[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
       DEPARTMENTS OF TRANSPORTATION, HOUSING AND URBAN DEVELOPMENT, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2018

_______________________________________________________________________

                                 HEARINGS

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED FIFTEENTH CONGRESS

                              FIRST SESSION

                                 ________

   SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND 
                URBAN DEVELOPMENT, AND RELATED AGENCIES

                   MARIO DIAZ-BALART, Florida, Chairman

  CHARLES W. DENT, Pennsylvania      DAVID E. PRICE, North Carolina
  DAVID P. JOYCE, Ohio               MIKE QUIGLEY, Illinois
  JOHN ABNEY CULBERSON, Texas        KATHERINE CLARK, Massachusetts
  DAVID YOUNG, Iowa                  PETE AGUILAR, California
  DAVID G. VALADAO, California
  TOM GRAVES, Georgia

  

  NOTE: Under committee rules, Mr. Frelinghuysen, as chairman of the 
full committee, and Mrs. Lowey, as ranking minority member of the full 
committee, are authorized to sit as members of all subcommittees.

                Doug Disrud, Cheryle Tucker, Carl Barrick,
                 Jennifer Hollrah, and  Matthew Anderson
                            Subcommittee Staff

                                  _______

                                  PART 6
      Department of Transportation, Federal Highway Administration--
                            Emergency Relief
   Department of Housing and Urban Development, Community Development 
                     Block Grant--Disaster Recovery

                                   
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 ______

                    U.S. GOVERNMENT PUBLISHING OFFICE

  28-271                  WASHINGTON : 2018

                            



                      COMMITTEE ON APPROPRIATIONS

                                ----------                              
             RODNEY P. FRELINGHUYSEN, New Jersey, Chairman


  HAROLD ROGERS, Kentucky \1\                NITA M. LOWEY, New York
  ROBERT B. ADERHOLT, Alabama                MARCY KAPTUR, Ohio
  KAY GRANGER, Texas                         PETER J. VISCLOSKY, Indiana
  MICHAEL K. SIMPSON, Idaho                  JOSE E. SERRANO, New York
  JOHN ABNEY CULBERSON, Texas                ROSA L. DeLAURO, Connecticut
  JOHN R. CARTER, Texas                      DAVID E. PRICE, North Carolina
  KEN CALVERT, California                    LUCILLE ROYBAL-ALLARD, California
  TOM COLE, Oklahoma                         SANFORD D. BISHOP, Jr., Georgia
  MARIO DIAZ-BALART, Florida                 BARBARA LEE, California
  CHARLES W. DENT, Pennsylvania              BETTY McCOLLUM, Minnesota
  TOM GRAVES, Georgia                        TIM RYAN, Ohio
  KEVIN YODER, Kansas                        C. A. DUTCH RUPPERSBERGER, Maryland
  STEVE WOMACK, Arkansas                     DEBBIE WASSERMAN SCHULTZ, Florida
  JEFF FORTENBERRY, Nebraska                 HENRY CUELLAR, Texas
  THOMAS J. ROONEY, Florida                  CHELLIE PINGREE, Maine
  CHARLES J. FLEISCHMANN, Tennessee          MIKE QUIGLEY, Illinois
  JAIME HERRERA BEUTLER, Washington          DEREK KILMER, Washington
  DAVID P. JOYCE, Ohio                       MATT CARTWRIGHT, Pennsylvania
  DAVID G. VALADAO, California               GRACE MENG, New York
  ANDY HARRIS, Maryland                      MARK POCAN, Wisconsin
  MARTHA ROBY, Alabama                       KATHERINE M. CLARK, Massachusetts
  MARK E. AMODEI, Nevada                     PETE AGUILAR, California
  CHRIS STEWART, Utah
  DAVID YOUNG, Iowa
  EVAN H. JENKINS, West Virginia
  STEVEN M. PALAZZO, Mississippi
  DAN NEWHOUSE, Washington
  JOHN R. MOOLENAAR, Michigan
  SCOTT TAYLOR, Virginia
  ----------
  \1\}Chairman Emeritus

  

                   Nancy Fox, Clerk and Staff Director

                                   (ii)
                                   


                             C O N T E N T S

                               __________

                           November 30, 2017

                                                                   Page
Diaz-Balart, Hon. Mario, a Representative in Congress from the 
  State of Florida, opening statementt...........................     1
Price, Hon. David E., a Representative in Congress from the State 
  of North Carolina, opening statement...........................     2

                                Witness

Hendrickson, Brandye, Acting Administrator, Federal Highway 
  Administration.................................................     2
    Prepared statement...........................................     4

                                 ______

                            December 1, 2017

Diaz-Balart, Hon. Mario, a Representative in Congress from the 
  State of Florida, opening statementt...........................    27
Price, Hon. David E., a Representative in Congress from the State 
  of North Carolina, opening statement...........................    28



Rackleff, Neal J., Assistant Secretary, Office of Community 
  Planning and Development, Department of Houseing and Urban 
  Development....................................................    29
    Prepared statement...........................................    32
    Answers to submitted questions...............................    57

                           Submitted Material

Bishop, Hon. Sanford D. Jr., a Representative in Congress from 
  the State of Georgia, submitted statement......................    56
Serrano, Hon. Jose E., a Representative in Congress from the 
  State of New York, submitted statement.........................    56

                                         (iii)


DEPARTMENTS OF TRANSPORTATION, HUD, AND RELATED AGENCIES APPROPRIATIONS
                                         FOR 2018

                              ----------                              

                                        Thursday, November 30, 2017

            FEDERAL HIGHWAY ADMINISTRATION--EMERGENCY RELIEF

                               WITNESSES

BRANDYE HENDRICKSON, ACTING ADMINISTRATOR, FEDERAL HIGHWAY 
    ADMINISTRATION, U.S. DEPARTMENT OF TRANSPORTATION; WALTER C. 
    ``BUTCH'' WAIDELICH, JR., EXECUTIVE DIRECTOR,
    FEDERAL HIGHWAY ADMINISTRATION

           OPENING STATEMENT OF CHAIRMAN DIAZ-BALART

    Mr. Diaz-Balart. We will call the subcommittee to order.
    Let me first welcome our witnesses, Brandye Hendrickson, 
acting administrator for the Federal Highway Administration, 
and Mr. Butch Waidelich, the executive director of the Federal 
Highway Administration. They are here to testify on the 
administration's request for additional funding for the 
hurricane recovery efforts of 2018.
    Obviously, the 2017 hurricane season inflicted billions of 
dollars worth of damage and economic loss in a number of States 
and territories, obviously, including my home State of Florida. 
And so we look forward to working with you and the entire 
administration to help rebuild those communities that have been 
devastated by Hurricanes Harvey, Irma, and Maria.
    So, today, we are going to focus this hearing on the $415 
million request for the Federal Highway Administration's 
Emergency Relief Program. This program supports both urgent 
repairs, which are needed in response to the disaster, as well 
as rebuilding projects needed for long-term recovery.
    And the beauty of this program is that it leverages the 
regular highway program to get projects moving quickly and 
responsibly. And so we look forward to learning more about what 
is funded in the request and understanding how the program will 
serve the needs of those communities that have been impacted by 
these horrible storms in this last year.
    So as I said before, I thank both of you for your service 
and for appearing before us today.
    Let me now recognize my friend and partner and colleague 
here, the ranking member, Mr. Price.

           OPENING STATEMENT OF RANKING MEMBER PRICE

    Mr. Price. Thank you, Mr. Chairman.
    I want to add my welcome to our witnesses, Administrator 
Hendrickson, Director Waidelich. We appreciate you joining us 
today. We look forward to what you will have to say.
    We, of course, are examining the administration's 
supplemental funding request for disaster relief and your 
programs, the programs you oversee. The Highway 
Administration's Emergency Relief Program is critical to any 
major recovery effort. We have got to restore highways, roads, 
quickly to facilitate the flow of aid and emergency resources 
and to set the foundation for long-term recovery.
    I appreciate that your agency has routinely authorized 
quick release to jump start the recovery process and that you 
have requested an additional $415 million to help the States 
and territories affected by Hurricanes Harvey, Irma, and Maria.
    I am concerned; will want to explore this later. I remain 
concerned that the supplemental request fails to address the 
existing backlog of ER projects in dozens of States that have 
suffered from other recent disasters. And in addition, the 
request doesn't include funding to respond to the wildfires in 
California.
    Finally, there are ongoing challenges associated with the 
cost estimation in hard-hit areas like Puerto Rico. And the 
committee will need to continue to receive updated information 
as those estimates are received.
    So we have a lot of work to do, and we look forward to this 
as a useful opportunity to exchange information as we look to 
the task ahead. We thank you for being here.
    Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, sir.
    Administrator Hendrickson, again, your full testimony will 
be included in the record, obviously. And so now we thank you 
again for being here and we will recognize you for 3 minutes.

STATEMENT OF BRANDYE HENDRICKSON, ACTING ADMINISTRATOR, FEDERAL 
                     HIGHWAY ADMINISTRATION

    Ms. Hendrickson. Chairman Diaz-Balart, Ranking Member 
Price, and members of the subcommittee, thank you for inviting 
me here today to discuss how Federal Highway responds to 
disasters, and the administration's request for additional 
funding for Emergency Relief Program. Joining me today is Butch 
Waidelich, Federal Highway's executive director.
    Having served as the CEO of a State DOT, I know firsthand 
how important the Emergency Relief Program is to restoring 
essential transportation infrastructure following a disaster 
and how critical that is to other recovery efforts, commerce, 
and the return to a higher quality of life for those impacted.
    As you know, over the course of 4 weeks, three major 
hurricanes caused widespread devastation across Texas, Florida, 
Puerto Rico, and the U.S. Virgin Islands. The administration 
took quick action to respond to these events, and under the 
leadership of Secretary Chao, U.S. DOT was no exception.
    Most of Federal Highway's disaster response efforts are 
provided by Federal Highway's Emergency Relief Program. This 
program provides funding to States, territories, Federal land 
management agencies, and Tribal nations for the repair and 
reconstruction of Federal transportation assets that suffer 
serious damage as a result of natural disasters or catastrophic 
failures.
    Through the ER program, Federal Highway has already 
provided over $130 million to respond to recent hurricanes. 
This funding allowed the recovery process to start almost 
immediately after the events ended. However, due to the 
magnitude of these storms, more is needed and, therefore, the 
administration is requesting an additional $415 million 
programs for the ER program to aid in the recovery.
    Federal Highway's response has not been limited to funding. 
The recovery from these storms would not be possible without 
the dedicated work of our division offices in Texas, Florida, 
and Puerto Rico. I would like to recognize staff from these 
offices, some of whom were personally impacted by these storms, 
for their nonstop and continued efforts in providing assistance 
to the states and territories.
    In addition, Federal Highway deployed its Federal Lands 
Highway staff to complete damage assessments, offer technical 
assistance, and provide turnkey engineering and contract 
administration support in these impacted areas. Our 
headquarter's Crisis Management team and other Federal Highway 
employees from across the country, who have volunteered to 
assist in recovery efforts, also deserve recognition for their 
efforts.
    I spent a lot of time in the Crisis Management Center, on 
many phone conferences, and also had the opportunity to visit 
our folks on the ground in Texas. While it is difficult for me 
here to convey their passion and their heart for service in the 
setting here today, I assure you that Federal Highway will be 
there every step of the way and is committed to supporting 
these communities in rebuilding their roads and bridges.
    Mr. Chairman, thank you again for the opportunity to appear 
before you today, and I look forward to answering your 
questions.
    [The prepared statement of Ms. Hendrickson follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
      
    
    Mr. Diaz-Balart. Thank you, Administrator. By the way, I 
would be remiss if I didn't mention that, during those storms--
and I didn't call the Secretary, she called me. Basically, the 
storm was barely over and she was already calling me. And so I 
think it is important to note that. And that is greatly 
appreciated. I greatly appreciate it.
    Members, we will proceed in the standard 5-minute rounds, 
alternating sides, recognizing members in order of seniority as 
they were seated at the beginning of the hearing. And 
obviously, as you know, those 5 minutes include not only the 
question, but also the answer.
    Ms. Clark. Are you looking at me?
    Mr. Diaz-Balart. I am not looking at you, because you are 
actually very concise.
    Let me just start. It is my understanding that the 
Emergency Relief Program--and Mr. Price spoke about this in his 
opening remarks--has an obligation backlog. And it is my 
understanding it is over $1 billion in expected funding 
shortfall of over $800 million. And as Mr. Price said, the 
request falls short of this amount, not to mention the 
additional funding needed to address the 2017 hurricane damage.
    So it would be great if you could explain how the ER 
backlog works and what happens when there is a shortfall.
    Ms. Hendrickson. The total backlog to date is about $1.4 
billion, and that includes the total need estimated for Harvey, 
Irma, and Maria. While we are certainly cognizant of all the 
other needs across the country, we update that information 
twice a year with revised estimates on what States feel that 
they can obligate. We certainly continue to support them in 
those efforts, but the destruction relative to these hurricanes 
is widespread and the need is immediate. And thus, the request 
to address those needs with this supplemental request.
    Mr. Diaz-Balart. So let me ask you, so if the request were 
not to be adequate to cover the current shortfall, and then so 
how will any new costs associated with the 2017 storm damage be 
addressed?
    Ms. Hendrickson. We have a semiannual allocation of funds 
that goes out to the States. And we send those out on a 
prorated basis based on need and what States feel that they can 
obligate. And so, you know, just depending on the available 
funds would determine how those funds would be allocated.
    Mr. Diaz-Balart. And I don't know if this is something you 
can answer, but any idea why the administration didn't request 
enough funding to clear the backlog and also support the 2017 
damage?
    Ms. Hendrickson. I know that the urgency was to get funding 
to the hurricane-impacted areas because of the devastation and 
because of the immediate need.
    Mr. Diaz-Balart. Is there a scenario where projects could 
potentially be delayed because of--you know, of a shortfall in 
funding?
    Ms. Hendrickson. States are free to use their normal 
funding, their normal Federal aid funding, to complete 
projects, and so I don't anticipate that there could be a 
delay. In some cases where absolutely there were no funds 
available, it is possible. But we don't expect that.
    Mr. Diaz-Balart. And obviously when you think of Puerto 
Rico and the Virgin Islands, where the damage is obviously 
large, particularly large relative to the size of their regular 
highway programs, and potentially waiting years to get 
reimbursed might be more challenging for those. Not that it 
wouldn't be challenging for others, but I would just imagine 
that for particularly those two territories it might be a lot 
more challenging.
    Ms. Hendrickson. So we allocate funds to States on a 
semiannual basis. As funding becomes available, the amount of 
funding is determined based on what is available and what is 
requested. And so we look every 6 months at the need associated 
with what projects can actually get accomplished based on what 
the States tell us.
    Mr. Diaz-Balart. Right. So any idea how much progress has 
been made in the actual damage assessments in each of the areas 
affected by the hurricanes? Obviously, you know, I am keenly 
interested in Florida, but not only in how it is going in 
Florida. Any idea how that assessment is taking place?
    Ms. Hendrickson. Sure. In Texas, relative to Hurricane 
Harvey damage, about 90 percent of the inspections have been 
completed. In Florida, with Hurricane Irma, about 70 percent of 
the inspections have been completed. In Puerto Rico, with Irma 
and Maria, about 91 percent of the inspections have been 
completed. And with the Virgin Islands, about 80 percent of the 
inspections have been completed.
    Mr. Diaz-Balart. Great. Mr. Price.
    Mr. Price. Thank you, Mr. Chairman. I want to just pick up 
on the same line of questioning.
    I am not sure, Madam Administrator, exactly what you are 
saying, so let's try to make sure. The request is for $415 
million, and that request is specifically pegged to the known 
damage in Texas, Florida, Puerto Rico, and the Virgin Islands. 
Is that correct?
    Ms. Hendrickson. That is correct.
    Mr. Price. So the request has no reference, makes no 
reference to the $751 million in unmet need, in backlog?
    Ms. Hendrickson. That is correct.
    Mr. Price. All right. And I thought I heard you say that 
the money went out in--the sequence of payment had to do with 
the request being complete, the assessments being complete. But 
this backlog, that is not the problem, is it? These assessments 
have been there quite a while.
    Ms. Hendrickson. We allocate funding based on what the 
States tell us their needs are and what they can obligate 
within the next 6 months. And so while--so as of the last 
distribution of funds, we are up to date based on what the 
States tell us that they can obligate. We have done another 
call to ask what the future looks like in fiscal year 2018, and 
that is the need that is represented in the $1.4 billion that 
also includes the hurricane, the total hurricane request.
    Mr. Price. All right. Well, the money that went out the 
door previously, of course, was appropriated in the 2017 
Omnibus, signed into law pretty late, admittedly, in May of 
this year. That included $528 million. And there was a major 
delay in obligating that. The bulk of that funding wasn't 
released until this month.
    Ms. Hendrickson. That is right.
    Mr. Price. And as you know, Ranking Member DeFazio, others, 
have expressed concerns about this delay. I share those 
concerns. Did that delay have to do with waiting on the States 
to make their needs clear and to meet their obligations? 
Question A.
    And question B, are you saying that now that that $528 
million has gone out the door, that is all you can do now, that 
the rest of that $751 million can't be committed until you get 
more information from the States?
    Ms. Hendrickson. So Federal Highway carefully considered 
the impacts of the hurricanes before we released the funds to 
make sure that the immediate needs from the hurricanes could be 
addressed.
    Mr. Price. Which hurricanes now are we talking about?
    Ms. Hendrickson. Harvey, Irma, and Maria.
    Mr. Price. This year's.
    Ms. Hendrickson. Yes.
    Mr. Price. All right.
    Ms. Hendrickson. So we wanted to make sure, before we sent 
out the semiannual allocation, that we were going to have 
enough funds to cover the immediate quick-release needs of the 
impacted areas from the hurricanes.
    Mr. Price. That is the source of the $415 million request.
    Ms. Hendrickson. The $415 million request is for the total 
damage associated, estimated with the hurricane.
    Mr. Price. That is what is left after the quick release.
    Ms. Hendrickson. Yes.
    Mr. Price. I see. OK. I still don't understand what is 
hanging up the unmet needs from previous hurricanes, though. 
$751 million, it is not included in this request. It is not 
clear how we are going to meet those obligations, is it?
    Ms. Hendrickson. States tell us what they can obligate in 
the next 6 months. So the backlog includes the most up-to-date 
numbers that States have told us they can obligate in the next 
year. So that is what that number represents.
    Mr. Price. Well, the fact that last year's money, the 2017 
money wasn't released until November 2016, is that par for the 
course or do you consider that to be a delay that you really 
wouldn't want to repeat in the future?
    Ms. Hendrickson. I would not expect that in the future. The 
reason for the delay, again, was, as we considered all of the 
needs due to the unprecedented hurricanes, we wanted to make 
sure that we had enough funds on hand to get immediately 
through quick release to the impacted areas to restore 
essential traffic.
    Mr. Price. All right. So there was a tradeoff between the 
quick-release needs, which none of us would dispute, the need 
to respond immediately to the horrible storms of this year, and 
that longer term need.
    It is still--unless I am missing something, it still 
appears to me that we are missing the--that there is going to 
be an appropriations--there should be an appropriations request 
that we are going to need to consider that will address these 
unmet needs from previous years. Or is the money in hand to do 
that whenever the paperwork is in order or whatever needs to 
happen?
    Ms. Hendrickson. The money is not in hand.
    Mr. Price. OK.
    Ms. Hendrickson. As you know, we have a permanent annual 
authorization of $100 million for the Emergency Relief Program. 
And historically, we have had supplemental appropriations each 
year, over $10 billion, actually, since 2005. And generally, 
over the course of the year, the average supplemental is about 
$1.5 billion each year, on average, over those years. So that 
would be expected.
    Mr. Price. All right. Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, sir.
    Mr. Dent.
    Mr. Dent. Thank you, Mr. Chairman.
    Hurricanes Harvey, Irma, and Maria left a trail, I think, 
of unprecedented devastation, and consequently, there are a 
wide range of recovery needs.
    Ms. Hendrickson, I wanted to ask you, when examining all 
these needs, how does a State or a territorial government 
prioritize repairs under this particular program? And is there 
the opportunity for citizens, businesses, and nonprofits to 
provide their input or flag needed repairs?
    Ms. Hendrickson. Sure. So this is a federally assisted and 
State-administered program. So States, you know, they do the 
assessments. We determine the eligibility for quick--I am 
sorry, for emergency relief funding. But the States really 
identify the priorities based on a lot of different factors, 
including economic development, safety, and mobility in their 
areas. So it would be up to them to prioritize those projects.
    We do, you know, certainly encourage and require public 
engagement as a part of the Federal aid program. So 
stakeholders, including residents and businesses, should 
certainly have the opportunity to weigh in on those priorities 
at the State level.
    Mr. Dent. OK. Now, if you take it a step further, Hurricane 
Maria, it hit Puerto Rico, which affected all aspects of day-
to-day life and industry in that territory. And as you know, 
people are still recovering. What capacities do they have to 
recover? So many of them are devastated right now in that so 
many workers and contractors themselves are probably recovering 
from the disaster. What is your assessment of the territory's 
ability to make use of emergency funding made available through 
the program? Are they able to utilize it at this moment?
    Ms. Hendrickson. We are aware that several contracts have 
already been--several emergency contracts have already been 
executed in Puerto Rico. And, in fact, our Federal Lands staff 
across the impacted areas are also performing contract 
administration work in the impacted areas. So we know that 
contracts are underway.
    It would be something--contractor capacity would be 
something to keep an eye on as more funding and needs 
assessments are determined. Moving forward, we would want to 
just keep a close eye on that.
    Mr. Dent. Do you have any information about the ability to 
secure qualified workers for these contractors? Are there 
qualified workers available down there right now?
    Ms. Hendrickson. We have not heard that that is an issue at 
this point but, again, that would be something to keep an eye 
on.
    Mr. Dent. OK. And you also indicated in your statement that 
good progress has been made in Puerto Rico in assessing the 
damage to Federal-aid highways, roads, and bridges. What do you 
believe is the timetable for completing all damage assessment 
in the territory? And are there specific characteristics or 
impediments in the remaining areas that are going to make them 
more difficult to reach?
    Ms. Hendrickson. Given the fact that now 91 percent of the 
assessments have been completed, we anticipate that it would be 
a fairly short turnaround time for the remaining facilities. 
For emergency repairs, there is a 180-day requirement, that the 
emergency repairs are completed within 180 days. So, certainly, 
before the 180 days has expired, we would expect all of the 
assessments to be complete.
    We also really, in most cases, require that the detailed 
inspections are completed within 3 months.
    Mr. Dent. I yield back, Mr. Chairman. Thank you.
    Mr. Diaz-Balart. Thank you very much, Mr. Dent.
    The always concise and quick, Congresswoman Clark.
    Ms. Clark. Thank you, Mr. Chairman. And thank you for being 
here today.
    I am not quite understanding how you got to your allocation 
yet. So let me give you an example; maybe you can help me 
understand it. In Florida, in the chairman's home State, my 
understanding is they have about $105 million in net-remaining 
need. So out of this allocation, which is the $415 million, is 
approximately 30 percent of the total no need. Would Florida 
get $105 million or did they get 30 percent of that?
    Ms. Hendrickson. The total need that is being described 
includes $105 million for Florida. So if the $415 million was 
approved, Florida would get a substantial portion of that $105 
million total need.
    Ms. Clark. OK. So you are not going to do 30 percent across 
the board, even though you are only asking for 30 percent of 
the total need. You are going to prioritize those needs in 
Texas, Florida, Puerto Rico, and the Virgin Islands?
    Ms. Hendrickson. The request is specifically for these 
hurricane-impacted areas. And so it would depend on if that is 
what Congress tells us to do, then that is how the funds would 
be allocated. But that is how the request has currently been 
made.
    Ms. Clark. OK. And did you say that there is an average 
supplement on an annual basis of $1.5 billion to this, to the 
emergency relief funding?
    Ms. Hendrickson. Historically, yes.
    Ms. Clark. Historically. But you have not received that 
this year, and you are not asking for supplemental in addition 
to this $415?
    Ms. Hendrickson. Correct. That is not a part of this 
request.
    Ms. Clark. And why did you decide not to do a request that 
would meet anywhere near historical standards, especially in 
this time of huge need?
    Ms. Hendrickson. This request was specifically to address 
the immediate need of the hurricane-impacted areas and, you 
know, given the unprecedented damage and widespread need, it 
was specifically focused on these areas.
    Ms. Clark. Yeah. I am just sort of, you know, curious about 
why, you know--I certainly understand prioritizing these high-
need areas, and I appreciate the efforts that have been made, 
but it seems like the ideal time to at least get to a 
historical supplement request. If you could tell me a little 
bit more about why you decided not to do that.
    Ms. Hendrickson. Again, the specific request was really to 
address the hurricane, the hurricane-impacted areas, and given 
the magnitude and the historic nature of the hurricanes, the 
$415 million was identified as the need for those specific 
events.
    Ms. Clark. OK. Going back to follow up on my colleague's 
question. There's about 91 percent of the damage inspections 
are done in Puerto Rico. And did you say it is about 81 percent 
in the Virgin Islands?
    Ms. Hendrickson. Eighty percent.
    Ms. Clark. Eighty percent? And I appreciate that you have 
given access to about $41 million to address emergency repair 
needs while waiting. Is there any estimate that you have at 
this time--and I know you have 180 days usually, you said, to 
get this--of the additional amount needed? And if we do not 
provide emergency relief funding sufficient to cover all that 
existing need, what impact is this going to have on funding the 
loan on transportation projects in Puerto Rico and Virgin 
Islands?
    Ms. Hendrickson. I did want to clarify that, for Puerto 
Rico, we have released $72.5 million in quick-release funds. 
And for the U.S. Virgin Islands, we have released $8 million 
already. And the total quick release for Hurricanes Harvey, 
Irma, and Maria is over $130 million. I just wanted to clarify 
that.
    Ms. Clark. OK. So I guess my question is, with the $415 
million that you have decided to ask for, with these 
outstanding inspections still needing to go forward, do you 
have any estimate how short you might be based on what you are 
seeing as the need at this point?
    Ms. Hendrickson. The initial damage inspections have been 
done. So as contracts are put together and as estimates are 
refined, the numbers could change, could change positively or 
negatively, depending on if the damage isn't as extensive as we 
originally thought. So this is typical in our Emergency Relief 
Program, is that as it gets closer to actual time for 
construction, estimates get refined. And so the final numbers 
come at the time of construction.
    Ms. Clark. OK. Thank you.
    Mr. Diaz-Balart. Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. And hello, colleagues, 
good to be with you. And thank you for coming today. This is 
very important.
    These hurricanes, these disasters, they just wreak havoc on 
people and their lives and communities. And we want to make 
sure that the funds that we are disbursing here are getting to 
the right place in a timely manner. And we also want to be 
accountable with these taxpayer funds as well.
    When we talk about the assessments, my understanding is you 
say the States do the assessments and the inspections. And so 
is that the State highway engineers and inspectors that do all 
this?
    Ms. Hendrickson. That is right. The State DOT's, through, 
you know, their employees, their inspectors, do the damage 
assessments, with our assistance.
    Mr. Young. I mean, your assistance would be sending some 
Federal Highway Administration folks down?
    Ms. Hendrickson. We have Federal Highway staff in all 50 
States.
    Mr. Young. OK. So they come from other States? They will 
come down from other States and leave a void in some other 
States?
    Ms. Hendrickson. No. We have Federal Highway employees in 
every State.
    Mr. Young. In every State, OK.
    Ms. Hendrickson. So it would be those division offices that 
would provide that technical assistance.
    You know, in cases where there is some kind of special 
expertise necessary or some kind of, you know, substantial 
need, as in the cases of these hurricanes, we have sent 
supplemental staff from other parts of the country to assist in 
the effort.
    Mr. Young. You want to make sure you have the smartest 
people there inspecting in the right way, knowing what to look 
for, because there are a lot of nuances, and it is case by case 
sometimes.
    Ms. Hendrickson. It can be, yes.
    Mr. Young. And then the States, they do the prioritizing of 
what needs fixed first?
    Ms. Hendrickson. Yes.
    Mr. Young. OK. How do you know that, within the 
prioritization, that those--that it is legitimate, that there 
is real accountability there, and that it is a real need? You 
work with them?
    Ms. Hendrickson. Absolutely. We work hand-in-hand with the 
States. As they complete the damage assessments and as they 
program their projects into their program, we review those 
damage assessments to ensure they are eligible for the 
emergency relief funds based on the conditions and the scope of 
the project.
    Mr. Young. OK. Because, you know, I have some--you know, 
maybe other people worry about it, but sometimes I think maybe 
folks try to slip in some projects in there that may have just 
been a wanting to be fixed for a while, and they see an 
opportunity, that the Federal tax dollars are coming in, a lot 
of it, to take care of some projects. And I just want to make 
sure that there is some accountability there to make sure what 
has been damaged because of the storm is what is the priority. 
And then you assess what the localities, the prioritization, 
what needs to be done. OK.
    Is it just the Federal Government that is sending the 
taxpayer dollars or is there--do the States have any financial 
skin in the game as well when it comes to this?
    Ms. Hendrickson. Sure. So the emergency repairs in the 
Emergency Relief Program are funded at 100 percent Federal with 
no local match.
    Mr. Young. OK.
    Ms. Hendrickson. The permanent repairs, they are funded at 
80/20 or 90/10, depending on the project. For territories, 
those are funded at 100 percent Federal match.
    Mr. Young. OK. That is all I have for right now.
    I yield back. Thank you.
    Mr. Diaz-Balart. Thank you very much, sir.
    Mr. Valadao?
    Mr. Valadao. Thank you, Chairman. Thank you very much for 
attending today.
    I am sure you are aware of the fires that devastated 
California in October. Unfortunately, much of the State had 
experienced similar wildfire situations for most of the summer.
    Last month, the President declared a disaster for these 
most recent fires, which burned through about 240,000-245,000 
acres. Can you please give me an update of what funding the 
Federal Highway Administration has provided so far in relation 
to the California wildfires?
    Ms. Hendrickson. I do not have a total of what has been 
allocated specifically for the wildfires. I know that 
California's request that was--it was met in the $519 million 
allocation--I am sorry, supplemental appropriation that went 
out in November.
    Mr. Valadao. OK. And this past Friday, the Office of 
Management and Budget submitted a request for $44 billion for 
additional supplemental disaster. Unfortunately, the State of 
California was not included in that package. I understand that 
the California damage assessments are ongoing and the 
administration will continue to work with the State in support 
of the recovery process.
    Does the Federal Highway Administration plan on requesting 
additional relief dollars funding in any forthcoming disaster 
relief supplement? I mean, are there any questions that need to 
be addressed? Are you guys getting all the information that you 
need as we move forward?
    Ms. Hendrickson. I feel like we are--we do have the 
information that we need. We have done a request to all States 
about their ongoing need. And California has identified $889 
million that they say can be obligated in 2018. And that is 
part of the $1.4 billion backlog that I identified earlier.
    Mr. Valadao. All right. Well, thank you.
    I yield back.
    Mr. Diaz-Balart. Thank you, sir.
    By the way, I was actually, in a positive way, taken aback 
about the numbers that you gave from Puerto Rico and the Virgin 
Islands as far as the assessment. And I would imagine that 
assessments in place, you know, doing that in Puerto Rico and 
the Virgin Islands, must pose some special challenges.
    So does the DOT have the resources it needs to evaluate the 
damage and to approve projects within a reasonable timeframe 
in? My question is really about the Virgin Islands and Puerto 
Rico. But why don't we just kind of through that open in 
general.
    Ms. Hendrickson. It has been a commitment of resources on 
behalf of Federal Highways, but I feel like this is when we are 
at our finest when we all can rally around the most important 
cause. And so we have pulled resources and prioritized this as, 
you know, a very important aspect of our business, and feel 
that this is the time we shine.
    Mr. Diaz-Balart. Do you know if that 9 percent remaining, 
right, in Puerto Rico, is that just because--I mean, by the 
way, that number is, particularly the challenge, is exceedingly 
high. I mean, it is an incredible achievement that you all have 
been able to do.
    Is that remaining 9 percent going to be a lot more 
difficult because it is in the boonies, it is harder to get to? 
Any idea what you foresee?
    Ms. Hendrickson. I wouldn't want to speculate.
    Mr. Diaz-Balart. Speculate on that, right.
    Mr. Waidelich. You know, it has been, quite frankly, 
remarkable, the speed that we have been able to give these 
assessments.
    Mr. Diaz-Balart. Yes, absolutely.
    Mr. Waidelich. And something I just wanted to mention. We 
have got this tool that it is an application that one of our 
engineers in our Federal Lands organization developed called a 
mobile solution for assessing and reporting. And essentially it 
is an app on an iPad.
    Now, when the event occurred in Texas, Harvey occurred in 
Texas, we actually had trained engineers in Texas. We trained 
engineers in our office to actually use it. And it saves quite 
a bit of time as far as getting those assessments done. In 
Puerto Rico and in the Virgin Islands, we ran into issues with 
the, you might want to say, WiFi necessary and the cell 
coverage necessary. But as that, you know, was overcome, it 
became easier and easier.
    So maybe what I am getting at is, is that 91 percent is 
remarkable, and we wouldn't be there if it wasn't for that tool 
that we have.
    Mr. Diaz-Balart. No, that is a remarkable number and, you 
know, again, I congratulate you all for doing that.
    The committee has received some requests to waive or to at 
least adjust, certain statutory requirements for this program 
on items such as expenditure caps and the cost share. And so 
has the DOT identified any requirements that potentially could 
prove problematic for one or more of the areas impacted by the 
2017 hurricanes? Are there issues that we need to be looking 
at?
    Ms. Hendrickson. Well, Federal Highway doesn't have the 
discretion to waive the territorial cap. That would be--you 
know, congressional action would be required to do that.
    Mr. Diaz-Balart. Right. But are there any areas you have 
seen that would be helpful for Congress to help you do that if, 
in fact, there are some specific areas you have seen that 
particularly problematic that maybe a waiver of a cap could 
help in one way or another, or something like that?
    Ms. Hendrickson. As more damage inspections come in and we 
understand the total need in the U.S. Virgin Islands----
    Mr. Diaz-Balart. It would be great if you could just stay 
in touch with us if, in fact, you see something like that that 
might be helpful to you all.
    Ms. Hendrickson. OK.
    Mr. Diaz-Balart. Again, just know that we are here to try 
to help in things like that, if at all possible.
    Let me just throw out one kind of a general open-ended 
question, which is what are some of the lessons that DOT has 
learned with respect to oversight? You know, there were a lot 
of stories and I don't want to say horror stories, but some 
issues particularly after Katrina and Sandy. And I have had 
conversations about lessons learned.
    But if you just want to kind of take a stab at that. Any 
specific lessons learned after particularly those two storms, 
and other major storms that have made it, again, have made the 
process, better, more efficient? You mentioned, obviously, this 
new process that you are using. But what other kind of lessons 
are out there that you think we should hear about that we may 
not have heard?
    Mr. Waidelich. I don't know if this is considered a lesson, 
but it is preparedness. You know, what you do prior to an event 
makes a huge difference as to what happens during an event.
    We work with the States, both Puerto Rico and Florida and 
Texas, prior to an event, training them on what to do in these 
areas. We work with them in their operation centers. We, you 
might want to say, game and have exercises to see how 
evacuations would take place.
    So when you actually practice, and I think, you know, for a 
good part of this, in Texas, for example, it was incredible, 
the speed of that recovery because of what they were doing 
prior to that event even happening, and the same thing in 
Florida.
    Another lesson learned is, you know, we have learned from 
Andrew with standards. You have the State of Florida that was 
hit by one of these hurricanes that was, you know, one of the 
largest that has ever hit the United States with some of the 
greatest winds. And the light standards remained. They learned 
from Andrew to, you might want to say, develop resiliency into 
their standards, so when an event like that occurred again, we 
didn't have the issues with those standards coming down.
    So, again, I think those are best practices that I think we 
need to continue and to follow into the future.
    Mr. Diaz-Balart. Thank you.
    Mr. Price.
    Mr. Price. Again, let me pick up on the chairman's 
brilliant line of questioning, because the lessons learned 
theme, it is resonant. We had an earlier informal discussion 
with this subcommittee, and we were talking along the same 
lines about the standards to which we build back. And the 
mitigation, the possibilities to encourage mitigation and the 
limits on future damage.
    You suggested at that time, and you seem to be suggesting 
now, that you try to build back to better standards. You 
encourage that, you review proposals with that in mind. We know 
how especially important that is in Puerto Rico and the Virgin 
Islands. But are you saying that this is standard operating 
procedure in a way that you take satisfaction with now or is 
this more aspirational?
    Mr. Waidelich. I wouldn't say it is aspirational. Now, the 
ER program itself allows you to rebuild to current standard. 
Many times when an event occurs----
    Mr. Price. That is why the question came up in the first 
place. How do you interpret that and how do you go beyond it?
    Mr. Waidelich. You know, first, many times the current 
standard is a greater standard than was there before. And 
resiliency is built in that standard because as highway 
agencies around the country move forward, those standards, you 
know, are raised to include resiliency.
    The program also allows to look at cost benefit for a 
betterment. That includes life-cycle costs, the additional cost 
of ER down the road that could occur if it isn't raised to a 
higher standard than the actual standard. But we all have to 
remember also in the FAST Act, what was included in that is 
something called a risk-based asset management system, which 
includes resiliency. And States are going through that right 
now as far as identifying and looking at their system. And when 
you incorporate risk in there, you have to include resiliency.
    And an example of that would be maybe an evacuation road, 
we would build to a little higher standard to ensure that that 
would be always available, versus another road that had very 
low ADT and wasn't needed in that. Or a road that goes to the 
power plant that would need to be accessed, or the hospital. 
Those are the types of things in the normal program that are 
being identified by States now.
    Mr. Price. Right. And by way of wrapping up, pulling 
together earlier themes, let me go back to Puerto Rico here and 
ask you about the process of collecting data and getting the 
information you need there. This has been touched on, but at--I 
know our staff at a briefing about a month ago was talking with 
you about the particular difficulties in getting the data you 
need in the interior of Puerto Rico because of the lack of 
electricity, the lack of wireless connectivity, in many cases. 
So that has been a problem. It could, of course, hobble our 
entire effort.
    What can you report on your progress in getting that data 
and getting it more expeditiously?
    Ms. Hendrickson. I will say that, again, in Puerto Rico, 
you know, 91 percent of the inspections have been complete, and 
so we feel like a lot of progress has been made since our last 
encounter here in presenting the information to you. Again, we 
feel like the estimate of the additional need of $212 million 
is a good estimate, but, again, those estimates will be refined 
over time.
    Mr. Price. Well, you know, the picture that came out 
earlier, and it wasn't that long ago, the picture that came out 
was we wouldn't have anticipated a 91 percent completion of the 
data. How have you pulled this off or what has happened to 
overcome these problems? Because they really aren't problems 
that are prevalent in the 50 States.
    Ms. Hendrickson. We have deployed about 100 employees for 
hurricane response relative to Maria. Our Federal Lands Highway 
staff is there onsite, along with the Puerto Rico division 
employees, to assist the Puerto Rico Department of 
Transportation in completing these assessments. And so we feel 
like with the additional support of Puerto Rico and the 
priority that they have put on this as well, that we are 
getting close to having the damage assessments complete.
    Mr. Price. All right. Thank you.
    Thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, sir.
    Mr. Young?
    Mr. Young. Thank you, Mr. Chairman.
    I just want to clarify the issue regarding waiver 
authority. And you say that you have--in certain instances, you 
can issue that authority when it is dealing with States, but 
not territories? Is that what I understand?
    Ms. Hendrickson. Ask that again.
    Mr. Young. Like, you know, caps or cost share, something 
like that.
    Ms. Hendrickson. You know, we do not have the discretion at 
Federal Highway to waive those caps.
    Mr. Young. OK.
    Ms. Hendrickson. Now, you know, the emergency repairs are 
funded at 100 percent and the permanent repairs are funded at 
80 percent Federal share with a 20 percent match, but those 
match requirements are not within the discretion of the Federal 
Highway Administration. Congressional action would be required 
to waive that.
    Mr. Young. OK. That's very, very helpful. Thank you.
    That is maybe something we may want to look at sometime, 
Mr. Chairman.
    And also, just to dovetail on what the ranking member and 
chairman have already talked about, just lessons learned and 
recommendations. You mentioned to be prepared, but on the back 
end of that, you know, what do we learn when it comes to 
responsiveness. And I think it could be very helpful to both 
folks who unfortunately may come under some disasters in the 
future, and with Congress and for the taxpayer to really 
understand what these lessons learned are and try to make sure 
that we make things better in the future. So thank you, Mr. 
Chairman.
    Mr. Diaz-Balart. Thank you, sir.
    Mr. Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman.
    I know that my colleague, Mr. Valadao, asked some questions 
related to California, so I just had one. And that was specific 
to the quick-release funds. Can you walk me through whether the 
California disaster qualifies for quick release, and what has 
been the discussion with California on that funding? I know the 
priorities were kind of debris clearing initially. Of course, 
as my colleague knows, 5,000 structures, 200,000 acres burned, 
40 deaths as a consequence. So can you talk with me a little 
bit about that specific category?
    Ms. Hendrickson. We have not currently received a quick-
release request from California, but what would go into that 
decisionmaking would be, you know, looking at the intent of the 
funds, the urgency of the request, how the funds would be 
intended to be used, on what types of projects. But we would 
certainly consider a request, if received.
    Mr. Aguilar. Thank you. That is it, Mr. Chairman.
    Mr. Diaz-Balart. Mr. Price, I want to make sure that unless 
you have--oh, no, wait, Mr. Valadao. I apologize. I almost, 
because you are such a small guy out there quiet in the corner 
that I almost forgot you.
    Mr. Valadao. So far down the road here.
    Mr. Diaz-Balart. You are recognized. My apologies.
    Mr. Valadao. Oh, no problem. Just a real quick question I 
should have touched on earlier.
    Moving forward, how do you plan on balancing the needs of 
those in the southeast dealing with the hurricane-related 
damages and those in the West dealing with very different kinds 
of damage caused by wildfires? Will the funding be disbursed 
competitively or will it be disbursed specifically to the 
hurricane-stricken States, and is there a timeline?
    Ms. Hendrickson. So the way that the emergency relief funds 
are distributed are through, again, through the semiannual 
allocation, which basically is distributed through a 
proportional share of the funding, based on the needs 
identified by the States. So the States tell us what they can 
obligate over the next 6 months or the next year. And when 
funding is not enough to meet 100 percent of those needs, they 
are distributed on a prorated share.
    They are also distributed through quick release. So if 
there are requests for quick release, that would be another way 
that funds get distributed. And then also, as directed by 
Congress. So if Congress tells us specifically to allocate 
funds for these events, then those funds would be distributed 
similar to how quick-release funds go out.
    Mr. Valadao. Thank you, Chairman. I yield back.
    Mr. Diaz-Balart. Thank you, sir.
    Well, let me first, Madam Administrator and Mr. Executive 
Director, thank you for your time. As this subcommittee has 
had, we had an informal Members' briefing or a roundtable, 
which I think was very helpful in getting all our members to 
understand, frankly, the intricacies of the program itself. And 
now we want to thank you today for your testimony. It has 
really broadened our understanding of the supplemental request, 
and it will help inform the subcommittee in our funding and 
policy decisions dealing with disaster recovery. So, again, I 
want to thank you for what you do, for your service, and also 
for being exceedingly accessible to this subcommittee.
    And so, with that, we will adjourn the subcommittee.
    Thank you very much.

                                           Friday, December 1, 2017

     DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT--DISASTER RECOVERY

                                WITNESS

NEAL J. RACKLEFF, ASSISTANT SECRETARY, OFFICE OF COMMUNITY PLANNING AND 
    DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

           OPENING STATEMENT OF CHAIRMAN DIAZ-BALART

    Mr. Diaz-Balart. Good morning. Let's call the subcommittee 
to order.
    This morning we want to welcome Mr. Neal Rackleff, Housing 
and Urban Development's assistant secretary for Community 
Planning and Development.
    Mr. Secretary, we look forward to hearing your testimony on 
the administration's supplemental request for Community 
Development Block Grants Disaster Recovery. Mr. Rackleff, as I 
read your bio--which is rather impressive, I may add.
    Mr. Rackleff. Thank you.
    Mr. Diaz-Balart. I was struck by the fact that you are 
coming to HUD with, frankly, a great deal of experience. And it 
is particularly relevant, Mr. Secretary, to our current 
challenges, as you spent years running Houston's Department of 
Housing and Community Development. And so, again, I think that, 
nobody better than you to be in this position particularly at 
this time. So, again, we are grateful for that.
    I am confident that your experience in Houston will serve 
you very well, sir. In fact, will serve all of us this 
subcommittee, the committee, and the entire country well. As 
you know, you face some great challenges in deploying CDBG 
resources to help our communities rebuild and recover from this 
year's disaster.
    Now, the administration has requested $12 billion in 
additional funding for HUD to establish a new, a brand-new 
competitor program for flood mitigation projects. This request 
assumes that we have done all that we need to do, I assume--
that is the assumption--all that we need to do for the regular 
CDBG-DR program when we provided the $7.4 billion in the first 
supplemental for the 2017 disasters.
    Now, let me say upfront, I don't believe that we have done 
enough in the regular CDBG-DR Program. I have personally 
witnessed the devastation in Florida, throughout different 
parts of the State, and particularly in the district that I am 
privileged to represent, where significant portions of Collier 
County were hit hard by Hurricane Irma. There are a couple of 
communities in the district that I represent that are still 
working awfully hard to get back on their feet. When you look 
at the Everglades City, Chokoloskee Island area, or Immokalee, 
those areas are still struggling. And, obviously, the Keys are 
still struggling as well. Folks in those communities know that 
the road to recovery will be long and a very difficult one. And 
so they are more than ready for the task of rebuilding. Their 
attitude is great.
    But we need to make sure that the full, appropriate Federal 
commitment is there for the long-term recovery. And I think all 
of us are committed to that, just as the Federal Government has 
stepped up in previous storms.
    So I would like to first take this opportunity, not just to 
discuss the administration's proposal for a new CDBG program, 
or a new CDBG type program, but also to look at the existing 
CDBG program and the remaining funding needs. I have heard from 
several members that we need to make sure that we are meeting 
pressing immediate needs of communities that have been affected 
by Hurricanes Harvey, Irma, and Maria, and those that have been 
affected by also the California wildfires.
    In addition to looking at the policy issues and funding 
requirements for CDBG Disaster Recovery, we will maintain a 
high priority on oversight, obviously, of these funds. And so 
we must make sure that this program is executed in a way that 
ensures, frankly, that there is as little room as possible for 
waste, fraud, and abuse.
    The traditional CDBG-DR program, as you know, Mr. 
Secretary, is run as a block grant program with funding 
provided directly to the States. That is how the program, I 
think, should be run, with flexibility in decision-making 
powers at the local level. That, by the way, has always been a 
big Republican priority. So, however, the block grant approach 
presents challenges for financial oversight as we balance 
flexibility with accountability.
    So we want to make sure, Mr. Secretary, that you have the 
tools that you need to make sure that every last dollar in the 
program goes to the intended purpose, which is obviously 
helping communities recover and prosper.
    Again, I am grateful that we have somebody of your 
experience in this position, and we look forward to engaging 
with you on that issue today, and obviously, continuing that 
oversight in months and years to come. Again, so I want to 
welcome you to this committee.
    And before we go and listen to your statement, let me turn 
it over to my colleague and my dear friend and ranking member, 
Mr. Price.
    Mr. Price, you are recognized, sir.

           OPENING STATEMENT OF RANKING MEMBER PRICE

    Mr. Price. Thank you, Mr. Chairman. I am also pleased to be 
here this morning and to work on this supplemental funding 
request from the administration for disaster relief.
    Secretary Rackleff, thank you for joining us today. We 
congratulate you on your appointment. Look forward to working 
with you.
    Mr. Rackleff. Thank you.
    Mr. Price. The HUD CDBG Disaster Relief Program is critical 
to disaster recovery. We have learned that through many 
disasters in many States. These flexible dollars from HUD have 
become, in many instances, the primary Federal funding source 
for long-term recovery and for rebuilding activities.
    North Carolina knows all too well what it is like to 
recover after being hit by major storms. After Hurricane Floyd 
made landfall in 1999, our State was one of the early pioneers 
when it came to innovative ways to leverage CDBG dollars for 
disaster recovery.
    Just last year, Hurricane Matthew inflicted more than $3 
billion in damage to North Carolina communities. And we have 
subsequently received more than $220 million in CDBG-DR funding 
to facilitate long-term Matthew recovery efforts. So I am 
grateful for this funding stream and for the cooperation of HUD 
in working with us.
    There have been some disagreements about how HUD measures 
unmet need in getting this aid to our State. But there is 
certainly no disagreement that CDBG-DR funding helps our 
constituents and remains a vital tool in the government's 
disaster recovery toolkit. So we have got to ensure that States 
and territories suffering from disasters receive adequate 
funding.
    To that end, I am interested in when we can expect full 
disaster estimates for unmet needs in Texas, Florida, Puerto 
Rico, the Virgin Islands. I also want more information about 
how HUD and its grantees will address rental housing needs 
during the recovery. In addition, I have several questions 
about the administration's request for national mitigation 
competition using $12 billion in additional CDBG dollars.
    I applaud the administration for emphasizing resiliency in 
mitigation. But we do need more information about how this 
competition is actually going to work and how it intersects 
with remaining unmet needs. It may be premature to fund such a 
program, or at least to totally rely on it, when we have yet to 
completely fund base unmet needs in States that were affected 
by Harvey, Irma, and Maria.
    So there is a lot to talk about, a lot to work on. And I 
look forward to hearing more about your request and how HUD 
plans to address ongoing disaster recovery needs.
    Thank you.
    Mr. Diaz-Balart. Thank you.
    Again, Mr. Secretary, thank you for being here. Your full 
written testimony will be included in the record. Thank you for 
being here. You are recognized for the 5 minutes.

 STATEMENT OF NEAL J. RACKLEFF, ASSISTANT SECRETARY, OFFICE OF 
 COMMUNITY PLANNING AND DEVELOPMENT, DEPARTMENT OF HOUSING AND 
                       URBAN DEVELOPMENT

    Mr. Rackleff. Thank you, first, for being so generous in 
your comments regarding my past experience.
    I want to start by complimenting this body with the speed 
with which you all reacted after these hurricanes. The $7.4 
billion appropriation came in record speed, and it is a 
testament to the commitment that you have to the people who are 
suffering and who have undergone so many difficult challenges. 
We stand with you in working to the very best of our ability to 
find the best ways to help folks as quickly as possible.
    More than $50 billion since 2001 for CDBG-DR purposes has 
been allocated to States and communities to help with really a 
very broad array of needs, everything from the 9/11 attacks, 
from hurricanes, floods, to wildfires. And I am pleased to tell 
you that for the past 25 years, I have been deeply involved in 
working out public-private partnerships to rebuild from 
disasters, to revitalize cities, and to provide quality, 
affordable housing.
    My most recent public service was in Houston as the 
director of Housing and Community Development. In that 
situation, I was plugged into an ongoing disaster recovery 
project relating from Hurricane Ike. And our group turned 
around a program that was plagued with inefficiencies and 
problems, got it back on track, and then moved through a 
subsequent allocation of funding in a manner that I think was 
really respectful to the families that we served. We found ways 
to do things much more quickly than they have done in the past, 
and we were more efficient with the resources that we were 
entrusted with.
    I want you to know that these resources, I have always 
felt, are a sacred stewardship. We have folks who sweat and 
bleed to earn a living, and those tax resources that are 
generated from that toil need to be used in the most prudent 
way possible.
    The $7.4 billion that was appropriated earlier is money 
that we try to use in a very rational and consistent and 
equitable way. Mr. Price mentioned concerns about the way that 
we measure unmet need. I am very happy to visit with you and 
your staff and look at those issues in depth, because I want to 
do the right thing to meet those needs. And, you know, if it 
means changing and doing things differently than we have done, 
I really don't care. The overriding goal that I have as the 
assistant secretary over CPD is to help families as quickly and 
as effectively as possible.
    This supplemental request, I think, actually is a really 
wonderful opportunity to look at these situations in a more 
proactive and preventive way. You know, the question regarding 
how much unmet need remains is one that we have analyzed. And, 
according to our analysis, we have made huge strides in terms 
of the amount of unmet need we are able to meet with the $7.4 
billion. We also think it is critically important that we don't 
only look at disaster relief when we are looking down the 
barrel of a hurricane or major flooding. You know, we have got 
to get into a more proactive mode. Often, the old maxim that a 
pound or a--what is it, a pound of--no, a penny worth of 
prevention is worth a pound of relief. Thanks. I am going off 
script. So folks back there are probably going, oh, please, 
don't.
    But, anyhow, you know, we want to make sure that we are 
smart with the resources that we have. And, you know, I can 
tell you from being in the trenches at the local level, there 
are a lot of jurisdictions that know of projects that would be 
extremely helpful for them to mitigate future flooding, but 
they just don't have the money to be able to afford them. So 
through a competitive process, which is fundamentally 
different, certainly, than what we typically do with CDBG-DR, 
we think that we can hone the analysis more finely and we can 
help communities leverage the resources that they have and find 
the best ways to avoid families experiencing flooding in the 
future.
    The eligible applicants for this program would be those 
States in insular areas with more than one flood-related major 
disaster between January 1, 2014, and December 31, 2017. So 
that would include 33 States, Puerto Rico, the U.S. Virgin 
Islands, and Guam.
    I can tell you that, you know, I got here, I was sworn in 
on August 16. And just about 2 weeks later, the hurricanes 
started hitting. And so I have been working around the clock 
with really a remarkable staff of professionals at the senior 
levels that I have been privileged to work with at HUD. And we 
are doing everything we can to get as much help to folks as 
quickly as possible.
    Thank you, very much, and I look forward to your questions.
    [The prepared statement of Mr. Rackleff follows:]
    
    
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    Mr. Diaz-Balart. Again, thank you very much, Mr. Secretary.
    We are going to go through the regular process as we always 
do as far as questioning in order, which I will not repeat 
here.
    Secretary, I agree with you that these are issues that we 
should not only deal with when we are looking down the barrel, 
as you said. But right now, we are looking down the barrel.
    Mr. Rackleff. Yes, sir.
    Mr. Diaz-Balart. And I agree with you that these are issues 
that should be looked at, but I would argue that through the 
regular process with hearings, through potential legislation. 
Right now, obviously, we have this emergency that we are 
dealing with.
    So let me talk a little bit about the administration's 
proposal for CDBG, you know, setting up this entire new program 
at HUD for flood mitigation projects, which is run as an 
interagency competition, as you mentioned. But part of the 
challenge we face, Mr. Secretary, is twofold. One is because we 
don't have a lot of time. We have folks that are suffering. We 
have got to deal with that right now through a supplemental.
    Mr. Rackleff. Yes, sir.
    Mr. Diaz-Balart. And the fact that we face a challenge in 
evaluating this new program, one of the challenges is that we, 
frankly, have very little details right now. It is very thin. 
The supplemental request describes the program in a single 
brief paragraph. Obviously, you have provided some limited bill 
language for this program, but there is no authorizing language 
proposed. For example, the program would largely be defined by 
a notice in the Federal Register.
    So, again, not telling you that it may not be the best 
thing since sliced bread, but this is a process that is going 
to have to be looked at, I think, through the authorizing 
process as well.
    So the first question most of us have is when a new program 
is proposed, really the first program, is what other Federal 
efforts currently have the same or similar mission? Avoiding, 
obviously, program duplication is a no-brainer for all of us. 
And I think our colleagues on both sides of the aisle would 
agree.
    Let me throw some issues. The Army Corps of Engineers, for 
example, does major construction projects, many of which 
address flood mitigation. Why should we consider duplicating 
that activity at HUD that doesn't have the expertise or the 
experience? The Federal Emergency Management Agency has a 
hazard mitigation grant program, which also supports flood 
mitigation projects. You know, how would this new program 
differ from FEMA's program?
    There are a lot of questions. I have got others, but let me 
just not overburden you with--I would like to kind of hear from 
you on some of your thoughts on some of these pretty basic 
issues that we have to deal with when you are creating a new 
program.
    Mr. Rackleff. Thank you very much. I think those are great 
questions.
    The Army Corps of Engineers certainly owns and operates 
many of the flood-related infrastructure projects and 
facilities throughout the country. But I can tell you that, 
from working in the local level, that there are numerous 
floodway, storm drainage, retention pond, spillways, levies, et 
cetera, that are operated by State and local governmental 
entities. I will also tell you too that what we plan to do with 
this new program is to really embark on an interagency effort.
    So, as you mentioned, there are other agencies that have 
greater expertise with regards to infrastructure. We are fully 
aware of that. We will work very closely with the Army Corps 
and with FEMA in developing the criteria for the competition 
that we are proposing.
    I will also tell you that one of the reasons that we are 
looking to use CDBG-DR funding is because of the legal 
capabilities of this funding. We are able to go in and not just 
get communities back to the level they were at before a 
disaster, but, as you know, we can exceed that level and build 
in resiliency and mitigation that wasn't there prior. So this 
is the best funding source to use, and we will work with our 
agency partners, as we have been already, to make sure that we 
develop criteria that makes sense.
    Mr. Diaz-Balart. And I get that. HUD's mission, as you 
know, is focused on housing and community development. And I 
think, as such, personnel at HUD, including yourself and 
others, have great expertise in that area. I believe it would 
be, respectfully, fair to say that HUD's personnel do not 
typically have a high level of expertise in large-scale 
flooding mitigation construction projects. And I am not being 
critical of HUD's staff, obviously. And, as you mentioned, 
there are some incredible people there. But it is just not the 
mission.
    So why is it appropriate for HUD to be, all of a sudden, 
the lead on such a new mission rather than another agency that 
has the expertise and practical experience and, you know, 
experience in managing those types of projects?
    Mr. Rackleff. Well, I can tell you that I appreciate your 
compliment to our staff. They are really incredible folks. I, 
personally, do have quite a bit of experience with 
infrastructure finance and construction in the last 25 years. 
About half that time has been in the private sector. I have 
represented municipal utility districts on water and sewer 
projects, flooding projects. And, also, when I was the director 
of housing, we found innovative ways to accelerate the 
development of storm drainage infrastructure using CDBG-DR 
funding that our public works department wasn't able to figure 
out how to expedite, because I had had experience doing tax 
increment financing and local development of infrastructure.
    So I would argue that I have a lot of that expertise. I am 
certainly no civil engineer. But, again, we are not going to 
rely just on our reservoir of expertise. We are going to work 
with FEMA and with HUD. The funding that they--with the Army 
Corps, rather. The funding that FEMA has, as I mentioned 
earlier, allows you to just get back to the place that you were 
previously and doesn't allow you to do the kind of flexible, 
proactive extra work that we hope to achieve here.
    Mr. Diaz-Balart. Thank you, Mr. Secretary.
    Mr. Price, you are recognized, sir.
    Mr. Price. I want to ask you about the environmental waiver 
provisions, but I also want to register my concern about this 
new departure.
    On the one hand, the mitigation emphasis is important and I 
think should be built in, to the extent we can, to all disaster 
relief efforts. There are concerns, though, about the unmet 
needs that remain in terms of the base CDBG-DR program and the 
kind of reliance we have had on that program in past disasters. 
And we want to make sure that, as we move toward this kind of 
competitive program focused on mitigation, that we don't 
shortchange the unmet needs. And we still feel that those two 
objectives need not be incompatible.
    Let me, though, ask you about the environmental waiver 
request, because I really want to lead with that. I think it is 
important, and we are not certain of our time here. So I want 
to take my time with this.
    You included a proposal related to environmental reviews. 
The request would allow the Secretary of HUD to waive 
environmental reviews for single-family homes outside FEMA's 
flood plain. Now, that is a change. Previous appropriations 
have allowed the Secretary to have broad waiver authority to 
administer the program, but has required continued compliance 
with fair housing, with nondiscrimination, and with labor and 
environmental laws.
    The flooding in Houston reached many homes outside the 
flood zones indicated on the flood maps. We have read reports 
of floodwaters that contained elevated levels of E. Coli, lead, 
arsenic, other toxins. Yet the proposal as requested by the 
administration would exempt these types of properties from 
environmental review. I know at the staff level we have worked 
to narrow the application of this waiver. But I am still 
concerned that this request doesn't adequately balance public 
health concerns with efforts to speed the process along.
    So my questions have to do with why HUD feels they need a 
statutory change to expedite environmental review. And what 
regulatory or administrative actions have you taken up to this 
point to address the issue?
    Mr. Rackleff. Thank you. I want to assure you, Mr. Price, 
that we are not intending to do anything that would put 
families or occupants of the homes that we are looking to 
improve in harm's way. We just absolutely wouldn't do that. 
However, I will tell you that, as you rightly pointed out, 
there is a very difficult balance between speed of assistance 
and desires to achieve other objectives. Right? And I have 
spoken extensively with folks who have run disaster recovery 
programs in Texas, in Louisiana, in New York--we visited New 
York recently--and in Mississippi. And while we need to be 
careful in making sure that we protect families, I can tell you 
that in many cases, we have single-family home subdivisions 
that, for example, were built 15 years ago, had extensive 
environmental reviews done before the development of those 
subdivisions. And we are spending a crazy amount of money, in 
my opinion, in doing environmental reviews at single-family 
homes. We really don't need to be doing endangered species 
analysis. We don't need a historic review analysis for a 15-
year-old tract home. Right?
    So we looked at the data. And let's--taking the $5 billion 
that has been allocated to Houston, if you assume 75 percent of 
that is used for housing, and you assume $150,000 per housing 
improvement project and $1,000 per environmental review, that 
is $25 million that we are spending to do pretty exhaustive 
environmental reviews on single-family homes, that, you know, 
if a family lives there and for some reason we find that there 
is a failure and they can't participate in the program, they 
are not moving. They are going to stay there. So this is 
fundamentally different.
    I have done real estate development for many years. This is 
not an urban situation where you wonder if there is a dry 
cleaner that was there before or underground storage tanks. So 
every leader of these programs has said if you can do one thing 
to speed the delivery of repairs to families and dramatically 
reduce costs, it is use a prudent single-family waiver for 
properties on the same footprint, because, in most cases, we 
don't need it.
    Mr. Price. My time has expired. We can return to this. We 
are ready to work with you on this. But we are also talking 
here about contaminants, environmental hazards that may have 
been introduced as a result of the disaster.
    Mr. Rackleff. Yes, sir.
    Mr. Price. And that is something that it would seem would 
need to be--we would need to address. And we would hope a 
waiver would be very selectively and responsibly exercised.
    I also want to get into, in the next round of questioning, 
the very broad application of this waiver to other agencies and 
what those implications are.
    But, at this point, thank you, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mr. Price.
    Mr. Valadao, you would be next, but I know that you would 
not mind yielding to the ranking member of the full committee 
here, Mrs. Lowey. So if that is all right with you----
    Mrs. Lowey, great to you have here, ma'am.
    Mrs. Lowey. Thank you, Mr. Chairman. I am honored to be 
here to discuss these important issues.
    Assistant Secretary Rackleff, I am sorry I was detained at 
another meeting.
    Mr. Rackleff. Quite all right.
    Mrs. Lowey. This request includes a proposal for a national 
mitigation competition, but includes no new money to address 
the unmet needs in Puerto Rico or the U.S. Virgin Islands. If 
you could explain to me how this competition process is 
different from what we saw during Superstorm Sandy, and why are 
there differences? It seems to me the two disasters are quite 
similar, Maria being potentially more devastating in scope.
    And, as I understand it, HUD relies on data obtained 
through FEMA field estimates. HUD then takes that data and 
determines the unmet need. Puerto Rico has requested $46 
billion in CDBG, with an additional $10 billion for community 
development projects like hospital reconstruction, school 
investment, small business grants. And these estimates, having 
been there with the Speaker not too long ago, these estimates 
do seem reasonable to me.
    Can you tell me why this request doesn't include Puerto 
Rico, or does this administration contemplate a fourth 
supplemental to deal with Puerto Rico's clear need?
    Mr. Rackleff. Thank you very much. If I could correct one 
misstatement earlier. I apparently said $5 billion was 
allocated to Houston. It is Texas that that $5 billion was 
allocated to.
    This particular program is one that the U.S. Virgin Islands 
and Puerto Rico would be able to participate in. But regarding 
the amount of unmet need relating to the $7.4 billion already 
appropriated, and others that could be appropriated, the 
challenge that we have is that we have very good data for Texas 
and Florida. And so we were able to accurately calculate unmet 
need in those areas. The data that we have in Puerto Rico and 
the U.S. Virgin Islands is far, far behind what we had there. 
So we simply don't have enough information yet to accurately 
determine the unmet need.
    I will also tell you that Puerto Rico, as you all are 
aware, has systemic economic challenges and capacity issues 
that are very, very real. The dollars we are talking about, I 
can tell you from having worked on one of these programs 
before, are going to tax the capacity of the most sophisticated 
States and jurisdictions that receive these funds. And we have 
recently received a report from the inspector general regarding 
the level of capacity in Puerto Rico, and there are grave 
concerns about allocating more money in a context where there 
are systemic economic problems and capacity issues that may not 
allow that funding to be used in an appropriate and effective 
way. So it is a totally different ball game there. But when we 
get better data, we will perhaps make other recommendations. 
Right now, we are focused on the $12 billion.
    Mrs. Lowey. May I just follow up with you on that, because 
having been there and talking with the people, we know--I 
mentioned the hospital reconstruction. The system is 
disastrous. Schools, small businesses, need help in getting 
going again. I have no doubt that the data is not sufficient. 
But these sources of funds are where they can really be of most 
help. So my question to you, to what extent do you provide 
technical assistance? In other words, if they need your funds 
and they are not doing a good--I am not going to get into the 
Governor, and staff, and who is capable and who is not.
    Mr. Rackleff. Right.
    Mrs. Lowey. So my question is, what kind of technical 
assistance can you provide, knowing that these are really 
important sources of funds for Puerto Rico dealing with the 
hospitals, the schools, the small businesses?
    Mr. Rackleff. Thank you. We actually have great technical 
assistance. And over the last few years, HUD has done a lot to 
streamline the application of those resources to areas that 
need it. So we have great resources. I am actually traveling to 
Puerto Rico on Monday with our deputy secretary and a 
contingency from HUD there. We have had staff on the ground 
there that are from Puerto Rico since the disaster hit. One of 
our very senior officials, Nelson Bregon, who is from Puerto 
Rico, has been down there, and we receive daily updates on what 
is happening.
    But with regard to specifically to technical assistance, we 
are doing a lot there. We have in the past. We even, in the 
past, funded a long-term affordable housing recovery plan for 
Puerto Rico, with Puerto Rican officials, which was really 
quite well done.
    So as we get more data, and as we are able to better 
understand the situation, we will be able to do a lot more to 
help.
    Mrs. Lowey. You mentioned this gentleman, Nelson?
    Mr. Rackleff. Bregon.
    Mrs. Lowey. Bregon. Is he there permanently or temporarily 
on assignment?
    Mr. Rackleff. He has been assigned there. He is from 
headquarters, but he has been there for several weeks now and 
will be there for the foreseeable future.
    Mrs. Lowey. And how many people does he have to work with 
him? Because I think what you said is they don't have the 
statistics, they don't have the documentation that is adequate 
or good enough to compete for these funds. But the needs are 
extraordinary.
    Mr. Rackleff. Yes, ma'am. The needs certainly are 
extraordinary. The data that we utilize to measure unmet need 
comes from FEMA inspections and from the SBA. So that data 
doesn't come from our group, which relatively is very small in 
Puerto Rico. Right now, there are 4,609 FEMA inspectors at work 
in Puerto Rico, and 125 in the U.S. Virgin Islands. Those 4,600 
inspectors in Puerto Rico have issued 685,000 inspections and 
completed 248,000 inspections. So that is about 36 percent of 
the inspections that need to be done.
    I will also tell you that we actually have 250,000 
individuals who receive HUD assistance in terms of rent through 
public housing, project-based Section 8, and the housing choice 
voucher program. We have 101,000 units of housing that we are 
responsible for in those different areas in Puerto Rico. So we 
are absolutely focused on doing whatever we can to help the 
families that are in those situations. Thank you.
    Mrs. Lowey. Thank you very much, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mrs. Lowey.
    Again, Mr. Valadao, thank you for your patience and your 
consideration. You are always a gentleman and, of course, you 
are recognized.
    Mr. Valadao. Thank you, Chairman.
    Assistant Secretary, thank you for being here today. I am 
sure you are aware of the fires that devastated California in 
October. Unfortunately, much of the State had experienced 
similar wildfire situations most of the summer. The President 
declared a disaster for these most recent fires, which burned 
through about 245,000 acres.
    Can you please give us an update on CDBG Disaster Recovery 
funding in reaction to the California wildfires so far this 
year? And, moving forward, how do you plan to balance the needs 
of those in the southeast dealing with hurricane-related 
damages and those in the West dealing with very different kinds 
of damages caused by wildfires?
    Mr. Rackleff. Thank you. I actually grew up in California, 
and went to law school in L.A., and lived in central California 
for a while. So that disaster is, again, another heartbreaking 
situation. And our thoughts and prayers are with the good 
people who have suffered so much there.
    We are looking at the--measuring unmet need through the 
same kind of FEMA data that we look at in the areas where the 
hurricanes are. We don't have enough data yet to be able to 
make a determination as to how much of the $7.4 billion should 
be appropriately allocated to the wildfires. But we would be 
very happy to visit with you and go through the methodology 
that we are looking at. We can show you--my team may say I am 
not supposed to say this, but I would be happy to show you the 
preliminary data that we have got that we are not going public 
with yet until it is appropriate.
    But one of the things to bear in mind is that when we look 
at unmet need, if folks have insurance that covers their need, 
then we don't provide funding for that. And so one of the 
unusual situations--or distinguishing characteristics of fire 
damage versus flood damage is that in a fire, you know, most 
everybody has got homeowners insurance that covers fire. And in 
a flood, you frequently have situations where your regular 
property homeowners insurance covers wind-driven rain and wind 
damage, but doesn't cover rising waters, unless you 
specifically have flood insurance. So that is one of the things 
that we are looking at when we are measuring the unmet need 
there.
    Mr. Valadao. Last Friday, the Office of Management and 
Budget submitted a request for $44 billion for additional 
supplemental disaster funding, with $12 billion specifically 
designated for CDBG Disaster Recovery funds. Will the disaster 
recovery fund be disbursed competitively or will it be 
disbursed specifically to the hurricane-stricken States?
    Mr. Rackleff. Regarding the $12 billion?
    Mr. Valadao. Yes.
    Mr. Rackleff. Yes. It is our intent that this be a 
competitive program. And I know that is controversial. It is--
we think what some call controversial, we would say is cutting 
edge, and is a better way to allocate resources. As I mentioned 
earlier, an ounce of prevention is worth a pound of cure. 
Avoiding mixing metaphors again.
    So, no, sir, we look forward to this being a competitive 
process.
    Mr. Valadao. I understand the Community Development Block 
Grant Disaster Recovery Program funding cannot duplicate 
funding available from FEMA, the Small Business Administration, 
U.S. Army Corps of Engineers. If funding is granted, how does 
HUD plan to monitor spending to avoid misuse and waste of these 
funds? And is there something this committee can do to help HUD 
ensure that those funds won't be misused and get funds to 
communities that are in need of them most?
    Mr. Rackleff. We work very, very carefully with all of the 
grantees to ensure that these funds are used properly. And so, 
here again, this is one of the big balancing efforts that we 
undertake. We all want recovery to go as quickly as possible. 
At the same time, we are talking about billions of dollars that 
need to be protected. And so one of the things we do when an 
allocation is made is that we go through a certification 
process to ensure that the grantee has appropriate financial 
controls in place, procurement controls in place, and also, 
that they have the capacity, meaning the humans on their staff 
who know how to utilize these funds and implement these 
programs.
    Mr. Valadao. Can you describe Federal resources that are 
available to local government, small businesses, and residents 
to rebuild private infrastructure? Are there opportunities 
under CDBG public-private partnerships? And, if so, what are 
some examples? And what has worked well and what not so well?
    Mr. Rackleff. Yes, there are opportunities for public-
private partnerships. And I can tell you one that I 
participated in that I alluded to earlier. We were developing a 
beautiful, affordable housing complex. Mr. Culberson, it is in 
the Hardy Yards area of Houston just north of downtown. It was 
going to be mixed-use on the new light-rail line, a very cool 
project.
    And we were trying to figure out how to fund infrastructure 
attendant to that. Went to our public works department, they 
said this will take us 4 to 7 years to do a major 
infrastructure project. We worked with the developer of the 
facility who had already designed and permitted about $12 
million of street reconstruction, drainage capacity increase, 
new signalized intersection. And then we looked at, with a 
civil engineer, to see how much benefit would accrue in terms 
of mitigating flooding to the surrounding area, not just on 
that developer's project. And then we structured an upfront 
program where the developer fronted the cost and we contracted 
with a tax increment finance district to be able to use CDBG-DR 
funds to reimburse the developer on a progress payment basis. 
It was win-win because we got a project done in about 6 months 
rather than the normal several year process. The community 
benefited and the developer benefited as well.
    So there are ways to flip these infrastructure models and 
do public-private partnerships that put the development risk on 
the developers and then utilize some type of revenue stream to 
be able to repay them.
    Mr. Valadao. Thank you. And I look forward to continuing 
the conversation.
    Chairman, I yield back. Thank you very much.
    Mr. Diaz-Balart. Thank you. By the way, usually I am very 
strict about keeping folks to the time. But since they are 
going to be probably calling votes anywhere between 10:30 to 
10:45, we may not get a second round, which is why I am kind of 
allowing folks to go a little bit over.
    But the gentlewoman from the Commonwealth of Massachusetts 
rarely does. So, you are recognized.
    Ms. Clark. Thank you, Mr. Chairman.
    Thank you for being with us, Secretary Rackleff. I had a 
question for you about some of the assumptions that seem to be 
altered in how HUD allocates its CDBG-DR funding. Specifically, 
you said in your testimony that managing flood risk is a shared 
responsibility, and that households within the 100-year flood 
plain that had financial ability to insure against flood loss 
should have done so. And I believe that you had pegged this at 
120 percent of area median income, and that they will not 
qualify for these funds any longer.
    Is my understanding correct?
    Mr. Rackleff. Yes.
    Ms. Clark. And what criteria did you use when determining 
that 120 percent of area median income was sufficient to 
purchase flood insurance?
    Mr. Rackleff. Well, actually, let me correct my earlier 
statement. It is more nuanced than that, right. So we used the 
120 percent area median income measure to determine unmet need. 
Right? But 70 percent of the total amount, say of the $7.4 
billion already appropriated, would typically need to go to LMI 
households, which are 80 percent and below area median income. 
Thirty percent of that money can be used for families that are 
actually at higher income levels through the urgent need 
national objective under the Community Development Block Grant 
fund.
    So it is not the case that families that are over 120 
percent AMI are completely shut out of the $7.4 billion. But 
what we are saying is that there needs to be a level of 
responsibility. So if you are a family that has the wherewithal 
to repair, and you have chosen not to get flood insurance, even 
though you are in a flood zone, we think that that family 
should be looked at differently than a lower income family who 
may not have the economic capability to meet that need. But we 
are happy to visit with you in greater depth and look at the 
assumptions that we are using.
    And, you know, we want to find the right measure. It is 
hard. We draw lines at places that we think are equitable, but 
we are very open to your----
    Ms. Clark. Can you tell me how many families or households 
you think will be affected by this sort of new means testing 
you are putting in place? And what was the notification process 
before these storms to let people know that this was going to 
be a change in the flood insurance and give them a chance to 
buy it?
    Mr. Rackleff. Well, it is certainly not a change in the 
Flood Insurance Program. The Flood Insurance Program, you know, 
is not affected by this.
    Ms. Clark. Sorry. I misspoke there. But what was the 
notification before these latest hurricanes that future 
assistance might be tied to your income levels?
    Mr. Rackleff. Well, we have to issue a Federal Register 
notice, which would have that kind of criteria embedded within 
it, unless any of my smarter team members behind me correct me.
    Ms. Clark. So when was that done?
    Mr. Rackleff. We have yet to issue the Federal Register 
notice for the $7.4 billion.
    Ms. Clark. So will this apply retroactively or you are only 
going to apply this prospectively after you issue that?
    Mr. Rackleff. Are you talking about the $7.4 billion or the 
$12 billion?
    Ms. Clark. The $12 billion.
    Mr. Rackleff. OK. I am sorry. Going forward, on the $12 
billion, we would issue notices, a Federal Register notice as 
well, that would provide that notification to everybody 
involved.
    Ms. Clark. So this won't--so will anyone's flood insurance 
that they might have thought they would get Federal assistance 
for be affected by this change in this income that they weren't 
anticipating?
    Mr. Rackleff. No. Their flood insurance won't be affected 
by this at all.
    Ms. Clark. Not the flood insurance, the disaster relief 
under the CDBG?
    Mr. Rackleff. I may be mixing a little bit of apples and 
oranges, and I apologize if I am. But with regard to the $7.4 
billion, families that are above the 120 percent median income 
can be served. We don't want to serve families, though, that 
are in the flood plain and didn't have that insurance. So that 
is the line that we have drawn with regards to basic 
eligibility. I think I was not clear in that earlier.
    Ms. Clark. I think I am not being particularly clear 
either. Was there any notice about that to those families 
before this disaster?
    Mr. Rackleff. No. No, there was not notice about that prior 
to this disaster. That is a new policy that we have introduced. 
And it would be rolled out with the notices that we are 
required by law to give.
    Ms. Clark. I see that I am out of time. I will let my 
colleague, Mr. Culberson, pursue my----
    Mr. Diaz-Balart. Thank you, ma'am.
    Mr. Joyce, you are recognized, sir.
    Mr. Joyce. Good morning.
    Mr. Rackleff. Good morning.
    Mr. Joyce. Mr. Rackleff, when allocating CDBG funds based 
on unmet recovery needs, how does the program balance grants 
for short-term disaster relief, mitigation activities, and 
long-term recovery activities?
    Mr. Rackleff. We do the best that we can to balance those 
issues, and we provide flexibility to local jurisdictions to be 
able to come up with an action plan that they think 
appropriately balances those different needs. The CDBG-DR 
funding is typically long-term recovery. There, as I mentioned 
earlier, because we are talking about an allocation of billions 
of dollars, we have to make sure that appropriate financial 
controls are in place. And we also have to go through a process 
where the jurisdictions develop an action plan and let us know 
how they are going to use that money responsibly.
    Mr. Joyce. In your written testimony, you are discussing 
incorporating the administration's infrastructure initiative 
policy principles such as leveraging State, local, and private 
resources and using public-private partnerships to expedite 
project delivery and support ongoing maintenance. Can you 
elaborate on the types of public-private partnerships we should 
expect to see as the funding is used in disaster areas?
    Mr. Rackleff. Sure. Now, I will say that that is pertaining 
to the $12 billion, and we would be looking at competitive 
proposals to come in. So, you know, I hope that we are 
surprised with some great ideas that are out there.
    I have worked on projects, as I mentioned, in the past 
where we have worked with the private sector to structure 
projects where they put the money upfront, they do the design 
and construction of infrastructure projects, which they can do 
much more quickly than governmental entities, and then we have 
a reimbursement structure that is set up. So that is one broad 
framework that can be used.
    But we do think it is critically important to help local 
areas to leverage the funding that they have got. Many local 
jurisdictions have, say, buyout programs that are already up 
and running and in place that have some funding there to buy 
out homes that have repetitively flooded. But they don't have 
enough. So there could be a proposal from a group to say, look, 
we have identified thousands of homes that we need to buy out 
to help families there, but we don't have the resources yet. 
You know, and we would like to combine our resources with 
theirs. Does that help?
    Mr. Joyce. It does to a degree. But how do you provide 
oversight for the funds that you are going to expend?
    Mr. Rackleff. Well, it is actually--the oversight is the 
same in many regards. And, as I mentioned, with some of the 
public-private partnerships, the fact that we shift the 
development risk of infrastructure to the private sector and 
have them take on the upfront costs actually protects our 
resources and those of our local government partners working 
with those developers because you are shifting the construction 
development risk to the private sector.
    Mr. Joyce. Thank you. And I would yield the rest of my 
time, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, sir.
    The gentleman from southern California, Senor Aguilar.
    Mr. Aguilar. Thank you, Mr. Chairman. And I will try to 
keep this short to ensure that our colleague, Mr. Culberson, 
has some time to expand on Ms. Clark's questions.
    I will pick up a little bit on what Mr. Valadao said. And 
also offer, Mr. Secretary, that I would love to see some of 
that data. You offered to share some of that data, that 
nonpublic data, at the appropriate time. And I would love to 
also see that with the type of collection of data that FEMA and 
SBA are mostly responsible for but have shared with HUD, damage 
caused by the northern California fires.
    I understand HUD has also made some changes to calculating 
the average cost of repair for housing damage caused by 
disasters. Can you spend some time talking about what changes 
were made?
    Mr. Rackleff. You know, that gets to a level of detail that 
our sort of genius folks in our analytical group go through. 
But I can tell you that what we do is we endeavor to make sure 
that the assumptions that we are making are based on recent 
economic trends and on the best available data that we have 
got. So it is appropriate for us to make sure that we adjust 
those baseline assumptions as we move through different 
disasters, because average amounts of damage, for example, can 
be dramatically different from one disaster to another. So we 
have worked carefully to make sure that we are using the right 
measures.
    And I would be happy to visit with you about other data we 
have got, to the extent I am legally able to do, so----
    Mr. Aguilar. Sure. If that was in response to my first 
question, I was just expanding on what you had offered Mr. 
Valadao with respect to data. If that is related to this, I 
think we would like to see a little--I would like to see a 
little bit more detail. I understand, you know, that there may 
be changes that need to be made. I think that what we would 
want to ensure is when we are talking apples to apples, you 
know, prior hurricane damage, versus this hurricane damage, 
those types of things, I think would be important for the 
committee to at least have a better gauge on if we could submit 
that, you know, maybe for the record, and have that expanded 
on.
    You know, I will ask a follow-up to what my colleague, Ms. 
Clark, mentioned and say, with respect to disaster funding, are 
there any examples at HUD where relief was means tested after 
the disaster? In essence, where residents were denied funding 
because they didn't make a decision, as you mentioned, with 
respect to flood insurance, yet weren't told about this prior 
to this disaster.
    Mr. Rackleff. Not that I am aware of.
    Mr. Aguilar. OK. Thank you, sir.
    I will yield back, Mr. Chairman.
    Mr. Diaz-Balart. Thank you very much, Mr. Aguilar.
    Mr. Culberson, obviously, very few States were hit as hard 
as yours. And we want to thank you for your leadership. So you 
are recognized, sir.
    Mr. Culberson. Thank you, Mr. Chairman. And I sincerely 
appreciate my colleagues' attention on this, appreciate your 
leadership and support, Mr. Chairman, to help the people of 
Florida and Texas recover.
    And if I could, Mr. Rackleff, in following up on Mr. 
Aguilar and Ms. Clark's questions, there is two aspects, I 
think, are deeply troubling about HUD's change of policy. Not 
only did you do so after the hurricane took place so people had 
no prior notice of this, but remember also that there were tens 
of thousands of people in the eastern area, for example, on 
the--along the Trinity River, along the San Jacinto River as 
well. This is the largest housing disaster in the history of 
the country, and people in those watersheds were flooded as a 
direct result of the deliberate action of the Army Corps of 
Engineers to open the floodgates.
    Now, we understand intellectually that they had to do it. 
It was as though in the San Francisco earthquake, most people 
suffered as a result of the fires after the earthquake, not the 
earthquake itself. So San Francisco had to make the decision to 
go in and blow up houses to create a fire break. If the 
government deliberately destroys your property to save others, 
that is something the government obviously has a responsibility 
to help compensate that property owner for.
    So by changing these requirements to 120 percent of--
changing that requirement after the storm, not only is it--it 
is unprecedented, it is unfair, it is damaging and destructive 
to these homeowners. But you are also shutting people out of 
access to funding that they will desperately need, and they 
were deliberately flooded by the government.
    So, Mr. Chairman, I join my colleagues in strongly 
objecting to this change, and hope that we will address it in 
our legislation that we are putting together to help the people 
of southeast Texas, Florida, and Puerto Rico, and the Virgin 
Islands recover. And I know we are working on that, Mr. 
Chairman, and appreciate very much your support for this.
    I am also deeply troubled that the administration's request 
in response to the largest housing disaster in the history of 
the country contains no funds for housing. It is unbelievable 
that OMB would propose something like this. And it is important 
to remember that the Constitution vests the Congress with 
responsibility for making these decisions. OMB's request is 
simply that. It is a recommendation. It is a request.
    I am very grateful to you, Mr. Chairman, to our leadership 
on both sides of the aisle, and to the Speaker and to our full 
committee chairman and to Mrs. Lowey for ensuring that the 
Appropriations Committee is going to be the one that resolves 
this, that we deal with it.
    Because, for example, not only are there no funds in there 
for housing, but this new program, which makes no sense--I 
would just as soon the administration experiment with creating 
a new program on somebody else's disaster. You know, let's wait 
till--you know, do this before the next disaster. Don't 
experiment on the people of Texas, Florida, Puerto Rico, and 
the Virgin Islands. Because this request will leave nothing for 
home repairs, rental assistance, small business recovery, and 
would exclude local governments from applying.
    So I strenuously object to this proposed new program, Mr. 
Chairman. Glad we are going to move in a different direction.
    And I also want to register my very strong objection, in 
the brief time we have got, if I could, Mr. Rackleff, with the 
attempts that your office is making to build a housing--build 
the Fountainview Project in Houston, which nobody wants. The 
mayor of Houston doesn't want it. City council doesn't want it. 
None of the elected officials want it. The neighbors don't want 
it. Nobody in Houston wants this project.
    And it is using Hurricane Ike money, Mr. Chairman. This is 
another thing we need to do, is make sure that these CDBG money 
disaster relief funds are actually going to people that have 
been displaced or damaged as a result of a storm. HUD is 
proposing to use very precious, hard-earned, and scarce 
American tax dollars for a project that nobody in the local 
community wants.
    And worse than that, Mr. Chairman, the project that HUD is 
proposing to build--and, Mr. Rackleff, I know you came out of 
the city of Houston. It is my understanding that you are the 
one really aggressively pushing this. So I would ask you to 
drop it, leave it alone. We don't want it.
    And not only that, Mr. Chairman, the project HUD is 
proposing to build with our precious, hard-earned, and very 
scarce tax dollars would cost about $250,000 a unit. I mean, 
even a high-end apartment in Houston--I mean, you have to work 
to make it $150,000 a unit. I mean, this is a gold-plated, 
unwanted, unnecessary, utterly wasteful housing project that 
HUD is attempting to strong-arm the mayor of Houston into 
taking.
    So, Mr. Rackleff, we appreciate your public service. But I, 
for one, am going to be working closely with my colleagues. We 
have got a lot of problems with what you are proposing, what 
OMB has proposed. And please leave the Fountainview Project 
alone. We have got a lot of better uses for the money. They are 
desperately needed elsewhere. And one place it could certainly 
be used is to help the people of Florida, Houston, and Puerto 
Rico recover by getting rid of this 120 percent requirement on 
eligibility. Do it for the next storm, and don't experiment 
with a new program on us, please.
    And I appreciate your help with this, Mr. Chairman.
    Mr. Diaz-Balart. Thank you, Mr. Culberson.
    Mr. Rackleff. May I respond?
    Mr. Diaz-Balart. Absolutely.
    Mr. Culberson. Yes.
    Mr. Rackleff. It is great to be with another Houstonian. 
And thank you for your very kind words. I know that your 
passion is directed towards helping the people of Houston that 
you serve ably.
    Mr. Culberson. It is.
    Mr. Rackleff. And we both love the people there. And I 
appreciate your fervor.
    Mr. Culberson. And my words are aimed at the Department. 
And I just appeal to you as a Houstonian. You know about the 
Fountainview Project. And let's just leave it alone. Let's use 
the money elsewhere. And leave my mayor alone, please.
    Mr. Rackleff. I got to respond to that. Right? In a loving, 
kind way----
    Mr. Culberson. My good friend, Sylvester Turner, a Democrat 
whom I worked with in the Texas House, who is a dear good 
friend, and he is now our mayor.
    Mr. Rackleff. I am not pushing that project.
    Mr. Culberson. Your agency is.
    Mr. Rackleff. And, in fact, I have recused myself from it 
because I worked previously on it. I will tell you in generic 
terms that I don't think that anybody should be doing 
development projects that are $230,000 per unit.
    Mr. Culberson. 250.
    Mr. Rackleff. Depends what measures you are looking at. 
But, again, I am speaking hypothetically. Right?
    So I share your concern on many of the issues that you have 
raised. I will also tell you that, unless I am corrected anew 
by my colleagues behind me, I misspoke earlier. And, Madam 
Clark, I apologize for not being as clear as I could have been 
regarding the 120 percent AMI issue.
    Mr. Culberson. And I want to yield any remaining time to 
Ms. Clark, if she----
    Mr. Rackleff. Sure.
    Mr. Diaz-Balart. There is no time to yield.
    Mr. Rackleff. May I clarify?
    Mr. Diaz-Balart. Yes. We will let the secretary clarify. 
Thank you.
    Mr. Rackleff. All right. So we are not saying that folks 
are ineligible if they are over 120 percent. We simply used 120 
percent of AMI instead of 80 percent of AMI for those families 
who are in the floodplain to calculate unmet need. But it is 
not a new criteria that is going to knock out a bunch of 
families that would have previously been eligible.
    Mr. Diaz-Balart. And thank you, Secretary, for that 
clarification. Obviously, it is something that we are going to 
need more information, so we would all be helped by further 
information on that.
    Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. I love these hearings 
because I learn so much, and I just learned something from my 
colleague here, Mr. Culberson.
    If you have recused yourself from oversight of that project 
that my colleague was talking about, then who is driving this 
or pushing this or monitoring this, or is it on autopilot and 
just----
    Mr. Rackleff. No, no. The issue involved there----
    Mr. Young. My colleague needs to know that. We need to know 
that as a committee, where to direct our questions.
    Mr. Rackleff. The division at HUD that handles fair housing 
is our Fair Housing and Equal Opportunity section. So our 
assistant secretary, Anna Maria Farias, is responsible for 
dealing with that issue. It is not within the purview of 
Community Planning and Development.
    Mr. Young. Well, that is helpful to get a name at least, so 
thank you for that.
    Mr. Rackleff. You are welcome.
    Mr. Young. In your testimony, you talked about your goal to 
getting families help faster and in a more efficient manner. 
You said in your testimony there that you are working to 
identify and remove unnecessary delays. We all appreciate that. 
You said that there is some challenges at the State and local 
and Federal level, and some of these changes to improve 
recovery efforts and outcomes, and some of these changes will 
be incorporated in the forthcoming Federal Register notice, and 
that is coming out when? And can you give us a preview of what 
to expect there? Because we would like to monitor those, make 
sure we see them, and be helpful.
    Mr. Rackleff. Sure. I would estimate that that will be out 
by--we are shooting for December 17 right now. We have been 
working very diligently on that notice.
    Mr. Young. Any statutory changes that Congress, that you 
know of, could move on that is blocking you right now that you 
would like to make any recommendations on that are hindering 
your outcomes?
    Mr. Rackleff. The biggest issue that I referenced earlier 
is environmental reviews on single-family homes that are not 
historic, that are not in areas near super fund sites.
    And, Mr. Price, I want to mention to you that one of the 
things I failed to mention earlier is that we would not use the 
waiver authority for environmental reviews of single-family 
homes in areas where there were reported releases or discharges 
of chemicals or untreated sewage, which happened in some areas 
of Houston. So we would be very circumspect in the way that we 
use that.
    But I can tell you, we are spending tens of millions of 
dollars to do, you know, environmental reviews of the single-
family homes that are completely, in most people's common sense 
opinion, unnecessary, and they take a lot of time.
    Mr. Young. OK. Thank you for your answers.
    And, Mr. Chairman, I have a few minutes left. I know my 
colleague here from Texas is very passionate, and would it be 
OK to yield to him?
    Mr. Diaz-Balart. Since we are not going to have another 
round----
    Mr. Young. Well, there is 2 minutes I am yielding back for 
anyone to use, under your direction. Thank you.
    Mr. Diaz-Balart. Mr. Culberson, we are going to give you--
because of how hard your area has been hit, we are going to 
give you any time that you might need. There is an additional 2 
minutes.
    Mr. Culberson. Thank you very much. And I am happy to yield 
part of that to my colleagues over here if I can.
    But I do want to ask about the requirement that HUD has as 
70 percent of these dollars go to low to moderate income, and 
people who have flooded in west Houston as a direct result of 
the deliberate action of the Army Corps of Engineers in opening 
the flood gates and flooding them. These are middle- to upper-
income homes.
    I submitted a request, along with my colleagues from 
Houston, that that be split 50/50. When are you going to act on 
that? And I hope you will make that change. You have got the 
authority to split that 50/50 between low to moderate income 
and upper income.
    Mr. Rackleff. The tact that we prefer to take is to stick 
with the 70 percent out of the gate, and then look at the data 
as we move forward and see if there, in fact, is a need to 
modify that. May I finish?
    Mr. Culberson. Yes, sir.
    Mr. Rackleff. And the other thing that I will tell you 
having worked one of these programs, is one of the biggest 
risks that we have of slowing down help to the very families 
that you and I care so much about is litigation from fair 
housing activists, which slowed down Ike recovery for a number 
of years. And they have asked us for 80 percent to go to those 
areas.
    Mr. Culberson. I have got tens of thousands of constituents 
who are living on the second floor of their house with all the 
sheetrock torn out on the first level. They have nowhere else 
to go. These are $400,000 and $500,000 houses. These people are 
not wealthy. These are middle income, hardworking Americans who 
are busting their chops. Their entire life savings is sunk into 
their house. And they were flooded deliberately by the Corps of 
Engineers. And by dragging your feet on this, you are really 
hurting these folks. These people need help.
    We need to have this change, Mr. Chairman, so it is a 50/50 
split. This is an unprecedented, the biggest housing disaster 
in the history of the country.
    Mr. Diaz-Balart. Mr. Secretary, we are going to give you--
--
    Mr. Culberson. Don't worry about litigation; how about 
helping folks.
    Mr. Diaz-Balart. We are going to give you just a few 
seconds to respond, and then we are going to move on.
    Mr. Rackleff. Well, I don't worry about litigation in terms 
of prioritizing, helping people either, but I will tell you 
that the thing that could bring this stuff--this program to a 
grinding halt is that very litigation that you are not worried 
about. I have had experience in the trenches dealing with this, 
and we need to be concerned about it.
    Nevertheless, we have looked at the unmet need that we see, 
and we think that we have made a very fair and equitable 
estimate of the damage that is there. We will work with those 
percentages if we think that it is appropriate moving forward.
    Mr. Diaz-Balart. Mr. Secretary, let me first thank you 
for--I think we are very fortunate, the country, and 
particularly those of us that our States have been hit--we are 
very fortunate to have you in this key position at this moment.
    Mr. Rackleff. Thank you.
    Mr. Diaz-Balart. So the committee staff will be in contact 
with your budget officer regarding questions for the record. 
And I know that we have a number of questions to submit, and I 
would imagine other Members--as you have heard, there are a lot 
of questions, so other members will also have questions to 
submit.
    Sir, if you would please work with them to return the 
information for the record to the subcommittee as soon as 
possible, that would allow us to be able to publish the 
transcript of today's hearings, and make, obviously, informed 
decisions as we move forward.
    We are also inviting other Members to submit additional 
testimony for the record no later than Friday the 8th. I don't 
know if that requires a unanimous consent agreement, but if so, 
without objection. I see no objection
    Mr. Price, again, a person who is also very familiar with 
these issues and has been for many, many years.
    Mr. Price. Thank you, Mr. Chairman. I join you in thanking 
our witness and indicating the desire of many of us to follow 
up. I appreciate your clarification, in particular, on the way 
that you anticipate the waiver authority would be used. On the 
other hand, this is a really broad waiver request. And another 
respect in which it is broad--and I do want to ask you to 
follow up on this, another respect in which it is broad is to 
indicate a desire to streamline and expedite this, not just at 
HUD, but across the government agencies with which you are 
coordinating and collaborating: Army Corps, FEMA, and so forth.
    I feel like we need to know what you mean by that, and what 
the compatibility is between the proposal you are making and 
the procedures in place in these other agencies, how this 
coordination would work, and so forth. So we will ask you to 
clarify that for the record.
    But this is a useful start this morning. And we appreciate 
your being here. We wish you well.
    Mr. Rackleff. Thank you, sir.
    Mr. Diaz-Balart. Thank you, Mr. Price.
    Mr. Secretary, as you can see, we are all anxious to work 
with you. There are a lot of concerns about this new proposal, 
and we will have ample opportunity to talk about them as we 
move forward. Obviously, some of us believe that, as Mr. 
Culberson said, that we should probably--those are things that 
might have to go through regular order, you know, through the 
other committees to make sure that we get this right. It has 
taken years to work out a lot of the bugs of CDBG-DR, and we 
are, I think, in a position where it is working relatively 
well. But anyway, we will have ample opportunity to deal with 
that.
    We want to thank you for your service. And I want to thank, 
by the way, the members of the subcommittee. We were a little 
bit more flexible this time because I think we could, and we 
have a secretary who is intimately knowledgeable, and again, we 
are blessed to have you there.
    Thank you, sir, for being here. Thank you all. And we are 
adjourned.
    Mr. Rackleff. Thanks. It was my honor to speak before you.

    [Material submitted for inclusion in the records follows:]

    Prepared Statement of Hon. Jose E. Serrano, a Representative in 
                  Congress from the State of New York

    Chairman Diaz-Balart and Ranking Member Price, I deeply 
appreciate the opportunity to testify before the committee to 
stress the need for Community Development Block Grant Disaster 
Recovery (CDBG-DR) assistance in Puerto Rico. Prioritizing the 
livelihood, health, and safety of the 3.4 million American 
citizens dealing with the devastating aftermath of Hurricane 
Irma and Maria remains one of my top concerns.
    As you may know, administering Federal relief efforts in 
Puerto Rico has been challenging due to the environment and the 
damaging effects of Hurricane Maria on the island's ports, 
roads, bridges, communication systems, and electrical power 
grids. As a result, Puerto Rico is still unfortunately 
operating on temporary emergency power. It is for these reasons 
that I call upon the committee to include robust CDBG-DR 
funding for Puerto Rico and other hurricane affected areas so 
that the island can expedite restoration of its most essential 
services including power and water treatment.
    I would note that I believe the administration's request to 
be inadequate in this regard. First, the amount requested by 
the administration, $12 billion, falls far short of what is 
needed in Texas, Florida, Puerto Rico and the U.S. Virgin 
Islands. I hope the committee will consider adding additional 
funds to this account beyond what was request. In addition, the 
request attempts to create a competitive process solely for 
flood mitigation projects. My understanding is that the 
administration also intends to prioritize projects with a 
significant local funding component already in place. I am 
deeply concerned that these restrictions will effectively 
eliminate Puerto Rico from receipt of any of these funds. In 
particular, because Puerto Rico's government is in the midst of 
a fiscal crisis, the local funding component will be almost 
impossible for Puerto Rico to meet. It is also troubling that 
the administration expects projects that would more 
appropriately fall under the U.S. Army Corps of Engineers to be 
shifted to this competitive process instead.
    While I disagree with the restrictions proposed by the 
administration, I do believe that the Committee should ensure 
that CDBG-DR funding be made available to build more resilient 
infrastructure that withstands future hurricanes and saves 
taxpayers' money in the long term. In short, this committee 
should provide Puerto Rico with the funding and flexibility is 
needs to adequately rebuild the island while making sure that 
funds are administered in a responsible and transparent manner.
    I have no doubt that we will continue to work hard and do 
everything possible to support Puerto Rico and the people on 
the Island as they recover from Hurricane Maria. I appreciate 
the committee's response to date, and look forward to working 
with you further on these issues.
                              ----------                              


Prepared Statement of Hon. Sanford D. Bishop, Jr., a Representative in 
                   Congress from the State of Georgia

    Chairman Diaz-Balart, Ranking Member Price, and 
distinguished members of the House Appropriations Subcommittee 
on Transportation, Housing and Urban Development, and Related 
Agencies. Thank you for the opportunity to submit written 
testimony for the record.
    In January 2017, two destructive storms ravaged the State 
of Georgia, with the Albany / Dougherty County region in my 
district being particularly impacted. Each of the storms were 
declared major disasters by the President, and together they 
caused hundreds of millions of dollars in damage and affected 
the lives of tens of thousands of Georgians. In the aftermath 
of those storms, Georgia's Governor Nathan Deal and the Georgia 
Congressional Delegation worked tirelessly to secure $200 
million in much needed Federal funding from the Department of 
Housing and Urban Development (HUD)'s Community Development 
Block Grant--Disaster Recovery (CDBG-DR) Program for disaster 
recovery in Georgia. I hope that as your subcommittee 
formulates its final fiscal year 2018 appropriations decisions, 
you will support the necessary funding to meet Georgia's unmet 
need.
    As you may know, in April 2017, Governor Deal partnered 
with the Governors of West Virginia, North Carolina, South 
Carolina, and Louisiana to jointly request Federal relief 
assistance in the fiscal year 2017 omnibus appropriations 
package for communities impacted by many natural disasters over 
the past year. In that letter, Governor Deal requested $200 
million total, $100 million for the Dougherty County region and 
$100 million for other smaller counties in Georgia affected by 
the January storms. Ultimately the Governors' request was 
successful, and Congress included vital funding for disaster 
relief in the fiscal year 2017 spending package.
    Unfortunately, the Department of Housing and Urban 
Development later communicated to the Georgia Congressional 
delegation that specific language Congress included in the 
April omnibus appropriations bill tied HUD to a previously-
issued Federal Register notice, and required HUD to look only 
at unmet housing need in determining eligibility for CDBG-DR 
funding. To expedite the allocation of CDBG-DR funds, Congress, 
in the April spending bill, directed HUD to utilize a formula 
outlined in a 2016 Federal Register notice governing the 
administration of CDBG-DR funds.
    Unfortunately, that 2016 Federal Register notice was 
written after money was appropriated to assist Louisiana after 
their storms and flooding in 2016, where over 40,000 homes were 
lost. The specific formula in the 2016 Federal Register notice 
did not allow HUD to look more broadly and accurately measure 
the actual devastation to communities like Dougherty County and 
the resulting financial need. In Georgia, the most significant 
portion of property loss was in the Dougherty County region was 
not housing--it was infrastructure, debris, public 
infrastructure, and redevelopment related.
    The congressional delegation attempted to work, in 
conjunction, with the Georgia Emergency Management Agency 
(GEMA) to urge HUD to reconsider their interpretation of this 
criteria or grant a waiver for Dougherty County to ensure the 
region was eligible for fiscal year 2017 funds, but thus far 
those efforts have been unsuccessful.
    In September, following the disastrous effects of Hurricane 
Harvey in Texas, and knowing that Hurricane Irma was on the 
way, Congress swiftly passed $15 billion in new funding for 
disaster relief efforts moving forward. Half of that funding 
was allocated to HUD for CDBG-DR efforts, and HUD is now in the 
process of considering the criteria for allotting that 
assistance. That spending bill provided flexibility for HUD to 
issue a new Federal Register notice, which is appropriate given 
the vast and various impacts from those storms.
    It is now a priority of the Georgia Congressional 
Delegation and our governor that any new allocations of CDBG-DR 
funding come with a new set of criteria to allow places like 
Dougherty County and other communities in Georgia to be 
eligible for the relief funding they need. It is imperative 
that HUD issue a new Federal Register notice that allows more 
broad eligibility criteria so Dougherty County can access the 
CDBG-DR funding. My colleagues in the House and Senate and have 
been in regular contact with Secretary Carson and Deputy 
Secretary Patenaude to make this a reality.
    I also urge the subcommittee to support these efforts by 
including legislative language in subsequent disaster relief 
funding that does not exclude or disadvantage Georgia's needs 
and ensures that disaster losses related to the January 
tornados are eligible for HUD assistance. Doing so will ensure 
that those in the Dougherty County/Albany area will be fully 
eligible for critical funding that will help them recover from 
these devastating storms and assist them in rebuilding their 
lives and returning to a sense of normalcy and safety.
    I know that compared to the dramatic effects of Harvey and 
Irma, Georgia's needs look small. However, the January 2017 
storms were just as devastating to those communities impacted. 
Simply put, we seek an opportunity for our communities who were 
affected by natural disasters access to funding for unmet 
recovery needs. Thank you for your consideration of this 
request, and I look forward to working with the members of the 
subcommittee on this important issue moving forward.
                              ----------                              


   Department of Housing and Urban Development Answers to Submitted 
                               Questions

                         Environmental Waivers

     Why does HUD feel that they need a statutory change to 
expedite environmental review?

    Several Community Development Block Grant Disaster Recovery 
(CDBG-DR) grantees expressed concern that time and cost 
associated with environmental reviews for homeowners trying to 
return to their homes after a disaster prolongs the recovery 
effort and significantly increases costs. Such cost increases 
mean we serve fewer families whose homes have been damaged. To 
address these concerns, the Administration requested 
legislative action to specify alternative environmental review 
requirements for single-family homes that are rehabilitated 
outside the floodplain, to expedite recovery. This change would 
apply retroactively to CDBG-DR funds appropriated under Public 
Law 115-56.

     What regulatory or administrative actions has HUD taken, 
up to this point, to address this issue?

    HUD has worked to educate grantees on a range of options 
that can help speed execution of environmental review 
responsibilities in the disaster response and recovery process. 
These options include:
     (1) Expedited comment periods that permit grantees to 
publish the combined Finding of No Significant Impact (FONSI) 
and Notice of Intent to Request Release of Funds (NOI/RROF) 
simultaneously with the submission of the RROF.
     (2) Adoption of another agency's environmental review--HUD 
grantees are permitted to adopt environmental reviews performed 
by other Federal agencies when the HUD grantee is providing 
supplemental assistance to actions performed under sections 
402, 403, 404, 406, 407, or 502 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act.
     (3) Unified Federal Review--The Unified Federal Review 
(UFR) establishes an expedited and unified interagency review 
process to ensure compliance with environmental and historic 
requirements under Federal law relating to disaster recovery 
projects, to expedite the recovery process, consistent with 
applicable law. The process aims to coordinate environmental 
and historic preservation reviews to expedite planning and 
decision-making for disaster recovery projects.
     (4) Technical Assistance--HUD has worked with Responsible 
Entities receiving CDBG-DR programs to help in the development 
of Tiered Environmental Reviews, Programmatic Environmental 
Reviews, and data sharing from FEMA to streamline and expedite 
the environmental review process.
    However, even with the implementation of these options, the 
cost and time necessary to conduct the reviews is still 
significant.

    One of the stated purposes for this waiver is to streamline 
and expedite the environmental review process across government 
agencies. CDBG-DR funds interface with many different programs 
of the Federal Government including FEMA and the Army Corps of 
Engineers. How does this waiver request compare to the 
authority provided in other Federal programs? For instance, do 
FEMA's Stafford Act programs have similar environmental waiver 
authority?

    HUD does not have in place a statutory waiver to streamline 
environmental review.

     Programmatic agreements allow for a streamlined 
collaborative process between Federal agencies and State 
Historic Preservation Offices when complying with the Historic 
Preservation Act. FEMA prefers to use programmatic agreements 
to comply with their post-disaster obligations under the 
Historic Preservation Act; other Federal agencies, like HUD, 
could join on to an existing programmatic agreement. Does HUD 
routinely use or encourage the use of programmatic agreements?

     Yes, HUD encourages the use of programmatic agreements 
between CDBG-DR grantees and State Historic Preservation 
Offices to streamline the process associated with the 
evaluation of historic properties. Following Hurricane Sandy, 
HUD proposed and negotiated an innovative use of Programmatic 
Agreements (PAs) to expedite historic preservation reviews of 
CDBG-DR projects, building upon previous work by FEMA. New 
Jersey and New York were able to sign the HUD Addendum to the 
FEMA PA in one month. FEMA PAs include extensive exemptions, 
shortened timeframes, and expedited resolution of adverse 
effects (like demolitions). The following states have signed on 
to the FEMA PA via the HUD Addendum: Colorado, Louisiana, New 
Jersey, New York, Oklahoma, South Carolina, and West Virginia. 
Texas has an existing CDBG-DR Programmatic Agreement with the 
State Historic Preservation Office. HUD has started working 
with Florida to sign a HUD addendum to the FEMA PA, and will 
focus on Puerto Rico and the U.S. Virgin Islands in the near 
future.

                             Rental Housing

     In many of the disaster-affected areas this year, rental 
housing was affected, particularly rental housing owned by 
small operators. What is HUD doing to ensure that grantees are 
adequately addressing rental housing in their action plans?

     In previous CDBG-DR appropriations, the Department has 
required CDBG-DR grantees to evaluate all aspects of recovery 
including rental housing. CDBG-DR grantees receiving those 
funds were required to include a description of how they will 
identify and address the rehabilitation, reconstruction, 
replacement, and new construction of housing and shelters in 
the areas affected by the disaster. This includes any rental 
housing that is affordable to low- or moderate-income 
households. Additionally, the Department has previously 
required CDBG-DR grantees to commit CDBG-DR funds for the 
recovery of rental housing. The Department will identify ways 
to incorporate these requirements into future allocations.

                         Small Area Mitigation

    While large-scale projects have their place in the 
mitigation toolkit, effective pre-disaster mitigation requires 
small, property level projects like house elevations and 
structure hardening. How will HUD encourage or require grantees 
to incorporate best practices for mitigation and resiliency 
when using CDBG-DR funds?

     In previous CDBG-DR allocations, the Department required 
CDBG-DR grantees to comprehensively plan for and incorporate 
the costs of mitigation and resilience measures to protect 
against the anticipated effects of future extreme weather 
events and other natural hazards. Mitigation costs must be 
reasonable, and grantee decisions to take certain actions must 
be cost reasonable relative to other alternatives strategies, 
such as demolition of substantially-damaged structures with 
reconstruction of an elevated structure on the same site, 
property buyouts, or infrastructure improvements to prevent 
loss of life and mitigate future property damage. The 
Department will specify applicable mitigation-related 
requirements in future CDBG-DR allocation Notices.

                         Mitigation Competition

    What kinds of projects do you envision funding under the 
proposed national mitigation competition?

     Funding could be used for a wide range of risk mitigation 
or resilience activities, including but not limited to large-
scale buyouts in areas of high flood risk or repetitive loss, 
elevation and structure hardening, forward-looking land-use 
plans, adoption of disaster resistant building codes, green or 
grey infrastructure investments (e.g., projects authorized by 
the U.S. Army Corps of Engineers and improvements to storm 
water management systems). Projects need to make sense under a 
cost-benefit analysis of flood mitigation and resilience 
objectives (some of which may be harder to measure).

     Generally, who would operate and maintain the projects? In 
the proposal, it appears that once an Army Corps of Engineers 
project receives funding via the competition that project is 
barred from future Federal funds.

     The Mitigation Fund would incorporate the administration's 
Infrastructure Initiative policy principles, such as leveraging 
state, local and private resources and using public-private 
partnerships to expedite project delivery and support ongoing 
maintenance. Winning proposals would specify the non-Federal 
source of sufficient funding for operations and maintenance. 
Projects without such funding would not be competitive.

     If an applicant were unable to contribute a significant 
local cost share, how would that affect their ability to 
compete for funding?

     An objective of the Mitigation Fund is to focus Federal 
dollars on significant mitigation projects in high-risk areas 
to stretch the use and benefit of taxpayer funds. Every state 
and local government uses its local funds for infrastructure 
investments every day. This fund would incentivize using state/
local/private funding to significantly increase total risk 
mitigation funding and to use public-private partnerships to 
improve efficiency in project delivery and ongoing maintenance 
and operations.

     Please describe the key differences between this 
competition and the NDRC and Rebuilding by Design competitions.

     The objectives of each competition are related to disaster 
resilience, but focused and implemented differently. Rebuild by 
Design was a design competition administered by philanthropic 
and non-profit organizations under the America Competes Act. It 
was searching for innovative design responses to the impacts of 
Sandy. Benefit-cost analysis was carried out after the fact and 
funding leverage was not a competition factor. State and local 
government implementers got involved late in the process.
    The National Disaster Resilience Competition (NDRC) 
involved state and local government initiated funding 
proposals, and was carried out under the strict requirements of 
the HUD Reform Act. NDRC distributed just under $1 billion in 
grant awards to states and local governments. NDRC was a long, 
two-phased competition incorporating a few of the design 
aspects of RBD, such as considering co-benefits of each 
project, while focusing more on applicant implementation 
capacity. NDRC scoring considered stakeholder engagement 
(especially with vulnerable populations), leverage, and long-
term commitment by the applicant, along with more standard 
capacity and sound approach factors. Only the largest proposed 
projects were subject to benefit-cost analysis.
    The current Mitigation Fund proposal focuses on reducing 
future Federal taxpayer disaster costs by funding significant 
mitigation projects in high-risk areas, emphasizing leverage 
and benefit-cost analysis. Funding would concentrate 
investments for flood mitigation solutions in communities that 
experience repetitive damage from flood-related disasters, and 
encourage community and neighborhood-wide solutions. This would 
lower the potential costs of future disaster recovery efforts 
for all Federal taxpayers.

    Although the proposal includes $10 million in HUD salaries 
and expenses, there is no additional funding for other Federal 
agencies, like the Army Corps, to help manage this large-scale 
program. This proposal would require HUD to oversee and 
coordinate a mitigation effort across government. Do you 
believe HUD has the capacity to independently manage such a 
large interagency program?

     HUD has the capacity to manage the grants with the $10 
million dedicated to this fund. For specific mitigation and 
environmental expertise related to particular projects, HUD 
would rely on coordination and consultation with Federal 
partners such as FEMA and the Army Corps of Engineers, as it 
does now.