[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:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 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.