Mitigation efforts are often characterized as structural—for example, building codes and flood control projects, such as dams and levees—and nonstructural—for example, land use planning, zoning, or other methods of minimizing the development of hazardous areas. A well-designed disaster mitigation program is perceived as a good way to reduce the overall exposure to risk from a disaster. For example, building codes that incorporate seismic design provisions can reduce earthquake damage. Additionally, floodplain management and building standards required by the National Flood Insurance Program may reduce future costs from flooding. For example, FEMA estimates that the building standards that apply to floodplain structures annually prevent more than $500 million in flood losses. In addition to FEMA, other federal agencies have a role in natural hazard mitigation. The Army Corps of Engineers’ major role in disaster mitigation includes providing assistance in constructing structural flood control facilities and maintaining them. According to its records, the Corps’ levees found in areas affected by the Midwest floods of 1993 prevented $7.4 billion in damage. The Tennessee Valley Authority provides information, technical data, and other assistance to promote the wise use of flood-prone areas. The Department of the Interior has mitigation responsibilities in a number of areas, including programs that help to develop scientific and technical information and procedures for reducing potential casualties and damage from earthquakes and volcanos, and a geologic-related hazards warning program that provides states and local governments with technical assistance to help ensure the timely warning of various geological disasters. The Departments of Agriculture and Commerce have roles in mitigation through their respective programs designed to conserve and develop soil and water resources and to assist states in setting up coastal management programs. As we reported in 1995, mitigation is one of three general approaches that have been proposed for reducing the costs of federal disaster assistance.For a number of reasons, including a sequence of unusually large and costly disasters, federal disaster assistance costs have soared in recent years. Obligations from the Disaster Relief Fund totaled some $3.6 billion in fiscal year 1996 and about $4.3 billion in fiscal year 1997. FEMA can influence program costs by establishing and enforcing procedures and criteria for assistance within the eligibility parameters established in statutes. We have recommended that FEMA improve program guidance and eligibility criteria in part to help control these costs. Historically, hazard mitigation has been considered primarily a responsibility of local and state governments as well as private citizens. These entities often control the decisions affecting hazard mitigation. For example, building code enforcement and land-use planning are generally under local jurisdictions. However, research suggests that, for a number of reasons, state and local governments may be reluctant to take actions to mitigate natural hazards. The reasons include local sensitivity to such measures as building code enforcement and land-use planning, conflict between hazard mitigation and development goals, the lack of an understanding of mitigation and political support, and the perception that mitigation is costly and involves solutions that are overly technical and complex. Also, while increased mitigation can be justified only to the extent to which averted losses exceed the increased costs of mitigation, mitigation policies often do not systematically compare the costs of mitigation with the losses expected to be averted, and data on which to base cost-effective mitigation may be incomplete and/or inaccurate. Individuals may also lack incentives to take mitigation measures. Studies have shown that increasing the awareness of the hazards associated with living in a certain area or previous experience with disasters do not necessarily persuade individuals to take preventive measures against future disasters. Residents of hazard-prone areas tend to treat the possibility of a disaster’s occurrence as sufficiently low to permit them to ignore the consequences. Finally, some research suggests that the availability of federal relief inhibits actions that would mitigate losses from disasters. For example, we noted in a 1980 report that the greater the degree of federal subsidization of disaster losses, the less the incentive for individuals to take action to minimize damage from natural disasters. The National Performance Review found that the availability of post-disaster federal funds may reduce incentives for mitigation. FEMA’s 1993 review of the National Earthquake Hazards Reduction Program (NEHRP) concluded that at the state level there is “the expectation that federal disaster assistance will address the problem after the event.” There are a number of approaches for addressing state and /or local governments’ reluctance to take actions to mitigate natural hazards. Our March 1995 testimony discussed recommendations by FEMA, the National Research Council, and the National Performance Review promoting the use of federal incentives to encourage hazard mitigation. For example, specific initiatives for improving earthquake mitigation included linking mitigation actions with the receipt of federal disaster and other assistance and prohibiting federally insured lenders from issuing conventional mortgages to households or businesses in an earthquake-prone area unless state or local governments have adopted or enforced appropriate seismic building standards. FEMA provides state and local governments with hazard mitigation grants and training in support of the agency’s endeavors to instill a community-based approach to implementing disaster mitigation efforts. FEMA is allowing more flexibility in targeting the agency’s grants to communities’ actual disaster risks through its agreements—called Performance Partnership Agreements—with the states. Recently, FEMA has introduced the concept of “disaster-resistant communities” through its Project Impact initiative. FEMA funds or otherwise promotes hazard mitigation through a number of programs. Under section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, FEMA administers a hazard mitigation grant program. Subject to certain dollar limits, the act generally allows the President to contribute grants of up to 75 percent of the cost of hazard mitigation measures within communities that have been affected by a disaster (the states or local governments pay the remaining portion of the costs). The communities’ measures must be cost-effective and substantially reduce the risks of future damage or loss in a community. Also, under section 406 of the act, communities recovering from disasters can utilize federal funds to mitigate damaged public facilities in accordance with certain standards—such as floodplain management standards. Furthermore, section 409 of the act helps establish the requirements for a comprehensive state hazard mitigation plan. As authorized by the National Flood Insurance Act of 1968, as amended, FEMA attempts to reduce future flood losses by providing federally backed flood insurance to communities as part of its National Flood Insurance Program (NFIP). The NFIP pays for claims and operating expenses with revenues from policyholder premiums, augmented when necessary by borrowing from the Department of the Treasury. Communities are eligible for the program only if they adopt and enforce floodplain management ordinances to reduce future flood losses. As of August 1997, over 3.7 million home and business flood insurance policies were in force in more than 18,000 participating communities, representing over $403 billion worth of coverage. NFIP also funds a flood mitigation assistance program which provides funding to states and communities. In 1997, FEMA reported that it distributed $16 million in 1997 to states and communities for planning and implementing cost-effective measures to reduce future flood damage to homes and other properties that had experienced repeated losses from flooding. Eligible projects under this program include elevating structures and flood-proofing properties. FEMA also attempts to reduce flood losses through buying-out flood-prone properties throughout the country and converting the properties to open spaces. Since 1993, FEMA reports that it has committed more than $204 million to relocate 19,000 properties out of flood hazard areas in 300 communities. To help mitigate the potential loss of life and property from earthquakes, the Earthquake Hazards Reduction Act of 1977, as amended, authorizes FEMA’s provision of earthquake hazards reduction grants to states under NEHRP. (FEMA shares administration of this program with the U.S. Geological Survey, the National Science Foundation, and the National Institute of Standards and Technology.) These project grants are available only to states with moderate or higher seismic hazard and the funds can be used for a number of purposes, including implementing mitigation measures to prevent or reduce the risks of earthquakes. To conduct training, public education, and research programs in subjects related to fire protection technologies, FEMA operates the U.S. Fire Administration under the Fire Prevention and Control Act of 1974, as amended. The agency’s efforts support the nation’s fire service and emergency medical service communities through such services as the national fire incident reporting system, which collects and analyzes fire incident data. This information is then utilized to help mitigate the loss of life and damage from fires—the United States has historically had one of the highest fire loss rates (in deaths and dollar loss) of the industrialized world. In 1995, FEMA published its National Mitigation Strategy, which stresses two 15-year national goals of substantially increasing public awareness of natural hazard risk and significantly reducing the risk of loss of life, injuries, economic costs, and disruption of families and communities caused by natural hazards. The strategy calls for strengthening partnerships among all levels of government and the private sector and sets forth major initiatives, along with timelines, in the areas of (1) hazard identification and risk assessment, (2) applied research and technology transfer, (3) public awareness, training, and education, (4) incentives and resources, and (5) leadership and coordination. In 1997, FEMA began its Project Impact initiative—an effort to help protect communities, residents, organizations, businesses, infrastructure, and the stability and growth of local economies from the impact of natural disasters before they happen. The program was based on the premise that consistently building safer and stronger buildings, strengthening existing infrastructures, enforcing building codes, and making proper preparations prior to a disaster would save lives, reduce property damage, and accelerate economic recovery. The initiative intended to build “disaster-resistant communities” through public-private partnerships, and it included a national awareness campaign, the designation of pilot communities showcasing the benefits of disaster mitigation, and an outreach effort to community and business leaders. Project Impact received an appropriation of $30 million in the fiscal year 1998 budget.