training and vocational training and things of that sort. that's for a disclose to the congress and a congressional notification that you rereceive. >> if you can refresh my memory for uruguay of how much would that country have gotten for land and bridge and to the other -- >> i cannot tell you off the top of my head. >> i will get the notification, refresh my memory. had the add minuadministration offered my favorable agreements on other related matters in exchange or if so what kind of exchanges? >> nothing financial beyond what it is in the congressional notificatio notifications. anything related is a broad category, i can say generally in open session that is many of our partners do view a detainee

transfer as an opportunity to deep end security and counter terrorism and cooperations of the united states. we welcome that and we look to facilitate that interest word exists. >> had the administration provided military training in exchange of taking in detainees and so to what extent and to which government. >> not to my knowledge, paul. >> ma'am, that's somethin something -- that's something we have to talk about in a closed session. >> like night vision goggles or something like that. >> again, the negotiation of security of assurances is detailed and complex and to discuss any specifics, i have to talk to you about that in closed sessions. we are happy to do so. >> have the administration provided intelligent equipment or training or intelligent sharing to any government in

exchange for accepting a detainee and if so to what extent and to what government? >> we have to talk about intelligent matter and closed session. the absence of any of these agreements would need to be discussed in a classified setting. so unless you said no to these questions, i think it would be fair to assume that at least some of this has or has not been happening or is happening, is the intent of the obama administration to continue to release all but but a handful of the most dangerous detainees in order to say to congress well, why keep on getting it opened when we have such few detainees there as if president obama does not have anything to do with clearing out the detainees in

the first place. >> we intend to continue the policy of the previous administration to transfer detainees that we conclude safely and responsibly transferred outside the custody of the united states and in accordance of applicable law. >> would it be fair to say that we would be seeing more detain t detain -- detainees being released. when you are the ones that is pushing them out? >> we have 29 detainees and our intention is to work to transfer those individual subjects to security sources. >> thank you, we know there is a great deal of resistance of having them coming to the united states, thank you very much, mr. chairman >> we go to mr. brad sherman of

california. >> prior administration did release more and more of those released by the prior administration had been caught fighting us on the battlefield. the fact is as much as we would like to fight the democrats and republicans, the policy had been the same. how is it almost in guantánamo bay and massively under state the cost of the release. we are told that it is wrong to keep them there for the duration of the war because the war

lastlas lasted too long. that's their faults. they raged war against america and we never guarantee them that the war is short. the purpose of incarceration of pow's is not only keeping them off battlefields but to detour their comrades. when we tell terrorists around the world if you get caught, you will get released while the war is still going on, we encourage their recruitment. americans have died because of this release. that's a massive under count. first of all, when we release somebody and they rejoin the battlefield, do they send us a report. are they link listed on linked in or news status and when one of them are on the battlefield, do we get a report of the

terrorists. here is a list of the people who killed them or provided them with lodgistic or here are the people that provided of the recruiting and financing. so unless we are certain that one of these released people is being monitored everyday and is not doing everything to help terrorists, we have to pursue that they are raging against us as before. because the cause of the release is also -- brought this to attention, all the -- every country in the world, take one denan t detainee and the president of the united states in debited to you. when you got a fishing concern or if you are seeking something from the united states, now or later, the answer is yes. we'll never get in an account of

that because you cannot account for the weeks or the notes. we are told that gitmo is a terrible advantage. gitmo is closed. we have no propaganda advantage. but, we can bring these prisoners to the united states, that does not enhance their legal status. the supreme court is ruled in the dion's case and the ramadan case as they have many legal rights there than they would here. here in america, when we accept nuclear bases and knowing that they will target our union and now we cannot accept our prisoner. we have 443 convicted terrorists right now. i will ask our witness if they are aware of any of those would

escape. we got the and the bombers and the uni bomber and we are training to bring to the united states el chapo who escaped mexican prison twice. we cannot incarcerate people here and obtain the political advantage that were told can be achieved by shutting down gitmo. but, instead we cannot vote on ways to do that. if the legal rights of these pow pows of the united states are great and if they are on u.s. soils, that's the public congress. identifying these are pows. they are none uniformed and combatment and less protection than those wearing uniforms fighting against us. so we got a lot of dead americans as a result of this catch and release program. we got one party that says we

cannot house from here although we are able to -- we got another political parties so anxious to shut things down that we massively under state the cause of release. >> thank you very much mr. sherman. >> mr. -- california. >> is it true from under current law that closing guantánamo is prohibited. >> this is not a trick question. [ laughs ] >> i don't think that current law prohibits closing guantánamo. i think what current law prohibits the expenditure of money to move detainees at guantánamo. under current law, you can close guantánamo by releasing prisoners, you just cannot bring them here. that's your assessment.

>> i believe the current loss of detainees being brought to the united states. the reason that you both have titles that say specia special -- closure is because your job is to close guantánamo, is that is right? >> that's correct. >> sir, my title is quguantánam detention closing. >> we'll leave that aside. your job is to close the detention, you are working towards that. i want to ask one or two fairly simple question. it is been said many times on both sides of the day that

president george bush's administration released more prisoners than you inherited. >> yes. >> okay. during that time, it is been discovered and during this administration it has been discovered and made public that some released by the bush administration went back and killed americans on the battlefield in afghanistan and other places, is that correct? >> yes, sir. >> so george bush released more prisoners and attempted to vet them was wrong. they went back and killed americans on the battlefield and we know it and the public know it, right? >> yes, sir. >> okay. so george bush's failures are now very public. they released people who went back to kill americans on the battlefield, okay? like mr. short-teerman, that's necessarily popular of my party.

this president released many people returned to afghanistan, are you prepared to say none of them killed americans? >> you are talking about guantánamo detainees returning to afghanistan? >> released after 2009 who in fact went back and killed americans. >> the assessment of the intelligent committee is the no detainee release since 2009 responsible for the deaths of america. >> so your public statement is that no detainees released by this administration have killed americans on the battlefield today. >> correct. >> i want to make sure that we have it on the record because i don't believe it. >> you can say it under the open and i believe it if you believe it. >> i want to make sure that we understand, we are sitting here and somehow president george

bush releasing the less dangerous and the less likely to be harden criminal harden terrorist, they were released and killed americans. you are releasing people, they are not killing americans. how do you account for that. is this rehabilitation that you have done? >> sir, there are a lot of factual predicates. you release people that did not kill americans on the battlefield, how do you account that difference that you set under oath. >> we have put in place procedures that are comprehensive and rigorous and they're interagency in nature and we believe that as a result of those procedures, that has contributed to the substantial

reduction in the reengageme reengagement -- seen in both administrations. >> okay, lets do that. you use procedures that limited reengagement but it has not limited reengagement, right? >> you released people after 2009 and they're back on the battlefield and attempting to kill americans, right? >> it is not correct to say that anyone reengaged of the definition and the intelligence of the community confirmed or suspected reengagement back in the battlefield. again, i am happy to talk and better yet, the intelligence community hence speak to the committee of the standards that are used but it is an over statement that an individual has been suspected from reenage gaugement to do harm in coalition forces. >> it is one of these things that i think this is not something that needs to be privately discussed.

madame chair if i can have 30 more seconds. people that were released under bush reengaged and killed americans. although people released under this administration were harden criminals. these were the people in fact were not released under bush because he thought they were too dangerous. they have been released. you are saying in a public form that they are reengaged but you are saying nobody died. >> sir, it is incorrect to assume that individuals released under bush are less dangerous or more dangerous during this administration. again, this would require a rather long discussion about why of the overwhelming p

preponderance of detainees. you keep on talking about vetting that's done by the bush administration. we have not aware of the type of vetting that's done. there is a lot of premises em d embedded. >> thank you. >> i am sure he will follow through. >> you need more time? the gentleman from california? >> thank you. >> i just want to understand, we have heard end lessly that the bush administration released people and they went back on the battlefield and president george bush and his administration have to live with the fact that they fought these people could be safely released back to cathar and other countries and in some cases they were wrong. but, you continue to work towards closure by release back to this country, yemen being a particular area of concern and i want to make sure that the american public here in an open session that you believed that

you have been flaw less of no americans died because people released on this president's watch. i want to thank the gentleman very kind to let me recap >> thank you for your approach to everything chairman eisen. >> first, i want to apologize to the lady by coming brazen. one of the gitmo six has this spirit. we have also established the fact that i think that, there is certain requirements and parameters that must be met before detainees are transferred to a third country. uruguay told us and providing intelligence and monitorin monitoring -- the former

president said that his government would place restriction on the movement of the six detainees that were released through uruguay. >> these gitmo six were not restricted in any way and he's not authorized ormond toing or surveillance. if we go back to the requirement that have been talked about numerous times here this morning, surveillance and monitoring and some assurances were part of the deal. so americans need to understand that one of the six detainees captures on the battlefield, al-qaeda operatives, captured it in afghanistan has disappeared. uruguay and brazil and united states and at this point have no idea where this individual is. now, this individual we are

talking about -- is a forger. he's responsible for forging documents and travel documents for al-qaeda terrorist, he's now disappeared in brazil. lets take it to the 30,000 feet level and think about brazil in general. we got an area in brazil and uruguay, a lot of folks are transcending through latin america. they are coming to south america to that area, all time zones and fake passports. they're just passports that don't belong to them and they're exchanging those documents in those regions for other false documents and trying to transit through latin america to get to america, to get to the united states. taken point. travel to the border region in

brazil and fake israeli passport. apprehended at the honduras airport trying to come to the united states on fake greek passport. now, we have a gitmo detainee forger for al-qaeda that escaped or disappeared or whatever you want to call it and here assisting others from the battlefield, isis operatives possibly and eck changing documents and getting new or fake documents to possibly travel to the united states of america. but, lets take another step, there is a huge event getting ready to happen in brazil, the olympics, that's a heck of a terrorist target. oh, so we got an al-qaida

operatives who's a forger and escaped in brazil or disappeared in brazil, who has the ability to forge documents and he's in the country that's getting ready to host the olympics. i hope our can of terrorism efforts in brazil working our allies there are full board. now, this gentleman has escaped, he's gone missing rather, the obama administration, are they concern about that? >> they indicated previously that all six detainees transferred to uruguay. >> you stated that. are they concern over his disappearance, yes or no? >> i would prefer him staying in uruguay with the five detainees. if you are asking me what

concerns me? frankly, it is the 532 who were transferred during the -- >> we have established the fact that we wished he would have stayed in uruguay with the other five. is the obama administration that he has disappeared. >> i believe i answered your question. >> mr. lewis. will you repewuate of the uruguay government -- will you re -- >> i believe that the y--

>> they did. that contradicted previous statements they have made publicly. so, why do you think that is? >> i am sorry. >> why do you think that is? >> we go back to all of these. >> why would they say one thing to you and another thing private? mr. duncan, can you yield for a minute. >> i can. >> i did want to put something in perspective for all witnesses here. it has to do with why the chairman or the western subcommittee would be upset here. the fact is the chief of intelligence in uruguay explained to our committee and gave us the information that they were not allowed to monitor or surveillance these six terrorists. the decision you made was to

transfer them anyway, he made that observation to this committee right at the transfer. you made the decision to transfer these six despite our warnings. the second point that's upsetting to him is the intelligence chief was then dismissed from his position after wantirning us and subsequently that they were outside our embassy. again, they were not allowed to monitor or surveil. now, we found ourselves in the situation despite jeff duncan's admirations and concerns and what we brought up, we find ourselves in the situation where one of these six intterrorists

indeed has been able to walk out of uruguay and no one knows where he is but we know his attitude. this is the reason for our concern. i thank mr. duncan on his work. >> i would like to thank the chairman to help clarifying these. we have been asking about these gitmo six and the ability to monitor them for a long time now. we have raised concerns of the events where we have witnessed the last few days where one of the six disappeared. he was not a terrorist, he's a forger. they were not edge gauge ngagin attacking or hurting our allies

in any way. i am clear that he was. thank you mr. chairman. >> last time you were here mr. lewis, you testified that women have been killed. you notified the committee that those deaths occurred in afghanistan by as many as 14 detainees who were released boo i the bush administration. i just like to ask a few questions. how many were killed and what were near names and where are they from. >> i believe it is 14. i believe our intelligence committee can give you specific details. the number is fourteen. many incidents were in a large scale fire fight and in a war

zone, we cannot distinguish who were kills or participants. the intelligence committee can give you the specific details. >> i would like to know whether they were servicemen or women or civilians or both. i would like to know their names and where they are from. those are the things i would like. you can provide or get me all of that. >> yes, sir. >> that'll be very helpful. and then, just to piggy back on some of the other questions, knowing that there were casualties associated with those detaine detainees, two afghanistan specifically you then as an administration to say it was okay to release detainees to afghanistan, is that correct? >> it may have been correct. and, at the moment, i can assure you that each detainee transfer to afghanistan or frankly anywhere else, we subject to the

review of the chairman of the chief of staffs and i can tell you the state department would not concur any transfer over the objection of the chairman that joined the chair of staff. >> did the government of afghanistan incapable of maintaining control of these individuals. >> the standard disnthe -- thes determinations that would have been made in conjunction with and subjected to consultation of the chairman, if in fact, they occur of this administration. i believe they have been. >> yes, congressman, there is been transfer drives. we do consult with the field

commanders in afghanistan. those ratransfers have been mad that any threat is mitigated by the host nation. it is better to talk about this in a closed setting. >> state for the record that one of your criterias of releasing them was not monitoring. that's no t a concern. you did not tell whether they were able to monitor or not? we cannot speak to specific security assurances with specific countries in an open session. that's what we do in all transfers like afghanistan. currently, it would not consent any transfer to a place like us in afghanistan unless the

chairman of the chief of stan concur in the transfer. >> it is the most corrupted place in the country, what a lot of us would like to understand is if monitoring is not apart of the decision and making sure that their whereabouts are readily ascertained. a lot of us are wondering why that is and what is the criteria? thank you, mr. chairman, yield back. >> you said that the the

standard is a litigation of your comments. >> i don't believe so. >> the current administration came in with that with 2009? >> congress came in with that. it is written into the mdaa. it is a piece of legislation passed by the congress and signed to law by president obama. >> that was the standard that you used? >> um, that's pretty shocking council countdo council duncan revealed that we are told uruguay were not able to monitor these travels. theeds were not the five that was released and exchanged for bergdahl, correct? >> correct. >> the bush administration, did they attempt to release what was an assessment of the lower level

of risks combatant at first. >> i cannot speak to it. the worse, we are not releasing. >> we are only releasing or transferring subject to security of those individuals who are designa designated. the bush administration would follow the same guidelines. i don't think that's a fair assumption respectfully. one reason why it is not a fair assumption for years that we have not release yemeni and detainees and of the circumstances in yemen. many of the detainees who

remained in guantánamo and who approved for transfers are from yemen thar yemen, that could reflect more of their nationalities than their risk profiling. the five that were exchanged for bergdahl. are any of those back in the battlefield? >> no. it was negotiated by the department of prisoner exchange. i am confident he will say no when he turns around. >> his time is fast, i am going to move to the next question. what number of countries do we look at for transferring these combatants of six or eight or 26? how many countries are involved? >> we can get you the numbers

but i believe we transferred detainees to 30 or 40 countries. >> we settled to 30 and nine back to their own countries. >> 30 countries. are you monitoring or are you able to track -- you talked about you spoke with career government officials in making those assessments and determinations. career officials on the united states side or the countryside or both? >> i was referring to the u.s. side >> on those 30 countries where we are sending people whether or not they can monitor them effectively, you are getting feedback and we call it -- i think it was information sharing, is that in realtime? >> it can be. >> but is it? >> in some circumstances that i am aware it is not realtime >> was it realtime from the guy in uruguay. >> we can discuss that in closed

sessions. i welcome the opportunity do that today. >> of those 30 countries, are you able to track in realtime and even in retrospect, are you able to track, okay, this country did a good job of keeping up with their combatant and this country was okay or this country was lousy, is there a scale of rating those countries and their abilities? >> i am not aware of a scale. >> how do you know if the company does not do a good job, how do you determine that? >> by their record. >> boy, that'll be a scale, would it? >> it would be specific to the performance of the particular country they're monitoring and information sharing with the united states. if we are not satisfied, we would not transfer a new one to the same place. >> okay, that make sense. >> the discussion you had with

mr. duncan and isa, you talked about the release under administration bush and 530 were we leased and how much under the current administration? >> 159. i don't think that you and i agree on the fact that somehow bush released the good ones and obama released a bad one, thas a fair statement? >> correct. >> would you say they were rough legislative equal? >> i can generalize. each case is different. what i was trying to do is push back against suggestions that bush released the easy ones and we only have the hard ones. >> is it safe to say, well, without the specifics you cannot know that. in general, one reasonable person may make that assumption. >> we are talking about specifics and not generalizat n

generalizatio generalizations. that's why we are here and we requested to speak with you in close sessions. a lot that is said including g uruguay is in active. >> i am happy to tell you. >> we'll come back to that. >> mr. wolosky, i am out of time. >> let me say, thank you, we are all on a time limit >> can i make one comment though? >> yes, sir. >> there are 29 detainees that are currently eligible to transfer who we believe we can transfer responsibly. >> can i make a suggestion? >> don't send them to uruguay. >> many of them are in yemeni. >> mr. woslosky, back to you. >> you mentioned earlier that

the guy got -- what would an additional two months done in your opinion? >> this individual was frankly a problem from the moment he landed in uruguay and i will tell you that and up front about it. his resettlement was difficult. >> we are not repopulating guantánamo. >> thank you mr. chairman, i yield back. >> we go to mr. joe wilson in south carolina >> thank you, leadership on this issue. it is so important and i have had the opportunity to visit guantánamo twice. to see the personnel there and the professionalism of our military. and it is a place where terrorists should be. in my home state of south

carolina, we learned a lesson. there is one terrorist in charleston, he had a consequence, he's attracted more terrorists. the thought of going to the united states -- or releasing them and it is interesting you said yemen, you release people to yemen which was supposed to be an example of great success by this administration of establishing a stable country and within days of releasing and partnering, terrorists, the country collapsed. it is interest to know, what did happen to the person who's been released to yemen previously. >> we do not release -- these

are the same people of the announcement of junior varsity committed murders in san bernardino and mass murders this week in baghdad and over and over again has been a dismissal to threats of the american families. >> this administration is consistent by reaching a nuclear deal providing tens of billions of dollars to a state's sponsored terrorism. last week the funding has been provided by iran to hamas of the attack and etcetera, and on israel. it is extraordinary to ignore this and we come to part ddonin

and returning, it is uncon sleevable. >> as you talk about recruiting tool. it is releasing people and not being serious about detaining people who have every intent to kill american families. and it is really interesting to me that they don't use the argument that it is a -- people know that they can be incarcerated. they are less likely to commit a crime or killing american families. i am grateful and even cnn yesterday reported that the u.s. officials have said that 44 years old a syrian national went off the radar in uruguay where she was reestablished in 2014 and prior to 20009. uruguay told cnn that diab was

considered a refugee and she would not need permission to leave the country. he would only need permission from foreign country to enter to get detain tees in uruguay point. >> there is a truth from cnn and i hope you look at and will reconsider what you are doing and that's the disappearance could provide fuel for an effort to close facilities in guantánamo especially if diab is found to join a terrorist group. 118 have returned to the faith and 86 of suspected to returning and a -- by releasing these people and pardoning people, american families are at risk

around the world. i hope that you will reconsider what you are doing. i am grateful of the washington post, the former secretary of navy, gordon ingram, he has sworn that the process of releasing did work. that what is being done is that with 200 detainees when we departed, none have been approved for release under the president more than half have been released. he has conducted the administration statements by the contrary of the white house or misleading at best. so i hope that you will really reconsider and understand of terrorism. this is not an academic exercise

of detur -- and i yield my time. >> do any of you believe that americans, gitmo involved with criminal of detainees? >> not aware of that. >> so the president has made it a national security imperative that we close gitmo. this we are told that he has to close gitmo because its got such a bad reputation but yet from what you just said, we know that those charges are not true. is that right? >> um -- we have a propaganda campaign going on by the enemies of the united states and

trackers against the united states against us claiming there is some kind of major criminal mistreatment of prisoners in guantánamo and neither one of you know as an example of that or the fact that is there was one or two instances certainly did not reflect what was going on in guantánamo, correct? >> the issue is wrongfully so there are many people around world and many countries who think that there are things that went wrong in gitmo. >> right. >> they perceived of what happened. >> let me correct it. now that a lot of people who think that, there are people who hate our country for promoting that knowing it is not true. lets get this in your mind. this is not nice american politics. this is in a criminal manner where the president would like to think these terrorists are american criminals.

this is people who hate our way of life and they are engaged in organized efforts to terrorize civilizations by murdering levels of non-combatant. >> we try to handle this. we got a president making national imperative to getting into people and by doing that adding some sort of credibility to whom? to the charge that our people who are working in guantánamo are a monbunch of ghouls who ar torturing people. there maybe one of two instances where they did something wrong. by and large you know and we know that the prisoners in guantánamo are treated brutally.

it will be seen and is seen as a sign of weakness by terrorists all over the world. this very act we are talking ant is encouraging those people who will murder non-combatives. lets get to those who were released by bush. i know leaders of afghanistan were picked up. they were in afghanistan at the time of our regions and a lot of situations like that. obama has released 159. i think it is a bit disconcerning, again what this administration insists on treating these terrorists as nothing more than criminals. that's why perhaps the president

finds it impossible to say the word, radical islamic terrorists." by doing so, again seeing as a weakness, the president is actually encouraging terrorists around the world to take advantage of this weakness and take advantage of the fact of what we are really to retreat if we have a propaganda campaign. i am glad to hear that we actually are suggesting that our guys did not commit all sorts of -- against these people. 159 that's released, what is disconcerning is that when i hear that we don't have proof but this number of these people have not committed in any other acts they have been released. i would like mr. isa trying

to -- it is absurd. it is so bad and the fact is we -- if we are waiting for evidence to prove before we could say. well, we think it is probable that they have been involved because we know what kind of people they are. that's one thing. >> what we are being told unless we have evidence that they kill americans or innocent people, we are going to assume that they have not. well, that's a way, this is not watching out for the security of interest of ts of the people of united states. this is projecting weakness and it is making sure more americans die and if nothing else giving in and having a press of the united states insisting on treating terrorists as if they are american criminals which will do nothing but encouraging terrorists over seas. >> we got a mike mccall from

texas. >> thank you, mr. chairman. the president campaigned on a practi promise to close guantánamo, is it fair to say that fulfilled? >> it's difficult to say. as you know, we're asking the congress to reconsider its position on bringing a small number of detainees into the united states, where as you know better than most, congressman, our federal prison system has a 100% success rate in safely incarcerating over 400 convicted terrorists. >> so the current plan is to process 29 transfers out of gitmo, which would leave -- i think there's 79 detainees, that would leave 50, i guess, at

guantanamo, right? >> that's correct. you know, the -- there are ten that are in some phase of the commission process, being prosecuted or serving sentences. the periodic review board process is ongoing. so it's possible that the number of detainees who are approved for transfer will increase. but your round numbers are generally correct. >> i was down there, i saw shake muhammad, evil incar nat. so the 50 remaining, is it your intention to -- we passed under the congress under the national defense authorization bill an express prohibition against bringing these detainees into the united states. this administration will honor that legal restraint, correct? it will follow the law? >> as the president has said, his intention right now, his goal is to work with the

congress to change the law. >> okay. what is the status of the trial of khalid shaikh mohammed? why is it taking so long? this has been since 9/11. >> sir, i'm a former federal prosecutor. other people are better placed to answer your question. but broadly what i'll tell you is, it's a new process, so everything is new. there's no precedent. there are a bunch of very good defense counsels. and the judge is being careful and deliberative. we have a very good chief prosecutor, chief martins, who's trying very hard. but it's just -- you know, to do the law carefully, as you know, sir, is a careful -- >> i know the defense counsel filing a lot of motions. pretty nice courtroom down there. there are 50 detainees that -- tell me how many of those will be facing military trials?

>> right now, there are seven that are in motions phase. the alleged coal bomber. and one more al qaeda leader. there are three in the sentencing phase. and we're continually looking at the others to see if there can be a case. but i'm not best placed to tell you where we'd be. >> we know 13 released have been implicated in attacks against the united states, or coalition forces in afghanistan. not a good number. let me ask you this question. has the administration ever refused to send detainees to a country because it could not provide adequate security? >> absolutely. there are many countries that we look at that we ultimately determine are not suitable for this. >> you mention a lot of these

detainees you want to transfer out are yemenese. yemen is a failed state, in my judgment. and it's in a really bad state of affairs. yet the huthis down there, you have al qaeda, in the arabian peninsula still plotting against the united states. can you tell me definitively you will not be sending these detainees to yemen? >> yes. >> okay. that's a very good answer. what country would most likely receive them? >> i'd prefer to talk to you in closed session about that. i mean, what i will say, as you know, generally we prefer repatriations to resettlements because of the language skills, family connections. in this case, that's not going to be possible for yemen. so we are looking at other

alternatives. >> last question. the saudis have a pretty good deradicalization program. have you considered that? >> yes. in fact, we transferred a number of the yemenese, i believe nine to saudi arabia in april. >> okay. i see my time is expired. thank you. >> thank you. i want to get back to the issue of what you told this committee in march. just in closing here. we asked specific questions about the transfer of detainees to countries ill equipped to handle them. and specifically, we asked whether the department of defense ever transferred a detainee to a country that it knew was incapable of maintaining control of that individual, and keeping him from returning to the battlefield. and mr. lewis responded no, and mr. wolski stated he was not aware of such an instance. the committee's response to the

letter, though, sent just this week states, that the law doesn't prohibit us from sending detainees to countries that have partially derogatory intelligence assessments. now, partially derogatory, in common terms, means can't contain. or at least are seriously challenged in containing those terrorists. so why didn't you cite the law instead of suggesting to the committee that detainees were not being transferred to countries that were incapable of maintaining control of them when it is so clear that they are? that's the point i wanted to make. that's why this seemed to me like misleading the committee. and while i appreciate the witness' willingness to speak to us in a classified setting, which we'll take advantage of, that can't hide the fact that these issues can and have been

discussed very productively here today. as you can see, we have serious concerns about this policy. and we'll continue the conversation. but i do want to thank the witnesses, and thank the members of the committee. and the committee is adjourned. >> thank you, mr. chairman.

>> on "american history tv" on c-span3, saturday afternoon at 1:50 eastern -- >> memoirs, always you have to be wary of, because not only are memoirs just by their genre bound to be self-serving to a degree, but the -- they also -- most of these people did not want to disclose too much. and in some cases, they may actually dissemble, and to try

to mislead people. >> historians talk about the techniques used by the cia and russian foreign intelligence service to gather intelligence, dating back to the cold war and how that has changed since the 9/11 terrorist attacks. at 6:00, examination of race relations in post-civil war memphis. >> many whites thought this is it, it really is happening. a full-scale black uprising. and they panicked. mobs of white men armed with pistols and clubs formed spontaneously downtown, marched to the scene of the shootout, and began shooting, beating every black person they could find. >> the 1866 riot that resulted in the massacre of dozens of african-americans, and the assault on freed women. also the role of federal u.s. colored troops stationed near the city. and just before 9:00, author and journalist walter isakson on benjamin franklin's american

national character. >> his view was that small businesses and startups would be the backbone of a new economy. and indeed one of the things that his group did was they made a set of rules and maxims for how to be a good startup entrepreneur and innovator. >> and sunday morning at 10:00, a road to the white house rewind. >> and in the music of our children, we are told to everything there is a season, and a time to every purpose under heaven. and for america, the time has come at last. >> you know that every politician's promise has a price. the taxpayer pays the bill. the american people are not going to be taken in by any scheme where government gives money with one hand and then takes it away with the other. [ cheers and applause ]

>> the 1972 republican and democratic national conventions. with richard nixon accepting the gop nomination for a second term, and south dakota senator george mcgovern accepting the democratic nomination. for our complete schedule, go to c-span.org. federal emergency management agency's top flood insurance official and small business owners recently testified before the senate small business committee on the cost of insurance. fema officials say it's important for the flood insurance program to draw a wider base of customers in order to lower premium costs. this is about 1 hour and 20 minutes.

good morning, everyone. and welcome. thank you for joining us today for our senate committee on small business and entrepreneurship hearing to discuss the need to avoid unaffordable flood insurance rate increases on small businesses. i want to begin by offering my condolences to the people of west virginia, who are dealing with the aftermath of truly devastating floods, which earlier reports indicate left thousands homeless, and took at least two dozen lives. i offer my thoughts, prayers and support to the citizens there who are burdened with this disaster, and encourage the federal agencies involved to continue their hard work to get these people the resources and assistance they desperately need. this hearing is an important step to begin a conversation in the senate about the national

flood insurance program well in advance of the september 30th, 2017, deadline for reauthorization. we're going to hear from two panels of experts and stakeholders to examine the details of nfib. i want to thank all of our witnesses for being here today. my role as chairman of the senate committee on small business and entrepreneurship, i'm making every effort to help small businesses along with all of our colleagues on the panel. this committee is working to shape policies that promote stability in the marketplace, so that businesses can operate with a long-term certainty they need to make strategic decisions. in the spirit, i believe it's important congress proactively works to avoid lapses in coverage, by passing a long-term reauthorization of the national flood insurance program well before next year's deadline. as many of us here remember, the

lapses in coverage in 2010 had major negative effects on the economy. it's extremely important for congress to thoroughly examine the program and carefully consider all potential legislative changes with plenty enough time for this body to take action, and prevent any unintended consequences from hurting the economy. to fully understand issues that the nfib has historically created for homeowners and small businesses in the marketplace, it's important to have a basic understanding of the changes in our country's flood policy. currently there are nearly 5.1 million flood insurance policyholders across the nation which represents a decrease over the last several years. after the big water insurance reform act was signed into law to help make the program solvent after hurricane sandy, many of these people, certainly many of my constituents in louisiana,

were outraged at unaffordable increases in their premiums, or the threat of that in the near future. rates were so dramatic in some cases, that some folks faced ten times the price of their previous premium. or even higher. it is not unheard of to hear horror stories of families paying $20,000 to $30,000 for a policy that had previously been $2,000 or less all on a modest middle class home. i met with many louisianaians about this, including folks who asked me to hand-deliver copies of their house fees to headquarters because of these drastic rate increases, they were not going to be able to afford their mortgages. furthermore, fema's mishandling of some cases of the waters act implementation involved inaccurate rate hikes that placed the viability of the

entire nfib at risk and caused real turmoil in real estate markets. not only in some cases did fema public inaccurate flood maps that could have permanently devalued the housing market, but they could have completely wiped out the life savings of many middle class homeowners and small business owners. our committee in new orleans last may, a resident lives in a home that was constructed at or above the nfip required elevation at the time of construction. in 2013, this resident wrote me that his flood insurance annual premium was increasing from $633 to $28,544 for an insurance policy worth $250,000. this is one of the many nightmare scenarios that we heard about on a regular basis.

and that was fueled largely by information from fema going directly to policyholders. because of stories like these, it was clear that the nfip needed an urgent fix to help homeowners and small businesses from truly unaffordable rate increases. in 2010, nfip expired four times for a total of 53 days, adding uncertainty during an already fragile housing market and delaying or canceling more than 1,400 home closings every day of that expiration. one of the major reasons for passing bigger waters in the first place was to ensure no lapses in coverage. fema's failed implementation of this law actually priced policyholders with excessively high rate increases that would have created lapses in coverage for other reasons. so congress acted in a

bipartisan fashion to pass a permanent legislative fix that provided relief to homeowners. unfortunately, fema was not as quick to implement these reforms, but under congressional oversight devised a plan to refund excessive overpayments back to many of the policyholders as mandated by the new law. going forward, we need to find a way to deal with the solvency of the nfip in a responsible way. but at the same time, not place this burden on the back of policyholders in an unaffordable way. it's important that we examine how fema spends every dollar of premiums paid into the system as part of this. i hope our conversations today will highlight the need for a long-term solution that prevents coverage lapses, and provides stability for small businesses who are trying their best to operate amidst rate increases and a track record of policy

changes and executive orders. so now let's get today's conversation started. again, i want to thank everyone for being here. and for participating. as always, we will invite any other members to submit opening statements for the report. that will be made a full part of the record. but we, as always, we want to get to our witnesses, and hear from them and have plenty of time for questions and discussion. our first panel is one witness, roy wright, the deputy associated administrator for insurance and mitigation at fema. in his capacity, mr. wright is responsible for fema's risk management mitigation and insurance programs which includes the national flood insurance program. welcome, mr. wright. it's good to see you.

we'll have questions after your testimony. >> good morning, and thank you, chairman vitter, and members of the committee. it's good to be with you this morning. thank you for the opportunity to testify about fema's efforts to strengthen the national flood insurance program, or nfip, and reduce the national loss to property caused by floods. after a disaster, it is crucial for a community's recovery to get local businesses back up and running. these businesses are at the heart of a community. often where the residents work, and get their resources. following a flooding disaster, having adequate insurance is a key part of a business's recovery. it is a powerful tool, and often the only tool available to home and small business owners. some reports suggest that nearly 40% of small businesses don't reopen after a flood. because they don't have the capital to rebuild, restock, or survive a sustained disruption.

the nfip serves at the foundation for national efforts to reduce the loss of property from floods, which are the most costly and frequent disasters in the united states. mr. chairman, as you know very well, flood insurance is a lightning rod in these halls. it is imperative to so many citizens, and the cost of insurance premiums hit the wallets of homeowners and small business owners directly. the passage of the bigger waters flood insurance format of 2012, and homeowners affordability act of 2014, they directed to make changes to major components of the nfip. both bitter waters 12 and the affordability act of 2014, each approached the sensitive subject in different ways. they both laid out congressionally mandated

reforms. including reducing subsidies for existing policies, for both residential and nonresidential policyholders, until they reflect the true risk rate. about 6.8% of our current policyholders are nonresidential, which includes businesses, nonprofits and houses of worship. nfip nonresidential policies provided up to $500,000 for building property, coverage and $500,000 for business related contents. the nfip policy allows a property owner to transfer their financial risk so that they can enable their recovery. before you can transfer the risk, you need to know you have a risk. and the greatest single way to inform on risk is with a pricing signal. all this said, there's been a stickiness to the criticism of the national flood insurance program in recent years. since assuming the overall leadership for insurance and mitigation program last summer,

we've laid out priorities to change that. in terms of how we change how we serve the customer, the product that we offer, improving how they understand the risks, reducing risks through mitigation, engaging private insurers, and continuing to implement the legislative reforms. let me highlight one of the elements. nfip's current $23 billion outstanding liability has resulted from premium subsidies colliding with catastrophic events. so to better diversify our financial risk in the future, fema is reexploring reinsurance to ensure the financial stability of the flood insurance program. we are currently working with the reinsurance industry on catastrophic flood modeling, gathering coats for the nfip, and exploring how to build the cost of reinsurance into the program. we are also engaging private

insurers on the primary market as we move forward. flooding disaster survivors can recover more quickly and more fully when they are assured against those losses. whether they purchase that insurance from the flood insurance program or through the private market. our priority is to ensure that as many citizens as possible are covered for flood damage. to that end, the coverage on the private market must be comparable to what we offer through international flood. and we need to be mindful of turning the nfip into the insurer of last resort, without the resources needed to map the risk in the nation, support proper land use including flood hazards, and have sufficient revenue to pay claims. finally, as directed by recent legislation, we're currently collecting data for nfip reforms and impacts on policyholders including small businesses. these data will feed into our work to design affordability

framework for the program due back to congress next summer. we want to meet the needs of the individuals in the community to protect themselves and their property from the most common costly disaster in the united states, while being transparent about their true risk to support community development. again, i thank you for the opportunity to testify today. and i look forward to questions from the committee. >> great. thank you very much. deputy administrator. i'll get started with discussion and questions. as you know, a perennial issue and problem in the program is the fact that historically, something like only 60% of folks required to have flood insurance have flood insurance. >> right. >> obviously that makes a huge difference in terms of the financial soundness of the program. we've been talking about this for several years with other

members. i've been asking what are we going to do differently to get that way up well above 90%. in general, the answer i've heard is, well, we're increasing the penalties for noncompliance. that always struck me as inadequate. just to sort of increase penalties on a piece of paper, but most people never are going to hear about that. what else has been going on, and what is the actual record, say, over the last two years of the percentage of properties that have to be insured actually under law, being insured? >> so a couple of points. first of all, i think what's really important about this kind of penetration rate and why it's so important, as high as the penetration rate goes, it actually brings prices down. it's imperative as we look at this. so we look at who is mandated under the law. it's those who have a federally backed mortgage.

so just the residential portion who have the federally backed mortgages. and so we look at the ranges, i looked at a number of studies. fema doesn't have a definitive number of structures that we can count. so we did a number of studies. and the ranges can go from the 40s to the 70% kind of penetration rate. we started asking questions, who's not covered. well, many businesses who outright own their property. people who own their properties outright aren't required, as well as folks who have their mortgage not federally backed. some kind of state or local business. under the flood insurance act, the responsibility for that enforcement explicitly does not reside with the federal emergency management agency. it belongs with the lending regulators. and we have provided data to them. we have collaborated with them. when i talked with them, they said, well, this is the standard part of the audits. i've spoken to bankers and lenders who tell me it is part

of what goes on, however i look at the penetration rates and they are insufficient. you speak about the penalties. obviously those are implemented by the regulators instead of by fema. i think to the degree that i've seen surges in people's insurance purchasing, is a point by which risks are understood, local government officials particularly help us advance this. and we see the synergy with the private sector. and just last year, some of it was tied to the pieces related to the el nino flooding. we saw an increase of policyholders, more than 30% in the state of california, because we lined those three pieces together. and so we've got to make the products are there to buy. and continue to work with the regulators. >> i don't want to cut you off, but as you suggested, this is a big deal in terms of the solvency of the program in terms of pricing.

so has fema figured out a way to track whether there's been an increase over the last two years, three years, five years? what is the record over the last several years? is there substantial improvement or not in terms of those properties that have to be covered under law being covered? >> so we have anecdotal evidence that says that -- >> let me stop you right there. >> that's all we have. >> i don't want to be rude, but this is such a big deal, why the heck are we merely talking about anecdotal evidence? this is a huge factor in terms of the solvency of the program. why don't we have a meaningful way to track this, to see if we're getting much better or not, and if we're not, which i'm certain is the answer, do something about it? >> we are maintaining -- over

the last year we've actually seen some growth in the mandatory purchase areas. you spoke about the decrease in policies. much of that happened in the areas that were the mandate was not in effect. some of that's tied to the $250 surcharge that was included. >> just to be clear, all i'm talking about now is mandatory. so what's the percentage within mandatory of compliance? >> i understand your point. when we went to the national academy of sciences and asked them this question, they came back and showed us a range. i'm committed to see the numbers go up, and the actions we can take there, and we will continue to redouble our efforts to give you better numbers. >> you mentioned that you're not in charge of compliance for that? >> correct. >> in this reauthorization, do you want power to make that happen? because it sure as heck affects things you have to deal with like solvency of the program. >> i think fema needs to have

a -- it has a role to play in this space. it comes from a pure enforcement perspective. i do not have a team of auditors who go across the country looking at the lending books, where the regulators already do. i think that's why it's always been assigned to them. but it's not producing enough of the outcome. so some adjustments need to be made. and we are willing to collaborate with those other regulators -- >> can fema think about specific suggestions that we can potentially put in a reauthorization to get this well above 90%? i don't know exactly what those are. they may involve the present regulators, they may involve fema, they may involve others, but this is a huge problem. >> it's already on my radar screen. i will take this back. it is something we need to deliver better for you. >> thank you. senator scott? >> thank you, mr. chairman. thank you, mr. wright, for being here this morning. as you're well aware, south carolina had a thousand-year

flood back in october. and we certainly appreciated the response of fema. i had the opportunity to go into sumter and manning that traditionally have not been hit by flood challenges and go door to door in communities and see the actual devastation firsthand. i certainly appreciate having a fail-safe, a position by the government to help out when necessary. i think it does, however, highlight chairman vitter's concern about the fact that we have a disastrous assistance program that doesn't compel or incent people to participate in some premium, some offset of what they anticipate as the federal government's response. very problematic, number one. so love to hear what you think would be positive, or constructive ways to incent folks to do something that they have no incentive to do. number one. number two, i spent about 25 years in the insurance business,

and 18 or 20 years selling flood insurance. when you talk about a premium going from $600 to $23,000, there's probably an issue of the original premium of $633, and without any question, a bigger issue of the premium of $23,000. so the process of re-rating communities is an important consideration. but maybe it was improperly rated initially. >> right. >> case in point, myrtle beach, south carolina. here's a community that during the 1,000-year flood, there were thousands of homes that were not impacted by a 1,000-year flood, that according to the new maps that are coming out, there will be 35,000 homeowners that will be required to buy flood insurance in areas where there hasn't ever been a flood to include the latest thousand-year

flood. so it brings into question, how we're mapping, where we're mapping, and is it actually accurate mapping. the 90-day period to respond, to petition the -- to provide a petition to say something's not working here, is it fairly a short amount of time -- i know it's codified in law -- but it seems to me that a longer period to dispute what the nfip comes to the conclusion would be helpful. >> let me take these in sequence. let me start with south carolina. i spent quite a bit of time with your insurance commissioner ray farmer following the event. and i think, mr. chairman, there's an interesting corollary we learned in south carolina. a hundred thousand households registered for individual assistance under the stafford act programs. 32,000 of them qualified. we paid flood insurance claims on 5, 200 households.

that's a big gap that was there. and it wasn't because the maps didn't show the area at risk. and i put some time in the communities, in the homes as we were going through this, and many of the neighborhoods in that midland area, in and around columbia, were rental properties. there was no mortgage. the landlord didn't have flood insurance. and the renter didn't buy contents insurance. but here's the fundamental difference. the average payment on individual assistance in south carolina was $4,500. while that gives a hand, it does not put anyone back. the average on the flood insurance claim was $25,000. you can rebuild things, you can put things back. so we get in this kind of space where i saw the power of it. and we're working with commissioner farmer now in terms of ways to see the insurance takeup rates move.

and i became particularly interested in those renters who didn't have coverage in this instance. you talk about the rating element, and the two extremes related to those prices. the original rate would have been one of those subsidized or grandfathered rates. that's how they have something sitting in the 600 range. we can debate the 23,000. but one of the provisions in biggert waters actually ledge slated an actuarial practice, which i think is something we need to be very leery of doing. and it required us to concentrate the risk, as opposed to mutualize it which is the way insurance normally works. and so we saw those extreme rates begin to play out. let's talk about the maps. as i've sat with some of the scientists with the thousand-year event first, i

applied that normally to what the columbia area experienced. i don't know that the area in myrtle beach experienced that level of flow. simply because myrtle beach was hit more of a coastal event, which theirs is more of a lower return interval. their maps in south carolina are done by the state of south carolina. we provide the funding to the state, who leaves that mapping effort in concert with the local communities. so our engineering standards, those dollars were put in the state to do the work. to make sure that we had the best data to drive toward accuracy. you highlight the last 90 days which is codified. but the mapping process with the communities lasted more than four years, with a series of public meetings. i don't know that we always get the right people in those meetings. and we are working now to make sure that across the board, how do we get not only electives,

but business leaders in the community engaging with us. if there are better answers, i want to know about them. but those maps are done in a way so that we do have something that is credible when it's done. >> last point. thank you, mr. chairman. >> you guys are now going through the process of engaging hopefully, successfully, and finding some reinsurance. which to me seems to be a no-brainer. >> absolutely. >> a necessity. it could have been, should have been, hopefully in the past, considered. i'm a little surprised, to say it kindly, that we have not had that process previously. >> so i can't speak to why my predecessors did not pursue reinsurance. what i can tell you is, in both -- particularly in the homeowners' flood bill, we were clearly directed to get to this,

which we did, and i'm on a course -- i'm spending a lot of time with the reinsurance community. i can never afford reinsurance to the full level of what i may experience. >> no insurance company ever does. >> exactly. but i began to look at these pieces about, if i have my premiums on hand, we have about $3.5 billion a year worth of premiums that are brought in. we have expenses we pay for out of that. i have a reserve fund that is now in place by the end of this year. we should be close to $2 billion in that. and then put a reinsurance layer on top of that. it would be inappropriate for me to say what would sit there initially. if i had that in place, i would not have borrowed money after sandy. >> no doubt. >> i would have had the layers in place. and there's clearly dollars available in the reinsurance

market today. there's an eagerness to come into this place. there are a series of legal procedures i have to walk through. but i have publicly said, and i will say here, it is my aim to be able to have reinsurance placed, and secured in calendar year 2016. >> the taxpayers will benefit tremendously on that notion. >> absolutely. >> given the true cost savings, and the number of catastrophic occurrences around the nation, and the definition of a flood zone today being so expansive. the ability to find that reinsurance today would be a cost saver to the taxpayer. >> i want to make sure that i -- i've got to build that into the price. so that we can afford that reinsurance coverage. >> that's a conversation we should have at some point in the future, since my time is completely up. but the difference between the price of something and the cost of something can be drastically

different. >> thank you. >> senator rubio. >> thank you, mr. chairman. thank you, mr. wright. i'm sure you know florida is no stranger to floods. i think last count, nearly 40% of all the national flood insurance program policies come from florida. i think it's the largest state contributor to the program. in fact, people in florida pay four times more into the program than they receive in claim payments. they have numerous businesses, and local governments, of course, expressing a tremendous amount of concern over not knowing how fema determines actuarial premium rates. so what are your plans, what are fema's plans for updating, disclosure, and transparency, and the determination of the basis for risk premium rates? >> so it is true that to date, florida has not received payouts at the level that they paid into premiums. that was also true for new york and new jersey prior to 2012. and so a large event, and you

know this very well, if a large hurricane hit the miami area, there would be large payments made out that would well exceed the kind of payments we saw in the sandy scenarios. i have been working with the insurance commissioner there in florida, because there's an interest in how are we setting our rates. some of them asked me to disclose all of my losses and what i've had to do is work under the privacy act. i can't hand all of that data over. so i have sat with a number of the folks from florida, and have begun to lay out a path, particularly given this reinsurance piece which is, how can i go through the modeling for reinsurance in a way by which i can provide the data they want to see. we have released our actuarial practices guide. but folks want to see more

insight on a policy by policy basis. and we are working in tandem with the reinsurance effort to provide much more data about the policies, the payouts, and the pricing. >> you mentioned the office of insurance regulation. you remarked in a letter to them that fema is constantly reviewing its methodology. are you continuing to refine this methodology, how do we guarantee people in florida, middle class floridians and others, who bear the brunt of these rate increases, that they're not discriminatory? in essence, what exactly is fema going to do to complete its guarantee a fair and equitable rate for the people of the state of florida? >> right. if i set aside the part of my book that is the grandfathered or subsidized rates that are set -- there's congressionally mandated subsidies put in place. the actuarial part of the book, we look at an entire class, and

we do meet the standards and we've been audited and reviewed and they have said, yes, these are the actuarial rates. this spring, i made an effort to take the pieces that the national academy of sciences gave me this year, and look at the methodology which i believe is antiquated, most of it rooted in the '80s, and said, we've got to advance down this path. over the next two years, i think we'll be able to demonstrate recognizable progress on that. and i think you'll see elements of transparency as part of that. >> one more point. pinellas county in particular, it has more nfip policyholders than 43 states. it recently received an award for an initiative. they created an app to better map the parcels in flood zones. that's an example of the kind of innovative solution that

localities have the ability to create. how does fema plan these initiatives? >> it is based on data that we put forward. we're doing this in two ways. we've moving the technology side to the national level, and ensuring that our data is open sourced. you're talking particularly about the flood risk data. so that at a local level, they can use it and push it in a way forward. through our mapping efforts, which congress, we appreciate, has restored us back to the higher levels of funding that we had not had in the preceding five years. wer making more of those investments in the technology and the data. i'm particularly interested in ways by which i can take the data and set them up so that app developers can take them and move them that best meet the needs of locals. >> okay. thank you. mr. wright, i want to have plenty of time for our second panel. but i want to highlight three

areas that will send you, for the record, and you can submit responses for the record. one is north carolina program of putting the state in charge of mapping, and according to the national academies, that's produced more accurate maps at lower costs. i want to ask you what you think that says about what fema should be doing more broadly with regard to empowering states and using states and/or locals as senator rubio said, and widear and new technology and where fema will be moving with that. number two, in 2004, congress passed legislation to make icc grants available before a flood where there's an offer of

pre-flood mitigation. and as i understand it, that's not being implemented by fema now. so the question is, why not? and when is that going to be properly implemented? and number three, i want your assurance about giving proper credit to all flood control features in an area which did not happen in the recent past. certainly in louisiana. are we doing that now, ensuring that all actual features on the ground, whether it addresses hundred-year risk or lower, is given proper credit in mapping? >> i appreciate that, sir. we'll make sure we get back to you on all three of those points. >> great. thank you very much. and now i'd invite our second panel of stakeholders to the witness table. and as they come up and get settled, i'll be introducing them.

mr. kevin roebls is from tampa, florida. he's been a licensed residential contractor in the tampa bay area since 1980. and has experience working for both private and public builders who sell numerous roles within the tampa homeowners association serving as president of tampa bay's home builders association in 2011. lucille strauss serves as chair of the state flood plane managers. miss krause has been involved with the flood plane program since 2002 as an area hydrologist in the twin cities area. mr. david mckey is broker and owner of caldwell banker one, a real estate company in baton rouge, louisiana. mr. mckey has been a licensed realtor since 1992 working in

the baton rouge markets. additionally served as president of the louisiana association of realtors and currently is the vice chair of the national association of realtors insurance committee. and mr. randy noelle is the president of reeve, inc., in le plas, louisiana. and serves as the 2016 second vice chairman for the national association of home builders in new orleans. mr. knollle founded it in 1985 and since built 1,000 custom homes in the greater new orleans area. he has more than 30 years of experience in the residential construction industry. welcome to all of you. thanks for your participation. each of you will have five minutes to testify before us, and any additional comments, written material, will be made part of the record. with that, we'll start with mr.

robles. >> chairman vitter, ranking member cheney, and members of the committee. thank you for the opportunity to testify today. my name is kevin robles. i'm a builder from the tampa bay, florida, market. i'm here to discuss how drastic rate increases in flood insurance have affected the housing affordability and my company's ability to meet the housing needs of my community. i will specifically address the flood insurance rate maps and their impact on the housing industry, most of which are small businesses. in 2012, the passage of the biggert waters brought on dramatic increases that negatively impacted home sales. rates doubled and tripled and homeowners were stuck paying for policies they could not afford. homeowners and home builders quickly saw the unintended consequences of the legislation, specifically on the grandfather or pre-firm properties. these rate increases took place when the housing market was still in recession.

a flood in my home state was one of the hardest hit. housing prices in florida fell 44%, far outpacing the national decline of 10%. today's housing prices remain 22% below normal. any negative change to the market such as flood insurance rate increases have long-term unintended consequences for florida's economy. as a small business owner, with at least a quaert of my customer base, active or retired military, i am constantly reminded of trying to keep housing prices affordable. in florida, every $1,000 increase in the home pricing, is overpriced 8,000 households. the pre-firm and grandfathered properties immediately increased on the sale of the home and fema is required to refund homeowners

whose rates have already increased. fema is required to notify the community affected and their congressional delegation before updating the new mapping models. although there are many positive changes that arose, i would like to discuss some of the problems the builders and small business homeowners face and their impact on affordability. in florida, there are a large special hazard flood areas. it is extremely difficult to avoid building in these flood planes. it can take months and cost hundreds of thousands of dollars to change the flood maps or elevated property. inaccurate maps are extremely problematic for builders. one of my builder colleagues realized the land had been incorrectly mapped into a flood plane. he had the funds to pay for the survey work and a staff who

could fill out the application and worm with fema. small business owners particularly those trying to start their business do not have staff and funds at their disposal to go through the labor intensive application and often complex application process. fema neglected to factor in privately funded structures or drawing rivers and streams where none exist. homeowners are being incorrectly mapped into flood planes and forced to purchase unneeded flood insurance. it typically takes years for these mistakes to be fixed. often requiring a lecty and costly process for the community builder and homeowner. thankfully florida has a year-long construction season, but states with colder climates and shorter construction seasons experience devastating costs and delays waiting for fema to approve their requests. i would like to thank the chairman and the committee with the opportunity to testify today. the increasing costs for flood rates and the lack of

affordability and inaccuracy in mapping have long-term problematic effects. we need to ensure that the next nfip reauthorization is done thoughtfully, to prevent the affordability concerns that we have seen. >> thank you very much, mr. robles. now we'll turn to miss stratus. welcome. >> i'm glad to be here today. first and foremost, we must understand that the national flood insurance program, or nfip, is far more than an insurance program. it includes flood plane management regulations and a mitigation component to help reduce damage to older at-risk buildings. this is a multi-faceted, multiple objective program as a four-legged stool is often referred to. these four components of the nfip work together to reduce future flood damage, and associated costs for businesses and landowners as well as taxpayers.

the adoption of flood plane management standards by more than 22,000 nfip participating communities results in $1.7 billion in flood losses avided annually according to fema data. the mitigation program within the nfip, the krin esed cost compliance and flood mitigation assistance have mitigated on average 1,850 buildings annually between 2010 and 2014. the nfip program will need to be reauthorized in 2017. the program needs to be made more fiscally sound to give business owners and homeowners about their risk, and promote mitigation. flood insurance affordability was largely ignored in the previous two reform bills and must be addressed now. there are numerous innovative

ideas to support the affordability, and we must bring all of the tools including those outside the nfip to bear on this issue. affordability should support mitigation, rather than subsidize insurance premiums only. our written testimony details the other priorities for the 2017 reauthorization. meanwhile, legislation to further promote the growth of a private market for flood insurance is making its way through congress. we support private sector investment and writing flood insurance and recognizes a valuable contribution that private sector currently brings to the table. in fact, the changes congress made in 2012 to promote private flood insurance market is working, and we are seeing an emerging but vigorous private market that is interested in able to write primary or first dollar flood policies. however, we have concerns with the proposed private insurance bill f 1679, in addition to other unintended consequences,

the two main issues are the lack of a fee equivalent to the nfip federal policy fee on private policies. this fee pays for flood mapping and elements of the nfip. elements of the private sector also depends on it. and the lack of the provision to assure that private policies for mandatory purchase would only be sold in nfip participating communities. we'd like to see this to avoid communities dropping out of the program and not enforcing the flood plane management regulations. we're strongly opposed to schemes that relegate the nfip to a residual market or a market of last resort. the most frequent and costly natural disasters, the recovery from major flood disasters often takes years and affects homeowners, businesses, schools, and others. impacting local economies and social resilience. small businesses which are the

economic engines for most communities need immediate access to funds for repairs, for replacement of inventory, and/or equipment, as well as for mitigation of future disaster losses. analysts report that of small businesses affected by floods, that cannot reopen within a month, 50% will never reopen. as flood losses increase, the nation will continue to need a robust fiscally strong nfip to comprehensively reduce flood risk. thank you. i'd be happy to answer any questions. >> thank you very much, miss strauss. now we'll turn to mr. mckey. welcome. >> thank you, chairman vitter, and thank you for the opportunity to be here today. my name is david mckey. i am the managing broker and owner of caldwell banker one in louisiana, your home state. i'm here today representing the views of 1.1 million members of the national association of realtors.

as vice chair of the insurance committee 2013 president of louisiana realtors, and a small business owner, i bring a unique perspective on the need for flood insurance. chairman vitter, realtors appreciate your continued leadership on flood insurance, and especially your hard work last congress. you were one of the original team of senators and house members that drafted the homeowner flood insurance affordability act. i'm pleased to report the affordability act has succeeded in reining in the most inaccurate rate increases across the country. while the act resolved the most immediate and pressing issues, a few remain that we'd like to bring to your attention. the affordability act say the rates will increase no more than 25% per year, even if properties sell. this resolves some ambiguity in the biggert waters law and provided clarity that fema did

not. since then, nfip rates have been gradually increasing. however, the market has calmed, and real estate transactions are moving. the law did not, however, eliminate the threat of $30,000 flood insurance. under the affordable act, rates keep escalating 25% each year until property owners reach the full cost rate. the problem is, property owners have to prove the full cost before they can get off the escalator. some small businesses may be stuck paying too much already. most are not being informed that they could pay less if they provided an elevation certificate. some are afraid they will pay $100 or $1,000 for an elevation certificate, and either their rates will not change, or they may possibly go up. what's worse, we don't know how many small businesses are facing

extreme flood insurance rates at the top of the escalator. fema does not collect elevation data on structures built before the first flood insurance rate maps. without this data, we do not know the scope of the affordability issues in the program, or funding needed to solve the program. i have several recommendations i'd like to share with you. congress needs to act before september 2017 when the nfip sunsets. nar urges congress to reauthorize a program on time and for a minimum of five years. shorter term extensions only exacerbate the market uncertainty, and will disrupt property sales where flood insurance is required for federally funded mortgage. 1 million nfip insured properties are not yet paying full cost. the more these properties that

are mitigated, the lower the nfip rates will be and the less the taxpayers will be exposed to future borrowing. while the federal government already provides substantial mitigation assistance, most property owners cannot access that assistance until after the property floods, when costs go up, and funds won't go as far. nar encourages congress to look governmentwide at all mitigation programs to find access before flooding and head off premiums while there's still time and the lower cost options are available. realtors believe that private insurance alternatives can provide a compliment to a strong and vibrant nfip. the combination of private market option and a strong nfip will ensure that flood insurance

remains available in all markets at all times. we urge the senate to take up and pass hr-2901, the modernization act, and allow consumers to shop around for comparable coverage. fema's attempt to publish reasonably accurate flood maps based on reasonable resources, fema attempts to public accurate maps based on their resources. the agency relies on property owners and communities to spot inaccuracies, and provide the data and analysis needed to suppo support corrections. the state of north carolina, on the other hand, uses lidar to collect that data so property owners won't have to buy elevation certificates. based on the information nar has gathered so far, using lidar to map the nation will take a modest investment by congress,

to produce benefits that are four to five times the cost. with that data not only would fewer property owners have to appeal, but also it would give congress the elevation data it needs to determine and address affordability issues. and next year's reauthorization bill. i do want to thank you for the opportunity to testify today. and nar greatly appreciates the committee's work. and realtors look forward to working with you and congress to get the renewal of the insurance program before september 30th of 2017. this is incredibly important for my state of louisiana, and i think very important for the country. thank you. >> thank you very, very much mr. mckey. and now we'll turn to mr. randy noelle. >> thank you, chairman vitter, and senator rubio. for the opportunity to testify today. my name is randy noelle.

i'm a home builder from laplace, louisiana. nahb has a long history of support for the nfip. in the past a few major disasters, the solvency has been threatened. many thought biggert waters would assure the fiscal soundness of the nfip. but there were major consequences to the housing industry. it triggered an immediate shift to full risk rates. with nonprimary home premiums increasing by 25% of the full risk rate each year. across the country, builders witnessed how drastic rate increases were negatively affecting home sales and saw rates increase ten-fold over what homeowners were previously paying. one louisiana buyer bought a home only to realize the flood insurance rates had increased from $400 to the full risk rate

of $13,000. this problem wasn't only affecting homeowners, i had a friend of mine who had a small home building business in louisiana, and his insurance rate on his office building went from $400 -- $4,000 to $40,000. one neighborhood near my home in st. charles parrish became fully devalued because the flood rate insurance increases. they were required to build 11 feet above the ground because of a levee that never flooded. however, the levee wasn't maintained by the core, and had been there for 70 years, fema wouldn't accredit it the levee. homeowners in that neighborhood were paying between $12,000 and $17,000 in flood insurance. they couldn't sell their homes. they couldn't make their

payments. the community mailed fema the key to their homes. they told fema to keep their keys because the homes were now worthless. the rate increases also have a direct impact on small business home builders. captions copyright national cable satellite corp. 2008 captioning performed by vitac