[Senate Hearing 115-148]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 115-148
 
                   AN EARLY REVIEW OF SBA'S RESPONSE
                         TO THE 2017 HURRICANES

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 27, 2017

                               __________

    Printed for the Committee on Small Business and Entrepreneurship
    
    
    
    
    
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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED FIFTEENTH CONGRESS

                              ----------                              
                    JAMES E. RISCH, Idaho, Chairman
             JEANNE SHAHEEN, New Hampshire, Ranking Member
MARCO RUBIO, Florida                 MARIA CANTWELL, Washington
RAND PAUL, Kentucky                  BENJAMIN L. CARDIN, Maryland
TIM SCOTT, South Carolina            HEIDI HEITKAMP, North Dakota
JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
JAMES M. INHOFE, Oklahoma            CORY A. BOOKER, New Jersey
TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware
MICHAEL B. ENZI, Wyoming             MAZIE K. HIRONO, Hawaii
MIKE ROUNDS, South Dakota            TAMMY DUCKWORTH, Illinois
JOHN KENNEDY, Louisiana
          Skiffington E. Holderness, Republican Staff Director
                 Sean Moore, Democratic Staff Director
                 
                 
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Risch, Hon. James E., Chairman, and a U.S. Senator from Idaho....     1
Shaheen, Hon. Jeanne, Ranking Member, and a U.S. Senator from New 
  Hampshire......................................................     2
Rubio, Hon. Marco, a U.S. Senator from Florida...................     5

                               Witnesses
                                Panel 1

Rivera, Mr. James, Associate Administrator, Office of Disaster 
  Assistance, Small Business Administration, Washington, DC......     4

                                Panel 2

Davis, Mr. Daniel, President and CEO, JAX Chamber of Commerce, 
  Jacksonville, FL...............................................    26
Lawrence, Dr. Steve, Executive Director & Research 
  Professor,Texas Gulf Coast Network SBDC, University of Houston, 
  Houston, TX....................................................    28

                          Alphabetical Listing

Association of Women's Business Centers
    Testimony dated September 27, 2017...........................    42
Cruz, Hon. Ted
    Prepared statement...........................................    37
Davis, Mr. Daniel
    Testimony....................................................    26
    Response to questions from Senator Rubio.....................    47
Lawrence, Dr. Steve
    Testimony....................................................    28
    Response to questions from Senator Rubio.....................    49
Nelson, Hon. Bill
    Prepared statement...........................................    34
Risch, Hon. James E.
    Opening statement............................................     1
Rivera, Mr. James
    Testimony....................................................     4
Rubio, Hon. Marco
    Opening statement............................................     5
    Prepared statement...........................................     8
Shaheen, Hon. Jeanne
    Opening statement............................................     2


                   AN EARLY REVIEW OF SBA'S RESPONSE



                         TO THE 2017 HURRICANES

                              ----------                              


                     WEDNESDAY, SEPTEMBER 27, 2017

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at at 3:05 p.m., in 
Room 428A, Russell Senate Office Building, Hon. James Risch, 
Chairman of the Committee, presiding.
    Present: Senators Risch, Rubio, Ernst, Inhofe, Rounds, 
Kennedy, Shaheen, Cantwell, Markey, Booker, Coons, and 
Duckworth.

OPENING STATEMENT OF HON. JAMES E. RISCH, CHAIRMAN, AND A U.S. 
                       SENATOR FROM IDAHO

    Chairman Risch. The Committee will come to order, and we 
want to appreciate and thank everyone who is here today, and we 
are going to have this hearing on an early review, in fact, a 
very early review, of SBA's response to the 2017 hurricanes.
    We have a couple of panels, and we have a number of 
Senators who are going to join us, who have to come and go, and 
so we are going to try to accommodate everyone's schedule, so 
that we can give everybody an opportunity to get in what they 
want into the hearing.
    So, with that, I want to thank everyone for coming today. 
Senator Shaheen and I are holding this hearing to review SBA's 
early response to the hurricanes that have caused disastrous 
devastation in just the past 2 months.
    Today's hearing is so important to the millions of 
Americans affected this year and thus far this year.
    I appreciate our three witnesses for appearing before us 
today. I know it cannot be easy leaving your home States in 
recovery efforts for even just 1 day to come up and testify, so 
I thank you, and the American people thank you, too, for 
bringing your perspective to this hearing.
    Hurricanes Harvey, Irma, and Maria have caused total and 
unprecedented devastation in portions of Texas, Florida, Puerto 
Rico, the U.S. Virgin Islands, and the rest of the Caribbean. 
These record-setting hurricanes that hit these coastal regions 
of the United States back to back to back have caused record-
setting flooding. Phone and power lines are still down, making 
it very challenging for first responders to get access to the 
affected areas.
    Many of these businesses and communities will face years of 
rebuilding before anything returns to normal. We all need to do 
everything in our power to help our fellow Americans get the 
most care and assistance possible.
    As you know, the Small Business Administration is one of 
the disaster agencies. It is the only time the SBA's interests 
are not just with small businesses but rather all businesses, 
private and non-profit organizations, and homeowners and 
renters who are affected by natural disasters.
    The SBA's role and coordination with FEMA and other Federal 
agencies is to offer low-interest, long-term disaster loans to 
those that have experienced hardships because of hurricanes, 
floods, tornadoes, and other natural disasters. Their primary 
focus is not only grants but on loans, and we will hear a 
little bit more about that today as we go on.
    To put in perspective the devastation that was caused in 
the past few weeks and the impact it had on the communities 
throughout these coastal parts of the United States, the SBA 
has approved more than $500 million in disaster loans for 
Hurricane Harvey, and unfortunately, that number will continue 
to grow. We are seeing more recovery efforts get under way in 
Florida and Puerto Rico, where there is significant, widespread 
damage and hardship.
    I am proud of those that continue to help with the disaster 
assistance programs, as we all are, and the countless 
volunteers that have donated their time and resources to help 
those in need.
    I look forward to hearing from all three witnesses. I thank 
them for being here today, and Senator Rubio--I am going to 
turn it over now to Senator Shaheen. Senator Rubio is going to 
be here in just a little bit, and since he is one of the States 
directly affected and has this week been in Puerto Rico to 
personally observe what has happened there, he has a unique 
perspective. When he gets here, we will ask him to say a few 
words also.
    So, with that, my colleague, Senator Shaheen.

OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, AND A 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Well, thank you, Mr. Chairman, and I think 
it is very important that we are holding this hearing today as 
we look at how we can help small businesses recover from the 
recent unprecedented and catastrophic hurricanes that we have 
all watched on our evening news every day. As we hold this 
hearing today, we have millions of our fellow citizens who are 
in imminent danger--without power, without communication, 
living with damaged or destroyed infrastructure. American 
citizens in Texas, Florida, Puerto Rico, and those in the U.S. 
Virgin Islands face a long and steep road to recovery. Today's 
hearing will give us an opportunity to learn how Congress can 
help.
    Senator Risch mentioned Senator Rubio's efforts in Puerto 
Rico, and I want to also call attention to the situation in 
Puerto Rico. What we are seeing there is nothing short of a 
humanitarian crisis. We have people who are in imminent danger, 
and our fellow citizens deserve a robust and swift response 
from both all of us in Congress as well as the Administration.
    I am looking forward to hearing about plans for the island 
as well as those areas affected by Hurricanes Harvey and Irma.
    I know it will be some time until we know the impact of 
these disasters, but in early September, Congress passed a 
supplemental appropriations bill to provide more than $15 
billion for disaster relief efforts, including $450 million to 
bolster the Small Business Administration's disaster response 
through low-interest loans to flood victims.
    Today's hearing is an opportunity for us to hear how SBA 
has responded--and I look forward to hearing your testimony, 
Mr. Rivera--to see the progress that has been made to date and 
also to learn what more we have to do.
    It is also an opportunity to discuss how the Federal 
Government and our local partners can continue to be valuable 
resources to small businesses as they face what seem like must 
seem like an impossible task, and that is recovery. Natural 
disasters can strike anywhere at any time, and while today's 
hearing is focused on the recent hurricanes, it is critical for 
all of us to ensure that the SBA will be ready to respond when 
the next disaster strikes in any of our States.
    And, unfortunately, what we are seeing is that natural 
disasters like the hurricanes, the recent hurricanes, are 
becoming all too common, and as we work to better respond to 
these disasters, we need to look at ways to mitigate damages 
and to help small businesses recover faster, because when a 
disaster strikes, time is of the essence. So I know that we 
will all continue to work with SBA to ensure disaster resources 
are supported by supplemental appropriations, and that these 
appropriations are also available to small businesses.
    So, with that, I look forward to hearing from our witnesses 
today, and, Mr. Rivera, I am looking forward to hearing what 
you have to say.
    Thank you, Mr. Chairman.
    Chairman Risch. Thank you very much, Senator Shaheen.
    Our first panel is a panel of one, but I know you can 
handle it, Mr. Rivera. So, with that, Mr. James Rivera has been 
the Associate Administrator of the Office of Disaster 
Assistance at the SBA since 2009. Prior to his current 
position, Mr. Rivera served as the Deputy Associate 
Administrator in the same office and has worked through 
disasters such as Hurricanes Katrina, Rita, and Wilma.
    Mr. Rivera and his team have been hard at work the last 
couple of weeks, and unfortunately, it seems for the 
foreseeable future as these affected areas work through the 
difficulties they are having.
    They have been on the ground in Texas and Florida after 
both Hurricanes Harvey and Irma assessing the damage and 
working in coordination with other Federal, State, and local 
officials with recovery and repair efforts for the victims.
    Mr. Rivera, thank you very much for all that you have done 
in the past and are doing now for Americans impacted by these 
terrible disasters. The good thing about all this is we have 
somebody who has substantial experience in these things and is 
able to step up and be ready on day one for the job.
    As we consider the storms in these coastal regions, I would 
like to mention the devastation and damage, and I would be 
remiss if I did not mention the damage that wildfires have 
caused this summer in the western United States.
    I recently helped to introduce a bipartisan bill to 
Wildlife Disaster Funding Act of 2017, which would help with 
wildfire funding and would protect desperately needed funding 
for fire prevention.
    Disasters look different across the United States, and we 
cannot forget other parts of the country that continue to be 
affected perennially by disasters as well.
    We in the western States have been working over the last 6 
years to redo the way that disaster funding is handled as it 
relates to fires. A good example of that is that the Forest 
Service in 1995 spent 16 percent of their budget on 
firefighting, and this year, just this year, up to where we 
are, have spent 56 percent of its budget. And they use what is 
called ``fire borrowing,'' and what they do is they take--when 
they have these huge expenses, they take money and borrow it 
from other accounts, such as the accounts that are used for 
prescription-type work on the forest to prevent fires. So this 
whole thing becomes a circle of problems.
    And, indeed, the Forest Service, the BLM, and others are 
using borrowing, which is very difficult. I understand that the 
disasters--this certainly does not take away from the disasters 
of the hurricanes that we have just had nor from the tornadoes 
that we have experienced in the past nor from earthquakes that 
we have experienced in the past, but nonetheless, it is a 
disaster, the effects of which are the same for the people that 
are involved.
    So, with that, I want to--I look forward to hearing an 
update from Mr. Rivera about recovery efforts going on in the 
Texas, Florida, and Caribbean regions.
    Thank you again for coming today. Mr. Rivera, the floor is 
yours.

 STATEMENT OF JAMES RIVERA, ASSOCIATE ADMINISTRATOR, OFFICE OF 
       DISASTER ASSISTANCE, SMALL BUSINESS ADMINISTRATION

    Mr. Rivera. Good afternoon, Chairman Risch, Ranking Member 
Shaheen, and members of the Committee. I appreciate the 
opportunity to talk to you today about SBA's disaster 
assistance response to the recent hurricanes.
    While I have been part of SBA's Office of Disaster 
Assistance for over 20 years, I have only had the opportunity 
to work with Administrator McMahon for the past 7 months. 
During this time, I appreciated her direction and how she has 
challenged SBA to be prepared for large-scale disaster events, 
the magnitude of what we are experiencing today with Hurricanes 
Harvey, Irma, and Maria.
    During her nomination hearing before this Committee, the 
Administrator mentioned that disaster assistance would be one 
of the first items she would address at the agency. In her 
words, ``Disasters do not pick a time. They happen, and we need 
to be prepared.''
    After her confirmation hearing and now in leading SBA, the 
Administrator has pushed us to test our disaster response 
models. In the months leading into hurricane season, we tested 
our system along the lines of Hurricane Katrina times three. 
Little did we know then and that what we know now that we would 
have three major hurricanes to respond to.
    SBA's disaster assistance mission is to provide affordable, 
timely, and accessible financial assistance following a 
declared disaster to businesses of all sizes, private and non-
profit organizations, as well as homeowners and renters. SBA 
works very closely with our Federal partners, including FEMA.
    During the initial response to a disaster, wherever FEMA 
goes, SBA goes. We collocate with FEMA in disaster recovery 
centers and even deploy our staff to support mobile units.
    We also stand up business recovery centers, generally in 
coordination with SBA resource partners, such as small business 
development centers, SCORE, and women business centers in order 
to provide free business counseling services and technical 
assistance to the impacted businesses.
    We are now in our fifth week since Hurricane Harvey first 
made landfall in Texas. The impact of Hurricane Harvey and then 
Hurricane Irma and followed by Hurricane Maria have greatly 
expanded the footprint of affected disaster regions.
    At this stage in the recovery efforts, I want to emphasize 
a few items: first, the dedication of the men and women on 
SBA's disaster assistance team; second, the response by our 
agency at an enterprise level supporting our office; third, the 
interagency coordination by our Federal partners, which in my 
opinion have been unparalleled with any recent disasters; and 
fourth, the foresight of this Administration in identifying and 
declaring early on Federal disaster areas.
    Additionally, SBA has provided daily updates to your 
offices. This information provides a snapshot of our staffing, 
loan activity, and agency notices. For general information to 
the public, the SBA website, sba.gov, remains the best source 
for timely information. The website is updated several times a 
day with details on our program offerings, and the website also 
has regional-specific information for respective hurricanes.
    Since the agency's inception in 1953, we have provided more 
than $56 billion to over 2 million disaster survivors. To give 
you an idea of the scope of our current disaster activity, in 
the first 30 days following Hurricane Harvey in Texas, SBA has 
approved over $500 million to disaster loan assistance. This is 
a testament to the dedication and hard work of SBA staff at all 
levels. However, we are continuing to lean forward and on board 
and train personnel in critical positions so that we can meet 
the needs of disaster survivors.
    Finally, while the focus today is on Hurricanes Harvey, 
Irma, and Maria, I want to point out to the Committee that SBA 
continues to handle over 30 other Federal and other agency-
declared disasters. We continue to watch the wildfires 
affecting areas in the West, and we will monitor any request 
that we receive across the country that engage our SBA 
resources.
    Mr. Chairman, thank you again for the opportunity to 
testify today. I look forward to the Committee's questions.
    Chairman Risch. Thank you very much, Mr. Rivera.
    I would invite Senator Rubio to make a few remarks.

  OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. SENATOR FROM 
                            FLORIDA

    Senator Rubio. Well, I appreciate the indulgence, Mr. 
Chairman and to my colleagues, and I will be incredibly brief.
    Obviously, Florida was deeply impacted by Irma, and then, 
of course, the Territory of Puerto Rico, which is the length of 
Florida itself. And I think one of the things that this hearing 
hopefully will highlight is we are used to seeing storms as 
flooding events or the destruction of structures. Buildings are 
destroyed. Roofs are gone. But after all that stuff is fixed or 
even when it is no longer traumatic, the underlying damage can 
go on for years.
    The Florida Keys is a unique place. Virtually, every 
business there is a small business, some in the families for 
generations. In the lower Keys, they will have no revenue now 
or for the foreseeable future. How they survive is very--I 
doubt significantly some of them will be able to without a lot 
of assistance, and that is where SBA is so critical because 
they will get the power up and the roads cleared. And a lot of 
the business withstood, but the underneath damage that happens 
could literally redefine a community.
    The highest and best use of a lot of these places would 
trend it towards larger operations, and the keys could lose its 
characteristic.
    I would imagine my colleagues from all over the country and 
New Jersey itself has faced this not so long ago. I understand 
that the damage of these storms go well beyond the images of 
flooding and structural damage, and so that is why these 
programs are so important. I think when we get to the question 
portion, we will be asking a little bit about some of the 
details that emerged in the rollout.
    But I thank you for that indulgence and thank the SBA for 
the work they do. I think you have been busier on disaster 
relief than you have in a long time, and let us hope we are out 
of storms, at least for this year, but thank you.
    Chairman Risch. Senator Rubio, since I think you are the 
only one on the Committee that has been on the ground in Puerto 
Rico, this week, as a matter of fact, would you mind--I have 
heard part of the perspective you have. Would you mind touching 
on that just briefly as far as what you have seen in Puerto 
Rico?
    Senator Rubio. Yeah. It is a looming crisis.
    Let me just start by saying that to be in the tropics for 8 
or 9 days without electricity, without water, without medicine, 
nothing good happens. So imagine if you are a diabetic living 
outside of San Juan. San Juan is not doing well, but the rest 
of the island and islands are in terrible shape. In fact, we do 
not even know. So if you are a diabetic, you have had no 
insulin for 6, 7, 8 days, or the insulin you had went bad, the 
result could be catastrophic.
    The other thing I would just say is--and I have staff in 
Puerto Rico now--is even if you got the aid in, the system to 
distribute it is not well defined because of the nature of the 
storm.
    They need roads rebuilt. They need temporary bridges. They 
need emergency communications. They need a massive infusion of 
fuel, water, everything you can imagine. There is only one 
organization perhaps in the world that can deliver that 
assistance, and that is the resources of the Federal 
Government, particularly through the logistical capabilities of 
the U.S. military.
    If we do not do that, I fear--and I hope with all my heart 
that I am wrong, but I fear that some of the news that we are 
going to start getting about some of these areas that have been 
cut off are going to be horrifying. But I hope I am wrong.
    But I am increasingly concerned about the humanitarian 
crisis facing 3.5 million American citizens.
    [The prepared statement of Senator Rubio follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    
    
    
    Chairman Risch. Thank you, Senator Rubio. I appreciate your 
personal perspective on that.
    With that, I want to turn to--I am sorry.
    Senator Cantwell. Mr. Chairman, if I could just chime in 
there.
    Chairman Risch. Please.
    Senator Cantwell. I appreciate the Senator's comments, and 
as Ranking Member on the Oversight Committee of Interior, I can 
just tell you how critically important it is that we use every 
resource that we have to help Puerto Rico right now.
    And we have been trying to expedite both in DOE and 
Department of Interior anything that we can do to be helpful.
    I think that you hit on a point that we are hearing about, 
that we are seeing, that there are resources literally at the 
ports, but they cannot get the trucks there to deliver the 
goods. And the reason they cannot is because the roads are 
destroyed.
    So we need our military to be there to help clean those 
roads, to get them unblocked, to get people to be able to 
deliver the products that are arriving, and then figure out 
what else we can do to help get that right back up as soon as 
possible.
    So I know the world wants to respond, but we have to build 
that infrastructure on the ground, so that they can respond.
    So thank you, Mr. Chairman.
    Chairman Risch. Thank you, Senator Cantwell.
    With that, Senator Shaheen.
    Senator Shaheen. Well, thank you.
    And just to illustrate, I knew that Senators Rubio and 
Cantwell were going to focus on what has happened in Puerto 
Rico, so we brought some pictures of the devastation that I 
think say it very clearly.
    You can see the roads in this one, and we have one, I 
think, that has flooding. This is people who are obviously 
trying to get water, and then there is one that shows the power 
grid, which has been totally devastated. So they illustrate 
very well what both of you were talking about.
    And we did have General Dunford, the Chairman of the Joint 
Chiefs of Staff, before the Armed Services Committee yesterday, 
who got asked, as my colleagues on the Committee know--got 
asked about Puerto Rico, who said that they were ready, were 
trying to do everything they were being asked to respond. And 
so I think if we think there are other things that they should 
be doing, that we should share that with General Dunford and 
Secretary Mattis.
    I heard from--before this hearing started--from 
Representative Nydia Velazquez, who is the Ranking Member on 
the House Small Business Committee. She was born in Puerto 
Rico. She represents a district that has many people who have 
family in Puerto Rico, and like Senator Rubio, she was in the 
island over the weekend and saw the crisis firsthand. And she 
asked if I would ask a couple of questions, Mr. Rivera, at this 
hearing today.
    We all know that SBA has opened multiple disaster recovery 
centers in Florida and Georgia due to Irma, but none yet on 
Puerto Rico. As we know, the Island has few disaster centers, 
disaster recovery centers to help those who have been affected 
by the hurricane.
    So can you speak to how many disaster recovery centers that 
SBA plans to open in Puerto Rico and how soon you think they 
might get up and running?
    Mr. Rivera. Thank you for your question.
    We were actually on Puerto Rico when the first disaster 
hit, Wilma, and then obviously, we sheltered in place 
approximately 10 to 15 of our staff that were on the ground 
that were mobilized from the States into the island.
    We have five or six local hires that are still there, so 
everybody is accounted for. So thank God for that.
    Senator Shaheen. That is great.
    Mr. Rivera. From our perspective, what we are doing right 
now is we are closely following FEMA. We are going out into the 
communities with FEMA to do the registrations, to do that type 
of work.
    The challenge you have mentioned and that everybody has 
mentioned here is we are in response mode. There is only so 
much we can do when we started the recovery piece, so the 
priority obviously is the food, the water, the electricity. We 
are on the ground. We have been on the ground, and as soon as 
they start opening up recovery centers or business recovery 
centers, we will have that opportunity with the local small 
business development centers. We will work through that 
process.
    It is premature for me to say how many we are going to be 
opening, but we are going to be there for the long term.
    Senator Shaheen. And do you expect to be in other locations 
beyond San Juan?
    Mr. Rivera. So we actually have a physical presence also in 
Virgin Islands. We will never forget our islands. We have got 
St. Thomas, St. Croix, and Puerto Rico that are also very 
important. We have three staff, I think, when I looked at this 
morning's report, that are actually on St. Thomas. The 
challenge again is just the infrastructure in place, and once 
this gets stood up--and we are working through that process 
right now--how can we think differently because, if you do not 
have the electricity and we are automated from that 
perspective, how do we get into these communities. And that is 
what we are working closely with FEMA to figure out.
    Senator Shaheen. So is there anything this Committee can do 
to support SBA's efforts in any of these areas, but I know 
particularly in the islands where they have had so much 
devastation and have so little infrastructure left?
    Mr. Rivera. Obviously, everything that this Senate 
Committee does helps us from our perspective.
    The one thing that we just need is we just need to continue 
to--if this group and the staff can help with getting the word 
out, register with disasterassistance.gov, and then FEMA is 
going to start with the presence of how the outreach occurs, 
but the filter and the first step in this whole process is 
getting into the FEMA system.
    We will have to determine what the poverty guidelines and 
who stays with FEMA and who gets referred to SBA, but it is 
critical that everybody gets in the registration process. And 
part of that includes temporary housing, shelter on the FEMA 
side. So there is a whole host of opportunities that can help 
the disaster survivor.
    Senator Shaheen. Thank you.
    Thank you, Mr. Chairman.
    Chairman Risch. Thank you, Senator Shaheen.
    Senator Rubio just pointed out--and maybe you could address 
this question, and that is, obviously, the first step is to get 
registered with FEMA. How do you do that when you do not have 
electricity and you cannot get online?
    Mr. Rivera. That is a great--that is a great challenge we 
have right now on the island of Puerto Rico. So what we are 
doing is we are going community to community, municipality to 
municipality. It is a slower process, but FEMA has mobilized 
teams. We are sending teams of 15 into these different 
communities, and we are going to go community by community, 
until that point where the electrical grid and the power is 
back on, on the island.
    Chairman Risch. What is your level of confidence that you 
are going to be able to reach a sufficient number of people 
doing it that way?
    Mr. Rivera. Where I struggle is--we are talking about 
respond in relation to recovery. We are not a first responder 
at SBA, obviously. We are there to help with repair, replace 
what was damaged by the disaster, the structure, their personal 
property.
    So I feel a little bit--from our perspective, we are doing 
everything we can as far as--if you need food, if you need 
water, if you need shelter, you are not worried about your home 
that is damaged. Maybe you are, but as soon as we cross that 
bridge between response and recovery, I can assure you that we 
will do everything we can.
    Chairman Risch. Thank you.
    Senator Inhofe. Thank you, Mr. Chairman.
    Mr. Rivera, you have pointed out in your opening statement 
that there are a lot of other types of disasters you are 
working with simultaneously right now. I know that you have 
been very active in some of the wildfires and the things that 
you have been participating in my State of Oklahoma now.
    In Oklahoma, we do not have hurricanes, but we have 
tornadoes, and I think a lot of the things are in common in 
terms of remedies and what you are doing and the resources you 
have and how to use them. In fact, we have more tornadoes in my 
State of Oklahoma than any of the other States. So you might 
arguably say that we are the tornado and the football capital 
of America.
    [Laughter.]
    But, anyway, on May 20th, 2013, an EF5 tornado hit the town 
of Moore, Oklahoma, killing 24 people and causing $2 billion of 
damages. It is kind of interesting because that same town of 
Moore had been hit twice before in the 20 years prior to that. 
No-one has ever figured out why they continue to come back and 
hit that.
    Well, it took businesses a year to rebuild from the damages 
and the tornado. I remember scenes of cows being lifted up and 
dropped on top of cars and things like that, and so it was a 
major thing.
    Earlier this month, Congress approved an addition of $450 
billion for SBA's Disaster Loan Program, and I saw the figure. 
And I would like to have an explanation. Maybe it is not true, 
but of that, I understand that $225 million of that was 
dedicated for administrative expenses. So that is half of 
everything going to administrative expenses. What is the reason 
for that?
    Mr. Rivera. Thanks to Congress for providing us with 
supplemental funding.
    Senator Inhofe. Mm-hmm.
    Mr. Rivera. We have currently, prior to the supplemental, 
about $3 billion in loan authority, and we have about $150 
million in salary and expenses. The old rule of thumb is 
administrative expenses run 10 percent of every dollar we loan 
out.
    So of the $450 million, it translated to $2 billion, so it 
is $150 million, and we have a subsidy cost for the taxpayer. 
For every dollar we loan out, it costs the taxpayer 14.5 cents 
on the dollar, so the calculation was split between what is 
loan authority. So it gives us $2 billion more in loan 
authority, so now we have $5 billion, and then it gives us some 
more money in administrative expenses.
    Senator Inhofe. That is a good explanation because I had 
seen the figures, and I knew there had to be some reason for 
that. But not only do the small business owners suffer from the 
natural disasters to rebuild and all of that, what it takes in 
the first month after the May of 2013 tornado, the City of 
Moore saw 11.4 decline in sales tax revenue, so there are other 
things that are happening at the same time.
    I recall during all of the tornadoes I have been involved 
in and working with the people that the one question that is 
asked more than anything else, and that is, how do 
individuals--and businesses--but how do they know how they 
qualify for disaster loan assistance?
    Now, it would be difficult, in my case in tornadoes, but 
much more difficult where you do not have the communications, 
which is the subject of this hearing right now. How are you 
communicating that with these people?
    Mr. Rivera. About 99 percent of our applications come in 
through the electronic loan application process. When we go on 
the ground, we set up our centers with FEMA. We collate, and we 
have the ability to use laptops and have these individuals 
apply online.
    We used to have a pen-and-ink process, where everybody 
would complete an application. We moved from that several years 
ago, and post-Katrina, we established the electronic loan 
application on the website. And we found that the information 
that is provided by a disaster survivor when they are 
completing this loan application is much more accurate and 
factual versus when we are having to transpose a paper 
application.
    Senator Inhofe. When you are out of electricity, how does 
that work?
    Mr. Rivera. Well, so what we have to do is we have to come 
in with some power.
    We leverage FEMA's bandwidth when it comes to--if there is 
a tornado, usually they will come in with a satellite truck 
that will enable us to all hook up at the disaster recovery 
center.
    Senator Inhofe. Yeah. All right. Thank you very much.
    Mr. Rivera. Thank you, sir.
    Chairman Risch. Senator Booker.
    [No response.]
    Senator Coons.
    Senator Coons. Thank you, Chairman Risch, Ranking Member 
Shaheen, for holding this hearing and to Mr. Rivera and the 
other witnesses for sharing your expertise and for your very 
hard work in response to these multiple disasters.
    As I think other members of the Committee have already 
said, that my thoughts and prayers go out to the victims, to 
the businesses, to the families, to the communities that have 
been devastated by multiple hurricanes now in the Virgin 
Islands and Puerto Rico and Florida and Texas.
    And I am struck by a recent poll that suggests barely half 
of Americans realize residents of Puerto Rico are citizens of 
the United States. I have had a three-decade relationship with 
the Virgin Islands, and I just remind you and fellow Americans 
that residents of the USVI are also U.S. citizens. So I am 
hopeful that we are doing everything we can to move as quickly 
as we can.
    I am grateful that Congress acted quickly on the first 
installment of Federal disaster assistance earlier this month, 
but I think there is more we can and should do. So let me turn 
to a couple of questions for you.
    I am the Ranking Member on the Appropriations Subcommittee 
for the SBA, so I am particularly interested in your thoughts 
about whether the SBA has and is likely to continue to have 
sufficient, both resources and personnel to respond to these 
complex disasters and in particular with regards to the Virgin 
Islands and Puerto Rico, given now the impact of two different 
hurricanes.
    Do you have enough personnel and resources, and what is the 
timeline in which you will submit a second request and be clear 
about that next request?
    Mr. Rivera. From SBA's perspective, Senator--and thank you 
from an appropriations perspective--we have $5 billion in loan 
authority.
    Senator Coons. Yep.
    Mr. Rivera. So in the first 30 days, we committed $500 
million. So we believe we have sufficient funding to last 
through this first quarter.
    As you also mentioned, this is the down payment. So, 
internally, what we are doing is we are strategizing to see 
what the dynamics of the three major disasters we have here in 
front of us and what additional funding will be needed, and so 
we are working that internally. And we will provide that 
information when that assessment is completed.
    Senator Coons. Could you tell me a little bit about how you 
are coordinating with both FEMA and HUD? Because in other 
complex disaster response situations, making sure SBA is fully 
integrated into that response is one of the most important 
things to making sure you are effective.
    Mr. Rivera. Yes, sir. Absolutely. So we are not a first 
responder, but we are on the ground immediately with FEMA. SBA 
collocates at every location that FEMA opens a disaster 
recovery center. We are there at the joint field office. If we 
open up a business recovery center, we invite FEMA to also come 
with us because there are opportunities where there is a 
homeowner that may come into a business recovery center. We can 
still leverage that relationship back and forth.
    We also have a real good relationship with HUD. So all the 
information that we share back and forth, we have a data-
matching agreement where SBA and FEMA share data all the time, 
and then when HUD comes in with their assistance, they have the 
ability to look at everything that FEMA has provided and SBA 
has provided.
    Senator Coons. Do you have business recovery centers open 
and operating in the Virgin Islands?
    Mr. Rivera. We have three staff on the Virgin Islands, but 
we are in that same situation where we are working closely with 
FEMA. And we are starting to figure out strategically where do 
you go in the neighborhoods and what neighborhoods are severely 
impacted, and that has been the strategy.
    But, if I can, this is really response, and we are part of 
the recovery team, so we are just trying to hit the nexus 
between where response ends and where recovery starts.
    Senator Coons. And in Puerto Rico?
    Mr. Rivera. We have about 20--about approximately 25 staff. 
We actually had staff on the ground when Maria hit that were 
there for the prior disaster, and they sheltered in place. But 
everybody is accounted for.
    Senator Coons. And in your opening, you mentioned SBDCs, 
SCORE, women business centers. Can you tell me just a little 
more detail about how they will help? In some cases, I would 
assume they already have outreach networks. They already have 
resources on the ground. How will they be helpful longer term 
to make sure that applicants understand what they are eligible 
for, complete their applications in a timely way, and that 
there is effective follow-through?
    Mr. Rivera. So thank you, Senator. I cannot thank our 
resource partners enough. Small business development centers, 
women business centers, SCORE, they are just all fabulous for 
our perspective. They help leverage our organization.
    We are snapshot lenders. So when you come in and you apply, 
we make a decision based on the information we have, and so 
what we do is in situations where we decline somebody or 
whether we approve somebody, we have the resource partners we 
refer them to. And what that does is that enables, for example, 
a small business development center to work with a declined 
applicant, and they can rework the debt.
    I was a former banker, so somebody would come to me, and we 
could rework the debt, restructure the debt, so they could come 
back to SBA, and they could actually qualify for a disaster 
loan. So we have had a very high success rate. When they come 
through, a high success rate after they have been declined with 
us and after they go through SCORE counseling or SBDC or WBC 
counseling, and they come back to us. Their debt has been 
restructured, and they can actually--we can actually make a 
loan back to that disaster business.
    Senator Coons. That was very helpful. Thank you, Mr. 
Rivera.
    Mr. Rivera. Thank you, sir.
    Chairman Risch. Senator Ernst.
    Senator Ernst. Thank you, Mr. Chairman, and I want to thank 
the witnesses from both our panels today.
    Of course, echoing the thoughts of many of the Senators 
that have already spoken, our hearts really do go out to those 
that have been victimized by these hurricanes.
    Similar situation to Oklahoma, in Iowa we do not see those 
types of disasters. We have the occasional tornado and 
potential flooding situations.
    One thing that Senator Rubio failed to mention in this 
setting that he had mentioned to a number of us yesterday is we 
have to remember that Puerto Rico and the British Virgin 
Islands are islands, and the recovery process is much, much--or 
excuse me--the response even to those hurricanes takes much, 
much longer.
    Telephone poles, as he was explaining to us, they have to 
be barged to the island, and that can take about 5 days to ship 
those recovery-type items just to support the infrastructure 
and repairs that are necessary.
    So as we are moving through this crisis situation and going 
through these response efforts and then we will move into 
recovery and support, so which is where you will come in, we 
need to understand that there will be some differences between 
the devastating that has occurred in those remote locations 
versus something that might happen in Iowa or even Texas or 
Florida, where we can just drive those supplies right on in and 
start to recovering right away.
    So with that in mind, not knowing how long it will actually 
take to get infrastructure up and moving again, with the 
programs that you have through SBA, are there times certain on 
the programs from when a disaster occurs, or is there leeway 
within the programs from ``Okay, now we have declared the 
infrastructure is good. People can start rebuilding. Now we can 
make those loans?'' When is the cutoff date for someone that is 
not even sure when they will be able to get back into their 
community.
    Mr. Rivera. Thank you, Senator. That is a great question.
    When we look at disaster recovery, we generally have this 
declaration period where you can apply. It is generally 60 
days. We are very flexible, though.
    Senator Ernst. Okay.
    Mr. Rivera. The President has the ability to extend that 
period of time. In larger disasters, historically, that has 
been 6 months, it has been a year, depending on the amount of 
devastating on the ground.
    For example, Sandy, I think I recall Super Storm Sandy, 
Hurricane Sandy was, I think, a 6-month period.
    I saw that Senator Booker left.
    And Katrina was--Katrina, Rita, Wilma was about a year 
period. So that is not my decision, but I am sure there is some 
flexibility.
    We also have the ability to accept late applications, and 
we are going to be very flexible. We are there for the long 
term.
    How we look at the application, we look at pre-disaster. 
Even if they have been out of business for 30 days, 60 days, 90 
days, we look at what their cash flow was prior to the 
disaster, so we give them every benefit of the doubt that we 
can on how they were before that disaster struck, and then what 
we do is we do our analysis. And then that is what we based our 
repayment ability on.
    Senator Ernst. Outstanding.
    Well, I appreciate that, and I would encourage SBA and the 
Administration to give all the flexibility that you can in 
understanding that those challenges that a number of these 
citizens will face is much different than what we would face in 
the Midwest or some of these other locations on the continental 
U.S.
    And in the remaining time I have, I just want to address--
Senator Cantwell has mentioned, of course, as we are going 
through that response and getting out there and propping up the 
infrastructure, how important the military could be in this 
circumstance. And I just want to give kudos to the sailors and 
marines that have already engaged in Puerto Rico and the 
British Virgin Islands.
    I have a great friend who is an Iowan who is serving aboard 
the USS Wasp, and he is an aviator. And they were involved in 
the medical evacuation of a number of people off of the British 
Virgin Islands, and he said it was unlike anything that he had 
ever seen in his lifetime. And he said it was like a war zone, 
and the landing zones just were not there.
    So just having that visual in my mind--and thank you, 
Senator Shaheen, for sharing those pictures--and what we have 
seen on the news, this is severely devastating to those folks.
    Again, I appreciate you allowing that flexibility because 
there will be some significant challenges moving forward, but 
again, thanks to our military for already being prepared and 
stepping in to do the right thing.
    So thank you all very much. Appreciate it.
    Thank you, Mr. Chair.
    Chairman Risch. Thank you.
    Senator Markey. Thank you, Mr. Chairman, very much, and 
again, I think all of us share that same view about the victims 
of Harvey and Irma and Maria.
    It is absolutely human suffering at a level that we have 
not seen in a long, long time, and it is the responsibility of 
our Government to respond and to respond everywhere, including 
Puerto Rico with the same pace that we respond in the 
continental United States. And our hope is that there will be 
an intensification of response in Puerto Rico so that they have 
assurances that we intend on treating them as citizens of our 
country entitled to all the benefits of being citizens of our 
country. So I would just put that out front and know that we 
will be monitoring that and any agency that deals with that 
island.
    The recent hurricanes that have devastated our coastal 
cities have caused a cascade of environmental and public health 
disasters. The flooding from Hurricane Harvey caused a loss of 
electricity at a chemical plant in Houston, Texas. Two 
explosions rocked the surrounding neighborhoods, sending a 
plume of black smoke into the air that choked first responders 
and triggered an intense fire.
    Residents and businesses in a 1.5-mile radius of the Arkema 
plant were evacuated for nearly a week, and emergency personnel 
attempted to get the explosions under control.
    It is precisely those sort of catastrophic disasters that 
the EPA under the Obama administration sought to prevent and 
mitigate when it issued its Chemical Disaster Rule. This rule 
enhanced public transparency and emergency response as well as 
instituted more protective accident prevention programs.
    Interestingly, the Small Business Administration Office of 
Advocacy issued comments on the Chemical Disaster Rule prior to 
its finalization advocating that the rule be significantly 
weakened, and one of the immediate actions taken by the Trump 
administration and EPA Administrator Pruitt was to actually 
suspend these rules before they could go into effect. We are 
talking about chemical disaster rules.
    Mr. Rivera, do you think that less protective standards are 
helpful in preventing chemical plant disasters and protecting 
impacted small businesses?
    Mr. Rivera. Senator, thank you for your question.
    I am not familiar with this advocacy position. So if we 
could get back to you for the record?
    Senator Markey. Okay. Does your office or the SBA take 
stock of small businesses in the vicinity of chemical plants to 
determine how they will be impacted by catastrophic chemical 
explosions?
    Mr. Rivera. When we are doing the damage assessment, 
obviously, if they are part of the footprint, they will be 
included.
    Senator Markey. Was your office consulted by the EPA prior 
to the Administrator suspending the Chemical Disaster Rule?
    Mr. Rivera. Senator, I would have to get back to you for 
the record. I am not familiar with this situation.
    Senator Markey. In addition to the regulatory costs on 
chemical plants, do you think that the Small Business 
Administration Advocacy Office should weight the benefits of 
having a strong Chemical Disaster Rule in place to protect 
small businesses in the vicinity of those chemical plans, which 
would be better protected?
    Mr. Rivera. I am sorry. Senator, once again, I would have 
to get back with you for the record. I am just not familiar 
with this.
    Senator Markey. It is very important because I think we are 
going to be seeing the same story in Puerto Rico as we go 
through that entire country, island's disaster. There is 
clearly going to be some incredible stories of environmental 
degradation, chemical leakage, and much of it could be 
protected if we acted in an anticipatory fashion.
    As you know, Texas has experienced three 500-year floods in 
the past 3 years, less than 2 weeks before Harvey hit Texas. 
President Trump rescinded an executive order by President Obama 
that established a Federal Flood Risk Management Standard. This 
standard aimed to avoid wasting taxpayers' dollars on risky and 
poorly sited infrastructure projects, while creating standards 
to ensure that public infrastructure is built to withstand 
growing flood risk from climate change.
    We are currently distributing Federal funds in the ravaged 
areas in Texas and Florida, and we will spend tens of billions 
of Federal dollars to rebuild and repair those structures.
    Mr. Rivera, do you think that Federal funding for 
rebuilding efforts should require that structures plan keeping 
flood risk in mind?
    Mr. Rivera. From my perspective, I am a Federal lender. If 
you are in a flood plain, you are required to have flood 
insurance by law. If you are outside the flood plain and you 
were flooded by that disaster, our policy is that you were 
required to have flood insurance.
    Senator Markey. Do you think it is important that 
infrastructure is reconstructed post-storm in a manner that 
incorporates the realities and science and climate change so 
that taxpayer dollars are not wasted to rebuild poorly sited 
projects, and so that they last as long as intended?
    Mr. Rivera. Again, from my perspective, being a Federal 
lender, if somebody comes to us and they had been damaged by a 
specific disaster, we do our best to try to approve a loan and 
make it affordable from that perspective.
    If they are required by the local county to elevate or 
whatever the local building ordinances are, that is what we 
follow.
    Senator Markey. And do you think it is important that the 
infrastructure be reconstructed, taking into account the danger 
that has already been identified and is likely to increase 
along our coastlines?
    Mr. Rivera. So there is a risk associated with living 
anywhere. If you are in a flood plain in the middle of the 
country or if you are in a flood plain in a coastal area, the 
risk associated with it is the amount of flood insurance that 
you will be required to pay.
    Senator Markey. There is a risk living anywhere, but at the 
same time, we know that there is a greater risk living in 
certain places and in others, given the past history, and I 
guess what I am trying to have you say is that this little 
history that we have had right now built upon what has happened 
in the past several years is enough of a warning that you would 
ensure that there would be standards that would be applied.
    Mr. Rivera. Well, Senator, I have been with the disaster 
program since 1989, and we have had many disasters.
    This year, we have major hurricanes. NOAA predicted that it 
was going to be an above-active year based on the weather 
pattern. So, I mean, I point to NOAA; that is, I mentioned 
before, my primary focus is being a Federal lender to make 
loans to homeowners and businesses.
    Senator Markey. And I appreciate that. I appreciate that. 
It is just what are going to be the standards going forward, I 
think that is the big discussion, and how do we avoid a 
repetition syndrome so that people are protected in the new 
structures that will be constructed to avoid additional cost?
    So I thank you, and I thank you, Mr. Chairman.
    Chairman Risch. Thank you very much, Senator Markey.
    We will turn to Senator Kennedy.
    Senator Kennedy. Thank you, Mr. Chairman.
    Thank you, Mr. Rivera, for being here today. I know there 
are other places you could be.
    I want to ask you a couple of questions about the way SBA 
interacts with community development block grants. Let us 
suppose I flood. It is not relevant for my example whether I 
have flood insurance. So let us just assume that I do not for a 
moment. I flood. I apply for an SBA loan, and I am approved, 
but I do not take the loan. And later, I become eligible for, 
let us say, $50,000 of relief through a block grant, a grand. 
If I do not take the loan, even though I am qualified, can I 
still receive that $50,000?
    Mr. Rivera. Thank you, Senator.
    One of the communication pieces that we have been dealing 
with, especially in the State of Louisiana after the storms 
that occurred last August----
    Senator Kennedy. Before you explain it, though, get me in 
the ball park. Is that a yes or a no?
    Mr. Rivera. So it is not--so we all have our statutory 
requirements.
    Senator Kennedy. I was afraid of that.
    Mr. Rivera. Well, let me--if I can spend a minute.
    Senator Kennedy. Okay.
    Mr. Rivera. It will only take a minute. I promise.
    Senator Kennedy. All right.
    Mr. Rivera. We all have duplication of benefits 
requirements. The Small Business Act has requirements. The 
Stafford Act, the FEMA has requirements--and HUD also has 
requirements, and we all have eligibility based on whatever our 
requirements are, whether it is FEMA, SBA, or HUD. And we agree 
that the rules probably need to be a little bit clearer. So we 
are engaging currently with HUD on how to better communicate 
the delivery of assistance.
    Senator Kennedy. And I appreciate that, but we have got 
people facing that issue right now. So let me try again. I am 
flooded. I apply for an SBA loan. I am approved, but I do not 
take the loan. And then along comes a block grant program, and 
I am qualified for $50,000 in block grants. If I have not taken 
the money, even though I have been approved, cannot I get the 
$50,000 today?
    Mr. Rivera. So----
    Senator Kennedy. Not tomorrow.
    Mr. Rivera. Okay.
    Senator Kennedy. Not 6 months from now, not after studying 
the problem today.
    Mr. Rivera. So, Senator, we had a lot of help back in 2010, 
2011, post-Katrina from the General Accountability Office and 
the Inspector General. There is some level of different 
perspectives as far as back in Katrina, we were allowed to pay 
down SBA loans.
    Senator Kennedy. Mr. Rivera, I am not trying to cut you 
off, but I try to stay to my time.
    What is the answer for today? It is either a yes or a no.
    Mr. Rivera. So this is really a HUD answer, not an SBA 
answer?
    Senator Kennedy. Well, let us say it is an SBA answer.
    Mr. Rivera. I really appreciate HUD giving us the 
opportunity. We were first in this sequence. HUD needs to make 
a decision since they are behind us. It is the delivery----
    Senator Kennedy. HUD says it is SBA. Trust me. Scout's 
honor.
    Mr. Rivera. Well, we should have a conversation with HUD 
and continue this discussion, with all due respect, sir.
    Senator Kennedy. All right. Let us suppose that I flood, 
and I apply for an SBA loan, and I am approved, and I take the 
loan. And later on, I qualify and receive $50,000 from a block 
grant. Let us suppose my SBA loan was $50,000. Can I take that 
block grant and pay off the SBA loan?
    Mr. Rivera. Well, in theory, you will not get that 
opportunity for that HUD block grant because you have no unmet 
needs. If you have $50,000 in damage, an SBA has provided you 
$50,000.
    Senator Kennedy. Well, suppose I have $200,000 of damage, 
but I can only pay back $50,000, which is why I took $50,000.
    Mr. Rivera. Absolutely. Every program has its 
eligibilities.
    Senator Kennedy. Let me be sure I understand. You are 
saying yes. I can take block grant money and use it to pay off 
an SBA loan.
    Mr. Rivera. No, not to pay off an SBA loan. There will be 
additional eligibility. Let us----
    Senator Kennedy. Let me start over, Mr. Rivera.
    Mr. Rivera. Okay.
    Senator Kennedy. I am sorry. I do not mean to be curt, but 
I need a straight answer because I got to explain this to my 
people. And folks in Florida have got to know. Folks in Texas 
have got to know, and folks in Puerto Rico have got to know. If 
I take an SBA loan, I borrow the money, can I use block grant 
money that I receive later to pay off the SBA loan? Yes or no.
    Mr. Rivera. You should not be receiving HUD assistance to 
pay down an SBA loan.
    Senator Kennedy. Trust me. If I do, can I?
    Mr. Rivera. You should not be receiving, based on the 
formula that is written, that is FEMA is first, SBA second, and 
if there is any unmet needs, sure, if there is additional 
assistance.
    Senator Kennedy. Okay.
    Can I have just 1 more minute, Mr. Chairman?
    Chairman Risch. Go ahead.
    Senator Kennedy. Let us suppose, then, I had $100,000 worth 
of--$200,000 worth of damage.
    Mr. Rivera. Okay.
    Senator Kennedy. Okay? So I took an SBA loan because I pay 
my debts.
    Mr. Rivera. Okay.
    Senator Kennedy. I would like to borrow $200,000, but I 
cannot pay you back, and I do not want to welch on a loan to 
the American taxpayer. So I only borrow $50,000 in an SBA loan, 
and then I get a $50,000 grant. So I have an unmet need. I have 
still got $50,000, in fact, of unmet needs. Cannot I take that 
$50,000 and pay off the SBA loan?
    Mr. Rivera. Not to pay off the SBA loan, but you have an 
additional need of $50,000. So the $100,000 in coverage is what 
would be used towards that $200,000.
    Senator Kennedy. Mr. Rivera, how can I explain this to 
somebody who just lost their home? I am not fussing. I think 
you all do an extraordinary job, but you all have got to get 
with FEMA and HUD and get this straight.
    Mr. Rivera. So, if I can, if I can have 30 seconds with 
you?
    Senator Kennedy. Absolutely. You can have all the time you 
want as long as it is okay with the Chairman.
    Mr. Rivera. Let us talk about Louisiana for a minute, 
right?
    Senator Kennedy. Okay.
    Mr. Rivera. We did a billion-2 last year.
    Senator Kennedy. And I am grateful for every penny.
    Mr. Rivera. Thank you. I appreciate it.
    So of the billion-2, there is about 5 to 6 percent between 
HUD standard being low moderate income, SBA standard. There are 
two different standards we are using here. About 4 percent were 
duplicative between what we are talking about, a duplication of 
benefits.
    So the real challenge you have here is that everybody 
assumes that HUD is going to give everybody a grant? That is 
not the case. It is the low moderate income difference between 
what we make a loan at based on SCORE and what HUD provides. So 
there is about 5 percent overlap. We would be glad to have a 
discussion with you and HUD.
    Senator Kennedy. And I understand that, but here is what--
--
    Chairman Risch. Senator Kennedy, let me--your time is up, 
to begin with.
    Senator Kennedy. I am sorry.
    Chairman Risch. But that is all right. First of all, you 
have a legitimate inquiry, and it is not unusual when you are 
dealing with different agencies to wind up with these kinds of 
conditions, and so I fully support your pursuing this.
    I think it would be more appropriate if you could get 
people from all the agencies together perhaps in a private 
setting to go over that and see if you cannot get an answer.
    Senator Kennedy. And I appreciate that.
    Chairman Risch. You are entitled to an answer, and I think 
it----
    Senator Kennedy. I appreciate that, Mr. Chairman. I 
appreciate the advice, but I have. And one agency says it is 
the other agency, and the other agency says it is this agency. 
My people need answers, and that is why I used my----
    Chairman Risch. Undoubtedly, they need answers, and I think 
the best way to do that, probably, is to resolve it either 
statutorily or hopefully regulatorily by someone who has 
authority over the different agencies. Somebody has authority 
to be able to resolve this.
    In any way we can help, I would be happy to.
    Senator Kennedy. I will be calling on your, Mr. Chairman.
    Mr. Rivera, thank you for your time.
    Chairman Risch. Thank you, Senator Kennedy.
    Senator Duckworth.
    Senator Duckworth. Thank you, Mr. Chairman.
    I just want to mention that Illinois has deployed a team 
from the Illinois Air National Guard to provide 
telecommunications assistance, food, water, tents, and cots to 
Puerto Rico. The Illinois Guard trains the Puerto Rico Guard on 
a regular basis. In fact, we have the seventh largest 
population of Puerto Ricans in the United States, and I am 
really proud of the work that our 126th Communications Flight 
has already done in helping to provide disaster relief to the 
devastated community.
    And, in fact, my stick buddy in flight school, the person 
that jointly--we spent time scaring the living daylights out of 
each other learning to fly aircraft--was an officer in the 
Puerto Rican National Guard.
    And I think it is time for Congress to act to make sure 
that agencies have the resources they need to assist the 
affected communities and to recover and to rebuild.
    I have heard similarly from my constituents in McHenry 
County who have been hard hit by severe storms and floods this 
year in Illinois that their experience with the SBA has been 
very positive.
    The SBA loan guarantees have provided critical support in 
rebuilding businesses and housing in the disaster-torn 
communities, but the loans provided by SBA sometimes do not 
have attractive rates, leaving mom-and-pop stores already 
carrying the burden of start-up loans and overhead costs still 
shopping around for financing to recovery from natural 
disasters.
    In Illinois, 95 percent of our employers are small 
businesses, small and medium businesses, and I know it is 
similarly the case in Puerto Rico as well.
    So, Mr. Rivera, are there ways to make the SBA Disaster 
Loan Program more attractive to small businesses?
    Mr. Rivera. From an interest rate perspective?
    Senator Duckworth. Mm-hmm.
    Mr. Rivera. So we follow a--we do a quarterly assessment on 
our interest rates. We follow statutory formula.
    For example, currently, in the current disasters, the three 
hurricanes we have, the home rate is 1.75 percent. The credit 
elsewhere rate, which is about 10 percent of loans, is 3.5 
business side. On the business side, it is 3.3 percent. For no 
credit elsewhere, it is about 6.6 percent. But we follow a 
statutory formula on how to determine the interest rates.
    Senator Duckworth. But I understand under existing 
authorities, SBA could provide disaster response matching 
grants or partial grant loans, just beyond the interest rates 
issue. But you could actually provide disaster response 
matching grants or partial grants loans for small businesses to 
help with the burdensome cost of recovery. Are there 
innovations like that, that SBA would consider, beyond just 
their straight loan program?
    Mr. Rivera. Well, we do not have grant authority. The last 
time we had grant authority was in 1973 when Hurricane Agnes 
came through, and basically, the last $5,000 of your loan was 
forgiven. We have not had grant authority since that.
    Senator Duckworth. What took it away? Because my 
understanding is that there is no explicit code that says you 
do not have grant authority.
    Mr. Rivera. We only can make loans to repair/replace what 
was damaged by the disaster in 7(b) of the statute on the Small 
Business Act, and I am not aware of us having any type of grant 
authority.
    I can get back with you. We can do some research and get 
back for the record.
    Senator Duckworth. If you could. Yeah, I thought it was 
only implicit in the President's disaster declaration, which 
says that SBA can provide loans to individuals and businesses 
after a disaster, but nothing precludes you from actually 
having some sort of a grant program. But, yeah, follow up with 
me.
    Mr. Rivera. Okay. Yes, ma'am.
    Senator Duckworth. That would be great. Thank you.
    And I want to follow up on what Senator--or my colleague 
from Louisiana, Senator Kennedy, was talking about, this 
duplication of benefits between SBA and HUD.
    At the hearing last year before this very Committee, then 
Administrator Contreras-Sweet told Senator Cassidy that work 
was under way to harmonize the programs, and that the rules 
governing participation in these programs were not communicated 
with the clarity that she wanted to see. And, obviously, from 
my colleague, that this is still an ongoing problem, even 
though I identified that this was a problem last year.
    And this is not red tape. This is just good customer 
communications and good customer service. I am concerned that 
we may be repeating past mistakes.
    Just this week, county commissioners in Lake County, 
Illinois, where we had recent flooding, told my office that 
they are receiving conflicting information from HUD and SBA 
officials in response to the July floods that we had.
    Mr. Rivera, as we move into the next phase of recovery and 
rebuilding from Harvey and Maria, Hurricanes Harvey and Maria, 
can I get your commitment that SBA is going to improve 
communications between SBA, HUD, and FEMA to make sure 
individuals have the knowledge to make the best decisions for 
their given situation when it comes to deciding which recovery 
programs to use? Because as you come in and you offer a loan 
and people think--they are desperate, so they take it, but no-
one bothers to tell them, ``If you take this loan or you take 
this FEMA money, you are not going to be eligible.'' And the 
three of you are not getting together to talk to each other and 
communicate that to the people and show them what they 
potentially could be getting. You are just staying in your 
siloes, and that is not helpful.
    Mr. Rivera. Well, Senator, we try our best not to stay in 
the siloes. We put it on our fact sheets. We discuss that with 
the disaster survivor.
    It is no different than insurance. If you get an insurance 
recovery, we go ahead and say, ``Come apply with us. We will 
make you the loan for $100,000.'' If you have $50,000 in 
insurance recoveries, you will use that $50,000 to pay down the 
loan. We put it in our fact sheet, but we will continue to 
work. If you have any thoughts or ideas on how we could better 
communicate that, please let us know. We would like to engage 
with anybody on the Committee on how to better communicate 
that.
    But we are in constant dialogue with FEMA and HUD and SBA 
on how we communicate with the disaster survivors. It is 
important that we have a clear, consistent message for anybody 
because it is confusing when you come in and you have to go 
through the process. I mean, it is not complicated in our mind 
because we do it every day, but somebody who just lost a house 
or home, we understand. We really understand, and we are trying 
to do the best job we can from a communication perspective.
    So if you have thoughts or if your staff has thoughts or 
you would like to meet with us, we would be glad to meet with 
you.
    Senator Duckworth. I would like to do that, and I would 
just say that I am not talking about people, the individual 
homeowners, who do not understand. The county commissioners who 
are operating at a higher level are the ones saying they are 
getting conflicting information, and they do not understand, 
and so the county commissioners do not understand. I do not 
know how the homeowners who are standing hip-deep in water are 
going to be able to figure this out on his or her own.
    Thank you.
    I yield back, Mr. Chairman.
    Chairman Risch. Well, Senator, there is nothing to yield 
back.
    Mr. Rivera, thank you so much for coming here today, and I 
think I can say, number one, I am glad we have you there with 
the background that you have. You seem to be uniquely qualified 
for this position, and you discharged yourself very well in 
some very difficult questions, which always arise when there 
are conflicting agencies involved in trying to resolve things. 
So thank you so much for your service. We truly appreciate it, 
and thank you for appearing here today.
    Mr. Rivera. Chairman, thank you for giving me this 
opportunity.
    Chairman Risch. Thank you.
    We will now move to the second panel, and we would ask them 
to come forward, Mr. Davis and Mr. Lawrence.
    And I am going to start while you are coming forward 
because we have votes scheduled for 4:30, so we will try to 
come through this.
    I want to welcome Mr. Davis to this Committee. He is the 
president and CEO of JAX Chamber in Jacksonville, Florida, and 
throughout his tenure, Mr. Davis has been a big proponent of 
creating a friendly business and entrepreneurial atmosphere in 
northeastern Florida. Mr. Davis, like many others in Texas, 
Florida, and the Caribbean, are now tasked with helping their 
community to recover from one of the worst hurricanes in recent 
history.
    Due to Hurricane Irma, Florida saw record-setting flooding. 
Millions of businesses and homes across all of Florida are 
without power. Many face the tough task of rebuilding their 
homes and communities.
    I am also pleased to welcome Dr. Steve Lawrence from 
Houston, Texas. Dr. Lawrence is the Executive Director and 
Research Professor for the University of Houston's Texas Gulf 
Coast SBDC Network. Dr. Lawrence has over 35 years of 
experience leading organizations and has held executive-level 
positions at companies such as PepsiCo and Dell Computers. He 
holds a doctorate in community health practice as well as a 
master's of public health from the University of Texas School 
of Public Health in Houston. He is also a 5-year veteran of the 
United States Navy.
    I look forward to this discussion on disaster assistance 
and relief and hearing from Mr. Davis and Mr. Lawrence about 
the impact Hurricanes Irma and Harvey have had not only in 
their communities but throughout Florida and Texas.
    Thank you again for being here today.
    And, Jeanne, do you have anything you want to add?
    Senator Shaheen. No.
    Chairman Risch. Thank you.
    So, with that, Mr. Davis, you are up.

 STATEMENT OF DANIEL DAVIS, PRESIDENT AND CEO, JAX CHAMBER OF 
                   COMMERCE, JACKSONVILLE, FL

    Mr. Davis. Thank you, Mr. Chairman, Ranking Member. It is a 
pleasure to be here today. It is an honor to speak before the 
Committee.
    I do want to let you know that I am the president and CEO 
of the JAX Chamber. It is one of the largest chambers in the 
country, 3,000 members located in northeast Florida.
    As Hurricane Irma threatened our State earlier this month, 
about 7 million people were ordered to evacuate our area. This 
is the largest evacuation in the United States history. Many 
families returned to their homes, their businesses, and 
livelihoods destroyed. Cities and counties across the great 
State are now facing their own unique challenges.
    In Jacksonville, normally our coastal communities are the 
areas most threatened by the hurricanes and tropical storms, 
and while those areas were definitely hit, the storm surge and 
flooding from Irma battered our downtown and other historic 
neighborhoods along the St. Johns River and its tributaries.
    On the day of the storm, 365 people located near the St. 
Johns River were rescued from rising flood waters. We have 
never seen a flood like this in our community.
    I want to quickly commend our local and State leaders for 
their planning and strategic response to get the city and State 
back to business. Jacksonville Mayor Lenny Curry and Florida 
Governor Rick Scott have been tremendous leaders in a time of 
crisis. I know our congressional delegation has been very 
active in the recovery efforts.
    I would like to also thank Senator Rubio, who invited us to 
speak here today and for his efforts surveying the damage 
across the State of Florida and Jacksonville.
    In surrounding counties, houses along Black Creek in Clay 
County saw several feet of flooding. The narrow stone streets 
of historic St. Augustine were all under water. Coastal 
communities in St. Johns and Flagler Counties, still rebuilding 
from Hurricane Matthew from less than a year ago, are now 
rebuilding again.
    One of the largest office buildings in Downtown 
Jacksonville, a fixture in any picture that you would see in 
our skyline, had a massive flooding and just reopened today.
    The resiliency we have seen and the willingness of business 
leaders to offer space, power, and Internet access, even to 
direct competitors, is indicative of the strength that we have 
in our business community in the State of Florida.
    The overwhelming majority of businesses are back and have 
been since the days following Hurricane Irma. Make no mistake, 
Florida is open for business, but we cannot leave behind the 
businesses in dire need of the disaster relief and assistance 
the SBA has set aside the funding for. These are mom-and-pop 
restaurants, high-end restaurants, award-winning ad agencies, 
established local law firms, and many, many more.
    Federal assistance is going to be critical for many 
businesses. Our partners in more rural counties report the 
recovery center has yet to even open in Putnam County, for 
example, where there was significant damage. With historic 
storms like Hurricane Irma, there will be tremendous needs, and 
overall, the Federal small business response has been strong.
    There is, however, room for improvement in collaborating 
with the local business and community leaders who are on the 
ground and are in contact with business owners. Recovery 
efforts cannot be led from Washington. They need to be led 
locally, from Middleburg to Fernandina Beach, from Cape Coral 
and Fort Myers. Let us tell you where the needs are, so 
together, we can rebuild these communities.
    One idea from small businesses is to have designated 
buildings that can quickly be converted into co-working spaces 
for companies who are displaced. With some downtown 
Jacksonville businesses being displaced, employees are working 
remotely elsewhere, which hurts downtown restaurants and 
service businesses who are dependent on foot traffic and nearby 
workers.
    There is also a real concern from small business owners 
about being penalized for applying for SBA loans. I know that 
was discussed earlier, but I wanted to mention it in this 
discussion. For example, if a business is approved for an SBA 
disaster loan, the amount of the loan approval is then deducted 
from the company's eligibility for future grants.
    Many businesses are not looking for traditional, longer-
term SBA loans right now. In these times of disaster, 
businesses need smaller amounts and quicker infusion of 
dollars. These are what can be used to clean up, to open the 
doors again, to meet payroll in the near term.
    One major concern for companies now is, in their biggest 
time of need, they have less collateral to apply for a loan.
    Remember, with these unprecedented evacuations, our 
businesses lost revenue well before the storm hit. Companies 
knew employees would need to prepare for the storm, and a vast 
majority made the decision in advance to close Friday and 
Monday. Because of widespread power outages, most of them did 
not open again until Wednesday, meaning at least 3 business 
days were lost and in some cases many, many more business days.
    These companies had been meeting payroll, despite a 
significant drop in business. For Peters and Yaffee, a civil 
engineering firm in Jacksonville with 15 employees, they are 
looking at more than $40,000 in lost hours and additional 
expenses to pay for overtime while they were in the crunch. 
They are in the crunch to meet client deadlines that remain 
unchanged.
    These are real and significant challenges that small 
businesses across Florida are facing, and these are the types 
of expenses that Federal disaster assistance should be used 
for.
    Thank you again for the opportunity to testify and discuss 
small business recovery in Florida. We have a resilient 
entrepreneurial spirit, and I am here to tell you we will come 
back from Hurricane Irma stronger than ever.
    Thank you, Mr. Chair.
    Chairman Risch. Thank you very much.
    Dr. Lawrence.

  STATEMENT OF STEVE LAWRENCE, Ph.D., EXECUTIVE DIRECTOR AND 
 RESEARCH PROFESSOR, TEXAS GULF COAST NETWORK SBDC, UNIVERSITY 
                    OF HOUSTON, HOUSTON, TX

    Mr. Lawrence. Thank you, Chairman Risch and Ranking Member 
Shaheen. It is an honor and a privilege to be invited here 
today.
    I am here today representing America's Small Business 
Development Centers, or the SBDCs, that were impacted by 
Hurricane Harvey. The SBDCs are on the business forefront every 
day helping America's small businesses start, grow, and 
succeed.
    We are the key resource partner of the SBA. Our Texas and 
Florida SBDCs are not only providing business support services 
to everyday clients but have also been providing extraordinary 
support and help to those businesses that have suffered from 
and, in some cases, totally been devastated by Hurricanes 
Harvey and Irma.
    The recovery for Texas and Florida will probably or likely 
require years of compassion and financial support from 
Congress, and of course, our hearts and prayers are with our 
SBDC partners in Puerto Rico and the Virgin Islands.
    Today, I would like to share with you a little bit about 
what we at the Texas SBDCs do every day and what our response 
has been during this disaster along with our SBA partners in 
helping Texas small businesses begin the long and slow recovery 
from Hurricane Harvey.
    SBDCs help clients start and grow their businesses through 
assistance in business planning, operations management, 
financial management, marketing, capital formation, 
procurement, and exporting. Free professional one-on-one 
counseling and advising is augmented by low-cost training on a 
variety of business topics, including writing business plans, 
marketing, accounting, finance, leadership, and business 
growth, amongst many more.
    A recent survey of our clients indicated that the two SBDCs 
in a hurricane-affected area combined created more than 10,000 
new jobs, and it provided access to over $400 million in 
capital last year.
    On Saturday, August 26th, while still in the middle of 
Hurricane Harvey, SBDC staff from the University of Houston 
Bauer College of Business, Texas Gulf Coast SBDC Network, led 
by our Deputy Director Sue Rhodes, and the South-West Texas 
Border SBDC Network, led by Al Salgado, reached out to our 
respective SBA district offices in order to begin the process 
of establishing business recovery centers, or BRCs.
    While the BRCs are fully the responsibility of the SBA 
disaster assistance offices, we wanted to ensure that we were 
proactively providing any help and support that we possibly 
could.
    Working with the SBA's Office of Disaster Assistance in 
Sacramento, California, and with the University of Houston and 
Bauer College's full support, approximately 1 week after the 
storm hit the Texas Gulf Coast, the first BRC was opened in 
midtown Houston, collocated with our Houston SBDC regional 
office. In the following days, BRCs were quickly opened in 
Rockport, Port Aransas, Beaumont, and Missouri City, all areas 
heavily impacted by the hurricane. These BRCs are staffed 7 
days a week.
    As we open these BRC offices, our efforts are focused on 
helping the small businesses, both current clients and disaster 
victims who are just discovering what the SBDCs can do to help 
them, work their way through the recovery process. In addition 
to typical SBDC services, they will need help in restoring 
their financial statements, estimating losses and future 
potential, and developing strategies to restore their customer 
base and attract new customers.
    Throughout the affected counties, many of our small 
business owners had been displaced from their homes as well as 
from their businesses and have been overwhelmed with cleanup, 
evaluating losses, and dealing with extreme trauma from this 
experience, while at the same time trying to determine not only 
how to survive, but how to pay for that survival. They come to 
the SBDCs for assistance not only in restoring their 
businesses, but also in restoring their lives.
    Some of our clients who were flooded, like the well-known 
Three Brothers Bakery in Houston, who by the way have survived 
four floods, are open on a limited basis, despite extensive 
damages, and they are in the process of seeking SBA funding. 
Owner Janice Jucker says that the SBA is really working hard to 
help small businesses, and she is most impressed with their 
quick response and their attention to her needs.
    But they are lucky. Many, like Arena Designs, are just 
beginning to work through the process of applying for disaster 
recovery funding and cleaning up their businesses, while having 
little or no income.
    Arena Designs is a textile, wall covering, and fine art 
design firm located in Northwest Houston. Opened in 1988, owner 
Rusty Arena developed a trade-secret method of creating silk-
screened textiles. He became an SBDC client in 2012, seeking 
help with financing to purchase textile printers and computer 
systems to reduce labor-intensive processes of creating his 
handmade designs and to expand his current product lines. The 
SBDC helped him with new financing and restructuring existing 
debt.
    During Harvey, Rusty's entire 20,000-square-foot warehouse 
took on more than 4 feet of water, damaging all of his fabrics, 
design materials, computing equipment, along with all of his 
financial records. Two 7,000-pound printing tables were 
floating in the floodwaters like toy boys.
    The SBDC is now working with Rusty to help recover 
financial records, develop restoration strategies, review cash 
flow options, debt restructuring, and further streamlining his 
operations. After renting for a long time and finally buying a 
building, Rusty's dreams of 30 years have been devastated by 
the storm, along with four full-time jobs.
    He told me on Friday that he could not even talk about his 
business until just last week because he was so distraught over 
the losses. He said that if it were not for the commitments 
that he had made to customers for his custom fabrics, he would 
not even bother reopening his business.
    Despite this and because of those commitments, Rusty now 
says, when referring to his building, ``Walls are optional,'' 
as he gets his business restarted.
    This brochure is the only one remaining of Rusty's sales 
materials and his business.
    Texas and Florida will be seeking SBDC funding under the 
RISE Act, as provided by Congress, to help our small businesses 
in this long-term recovery. This Act allows for financial 
assistance to SBDCs to advance and improve the disaster 
recovery and growth of small businesses when they are located 
in areas, which the President has declared a major disaster.
    This will be a prolonged recovery, taking years of effort 
to restore and rebuild our small businesses along the Texas 
Gulf Coast. We are asking for your support as we continue to 
provide our core SBDC services to small businesses in our 
communities throughout our service areas, but also providing 
extraordinary SBDC relief and support to those devastated by 
the storm, like Rusty.
    We greatly appreciate America's prayers and support. We 
thank this Committee and Congress for your help and support, 
and I thank you for your time today.
    Chairman Risch. Thank you very much, Mr. Davis and Dr. 
Lawrence.
    When we hold these hearings, we do so to try to get a 
handle on what is actually going out on the ground, since 
obviously it is difficult for all of us to get there, and you 
have provided that for us. And for that, we are very grateful. 
There is just no substitute for having people who have had eyes 
on the situation and being able to come and talk to us about it 
and talk to us about how that actually affects people, which 
is, after all, who we are here to serve.
    So thank you so much for taking the time to travel to 
Washington, D.C. I know you have--I am sure you are anxious 
about things that need to be done at home, but again, you have 
done a real service to your constituents of being here to help 
us through this thing.
    So, Senator Shaheen.
    Senator Shaheen. Thank you, and thank you both for your 
testimony and for being here today.
    Mr. Davis, you talked about the importance of businesses 
getting money quickly and having smaller bridge loans to help 
them get through difficult circumstances. You also talked about 
that, Dr. Lawrence.
    I am sorry Mr. Rivera is not here because back in 2008, the 
Congress passed what was called the Small Business Disaster 
Response and Loan Improvements Act, which established two 
guaranteed loan programs at the Federal level to provide bridge 
loans to small businesses.
    Now, unfortunately, neither of those have yet been 
implemented, but I know that--or I understand that Florida has 
a small business emergency bridge loan program, and I wonder if 
you could speak, Mr. Davis, to what you have seen about how 
well that has worked and whether there are any lessons that you 
all have learned that we can share with SBA at the Federal 
level as we try and implement those two programs.
    Mr. Davis. Thank you, Senator.
    The bridge loan in the State of Florida is enacted by the 
Governor, and originally, the bridge loan was for a maximum 
amount of $25,000, but since the travesty, he has increased it 
to $50,000 per application.
    We believe strongly in the bridge loan as a tool in the 
toolbox. In many cases, when these businesses are devastated, 
they are trying to figure out how to maintain payroll to try to 
keep the doors open, get lights back on, with the flooding put 
new sheetrock on the walls, and you have to use every available 
asset that you can.
    We believe that the State of Florida is going to continue 
to being flexible to understand exactly how the bridge loan can 
best be used in combination with the SBA, and so we look 
forward to adjusting along the way.
    And we feel like the chambers across the State have an 
opportunity to communicate what is available to their small 
business members, and we think that is the critical role that 
we can play in what is available for the folks to get back on 
their feet.
    Senator Shaheen. And is your bridge loan program done in 
partnership with banks in Florida?
    Mr. Davis. It is through the Department of Economic 
Opportunity and the Governor's office and partnership with the 
SBDC community in the State of Florida, so it is a government 
agency that is working to help folks.
    Senator Shaheen. So it is taxpayer dollars funded?
    Mr. Davis. It is, but it is from the State level.
    Senator Shaheen. Yeah.
    Dr. Lawrence--I guess this is for both of you because one 
of the things that we have struggled with at the Federal level 
is how much to prepare, mitigation versus relief, and I wonder 
if you think that we should be incorporating more measures to 
make our infrastructure and our buildings more resilient to 
disasters in a way that would be helpful as we look at the 
future.
    I do not know. Dr. Lawrence, do you have any perspective on 
that?
    Mr. Lawrence. Thank you, Senator.
    I think the answer is a relatively simple one to give to 
you but not easy to execute, which, of course, it makes sense 
to make structures stronger, but lots of times, small 
businesses are family owned businesses that struggle just to 
get the business started with, as I provided you earlier, raw 
materials----
    Senator Shaheen. Right.
    Mr. Lawrence [continuing]. Just as sales examples. So 
spending money for infrastructure, for concrete buildings or 
devastating storm survival buildings is hard for them to do, 
and I am not sure that they could do that without the 
government providing help or loans in doing that. I do not 
think they would have the resources to start with.
    So I think they try as hard as they can, and I think 
everybody would like to have that, but when you are starting a 
business in your home with every single penny you have got from 
your savings account, it is hard to do those kinds of 
constructions and preparations.
    Senator Shaheen. One of the conversations we have been 
having is about as we look at Puerto Rico and the devastation 
there to particularly their utility grid. That one of the 
things that we ought to be thinking about as we provide support 
in rebuilding that grid is thinking about how to make it more 
modern and not rebuild the same old lines that we have rebuilt. 
So that is the kind of thing where I think there is a real 
opportunity.
    But I want to ask you about RISE because one of the things 
that you talked about, Dr. Lawrence, is seeking SBDC funding 
under the RISE Act. How will you help work with small 
businesses using the resources that are available through RISE? 
And I also understand that one of the things that the SBDCs 
have been able to do as part of these disasters is to call on 
help from other SBDCs across your own region and throughout the 
country, and can you talk about how that has worked and whether 
you have actually been able to get help, either in Florida or 
Texas from other SBDCs?
    Mr. Lawrence. Yes, Senator. Thank you. It is a great 
question.
    Believe it or not, Hurricane Harvey hit exactly the weekend 
before we had the national conference for the SBDCs. So we only 
had--as a result of that, most of our staff did not go to the 
conference, but those few of us who did, every SBDC in the 
country offered help and support, including manpower paid for 
by them, not paid for by us, to assist in any response that we 
had.
    The problem that we had with that is it was way before we 
knew how much help that we needed. We are only getting into the 
part of the curve right now where we are starting to see how 
many loan applications we are going to have, how many 
businesses are really damaged.
    As I said earlier, a lot of the business owners, their 
homes were damaged too. So they were mucking their houses and 
their businesses and really are just starting to kind of pull 
themselves together. Like Rusty, he could not even start 
talking about that until last week.
    So we have had lots of offers for help from SBDCs. It is an 
unbelievable organization of people who are committed to small 
businesses.
    Senator Shaheen. Right. I am a big fan.
    Mr. Lawrence. Yeah. I mean, it is just amazing.
    Under the RISE Act, as it reads, the funds are provided 
for--can be provided for SBDCs to provide support that is not 
otherwise given. So we interpret that as being extraordinary 
support in terms of--we mentioned earlier--I think Associate 
Administrator Rivera said leaning forward, reaching out into 
the communities, not waiting for people to come to us, as well 
as providing more advisors, more services, and more training to 
help people get up and running faster, so that is how we would 
use the funds.
    And the two SBDC areas that have been affected, both would 
use the funding in that same way, and that is how we will 
develop the proposals for it.
    Florida, I am not sure.
    Senator Shaheen. And do you anticipate actually taking some 
of those offers from SBDCs up on their willingness to come and 
work with you?
    Mr. Lawrence. I am certain that we will. They are offered--
given periods of time, so it is not a long-term endeavor----
    Senator Shaheen. Sure.
    Mr. Lawrence [continuing]. Like we are going to have to 
need for this recovery, because it will be slow and long term, 
but I am sure that we will.
    You almost feel an obligation to take them up on it because 
they are so kind to offer everything. When they say that it is 
paid for, it is hard not to say yes.
    Senator Shaheen. Well, thank you both very much. My time is 
up.
    And, Mr. Chairman, I have a statement from Senator Nelson, 
the other Senator from Florida, with respect to the SBA's 
response to the disaster that I would like to submit for the 
record, and I also have some questions that we will be 
submitting to SBA for the record.
    Chairman Risch. Without objection, it will be so ordered.
    [The prepared statement of Senator Nelson follows:]
    
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    Chairman Risch. I likewise have had submitted from Senator 
Ted Cruz a testimony for the record, and without objection, I 
will have that also entered.
    [The prepared statement of Senator Cruz follows:]
    
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    Chairman Risch. Again, thank you both for coming. Thank you 
to all of you who attended this hearing.
    And if there is nothing further, the Committee will be 
adjourned.
    [Whereupon, at 4:33 p.m., the Committee was adjourned.]

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