    [Senate Hearing 119-331]
    [From the U.S. Government Publishing Office]

                                                          S. Hrg. 119-331

                      SBA'S HURRICANE HELENE RESPONSE: ONE YEAR
                                         LATER
    =======================================================================

                                 FIELD HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                              AND ENTREPRENEURSHIP

                                     OF THE

                              UNITED STATES SENATE

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               SEPTEMBER 22, 2025

                                   __________

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

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                    __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    63-079                     WASHINGTON : 2026
    =======================================================================

                COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                        ONE HUNDRED NINETEENTH CONGRESS

                                  ----------

                            JONI ERNST, Iowa, Chair
                EDWARD J. MARKEY, Massachusetts, Ranking Member
    JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
    RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire
    TIM SCOTT, South Carolina            CORY A. BOOKER, New Jersey
    TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware
    JOSH HAWLEY, Missouri                MAZIE K. HIRONO, Hawaii
    TED BUDD, North Carolina             JACKY ROSEN, Nevada
    JOHN R. CURTIS, Utah                 JOHN W. HICKENLOOPER, Colorado
    JAMES C. JUSTICE, West Virginia      ADAM B. SCHIFF, California
    JON HUSTED, Ohio
                    Meredith West, Republican Staff Director
                     Sean Moore, Democratic Staff Director

                               C O N T E N T S

                                  ----------

                               SEPTEMBER 22, 2025
                               OPENING STATEMENTS

                                                                       Page
    The Honorable Ted Budd, U.S. Senator from North Carolina.........     1

                                   WITNESSES

    The Honorable Rebecca K. McCall, County Commissioner, Henderson
      County, North Carolina.........................................     3
        Prepared Statement...........................................     5
    The Honorable Peter O'Leary, Mayor, Chimney Rock Village, North
      Carolina.......................................................     8
        Prepared Statement...........................................    10
    Mr. David N. Jackson, President and CEO, Boone Area Chamber of
      Commerce, Boone, North Carolina................................    11
        Prepared Statement...........................................    13
    Mr. James ``Chris'' Stallings, Associate Administrator, U.S.
      Small Business Administration..................................    26
        Prepared Statement...........................................    29

                            QUESTIONS FOR THE RECORD

    The Honorable Rebecca K. McCall
        Responses to questions submitted by Ranking Member Markey....    37
    The Honorable Peter O'Leary
        Responses to questions submitted by Ranking Member Markey....    38
    Mr. David N. Jackson
        Responses to questions submitted by Ranking Member Markey....    39
    Mr. James ``Chris'' Stallings
        Responses to questions submitted by Ranking Member Markey....    41

                SBA'S HURRICANE HELENE RESPONSE: ONE YEAR LATER

                           MONDAY, SEPTEMBER 22, 2025

                          United States Senate,
                            Committee on Small Business
                                          and Entrepreneurship,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 2:01 p.m., in
    Henderson County Historic Courthouse, 1 Historic Courthouse
    Square, Hon. Tedd Budd, presiding.
        Present: Senator Budd.

                   OPENING STATEMENT OF SENATOR BUDD

        Senator Budd. Good afternoon, everyone. I call the
    Committee on Small Business and Entrepreneurship to order.
    Today's hearing comes in a somber moment. Almost one year ago
    today, Hurricane Helene made landfall in Florida before
    continuing northward and devastating Western North Carolina.
        Many of us here today personally experienced the
    devastation that storm brought. Many areas were hit with high
    winds, and received 20 to 30 or more inches of rain, leading to
    catastrophic flooding and mudslides that tragically claimed the
    lives of 108 North Carolinians. Altogether, a total of 11
    states were impacted, and Helene caused almost $80 billion in
    damage, making it one of the worst hurricanes to hit the United
    States, ranking alongside Hurricane Sandy and Hurricane
    Katrina.
        Here in North Carolina, 39 counties were eligible for
    federal assistance following the storm. Those counties
    comprised 40 percent of the state's population and 45 percent
    of the state's GDP. In the aftermath, our state's disaster
    survivors started down the challenging road of rebuilding.
        I want to say how proud I am of our state for coming
    together in this time of need and the sheer tenacity of
    everyone out here in Western North Carolina, who lent a hand
    and helped folks in dire straits. Frankly, I wish the same
    could have been said for our federal government, but
    unfortunately, under President Biden, they were unprepared and
    asleep at the wheel.
        The Small Business Administration, or the SBA, provides
    disaster loans and have been crucial to many Americans
    recovering from natural disasters, and North Carolinians in the
    wake of Helene were no different. The SBA gives eligible
    individuals access to disaster recovery loans up to $500,000,
    and eligible businesses loans up to $2 million for physical
    damage and economic injury.
        These loans help restore homes to their pre-disaster
    condition, and help businesses replace equipment and maintain
    payroll. Unfortunately, due to the blunders of the Biden's SBA,
    too many North Carolinians were unable to find the help they
    needed to simply rebuild and regain their livelihoods.
        The prior administration mismanaged the SBA's Disaster Loan
    Program by issuing irresponsible rules and dramatically
    increasing the cost of making and administering disaster loans.
    Moreover, as SBA drew closer to exhausting the funds it had on
    hand for these loans. The staff at the wheel of the Biden
    Administration failed in one of their most basic duties, and
    that is notifying Congress that funding was running low. This
    led to an unacceptable 66-day shortfall, lasting from October
    12th through December 20th of last year.
        Here in North Carolina, 97 percent of business loan
    applicants were impacted by the shortfall. For more than two
    months, the federal government left survivors in North Carolina
    on their own with nothing but bootstraps and their community to
    assist in rebuilding. We must ensure that a crisis like this
    will never happen again.
        This SBA program is instrumental in the rebuilding process,
    and once it was back to working, it has served over 3,500 North
    Carolinians following Hurricane Helene. And that's why, earlier
    this year, I introduced the Disaster Loan Accountability and
    Reform Act to create more safeguards against a future
    shortfall.
        This bill would require annual appropriations to SBA's
    disaster loan program, inform Congress when funds are low, and
    increase reporting to Congress. I want to thank my colleagues
    on the Small Business Committee for working in a bipartisan
    manner to get this bill through committee.
        I'm grateful for the many changes the Trump Administration
    has made to address the problems in this program since January,
    including improvements to reporting, local coordination, and
    constituent services. However, we're still recovering from the
    aftermath of Helene. It's critical to understand the impacts of
    the shortfall last year, and what steps can be taken to further
    safeguard disaster survivors after being left without aid
    again.
        Returning Western North Carolina to normal following Helene
    hinges on our federal government and its agencies working in
    coordination with one another. I will continue to engage with
    each of our cabinet agencies to ensure our federal government
    is responsive to the needs of Western North Carolina.
        I want to thank our witnesses on both panels today, and I'm
    honored that you've decided to join us to speak on the efficacy
    and unity of SBA's programs and ways to improve. I look forward
    to your testimony. And before we start our testimony, I ask
    unanimous consent that the witnesses's full statements be
    included in the record. Without objection, so ordered.
        For a quick run of show, I want to note that each of the
    witnesses will have five minutes to give their remarks, and
    then, we'll turn to questions. I'll introduce each of you, and
    then recognize you for five minutes for your testimony. And we
    do have two panels today. So, after our first panel, we'll take
    a brief moment to let them and get up, and we'll have our
    second panel seated.
        And we'll now proceed with our first panel. We'll start
    with Commissioner Rebecca McCall, who currently serves as a
    Henderson County Commissioner. Commissioner McCall was sworn in
    on December 3rd, 2018, and is serving in her second term as
    Commissioner. She served as the Chair of the Henderson County
    Board of Commissioners when Hurricane Helene hit Western North
    Carolina.
        She's a Henderson County native, and holds a bachelor's
    degree in business administration for Montreat College. We
    thank you for being here, and you're recognized for five
    minutes for your testimony.

       STATEMENT OF MRS. REBECCA K. MCCALL, COUNTY COMMISSIONER,
    HENDERSON COUNTY BOARD OF COMMISSIONERS, HENDERSONVILLE, NORTH
                                CAROLINA

        Mrs. McCall. Thank you for having me. September 27th, 2024,
    will be a day we long remember in Henderson County and Western
    North Carolina. Hurricane Helene hit us with full force. Not
    only was there enormous amount of rainfall that resulted in
    flooding as deep as 30 feet in some areas, there were also
    2,000 landslides, 80 of which were in Henderson County. The
    landslides uprooted giant trees and dislodged mammoth boulders
    that took out everything in its path. In the Hickory Nut Gorge
    area, the river grew three times wider than normal. Homes and
    businesses along the river were washed away, as well as the
    land they once stood on. The power outages that lasted up to
    two weeks in most areas registered to one and a half million in
    the multi-county area. With 95 percent of Henderson County
    affected, more than 425 miles of roads and 200-plus bridges
    were severely damaged in Henderson County alone. All of this
    has left an impact on our businesses. Those that were not
    severely damaged by flooding or fallen trees were still
    affected by power outages and, most importantly, loss of
    business because there were no customers. Even after power was
    restored, the water receded and the main roads opened up, we
    were left with the cleanup and rebuilding that continues today,
    one year later. As a result, many businesses lost weeks of
    sales.
        Having been a small business owner, I'm aware that one week
    of slow business is tolerable, two weeks is concerning but
    three weeks and beyond can be devastating. There was also the
    ripple down effect where loss of sales led to loss of inventory
    purchases, which affects other businesses, layoffs of
    employees, and for the county, reduced sales tax income.
        Within a few days, organizations showed up to offer
    assistance. SBA was one of those. We quickly established a
    disaster relief center (DRC). SBA had a presence at the DRC to
    answer questions and assist in application filing for loans.
    Once we opened those doors, SBA representatives were there to
    speak with residents about the possibility of loans to rebuild.
    Our staff conveyed how SBA was there, eager and ready to assist
    those in need. The staff who manned the table were friendly,
    accommodating, and helpful.
        We commend SBA on their presence and willingness to help,
    and are grateful for their continued support all these many
    months later. The benefits of the SBA program, though, are
    numbered. The paperwork is straightforward and the low-interest
    rate terms are favorable. But when asking people why they
    didn't apply, the biggest issue we heard was that these are
    loans, not grants. While recovering, many individuals and
    businesses didn't feel comfortable taking on another loan that
    they would have to pay back, especially as they were uncertain
    about their source of income in the coming months. Some
    businesses chose not to reopen. Some have closed after
    reopening. Some are still undergoing repairs. Some embraced the
    opportunity to become better than they were before and are
    thriving once more but still working to make up the loss. Even
    nine months after the storm, half of the businesses in Western
    North Carolina were still earning 20 percent less than they
    were before Helene. The damage to small businesses in the
    county is hard to quantify, but we do know that across Western
    North Carolina, 96 percent were impacted. This includes 83
    percent that had to close for some period of time. In Henderson
    County, specifically, of 130 businesses we have data on, over
    $9 million has been reported in damages.
        Henderson County's economy changed completely in the
    aftermath of the storm. The infrastructure of the region was
    not capable of supporting the usual fall tourists, and the
    local businesses suffered a loss of revenue with $10.5 million
    lost in the agritourism business alone. While our TDA did a
    great job reminding folks that there were areas of the county
    open for business, we lost over $4 million in stored apples
    that were ready for distribution. The hesitancy to use SBA
    loans for some of these losses speaks to locals' fear of taking
    on debt in such a challenging economic situation.
        Adjustments to the SBA, including the addition of grant
    opportunities or loan forgiveness for businesses rebuilding and
    continuing to operate post-natural disaster would have
    increased the number of businesses turning to SBA for
    assistance.
        In conclusion, we are extremely grateful for the role SBA
    played in our recovery from Hurricane Helene. We have learned
    many lessons from the storm of how to be better prepared to
    support businesses in the wake of natural disasters, and we
    hope that we can work together with the SBA to implement these
    changes to better support our future disasters. Thank you.
        [The prepared statement of Mrs. McCall follows.]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Budd. Thank you, Commissioner. Now we turn to Mayor
    Peter O'Leary. Peter is the owner of Bubba O'Leary's General
    Store, and also serves as the mayor of Chimney Rock Village.
    Mayor O'Leary has owned Bubba O'Leary's General Store with his
    wife, Ann, for 33 years. And thank you for being here, and
    you're recognized for five minutes for your testimony.

    STATEMENT OF MR. PETER O'LEARY, OWNER, BUBBA O'LEARY'S GENERAL
       STORE & MAYOR, CHIMNEY ROCK VILLAGE, CHIMNEY ROCK, NORTH
                                CAROLINA

        Mr. O'Leary. Thank you, Senator. As you said, I'm a small
    business owner in Chimney Rock Village. I own three retail
    buildings. Two of them operate as the general store and one of
    them I rent out to another small business owner.
        Hurricane Helene severely damaged two of my buildings and
    completely destroyed the other one. The buildings were assessed
    at some point by SBA after we filled out an application for
    assistance in October of '24. And I was not notified when the
    assessment was done, but I did receive a phone call shortly
    after that November 6th, 2024, from an SBA staffer with
    questions about our application. We were approved shortly after
    that, and everything seemed to be going extremely well.
        Our application to SBA is for the funding to rebuild the
    destroyed building. My other buildings and contents were also
    included, and we did need that financial assistance to do some
    repairs and replace contents in both of them as well.
        We knew at the time that no funds were available, and we
    were told that when we filled out the application. But we were
    assured that funds would be available soon, and they were, I
    believe, in January. So, we were excited to move forward.
        Our issues started after that, basically, in February of
    2025, when I started reaching out to the SBA officers to answer
    their questions, but also try to get my questions answered.
    Every few weeks, I would receive a notification that my case
    manager had been changed. I would then try to reach out with a
    phone call and/or email to my new case manager with questions,
    but would not hear from them or would get a very slow response.
    Then after a few weeks, I would be notified that I had a new
    case manager came. It became very frustrating.
        Over about a six-month period, I had five different case
    managers. During this time there were several requests for
    information from SBA, which raised many questions from me about
    their procedures, and how much I would be allowed to borrow,
    and other issues. Many times, I would have questions and would
    reach out to the case manager and not get the information I
    needed.
        My impression of the process was that many of these case
    managers were not correctly trained or did not have the
    experience needed to respond to my questions. I have worked in
    a previous life as a bank loan officer and are very familiar
    with commercial lending. It was frustrating to try and make
    building plans and business decisions based on information I
    was told, and then be notified that something had changed or
    was not being allowed. This would require me to attempt to
    clarify information and ask questions, but a lot of times I
    wouldn't get a timely response, or I'd have to deal with a new
    case manager and bring them up to speed.
        The whole process has now worked out, thankfully, but it
    did take about seven to eight months, longer than it
    realistically should in my opinion. I've heard similar stories
    from other businesses in Chimney Rock Village who have been
    very frustrated with the length of time necessary for their SBA
    applications to be processed, and the confusing information
    that's given to them regarding their applications and requests
    for funding.
        So, I'll just reiterate that I believe there's a lack of
    training, and I think that's really the main issue that I
    noticed as a business owner is that people are not able to
    respond to the questions, especially in a timely manner. And I
    just feel like with better management, maybe that problem could
    be solved. Thank you.
        [The prepared statement of Mr. O'Leary follows.]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Budd. Now, we turn to David Jackson, who serves as
    President and CEO of the Boone Area of Chamber of Commerce in
    Boone, North Carolina. And earlier this year, Mr. Jackson was
    recognized as a Community Advocate of the Year by North
    Carolina Rural Center. He holds a Bachelor of Science from
    Appalachian State University. It's a great school. We thank you
    for being here, and you're recognized for five minutes for your
    testimony.

    STATEMENT OF MR. DAVID M. JACKSON, PRESIDENT & CEO, BOONE AREA
               CHAMBER OF COMMERCE, BOONE, NORTH CAROLINA

        Mr. Jackson. Thank you, it's great to see a fellow
    Mountaineer here as well today. Senator, thank you for bringing
    this Committee to Western North Carolina, and spending time in
    this beautiful area of the state. In the testimony that I
    submitted, I detailed some of the positive aspects of the
    response with SBA and FEMA in the wave of Hurricane Helene,
    along with opportunities for improvement.
        I'd like to build on those comments this afternoon, by
    first reiterating sincere gratitude for the SBA and FEMA field
    agents that arrived in our communities to staff the business
    and disaster resource centers. These workers left their
    families to come assist ours. They brought empathy and
    compassion along with the seal of the United States government,
    and they helped our citizens and business owners understand a
    language and a process that was new, confusing, and at times,
    very frustrating.
        These agents were the conduit for over $85,000,000 in
    allocated funding through SBA businesses and EIDL loans in
    Severity 1 Counties as defined by the Economic Development
    Partnership of North Carolina (EDPNC) and their Helene Business
    Loss Assessment Report. That represents just more than half of
    the dollars that have been allocated to Western North Carolina
    to support our small businesses after the storm. The estimated
    economic loss in the fourth quarter of last year for the region
    was calculated in that same EDPNC report at $1,800,000,000. The
    philanthropic dollars that have been raised nearly match the
    SBA's deployed loan payouts, but don't come close to satisfying
    the loss of revenue, or stability, our small businesses saw
    disappear over the course of about 72 hours.
        $1,800,000,000 in loss cannot be absorbed just through
    loans to the businesses that lost inventory, revenue
    predictability, staffing, and core infrastructure. Many of
    those impacted businesses were not finished paying off COVID-
    era loans when the storm hit and the thought of more debt was
    daunting and simply not economically responsible. So, some just
    closed.
        These small businesses are the heartbeat of the economy
    your Committee aspires to support. We need diversity and
    available disaster funding for businesses to restore savings,
    to supplement losses not covered by insurance, and to restore
    economic stability for our local governments, all of which
    suffered sales and occupancy tax declines during one of the
    most profitable quarters of our calendar.
        Philanthropic support for businesses has come from
    fundraising from a number of organizations, individual donors,
    and local chambers of commerce. The Boone Area Chamber
    Foundation has raised over $1,300,000 in hurricane relief, the
    majority of which has been deployed through Business Disaster
    Resiliency Grants across Watauga, Ashe, and Avery counties.
        We will release a fourth round of that funding next month,
    centered mostly around storm-related revenue loss. Chambers
    across Western North Carolina have worked with partners to
    generate north of $6,000,000 in direct business disaster
    support grants. Partners like the U.S. Chamber of Commerce,
    Mountain BizWorks, Dogwood Health Trust through a partnership
    with Governor Stein and the North Carolina General Assembly,
    made grant funds available.
        To small businesses, the economic ramifications of this
    region would be far greater if not for those efforts, but don't
    come close to covering the loss. As I bring my remarks to a
    close, I offer our collective partnership. My chamber
    colleagues and I are eager to participate in conversations
    about what our business community has experienced.
        We're eager to strategize and create a small business
    disaster support playbook that can be replicated in communities
    like ours across the state and the country. We feel strongly
    that funding must come from blended sources, and it must
    feature creative avenues for deployment. As we see, not all
    programs fit all businesses. We're ready to help the SBA lean
    into their preparedness culture that they've tried to create,
    but honestly hasn't gotten the traction it deserves because,
    frankly, that's not how our society is wired. We encourage you
    to bet on small businesses. It's the Main Street coffee shops,
    the outfitters, the art galleries, the retailers that make our
    communities different than suburbia.
        Many visitors use the Blue Ridge Parkway as their escape,
    and I thank you and your staff for your leadership in
    prioritizing parkway repairs and balancing the timing of that
    work along with the Great American Outdoors Act projects that
    our region wholeheartedly supports; work that will keep the
    parkway available for generations to come. There is no more
    unique connector of our communities than the Blue Ridge
    Parkway, and the $1,300,000,000 of annual economic impact this
    national park generates is essential for our region's economic
    prosperity.
        I conclude with this comment from a local business owner in
    Watauga County that summarizes the mood of the moment, and
    certainly, captures some of what we felt collectively during
    the two months that you referenced a moment ago, that last
    year, SBA was without disaster funding.
        He said, ``While I recognized the challenges our leaders
    face, I remind them that business is not about a vote. It's not
    about the next election. It's about our lives. And I'd like
    them to recognize that we represent a real and meaningful part
    of our economy.''
        Thank you for your opportunity to speak today, and look
    forward to additional questions.
        [The prepared statement of Mr. Jackson follows.]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Budd. Thank you. And I thank each of you for your
    testimony. I recognize myself for some questions. As we're
    coming up on the one-year anniversary that's actually this
    Thursday night into Friday the 27th, we're all reflecting on
    the horrors that were brought by the storm. And the scars left
    by Helene are innumerable, but I'm proud of how we're coming
    together as a community to support each other in rebuilding
    after the storm. So, with this in mind, would you walk us
    through the immediate aftermath of the storm and what the
    federal response was like on the ground? Commissioner McCall,
    let's start with you.
        Mrs. McCall. Well, frankly, I wasn't even thinking about
    the federal government at the time. I was thinking about how to
    get from my house to downtown because every road was blocked by
    either fallen trees, or fallen power lines, or flooded, or one
    way or the other. It took hours, and hours, and hours, to clear
    a path just to get from one spot to another. But we did come
    together, and we did take care of each other, and our EMS was
    amazing. They had prepared days ahead of time, and they were in
    prominent locations so that they could respond quickly. And our
    fire departments had gone door to door previously, days before
    to evacuate people that we thought needed to be out of harm's
    way and that saved many, many, many lives. We were setting up
    shelters; we were looking for generators; we were doing
    everything that we could think of just to survive. I'm going to
    tell on our county manager; he broke into Ingles and took food
    off the shelves just to take our EMS facility so that those
    people would have something to eat. But then we saw a response
    from numerous organizations. It was volunteers, it was
    nonprofits, it was churches, it was people coming from all over
    bringing things, and bringing food trucks, and helping us get
    through each day, one day at a time. FEMA did show up. SBA
    showed up maybe a week, I think it was a week later. It's hard
    to put in my mind the time elements, but everybody did start to
    come. They had to learn the lay of the land, though. They were
    unfamiliar with who we were, and what was going on. But they
    were here, they wanted to help, they wanted to respond. But we
    felt a little bit like we needed to--they expected us to cater
    to them, and we did not have time to do that. So, we said, you
    know, here's what it is. Figure it out yourself. Tell us what
    you need. We'll find the best way to help you get what you
    need. So, we did set up a distribution or a disaster relief
    center. We turned our college parking lot over to FEMA, and
    they set up all of their places to stay there. They took it
    over. I remember seeing all these trucks show up, and it was
    like a convoy of trucks, and they were pulling these trailers
    that looked like shower trailers. And I was going, ``They're
    here. The shower trailers are here.'' But they were only for
    FEMA employees. They weren't for our public. So, we had to wait
    for others to show up. But like I said, they came, they did
    their thing, they went door to door, they put flyers on doors.
    But it was more, we took care of ourselves, we took care of
    each other, and that's how we got through this, and that's how
    we're continuing to get through this.
        Senator Budd. Thank you, Commissioner. Mr. Mayor?
        Mr. O'Leary. Well, the initial response was certainly much
    more local. As Commissioner said, the volunteer fire
    departments did a fantastic job, the county officials. We had a
    lot of out-of-town people and just local citizens, for that
    matter, bring equipment in to help out. SBA and FEMA did show
    up well. FEMA more specifically, but it was the very early--I
    don't mean to cast too many aspersions on, but the very early
    was more like almost a PR-type appearance for FEMA. But they
    did show up and start going around and assessing the damage.
    But I think one thing you have to sort of keep in mind is that
    it's kind of a multi-layered approach. I mean, local obviously
    is going to be the first ones to respond. And, honestly, in my
    opinion, the federal government, FEMA, SBA, their response does
    come several weeks and maybe even several months later as
    you're trying to rebuild more. The biggest problem that we had,
    and I'll switch my mayor hat, was there is a tremendous amount
    of cleanup that has to be done after an event like this right
    away. And you can't wait for--you can't even wait a day. I
    mean, people need to have roads cleared, driveways cleared,
    access for safety, and you know, just for the well-being of the
    public. So, that falls on the local governments. It falls on
    Chimney Rock Village, for example. But the problem that we
    faced was that's extremely expensive for a small community like
    ours. And FEMA is set up basically as a reimbursement agency
    for those types of things. And that moves extremely slow. So, I
    think a lot of your small communities faced a huge financial
    crunch trying to pay these local contractors who are doing a
    phenomenal job of cleaning, but then you turn around for
    funding to pay for that from FEMA, and it takes quite a bit of
    time. And I hope that--I do understand that maybe some changes
    are being made along those lines, but for as far as the federal
    response, that's really the biggest hurdle that I saw was just
    the way that the funding goes to reimburse the communities. It
    maybe should be funding up front for some of these immediate
    needs.
        Senator Budd. I think it's helpful.
        Mr. Jackson. Yeah. So, I'll start this off in a couple of
    different ways. First off, I remember our FEMA administrator's
    name, Jake Kwiatkowski. He was the first person to reach out to
    us. I found out very quickly that in order to get FEMA or SBA
    staff into the community, that required a reservation
    authorization number from the hotel. If they were going to
    come, and stay, and be deployed, that that confirmation number
    was what triggered the deployment. So, our office ended up
    coordinating about 100 different federal personnel for the
    local area that way, and we were glad to be able to do so. And
    I'm appreciative that because of the storm's impact on the
    football game, we had enough hotel space for that to occur.
    There was some additional confusion about the setup of the
    Business Resource Center and the Disaster Resource Center. They
    were co-located in a facility that we managed, which we were
    happy to do. But who was taking the lead on that? And that's
    where Jake was able to come in and say, you know, here is the
    process. That facility had to be inspected twice by two
    different agencies before full deployment could occur. And that
    ended up taking a few extra days to get that resource up. I
    will say, though, that the staff that we had in Boone, working
    out of that center, seemed to be specifically trained for some
    key things. And I go back to Jake for a second. He was a former
    firefighter with a background in building, planning, and
    inspections. That became incredibly helpful dealing with the
    impact of the disaster that we had on our side. And again, I
    mentioned it in my testimony, the fact that the folks that got
    deployed were disaster survivors. We had folks from Houston,
    Puerto Rico, Florida, that were able to teach a language that
    people did not understand and brought some compassion along
    with that. So, that part of our experience was very helpful.
    Our FEMA staff and SBA staff got in line with our emergency
    management very quickly. And Will Holt was able to make a lot
    of the decisions and make sure that there were people that were
    going out with those folks. Because one of the first things
    that was shared with us was that this disaster brought a
    topographical challenge that nobody had ever seen before. And
    they just didn't know where to go or how to access some of
    those areas. So, that I would totally agree with, our local
    responders were essential in making sure that the federal
    response could get deployed accurately.
        Senator Budd. That's very helpful. You know, Mr. Mayor,
    when you were speaking, it reminded me of Ronald Reagan's nine
    famous words, ``I'm from the government, and I'm here to
    help.'' But hopefully, with some reforms, we can actually be a
    little more helpful. This is very good, appreciate that. You
    know, as a lot of you know, the Biden Administration made a
    number of changes to SBA's disaster loan program, including
    increasing the unsecured loan limit and changing the ``credit
    elsewhere'' standards. These changes, coupled with a lack of
    Congressional notifications when funding for the disaster loan
    program was almost exhausted, led to a 66-day shortfall in the
    program. And this is just days after the storm in early
    October. During the shortfall in North Carolina alone, over 900
    businesses were left waiting to receive loan approvals and
    disbursements, thus delaying their recovery by over two months.
    Mr. O'Leary, can you talk about the impacts that shortfall had
    on your business and community?
        Mr. O'Leary. Well, it affected people's planning. I guess,
    for the individual businesses. We were, like I said, able to
    get the applications done fairly quickly. So, that response was
    good. And then, even the follow-up to me personally was pretty
    quick, I thought. And I was approved for the loans that they
    said, but they said there's no money. So, that was extremely
    frustrating. And then when you're working with--obviously, you
    have to work with a builder if you're rebuilding, or you know,
    spending the money in some fashion. And those people are asking
    what your plans are or when you can start, and you don't know.
    There's just so much uncertainty.
        Senator Budd. Do you know how long after the storm of
    September 27th that you actually began the paperwork process?
        Mr. O'Leary. We did in, probably, mid-October. I don't know
    the exact date, but yeah, mid-October. And we were actually
    approved, I did have an interview on November 6th, and shortly
    after that, our application was approved, but approved and no
    funding.
        Senator Budd. Which didn't happen until earlier this year
    of 2025, the funding. In North Carolina, we're entrepreneurs at
    heart, including in rebuilding. Mr. Jackson, the Boone Area
    Chamber of Commerce set up its own program, I think you
    addressed that a few moments ago, for business resiliency
    grants. Could you talk more about how these grants bridge the
    gap during this time with no SBA funding, and how it continues
    to help recovery today?
        Mr. Jackson. Yes. Thank you for acknowledging that. There
    was no gap to bridge. It was the money. We were very quick to
    find out that through the delay process, and the SBA loan
    program, certainly that happened, as you mentioned right after
    the storm was over. We found also that the timing of insurance
    payouts that weren't coming, it seemed like everything was a
    negative answer. The State of North Carolina was working
    through the General Assembly on their own ideas around grants,
    but nobody's got anything that looks like that, from a
    governmental standpoint, that is a true grant. I think one of
    the unfortunate things about the timing of this, too, is that
    this disaster occurred close enough to the COVID pandemic that
    that's what people were looking for. The amount of times I
    heard, ``Are we going to get a PPP loan? Are we going to get
    something that behaves like that?'' And the behavior, yes, that
    makes a lot of sense. Some sort of forgivable loan that has
    some performance tied to it could have been the right recipe.
    But without that, not only our Chamber, but chambers across the
    region, and other partners like Mountain BizWorks, and others,
    had no other choice but to try to get the philanthropic
    dollars. And that's where, I think, there's a silver lining
    here in just finding out how much people care about our region.
    Those dollars came in from all over the country, all over the
    world for that matter. And they were small, they were large
    payouts, they were philanthropic agencies that got behind that
    work, but they wanted to see the small communities that we all
    represent here survive this. So, we were able to put together
    an initial payout of $206,000 that went directly to our early
    childhood businesses and the families that have kids in those
    programs. We paid off tuition for the month of October, because
    we knew that families needed some money to make quick repairs,
    but we needed that industry stabilized. Soon after that, we've
    deployed a little over $1,000,000 dollars now in grants--small
    end, $500, top end, about $25,000. But you hear from businesses
    that had the foundation of their business knocked off, the
    building off of the foundation, or major infrastructure
    hurdles, that a $25,000 grant's not going to touch. So, it gets
    back to the broader picture of how we are looking at business
    in terms of the disaster. We've got good programs for the
    individuals. A lot of these individuals have family businesses
    that are almost symbiotic. And that's where we are eager to
    have some conversation about what comes next, and how can we
    have something that's readily available deployable by
    communities for these instances.
        Senator Budd. Thank you. The SBA's Office of Inspector
    General and the U.S. Government Accountability Office have both
    reported that the SBA fails to effectively reach rural
    communities following a disaster. After Hurricane Helene, these
    problems were only compounded by downed telephone lines and
    little to no internet service. Mr. O'Leary, you were not only a
    leader of the community, but you were also a small business
    owner. So, how did you learn about SBA's products, especially
    in those early days, and what sort of outreach do they do in
    your community to let you know who they were and how they could
    help?
        Mr. O'Leary. We learned primarily about SBA through the
    FEMA representative. So, if you were a business and you went to
    the FEMA representative and filled out--they encouraged you to
    fill out applications and we did, too. We encouraged all of our
    residents to fill them out. And if you were a business, they
    directed you to SBA. Our problem was SBA didn't have an office
    set up in Chimney Rock Village. They were mostly set up--the
    two I remember were in Asheville and Hendersonville, which at
    the time, we had to go--we couldn't go directly there because,
    like you said, the roads being out. So, we had to drive about
    an hour drive, an hour and a half drive, to get to those
    offices. Eventually, they did send some representatives down
    after--I can't remember the exact timeframe, but it would've
    been in the January or February timeframe, that they sent SBA
    officers.
        Senator Budd. FEMA was in the early weeks?
        Mr. O'Leary. FEMA was much earlier. We had FEMA
    representatives in mid-October that were down there talking to
    residents.
        Senator Budd. And so, in that early period, FEMA was
    telling you about SBA, but it was months before SBA came to
    you?
        Mr. O'Leary. Right. And FEMA said, fill out a FEMA
    application, but then if you were a business, you had to take
    that next step and fill out an SBA application.
        Senator Budd. Thank you. The U.S. Small Business
    Administration provides loans to renters, homeowners, and
    businesses following a disaster. SBA established a field
    presence in North Carolina shortly after the storm to provide
    in-person consultations for these types of loans. We've talked
    about that just a second ago, although it wasn't always where
    the need was. So, Commissioner McCall, I know that
    Hendersonville had an active recovery site with multiple
    agencies. Do you think this was beneficial? And what was your
    experience in coordinating with the federal resources?
        Mrs. McCall. Yes, it was very beneficial. We were lucky
    enough to find a place. It was previously had been a grocery
    store, so it was a large space that we were able to separate
    and have FEMA on one side, and our local nonprofits and other
    organizations on another side. Even our DHS was there for a
    period of time for the SNAP project. Having everything under
    one roof was helpful because people could come, and if they met
    with say, FEMA, and FEMA said you needed to meet with SBA, then
    it was all right there together. One of the problems that I
    think needs to be addressed is all the application filing. I
    mean, it is all the same government, and there were multiple
    applications that had to be filed. And if you didn't dot an I
    or cross the T, you were automatically denied. I actually think
    this goes--there's a movie about this--but I actually believe
    that they're trying to say no first, and get people to appeal.
    And a lot of people didn't know that they could appeal, and so
    they just went away. But if anybody contacted me, I said
    appeal, appeal, appeal again, appeal, appeal a third time,
    appeal a fourth time. One of the organizations that was there
    represented the Commissioner of Insurance for North Carolina,
    and insurance really was concerning because the insurance
    denials were worse than the FEMA denials, I believe. There was
    a family that I know of that their whole entire house flooded
    from raw sewage. And the sewage came up from inside of the
    house. And they had flood insurance, but they were denied by
    their insurance company because the sewage did not come in from
    outside. If it had come in from outside, then their insurance
    would've paid. So, they had to turn to FEMA. Again, they were
    denied. I think they eventually got $20,000 for their $400,000
    house that had to be completely rebuilt inside. And if it
    hadn't been for our local churches and other organizations to
    help them, they probably would never have been able to rebuild
    their house, but they're back in it today. But it took months,
    and months, and months, and months, to get there. But I think
    having all those organizations together to support each other,
    and especially a one-stop-shop for those who needed the help
    was very beneficial.
        Senator Budd. Thank you, Commissioner. Mr. O'Leary, from
    your testimony, it's clear that you experienced a lot of
    problems on the back end of your loan. Even once the shortfall
    ended and there was the funding, I think we can all agree that
    a couple of weeks is too long to wait for simple questions to
    be answered, and eight months is too long to receive
    disbursements for your loan. So, how did the long wait time
    impact your ability as a business to recover from Helene plan
    for the future of your business?
        Mr. O'Leary. Well, it just put everything in limbo in the
    sense that we couldn't make firm plans. We thought that we were
    moving forward with the funding. We thought we'd been approved,
    actually, right up front. And then, once the money became
    available, we were asked to provide additional documentation.
    We were given additional clarifications, and it became very
    confusing. And that's why there were so many questions that I
    had for my case managers. And it just slowed the whole process
    down. I mean, it essentially added a good six to seven months
    to our rebuild time. And we are presently looking at receiving
    funding within the next couple of weeks and starting the
    building. But you know, we were hoping to start back in March
    or April. And so, it's just put that much of a delay on it. So,
    for a seasonal business like Chimney Rock Village, and a lot of
    Western North Carolina, we are seasonal, if you don't do it at
    the right time of year, then you're liable to not only miss
    this season, but maybe the next season. So, that's why, of
    course, for us, timing is very important. But you know, it
    could have easily happened--this funding could have happened
    six months ago if things had been moving a little faster.
        Senator Budd. That's very helpful. Thank you. You know, our
    second panel has the SBA's Associate Administrator for the
    Office of Disaster Recovery and Resilience. So, I'd like to ask
    two things from each of you all while you're still here, given
    that you've got a unique opportunity to give feedback. First,
    what's your top line message to SBA about Hurricane Helene,
    specifically? And second, if you could ask SBA to fix one
    thing, what would it be. Commissioner, I'll start with you.
    Now's your chance.
        Mrs. McCall. Make the process simpler, I think. We were
    speaking earlier in the room we were waiting in, if anytime you
    go to--well, Mr. Jackson brought up the example of FAFSA. FAFSA
    used to be the hardest application to fill out ever made, but I
    helped my granddaughter this year, and it was just a matter of
    minutes, and it was all complete. And because they were able to
    pull from all the information that was already there, why can't
    the process be as simple with other applications? But also,
    loans are great, but SBA needs to look at it from the small
    business perspective, and realize that these people needed help
    recovering, and they were already paying off a mortgage. And if
    they lost the business, if the business floated down the river,
    then there's nothing left of that business to even have a loan
    for. And then they're stuck with that loan, and then they're
    facing the possibility of bankruptcy. So, there needs to be a
    possibility of offering grants, or forgivable loans, or
    whatever it is. But there's got to be more to offer through the
    SBA than just the loan.
        Senator Budd. Thank you. Mr. O'Leary?
        Mr. O'Leary. I would say I would echo that, simplify the
    process. And by that, I mean also cover all the basics upfront.
    I mean, as I said, I was a commercial loan officer years ago,
    and when you're approved for a loan, then you're approved for
    the loan, and you know up front what the money's for. And I
    felt like things kept changing, and that's why I needed all
    these clarifications because they approved me, and then they
    started kind of changing the rules and saying, ``Well, this
    doesn't cover that, and it doesn't cover this.'' And it's like,
    ``Well, I thought it was approved.'' So, I think simplify the
    process, make sure you cover all those bases up front. And
    then, the other thing I would just emphasize is the people that
    are dealing with the public, just make sure they're well
    trained. Just train them in how to answer these questions and
    have a timeline for when you get back to people with an answer.
    You know, it shouldn't be weeks to get an answer. It should be
    maybe a day or two, if not a few hours.
        Senator Budd. I think you mentioned there were six loan
    officers in five months or so.
        Mr. O'Leary. Five case managers.
        Senator Budd. Five case managers.
        Mr. O'Leary. Yeah, over a six-month period, five case
    managers.
        Senator Budd. So, that added to the complexity, of course.
        Mr. O'Leary. I never knew who to contact.
        Senator Budd. Thank you. David.
        Mr. Jackson. So, my advice would be customer-forward
    relationships. And, I emphasize the word relationships. And
    maybe this was a little bit unique to our disaster, given the
    geographic region, but I would echo or I would think that this
    would echo across the country as well. We've got some deep-
    rooted Appalachia culture in our region, where trust is earned.
    This is not a community where you say, ``Go call somebody on
    the phone,'' especially, when the phone is at work. Don't call
    somebody on the phone, don't log onto a website and wait for
    your time in the queue. This is about a person who's in a
    center that you form a relationship with. And once those
    relationships were able to be formed, we had some of the best
    interaction with FEMA, the SBA, and any federal agency for that
    matter. And then it all went away. I would consider the value
    of customer-forward relationships, and how that can lead to the
    information getting processed in a timely manner. I would echo
    the process. I think that's been well articulated. I would go
    back to my one suggestion, being diversity in the products you
    offer--forgivable loans. I don't think that anybody that's been
    represented by any of our communities has just come to this
    thing looking for a handout. They need a hand up into making
    sure that they have a fighting chance to move forward. And that
    means there's a measure of performance that I think that most
    businesses, most small businesses, in our region are willing to
    understand that they have to abide by. It's not just take a
    check and go to the beach. It's here's what can help me get my
    doors open again. Forgivable loans, grants, that equals tax
    base. And it comes back to the customer side of this. Again,
    taxpayers are customers, too. And I think that if there were
    more tools that were available to help them get out of the
    gates, they are the first ones that want to be a part of the
    positive piece of recovery for all of our communities.
        Senator Budd. This has been great. Thank you all for being
    here today. We appreciate your time. We appreciate your
    testimony. We're going to take a quick recess to allow our
    first panel to get up and allow the table to be reset for the
    second panel.
        [Recess.]
        Senator Budd. I call the Committee back to order. And we
    will now proceed with our second panel. I'm pleased to welcome
    Mr. Chris Stallings, who serves as the Associate Administrator
    for the Office of Disaster Recovery and Resilience at the Small
    Business Administration. Prior to his role at the SBA, Mr.
    Stallings served as the director of the Georgia Emergency
    Management and Homeland Security Agency. We thank you for being
    here, and you're recognized for five minutes for your
    testimony.

      STATEMENT OF MR. CHRIS STALLINGS, ASSOCIATE ADMINISTRATOR,
     OFFICE OF DISASTER RECOVERY & RESILIENCE, U.S. SMALL BUSINESS
                     ADMINISTRATION, WASHINGTON, DC

        Mr. Stallings. Chairman Budd, thank you for the opportunity
    to testify today on behalf of the U.S. Small Business
    Administration, to discuss SBA's recovery operations in
    response to Hurricane Helene.
        My name is Chris Stallings, and I have the pleasure of
    serving as the Associate Administrator of SBA's Office of
    Disaster Recovery and Resilience. I bring nearly two decades of
    emergency management and public safety experience to this role.
    Before joining the SBA, I served as the Director of Emergency
    Management and Homeland Security, leading the state's responses
    to disasters, including the COVID-19 Pandemic and Hurricane
    Helene, the very storm that brings us here today.
        As we gather in front of the Henderson County Historic
    Courthouse, I'm reminded of the incredible resolve Americans
    displayed during the challenges brought by Hurricane Helene,
    which was one of the most destructive storms to impact North
    Carolina and the surrounding region. These were challenges I
    witnessed firsthand in Georgia where communities were
    destroyed, and where families and small businesses were
    devastated.
        Under the leadership of Administrator Kelly Loeffler and at
    the direction of the President, Donald J. Trump, the U.S. Small
    Business Administration has improved its readiness to serve
    disaster-impacted communities like these, and we have committed
    to taking the lessons learned from Hurricane Helene to ensure
    that the SBA is always ready to provide reliable and robust
    disaster support.
        We are ready when disaster strikes, and we are committed to
    serving as a trusted partner in recovery. And to that end, SBA
    continues to lean forward supporting long-term recovery and
    economic relief for all Americans affected by disasters.
        Since January the 20th, 2025, the SBA has restored our
    recovery mission to begin and end with the survivor in mind. We
    have elevated our regional recovery coordinators for rapid
    information sharing and extended partnerships with local and
    state agencies to maximize outreach and service delivery.
        We have prioritized cross training with our Office of Field
    Operations to deputize more SBA personnel to assist with
    disaster response. Most importantly, we have improved funding
    readiness to prevent disruptions like those we saw during the
    Biden Administration, which left thousands of Americans
    stranded without vital relief.
        SBA has expanded ground support to guarantee help is
    visible and accessible to everyone. Through listening sessions
    with state emergency management leaders and SBAs Office of
    Rural Affairs, SBA has bolstered our recovery response to rural
    regions, deploying mobile recovery vehicles, portable loan
    outreach centers, which brings our team and the disaster
    assistance programs to the survivor, no matter how remote their
    location.
        And in July, we ended a Biden-era regulation that banned
    the SBA from providing disaster relief in the form of economic
    injury disaster loans to faith-based organizations. SBA has
    also extended the capacity of our disaster processing and
    disbursement center to accelerate the release of funds after
    the loan is approved. Today, the average approval time after
    submission is 14.83 days, down from 17.73 days just a year ago.
        During recovery operations for Helene, SBA mobilized 381
    staff across seven states, supporting 115 disaster recovery
    centers. These centers which provide in-person assistance to
    residents, businesses, and nonprofits seeking federal disaster
    assistance were visited by over 27,000 disaster survivors, with
    SBA approving over 18,500 applications for a total of
    $1,700,000,000 in long-term recovery funds, helping families
    rebuild homes, allowing small businesses to replace equipment
    and inventory, and fueling the local economy recovery.
        In North Carolina, SBA led economic stabilization efforts
    and developed the recovery needs assessment, and recovery
    support strategy, which identifies specific needs of small
    businesses. Utilizing available data, SBA provided targeted
    support through our resource partners fueling local economic
    recovery.
        SBA has remained a key contributor in recovery initiatives,
    which includes the Private Roads and Bridges Task Force holding
    business recovery resource expos, and hosting mitigation
    funding workshops, enabling survivors to use additional SBA
    funding assistance to reduce the risk of future disaster
    damage.
        Our agency remains focused on how we can continuously
    improve and help the disaster survivor. The lessons learned
    during Hurricane Helene were vast and have already been woven
    into SBA's mission to deliver disaster loan assistance through
    extensive partnerships with local leaders, our own field
    apparatus, and a small business community.
        In closing, thank you for your continued support of SBA's
    disaster recovery mission. Your partnership ensures that we
    deliver timely and reliable assistance to families and small
    businesses when they need it most. The SBA remains committed to
    helping disaster-impacted communities rebuild stronger and more
    resilient for the future.
        Thank you, and I look forward to your questions, sir.
        [The prepared statement of Mr. Stallings follows.]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Budd. Thank you for your testimony. I now recognize
    myself for questions. Mr. Stallings, you've been in this
    position since February of this year, and thank you for your
    willingness to serve. While you were not in this role during
    the SBA's initial response to Helene, this afternoon, you were
    able to listen to the experiences of individuals in businesses
    across Western North Carolina in the aftermath of the
    hurricane. So, is there anything that you'd like to say in
    response to their testimony and the discussion we had
    previously?
        Mr. Stallings. First and foremost, we apologize for the
    funding lapse that I can't imagine what that sent shockwaves
    through the community. The Biden Administration failed to
    communicate with one another internally, and certainly with our
    members of Congress. That's something that we take very
    personal. I, just like them, woke up at sunrise and I found out
    that, before sunrise, I'd already lost 10 Georgians under my
    watch. I know the impact that this storm has had, and I can say
    that we have made every step through this process as customer-
    focused and as disaster survivor-friendly as we can make it.
    Some of the heartburn that has been laid out today is the
    heartburn I brought with me, because I, too, saw these
    challenges in Georgia. I had to answer the phone to the
    businessmen and women, and survivors there trying to explain
    why their government, that they pay their taxes to, didn't have
    enough money to fund their need. So, I understand that. My
    heart hurt, I was frustrated and when given the opportunity, I
    thought, if you can't beat them, let's join them. I look
    forward to the opportunity to come in under the leadership of
    Administrator Kelly Loeffler, who brings a wealth of knowledge
    in business who says, ``Chris, we need to turn this back into
    what it should be, about the survivor.'' And so, we leaned in
    heavy. And so, I just first want to apologize for our lapse. We
    made the promise that we're here to do everything we can to
    learn from our mistakes and embrace them so that we can build a
    better future for everyone else who experience similar
    situations.
        Senator Budd. Thank you very much, Mr. Stallings. I
    remember those early days and the North Georgia coverage. It
    was our own Franklin Graham from Samaritan's Purse and former
    President, soon to be President again, Trump, and now
    Administrator Leoffler. Perhaps you were at that site, but I
    appreciate your work there. We have to remember, while the
    lion's share was Western North Carolina, Georgia was
    tremendously impacted as well. So, thank you for your work
    there. Specifically, I want to follow up on Mr. O'Leary's
    testimony that appears to have heard more recently. I
    understand that you inherited a backlog from the prior
    administration. So, what have you done to address the backlog?
        Mr. Stallings. So, I think the first thing that was
    mentioned was the separation of the disaster loan program from
    the Disaster Recovery and Resilience branch. The first thing
    that Administrator Loeffler has done is through our
    reorganization once complete, she's bringing that back
    together. That gives us the opportunity to work that process
    completely from beginning to end. When talking with our team,
    one of the first things I talked about and learned from our
    team was that those customer service reps that sat in those
    disaster recovery centers that talked hand in hand with those
    survivors, had the ability to get that person to the submit
    button. But once that application was submitted, they lost the
    ability to have some of those back-office conversations and see
    where that loan process was. Under the previous administration,
    there was a focus on speed. Now, in my biography, if you read a
    little further back, I was a state trooper, and when I stood on
    the firing line, I couldn't miss fast enough. I needed to be
    accurate with every round that left my revolver or my firearm.
    What I would say is the previous administration focused on
    speed, but not accuracy. So, why did someone experience maybe
    five loan officers? Well, the faster I could get it off my
    desk, I met a metric. I'm a human; I want to be treated as
    such. I'm bringing back through the leadership of Administrator
    Loeffler and under the direction of our President, a human
    element to the process; picking up the phone, talking one-on-
    one. I grew up in the foothills of the Blue Ridge Mountains. I
    understand and speak Appalachian. You don't have to worry if
    they like you or they hate you. Give them three seconds and
    read their face, you'll know. I think that is important in the
    process. How would you want your loan treated when you call me?
    And I think that's the effort you deserve. So, one of the
    things we're bringing back is picking up the phone and bringing
    the human element. Yes, technology's great. It is wonderful to
    be approved in 15 minutes, but it is an awful experience to be
    denied in 15 minutes and have to wait weeks on a letter that
    tells you why. And it could be as simple as mentioned in one of
    the applications, a mis-stroke of the keyboard. I have a
    grandmother. I'm very fortunate, I have all of my grandparents.
    I would never ask them to sit down on a computer and fill out
    an application they're not comfortable with. Part of that human
    element is still keeping that pen-and-paper mentality, walking
    someone through that process slowly. I think that's so
    important, something that this administration is committed to
    doing; bringing the human element back to the process, because
    we're dealing with folks who didn't ask to be there. I promise
    you, if we had went back on the 26th of September, and took a
    poll and said, ``Who's willing to have their home or business
    destroyed by generational flooding?'', that not a single hand
    went up. We have to keep that in our mind as we go through the
    process.
        Senator Budd. Thank you. This may be a continuation of that
    prior answer, but under your leadership, the Office of Disaster
    Response & Recovery has been hard at work undoing a lot of the
    mistakes from the prior Biden Administration. So, could you
    talk about some of the changes you've made, and how it's going
    to better serve disaster victims?
        Mr. Stallings. Yes, sir. Focusing on the individual, not a
    metric. Not a, ``Did I do well enough to get my performance
    evaluation checked off because I approved or disapproved so
    many loans.'' Also, the ability for our team to just sit down
    and look at where we're good. You know, it's really easy to
    stand here, and thump our chest, and talk about the areas that
    we're good at. Everybody enjoys that. But it is taking a moment
    to look and see our areas that we're not good and we need some
    improvement. Our customer service needed improvement. One
    mandate that I've required is, once the reorganization is
    complete, every individual in my agency, that falls under our
    disaster program, if you've never been deployed to a disaster
    scene, you have to go to one. And why is that important? I
    thought I was an emergency manager in Georgia until I stood in
    a disaster scene and saw the tear streaks through muddy faces,
    and I saw children picking up their toys out of the mud in the
    yard, and I saw families broken. And until someone experiences
    that, unfortunately, you don't really have compassion and
    understanding for what a person is going through. So, first
    mandate was we're putting every single individual in the field.
    You've got to go stay, you've got to go work those disaster
    recovery centers, before you go back, you'll be truly
    sympathetic then to that disaster loan. The second part is
    within our statutes. My focus is not speed of approval or
    denial, it is make the effort to get to yes. That is our motto.
    What is our effort--get to yes. If we can get to ``yes''
    legally through our statutes, there's no reason why we
    shouldn't. These are tax dollars paid by taxpayers, and they
    deserve the right to have access to the resources that the
    federal government has promised that we would bring.
        Senator Budd. Thank you. So, for everyone here lucky enough
    not to be steeped in SBA disaster loan funding and how the
    federal government estimates funding requirements, the subsidy
    rate helps Congress understand how much money the SBA needs to
    fund its disaster program each and every year. In 2022, the
    subsidy rate was 8.96 percent. By 2025, the subsidy rate more
    than doubled to 22.22 percent. A higher rate means the program
    costs more, and the SBA should work with Congress to ensure the
    program won't run out of money during a disaster. So, Mr.
    Stallings, how does a higher subsidy rate impact the number of
    loans you can make and disaster survivors that you can assist?
        Mr. Stallings. In easy language that even a guy who grew up
    in Fannin County, Georgia, can understand; the higher the rate,
    the less dollars I have. And so your $100,000,000 that you give
    me just doesn't go as far as it did. So, the more we can work
    together to get that subsidy rate down the better chance we can
    to reach more folks. It also prevents that funding lapse that
    fell under the previous administration.
        Senator Budd. So, would you agree, Mr. Stallings, that this
    higher subsidy rate likely limited the number of loans that SBA
    was able to make following Hurricane Helene?
        Mr. Stallings. I would, sir.
        Senator Budd. Earlier this year, I introduced S. 300, the
    Disaster Loan Accountability and Reform Act, or DLARA, for
    short. The bill looks to make statutory changes to increase
    oversight, ensure that a funding shortfall like this never
    happens again. Mr. Stallings, I'm pleased that some of the
    provisions in this bill, such as the monthly disaster report,
    have already been addressed by the Trump Administration. Can
    you explain what changes have been made to disaster report and
    the importance of Congressional reporting?
        Mr. Stallings. Yes, sir. So, per the Small Business
    Disaster Response and Loan Improvement Act of 2008, there
    should have been monthly reporting already occurring. We came
    in, looked at the report, and the report was difficult, at
    best, to understand. We revitalized the report, we changed it,
    we made it much easier to digest, We made it easier to look at
    and regurgitate. I can give you the information on it, and it
    is easy to recall. It's not just spreadsheet after spreadsheet
    of trying to hide a mistake. By that, we've also made a promise
    that it will come to Congress every month as it should. We've
    been faithful to that promise already, and we've got positive
    feedback on the changes that we've made. I think it was
    extremely important, as someone that has worked with the
    federal government, the transparency of it, showing where we
    stood. You know, just give me my odds. I'll fight from there.
    Tell me what I have, and what I don't have. I don't like the
    word ``maybe''. And this report that we're doing takes away the
    maybes. I think it gives us a lot of ``yes'' and ``no''. And
    so, the report itself was important. It also, in your bill that
    you mentioned, sir, you talk about us bringing the program back
    together. That was a Day 1 priority. Once confirmed,
    Administrator Loeffler said we've got to bring that back
    together. It just doesn't make sense to have it torn apart. So,
    bringing back that disaster loan apparatus together, I think,
    is extremely important as well.
        Senator Budd. Thanks. The SBA ran out of funding on October
    16th, beginning a 66-day shortfall, which we discussed earlier.
    And that lasted until December 21st. And this shortfall ended
    only after Congress passed a supplemental appropriation, which
    provided the SBA with an additional $2,300,000,000. DLARA would
    require the SBA to submit a statement as part of its annual
    budget, detailing the 10-year average cost of providing
    disaster loans and administering the program. Do you think
    incorporating the funding of SBA's disaster loan program in the
    regular appropriations process could have helped avoid a
    similar shortfall in the future, or lessen the need for
    supplemental appropriations?
        Mr. Stallings. I think transparency between our agency and
    Congress is extremely important, whether it's with a monthly
    report or the annual budget. I think the fact is, that we need
    to maintain an open line of communication. We certainly enjoy
    our work with the Small Business Committee, both the Senate and
    in the House, and we promise to remain transparent. As long as
    Administrator Loeffler is in her seat and I'm in mine, we
    promise to make that relationship work.
        Senator Budd. So, I wish you were in your role five months
    earlier, but one of the most concerning problems with the
    shortfall is SBA failed to find the solutions in the moment.
    SBA wasn't able to stretch the limited funding they still had,
    to ensure that some people got even a little bit of money while
    SBA waited for the full amount to be approved by Congress.
    Having this flexibility during disasters was an important
    lesson learned, and my bill will provide the flexibility to the
    SBA Administrator to lower SBA's loan obligations to the
    statutory unsecured loan limit of $14,000 when the disaster
    subsidy account falls to under 10 percent. More simply, this
    fix will allow the Administrator to ensure more people can at
    least get a first portion of their loan so they can start
    rebuilding, rather than making thousands of borrowers wait on
    the federal government. Mr. Stallings, how will this
    flexibility increase the number of constituents who could
    receive the funding?
        Mr. Stallings. Well, first I have to brag on my
    Administrator. I don't think President Trump could have made a
    better selection by naming Administrator Loeffler to her seat.
    She comes with a business background, so she understands how to
    make dollars and cents work. She understands that flexibility
    is key. And if that bill is passed, I believe that--I don't
    believe--I know that our agency will be able to work with you,
    and your team, and the whole committee to ensure that that
    flexibility allows us to be nimble. I think that most lessons
    that I ever learned in my emergency management background was,
    give me a little of something--that beats all of nothing. And
    so, if I can take a little of something and be flexible, it can
    get me down the road a little further.
        Senator Budd. That's helpful. Thank you. Another challenge
    is the whole-of-government approach to disasters and ensuring
    proper interagency coordination. For many folks, the alphabet
    super agencies involved in disaster recovery, it only hurts
    rather than helps. Could you talk about your work alongside
    other federal partners to ensure the process following disaster
    is more coordinated and streamlined?
        Mr. Stallings. So, I take great pride in communication,
    talking with those agencies. It did not fall on deaf ears the
    aggravation of the application--multiple agencies, multiple
    applications. We have made it a priority to express our desire
    to see one application. And I believe that is a future that
    needs to be funded and found quickly in the federal government,
    is that there's one place that an individual can go. Business,
    homeowner, renter, private, nonprofit, enter in their
    information, and then those in federal family should be able to
    pull what information they need that's applicable to their
    program. So, I'm a big advocate of that. I believe simplifying
    it. The disaster portfolio, whether it's grant or loan, is
    different than the 7(a), or the 504, or any other operation
    that you would get from SBA. Why is that? It's the mindset in
    which someone is applying. We have to take into consideration
    the mindset of the applicant. What they've just experienced,
    what they've just faced, and keeping it simple for them is a
    huge step in the process. So, sir, I'm a big advocate of
    bringing those partners together. I've met with USDA, I've met
    with FEMA, weve met with HUD, we've met with all the federal
    family that would show up, and say; how can we better do this?
    And I think the first step is that one application process.
        Senator Budd. You talked a lot about agencies, particularly
    SBA, and how to improve. What would you recommend to Congress
    on how to improve the process on our side, and how to better
    serve taxpayers?
        Mr. Stallings. I think more flexibility on the ground when
    our team shows up. We are now making some changes to how we
    operate internally. As you mentioned earlier, and I believe in
    Panel 1, the response is very important. But we're not a
    response agency. We're a recovery agency, unfortunately. I
    spent a long time with blue lights and sirens on a vehicle, and
    when I hear them, my heart starts beating fast now. But it's
    difficult to know that my role sometimes is not to be there in
    the immediate. And so, we are leaning forward in other ways.
    We're starting to put our regional recovery coordinators inside
    state operation centers where we can--so that we could start
    talking then and whispering, ``Hey, don't forget us. Let's go
    ahead and start doing this. Let's think about that.'' The value
    of blue-sky conversations. You talked about earlier the role of
    the government. Well, I think part of our response is knowing
    what tool to reach in the toolbox. You know, if the old adage,
    ``If the only tool you have is a hammer, everything is a
    nail.'' Well, if we can show someone else another tool, having
    some more blue-sky day conversations. So, we've made a lot of
    strides. President Trump's intergovernmental affairs team has
    really given us an opportunity at SBA. They've set up a lot of
    phone calls on our behalf so we can start talking to governors
    and governor staff. Myself, and Administrator Loeffler have
    traveled a lot talking to these teams. So, that going into a
    storm, you know, we're there, you thought about us in advance,
    you're understanding the programs that we do offer so that when
    it does go bad, unfortunately, you know you've got a friend in
    us that you can call. That SBA has a myriad of programs that we
    can bring to the table, and that you're not trying to scramble
    for solutions. There's a solution you met months ago called
    SBA, and we just want to be there to help.
        Senator Budd. Great. Thank you, Mr. Stallings. I have no
    further questions, and that concludes this panel. I want to
    thank our witnesses on both panels for being with us today. I
    ask unanimous consent that the record of today's hearing to
    remain open for two weeks for members to submit questions,
    revise and extend their remarks, and submit additional
    information for the record.
        Without objection, so ordered. With that, the Committee on
    Small Business and Entrepreneurship stands adjourned. Thank
    you.
        [Whereupon, at 3:15 p.m., the hearing was adjourned.]
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