13690 revises and updates Executive Order 
11988 (1977) and reflects insight gained from significant experience 
addressing Federal floodplain management issues since that time. In 
working to establish a new flood risk management standard, entities 
across the Federal government drew on lessons learned from recent flood 
events, consensus-based standards, current practices within 
communities, input and views from a wide range of stakeholders and 
experts, and decades of experience under Executive Order 11988. As 
detailed further below, the Standard reflects the work of the 
Mitigation Framework Leadership Group (MitFLG), the Hurricane Sandy 
Rebuilding Task Force, and the Task Force on Climate Preparedness and 
Resilience, among others. This process of incorporating lessons 
learned, input, and feedback--including from governors, mayors, and 
other stakeholders--remains ongoing.
    The interagency Hurricane Sandy Rebuilding Task Force (created by 
Executive Order 13632 (December 7, 2012)) played a significant role in 
the reassessment of Federal flood standards in light of experience with 
Hurricane Sandy and lessons learned since Executive Order 11988 was 
issued in 1977. This Task Force was chaired by the Secretary of Housing 
and Urban Development, who led the effort in coordination with multiple 
Federal partners, as well as an advisory group composed of state, 
local, and tribal elected leaders. As one of its first actions, the 
Task Force developed a flood risk reduction standard for major Federal 
investment in Sandy rebuilding that took into account data on flood 
risk and applied that standard to all investments in Sandy-affected 
communities. After months of engagement by Federal partners-including 
with local leaders and community groups-the Task Force issued a 
Rebuilding Strategy, which established recommendations to help guide 
the Federal funding decisions related to Sandy-related rebuilding. The 
Task Force called for all major Sandy rebuilding projects in Sandy-
affected communities using Federal funding to be elevated or otherwise 
flood-proofed according to this flood risk reduction standard, which 
was created using the best available base flood data plus one 
additional foot of free board. Subsequent to this pilot program, the 
President's June 2013 Climate Action Plan directed agencies to take the 
appropriate actions to reduce risk to Federal investments, and 
specifically to update their flood risk reduction standards.
    In response to Hurricane Sandy, the President also established the 
President's State, Local, and Tribal Leaders Task Force on Climate 
Preparedness and Resilience in November 2013, with twenty-six 
governors, mayors, and local and tribal leaders serving as members. 
After a year-long process of receiving input from across State, local, 
tribal and territorial governments, private businesses, trade 
associations, academic organizations, civil society, and other 
stakeholders, the Task Force, in addition to several other 
recommendations, recommended to the President in November 2014:

        Federal agencies should adjust their practices in and around 
        floodplains to ensure that Federal assets will be resilient to 
        the effects of climate change, including sea level rise, more 
        frequent and severe storms, and increasing river flood risks, 
        as called for in the President's Climate Action Plan. Projects 
        that receive Federal funding should be sited and designed with 
        the best-available climate data and include margins of safety, 
        such as freeboard and setbacks, to account for uncertainties 
        and reduce costs and disruption from future hazards.

    DHS issued the National Mitigation Framework (NMF), which 
established the Mitigation Framework Leadership Group (MitFLG) in 2013 
to coordinate mitigation efforts across the Federal government and to 
assess the effectiveness of mitigation capabilities as they are 
developed and deployed across the Nation. The MitFLG was established to 
promote coordination of mitigation efforts across the Federal 
government and is responsible for assessing the effectiveness of 
mitigation core capabilities as they are developed and deployed across 
the Nation. The MitFLG includes ten state, local, tribal, and 
territorial members that serve as non-Federal participants. 
Specifically, representatives from the State of Mississippi Department 
of Health, Terrebonne Parish Commissioners, City of Palm Bay, FL 
Planning Department, City of New York City Office of Recovery and 
Resiliency have been members since July 2014 and representatives from 
the State of Georgia Environmental Finance Authority, Energy Resources 
Division, Tillamook County, OR and the Fond Du Lac Tribe of the 
Chippewa have been members since April 2015. The MitFLG facilitates 
information exchange, coordinates policy implementation recommendations 
on national-level issues, and oversees the successful implementation of 
the NMF.
    Federal members of the MitFLG, including representatives from the 
Department of the Treasury, the Department of the Interior, the 
Department of Commerce, the Department of Defense (including the U.S. 
Army Corps of Engineers), the Department of Health and Human Services, 
the Department of Housing and Urban Development, the Department of 
Transportation, the Department of Energy, the Department of Homeland 
Security's Federal Emergency Management Agency, the Environmental 
Protection Agency, the General Services Administration, the Office of 
Management and Budget, and the Council on Environmental Quality came 
together to apply lessons learned from Hurricane Sandy and other events 
across the country to bear more broadlythrough a Federal flood 
management standard, consistent with many of the Task Force on Climate 
Preparedness Force's recommendations and Resilience's recommendation 
and the directive of the President's Climate Action Plan directive. 
These members of the MitFLG worked to develop an FFRMS that reflects 
the best available science, lessons learned, and input and 
recommendations gathered from experience, feedback, government-led 
convening, and coordination and discussions with stakeholders on these 
issues.
    As a result of these efforts, on January 30, 2015, the President 
issued Executive Order 13690, ``Establishing a Federal Flood Risk 
Management Standard (FFRMS) and a Process for Further Soliciting and 
Considering Stakeholder Input.''
    Contractual support for facilitation and technical editing was 
initially provided under a FEMA contract by Clark Group LLC and their 
subcontractors VHB, Vanasse, Hangen, Brustlin, Inc. Subsequently, those 
services were assumed under a USACE contract with The Council Oak.
    Question. Which Governors, mayors, and other stakeholders did FEMA 
solicit information from prior to the establishment of the new FFRMS?
    Answer. Please see the answer to the previous question for a 
summary of the background of the development of the FFRMS.
    Question. Please summarize the activities of the Mitigation 
Framework Leadership Group since its inception relating to the 
development of the FFRMS, including a list of Federal members. Also a 
list of non-Federal members, including state, local and tribal 
governments, private sector and non-government organizations, and 
please summarize their involvement in the development of the FFRMS and 
the dates such involvement occurred.
    Answer. Please see the answer to the previous question for a 
summary of the background of the development of the FFRMS.
    Question. Please detail the Administration's methods used in 
determining the costs, benefits or scientific rationale of the FFRMS 
prior to its issuance, and provide the results of any such analyses.
    Answer. The issuance of an Executive Order does not require that a 
cost-benefit analysis of alternatives be completed. However, an 
economic analysis is typically required as agencies undertake 
rulemaking or significant policy development.
    Each Federal agency will carefully consider how to appropriately 
apply this standard to their programs. In many cases, those individual 
agency processes of updating regulations and procedures will involve 
their own process of notice and comment.
    When implemented, the FFRMS will reduce flood risk, increase 
resilience, and diminish the likelihood of future losses, thereby 
reducing future costs to the Federal government, state and local 
governments, and the private sector.
    Floodplain management standards have a proven record of reducing 
the costs of floods on individuals, communities, the Federal Treasury, 
and society as a whole. The existing floodplain management standard 
saves the country more than $1.6 billion annually in prevented damages. 
But given the challenges of the increasing number and intensity of 
flood events, EO 13690 seeks to create a higher standard to better 
protect communities, national investments and lives.
    Previous studies have shown that the expense of elevating new 
structures during construction is low, generally adding between 0.25 to 
1.5 percent to the total construction costs for each foot of added 
height.
    Rebuilding to the FFRMS following flood damage may require 
additional state or local funds where programs are based on a cost-
share with grantees. However, projects based on these standards have 
been shown to be cost-effective and provide longer-term protection 
against future disasters. Additionally, the Multi-hazard Mitigation 
Council of the National Institute of Building Sciences conducted a 
study on the benefits of FEMA-funded mitigation projects and concluded 
that they were successful and cost-effective, saving society, on the 
average, $4 for every dollar spent. Put simply, studies show that 
although building higher and safer can be initially more costly, over 
time, it saves money because future storms cause less damage to 
properly elevated buildings.
    Further, for structures built using Federal funds that require the 
purchase of flood insurance, the cost of building to the FFRMS can 
often be fully recovered in the form of decreased insurance policy 
payments.
    Question. Did FEMA or the Administration conduct any activities to 
engage the public and their representatives in Congress in the 
development of the FFRMS prior to January 30, 2015?
    Answer. Please see the answer to the second question under FFRMS 
EXECUTIVE ORDER for a summary of the background of the development of 
the FFRMS.
    Question. Please provide a detailed accounting of any funds 
expended to support the activities of the Water Resources Council, 
including the source of all such funds. Identify any Executive Branch 
personnel, including offices, departments, and agencies, utilized to 
support the activities of the Water Resources Council. Also include the 
dates any meetings of the Water Resources Council were held, attendance 
at such meetings, and whether there was any public notice of any 
meetings.
    Answer. The Water Resources Council (WRC), a group comprised of the 
heads of eight departments and agencies, has not to date convened 
regarding, or been involved in, the FFRMS, issued in January of this 
year.
pw 7453 (lsu hsc school of medicine--medical education building) and pw 
      9283 (lsu hsc school of medicine--clinical science building)
    Question. LSU Health Science Center in New Orleans. The LSU Health 
Science Center (HSC) in New Orleans continues to wait after more than 
10 years for FEMA reimbursement and the completion of outstanding 
Project worksheets (PW) for damages incurred as a result of Hurricane 
Katrina. While I know FEMA has made progress on completing certain 
related project worksheets recently I was wondering if you could 
provide me with an update as to when you anticipate that FEMA will be 
able to reimburse LSU for the recovery work remaining to be completed 
at their New Orleans School of Medicine?
    Current Status: On 3/3/15 FP&C submitted a $56,950,000.00 
Construction Cost Breakout (``estimate'') for recovery work remaining 
to be completed on the Clinical Science Research Building (PW 9283) and 
the Medical Education Building (PW 7453). FEMA is currently reviewing 
this submittal to identify work not captured in any previous grants. 
These facilities are part of the LSU Health Science Center School of 
Medicine campus in downtown New Orleans. Based on the estimate provided 
to FEMA on 3/3/15, FEMA expects FP&C to submit a request for a 
consolidated improved project along with a mitigation proposal for the 
LSU HSC School of Medicine. Upon receipt, FEMA is expected to evaluate 
the request and work to make revisions and complete the affected PWs.
    Answer. FEMA has begun its review of the advanced copy; however, it 
is important to note FEMA cannot formally respond prior to receiving 
the Grantee's concurrence with the Sub-grantee's request.
    Based on the advanced copy, FP&C's most recent request expands the 
standby power generation system originally approved for the CSRB (PW 
9283) and Medical Education Building (PW 7453) to include five other 
buildings on the School of Medicine campus: Resource Center (PW 7586), 
Allied Health/Nursing (PW 10309), Lions Eye Center (PW 8289), Student 
Residence Hall (PW 6367), and the Central Utility Plant (PW 12129). 
FP&C's 8/15/13 and 3/3/15 requests did not include a revised Hazard 
Mitigation proposal (HMP) or Benefit Costs Analysis (BCA); FEMA is 
required to recalculate the previously approved HMP in order to ensure 
the project remains cost effective. Due to the significant increase in 
proposed costs and lack of a revised HMP and BCA, FEMA has elected to 
revisit all PWs related to the seven buildings associated with the 
request. Additionally, FEMA is performing a comprehensive cost 
reasonableness analysis of FP&C's $57,403,000 estimate.
    FEMA has undertaken the above actions in anticipation of receiving 
the Grantee's concurrence with FP&C's 3/3/15 request. Upon receipt of 
Governor's Office of Homeland Security and Emergency Preparedness 
(GOHSEP) concurrence, and once FEMA's cost reasonableness analysis and 
review of the seven PWs associated with the Sub-grantee's 3/3/15 
submittal is complete, FEMA will identify and request any additional 
information required to make a complete eligibility determination. 
After a review of the additional information FP&C provides, FEMA will 
consult with GOHSEP, FP&C, and LSU HSC to reach a consensus regarding 
FEMA eligible repair and hazard mitigation work, as well as agreement 
on a reasonable cost for FEMA PA program participation.
    Current Status: On 3/3/2015, FP&C submitted to the Grantee a 
$57,403,000.00 Construction Cost Breakout (``estimate'') for the School 
of Medicine campus. The 3/3/15 submittal is currently under review with 
GOHSEP's Alternate/Improved Projects team. FEMA received an advanced 
copy of FP&C's request on 4/16/2015.

                            PWs 7453 & 9283--Obligated Funding Summary as of 5/13/15
----------------------------------------------------------------------------------------------------------------
               PW                     Facility          Version     Date Obligated        Obligated Funding
----------------------------------------------------------------------------------------------------------------
                                                                 0        08/17/06                   $623,007.00
                                                                 1        06/19/07                    $69,223.00
                                 Medical                         2        10/09/07                 $1,972,194.00
7453                             Education                       3        10/22/08                   $357,192.64
                                 Building                        4        05/27/09                -$1,998,076.00
                                                                 5        09/30/10                 $5,192,330.36
                                                                 6        03/28/12                   $407,401.62
                                                   -------------------------------------------------------------
        Subtotal:..............                                                                    $6,623,272.62
                                                                 0        11/13/06                   $335,951.10
                                                                 1        06/19/07                    $37,327.90
                                                                 2        04/04/08                   $344,837.00
                                 Clinical                        3        10/22/08                   $157,465.00
9283                             Sciences                        4        06/23/09                         $0.00
                                 Building                        5        09/23/10                   -$80,480.00
                                                                 6        05/01/12                $29,346,893.00
                                                                 7                                   $184,888.24
                                                   -------------------------------------------------------------
    Subtotal:..................                                                                   $30,326,882.24
                                                   -------------------------------------------------------------
    Total Obligated:...........                                                                   $36,950,154.86
----------------------------------------------------------------------------------------------------------------

               national domestic preparedness consortium
    Question. The National Domestic Preparedness Consortium is charged 
with training the nation's first responders. In the Administration's 
Budget request for fiscal year 2016, there was only a $49 million 
request for the Consortium, which is a $52 million decrease from last 
year's funding level. If this decrease was to go into effect what would 
be the impact on first responder training?
    Background and/or follow-up: Each year, Congress provides the 
additional appropriations to fund the NDPC. The results from the NDPC 
are fantastic. A couple of years ago, the National Center for 
Biomedical Research and Training at LSU had the Boston Police sing the 
NDPC praises for the incredible training they received and how it 
prepared them for the horrible day at the Boston Marathon. The 
Administration each year not only does not provide the necessary 
funding for this program but it also wants to make this program into a 
competitive grant instead of building upon the investment already made 
in the NDPC. Please explain.
    Answer. The fiscal year 2016 budget request for the National 
Domestic Preparedness Consortium is based on the fact that States are 
assuming increased responsibility for awareness level, refresher, and 
sustainment training that will allow our institutional partners to 
focus resources on more advanced, specialized training consistent with 
their respective expertise. More curriculum is also being delivered in 
train-the-trainer and web-based formats, which helps reduce costs. 
Unlike in previous years where we proposed to complete the NDPC as part 
of acompetitive Training Program Grant, we are not proposing to 
complete NDPC funding in fiscal year 2016.

                          SUBCOMMITTEE RECESS

    Senator Hoeven. With that, this subcommittee stands in 
recess.
    [Whereupon, at 5:57 p.m., Wednesday, April 22, the 
subcommittee was recessed, to reconvene at a time subject to 
the call of the Chair.]

                                   -
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