nd. the reason omnibus or cromnibus required d.o.t. to include a comment and rule making so that there could be some public input on changing this guidance, can you assure me that d.o.t. will comply with public notice and comment requirements and take a hard look at whether this really makes sense? this strikes me as government overkill at its worse. >> i can absolutely assure you that we will take seriously the notice and comment period. i will also do you one better. because of the unique circumstances of maine and the camping industry there, i will also send a team to solicit comments directly from stakeholders in maine who are dealing with this unique issue that you have raised. >> thank you. that would be terrific. senator reed. >> well, thank you very much, madame chair, for your questions and, again, for your leadership

here. let me begin with a topic that the chairwoman is familiar with, cyber security, particularly the faa. i had the privilege really of watching the chairman work and superb job of pending the intelligence bill and no one knows more and more thought 68 about the issue than senator collins, but i understand that within the faa there is a huge need to protect the system from cyber incidents and intrusions. but that there is organization in the air traffic organization that basically has to borrow funding in order to help promote cyber security from other agencies and borrow personnel, that there are different experts within the faa that disagree as what's the best approach and how to deal with it. it's -- it is a critical issue. and it seems not only is it a resource issue but it's an organizational issue so let me ask you, mr. secretary, what are you and the director who i have great admiration for doing to get this done.

you know, we are late. we won't see problems on the road. we are already years late in dealing with it. >> thank you for the question. it is also an issue of enormous importance and we recognize that at d.o.t. and at the faa. specifically, the faa is working to address issues and recommendations that gao has also raised as it related to cyber security and the faa. we have already established a number of technical findings that are focused on remediating some of those concerns. in addition, the faa has established a new executive cyber security steering committee that will focus on these issues across the department, across the agency. one of its major

responsibilities will be to coordinate the implementation of the gao recommendations, the committee will also take a risk-based approach in addressing the larger set of issues associated with cyber security. in addition to that, this is an area where we're also joined at the hip with our other agency partners and so we're working closely with the department of homeland security, the national security agency and the u.s. army cyber command to coordinate our efforts to protect the integrity of our air space. >> is there someone individual that's in charge? i mean, committees are useful, but to get things done, implemented, et cetera, usually has to have somebody that's responsible. is there somebody that you've designated?

>> look, i hold michael responsible for that but we have several units within faa that focus on this, within air traffic control, within certification, within a number of areas. but i think that is an area that we will focus on making sure there's an appropriate accountability on these issues going forward. >> just ask me if this sequestration went into effect, how -- could you deal with this issue or would you be such -- >> it would be tough. it would be very tough. we have already experienced just over the last couple of years what sequestration can do to our agency. and particularly, ongoing operations. and actually our faa takes as a point of pride despite the shutdown and sequestration we have made progress on integrating more technology in the air space and measure bring harder when there's uncertainty. >> let me turn to another topic, mr. secretary. that is, that we're pleased to

see in the proposal additional resources, $75 million for transit for small, urban and rural areas. but the concern we have is that the way that the proposal is drafted it has to have premium features, you know, dedicated rights of way and continuous services. for many communities, they can't do that for either financial reasons or for just practical reasons and my concern is that there's cities that could use a help from federal transportation to improve their transit, putting new software on their buses, new signaling devices, et cetera and can be shut out because they can't respond to these premium features. what can you do to make sure that we can get some of this money out to deserving rural and small urban areas? >> i'm glad you raised that because overall in the grow

america act, we're putting more than $1.6 billion in place in fiscal year '16 for state and rural transit programs and providers. that would include $810 million in transit formula grants so that would be one place that rural communities and small communities could tap. the $75 million of which you spoke is the accelerated project delivery and development piece where we're trying to encourage local communities and transit agencies to adopt best practices in getting projects rapidly on the ground and rapidly providing service. our hope is that there's very -- there's a lot of low-hanging fruit that agencies can adopt quickly and to get access to those $75 million funds. but we want to make sure that we're encouraging the rapid deployment of transit in addition to transit overall.

>> and i certainly think that's appropriate. it's just that there are some communities that, you know, they cannot get a dedicated right after way, et cetera, but they could do some significant things in terms of improving their transit delivery systems in they could get access to at least a portion of this money so i would ask you to sort of think about that. my time's concluded. thank you. >> thank you very much, senator reed. senator blunt. >> thank you, chairman. on the proposal on the multi-year bill that senator reed, senator collins, all of us want to see us get to a multi-year bill, you clearly can't build infrastructure in an effective way six months or two years at a time. your proposal, the administration proposal that would close the gap between where the gas tax money is and sort of mid level aspirations

for what we could do at infrastructure relates to taxing foreign profits. would that be a mandatory tax, secretary? would that be a tax that would be on those profits whether they came back or not? >> yes. yes. it's a part of a larger comprehensive tax reform package and several components. i'll just talk about two. the way we pay for the grow america act is basically there's one to $2 trillion of existing overseas untaxed corporate earnings that would be taxed at a 14% rate. that is 21 percentage points lower than the current rate, so it provides an incentive for companies that want to bring the money over to bring it over. but either way, that's the rate. for future profits there would be a maximum of 19% u.s. rate and some discount for whatever applied rate those companies are paying in the country where the profits were realized.

and that does not pay for our bill. it actually goes for other things but it's part of a larger corporate tax reform proposal that the administration is pursuing. >> and the reason for the mandatory rate is that then you would have a guarantee of how much money would be -- would be coming in based on those profits that you could truly guarantee just to a great extent what is highway bill would look like for five or year six years. that the reason for the mandatory opposed to an optional rate if they bring it back? >> it's a benefit. but also, the sort of -- the classic kind of repatriation proposal, a voluntary kind of tax holiday hasn't scored well and so the technical reason why we do in it a mandatory fashion is because it -- the other way just actually doesn't score well and this is a way that you can actually work to reduce the overall corporate tax rate and also bring those proceeds back home and put them to work. >> and my other question, mr.

secretary, last year the spending bill suspended for one year the restart provisions in the 2011 rule on hours of service. as part of the suspension, the department was asked to complete a study on the operational safety, health and fatigue aspects of the restart provision. how's that study going? >> we have hired consultant to perform the study. we are working very diligently to make sure not only that the study is credible, that we're hearing from all of the various stakeholders to make sure that this is as bullet-proof a study as possible and has the transparency and credibility everyone expects and i hope we are able to meet the deadlines that congress established. >> okay. thank you, mr. secretary. thank you. >> thank you. senator durbin?

>> thank you. mr. secretary, good to see you again. thank you for coming by my office. let me echo the previous comments of the tiger program and my list of favorites, top favorites, the create program which means so much in our part of the world with so many railroads and a potential to expedite the movement of goods and alleviate some of the problems associated with rail traffic. core capacity means so much to us. there was a time when it was difficult to rest any funds out of the appropriation bill unless for, quote, new starts. i think we come to realize a lot of old starts are still of tremendous value and need to be upgraded and core capacity is part of that. mr. secretary, last friday we

had an anniversary celebration in chicago of the passage of the americans with disabilities act. 25 years, 25 years ago senator bob dole, tom harkin, president george h.w. bush ended up making history and really liberating huge number of americans who were disabled from the bonds that the -- the binds -- the binding that they faced in being unseen, unheard and not part of america. i said at that anniversary that i wondered if the ada could pass this congress today. and i really seriously doubt that it could. it's an indication of our dysfunction and our inability to address some of the basics. the transportation bill in washington used to be one of the basics. some of us who have served for a while can remember when this was the easiest bill on capitol hill. the easiest. totally bipartisan. members of the house begging to serve on the public works

committee so they could have a chance to grab that shovel, grab chose scissors and get a picture taken to help their districts and senators to help their states. and we did it easily. without any heavy lift. and now, there is a serious question about whether this congress can pass a transportation bill. and there are even me believes of the senate and house arguing as to whether or not there should be a federal transportation bill. obviously, they never heard of dwight david eisenhower and the interstate highway system. so, the point i'm getting to is i will support whatever funding source we can come up with. i would certainly like to see it more of a user fee, tax related to the purchase of fuel but i know that has diminishing returns with fuel economy. i would like to see relief in the tax for people of lower income, who pay more disproportionate share of the tax from their income.

i'm open. i'm wide open. the thing that troubles me is to basically grabbing at a source that i don't know we can count on on a regular basis. maybe it gets us through the current crisis and that's all we can hope for. but what is your long-term view? what would you think is a reasonable revenue source for a federal transportation bill that builds highways, sustains mass transit and gives america a fighting chance to be competitive in the 21st century? >> well, it's a very tough question because there are lots of academic ideas but at some level it becomes a question of what can get the political support to actually pass. i would say that, you know, the points that have been raised about the fact our proposal is a six-year proposal they're fair points.

but i also would be remiss if i didn't remind us all that we've had 32 short term extensions in the last 6 years. and having six years of stability is a far cry from where we have been over the last six years. now having said that, there's a lot of ideas that are out there. there are ideas about vehicle miles traveled, ideas about other user fees going up to the wholesale level to raise revenue on the barrel as opposed to at the pump. there are lots of ideas and you're seeing states experiment with some of these funds. >> states are raising their gas taxes. >> some of them are, absolutely. and i would also add in many of those states where voters and governors and leaders worked hard to put more revenue on the table to get more things done they're standing on the shoulders of the federal funding and if that federal funding goes away they're going to go one step forward -- >> 75% of the highway

construction in illinois through federal funds. some 80% of the mass transit through federal funding. and what you have just said, 32 short term extensions of the federal highway bill is the definition of dysfunction. and i might also add, i don't believe we can patch our way to prosperity in this nation. filling potholes doesn't build a highway and we are gearing up to fund the federal commitment to patch these potholes instead of building an america that can succeed in the future. i'll close by saying i know we talked -- you talked before i came in about tank cars. we had a long conversation. i hope we move to a new generation of safer tank cars. take the ones we have on the rails and make them even safer and i hope that we could address this volatility question of the contents of those cars which i've discussed with you and senator cantwell and others. thank you for your testimony. >> thank you.

>> thank you. senator capito. >> thank you. thank you, madame chair. i want to thank the secretary for being here today. i want to ask talk about the tank cars. as you know, an accident occurred in west virginia and the fayette county. 109-car train was carrying more than 3 million gallons of balkan oil from north dakota and 21 of the cars derailed. i'm sure you saw the pictures. thankfully, nobody was hurt, and we were really pleased about that. but it's my understanding that this rule that was supposed to be finalized in january if i'm correct and that many people not just on the safety side but on the business side, too, need the finality of that rule that which would provided by either requiring that they replace or retro fitted because in the accident they had the 1232 cars as i'm sure you're aware. they were i guess not blanketed or weren't -- so i'm very, very interested in that. you have talked about the status of the rule but if you could just reiterate that and then

what kind of commitment do you have to getting this out as quickly as possible? >> it is a top priority for me. lac-megantic that drew the world's attention happened four days into my tenure as secretary of transportation. this is an issue i've been dealing with almost from day one and we have been working feverishly on lots of approaches to this including 24 actions that were taken immediately following and then additional actions that we have taken as recently as last week. i agree with you that the production of the final rule on these -- not only on the tank cars, but on a range of issues that affect the safety of the transport of this material is critical. >> right. >> and we are continuing to work with omb because of the way the process works, i'm not at

liberty to at this point offer you a date or a time. but i can tell you that we are working very, very closely with them and i think we are getting very close. >> well, i'm happy to know you're getting close. i would encourage you sooner than later and i'm sure you feel the same way. you know, i'm curious to know, too, i think the incident that is are occurring and there was one in illinois i believe after the west virginia accident, i think it brings to light the national discussion of pipelines. i know you do pipeline safety within your department. i guess, would you -- i would be very interested to see juxtaposing, you know, carrying this crude through a pipeline on to a train -- i know we are going to need both. one of the pipelines we voted for here is subject of much

controversy. do you have any comment on that in terms of relative safety issue or lack of infrastructure or anything along those lines, pipelines? i'd like your comments. >> from a department standpoint, we're agnostics when it comes to how the stuff moves. our main point is to make sure that however it's moving, whether it's by truck or by rail or by pipeline that it's moving safely. i'll point out that pipelines are not immune from -- >> absolutely. >> accidents. in fact, we had a spill in montana. the yellowstone river of significant amount of crude oil from the north dakota area. so, you know, we will continue working to make sure every modality that's used to move this material is safe modality. >> on the rule you're putting forward, on the tank car issue, is that exclusively or principally on oil transport or

does it include a lot of other transport? i mean, i'd like to see that prioritized because obviously that's been the issue. >> so in the notice of proposed rule making that was issued last fall, we focused on the same level of risk category. so not only the crude oil but also something like ethanol that's in the same class of material would also be covered by our rule. >> well, i would suggest that -- i mean, i would ask is there any way to put a higher priority on the oil transport? obviously came up very quickly because of the discovery and unknowns and issues. i would encourage or ask any way to higher prioritize that. it's newer material carrying ethanol for a long time. on our rail systems and on our roads. and so i think i'm -- i think this is a bipartisan issue in terms of the urgency that we feel.

and i would like to say with the four seconds i have left a robust six-year highway program is something that i'm very passionate about. we can work together. and we've had a rough winter so if anybody wants an illustration, we don't want to spend our money repairing the roads but we need a lot of repair money, too. there's a lot of potholes out there. thank you. >> absolutely. thank you. >> thank you. senator feinstein. >> thank you very much, madame chairman. mr. secretary, welcome. and thank you for your service. i'd like to speak with you in my brief time about two issues. the first is drones. and the second is positive train control. on the first, we've been working with some of your people on legislation and i want to thank you for that. i've been very concerned about where the faa is going to go and whether it's sufficient. it's going to permit sufficient regulatory authority. they have the authority over large drones and small commercial drones. but not over small recreational drones an it's clear to me that

these drones can also provide a substantial safety risk in untrained hands. and i think this is a gap in the legislative authority of the regulatory agency. and it also prevents faa from regulating drone manufacturers which are currently exempt from faa regulation if they're drones might be used for a recreational purpose. i think there's some very constructive steps that can be taken. for example, the faa should have the ability to require that manufacturers put a safety brochure like their quote know before you fly end quote pam let in the box with every consumer drone that's sold. the faa should be able to require that every new drone have the same type of virtual geo fencing that some manufacturers are already doing voluntarily. it's my understanding that after the drone crashed into the white

house lawn in january the drone's manufacturer put out a software update for the newest models that establish that a virtual fence around washington, d.c. only that would prevent these drones from coming too close to the city. i think that's very helpful. it's too bad only one manufacturer and it took an accident to have that happen. but washington is not the only community that deserves this protection. but the faa does not currently have the authority to require manufacturers to follow suit. i would like to know what your views are and would additional regulatory authority from congress be helpful for faa to achieve these goals. >> well, first of all, senator

feinstein, i want to thank you for your leadership on this issue. we have had several colloquies over the years on this topic. and your focus on it is appreciated. >> thank you very much. >> the faa does have many challenges when it comes to manage this emerging issue. and the gaps that you have identified are, in fact, gaps. and we welcome your engagement on this issue and the efforts that you're undertaking to look at legislative solutions to this. >> thank you very much. my other big priority, positive train control.

the 2008 metro link crash really brought home the problem of single tracks and commuter trains going one way and freight trains going the other. it's hard for i think anyone to see bodies chopped into parts when these accidents happen. and i think positive train control is one of the most important things our government can do to prevent this from happening. i've been concerned by the time it takes and i'm particularly concerned whether metro link can get approval this year to be able to move ahead. they are ready to do so. could you tell me what you know about that and whether it is possible for metro link which is our big commuter southern california line to get that approval? >> we think this is an urgent issue. all across the country and particularly with metro link. our team stands ready to help. we do believe that if metro link

is able to provide us with their -- with their package as quickly as possible that we do have the resources in place and the ability to get that certification done by the end of the year. so we would work very closely with you to make sure that happens. >> well, thank you. and we will relay that promptly to metro link and i'll let you know when they will have their package in and then if you could let me know if that would be adequate for you to be able to certify it or approve it by the end of the year. appreciate it. >> absolutely. >> thank you very much. >> thank you. >> thank you, madame chairman. >> thank you. senator daines. >> thank you, madame chair. secretary foxx, i do share your concern and statement today that people outside the beltway desperately want us to find a way to work together here in washington and fix the serious transportation issues we have in america. in northern states like montana,

where our construction season is short we need to get some certainty, sir. and we can't begin the much-needed projects in montana without another short-term highway funding extension so you have my commitment. i think you have everybody on this dias commitment to work hard in the senate to get a long-term funding bill through the u.s. senate. last time we met at a senate commerce committee. i know you're facing challenges of vacancies and work to move forward in the key roles. i think at that time there were five major operating agencies in the d.o.t. that had acting administrators. my question is, what is the disconnect here and why hasn't the administration nominated anyone for these positions? >> well, there is having been through the process, it takes a while from the time someone agrees to do the job. there's a vetting process. there's a very extensive process that's involved in this.

what i can tell you is that we have one of the five pending vacancies in front of congress today, the federal transit administration. and we'd be delighted to have congress take up that confirmation as soon as possible. the other four are in some stage of process and my hope is that that moves along a pace and able to get those up soon. >> yeah, yeah. we are looking at the website here. i know mr. nadu is an administrator. is he still in an acting role? >> he is actually now deputy administrator again because of the length of time. >> we have that federal vacancies in reform act i believe when it hit the 210 days and then deputy. >> that's correct. >> sounds like a loophole in the rule there in a little bit in terms of getting it pushed and i can't imagine running an

organization with having the open head counts in very, very key positions. let me turn and shift to femsa. and you mentioned the pipeline spill in montana that we saw happen on the yellowstone river. some 30,000 gallons of crude dump into the yellowstone. the yellowstone is a tremendous fishery. it is the water source for many communities in montana. i have spent a lot of hours in an mckenzie boat fishing on that river. the femsa acting add min term ends and your deputy came up, a great meeting with him. he witnessed and pulled up that broken pipe. we saw it a 1955 pipe that had a weld that looks like probably failed on it. could you help explain the interim plan for the next acting administrator? may 2nd i believe in femsa we hit that same 210-day threshold. what's the plan going forward? >> well, the plan is currently that mr. butters will continue to serve as the leader of the

organization until a nomination is put forward and a confirmation vote by the senate. and my hope is that nomination will be imminent and that you will have an opportunity to help us put a leader in place of that agency. >> you said you had one i think of the five positions filled in this long arduous process. what's the plan for the other four to get these positions filled as soon as possible? >> well, as i said, in the commerce hearing, we have been working very closely with the white house on these issues. and, of course, the prerogative is ultimately the president's to put up a nomination and my belief is that the positions that you're talking about all four of the other positions are in some stage of the process and that the president's time and choosing those nominations will be made. >> do you know why it's taking

so much time? >> got to be very qualified people in this country and dealing with pipelines breaking, rail car challenges, i can't think of anything more important to make sure we have the right leadership filling the positions. if i was looking at my to-do list every day in terms of threats of safety for people as well as challenges for environment, why isn't more being done leer there? >> well, look. i don't think it's a matter of effort. frankly, having observed this process for quite a while i think there are fair number of very qualified people who look at what one has to go through to go through this process, including having months on end of a pending nomination that they some point say, hey, it's okay.

i can do whatever else i'm doing and serving the public will have to come later. so i think that there is -- i can't overstate how challenging it becomes when people give of their time and out of private sector lives or whatever else they're doing to invest in moving forward into a government position and in some cases spend months and some cases more than a year waiting for a nomination. >> yeah. it's one more part of the uncertainty in this city puts in front of as a barrier i think to moving forward here on many, many issues. my time's out, secretary foxx. thank you. >> just know this. i'm moving as quickly as we can and look forward to getting the nominations up to you. >> thank you. >> yes, sir. >> senator coons. >> thank you for convening this today and thank you, secretary foxx, for your positive, energetic can-do approach to the very real and lasting issues of infrastructure for our country. i want to specifically thank you and your staff for a very responsive attitude when we had a challenge in delaware as you

well remember. we found ourselves really challenged with the closure of a bridge due to ground shifting that detoured 90,000 cars a day and the speed and thoroughness with which you responded and helped us get access to emergency relief funding and get the bridge back up and open i think surprised everyone in the area. so thank you. thank you also for your advocacy and leadership in seeking a long-term blueprint. you have heard from many members today that we share your concern in absence of a reauthorization we are falling behind. just in the little state of dell care, small but mighty state of delaware, there's work on hold due to uncertainty. i think we continue to put at risk jobs, infrastructure, competitiveness, things i care about a great deal. let me turn if i might to amtrak where i took the 625 train down this morning and god willing will take the 6:05 train home. i commute virtually every day

and very pleased to see your request for this coming fiscal year and the $28.6 billion over the coming 6-year period for investment in the national passenger rail system. as part of an integrated for the first time really as a fully integrated national transportation strategy. passenger rail is critical to our overall national transportation strategy and fixing our network and investing in state of good repair i think is essential to reducing congestion and improving efficiency and connecting towns across america. amtrak set records year over year and continuing to underinvestment in the critical infrastructure. so last month i led a letter with pennsylvania senator casey and 20 other senators asking the subcommittee to consider funding am track at $2 billion for fiscal year '16 and i would be interested in hearing what you

believe we need to do to improve service and making progress towards achieving a state of good repair in the northeast corridor. >> i think it's an excellent question. and it speaks to one of the fundamental tenets of the grow america act which is that it is not just the year to year funding that we need to put amtrak on a more stable footing, the not only be able to improve its operations, but also, to make sure that managing the state of good repair of the system. that it is having multi-year certainty. that is also very critical to that. and our bill puts fully $28.6 billion over 6 years into a passenger rail system so that there is multi-year certainty,

amtrak can actually plan. i think one of the things amtrak suffers from is just not being able to plan beyond the current year. and i think it's very important for us to start thinking of our passenger rail system as a critical part of the overall surface system and our budget reflects that. >> one of the things i'll commend you for is proposing a dedicated funding stream for rail comparable to highway and transit and hope to include that in the reauthorization for surface transportation. let me ask you one other question in the time i've got. it's my understanding that amtrak submitted an application for a loan for the current fleet. the program is authorized to provide loans and guarantees up to 35 billion and only a fraction of it is tapped. i'm giving this loan for advance of it desperately needing to be replaced provide major benefits for the northeast corridor. i'm a strong support ore of this program for critical infrastructure projects like this. i hope we can overcome any potential concerns or issues and just wondered if you could give me an update on that loan

proposal status stands and a final deadline. >> the loan application is under review. i know that amtrak is anxious to get a decision on this soon. i would expect that by the -- no later than the middle or end of the summer we should have a final call on that, maybe even before that. the point that you make about the rift program i think is also a very important point because we find that many agencies, many transportation systems don't make use of rift partly because of the credit risk premium that's required is up-front money to tap into it and the grow america act one of the things it does is it allows federal rail administration grants to be used as part of the credit risk premium so that we can make better use of the rift program, as well.

i wanted to make this point. >> this is another example, mr. secretary, of an area where you have real command of the underlying facts and issues and working to solve what have been long-standing challenges that have been real barriers to our ability to invest responsibly over the long term in passenger rail for the whole country. thank you for your testimony today. i look forward to working together with you on this important issue. >> thank you. >> senator boozman. >> thank you, madame chair. thank you, secretary foxx, for being here. we really do appreciate your hard work. i know that you have faced some difficult challenges as we do as a congress. you know? in making such it such that we have the infrastructure that we need in this country. one thing that i have to mention and you mentioned it in your testimony and i appreciate it and constantly brought up. trying to get the modernizing

the permitting process. >> yes. >> you know, getting it up to snuff. we talk a lot of things that cost money. this would save a tremendous amount of money. and i know that that you're working hard to do that and your particular agency. tell me about the cooperation with the other agencies. are you making any headway to try and get them to understand how important this is? >> what i would say is that on a project by project basis we have been able to actually work very well with other agencies. and one example that i use commonly is the tappan zee bridge project would ordinarily would have taken three to five years of permitting work at the federal level we got that done in 18 months and we did it by

bringing all the agencies to the same table at the same time and working through the permitting issues, each agency had together. the place where i would like to take this and where we would love to have congress' help, and of course, your committee's help, is by routenizing that type of process. by creating a system where that becomes more of the norm opposed to an exception. our budget also reflects permitting center to stand up to help accelerate projects. >> very good. and certainly, you know, anything we can do to assist you in that -- i think i speak for the entire committee, the entire congress, we will be glad to help in that regard. we're very proud of our aviation aero space, you know, entities in arkansas. in regard to efficient processes, can you talk a little bit about when's going on in making sure that faa certification process is efficient? you know, promotes safety and enhances competitiveness. >> we are working through the

faa to improve the overall effectiveness and efficiency of aircraft parts certification by implementing a system safety approach to that. and we're committed to using all of our available tools under the faa modernization act to support it. we have to do this in many cases on a case by case us basis working carefully with each manufacturer to assure that that manufacturer has the protocols in place to be as safe as possible and certified to our standards but where we see that we're going to do everything we can to work with them to accelerate the certification process. >> the small airplane revitalization act requires improvements to the

certification process for small airplanes by modernizing part 23 air worthiness regulations which will enhance safety and reduce costs. faa, d.o.t. and omb must focus on a coordinated and concurrent review process to ensure notice of proposed rule making is issued by the summer of 2015. a failure to act would seed international to other authorities. can you talk, again, maybe in a little bit of detail about implementing requirements of the act? >> well, again, i think what the faa is purporting to do is to work with each individual manufacturer. what we don't want to do is to essentially certify a manufacturer to manage certain parts of our protocols on their own if they're incapable of doing it.

so we have a process by which our teams go into manufacturer and stress test their safety protocols and if we're confident that they can meet or exceed the standards we have set and we have precedent for having allowed some of the manufacturers to do that. now, in the large scale, in some of its facilities, boeing has that. on the small scale, i can't cite you chapter and verse yet of who's able to do that. >> no. thank you. thank you, madame chair. >> thank you. senator murphy? >> thank you. thank you first for making your first official visit when corm confirmed as secretary to new haven connecticut. we appreciate that in part because of the attention that you were paying then and have paid to the northeastern rail corridor, and i really wanted to build off senator coons' questions. he was talking about the budge it for amtrak writ large. but i wanted to drill down on the northeastern rail corridor. we are talking about a section of the country that's only about 2% of the nation's land mass but has 20% of the rail traffic and about 19% of the nation's gdp. and when i heard senator daines talk about a pipe which was constructed and welded in 1950,

i think about how envious we would be of construction that was only 60 years old when it comes to the rail lines and the bridges that run up the northeast corridor. we've got a bridge in nor walk that you know a lot about that opens occasionally when we want it to open because it was built in the grover cleveland administration. and we're finally thanks to your help rebuilding that bridge. but i want to thank you for your recognition that the northeastern rail corridor just cannot continue to sort of tread along at the current funding pace and so you've got a proposal here which is really important, setting aside a certain amount of money, not nearly enough but an important signal of commitments in the future to do specific work on the northeastern rail corridor. and i just wanted toe to allow you the chance to explain why

you proposed in the budget a specific matching grant for the corridor, and how important you believe that is to trying to make sure that we don't have a disaster by virtue of one of these bridges failing. >> well thank you very much for the question. the northeast corridor is a critical lifeline for many people. out of -- you compare it to airline travel between, say washington, d.c. and new york three out of every four trips is taken by rail. not the the other way. so it's a very important corridor for us. it's also a corridor, as you pointed out that is moving past its useful life in terms of infrastructure.

and one thing we can't afford is something to happen tw the infrastructure that would result in a loss of life or a long-term stoppage in our ability to move people it would create a traffic disaster in the northeast if we didn't have that northeast corridor behind us. so our fiscal year 2016 budget request contains 550 million specifically for the northeast corridor, much of it specifically for state of good repair. just to get us back in the business of trying to update what we have. i think long term we need to have a butch bigger vision for the northeast. i think the service should be faster. i think we should think this terms of making sure that we have a stepped up level of safety features on all aspects of our rail systems in the

northeast and this could be the subject of not only public funding, but it also could be the subject of public private partnership as well. we are working actually to develop a strategy around this along the with northeast corridor commission. i think that over time we're going to see some big things happen in the northeast corridor. and it's important that it happen because some of the infrastructure up there may have a life span of, say 20 or more years. if we wait too long, we're going to find ourselves not having that great asset. >> i want to ask you specifically about the innea ininnovation of the last authorization. they've done really great work proposing new allocation between states and am track. there's also a proposal to proside some funding to allow them to transition to this new way in which you allocate capital resources between the state governments, the commuter rail lines, and amtrak. they've done really great work and i hope that you're going to

continue to support this. part of this is just getting all the different commuter rail lines in all the different states to have the same strategy and plan. up until the commission, really wasn't happening. which hurt us. >> i would say that as we move from concept to execution on what's been envisioned, it's going to be very important for each of the states to buy in to what it is we're trying to get done. we're looking forward to working with you and others up there. >> thank you, madame chair. >> thank you very much. mr. secretary, it looks like we have a couple more moments before the vote, so you don't get to leave us quite as quickly as you might have hoped. and what i would suggest is that senator reed and i each do one question. did you make them call the vote when i said that. >> that was me. >> nice work. let us each ask you one more

question. one important way to reduce highway fatalities is to require the installation of speed limiting devices on heavy trucks. limiting devices on heavy trucks. this is something that the trucking industry itself has petitioned the department for and the department has received literally thousands of comments in support of the petitioners request. the fncsa itself set the regulation would decrease the number of fatal crashes annually. and would have minimal cost since the governors are already installed on many trucks. yet this has lingered within the department since i believe 2011 and has been delayed 21 times.

could you tell us why the department has failed to issue these regulations on speed limiters so many years after the initial petition despite widespread support and evidence of their effectiveness? >> well first of all, i want to commend not only you but many of the stake holders pushing for this because we do believe that there is a benefit and that benefit to having a rule in place here. of course, some of it predates me but i can tell you from the agency perspective, there has been a lot of work done to quantify the safety benefits in terms of crashes injuries and fatalities that have been -- that would be prevented. the department also had to complete analysis of fatality analysis reporting systems and general estimate systems data as well as research to provide

sound estimates of safety benefits prior to submitting the rule making proposal. having said all of that, i can tell you there is a notice of proposed rule making that is working its way through the department currently and i'm looking forward to getting that out as soon as possible, hopefully no later than the fall. >> thank you. senator reid? >> thank you, madam chair, mr. secretary, i think senator durbin would join me in this. e cigarettes, you have said that they cannot be used to board an aircraft by a passenger. but you're sort of stuck because you cannot bar them from baggage and cargo and recommended they not be included in cargo or baggage because you have to work with the international organization. when will you finalize the rule specifically prohibiting the use of e cigarettes gi passengers on

aircraft? two, can you work quickly with eko to get an international rule to ban them from baggage? if you can't do that will you come to us or should we jump ahead and do legislation that authorizes you to do it independently? >> very important question. and we have brought our concerns to the attention iko, that is the right venue to deal with the framework of e cigarettes and i would like to point back to you after consulted with faa on what the time is for actual action on that. beyond that, the faa did issue a safety alert in january of 2015 informing air carriers of the emerging risk discouraging them from using the belly of the planes to store these e gets and encouraging that if they have to to be transported by passengers transported in the passenger section of the airplanes where

an incident can be handled more readily. and so at this point, what i would say is that we plan to work through iko to try to get the world standard in place and i would like to come back to you with a time line on which we think that can happen. then we can have further discussion how you would like to proceed. >> thank you. >> thank you senator reed, i want to associate myself with your position on the e cigarettes completely. i think we have time -- if either of you would like -- okay, great. this hearing will adjourn. mr. secretary thank you very much for adjusting your schedule in light of the votes and do admire your ability to call the vote and thus avoid the additional round of questions that we had for you. they will be submitted for the

record and i do want to say that the record will remain open until next friday for any additional questions for testimony that may be submitted. thank you for being here today. this hearing is now adjourned.

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committees, the president's cabinet and federal agencies and state governors. order your copy today. it's $13.95 plus shipping and handling through the c-span online store at c-span.org. >> defense secretary ashton carter releases the the pentagon annual report on sexual assault in the military. it's at 1:00 p.m. eastern. you can see it on our companion network, c-span. >> 150 years ago this weekend a grieving nation gathered along the route of abraham lincoln's funeral train as it made its way from washington, d.c. to his final resting place in springfield, illinois. this sunday afternoon at 2:30 on american history tv on c-span3 we're live from oak ridge cemetery in springfield to commemorate the anniversary of president lincoln's funeral with 1,000 reenactors and recreation of the 1865 eulogy and speeches

and musical performances and historians and authors and a tour of newly recreated lincoln funeral car. this weekend saturday at 10:00 eastern, the grand prize winners in the student cam documentary competition and festivities of the state visit of shinzo abe including arrival at the white house and dinner and toast in his honor. the supreme court of united states oral arguments on the issue of same-sex marriage on whether the 14th amendment requires the state to license a marriage between people of the same sex. on book tv, saturday night at 10:00 on afterwards looking at the life of our first lady, michelle obama from childhood through the white house. sunday at noon our live three-hour presentation on jon

ronson, who has written at many books. join the conversation with jon ronson, taking your phone calls and e-mail and facebook comments and tweets. get the complete schedule at c-span.org. >> sunday night "washington post" national security reporter on the situation in the middle east and his opinion on the 2003 invasion of iraq. >> i think one of the things about the bush administration and paul wolfowitz who never claimed to be an expert on the middle east or iraq and proved it and history has proved it, is that we look at things from our own point of view. and get deceived by it. and you can go back to vietnam was a great example of the first

time we sort of did it openly but we have a history of trying to think other people are like us. and the world is different. and particularly in the middle east totally different culture. >> sunday night at 8:00 eastern and pacific on c-spanq and a. >> craig fugate testified about his agency's 2016 budget request and totals $7.5 billion for disaster preparedness and response.

>> call this hearing to order for the appropriations subcommittee. today will be -- i'd like to welcome administrator fugate, administrator of fema appreciate very much you being here and senator sheehan, appreciate you being here as well. we're here to discuss the fiscal 2016 budget for your agency. before we get into your budget, i want to take a moment to thank you for sending roy wright. several years ago was very helpful and will his visit pertains to one of the subjects i'll bring up later today, talking about how we coordinate flood mapping and flood insurance with communities efforts to build the flood protection. very fine job and very helpful and that's something that can be

helpful around the country. >> the focus for today's hearing is -- at least my focus will be on three areas. effective stewardship of the disaster relief fund, fema's efforts to lay down risk before a disaster occurs and measuring preparedness of the nation after years of investment. disaster relief fund or drf is fema's biggest tool in aiding disaster victims and rebuilding communities and ensuring resiliency in future disasters. congress took a maker step to stabilize it to establish a formula for its funding. they must focus on ensuring the funds are managed and distributed in an effective and efficient matter and respond and mitigate against disasters. congress took steps in 2013 to help reduce the overall cost of

disasters in the sandy recovery improvement act, section 428 of that act provided for alternative procedures and certain projects to grant -- allow grantees to receive full project funding up front on agreed to estimates. that option should reduce administrative costs start recovery projects faster and likely reduce the challenges currently being experienced with the obligations of funds after projects closed. unfortunately there seems to be resome reluctance to embrace that program. this is an innovative idea to help projects move forward more expeditiously. mentioned deobligations because i know this is a real concern of the states, where projects and expenditures are questioned in an audit, fema appropriately has

the ability to de-obligate funds. however, that authority has been exercised years in some cases after project approvals, and often well after project completion in response to audits by the inspector general. we need to find a balance between any waste fraud or abuse findings and decisions made under the pressure of responding to a disaster. so again i applaud you for fema's effort to work with grantees through the new procurement disaster assistance teams and hope they help grantees with the common mistakes while managing a response to the disaster. but clearly there is a real concern on the part of states so that the possibility of de-obligating funds, i understand that having served as a governor ten years, i know that senator sha heene understands it very well too

based on her ten years as governor. we have to find ways to mitigate that concern better address the challenge that it poses between states being able to go ahead and undertake these projects in a timely way with confidence that they are following the rules but at the same time making sure we don't have waste, fraud and abuse, we have to do both. it is a challenge. >> also you and i have discussed and agreed administrator in the past that fema's hazard and premitigation disaster programs and risk map are critical to buying down damage that would otherwise be seen in future disasters, especially flooding. the key is that disaster mitigation focuses on the actual hazard that the funding is effective in preventing or mitigating that type of disaster whether it be flood,

fire or other natural disaster. the example that i used in our discussions and that i've worked on with you and other members of your agencies where we have flooding and roads get washed out. and you can replace the road exactly like it was in a sense but if that is at a level where it continues to wash out and be flooded, that doesn't make much sense. we just repeat the problem, we keep stepping in the same hole. the ability to make sure that you replace the road in a way where you mitigate against some of those problems is cost effective for everybody concerned. you pay for it once, instead of three or four or five times and localities better serve because they have a useable road. so i think this is an important area that we'll explore in

addition in this hearing. i know you have some thoughts on that. with respect to preparedness effort, the administration is against the proposal to consolidate grants into the national preparedness grant program or the mpgp. well, the authorized committees should consider this proposal i believe fema could be doing more to assess the return on the investment, that the government has made in our nation's preparedness, what is the level of preparedness across the nation, how are training and exercise efforts integ greated with these grants. how can we better measure the effectiveness in raising the preparedness level. we want to talk about where we are in terms of preparedness as a nation what your opinion is in that respect and what we're doing to continue to improve it. fiscal year 2016 requests also funds to start modernization for

your grant systems. willed modernization approve abilities of state to report preparedness levels. we talk about cost savings, always a good thing. but also want to talk about the effectiveness of the program. i'll look forward to hearing on this and with that i'll turn to ranking member member for any opening comments she may have. >> thank you, mr. chairman. welcome administrator fugate and staff members who are here. as a former governor i also recognize how critical fema's activities are when states have emergencies and even more personally having been in a tornado in one point in my past, very personally benefited from

the efforts that fema has made to help people who are victims of disasters. i appreciate that your work is critical and understand currently that all 50 states including new hampshire and some tribal areas have an active relationship with fema and understand the costs to rebuild are growing. in 1990s, they were appropriated $3 billion a year for disaster costs and one decade later average costs tripled to over $9.5 billion a year. disaster types are also more varied and complex in the last five years along with the anticipated floods and tornadoes and wildfires and hurricanes, the nation has had an earthquake on the east coast a super storm, sandy, in the northeast. landslides in the west. a bombing at the boston marathon, active shooters in public places and unprecedented

snow in the northeast. and further impacts from a cyber attack are constantly materializing so it has been a very busy time at fema. now, because these events have become more common and more intense, this makes our mitigation efforts increasingly critical. we can't continue to just make investments in rebuilding after an event occurs. we must payee squall attention to preventing damage from occurring in the first place. these efforts are not only critically important to vulnerable communities but also to the federal budget. i was pleased to see the administration's request for a significant increase in mitigation efforts to better prepare and reduce the impacts of flooding and other types of natural disasters. for every dollar we invest in these activities we save up to $4 in rebuilding costs and that is in fact a smart investment. each state territory major

urban area and several tribes have ongoing preparedness projects with the agency as well. these activities have an immediate and real i am pangt on citizens, on businesses and on our first responders. i look forward to working with you to ensure fema's support role is delivered in a user friendly way both from your headquarters and regional offices. again, thank you for being here today and i look forward to your testimony. thank you, mr. chairman. >> thank you senator. i would also offer senator baldwin, any opening statement you may have. >> thank you mr. chairman and ranking member. i don't want to give an extensive opening statement, but i will like you mr. chairman preview the focus of my questions following your testimony will be the issue of rail safety and prospect for

derailment or explosion as we see a lot of train traffic through our state and particularly from the chairman's region of the world. so just as that i thank you for being here and opportunity for questions following your testimony. >> mr. fugate we turn to you for your opening statement. >> senators and mr. chairman thank you. the first thing i want to talk about is, i want to thank you and your staff for something that isn't always seen as something that's glamorous but it's a key part of the constitutional separation of powers. that is the budgeting process. the fact that the administration comes forward recommendations and ultimately congress must determine where we apply our taxpayers dollars it is a deliberative process that we participate in. it's not easy. our staff spend a lot of time on it. we're not going to agree on everything.

but it's the difference between having continuing resolutions and uncertainty and knowing what the intent of congress was with a budget that makes a difference in our ability to execute the mission. it isn't always going to be the highest priorities some think we should be working on. i understand what it takes to get to the budgets to ensure we have the resources to do our job. so first of all i understand our role here is to present our budget. but i also understand it's the role of you to make those decisions to figure out how we're going to fund all of government and we're part of that discussion. so we just appreciate that. the second thing i want to talk about is -- and i want to save more time for questions because there's a lot of things we want to talk about. when i got to fema, it was a real challenge to be able to talk to you and tell you about what we were doing. i could more easily tell you how much money we had spent. but i couldn't tell you what that had actually accomplished.

even within the programs i found that we were often times doing things because we had doing it without understanding, there is another way to look at this? and i told the staff when i got there and i come from the state of florida. enjoy your budget, this is the last one that's going to go up. we knew what was happening across the country and knew the economy was in trouble. and the years of budgets incrementally going up each year, you were able to achieve your mission because you're going to get more each year was over. and it didn't mean you didn't have needs but you did have to look at your budget differently. if you're going to find or free up money for the things you thought you needed to do they were going to come from the things you had been doing that either you were going to do differently or find different ways to accomplish that. to a certain degree, we were doing that well before sequestration came in. even within that, we focused on the mission and not used that as an excuse but look at how do we get more efficiency in savings.

but needed to coalesce around a lot of moving pieces of fema in something we could tell people, this is what we have to be focused on. the first thing, you have to build for the catastrophic disaster. if you don't, your risk is we'll have the next katrina. systems do not scale up. if you're not -- it's why you're putting teams together and building programs. if you only build to what you're capable of doing that larger disaster will be a failure. that doesn't mean you have to ask for more money but you have to look at systems designed around catastrophic disaster response and build your programs around the people you serve. as senator hoefen points out when that's not the case, we see the mismatch between trying to serve our communities and how they need to work for them versus what may be easy for us to administer. often times we defaulted to those easy to administer weren't

focused as much as people serving. that is played out and survivors communities not getting full support they should have gotten in a disaster. you have to go to where disasters are. just because it works at 500 c street doesn't mean it will work on a train derail. in the middle of nowhere with poor communications, you have to build the systems that go to where the disaster is and not what works in washington, d.c. you have to buy down your future risk. we have to do a better job of understanding that we can no longer subsidize risk and come back to first dollar every time there's a disaster if local governments and states are not doing their part to increase future risk. we can't deal with every disaster and building it back the way it was only to rebuild it time and time again. we have to do that differently. we have to look at risk reduction. the last thing we often times at fema as your committee staff will tell you have not been

good stewards of the basic functions of our programs, whether it's i.t., personnel, a lot of things that may not be things people want to talk about in disaster. if you don't have the foundational systems working right, you're not going to build that catastrophic disaster response team. it goes from how you hire people and build your systems and set up architecture for i.t. through the lens, are we as a nation, building the capability to responds to catastrophic disasters, not just what fema does but all grant dollars that funded local and state capabilities. are we building a capability to respond as a nation to catastrophic disasters? that, mr. chairman available to respond to your questions. >> thank you administrator for being here today. we'll begin the questions we'll start with rounds of five minutes. i want to go right to the concern that has come up in

regard to hurricane sandy and claims for homeowners who have not received the proper resolution on their claims that they've had issues with the insurance company and it appears particularly with engineering companies that have worked on adjusting their claims and as it turns out, these claims were not adjusted properly and it appears homeowners were shortchanged on recovery that they are entitled to. my understanding is there's of the 144 claims -- 144,000 claims that were made that there's on the order of 1,200 cases where the engineering report may have been fraudulent, improper, where the insurance company didn't provide the proper reimbursement

to the homeowner. this is a very serious concern and we need to make sure we understand exactly what happened and hold those responsible accountable and correct it. i also am aware that administrator roth the dhs inspector general is conducting a full investigation and we look forward to his report. i would like you to respond as to exactly what are the actions that you're taking and what is the current status of this matter? >> well the actual cases you mentioned i believe those are cases actually being litigated. we're concerned there may be people who did not choose to litigate that may also have had questionable engineering reports. very simply we're approaching this from if they are owed more money, we pay. if it's fraud, we refer that to the ig injustice. if the costs xleed what the claims are we're willing to

settle. we're working towards settlement. there are additional hearings taking place as we move towards that. but we're prepared to reopen the other cases where there may have been engineering firms or concerns of allegation that involve these firms as to how accurate the findings were in determining what the damages were. so we're in the process to begin in this next month opening up claims processed to the people that had policy -- if they got the full amount, $250,000, they've got what their insurance will pay. those who did not receive that that still had concerns we're going to open up a process to begin looking at those with the same scrutiny we've been looking at those that have been in litigation. but this goes back to being survivor sen trick. we found through our own program, we put more emphasis on

ensuring the funds without making sure we're putting as much emphasis on servicing those claims. there should have been no reason why if it was eligible it wasn't paid, there's no incentive for anybody not to. we're still looking at what was the systemic cause. we think it comes back to, there was more emphasis on not making overpayments because the insurance company w06ould have to get the money back and that seemed to drive more of this than making sure there was equal weight given to paying fully what the policy should have paid. so as we get through that, we'll provide more updates, we're currently focused on resolving the current litigation going back to the people that filed claims and then going back to those systemic issues as the ig is looking at it as well as attorney generals in both states of new jersey new york to look at fundamental issues as well as any impropriety taking place

we're also looking at the structural issues that got us there. we want to build this program back. there's equal weight given to ensuring full payment on claims without the overbearing penalty of having to pay money back driving decision-making. >> so my understanding is there are 144,000 cases or claims that included engineering services. you're saying for those 144,000 cases, you set up a process whereby they can in essence apply for any -- to address any shortfall they may have suffered and get the reimbursement they are entitled to. >> yes sir, we brought people from across fema to set this up. we'll be announcing it coming live this next month. we're going to triage and start with those involved in certain firms that we saw concerns with and then as we get those we'll

open it up to anybody else. and again if there was any concerns or questions about their claims processed, we're not going to predetermine that until they call us and we start working that and see what we find. >> you'll start that process when? >> our goal is to start next month. >> you've already taken steps to address the administrator who was overseeing the program, i understand? >> that's correct. >> are there going to be further changes in personnel or are you awaiting the inspector general's report at this point? >> right now we've had some staff changes and brought in an experienced senior executive service to take over and lead the program. we have detailed people into the program to provide the initial search help. we'll be evaluating that with the assistance of the ig and others what additional steps maybe needed if we find things that suggest if there's any impropriety among our staff.

>> administrator fugate, senator hoven asked a number of my questions but one of the things i found almost as troubling as the allegations of fraud by a number of insurance companies were conversations that i had with my colleagues about raising concerns that they had heard from their constituents in new york and new jersey about what was happening to them. they had raised it with the program and that they had not gotten any attention until after the segment on 60 minutes really highlighted what had happened there. i wonder if you can speak to that and to the effort to make sure that when complaints are brought before the agency, that they are taken seriously and there's some mechanism whereby those are examined and responded to in a substantive way.

>> yes, senator the personnel move were being made prior to the 60 minutes. i had to free up certain staff to make them available to be transferred in. and that took more time but we originally this came to my attention as something that was out there but it was like we saw one or two cases. and i referred to staff and said, look guys, what's going on? we need to address this and focus on again, if we owe more money, why aren't we paying them? we found ourselves in a situation because we use write your own policies we weren't able to directly engage and as the process kept continuing i became more and more as frustrated as anybody on why we cannot get to resolving these cases. if we owe money we pay. if there is allegations of fraud, then there's a mechanism to handle that.

if we're having a dispute but litigation costs are greater than what the settlement will why weren't removing to settle. prior to 60 minutes we were already making changes but had to free people up to make the moves and reassign people and start the process of changing out the leadership. and that was probably, you know, it started that really right after the thanksgiving holidays was we made decision we were going to make changes but had to move the personnel and start that process of getting them slolted and getting them in place and up to speed to start dealing with this. >> well, i appreciate that i'm glad to hear that you were already taking action. one of the things that was pointed out on the "60 minutes" segment, there was a class action attorney who actually brought a number of these cases to the agency and that it took -- at least it was presented as taking that level of attention before it rose to

the point of somebody taking action on that. so i'm glad to hear that you were addressing it and it seems to me this is the kind of thing that we all ought to be on the lookout for every day as we're trying to make government work as effectively and efficiently as possible. i look forward to hearing more about the reforms that you put in place so that this kind of abuse doesn't happen again in the future. i want to go back now to one of the challenges that you pointed out in your statement, opening statement, about putting together a budget for fema that works given all of the unknowns that you're dealing with. as you point out, you have disasters you can't anticipate

in advance and the number of the severity and type and you have to plan for that. i wonder if you can spend a few minutes talking a little bit how you do the planning process and what's involved and how you allocate resources and thinking about what might be coming up? there two parts to this. we do deliberate planning with communities based upon various scenarios, you're not going to have catastrophic disasters if you have a large risk. it tends to geographically define where that is. it didn't mean we don't prepare across the country but it does tell us where to do that. we do that and identifies what the capabilities are. this goes back and drives the initiatives in the threat hazard reduction of areas we need to focus on to build capability. another piece of this budget within the disaster relief fund, one of the things you fully fund a drf, we've been able to maintain a healthy balance. when we had the colorado flood several years ago, we weren't in

the situation we were in 2011 with irene where we were out of money and congress was having to very quickly do a supplemental. by maintaining a balance of a billion dollars in the fund at the end of the year we are prepared for those no notice earthquakes or other events that are large scale that gives us funding to do initial response then ensures congress has a time to do a deliberative process in determining a supplemental versus running out of money, you're having to make quick decisions without the information. so maintaining that balance gives us that initial push for a response to a catastrophic disaster. we did this in sandy as well. if you remember although there was a lot of work getting to supplemental, it was not about fema having to shut down or not do our jobs because we didn't have immediate funding. by maintaining that balance in the drf and allowing that balance to stay there, it protects the ability of congress to do deliberative findings when supplementals are requested, versus having to respond to what in many cases is a preliminary

data. >> i certainly agree with that. i think that makes much more sense and support that effort and having had communities in new hampshire who are affected by hurricane irene and some of them still affected by that. appreciate it's much more important to have funding there so you can continue the relief efforts throughout. >> the one thing i would say and i understand the point you're making about planning for major disasters for areas where they are going to hit significant populations the one thing that i hear from people in new hampshire, even though it may be a small community or maybe even one farm one neighborhood, people there are affected just as dramatically by disasters as large communities like new york or some of the communities in new jersey. and so that's why the efforts at fema make such a difference and

are o important. we look at where the largest disasters can be and that ensures when you do have that disaster in your home state and we may have tornadoes in the south and then there's an earthquake on the west coast, we're not pulling resources out of your state when you still need them. this goes into our planning and aactually drives our assumptions that we don't have one disaster at a time. >> thank you, mr. chairman. >> senator baldwin. >> thank you, mr. chairman. as i mentioned, i plan to focus my questions on oil train safety and disaster preparedness in that regard. it's an issue i've been heavily involved in as my state has become one of the most heavily traveled routes to bring oil from the refinery on the east coast as well as the gulf. also as the ranking member of the authorizing subcommittee with jurisdiction over fema,

i've become very involved and enthusiastic supporter of the response act. which would establish a subcommittee of fema to bring together experts and establish best practices for responding to oil train derailments. i look forward to working with the chairman and ranking member this subcommittee to ensure that fema grant programs are adequately funded to provide training and equipment for first responders to respond to oil train accidents. mr. fugate in your testimony, you identified building capacity or capability for catastrophic disasters as a strategic priority. in wisconsin, certainly my constituents who live on the rail corridors and state emergency management personnel have identified the increasing frequency of oil trains passing

through their communities as a catastrophic disaster waiting to happen. the growing number of oil train explosions in north america suggests that it is not a matter of if but when. additional train accidents will occur and we worry a lot about one in wisconsin. i want to ensure that fema is doing all within its power to build its capacity to respond to such an incident were it to happen. i would like to hear from you first off, sort of where and how the growing threat of oil trains accidents fits into your strategic priorities and what fema plans to do in response to this significantly increasing volume of oil train traffic. >> senator as we're not the

regular tri agency, i want to focus on consequences. when we talk about specific hazards, are we building capacity and capabilities to respond to the likely impacts? from the most immediate fire fighting operation, which we've been working through our center for domestic preparedness, to update training, but also what happens if that occurs in a populated area and search and rescue operations and warning systems, integrated warning system, what most think of as emergency broadcasting and alert system. working with states to make sure they have those systems ready to go to warn and evacuate populations and teams that can support the states if they need additional personnel to do search and rescue and communications equipment that can be deployed to support those responses. but also looking at our grant program, that's really where most of the resources will be utilized in this. and although the intent of the homeland security grants are to

build capability for terrorism, it's also understood the same capabilities you have to build for a bomb explosion would be similar to the type you would have to respond to a train derailment. we don't preclude it we make sure that as we identify new threats, that we look at our grant language to see if there's things in there that unintentionally can be used for that. we don't want to subtract from the situation we have to prepare for these types of events such as terrorism. other hazards that have capabilities that we're building, we want to address that from the standpoint of life safety and immediate response, communications evacuation and sheltering. that's pretty much something you're going to need to do in a lot of different events. it's the idea that our grant dollars are looking at where do we need to put more emphasis. our first work with d.o. it is looking at training capabilities and we want to make sure senior

executives in the fire service have the latest but also looking into the grant programs and as we see the threats emerging, because this is dual use we do have capability and always go to the consequences, what are things we need to do if that happens? and again, from a lot of emergency management preparedness grants which i again support this administration recommendation and committee has done a lot of work here, those emergency preparedness grants, those are the dollars that can be used to develop this community plans. there are other programs that are not part of fema that have supported this before. under the super fund reauthorization, epa administers for local emergency planning commits. there's a lot of different pieces we can apply to this. from our standpoint we're looking at the consequences and most immediately our training and grant programs and looking at gaps this is exposing across the nation. >> if i could follow up briefly on the training aspect you talked about training and

reaching out to senior executives. but i'm certainly hearing from rank in file emergency management personnel who feel they are under prepared were an event like this to happen. specifically they feel they lack resources to send first responders to require training or provide them the specialized foam that would be needed, for example, to put out burning crude oil fire. they don't feel they are getting adequate information from the railroads themselves to respond quickly to an incident should one occur while a train is passing through their jurisdiction. i'm curious to know how much fema has engaged with the railroads themselves and do you believe that more action would be necessary from the railroads and oil producers in order to properly protect the citizens who live along these rail lines? >> we're not directly working

with railroads we're working with our federal partners that actually have that regular torre oversight. we continue to work in the inner agency with this. that's part of the reason why a lot of train is designed to independent study type as we sit down and going what are training needs and what can we already have that we can utilize and what can we adapt? we're still in the process of developing and further examining what additional training needs are out there. we're also working back through the department of transportation with the industry itself over types of training venues they have that we can also tie into our other training to make more available the visibility of what industry has out there for training in addition to a lot of state fire academies and our national fire academy and making sure that we have consistent training, we're looking at field delivery training and looking at -- part of this is dealing with the most immediate --

what's the best information, how do you deal with this and are we getting that ready to go. then looking at what are all of the delivery systems that are needed to get that out to the local level. >> one of the things i mentioned in my opening statement was making sure as you work with flood mapping and remapping and flood insurance that you're coordinating with planning and efforts to build permanent meant flood protection. tell me what you're doing to make sure they work together in tandem. it's important in terms of the cost of flood insurance for people who live in the communities? >> all the way back to when you were governor we had a challenge that our regulations would not recognize future projects in calculating risk as we were updating maps. that's fine when you get it

we'll come back and change the maps. then we have the issue of having to change rates several times and knew this was authorized to coming on. i think you saw from roy wright that we're taking a more pragmatic approach. if we know the commitments there and projects are coming on in a timely manner does it make a lot of sense to change rates several times and not recognize that? so as we're going through this what we do want to make sure is that the community has the commitment and fundsing and moving forward with that. i think that from the perspective is much more pragmatic to work with that community and not issue a map until we know that's online but we also make sure that communities are going to be moving forward because we don't want to delay that if there's risk out there that people aren't aware of that the maps would show. if we know there's permanent work and things taking place that's going to fall outside of the updated map cycle and if we delay for a year we would actually have best data and

recognize that. i think working to be more pragmatic about that so we're not unfairly penalizing communities and waiting to identify risk for indeterminate periods of time. >> the ability to do that in phases is important. if that can be coordinated with building that permanent protection, which is very often done in phases, i think it makes a big difference for people. >> between 2004 and 2013 the ratio was about 13% in terms of add min cost relative to your disaster recovery fund and compared that to the states that had about a 3% ratio i think it was. so can you tell me why your

addmin cost is at 13% and state is at 3% and first why and then what are you doing to make sure it's cost effective as possible? >> well, those admin costs include the capabilities to respond to disasters rolled into that. it also means that the state is usually benefitting from the jfo that we're releasing and a lot of overhead costs we build into our budgets did not have to -- the state had to deal with that. you're pointing out something i challenged my staff, how much does it cost me to administer one grant dollar in disaster. it depends on how many people you've got and what's the complex tri. that's not a good answer. i'm trying to look at this the same way you are, why do i have to establish all of these different tools if i don't need them in every disaster? one of the things we've done, why are we establishing a physical presence if it's going to be public assistance and i

get staff in and work out of hotel rooms and don't need a facility or security or i.t. hookup, so we're doing what we call virtual jfos with the state. many of them appreciate it because they can stay in the workplace and get the work done without having to relocate to another location. we are looking at what is it costing us? are there different ways of doing it? we're more inclined to do virtual field offices and we're looking to drive down that cost. but we also do things that are reporting requirements to states don't have the oversight that we have. if you look at the post katrina reform, we have a lot of oversight to ensure that we are delivering programs and eliminating fraud and waste so as we go through that, we're trying to go -- how do we do a better job of accomplishing the oversight without what the systems we built that sometimes are very cumbersome and not that efficient and were the initial response to how do you provide oversight. we're looking at maintaining

fiscal accountability in delivering programs but looking at the mechanisms, there's got to be a more effective less expensive way. as a state person, i was often times floored by the number of people that fema would bring in for something like external affairs. we had a joint field office for hurricanes that had over 5,000 people in it and i can assure you half of that was in the state of florida. i'm also sensitive to how much of a workforce do we need to bring in to support a state and how much is they've always done it that way and that's why we really push back on the number of people deploying and setting up physical locations and focusing on the outcome of executing a disaster not just going in and throwing in systems that had always been in place in a level that wasn't sustainable or necessarily required in all disasters. >> do you have any type of statistics that show what you've been able to save or any benchmarks? >> we are benchmarking -- the

challenge i keep running into when i try to zo do disasters, i can show staff what it cost us to run a virtual joint field office versus what it would have been to set up a facility. we have to go in and lease a facility for so many months and everything associated with that. we may only need it for a month to do what we need to do. i can give you -- it's better if i show you those type of disasters and what it would have cost if we didn't do this versus what we traditional spent. as we build better anl lit ticks we're trying to get to the number of how much is it part of the disaster response versus overhead to maintain the capability response and then looking at that on a case by case basis, are we showing savings? some disasters like sandy will have a higher cost, a lot more people and facilities and very expensive people to put people in hotel rooms. other disasters would be less expensive and others we're looking at are we driving trends down and are we seeing overall

that we're containing overtime costs and are we not doing things just because people have always done it that way to drive down the cost of each dollar we miss. i think i can give you some things we're working towards. give you case studies of disasters where we have done reductions and start showing you those trends. >> you'll show us some metrics on outcomes? >> yes. >> thank you, i agree, i look forward to seeing those. i want to go back to your conversation with senator baldwin, and working with local first responders and local agencies and i certainly agree with that as governor after september 11th i can tell you very directly what a difference the department of homeland security grants have made in new hampshire to our preparedness. and that's why i was concerned when i saw in the budget you were proposing an 18% cut to

preparedness grants 28% cut to training and 1.5% cut to firefighter grants. the recent fema report found eight areas where communities are still in need of improvement and i know that one of the proposals is to consolidate many of these grant programs and while i appreciate that there are places that there can be efficiencies, i can tell you that those grants as i said have made a huge difference in new hampshire. we leverage a little bit of money and make it go a long way. and the firefighter grants and other preparedness grants have been critical. can you explain why the proposed reductions and i know that at least my understanding is that the authorizing committee is probably not going to take up

the consolidation issue that's probably not going to be an option in this budget. as i said, i probably wouldn't support it if it were. i wonder if you can talk a little bit about that. >> two pieces very straightforward. obviously i would like to provide the maximum amount of funding that would -- that we could provide in the grants programs but you have to make hard choices and we have to fit within our budgets and submit based upon overall administration and this is a continuation of the president's request, so although congress has been able to find more money and funded the grants at higher levels, we have been pretty consistent in what we've asked for. as far as consolidation of grants this actually went back to -- my experience in florida was since the ability to leverage dollars across the state, some states do a better job than others but it came back to governors you have the emergency powers and

constitution establishes the emergency authorities, the consolidation of grants really upon the governor and state and the position to help direct more resources were across the state you know your states better. give you more flexibility across the grants to make those decisions. we also understand stake holders don't have the same trust there there's concerns about not all states may be as equitiable in distributing funds. as i've said in each of my testimonies, the reason we're doing this is recognizing the role of states have governors and have what state constitutions in power the emergency authorities and the creation of the political subdivisions are unique to each state and by consolidating these grants at the level of the governor it gives governors more flexibility to determine priorities. that being said i've also said i will faithfully execute the budget that congress provides with the direction you give us and that will be not up for

debate. >> thank you. >> one of the draft national preparedness goal that is out for review says that fire management sense to me. and the request for grants for fire departments was a reduction and so can you talk about what a reduction in fire departments would have on the distribution of funds to rural communities and volunteer departments and how we can on the one hand talk about a goal of fire management and suppression and talk about grants to fire departments and folks who need to make sure we're prepared for those fires. >> i think the structural

firefighters goes back to the original framework while in fire fighting. and on a national level fires had been the one failure response most often but i had come out of the fire service so i have to be bias here as a structural firefighter. we do a lot of firefighting but in disaster we do the bulk of the search and rescue and emergency capabilities at the local level we felt it was important they be recognized as the framework of the emergency support function that exclusively on wildfires. as far as the grants, the reduction will mean fewer smoke detectors and fewer breathing apparatus but it's a reality that when we have to force into a budget, everything and all priorities, these are numbers we were able to get and represent to you what we think is the administration we can fund. it doesn't mean there's not more demand or need, this is based upon all of the parties the administration has to look at funding everything from health

and human services and ebola response and a lot of things i find myself dealing with, this is where we came out and we're able to make the recommendation. we also understand this is where we start the discussion. >> i'm glad to hear you acknowledge that it will have an impact if we don't have that additional funding. i want to go back to the discussion about how you put together your -- several things that you include as new shouldn't say they are new initiatives but to upgrade the management structure, focus on

i.t., on business management grant management and i cyber security, can you talk about why it's important to do those now and have those initiative rose to the top of what you were looking at in order to be more efficient? >> we had started this before being -- part of homeland security we found ourselves with grant modernization being wrapped in the initiative that did not later occur. we have systems that are ancient. we pay so many in supporting and maintaining old systems that we think we can do a better job by modernizing the systems and reduce costs. in many cases we think we can

have substantial reductions by upgrading to newer systems and pay legacy costs. this becomes a cyber security concern as well. when you have systems running on old, old systems, including the fact that microsoft is no longer supporting server 2003, but your systems are built on that, if you're not upgrading them, you increase cyber vulnerabilities xgt we've looked at our vulnerabilities on that end not a poster child at all for that. we've been documenting our systems and eliminating redundant systems no longer needed but we have reached a point where if we do not start upgrading these systems, not only will they become more expensive to maintain but not achieve the purpose of being able to be transparent and share information with stake holders and quite honestly spend more time responding to your request by creating a spread she'll in excel to take the data to cannot produce to make your decisions. >> do you have estimates on how much -- how much you're going to save or how much the spending will balance out in the long term because of the efficiencies you'll be able to achieve?

>> yes, senator, we've taken -- we're back and what we said is we're going to take small incremental steps and build on common operating systems and use government owned systems and move forward in the grant consolidation and modernization. we can show you from our time line if we appropriate funds for this what our milestones are and projected savings and what it's costing you right now to maintain the current systems and how we'll see those costs go away as new systems come on and replace them. >> that's great, if that's something you have not shared with the committee, will you do that please? >> yes. >> we would very much like to see that. thank you. >> as a result of sandy, you received both authority to provide upfront fundings for public assistance projects so that entities could get funding up front and to give them -- both to expedite the process and give them more flexibility to get it done. and then also, given authority to examine ways in which you could reduce disaster costs nationally. both of those seem like really

good ideas and like you to respond in both areas. why aren't more of the -- why isn't more of the funding where it can be provided from, why isn't it being utilized more frequently? and then second, talk about your strategy as far as implement being the national strategy? >> yes, senator, as with anything new there was a lot of concern that by doing a cost estimate what would happen if they discover something later on that wasn't anticipated they would miss out. they would be stuck with a bill. our first success actually came out of a case that was still pending from irene in the state of vermont and once they understood the flexibility to solve problems we have not been able to resolve, they moved

forward with it and had the first success project. we've seen a lot of resistance because of unknowns. as that success spreads, people are starting to understand this is giving them flexibility and ability to move forward with certainty on these projects and we are increasingly seeing more projects come in that will go this route. the amount that we've already approved and dollars going out are in the billions. i am still working with the mayor of new orleans to finalize the projects till outstanding from katrina ten years later. i do not foresee that with sandy. where we are with the complex hospital using this charity we were five years and went to arbitration before we got an answer. we're already moving forward on funding in the construction and

rebuilding and repair of hospitals. so i think this is still the concern that what if they find things later. we don't need to rush that, i want to make sure it's a good solid number, once we have that nb and we can agree to it, do i really need to be there every time you change an order or you need to do something different to get a review? and i have do dole out money each quarter and do the inspections? that's where the administer costs goes up. if we have a good product and good agreement and have fiscal tools in place and accounted for what was eligible and make that determination, then we should be able to move forward. i think as applicants become more familiar with that and see the benefits of it, we're going to see increasingly in particularly in large complex projects communities turning to this to speed up the process. >> what the is flexibility mechanism, the concerns are

covered if they take the money up front and find out there is additional cost, what is the flexibility? >> part of that is, what we have done in many cases, we'll write a small grant to bring in an engineering firm and you've been through state bid process where you bid out a building and the person bidding on it made a mistake, they own the mistake. we basically take this up to where you got somebody ready to bid on that project, that's the number we want so we've done everything, they've done the studies and done engineering have done the due diligence. at that point you should be ready to issue the contract. if the person didn't do due diligence that's going to be their responsibility. we've tried to make this as seamless as we can with the best understanding of what it is when all of the eligibility is. if it takes us a year to get to that or something complex like a hospital, we'll take a year. once we get to that number, we

want to be able to pay you, allow you to move forward and i allow you to do things we have historically not, from the standpoint of other federal dollars making decisions about increasing size with your own dollars, we were so con strained -- we can only do what was damaged. and if you need to do things that were going to prove that, we may not be able to fund it but shouldn't be an i am pediment to you, or utilizing community dollars to enhance something. our process was always so restrictive that that was very difficult. >> this is much better. we build the mitigation on the front end. as you point out, a lot of times we'll build back based upon the past data, we have been back to that facility more than once because it got wiped out. we need to move beyond that. we have to loong at not just building back to what we always