[Senate Hearing 110-774]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-774
 
 REBUILDING THE GULF COAST: SMALL BUSINESS RECOVERY IN SOUTH LOUISIANA 

=======================================================================

                             FIELD HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP



                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 20, 2008

                               __________

      Printed for the use of the Committee on Small Business and 
                            Entrepreneurship


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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                 JOHN F. KERRY, Massachusetts, Chairman
CARL LEVIN, Michigan                 OLYMPIA J. SNOWE, Maine
TOM HARKIN, Iowa                     CHRISTOPHER S. BOND, Missouri
JOSEPH I. LIEBERMAN, Connecticut     NORMAN COLEMAN, Minnesota
MARY LANDRIEU, Louisiana             DAVID VITTER, Louisiana
MARIA CANTWELL, Washington           ELIZABETH DOLE, North Carolina
EVAN BAYH, Indiana                   JOHN THUNE, South Dakota
MARK PRYOR, Arkansas                 BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         MICHAEL B. ENZI, Wyoming
JON TESTER, Montana                  JOHNNY ISAKSON, Georgia

                 Naomi Baum, Democratic Staff Director
                Wallace Hsueh, Republican Staff Director








































                            C O N T E N T S

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                                                                   Page

                           Opening Statements

Landrieu, Hon. Mary L., a United States Senator from Louisiana...     1
Vitter, Hon. David, a United States Senator from Louisiana.......     8

                           Witness Testimony

Cornelius, Eugene, District Director, U.S. Small Business 
  Administration, Washington, D.C................................    15
Roach, Hon. Randy, Mayor, City of Lake Charles, Lake Charles, 
  Louisiana......................................................    22
Landry, John T., Director of Development, University of Louisiana 
  at Lafayetteville, and Chairman, Infrastructure Committee, 
  Louisiana Recovery Authority, Abbeville, Louisiana.............    30
Swift, George, President and Chief Executive Officer, Southwest 
  Louisiana Chamber of Commerce, Lake Charles, Louisiana.........    49
Manuel, Carl, Owner, Anna's Pies, Inc., Lake Charles, Louisiana..    60
Little, Donna, Director, McNeese State University Small Business 
  Development Center, Lake Charles, Louisiana....................
Darbone, David, President, Grand Oaks, Inc., Lake Charles, 
  Louisiana......................................................    73
Lazare, Sheri, Director, Enterprise Consortium of the Gulf Coast 
  Women's Business Center, Lafayette, Louisiana..................    77
van de Werken, Donald C., Director, New Orleans U.S. Export 
  Assistance Center, New Orleans, Louisiana......................    80

          Alphabetical Listing and Appendix Material Submitted

Cornelius, Eugene
    Testimony....................................................    15
    Prepared statement...........................................    18
    Response to post-hearing questions from Senator Landrieu.....    94
Darbone, David
    Testimony....................................................    73
    Prepared statement...........................................    75
Landrieu, Hon. Mary L.
    Opening statement............................................     1
    Prepared statement...........................................     4
Landry, John T.
    Testimony....................................................    30
    Prepared statement...........................................    33
    LRA Economic and Workforce Programs, disaster funds 
      allocated, and new requests................................   127
    Response to post-hearing questions from Senator Landrieu.....   109
Lazare, Sheri
    Testimony....................................................    77
    Prepared statement...........................................    79
    Business Establishments within Rita-Damaged Areas, map.......   126
    Response to post-hearing questions from Senator Landrieu and 
      Senator Vitter.............................................   117
Little, Donna
    Testimony....................................................    66
    Prepared statement...........................................    68
    Response to post-hearing questions from Senator Vitter.......   114
Manuel, Carl
    Testimony....................................................    60
    Prepared statement...........................................    62
Roach, Hon. Randy
    Testimony....................................................    22
    Prepared statement...........................................    25
    Response to post-hearing questions from Senator Landrieu.....    99
Swift, George
    Testimony....................................................    49
    Prepared statement...........................................    51
van de Werken, Donald C.
    Testimony....................................................    80
    Prepared statement...........................................    82
    Response to post-hearing questions from Senator Landrieu and 
      Senator Vitter.............................................   120
Vitter, Hon. David
    Opening statement............................................     8
    Prepared statement...........................................    10

                        Comments for the Record

Questions and comments from the audience.........................   144


 REBUILDING THE GULF COAST: SMALL BUSINESS RECOVERY IN SOUTH LOUISIANA

                              ----------                              

                      WEDNESDAY, FEBRUARY 20, 2008

                      United States Senate,
  Committee on Small Business and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 1:38 p.m., in the 
Buccaneer Room, Lake Charles Civic Center, 900 Lakeshore Drive, 
Lake Charles, Louisiana, Hon. Mary Landrieu, presiding.
    Present: Senators Landrieu and Vitter.

  OPENING STATEMENT OF HON. MARY L. LANDRIEU, A UNITED STATES 
                     SENATOR FROM LOUISIANA

    Senator Landrieu. If everyone would take their seats, 
please, I would be happy to call the meeting of the Senate 
Small Business Committee to order, a field hearing, our first 
one in the State of Louisiana, I am proud that Senator Vitter 
and I could direct this meeting here in Lake Charles, 
Louisiana, in southwest Louisiana.
    I want to begin by thanking the Chair of the Committee, 
Senator Kerry, and the Ranking Member, Senator Snowe, for 
allowing us to have this field hearing in Louisiana. Both 
Senator Vitter and I have the pleasure of sitting on the Senate 
Small Business Committee. We asked specifically if we could 
have a field hearing in Louisiana and chose this site because 
of our focus on small business development, how it is being a 
part of the recovery from Hurricanes Rita and Katrina, and how 
small business has been impacted and how it is growing after 
the storms, and what the outlook looks like.
    So we have a very full panel. I want to also thank the 
staffers of Senator Kerry and Senator Snowe who have joined us. 
I want to acknowledge that while he has not been asked to give 
formal testimony today, we are pleased to have the Small 
Business Director from the Dallas Region, our region, the 
office in Dallas, Joe Montez. Joe, would you please stand? We 
welcome you and thank you for being here.
    [Applause.]
    Senator Landrieu. I am also pleased to have in the audience 
Michael Ricks, who is the new Regional Director for our region. 
He will not be testifying officially, but will be available for 
questions and comments. Michael, would you please stand?
    [Applause.]
    Senator Landrieu. And Mr. Eugene Cornelius, who will be 
testifying today, has been the Director of our region here in 
Louisiana for the last several years, has just been relocated 
to another part of the country, so will be delivering the 
testimony as he has been really the engineer of most of this 
recovery.
    Let me also thank Mayor Randy Roach. Mayor, thank you and 
your city council for hosting us today. And I also want to 
thank all of the other State and local officials that have been 
part of this hearing and the small business leaders, the 
chamber that helped us to put this hearing together today.
    So we have a wonderful list of panelists. I will introduce 
them in just a moment. We are going to have two panels. We hope 
to move through this in the next 2 hours. But let me just make 
very brief opening remarks, and then I will turn it over to my 
colleague, Senator Vitter.
    The hurricanes, both Hurricanes Rita and Katrina, were two 
of the costliest hurricanes in the history of our country. 
Hurricane Katrina's eventual or to-date cost is $81.2 billion. 
Hurricane Rita caused $11 billion in damage. Together, almost 
$100 billion in a double-whammy, two-punch hit to the Gulf 
Coast, but particularly to the southern coast of Louisiana, 
both on the southwest side with Hurricane Rita hitting and then 
on the southeast side as well.
    All of us, homeowners and businesses alike, felt the 
brunt--our public institutions, our libraries, our schools, our 
colleges, and our universities. But the small business 
community, you could argue, maybe took the greatest hit of all 
because small business by its very nature has less resources 
than large business or public entities. Our business owners, 
20,000 of them, were impacted in the State of Louisiana, were 
directly--their businesses either destroyed or severely 
damaged, their physical infrastructure. If their business was 
not destroyed or damaged, their markets were most certainly 
impacted by the loss of over 1.3 million people that fled this 
area for higher ground. And some of our people are just now 
returning after 2 1/2 years, trying to re-establish their 
homes, their churches, their businesses, and their schools.
    So this hearing is really to focus on the recovery of small 
business; what we have done that has helped; and what we need 
to continue to do. I would like to note that for the port of 
Lake Charles, which is a very significant entity here, we were 
pleased to pass a WRDA bill, Water Resources Development Act, 
that has some additional infrastructure improvements and 
investments to the port. That port alone helps to generate 
about 31,000 jobs in this area. Many of them are jobs 
associated with small businesses, contractors, fabricators, 
importers, exporters, et cetera.
    We also are very proud in southwest Louisiana to have 20 
percent now of the Nation's natural gas supply coming through 
southwest Louisiana. So I spend a great deal of my time 
reminding people in Congress that this just isn't any dot on 
the map. This is a very significant place, not only for the 
people that live here and call South Louisiana home, but it is 
a very significant place on the map for the United States of 
America and our oil and gas supply that is dependent on the 
vitality and economic strength of the business community here.
    And, in addition, we are going to hear some testimony about 
specifically the small businesses, the 6,700 businesses, some 
of which are here in the southwest area, that were helped 
through the Small Business Administration, and then what is 
left to do, because there is a great deal of work left to do. 
But I am proud to be a member of this Committee. I know Senator 
Vitter is as well. And our continued focus in this Committee's 
bipartisan efforts to help the SBA to be a better effective 
advocate, to help the LRA, to help the State, and to help the 
small businesses in any way that we can to grow and expand 
right here at home.
    [The prepared statement of Senator Landrieu follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Vitter?

OPENING STATEMENT OF HON. DAVID VITTER, A UNITED STATES SENATOR 
                         FROM LOUISIANA

    Senator Vitter. Thank you, Mary, and welcome to all of you. 
Thanks for being here.
    I also am excited to help bring this field hearing here 
specifically to southwest Louisiana, and we wanted to do that 
for a number of reasons, including that we always need to 
remind Congress and the Nation of one word, ``Rita,'' in the 
grand scheme of things and everything we have dealt with since 
2005. So this is another great opportunity to do that.
    It is largely a ``good news'' story here in terms of 
recovery. There are plenty of hurdles and challenges that 
remain, but I think the recovery in this part of the State has 
been very impressive. And although we are going to talk about a 
lot of Government programs and opportunities, the fundamental 
reason is the people of southwest Louisiana, your 
determination, your grit, your attitude to just get it done. I 
saw that from the moment I was on the ground here with Mayor 
Roach and others 2 days after the event. And that is what 
pulled this region through and served you so well.
    Having said that, there are challenges and hurdles that 
remain, and there are things we must do more effectively in all 
levels of government. We are certainly going to talk about 
those today. One issue that will certainly come up is the lack 
of available and affordable insurance. That is a major limiting 
factor in terms of our recovery throughout South Louisiana, as 
well as South Mississippi. A flood insurance reform and 
reauthorization bill is before the Senate now, and I am working 
hard with Mary and others to use that opportunity to help focus 
on not only updating the Federal Flood Insurance Program but 
getting the requisite attention on the wind and liability side, 
which is a huge constraint for small business and for 
individuals.
    Just last week, I met with Senators Cochran and Wicker from 
Mississippi, and, of course, we worked closely with Mary on 
those issues.
    GO Zone incentives have been very positive for all areas of 
the GO Zone, including here, and I would certainly like to work 
with Mary and many others to extend those to the greatest 
extent possible to continue to get that positive impact here in 
southwest Louisiana.
    Taxation of Road Home grants is a continuing problem, and 
Mary and I have both authored legislation to try to fix that, 
are working hard to try to include that in legislation this 
year, because that is an unfair situation.
    Small business challenges in general, sometimes small 
businesses are just deluged with paperwork from Government, and 
that is why I have introduced the Small Business Paperwork 
Relief Act, could affect small business after a disaster, could 
affect small business in many other situations as well.
    And then, finally, and perhaps most specifically in terms 
of the recovery, Mary and I have joined the Chair of this 
Committee, Chairman Kerry, and Ranking Member Snowe to author a 
bipartisan Small Business Disaster Loan and Improvements Act. 
It is fully bipartisan. It is very positive. It tries to take 
some of the lessons from Rita and incorporate them for the 
future. But we certainly hope to learn more lessons today. It 
does a lot of things, quicker action, quicker disbursement of 
loans, increasing the disaster loan amount significantly, 
trying to integrate the private sector and banking and other 
resources better in the process. So it is a good, working 
product, but we will certainly look to improve it based on the 
testimony today. We have actually now passed it through the 
Senate twice, and we will continue to improve it and work with 
the House to pass it into law.
    So, with that, I look forward to all of the testimony. 
Mayor, thank you for hosting us and the city for hosting us, 
and I look forward to really listening and absorbing the 
experience of all of you who have lived through some very 
trying times.
    [The prepared statement of Senator Vitter follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Landrieu. Thank you, Senator Vitter.
    Let me begin by just briefly introducing the panelists and 
then start in the order of the introduction. We have asked each 
panelist to limit their remarks to 5 minutes, and then we will 
have one round of questioning, and two if necessary, and then 
move to the second panel.
    Eugene Cornelius, a native of Chicago, but has been a 
trusted partner with us in the rebuilding effort as he served 
as the SBA Louisiana District Director for the last several 
years. He has had experience with the SBA since 1999. We are 
pleased to have him with us today.
    Mayor Randy Roach was first elected in the year 2000 for an 
unexpired term. He was re-elected again in 2001 and 2005. He is 
a native of Lake Charles, received his undergraduate and law 
degree from LSU. Randy, we thank you for your really 
extraordinary leadership here before, during, and to this day 
after the storm.
    And Mr. John Landry is a resident of Abbeville, but he 
honors us by serving as Development Director for UL in 
Lafayette. After the storms, he was appointed to the Louisiana 
Recovery Authority. He also serves as Chairman of the 
Infrastructure and Transportation Committee for the LRA, and we 
thank you and the other members of the LRA. There are other 
members--I think Laura Leach and Tom Hanning and others from 
this area have served, and we thank you for your really just 
tireless service on behalf of the State's recovery, Mr. Landry.
    But let's start with you, Mr. Cornelius, if we could.

 STATEMENT OF EUGENE CORNELIUS, DISTRICT DIRECTOR, U.S. SMALL 
           BUSINESS ADMINISTRATION, WASHINGTON, D.C.

    Mr. Cornelius. Thank you. Good afternoon, Senator Landrieu, 
Senator Vitter, members of the Committee, and audience and 
guests.
    Senator Landrieu. Can you speak into your microphone, 
please?
    Mr. Cornelius. Am I not on?
    Senator Landrieu. Yes. There. I think you are on. You just 
have to speak more closely into it.
    Mr. Cornelius. OK. Thank you. Thank you for inviting me to 
discuss these efforts and progress and improvements that are 
being made on behalf of the disaster of 2005 and the role 
specifically that SBA played and is continuing to play as it 
provides assistance to the victims of Hurricanes Katrina, Rita, 
and Wilma. I am Eugene Cornelius, and I was recently the 
Louisiana District Director for the last 4 years.
    I am proud to lead the local team that was dedicated to the 
point and being the direct point of service between the SBA and 
this community and the great response that we had in this 
agency. During the rescue, relief, and restructure of the Gulf 
to date, SBA received over 422,965 loan applications, of which 
364,491 were homeowners and over 58,000 were business. Of 
those, SBA approved 161,000 loans for almost $11 billion. Since 
then, as with all major disasters, we have had a number of 
cancellations, so the net number of loans approved is 
approximately 120,000 for $6.9 billion. And that money is at 
work in the Gulf right now rebuilding homes and businesses and 
supporting local economies.
    More specifically, over $390 million has gone directly to 
the parishes in the south region of Louisiana. In total, over 
$3.7 billion in SBA loans have been disbursed to Hurricane 
Katrina, Wilma, and Rita victims here in Louisiana. In 
addition, another $290 million has been disbursed to victims of 
Rita, and I am pleased to share with the Committee today only 
700 loans--the total amount of 700 loans of Rita have been 
completely disbursed or partially disbursed, and those 
borrowers who have not yet disbursed, we are ready to disburse 
those loans upon their services. But they have elected not to 
have the disbursement, not SBA.
    In the first several months after Katrina, SBA had a 
tremendous difficulty in meeting the needs of the people of the 
Gulf Coast, and I am proud of the great progress we have made 
in the Gulf and in disaster recovery, more importantly focusing 
on the last 18 months. With our new Administrator coming 
aboard, we were able to meet the challenges that our agency 
faced. We were able to retool our arsenal and our resources and 
re-employ different people in different capacities to meet the 
needs that our agency was not meeting at the beginning. And we 
have done so in a very, very effective way.
    In June of last year, SBA presented to the Committee an 
agency Disaster Recovery Plan--an agency Disaster Recovery 
Plan. After months of deliberations and countless hours of 
work, the agency committed to critical steps that are being 
taken not only by us but by Federal agencies as well to prepare 
and respond to other national recoveries. But we are not 
finished. This is a working document, and we continue to review 
and update it appropriately.
    Our improvements to the disaster assistance process include 
an accelerated loan application decision process, improved 
processes and tools for loan closing and fund disbursement. 
This was critical and this was the major flaw of SBA that we 
were not able to keep up with, given the magnitude of our 
disaster. So having had these policies in the last 18 months I 
think has significantly improved our service to this community 
and will prove as great service to our Nation in the future.
    Additionally, in the Gulf, we have continued to be active 
in the Government contracting process both at the Federal level 
and local levels. Small business participation exceeds the 
Federal Government's 23-percent contracting goal by 5 percent. 
Our preliminary data shows that small businesses have received 
over 28 percent of the nearly $18 billion awarded for the 
recovery efforts. Of those, 8.1 percent has gone to small 
disadvantaged businesses; 4.2 percent has gone to women-owned 
businesses; and 4.2 percent has gone to HUBZone firms.
    Furthermore, I know the Committee is interested in the 
performance of the Federal Government in contracting to local 
businesses. And as noted in a GAO report of March 2007, local 
businesses of all sizes in the Gulf Region received nearly 28 
percent or $4.99 billion of the $18 billion in contracts. Of 
that $4.99 billion, approximately 57 percent went to local 
small businesses here in Louisiana. And in Louisiana, 67 
percent of our local district office portfolio of 8(a) firms 
received Government contracts.
    SBA remains committed to making sure that our small 
business customers receive a fair opportunity to help in the 
restructuring efforts. Soon after Katrina struck, SBA dedicated 
personnel to assist in identifying small business contracting 
opportunities. Five Procurement Center representatives were 
specially assigned to work with Federal agencies----
    Senator Landrieu. Gene, excuse me. Could you try to wrap 
up? I am sorry. I didn't----
    Mr. Cornelius. Oh, my time expired?
    Senator Landrieu. Yes, your time has expired. But go ahead, 
take 30 seconds----
    Mr. Cornelius. Well, we did so much, I want to just make 
sure you know it all. But I will wrap it up right here.
    We worked with the Department of Defense, Homeland 
Security, and General Services, and we made sure that these 
local businesses got Government contracts so they could employ 
people locally and we could keep money in versus building on 
debt with only our loan program. So I wanted to make sure we 
made a point of that.
    I will end at that. I just want to give one recognition to 
our service providers in the Small Business Development Centers 
and SCORE were critical in helping these businesses retool 
after the storm and get the money that they needed faster.
    [The prepared statement of Mr. Cornelius follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Landrieu. Thank you. And if you all want to 
summarize your testimony, and we will try to give you a 1-
minute warning or nudge, if you would, and then the rest of 
your statement will, of course, be submitted to the record.
    Mayor Roach?

  STATEMENT OF HON. RANDY ROACH, MAYOR, CITY OF LAKE CHARLES, 
                    LAKE CHARLES, LOUISIANA

    Mayor Roach. Thank you, Senator Landrieu. And before I 
begin my 5 minutes, let me just officially welcome both of you.
    Senator Landrieu. Yes, take that off of my time, not his.
    [Laughter.]
    Senator Landrieu. Go ahead.
    Mayor Roach. I want to thank both of you for coming here 
and hosting this first session here in Louisiana at the Civic 
Center. We appreciate it very much. You know, in the aftermath 
of Hurricane Katrina, this room did not look quite like this. 
We had people all through the Civic Center, over 3,000 people 
were at one point domiciled here, and then, of course, 
Hurricane Rita came, and we have been doing a lot of work since 
then. But we appreciate you being here, and we want to thank 
both of you for the help and the support that you have given to 
us to get us to this point.
    I also want to just thank Mr. Cornelius for all the work he 
has done, because he did an incredible job supporting small 
business here in southwest Louisiana, and I want to thank him 
for that. Again, we appreciate it.
    Now, start that clock.
    [Laughter.]
    Mayor Roach. All right. The aftermath of Hurricanes Katrina 
and Rita has created an opportunity for this State to help to 
find the solutions to some of the most challenging 
socioeconomic issues of the 21st century facing America. So 
far, we have been focused on the immediate needs of recovery. 
This has forced us to look at traditional programs and policies 
to meet these immediate needs. But the world has moved on to 
other issues, yet thousands of people in Louisiana and 
Mississippi are dealing with the long-term effects of the 
hurricane season of 2005.
    The shortage of housing became one of the primary problems 
to face southwest Louisiana following the storm, and this issue 
continues to persist for people in the middle-income ranges. It 
is also contributing to the manpower shortage that we are 
experiencing in this area and in other areas along the Gulf 
Coast. In southwest Louisiana, immediately following Rita, a 
labor shortage occurred. FEMA and other relief agencies hired 
workers for clean-up and reconstruction efforts at artificial 
salaries. Refineries and petrochemical plants had to increase 
wage scales by $4 an hour and offer sign-on bonuses. Even 
Burger King and McDonald's had to offer sign-on bonuses. Some 
workers were brought in from other areas. Many small businesses 
could not afford to pay those higher wages and had to cut back 
on operations.
    While the situation has somewhat abated, it did force some 
businesses to close. Those businesses which rely on workers 
making minimum wages or even in the area of $8 to $15 an hour, 
such as restaurants and contractors, are still experiencing 
difficulties in finding workers. The city of Lake Charles and 
other communities are finding it harder to find qualified 
workers. A local general contractor who has been one of the 
primary road construction contractors in the area recently 
decided to stop doing road construction business because of the 
difficulties he has continued to experience in finding a stable 
workforce.
    The rest of the country will soon experience the same 
problems with their workforce. Many regions already are. They 
just have not recognized the problems. The solutions will 
require that our State and Federal Governments be willing to 
think outside the box and find creative solutions to these 
problems.
    In Biblical times, people were warned about putting new 
wine into old wineskins. We would do well to remember that and 
resist the temptation of trying to fashion solutions to these 
and other recovery issues by relying on existing programs and 
policies.
    The discipline of socioeconomics can produce some rather 
harsh results if we are not careful. History is proof of that. 
We can either think creatively and solve some of these problems 
before they become a crisis, or wait until the system collapses 
and rebuild a new set of policies to deal with the issues. I 
think we would all agree that it is better for all concerned, 
particularly for our children and grandchildren, if we act now.
    I want to conclude my remarks by quoting from a study that 
was done for our area by Dr. Michael Kurth and Daryl Burckel 
from McNeese State University. It is dated October 24, 2007, 
and here is what they concluded relative to the workforce 
shortage in our area: There appears to be a significant labor 
shortage at the low-end of the wage spectrum (under $10 an 
hour) characterized by extended job vacancies, the hiring of 
under-qualified employees, and the importation of workers from 
other areas. This situation existed prior to Hurricanes Katrina 
and Rita, but it was made worse by the storms. There also 
appears to be a labor shortage among skilled craftsmen, 
construction and technical workers at all wage levels 
characterized by rising wages and recruitment of workers from 
outside the region. This situation did not exist prior to the 
hurricanes.
    Among medium-wage workers, however, there appears to be a 
labor surplus characterized by underemployment and lack of 
labor force participation. This situation existed prior to the 
hurricanes, but has become more apparent due to the contrast 
with the situation in the other segments of the local labor 
market. There are a number of reasons for this which are not 
unique to southwest Louisiana: (1) since World War II, 
education policy in the United States has emphasized college 
over technical training; the labor force participation of women 
has risen sharply over the last three decades; in many 
families, the woman's career is secondary to their spouse's, 
with the result that many women are tied to a geographic area 
and unable to take advantage of higher wages elsewhere; and (4) 
few women are employed in the construction trades and crafts. 
Thus, in the aftermath of the hurricanes, many females lacked 
the labor market mobility to take advantage of higher wages 
elsewhere, and they lacked the skills and training needed to 
replace the males who took higher-paying jobs elsewhere.
    This ``structural'' unemployment presents both a challenge 
and an opportunity for the local economy. With the appropriate 
training, many medium-wage workers will be able to find higher-
paying jobs and satisfy the needs of local employers, but this 
will require restructuring and refocusing our educational 
institutions. Moreover, when it comes to economic development 
efforts, all jobs are not equally desirable. For example, firms 
that require workers in segments where there presently is a 
labor shortage are likely to have difficulty recruiting workers 
and to be disappointed with the quality of those workers they 
do hire.
    It is our recommendation the educational institutions and 
economic development initiatives in southwest Louisiana work 
hand-in-hand to ensure that our population has access to the 
training and skills needed in our local labor market, and that 
the firms that locate here are able to find an ample supply of 
appropriately trained and educated workers.
    The report focuses primarily on the labor shortage, but 
Senator Vitter and Senator Landrieu have both mentioned the 
problems that insurance is creating for small businesses in 
this area. And I would have to say that that probably is one of 
the most serious problems facing the entire Gulf Coast area. In 
Lower Cameron Parish, you cannot find insurance, and we are 
having increasing problems in this area of finding affordable 
insurance. So it does require, I think, a concerted effort and 
a creative solution to deal with both of those problems.
    Thank you.
    [The prepared statement of Mayor Roach follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Landrieu. Thank you, Mayor Roach. I really 
appreciate that input on the workforce. We are hearing that 
more and more places, and we will come back to that in the line 
of questioning.
    Mr. Landry?

     STATEMENT OF JOHN T. LANDRY, DIRECTOR OF DEVELOPMENT, 
   UNIVERSITY OF LOUISIANA AT LAFAYETTEVILLE, AND CHAIRMAN, 
    INFRASTRUCTURE COMMITTEE, LOUISIANA RECOVERY AUTHORITY, 
                      ABBEVILLE, LOUISIANA

    Mr. Landry. I think next time I am going to take a tip from 
Mayor Roach. He has big print so I think he can speak faster.
    [Laughter.]
    Senator Landrieu. Well, the older we get, the bigger print 
we need.
    Mr. Landry. That is right. Senator Landrieu, Senator 
Vitter, thank you both. I am grateful to have the opportunity 
to share with you today the ways in which we have strategically 
invested our Federal dollars to fund innovative programs to 
meet our current needs with an eye to the future. I also want 
to share our continued challenges facing economic recovery that 
demand attention from all levels of Government and private 
interests.
    The State has made great strides since the dark days of 
2005. Immediately following the storms, the State dedicated $10 
million in State funds to a bridge loan program to provide gap 
financing for more than 370 impacted small businesses as they 
waited for SBA loans or insurance proceeds to kick in. As 
Federal funds were committed to Louisiana, the LRA Board then 
carved out another $350 million from much needed infrastructure 
repair funds to assist in the recovery of the State's damaged 
businesses and workforce. While these funds were not nearly 
enough to address the significant challenges to the State's 
economic recovery, the LRA with its State agency partners 
developed a strategic approach to addressing the retention and 
stabilization of the business community and its workforce in 
hopes of stimulating recovery in key economic sectors. I would 
like to quickly walk you through the highlights of some of 
these programs.
    In the area of business recovery, the State first added 
another $35 million into the existing bridge loan program which 
provided loans up to $100,000 to another 380 businesses. Again, 
the bridge loan was intended as gap financing for eventual SBA 
loans or insurance payouts. As it became clear in the fall of 
2006 that SBA loans and insurance were both taking longer than 
expected to pay out, the State set aside more than $200 million 
for a grant and loan program for small businesses. The first 
phase of the Business Recovery Grant and Loan program, which 
was developed by the LRA and is administered by LED, launched 
in January of 2007 and has made possible nearly 3,500 grants of 
up to $20,000 to small businesses and loans of up to a quarter 
of a million dollars or more for 350 more businesses. A second 
phase of this program to be launched in April 2008 will help an 
additional 1,500 small businesses.
    The State is using our Federal funding to create 
innovative, long-term initiatives in our community. As part of 
this program, LED and the LRA established a revolving loan fund 
to create long-term investment in these communities. 
Additionally, the LRA and LED designed a technical assistance 
program for small businesses.
    In the area of workforce recovery, the State received an 
initial Federal allocation of more than $10 million from the 
U.S. Department of Labor for the Pathways to Construction 
program in an attempt to meet the demands of the construction 
industry. The State put an additional $5 million into this 
program. Since early 2006, the program has trained 
approximately 10,000 entry-level construction workers.
    The LRA established the Recovery Workforce Training program 
in June of 2007 to address the shortage of labor faced by 
employers in key recovery sectors, including construction, 
health care, oil and gas, transportation, advanced 
manufacturing, as well as the cultural economy.
    Administered by the Workforce Commission, the $38 million 
program will train and place more than 7,000 people in 
occupations that range from entry-level laborer to skilled 
registered nurses.
    Some other sector initiatives. The Recovery Tourism and 
Marketing program, developed in conjunction with the Department 
of Cultural Recreation and Tourism, provided $28.5 million for 
support of local tourism and marketing. The LRA and the 
Louisiana Board of Regents used another $28.5 million to 
develop a research, commercialization, and educational 
enhancement program. This program has provided dollars to 
rebuild science and technology-related research programs and 
related workforce development programs at 11 severely damaged 
universities that can lead to economic development outcomes. 
The LRA also set aside $19 million under the Fisheries 
Infrastructure program to rebuild and repair the infrastructure 
critical to this badly damaged industry. These awards will be 
announced in the near future.
    What remains to be done? It is clear that in the immediate 
future there are a number of different needs that are required 
to stimulate the economic recovery of the most heavily impacted 
parishes. A number of additional measures are outlined below 
that would provide a comprehensive approach to economic 
recovery. I will not have time to go through each one, but I 
will touch on a few points.
    Small businesses are the backbone of our State's economy. 
More than 90 percent of Louisiana businesses have 20 employees 
or less, and these businesses are responsible for more than 80 
percent of the new jobs created. So we need assistance in 
providing low-cost financing, capital, and technical assistance 
to small business and entrepreneurs during the recovery. We 
need to develop a fund to support an awareness and marketing 
campaign to promote Louisiana as a tourist destination and 
correct some of the misconceptions about Louisiana and New 
Orleans. And we need to assist in the commercial fisheries 
industry. There was more than $400 million in lost 
infrastructure, but unfortunately, all we have is $19 million 
to allocate to that industry.
    So we need to provide adequate, equitable resources for the 
recovery of our commercial as well as recreational fisheries. 
We need to ensure FEMA tasks the Coast Guard by mission 
assignment or interagency agreement with the responsibility of 
conducting a comprehensive marine debris removal program, as 
was done in Alabama and Mississippi. We got the short end of 
that stick.
    Provide sufficient funding for NOAA to complete their Gulf 
Coast Survey work along the entire Gulf Coast. We need to 
address the acute domestic labor shortages, and we are asking 
for support of additional funds for the State's Recovery 
Workforce Training program, and, again, I have listed some 
other items, as well as the GO Zone Act being extended.
    In recovery models in prior catastrophes were based on 
assumptions that proved invalid post-Katrina and Rita. The 
broader recovery issues associated with the rebuilding of the 
regional economy--lack of qualified workers, housing, etc.--
pose unique challenges for the recovery of small businesses. We 
know that you and your colleagues both in the Senate as well as 
in the House have been hard at work at such programs. We want 
to thank you for your significant efforts on our behalf.
    I want to thank you both again for your continued vigilance 
in support of South Louisiana. We would not be able to report 
such progress were it not for your tireless advocacy for the 
State's continued needs. We thank both of you.
    [The prepared statement of Mr. Landry follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Senator Landrieu. Thank you, Mr. Landry.
    If we could start now just our first round of questioning, 
and if we have time at the end, we can take some questions from 
the audience, but we have to check our time.
    Mr. Cornelius, when the storms struck, I was actually 
shocked, as you know, to see that the small business disaster 
plan that was implemented. It was about 2 inches thick, very 
difficult for anybody in Washington to read, let alone people 
here, under feet of water, several feet of water. So we, by 
virtue of our Committee, directed the SBA to streamline that 
plan, adopt a new one so that, as Mayor Roach testified, we can 
keep our eye not just on the current challenge but in the 
future trying to do a better job than what was done.
    Can you give us an update as to where that plan is, the 
mandates by our Committee for SBA to restructure itself so that 
these 90 percent of our businesses that have less than 20 
employees--most of them can't employ full-time accountants or 
lawyers or lobbyists--can figure out what they can do after a 
disaster like this? And could you just give us a brief update 
of how that is being implemented right now?
    Mr. Cornelius. Well, as I said earlier, the agency has 
submitted to the Committee a Disaster Recovery Plan. What we 
did was our new Administrator, Steve Preston, came aboard, and 
the first thing he looked at was the critical path of how a 
disaster loan comes in, when it comes in, what we do, how we do 
it, and what is going on. And he restructured teams within SBA, 
and these teams are now structured in place. They have reduced 
the time that it takes to process loans all throughout 
disasters, not only in our disaster but we use it nationally.
    If you look at what happened in his restructuring in his 
plan and what has been implemented, what normally took us 90 
days to 120 days after Katrina now takes us less than 30 days, 
and that is because we assign resources, not only our human 
resources but also our IT resources that came in in situations 
that we can improve technology to get evaluations on property 
and damages so we could secure that.
    So that plan that was submitted to the Committee is 
actually being implemented by this agency.
    Senator Landrieu. Could I ask, Joe, would you mind maybe 
just stepping up and giving a comment for the record? I hope 
that my staff told you that I may be asking you for this. But I 
think this is very important for the businesses here, the 700 
businesses in southwest Louisiana who were successful in 
getting a small business loan. That may be the good news. But 
the bad news is there may be thousands that attempted and just 
finally gave up because of the kind of process that was just 
not in place to be of help to them at a very desperate time.
    So could you just comment briefly on how you were 
implementing this new disaster plan? And how many people do we 
have, you know, in place in Louisiana, South Louisiana, to take 
care of this if this happens again?
    Mr. Montez. We have here in Louisiana a staff of about 
eight or ten people in the New Orleans District Office who are 
assigned responsibility for the entire State of Louisiana with 
regard to what we refer to internally as our regular SBA 
programs, that is, 7(a) business loan programs, 504, the 
Government contracting such as the 8(a) programs, and then in 
conjunction with the SBDCs and SCORE, the technical assistance 
programs.
    What we have beyond that for disaster response is a cadre 
right now of approximately--and I don't know what the exact 
head count is, but approximately 1,200 people at the Disaster 
Processing Center in Fort Worth, which is a headquarters entity 
that all disaster loan applications will be processed through 
there.
    Now, when Eugene references teams, it is at that facility 
where they have teams of four or five individuals who are 
assigned a batch, if you will, of applications that will drive 
those applications quicker and more thoroughly and more 
efficiently through the disaster loan application process.
    Senator Landrieu. Has there been any talk--and I am going 
to move on in just a minute--which came up after the storms, of 
using the local banks and the local lending community that is 
familiar with these small businesses to maybe partner with you 
all in a way that can expedite the loans? And the other point, 
B, is the streamlining of the paperwork that was required. You 
know, people were asked to submit tax returns back 5 years. 
Well, heck, if they had their tax returns in a house that was 
dry--but the tax returns went out the window with everything 
else. I mean things like that that were just mind-numbing for 
us to try to move this bureaucracy to understand what our 
people were dealing with.
    So, A, are you working in any way with banks, yes or no, 
and if there is a possibility, and streamlining the paperwork 
required for our small businesses.
    Mr. Montez. It is my understanding, Senator, that the 
headquarters people are working with the local lending 
communities, private banks, if you will, to join us in 
processing some of these applications, and perhaps taking the 
first step in actually doing the loan, that is, issuing the 
funds, disbursing the funds, and we come back and guarantee 
that.
    Now, where we are with regard to that, that is something 
that is made--that decision is made in Washington, and I think 
that would probably be a question better asked of the 
Administrator or the disaster program people at headquarters, 
because they ultimately will have the responsibility for 
outlining the parameters of such an agreement.
    With regard to the requirements of such things as 5 years' 
worth of tax forms, et cetera, et cetera, I believe that has 
been largely eliminated. Those requirements are eliminated, 
particularly in instances where such as occurred here with Rita 
and in New Orleans with Katrina. It just did not make sense.
    Senator Landrieu. No, it does not make sense for people to 
have to give you titles and insurance policies and tax returns 
that were flooded, you know, lost in the flood and, you know, 
they cannot go forward until they retrieve that paperwork. And 
not to go on, but it was mind-numbing that if you needed their 
tax returns, the SBA just could not call the IRS, you know, 
which is like right next door, and get the tax returns that are 
on record somewhere. But yet our people were forced to go dig 
through debris to literally try to find their tax returns.
    Now, we have eliminated that, but I just want to make sure 
that you are cognizant that in the future we hope that these 
procedures will be clearer. It is only one of about a hundred 
things I could talk with you about.
    Mayor Roach, and then we will be finished my turn in just a 
minute. Would you be a little bit more specific in your 
conversations--because I know you have been one of the leaders 
that both Governor Blanco and Governor Jindal are depending on 
to help give advice about this workforce development issue, 
because I think this is really crucial. And I appreciate the 
time that you spent talking about the report. Have you made any 
specific suggestions other than the one that you made about 
making sure the State is investing in our technical colleges? 
Could you elaborate a little bit? We would like to take away 
one or two really specific suggestions from a mayor trying to 
rebuild a city, a regional leader trying to rebuild a region. 
You have got fisheries. You have got energy. You have got port 
fabrication. You have got retail. You have got tourism. You 
know, you have got a lot of different kinds of petrochemical. 
So you are hearing from a lot of different kinds of employers 
about this. What have you shared with the State that maybe 
Senator Vitter and I could take back to Washington to be 
helpful in terms of this job training piece?
    Mayor Roach. Well, what we have talked to the State about 
is the idea of taking the opportunities that we have with 
Sowela Tech and our local high schools and to begin at the high 
school level a job training curriculum, because there are many 
children who are not college-bound and who, quite frankly, are 
not challenged enough at the high school level, and working 
with local high schools and Sowela to develop an articulation 
agreement so that they can begin training in high school and 
then take that training and have that credit transfer into the 
technical--or the community college setting and thereby 
encourage them to develop job training skills and introduce 
them to the different types of skills and the different types 
of opportunities that are available in the job market today.
    What we are finding is that many young people today simply 
are not aware of the opportunities that are out there and are 
not being adequately exposed to the job opportunities in terms 
of what those jobs involve. For example, we just met just 
yesterday with the local school board, and we are looking at an 
opportunity where the city will help through a cooperative 
endeavor agreement to expand the job training facilities that 
exist to introduce into the high school level a curriculum that 
gives hands-on experience, hands-on training, and expose 
children not just to books but to an applied application of the 
math and science principles that they are learning in school, 
and hopefully at the same time challenge them to actually do 
better in school.
    What we have found in some cases is that some children are 
not stimulated by just learning from a book, that when they see 
it and they can do it with their hands and they can understand 
it, then it becomes a little more meaningful and a little more 
real. And some of those students actually improve in terms of 
their academic performance.
    So we are looking at that in a different approach to job 
training. Workforce development has had traditionally a focus 
on either college age or even post-secondary-age workers. We 
are looking at training those workers and reaching workers in 
the high school level.
    Senator Landrieu. Well, let me suggest this, and then I 
will turn it over to Senator Vitter. We were successful in 
allocating about, as I recall, $435 million for restart money 
for the State schools. This was 2 1/2 years ago. Some of that 
money, John, may still be available, and I would like to pursue 
the opportunity to look there, as well as maybe some additional 
Federal funding that we could direct this way for a pilot to 
see if we could, you know, really find some successful pilots. 
This is a great need throughout all of our State with an 
unemployment rate of about 3.9 percent, but a dropout rate in 
our high schools exceeding 50 percent. There just seems to be 
such a disconnect between the demand for jobs and the 
availability of our students.
    So there is a lot of discussion, without taking too much 
time going on, in the education reform circles about retooling 
high school curriculums. And I see Ann Knapp, who used to chair 
the Sowela Tech Board taking notes. But if we could work, would 
you be willing to help us fashion a pilot program?
    Mayor Roach. We talked about a pilot program yesterday with 
some representatives from the school board. So this would be an 
excellent opportunity.
    Senator Landrieu. Great.
    Mayor Roach. I wish I had the presentation and you had the 
time to see it, but it would be--I think we have got something 
that could fit very well with what you are talking about.
    Senator Landrieu. But I think it underlines one of the 
important challenges besides the insurance issues that we have 
raised. It is really the workforce, lack of workforce 
development opportunities that hit small businesses that cannot 
compete with some of the larger businesses for the higher 
salaries. And it puts businesses of all walks of life at a real 
disadvantage. And it is something that we could in a Government 
public-private partnership, I think, really address.
    Senator Vitter?
    Senator Vitter. Thanks, Mary.
    As I start, let me just repeat that if anyone in the 
audience has a concise comment or question, I think there are 
index cards being passed around or available in the back. 
Please write it down. If it is about these subjects, we will 
try to get to them in the discussion. If it is about anything 
else, I certainly have staff in the back, and we will try to 
meet or respond to other issues as well, perhaps after the 
meeting. And thanks to all of you for being here.
    Mr. Cornelius, the 700 figure, I just want to back up and 
understand it. That is the number of Rita loans that have not 
been disbursed?
    Mr. Cornelius. Correct.
    Senator Vitter. And in each and every case, as I understand 
your testimony, that is because of a change of heart or a 
factor on the applicant side?
    Mr. Cornelius. Yes.
    Senator Vitter. So as far as you know, every Rita SBA loan 
has been dealt with in terms of your SBA responsibilities as of 
now?
    Mr. Cornelius. Well, as of what SBA can do given that they 
have not gotten information or where the applicant wants to go. 
We are at that point, yes.
    Senator Vitter. OK. And so if that is the case with the 
applicant, you obviously tell them you need to do A, B, and C.
    Mr. Cornelius. Correct. Some of them we have not located. 
Some have canceled, want to cancel. Some have decided not to 
pursue. But in every instance that I named, yes, that is pretty 
much the case. We have to have the applicants do something in 
order for SBA to go further.
    Senator Vitter. OK. And, also, with regard to the disaster 
plan and the need for sort of what I would call surge capacity, 
basically you pointed to the disaster staff in--is it Dallas? 
Fort Worth. I assume in an event big enough, like Rita--that is 
not big enough. I assume if you have a big enough event, you 
need an extra surge. So what is the plan for the quick, 
efficient surge beyond your employees, No. 1? And, No. 2, is it 
better to plan on hiring and training more people immediately 
or partnering with folks in the private sector, as Mary 
mentioned?
    Mr. Cornelius. Those are the permanent staff in the Fort 
Worth area, but nationwide SBA has a cadre of people that they 
can call up in an emergency or in a disaster where we need it. 
We do not have the means or the resources to have those people 
on for full-time because there is no justification for full-
time jobs in that situation. But here in Louisiana, we have 
over 700 people who have been through the experience of Katrina 
and Rita and Wilma that we can call on, SBA can call on, and 
they can become employed in our cadre and be ready to face a 
disaster if one hits in our State.
    Senator Vitter. And you are basically saying you think that 
is adequate even for a big, big event, not a typical tornado, 
et cetera?
    Mr. Cornelius. Absolutely, because if you look at what 
happened with Katrina, we had 450 people coming in on a 
rotating basis. We looked at the numbers. It was somewhere 
around 270 that were really--when we were at our height of 
getting the contracts done and getting the applications done 
and getting things moving under the new plan that Administrator 
Preston did.
    Now, we did also allocate certain staff to certain areas, 
such as New Orleans City Hall, that helped us with the Road 
Home situation, with getting mortgages and titles and all the 
things that Mary was pointing out as far as documents. And we 
found that it was more feasible to have those people in those 
situations, and we used less resources because they were 
concentrating on getting the bottleneck of the problem in the 
Road Home situation.
    Senator Vitter. OK. Mayor Roach, what is your observation 
about what various GO Zone incentives have done in this area in 
terms of the recovery?
    Mayor Roach. Well, I think the GO Zone--I was talking with 
one of the tax attorneys in town the other day, and he said, 
you know, in the next couple of years, by the next 2 or 3 
years, you are going to see more investment in this area than 
you have ever seen before. And he attributed it to the GO Zone, 
particularly to the 50 percent depreciation allowance that is 
afforded under the provisions of the Act. That tends to be the 
provision that gets the most attention, but there are other 
provisions and other benefits in there. But I think the GO Zone 
Act is a tremendous incentive, and I think that it really is 
the type of thing that America works best with. It creates an 
incentive. It does not mandate a particular investment. It just 
gives credit for investment, and it encourages American 
business to go to work, and it gives a great incentive to do 
that.
    And so if there is any message coming out of this 
particular situation as far as we are concerned, it is to just 
give American business the incentive to go to work and get out 
of the way and watch them go to work, because they can do 
tremendous things. That has been our forte, so to speak. And 
that to me is the significance of the GO Zone Act.
    Senator Vitter. You may have just answered this question, 
but let me make sure. I was going to ask, there are a menu of 
different GO Zone incentives. We are trying to extend them 
basically all in time. We may be able to extend some, but not 
all. So what would be at the top of the list. The 50-percent 
depreciation?
    Mayor Roach. The 50-percent depreciation, that would be 
probably top of the list. But I would also say that what--you 
know, it is kind of a chicken-and-egg situation, and we have 
had this problem in other areas. But many people wonder why 
recovery does not work faster than it works. And I was talking 
with a local physician, and he just opened his new office. He 
just opened his new office. He made the decision to build a new 
office 2 years ago. And that is just one person, and that is 
one office. It is the amount of work that has to be done before 
you can actually complete the project. And with the rules and 
regulations and policies, all well intentioned and all well 
intended and--I am not saying we should repeal them, but there 
are so many hoops that we have to go through in order to get a 
project not only permitted, but then we have to worry about 
funding and other things that we have to do. So it takes more 
time.
    So I would say to Congress, we have created this set of 
rules and regulations to do things and policies, environmental 
and otherwise, that we say need to be taken care of, but to do 
that on such a large scale when you are--it is not just one 
building. It is an entire region that we are trying to rebuild. 
It just is going to take time. The workforce shortage has 
created pressure.
    Just to give you an example, we are finding that concrete, 
the staple for reconstruction, is at a premium, and concrete 
now is $100 plus a yard. And so that--I mean, it is just the 
availability of the raw materials that are necessary for 
reconstruction is making the whole process a little bit more 
difficult.
    So time is of the essence. We know we need to rebuild. We 
know that GO Zone works. But we know that in light of the 
magnitude of the devastation, it is going to take time in order 
to complete that rebuilding. So if we want the GO Zone to 
really have its intended benefit, then we have to have a little 
bit more time.
    Senator Vitter. Thank you. And, Mr. Landry, thanks for all 
your work with the LRA. You mentioned bridge loans, which the 
State LRA did some of. I don't know if you know this off the 
top of your head, but do you know the overall default rate from 
that experience and, therefore, the overall conclusion about if 
it really got businesses to a point that it could work or not?
    Mr. Landry. I have invited Robin Keegan with our staff, who 
handles this on a daily basis. But before she comments, though, 
it occurred to me, as Mayor Roach was talking about the GO 
Zone, the bonus depreciation, Senator Landrieu, you mentioned 
that a lot of the small businesses do not have the luxury of 
attorneys and accountants. And so I guess in a perfect world, a 
lot of these small businesses could take advantage of the more 
complex--I mean, it is difficult for the sophisticated business 
people to take advantage of some of these complex depreciation 
bonuses. So I don't know how--that is just a thought. Some kind 
of way of simplifying that goes on for very small businesses 
might be something to consider.
    Robin, do you want to address that?
    Ms. Keegan. Thank you. I am Robin Keegan. I am the Director 
of Economic and Workforce Development for the Louisiana 
Recovery Authority. Thank you for the question.
    The first phase of the bridge loans were small loans 
$25,000. That phase had a very high payback rate in a very 
quick amount of time.
    The second and third phase were loans up to $100,000, 0 
percent interest for 6 months, and then we knew that people 
were needing more time, as Mayor Roach eloquently spoke, 
because SBA was having challenges paying out many of these 
loans. These were supposed to be gap financing to SBA or 
insurance payouts. So we extended those bridge loans for two 
periods, and we are just now in the process of reclaiming those 
loans. So I do not have a firm answer for you at this point, 
but I can get it for you. We are having some challenges with 
getting repayments simply because people are taking a lot more 
time to be able to be financially and fiscally stable, which is 
the desperate need for more low-cost financing that we need for 
our business community. But I will get you the specifics.
    Senator Vitter. Great. Well, I would be really interested 
in tracking that and seeing the----
    Ms. Keegan. Definitely.
    Senator Vitter. I guess what I am after is the eventual 
success rate. In other words, what percentage of these 
businesses that get bridge loans make it and what percentage 
don't? Because, obviously, we all--that is the whole point, a 
bridge to somewhere.
    Ms. Keegan. Exactly. I will get that to you.
    Senator Landrieu. I think that would be very helpful, and I 
just want to add, before we call the other panel up, it would 
also be helpful if we could get the SBA--and despite our really 
heroic efforts, if I have to say so myself--to get the SBA to 
not require full payment of their loans that they have made 
when people receive their Road Home grants which be extremely 
helpful. We have tried to pass this legislation, and we have 
been thwarted by the administration, by the SBA itself and the 
administration. We have support from Members of Congress from 
both political parties. So we are going to try again to get 
that waived so that if a person took out a 20-year small 
business loan, they actually have 20 years to pay it back. And 
they don't have to pay it back the week after they get their 
Road Home grant, which just puts them right back where they 
started the first place, and then maybe they can pay off, you 
know, the loan that Senator Vitter was speaking about, if the 
Federal Government could wait in line.
    Second, I want to just say one thing, John, with what 
Randy, the mayor, mentioned. The GO Zone has been very 
effective. We hear nothing but positive things. But it is 
apparent to me that the larger you are, the stronger you are, 
the more quickly you can get your application in, the more 
lobbyists you can hire to go to the Bond Commission and others 
to get your billion dollars.
    Small businesses do not have that, and with the fisheries 
situation here--which, I will admit, we have not been able, 
despite our efforts, to bring enough attention to our fisheries 
industry. I wish, John, that we could think maybe at the State 
level to either set aside or hold back some of that allocation 
to help our fisheries industry stand up, because these guys 
have really been fighting hard to get their boats back in the 
water and get their ice back on the docks, et cetera. And if we 
do not try to do something like that at the State or local 
level, you know, Mayor Roach, the big guys could come in, sop 
up all the GO Zone bonds, and, you know, you are sort of left 
with the smaller businesses really struggling. And I know we 
are trying to extend another $5 billion, we have been asked. I 
don't know if we can find that. We are going to try.
    And then the second point on this concrete, just to show 
you how these things are interlocking, I believe--if Senator 
Vitter knows, he could add something. I believe one of the 
largest concrete distributors is on the ``MR. GO,'' which is 
the Mississippi River Gulf Outlet, which we are closing, we 
have to close because of St. Bernard Parish. We have a request 
in for $160 million to help relocate some of those businesses, 
and one of them is a scrap metal business, and one of them is a 
concrete distributor, which is the largest, I think, in the 
region, the whole Southern Region.
    So you know, people really need to understand how this is 
tied and what is driving some of these prices up is because 
there is so much work being done to sort of relocate 
businesses, reshift channels, et cetera, after this great 
flood.
    All right. Thank you all very much. Let's go to our next 
panel. Thank you so much.
    Senator Landrieu. If we could have George Swift, President 
and Chief Executive Officer of Southwest Louisiana; Carl 
Manuel, owner of Anna's Pies; Mr. David Darbone, President, 
Grand Oaks, Inc.; Ms. Donna Little, Director, McNeese State 
Small Business Development Center; Sheri Lazare, Director, 
Enterprise Consortium of Gulf Coast Women's Business Center; 
and Donald van de Werken, Director of the U.S. Export 
Assistance Center in Louisiana.
    This is quite a large panel. We thank you all for being 
cooperative. We are going to ask you to limit your opening 
remarks, if we could, to 3 minutes each so that we can get 
through the panel and get to some questions. And if we have 
time, we will open it up to questions from the audience. We are 
going to go in the order that you all were introduced, and if 
you don't mind, I am not going to go through any further 
introduction to try to save time. But thank you all, and all of 
your appropriate biographical information is in the record of 
the hearing.
    Let's start with you, George, and thank you so much for 
your leadership through a very difficult time as the Chamber 
leader for Southwest Louisiana, and we will being with you.

   STATEMENT OF GEORGE SWIFT, PRESIDENT AND CHIEF EXECUTIVE 
OFFICER, SOUTHWEST LOUISIANA CHAMBER OF COMMERCE, LAKE CHARLES, 
                           LOUISIANA

    Mr. Swift. Thank you, Senator Landrieu, Senator Vitter, and 
staff members. We are glad to have all of you here. Thank you 
for coming to southwest Louisiana. We sometimes do feel 
forgotten, and we know we are not forgotten with you and those 
who are represented here. So we appreciate that.
    I am not going to go into a lot of the topics that have 
already been covered, but certainly insurance, workforce, and 
affordable homes are the topics that are really holding us 
back, but I will get right to the small business segment.
    Immediately after Hurricane Rita, the Chamber Southwest 
building was transformed into a Business Recovery Assistance 
Center. We had all of the agencies coming together, many of 
which had lost their location, such as the Small Business 
Development Center and many organizations including the SBA 
were with us. We received over 8,800 telephone calls and 3,200 
businesses came to our Recovery Center to get assistance of 
various forms.
    One of the things that was most helpful to the people was 
the thought that we were going to get some assistance from SBA. 
And while many were helped and we had much assistance on hand, 
the end result was that we ended up with more of a promise of 
assistance than actual assistance. And we realized that the 
event, Rita and Katrina, and the scope of it has never been 
felt before. And so we are dealing with gigantic proportion. 
But what we found was that many businesses were unable to get 
the assistance they needed. It caused them great hardship, and 
they basically gave up on the SBA process after some period of 
time.
    The Louisiana Recovery Authority bridge loans were very 
effective for those that were able to get those, and I think if 
we could come up with a more rapid response similar to 
individuals received FEMA assistance immediately, $2,000, if we 
could have an assistance fund for small businesses--and we are 
talking about the very small businesses, ten, five employees 
and under, that if they could receive $5,000 right away, this 
could help keep the doors open; it could help them restock; it 
could help them get the utilities turned back on, pay employees 
until they could go to their banks. Many times they were not 
able to get with their banks because the banks were closed or 
they were not able to fill out a lot of complex records 
because, as you indicated, Senator Landrieu, they did not have 
those records. And so some kind of quick response we think 
would be very helpful.
    We have some suggestions that if a disaster recovery plan 
is put into place, that we have maybe businesses are instructed 
to keep a disaster or emergency toolkit that has their vital 
business information--insurance, major vendors, and licenses--
all in one place so that they could keep those. And then after 
a disaster, if we could have a quick response from SBA within 
48 hours, mainly on information that they need, and then as we 
said, access to capital, a financial grant of at least $5,000 
per impacted business, it would help businesses in the 
immediate recovery.
    We also think that, you know, within 60 days we should be 
able to establish microloans, grant or loan combinations to 
small businesses at competitive terms. We think it is a good 
idea to use existing financial institutions to process those 
loans. It worked very well with the State LRA bridge loan 
program.
    And then businesses we find need technical assistance such 
as helping to recompile their financial records, and maybe a 
voucher for assistance with the financial records would be 
beneficial.
    So these are just some of the suggestions that we have. We 
do think that the true impact has not been felt on our small 
businesses yet. We think it will take 3 to 5 years to really 
measure the impact that Hurricane Rita has had on our small 
businesses. Many folks--and we had an informal discussion with 
some of the staffers from the Small Business Committee earlier 
today. They maxed out their high interest credit cards, they 
cashed in savings and retirement just trying to keep their 
businesses open. So I think the jury is still out on the real 
true impact.
    But, again, thank you both for being here and to all of you 
for helping to realize that we have some problems and a lot of 
opportunities that we need to take advantage of, but we need 
some more assistance to get through this challenge.
    [The prepared statement of Mr. Swift follows:]

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    Senator Landrieu. Thank you very much.
    Mr. Manuel, Anna's Pies, thank you for your testimony. Go 
right ahead.

   STATEMENT OF CARL MANUEL, OWNER, ANNA'S PIES, INC., LAKE 
                       CHARLES, LOUISIANA

    Mr. Manuel. Delighted to be here. Can you hear me?
    Senator Landrieu. Can you pull it a little closer to you?
    Mr. Manuel. A little bit better?
    Senator Landrieu. Thank you.
    Mr. Manuel. OK. We were affected by Hurricanes Katrina and 
Rita. When Katrina hit New Orleans, we lost all of our 
customers from New Orleans and surrounding areas. We were 
unable to make deliveries or contact our customers while the 
city and surrounding areas were shut down. No one in, no one 
out, was the ultimate problem.
    A few weeks later, we were hit very hard by Hurricane Rita. 
For weeks, our city was shut down. Meanwhile, we still had 
bills to pay and no cash-flow. Once we were allowed back into 
the city, we were lucky to walk into a building that was still 
standing. All of the sheetrock on the walls and ceilings had 
come down from the rain. Water was everywhere in the building. 
The coolers, freezers, and ovens were not working properly due 
to the damage from the storm. A day or two later, after the 
clean-up process had begun, the State health inspector, along 
with the Federal agents, stopped by to see and inspect damages 
and also inform us that we were not allowed to make or produce 
anything until they came back and gave us the OK. We were 
short-handed. Actually, all employees were still out of the 
city. So that caused us 6 more weeks of clean-up and lost the 
profits before we could open.
    Our employees ended up not coming back because they had 
relocated. So we were really in a bind physically, financially, 
and emotionally. We applied for Federal loans, and it is now 3 
years later, have not heard one word from the SBA in either 
denying us or not. We never heard one word.
    We had about $10,000 worth of damage due from wind and rain 
damage, not including getting the damaged equipment fixed. We 
did what it took to get back on our feet. Little by little, 
with sheer determination, we were able to get back up. New 
Orleans and surrounding areas is barely back up for us because 
so many businesses in New Orleans had closed down.
    In closing, I would like to give a few suggestions to the 
panel.
    The Small and Emerging Business with Mr. Adrian Wallace has 
given us unwavering support. Mr. Wallace worked diligently with 
us to help us get back in business. I would recommend them to 
anyone needing assistance.
    No. 2, the McNeese Small Business Development Center 
located at McNeese State University, with Ms. Donna Little, 
gave me real assistance and information. I would also recommend 
Ms. Little and the center to others.
    The SBA Assistance Program was not very helpful of any. 
They turned deaf ears on us. They didn't even bother to answer 
the application after we tried contacting them and everything 
else. I feel as a Government entity that they should have--that 
they should be more receptive to small business trying to 
recover.
    Thank you.
    [The prepared statement of Mr. Manuel follows:]

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    Senator Landrieu. Thank you, Mr. Manuel. Would you state 
for the record your location? Were you in Lake Charles and in 
New Orleans?
    Mr. Manuel. We manufacture our pies here in Lake Charles, 
and we run a route in New Orleans.
    Senator Landrieu. OK. And what is your current address, or 
what was your address in Lake Charles?
    Mr. Manuel. It is 2323 Moeling Street, Lake Charles, 
Louisiana.
    Senator Landrieu. OK. And how long had you all been in 
business?
    Mr. Manuel. Sixteen years.
    Senator Landrieu. All right. Thank you. We will come back 
for questions.
    Ms. Little?

 STATEMENT OF DONNA LITTLE, DIRECTOR, MCNEESE STATE UNIVERSITY 
   SMALL BUSINESS DEVELOPMENT CENTER, LAKE CHARLES, LOUISIANA

    Ms. Little. Thank you. Senator Landrieu, Senator Vitter, 
and distinguished guests, thank you for the opportunity to tell 
you about the work the Louisiana Small Business Development 
Center has done and is currently doing in small business 
recovery in South Louisiana and to tell you of the challenges 
our small businesses still face. I am Donna Little, Director of 
the LSBDC at McNeese. We are an SBA partnership program with 
the State of Louisiana and participating universities. We 
operate nine centers in the State. Our mission is to build 
small businesses.
    Senator Landrieu and Senator Vitter, we deeply appreciate 
the leadership you, Chairman Kerry, and Ranking Member Snowe 
provided in securing additional funds for the SBDC network for 
fiscal year 2008. I am very proud to say that every member of 
the Louisiana delegation supported your effort. The increase 
restores funding we lost in fiscal year 2001 after the 2000 
census showed slower population growth in Louisiana.
    Let me start by saying that small businesses still need in-
depth technical assistance just as we provided after the 
hurricanes. We helped thousands apply for SBA disaster loans, 
staffed State business recovery centers, worked in DRCs, and 
listened to owners. We provided small businesses with an 
average of 5 hours of loan assistance, time that an SBA 
disaster loan officer cannot spend. What we have achieved in 
assisting the small business community with recovery is pretty 
impressive. Since October 1, 2005, we have provided one-on-one 
consulting to 6,750 small businesses across South Louisiana, 
training to nearly 14,000 persons, and believe me, we did not 
count everything. Our clients have created 356 new businesses 
and 2,000 new jobs, with more than $104 million in debt and 
equity funding, significant numbers.
    Now, in going forward, we are focused on helping small 
businesses make sure that their business model is relevant, 
helping them adjust, helping them analyze financial statements, 
figuring out how to innovate and serve clients and markets with 
fewer employees, prepare disaster plans so the next time they 
will be ready, compete in a global market. This is not the time 
to cut technical assistance.
    Since Hurricane Rita, small businesses face these problems: 
personal debt that they cannot refinance, insurance costs, 
expensive construction, finding good workers.
    Two weeks after Rita, I returned to Lake Charles. McNeese 
was still closed. I worked at the Chamber Southwest using my 
laptop, a borrowed printer, and a folding table. One person 
serving five parishes, I spread the word to the LSBDC that 
McNeese was helping small businesses while other LSBDC 
personnel were doing the same across South Louisiana. I held 
eight seminars on SBA disaster loans in four different towns, 
going through the applications line by line, doing my own news 
releases and photocopying, hauling boxes of forms around in my 
car. I held clients' hands while they cried. The owner of a 
party goods store with contracts for Christmas parties and 
Mardi Gras balls was in despair over those lost sales. I 
suggested she reduce her operations and lease part of her 
building to another business, which is what she eventually did. 
I prepared them for the months between the application and the 
actual disbursement of funds. The bad publicity after Katrina 
made many decide it just was not worth the effort. They did not 
even apply.
    I suggested credit unions or other quick money to keep them 
alive, explaining cash-flow and repayment ability, things that 
they had not really thought about because, before Rita, they 
survived on almost nothing, with no debt. They had a hard time 
figuring out how to start over.
    The LSBDC at McNeese is a very small office. My total 
operating budget is just over $150,000, including SBA, State 
funds, and funds from McNeese. Eighty-eight percent of my 
budget is for personnel costs, provides for one director, one 
business consultant, and one admin person--minimum staffing. 
With this staff, we expect to provide individual in-depth 
consulting to approximately 175 existing businesses and 
entrepreneurs and training to approximately 400 over this 
fiscal year.
    If another storm hits this summer, we will be in as bad a 
shape as we were before Rita, although we have learned some 
very good lessons.
    Thank you.
    [The prepared statement of Ms. Little follows:]

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    Senator Landrieu. Thank you, Ms. Little. Let me just ask 
you, did you put in your testimony that right after the storm, 
you received a budget cut from the State of Louisiana?
    Ms. Little. Yes, it is in my written testimony.
    Senator Landrieu. All right. Ms. Lazare--I am sorry. Did I 
miss that? I am sorry. Mr. Darbone?

 STATEMENT OF DAVID DARBONE, PRESIDENT, GRAND OAKS, INC., LAKE 
                       CHARLES, LOUISIANA

    Mr. Darbone. Thank you. Senators Vitter and Landrieu, thank 
you for inviting me here today to discuss what I think are 
important issues that we face in our region.
    As a local general contractor and commissioner of the port 
of Lake Charles, I have been immersed in the day-to-day 
rebuilding efforts of our city. When Hurricane Rita came 
blowing through our city, I was one of those people who decided 
to stay and weather the storm. My home and family did manage to 
make it through the storm with no one being injured and minimal 
damage to our home. Unfortunately, many others did not have the 
same result as we did.
    The day after the storm, I assessed the damage in my 
neighborhood and some of the surrounding area. I managed to 
gather my crew from wherever they had taken refuge and brought 
them to my house. We used a generator for electricity and went 
to work clearing trees off of homes and trying to do as much 
hurricane triage as possible.
    As people started returning to their homes, the intensity 
picked up in terms of everybody trying to get their homes 
repaired at the same time and contractors trying to do as much 
as they could to help. With approximately 100 licensed 
contractors doing as much as they could as fast as they could, 
the job was overwhelming.
    The local Home Builders Association became a critical part 
of helping people by providing information about local licensed 
contractors, and over time we helped rebuild our community. Our 
regional and local Senators have done a great job of working 
together to overcome insurance increases that hurricane victims 
have to deal with by trying to stabilize the cost that people 
have to add to an ever decreasing income. The Home Builders 
Association continues to provide continuing education to 
builders about hurricane code changes, new laws that the State 
now requires, and our challenge today is to try to educate 
faster than the new regulations are being implemented. So we 
are working hard to try to do that to get some of the 
contractors up to speed and stay on top of that.
    As Chairman of the Commissioners for the Port of Lake 
Charles, I am proud to say that we have been able to work with 
our Senators and Representatives, local and regional, to get 
their help in providing funds to allow us to grow our 
community. The port of Lake Charles is the 12th largest port in 
the country and the 4th largest port in Louisiana. We think we 
are the No. 1 port in Louisiana in heart and energy, and the 
port and surrounding businesses along that channel provide an 
economic impact of $4.5 billion in business revenue, $2.3 
million in personal income, $250 million in State and local 
taxes, and like Senator Landrieu said, 31,000 jobs.
    The passing of the WRDA, the Water Resources and 
Development Act, was critical to the port. This bill provided 
$15 million to install rock along the banks of the channel to 
prevent erosion. The port continues to maintain our channel, 
which is not only critical to our community but to the Nation 
as well. With the completion of Sempra LNG, our channel 
corridor will provide 20 percent of the Nation's natural gas 
supply and 4 percent of the Nation's oil supply. This is the 
reason that we continue to ask our Senators to fight for more 
funds for us to maintain the channel.
    At this point, we have $14 million in our budget to do 
that, but that leaves us with a deficit of $7 million from what 
the total cost is. We are faced with a need of over $400 
million over the next 20 years to maintain our channel. And our 
need is great, but what would happen to the Nation if we could 
not provide them with heat in the winter?
    Finally, we are thankful for the GO Zone opportunity. The 
port of Lake Charles helped the Lake Charles Co-Gen Plant 
secure $1 billion on GO Zone funds, and those bonds helped to 
build the new gas plant here that is going to provide about 350 
high-paying jobs. We have on our radar two companies that we 
are on the short list with right now that if this deal goes 
through with those two companies, using the GO Zone bonds would 
be tremendous in helping them, and they are going to provide 
1,500 jobs to this area. And so we think that the GO Zone 
opportunity is a great opportunity, and we would really like to 
suggest extending that as much as we can, and the 50 percent 
part of that is really what helps attract some of those 
businesses to our area.
    The port is not only focused on bringing in new jobs, but--
--
    Senator Landrieu. Please wrap up.
    Mr. Darbone. The port is not only focused on bringing in 
new jobs, but closing the labor gap by offering scholarships to 
places like Sowela Community College, and the reason that we 
want to do that is because we think that if we bring in jobs 
and high-technical jobs to our area and we do not have the 
skilled labor to do it, then we are going to find ourselves in 
a quandary. So we are asking that if you take a look at places 
like Sowela, I think it is an emergency, the need that they 
have. We have students in trailers at this point, and I think 
at a minimum they have a need of about $30 million to get that 
college up to speed so that we can start preparing people to be 
prepared to take these jobs that we are bringing to Lake 
Charles.
    [The prepared statement of Mr. Darbone follows:]

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    Senator Landrieu. Thank you very much.
    Ms. Lazare?

 STATEMENT OF SHERI LAZARE, DIRECTOR, ENTERPRISE CONSORTIUM OF 
  THE GULF COAST WOMEN'S BUSINESS CENTER, LAFAYETTE, LOUISIANA

    Ms. Lazare. Thank you, Senator Vitter, and thank you, 
Senator Landrieu. Again, I am Sheri Lazare with the Enterprise 
Consortium of the Gulf Coast Women's Business Center, and I 
also want to personally thank you, Senator Landrieu, in helping 
us get that center approved and get the grants from SBA to get 
it started. So we are real excited to be able to do what we can 
for South Louisiana.
    As many citizens and you well know, the small businesses in 
our community are truly what drive our economic base. And after 
the hurricanes, we saw that the biggest sector that was hit was 
service and retail, and that was across the board.
    Now, after the second quarter 2006, most of South Louisiana 
had returned to within 1 percent of its pre-storm firm count, 
with the exception of Cameron Parish, which was down still 20.8 
percent.
    Now, the difficulty that the business owners are finding 
and experiencing in not only re-establishing growing and/or 
beginning new businesses is, as you have heard throughout the 
day, funding. It is the bottom line that they across the board 
are needing.
    In addition to the funding, the workforce pool is less 
experienced and less educated. That is what we are hearing from 
these business owners across the board, which, again, is 
draining more money from their pockets to then have to train 
the employees because they do not come with the necessary 
training that they need.
    The additional types of technical assistance that are 
needed vary greatly depending on the industry which we are 
talking about, but the common voice that appears throughout as 
far as TA goes is software assistance and just understanding, 
like you were saying, getting QuickBooks back up to speed, 
understanding the new Vista, understanding Office-07. In 
addition to that, the workforce that is coming in, where they 
may be technically savvy in being able to surf the Internet and 
things like that, they are not always technically savvy in the 
utilization and use of these programs.
    Additionally, with small businesses in the area, they hire 
two out of every three people, which, again, shows that 
encouraging small business growth will not only bring business 
and economy, but it will also bring labor force and employment 
opportunities.
    As far as women-owned and minority-owned businesses, the 
numbers are growing drastically. Just in Louisiana in 2002, 
there were over 86,000 women-owned firms. That was a total of a 
23-percent increase, up from 1997, and it generated over $12 
billion in revenues. Now, this does not include jointly owned 
businesses with women and men nor married partners with 
businesses as well. So, that would, of course, increase that 
number greatly.
    As for Hispanic-owned firms, in 2002 there were 7,646, 
which is an increase of 15 percent from 1997, and black-owned 
firms numbered 40,252, which is an increase of over 56 percent. 
So you can see that the need for minority- and women-owned 
assistance is growing greatly, as they are the largest 
populations which are starting businesses.
    As I stated, being that we are a part of the Enterprise 
Consortium of the Gulf Coast, in 2006 we assisted over 750 
people, and 40 percent of those were women. In addition to 
that, 15 percent of them were pre-startup businesses, and 82 
percent of those pre-startup businesses were all minority-owned 
and minority-initiated; and of all the 750 that we assisted, 95 
percent of them were at economic disadvantage. As they stated, 
individuals have been dipping into their personal funds in 
order to make up for what the business has not been able to do, 
and as a result, putting both their business and themselves in 
financial jeopardy.
    [The prepared statement of Ms. Lazare follows:]

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    Senator Landrieu. Thank you very much.
    Our final witness, Mr. van de Werken.

  STATEMENT OF DONALD C. VAN DE WERKEN, DIRECTOR, NEW ORLEANS 
     U.S. EXPORT ASSISTANCE CENTER, NEW ORLEANS, LOUISIANA

    Mr. van de Werken. Thank you. I will try to summarize my 
comments and give my time back to Eugene back there.
    My name is Don van de Werken. I am with the U.S. Export 
Assistance Center, and we are part of the U.S. Department of 
Commerce International Trade Administration. Our mission at the 
USEAC is to help Louisiana small- and medium-sized enterprises 
find international markets for goods and services. We have 
offices in most major embassies and consulates around the 
world, and we also have several offices through most large 
metropolitan areas throughout the United States. In Louisiana, 
we have our main office in New Orleans, and we have folks 
scattered throughout the State.
    International trade plays a key role in Louisiana's 
economy. In 2007, Louisiana exports were $30.4 billion compared 
to $23.5 billion in 2006. Louisiana exports have grown 29.2 
percent in 2007, more than double the overall U.S. rate of 12.1 
percent. And I will also point out I just saw something in the 
Miami Herald that their growth rate was only 10 percent. So we 
tripled the amount of exports. The value of export shipments 
for agricultural products throughout Louisiana's lower 
Mississippi River ports account for 50 percent of all U.S. 
grain exports, and it was particularly high showing an almost 
40-percent increase over last year.
    In fiscal year 2004, before Rita and Katrina, our office 
met with about 500 companies in about 1,600 counseling 
sessions. We reported about 81 export successes from 35 
companies. As you can expect, those numbers drastically 
decreased in 2006. But I am happy to report that that picture 
is improving. And as I said, I am summarizing this stuff. I 
submitted the full remarks here.
    I want to point out that it was the leadership of the 
District Export Council, various other economic development 
organizations, George right here was instrumental in helping 
spread the word that exporting is important, even though you 
are suffering a disaster.
    I also want to thank Senator Landrieu's office for helping 
us realign some of our export service costs, and it was a big 
boost to some of our smaller companies. To date, 39 companies 
used our reduced-price services, and that was a big boost.
    I also want to thank both Senators for encouraging our 
folks back in Washington to do an issue of our Export Magazine 
Commercial News USA, focusing on hurricane-affected companies 
and there are some copies in the back for those of you who 
would like to look at it.
    On the topic of Katrina and Rita, I just want to highlight 
two important things that are happening.
    Senator Landrieu. If you could try to wrap up, you have got 
about 30 seconds.
    Mr. van de Werken. OK. Real quick is that we did see trade 
volume increases after the storm. We do not know what happened, 
but I think what was most important is that--and I can hear it 
from the rest of the folks talking--the companies that were 
export ready, those that had a plan, that were able to react 
quickly and were able to refocus those goods and services to 
other markets, survived much better than those that did not 
have a plan.
    That ends my comments.
    [The prepared statement of Mr. van de Werken follows:]

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    Senator Landrieu. Thank you very much. I have a line of 
questioning, and then I will turn it over to Senator Vitter. 
And if we have time, we will take a question or two, if we can.
    But let me begin with this school renovation piece. We were 
able to push through against, again, the advice or support--
without the support of FEMA or Homeland Security a special Act 
that was just signed by the President to expedite the 
rebuilding of our elementary and secondary schools. These 
project work order sheets, we have billions of dollars stuck 
basically in a pipeline. And we were successful in passing that 
bill through for elementary and secondary schools.
    I am going to commit today to do a similar bill for our 
higher ed and vo-tech schools and call it the emergency that it 
is. I do not understand why the Federal Government is resisting 
our efforts--and we both support this; our whole delegation has 
supported this--to do basically a global sort of reimbursement, 
a streamline reimbursement to get our technical colleges and 
universities up, which is a key, to me, to helping support the 
growth of all business in Louisiana, but particularly as we 
have heard testimony from almost all of you on this subject 
today.
    Second, based on a question, I think, Ms. Little, that you 
brought up, or a comment, I would like Mary Lynn, if you do not 
mind, just to stand up because there is a special program that 
we did implement for software that Microsoft is giving to small 
businesses. You do not have a microphone, but would you speak 
loudly enough so the testimony can go on the record, of what 
Microsoft has agreed to do for all small businesses--and it has 
been unprecedented--in this hurricane recovery. Go ahead. Can 
you bring her a microphone just to get this on the record?
    Ms. Wilkerson. Senator Landrieu brokered a deal with 
Microsoft, who literally committed millions of dollars in 
Microsoft software for small businesses. Essentially what they 
would do is go to their regular retailer and check into that. 
Then they would come to the SBDC to be vetted and approved. 
This process takes about 2 weeks, and we are going to be 
offering training in conjunction with that so that people can 
understand how to use the software effectively and efficiently.
    There is a lot of confusion about the five license. That is 
really not nearly as bad as it seems. The site licenses--there 
are five--can be a mixture of any kind, and you really only 
have to have two computers to make that work. And so what we 
are doing is helping people explore. You might want to do 
Internet development, so you need that software for Web pages 
or whatever. But they are going to pay the first year of that 
license to your local distributor so there are no funds lost in 
the State of Louisiana.
    Senator Landrieu. Which is a value of about, what, $7,000 a 
year?
    Ms. Wilkerson. It can be up to, I think, about $12,500, as 
much as. So it just depends on the packages you buy, and it 
really is an inexpensive way. It is less expensive than going 
to major suppliers of software when you do it this way, and 
they understand that a business may not be able to pay year two 
and three. But you make a commitment, and you can upsize or 
downsize, no payment penalties. It is a great program, and it 
is a partnership with Microsoft.
    Senator Landrieu. Well, we thank Microsoft, and I just 
wanted to bring that to the attention of this hearing because 
we are, many of us--not just the two of us but others--trying 
to think outside the box, offer new solutions, try to engage 
with the private sector to bring help to our small businesses, 
and that was one of the specific ideas that I had remembered.
    Let me just ask one more question, and then I will turn it 
over to Senator Vitter for his line of questioning.
    Mr. Manuel, I am glad for your testimony today because your 
testimony is typical, with all due respect to the SBA, of many 
of our small businesses that really struggled to try to reach 
to them and were left wanting. What would you recommend to them 
in the future so that the SBA could be more accountable to you, 
more appropriate to your needs at the time? You had been in 
business successfully for 16 years. You were known to the local 
lending or banking community. What could the SBA have done--you 
know, what do you want them to do in the future?
    Mr. Manuel. Send a letter. If I could have gotten some kind 
of a response--you know, they left me hanging in the balance. 
When the lady, Mr. Swift's--on their floor over at the Chamber, 
when she helped me with my application, that took 4 or 5 days. 
We had to go and find those documents we were talking about 
that were all messed up and disheveled and everywhere. She 
said, you know, we are really swamped right now, but you will 
hear from us, you will get a letter, you know, you will hear 
back from us.
    I heard nothing. I never got anything saying, hey, you were 
turned down, this is what we are doing, apply back. Nothing.
    Senator Landrieu. Well, we hope that some of that has been 
solved. We do not know, and only time will tell. And, 
unfortunately, we are going to probably face another disaster 
somewhere along the Gulf Coast. We hope that the SBA is taking 
steps that we have mandated through our Committee. There have 
been some mandates through other committees and some work that 
SBA has taken on by themselves administratively. But the fact 
of the matter is that just the number of loans out the door 
does not tell the whole story. We are proud, I think, of the 
700 loans out the door to southwest Louisiana, but what we are 
also concerned about is the loans that never got out the door 
to small businesses that decided to close up and give up 
because they just could not wait any longer.
    And one more question. We have talked about this credit 
crunch, or a lot of businesses, when I have asked them, well, 
how did you survive, they said, I just used my credit card, 
Senator, and I have got $20,000 or $40,000 on my credit card. 
Now with the downturn in the housing industry and that 
collateral losing some value because of the subprime mortgage 
crisis around the country--thank goodness we are not in the 
forefront of that, but we have still been affected. Is there 
something that any of you would want to suggest as maybe a way 
that we could get some kind of lower interest rate or longer 
repayment on some of those credit cards that might smooth out 
this debt? Not forgive it, but smooth out the debt so that 
businesses could maybe pay it over a longer period of time and 
not have that running monthly punitive interest that the credit 
card companies provide?
    Ms. Lazare, have you proposed anything like this for a 
special sort of emergency situation?
    Ms. Lazare. We are in discussions about it with Acadiana 
Regional Development District, the local SCORE, and the SBDC at 
UL currently.
    Now, one of the things that we have discussed in terms of 
that is, like you stated, giving them not only a longer time, 
but as the credit card companies, many of them did right after 
the hurricanes, forgiving the interest rate for a period of 
time and just letting them--whatever balance they already had, 
allowing them to start paying that down, and then maybe 6 
months, 9 months later, attach the interest rate back; or even 
giving them longer times with less penalties, because so many 
of them now are actually in the process of either claiming 
bankruptcy or actually losing their homes because they have 
invested so much of their personal assets into their business.
    Senator Landrieu. Senator Vitter?
    Senator Vitter. Thank you, Mary.
    Well, Mr. Manuel, I, too, was distressed to hear your 
experience, and we will look into that specific experience to 
understand what happened and get back to you with that. And 
thanks to all of you for your testimony. I am going to forego 
specific questions. I will follow up with you individually so 
we can have at least some comments and questions from the 
audience, and then we will be wrapping up. But thank you very, 
very much.
    Senator Landrieu. OK. If there are any questions, you can 
turn them in in writing to this desk here, and I will sort 
through some of them, if we have time.
    George, before you all leave, while I am looking at those, 
do you have any other comments that you want to make for the 
record about anything, any other suggestions we could take 
back?
    Mr. Swift. Well, your suggestion about the technical 
community colleges and the assistance, we have a workforce 
crisis here with all the announced projects that we have and 
the needs right now. We are estimating about 6,000 workers are 
needed in the petrochemical industry, aviation industry, and 
construction and trades. The quickest way--and, also, the study 
that Mayor Roach referred to showed that we have a lot of 
underemployed people and a lot of people with general degrees 
but lack skills, if they could get some skills through the 
technical community college, they can earn very good. Aviation 
jobs, $70,000, $80,000 a year; petrochemical, the same range; 
welders, pipefitters, and so forth, very good careers with 
opportunities for advancement.
    So if we could jump-start the facilities to enable us to 
get more people into the workforce training, you have to have 
some certification or some skills to get these jobs, but that 
would get us over the hurdle. So that would be a major factor 
if that could be accomplished.
    Senator Landrieu. Well, I plan to take this message back to 
Washington with renewed energy, because we are asked to provide 
constantly additional H-1B visas for people to be brought in to 
do the work that needs to be done. And while I am open to the 
needs of the industry for that, it is just very disheartening 
to know that we are not doing the kind of training right here 
to teach our own native workforce and give them the opportunity 
for these $70,000, $80,000, $90,000 jobs.
    So Senator Vitter and I and the other Senators really have 
to balance the request of the industries to allow us to 
expand--I think it is a $60,000 annual limit on H-1B visas, 
when we know that we are not investing in the kind of 
instruction and opportunity that could provide that workforce 
here. So that is something I am going to take back with renewed 
energy.
    Ms. Lazare. If I can add to that as well?
    Senator Landrieu. Ms. Lazare?
    Ms. Lazare. Because I know one of the concerns from the 
workforce as well, in conjunction with the vo-techs and the 
community colleges, is a lot of times they cannot get the 
necessary training unless they actually enroll in that 
institution, and a lot of times that is very discouraging for 
individuals to enroll for a class or a training and then leave 
again. So I know there has also been talk about offering it as 
continuing education courses through either the universities or 
the vo-techs and community colleges so they do not actually 
have to enroll and they can do it and still earn the necessary 
credits and requirements, but without having to enroll.
    Senator Landrieu. OK. You all have been an excellent panel. 
If there are any questions, I will look at them now, but we 
have got to wrap up. And if not, all of these comments that are 
being submitted, we will put them into the record.
    I think this is a question about the H-1B visas with the 
shortage of workforce. Is the Federal Government considering 
making Louisiana exempt from the quota given the skilled 
workforce is limited? And we just discussed that. We said, yes, 
we are very sensitive to the needs of our business, but I for 
one--and Senator Vitter can speak for himself most ably. But I 
am very concerned that we are not doing what we need to do here 
to train our own people for these very excellent jobs, and 
particularly giving our high school students that are 
struggling an opportunity, kind of a career track, starting in 
their sophomore, junior, or senior year going right into work. 
And if they wanted to go back to college, they most certainly 
could. I mean, nothing in this track prevents them from seeking 
a higher degree or a master's or a Ph.D. But at least when they 
graduate, they are ready to go to work and can always go back 
to school, is kind of the process we want to create.
    All right. We will take all of these other comments that 
were sent in and put them in the record of the hearing. This 
hearing will remain open, the record, for 2 weeks, to submit 
any further comments to the record. I thank again Senator 
Vitter for joining me, and thank you all. You were an excellent 
panel.
    The meeting is adjourned.
    [Whereupon, at 3:13 p.m., the Committee was adjourned.]
































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