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28–246 PDF 2018

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 

( 

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

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(II) 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED FIFTEENTH CONGRESS 

JAMES E. RISCH, Idaho, Chairman 

JEANNE SHAHEEN, New Hampshire, Ranking Member 

MARCO RUBIO, Florida 

RAND PAUL, Kentucky 

TIM SCOTT, South Carolina 

JONI ERNST, Iowa 

JAMES M. INHOFE, Oklahoma 

TODD YOUNG, Indiana 

MICHAEL B. ENZI, Wyoming 

MIKE ROUNDS, South Dakota 

JOHN KENNEDY, Louisiana 

MARIA CANTWELL, Washington 

BENJAMIN L. CARDIN, Maryland 

HEIDI HEITKAMP, North Dakota 

EDWARD J. MARKEY, Massachusetts 

CORY A. BOOKER, New Jersey 

CHRISTOPHER A. COONS, Delaware 

MAZIE K. HIRONO, Hawaii 

TAMMY DUCKWORTH, Illinois 

SKIFFINGTON E. HOLDERNESS, Republican Staff Director 

SEAN MOORE, Democratic Staff Director 

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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 

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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 evLAP51NQ082 with DISTILLER

2 

erything 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. 

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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. 

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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 

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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. 

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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 

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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:] 

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Senator Marco Rubio 

Senate Committee on Small Business and Entrepreneurship 

"An Early Review of SBAs Response to the 2017 

Hurricanes" 

September 27,2017 

OPENING STATEMENT 

• I would first like to say, thank you all for being here. 

• Mr. Chairman, thank you for holding this important 

hearing-one that is incredibly personal to states like my 

home state of Florida, to Texas, Louisiana, and most 

recently to Puerto Rico and the U.S. Virgin Islands. 

• Three hurricanes have wreaked havoc on Americans in 

the past two months leaving people homeless, without 

work, and financially strained. 

• For two months, our federal agencies have responded to 

each natural disaster, in multiple states and territories, 

serving our constituents in times of despair and need, and 

we are so grateful to them. 

• One such agency, the Small Business Administration, 

which is the focus oftoday's hearing, was up and 

running in Florida within 48 hours after Hurricane Irma, 

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a record-setting category four storm, which impacted 

nearly the entire state. 

• The assistance provided by this agency can be so crucial 

to homeowners, renters, and business owners whose 

homes and businesses were damaged or destroyed by 

these storms. 

• Many of these same people are still recovering from 

hurricanes Matthew and Hermine, which hit Florida just 

a year ago. Some have lost everything and are forced to 

close their doors indefinitely. 

• Nevertheless, I have been amazed at the overwhelming 

support these individuals have received not just from 

their communities, but the entire country. 

• The American people are resilient and I know that 

together we will get through these tough times. 

2 
10 

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. 

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11 

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. 

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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 adLAP51NQ082 with DISTILLER

13 

ministrative 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. 

LAP51NQ082 with DISTILLER

14 

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. 

LAP51NQ082 with DISTILLER

15 

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. 

LAP51NQ082 with DISTILLER

16 

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. 

LAP51NQ082 with DISTILLER

17 

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 pubLAP51NQ082 with DISTILLER

18 

lic 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 

LAP51NQ082 with DISTILLER

19 

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? 

LAP51NQ082 with DISTILLER

20 

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. 

LAP51NQ082 with DISTILLER

21 

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 addi- tional 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 

LAP51NQ082 with DISTILLER

22 

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. 

LAP51NQ082 with DISTILLER

23 

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. 

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24 

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 homeLAP51NQ082 with DISTILLER

25 

owners 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. 

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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, highend 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, 

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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. 

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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. 

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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. 

LAP51NQ082 with DISTILLER

30 

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 

LAP51NQ082 with DISTILLER

31 

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 

LAP51NQ082 with DISTILLER

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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. 

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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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Insert offset folio 3 here 28246.003

Senator Bill Nelson's Statement for the Record for the 

U.S. Senate Committee on Small Business & Entrepreneurship 

"An Early Review ofSBA 's Response to the 2017 Hurricanes" 

September 27,2017 

Chairman Risch, Ranking Member Shaheen, and the distinguished members of 

this Committee, thank you for giving me the opportunity to participate in the 

conversation today. 

As the senior Senator from Florida, I have seen firsthand the unbelievable impact 

of Hurricane Irma. I traveled to many parts of the state with my colleague Senator Rubio 

and what we saw was heartbreaking, but also hopeful in the way people from different 

backgrounds came together to help each other in a time of need. 

In the wake of the storm, we saw millions of people without power, several 

communities flooded, limited access to critical supplies like gasoline, and significant 

property damage-which all have an effect on the local economy-but also sadly led to 

several deaths in Florida, including 11 people at a nursing home in Hollywood, Florida 

that died after several calls for help went unanswered. 

Something like that shouldn't happen in America-the greatest, most resourceful 

country on the planet. That's why I think it's critically important that we have this 

conversation today and find out what we can do better to get critical services up and 

running with less delay and improve the way we coordinate responses-so that when 

someone calls those of us in public service we respond with urgency and purpose. 

I'm glad to say I found a great partner in Senator Rubio, who shares my resolve in 

helping people recover from this unprecedented storm. That's why we introduced the 

Small Business Disaster Relief Act (S.l853), which seeks to speed up the time it takes to 

process Small Business Administration (SBA) disaster loans, help regional small 

business development centers get needed resources to disaster areas sooner, and make it 

easier for businesses vital to recovery efforts to get the help they need and restore 

services-like debris removal, gas, electricity, and telecommunication services. 

We also partnered on letters to SBA Administrator McMahon and Housing 

Secretary Carson, asking for quick action to establish Business Recovery Centers in areas 

affected by the storm, and an easing ofHUD's disaster aid regulations, which penalized 

people for applying for an SBA disaster loan even if they didn't wind up accepting the 

loan. 

When it comes to helping people recover from a disaster, there's no room for petty 

politics. As we look at the challenges facing our communities back home, we need to 

follow the example of the people I saw back home. We need to come together to lend a 
35 

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helping hand no matter a person's background or predicament-and that includes our 

fellow Americans in Puerto Rico and the U.S. Virgin Islands. 

I look forward to working with this Committee to advance all the ways we can 

help those devastated by the storms and make sure mistakes made are never repeated. 

Thank you. 
36 

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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Testimony before the Senate Committee on Small Business 

"An Early Review ofSBA's Response to the 2017 Hurricanes" 

Senator Ted Cruz (R-TX) 

September 27,2017 

Chairman Risch, Ranking Member Shaheen and Members of the Committee, thank you for the 

opportunity to provide a statement for the record at today' s hearing and offer my perspectives on 

the impact of hurricane Harvey on the state of Texas. 

Texas is hurting. This hurricane, hurricane Harvey, is unlike anything we have seen 

before. Harvey is being described accurately as a I ,000-year-storm, something that occurs every 

1,000 years. And in Texas, we've never seen anything like it. 

Harvey started out as a category four storm hitting South Texas, hitting Corpus Christi, and 

Victoria, and Rockport, and Port Aransas and Aransas Pass and Refugio. Those communities 

were devastated by category four winds that destroyed homes that destroyed schools that 

destroyed county courthouses, and city halls and buildings. It took down wires and took down 

power and took down water, and took down sewage. 

But Harvey wasn't finished after making landfall and wreaking destruction. Harvey then turned 

north. North and east and moved over the city of Houston and just sat there. Sat there dumping 

rain day, after day, after day. It's actually what made Harvey different. The storm sat there and 

dumped 27 trillion gallons of rain. We had 52 inches of rain in four days, which is about the 

average annual rain fall in Houston. We saw flooding in parts of the city that had never flooded. 

Then it moved East, and pummeled Beaumont and Port Arthur and Orange and Nederland. 

The scope of this disaster defies words. It's not one community or two communities or three 

communities. It is over 250 miles stretching from Corpus Christi all the way to Louisiana. It is 

250 miles of devastation. 

The Texas Department of Safety estimated that overall 185,000 homes were damaged and 9,000 

were destroyed. The Houston area alone, the flooding is massive. Neighborhoods where there's 

a real possibility every single home will have to be knocked down and rebuilt, every 

single government building will have to be knocked over and rebuilt. 

In any disaster there are three phases. There's phase number one, the active crisis where search 

and rescue is the only priority. Saving lives. 

After the search and rescue is over, after the saving of lives, there is the next phase. And that 

phase is relief. Providing relief to the people who have lost everything right then. 

And then the third and final phase will be rebuilding. And rebuilding is going to be a project 

that's going to take days. And then it's going to take weeks. And then it's going to take months 

and it will ultimately take years. The scope of this devastation is massive. There are multiple 

estimates that this may prove the costliest natural disaster in U.S. history. And having seen 
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firsthand the scope of the disaster, the thousands of homes and businesses destroyed, I can 

readily believe it. 

Harvey left devastating damage. But we're coming back. All across the Gulf Coast, communities 

are hard at work they've rolled up their sleeves and are coming together to rebuild. Churches, 

neighbors and friends are working together- neighbor helping neighbor, Texan helping Texan. 

They've been pulling the sheet rock from houses, ripping up flooring, and throwing out the 

furniture that was ruined by floods. Having visited many of these communities two or three times 

in the past several weeks, you can already see very major progress. 

It is inspiring to see Texans help one another and stand united. It is a testament to the character 

of Texas. The dedication of local officials, teams of volunteers and relief workers in these 

communities is inspiring. It's the Texas spirit that got us through the storm, and it's that same 

spirit that will help us rebuild even stronger. 

The management of the response and recovery effort - from the city of Houston, to Harris 

County, to the governor's office and FEMA- has been steadfast. Now that the TV cameras are 

gone and recovery has given way to rebuilding, Congress will need to step up just like in the 

wake of other hurricanes. 

I look forward to working with this committee and the Small Businesses Administration to 

ensure that homeowners, renters and all sizes of businesses have the necessary federal resources 

to fully rebuild and recover from this disaster. 
39 

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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APPENDIX MATERIAL SUBMITTED 

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P'\)ASSOCIATION OF L'<f WOMEN'S BUSINESS CENTERS 

Testimony of 

Antonella Pianalto 

on behalf of the Association of Women's 

Business Centers 

to the 

U.S. Senate Committee on Small Business 

and Entrepreneurship: 

An Early Review of SBA 's Response to the 

2017 Hurricanes 

September 27, 2017 
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Thank you Chairman Risch, Ranking Member Shaheen and distinguished Members of the 

Committee for the opportunity to share this testimony with you. My name is Antonella Pianalto, 

and I serve as the President & CEO of the Association of Women's Business Centers. 

The Association of Women's Business Centers (AWBC) supports the national network of 

Women's Business Centers (WBCs) by providing training, mentoring, programming, and 

advocacy with the goal of improving services to women entrepreneurs. The A WBC' s membership 

includes every WBC throughout the United States. 

As you know, the Women's Business Center program is a public-private partnership with more 

than 25 years of success in providing training, counseling, mentoring, and access to capital to 

women entrepreneurs across the country. Our continued growth leaves an enormous footprint of 

successful business owners and job creators. In fiscal year 2016, our centers reached more than 

145,000 clients and conducted over 93,000 hours of counseling and over 15,000 training sessions 

in over 35 languages. 1 In 2015, the most recent data, WBCs assisted with nearly $429 million in 

private capital infusion and last year helped to secure nearly $40 million in government contracts 

for women-owned businesses. 2 

These statistics, beyond metrics of the program's impact, are directly relevant to our conversation 

today about how SBA resource partners can help in the response to natural disasters such as 

hurricanes. That is, through increased access to capital and engaging small businesses in the 

recovery effort, WBCs can play a key role, as they often have, in helping these communities 

recover. 

The recent historic storms of Hurricanes Harvey, Irma and Maria have affected countless numbers 

of small and women-owned businesses. These businesses are in desperate need of disaster relief 

assistance to get up and running again, as data from the Federal Emergency Management Agency 

(FEMA) indicates that 40% of small businesses do not re-open after a disaster.3 WBCs are able to 

help businesses recover from the storms that have wreaked havoc in areas such as Texas, Florida, 

and Puerto Rico. 

Not only do WBCs provide information on SBA disaster-related assistance to clients, but they can 

also help small businesses apply for disaster relief loans, process loans faster, and ensure that 

government contracts for disaster supplies and relief work are awarded to local businesses. 

1 US Small Business Administration. Office of Entrepreneurial Development 2015 Year in Review, p. 39. Available 

online at https://www.sba.gov/sites/default/files/resources_articles/2015_0ED_Year_In_Review.pdf. Hereafter SBA 

OED 2015 Report. Federal contracting data provided by SBA via Entrepreneurial Development Management 

Information System (EDMIS). 2 Fiscal year 2016 data provided to A WBC on request by SBA. 3 Federal Emergency Management Agency (FEMA), Protecting Your Business. Accessed on 4 October, 

2017. https://www .fema.gov/protecting-yow-businesses 

2 
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Response to Hurricane Sandy 

Hurricane recovery efforts are nothing new to the WBC program. Recently, this included 

participation in the significant clean up and recovery effort from Hurricane Sandy which 

devastated the Northeastern United States in 2012. Reports from one of our WBCs in New York, 

gives a brief, but critical, insight into how WBCs play this important role. 

Following Hurricane Sandy, many business owners were in desperate need of capital both for 

payroll and repair efforts. Simply keeping the lights on became a priority for the entire 

entrepreneurial development community. In cases from a WBC in New York City, many 

businesses were at first turned down by the SBA for disaster loans, largely due to an inability to 

properly navigate the requirements. This WBC supported the owners through the reconsideration 

process by providing technical assistance and guidance in reapplying. Many of the businesses were 

eventually granted loans and able to use the funds to rebuild, recover, and re-open. 

Simply put, without the knowledge and resources of a WBC in the region amidst such a crisis, 

small businesses fall through the cracks. Members of A WBC throughout the country have similar 

stories about how they helped entrepreneurs find resources from government agencies like FEMA, 

the General Services Administration, and the U.S. Army Corps of Engineers. 

Capabilities of WBCs Amid Disaster Recoverv 

The WBC strategic approach is relational: they establish long-term relationships with clients and 

serve them from inception through the life cycle of their businesses. Serving clients impacted by 

disasters is a critical piece of the long-term relationship. 

WBCs differ from other types of entrepreneurial training programs by providing a safe place to 

learn, peer support, mentoring opportunities, and offering a sense of community that clients cannot 

find in other places. WBC clients consistently state that they come to WBCs not just for the 

business training and counseling, but for the supportive environment that helps them build selfefficacy and confidence in their ability to succeed. For small businesses impacted by disasters, this 

supportive environment and sense of community is even more essential to help them through the 

recovery process. 

Not only do WBCs provide a supportive community for those affected by disasters, they also 

provide technical assistance. WBCs offer small business owners assistance with the disaster loan 

application paperwork and processing, and assistance with the plan to apply the funds to their 

business. WBCs are also instrumental in assisting small businesses in securing disaster response 

contracts from the federal government to provide supplies and services to assist in the relief and 

recovery efforts. By steering government contracts to local small businesses, individuals in the 

local community who were affected by the storms are able to get back to work. 

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Not only does this stimulate the local economy, but it also ensures that the work of disaster 

recovery gets done faster and more efficiently than it otherwise would were the work contracted 

out to large corporations with no ties to the community. WBCs have a long history of securing 

government contracts for small businesses, and 77% of all WBCs aid in procuring government 

contracts. 

Responding to Hurricanes Harvey. Irma, Maria 

There are currently 10 WBCs located in the disaster affected areas within the United States and 2 

located in Puerto Rico. Those WBCs are: The Wo~en's Business Center of Cameron County in 

Brownsville, Texas, the Houston Galveston Women's Business Center Women's Business 

Enterprise Alliance (WBEA) in Houston, Texas, the Women's Business Border Center El Paso 

Hispanic Chamber of Commerce in El Paso, Texas, the LiftFund Women's Business Center in San 

Antonio, Texas, the Good Work Network, in New Orleans, Louisiana, the Urban League of 

Louisiana-Women's Business Resource Center, in New Orleans, Louisiana, the Florida Women's 

Business Center for Technology Enterprise & Development in Delray Beach, Florida, the 

Jacksonville Women's Business Center Jacksonville Chamber Foundation, Inc. in Jacksonville, 

Florida, the Women's Business Center, we VENTURE at Florida Institute of Technology in 

Melbourne, Florida, the Women's Business Centre at The Helen Gordon Davis Centre for Women 

in Tampa, Florida, and Centro Empresarial Para La Mujer (Center for Puerto Rico), and Instituto 

Empresarial para Ia Mujer (Business Institute for Women) in Puerto Rico. 

All of these centers are leaders in there community and a natural resource for businesses in need. 

They are well-suited to aid business owners in navigating loans and participating in the recovery 

effort. Changes, though, under consideration from Congress could greatly increase all of these 

centers ability help. 

Recommendations for Congress to Improve Disaster Response 

While there is need for an immediate response to the damage wreaked by the recent hurricanes, 

natural disasters can strike anywhere and at any time and these hurricanes are surely not the last, 

unfortunately. In the words ofSBA Administrator, Linda McMahon, "disasters don't pick a time 

and we need to be prepared.'"' 

4 Nomination of Linda E. McMahon to be Administrator of the Small Business Administration: Hearing Before the 

Committee on Small Business and Entrepreneurship, Senate, 27 January, 20l7, 115" Cong. 42. Washington: GPO, 

2017 (statement of Linda E. McMahon, Administrator, Small Business Agency). 

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In order to maximize the ability ofWBCs to support disaster relief efforts Congress should: 

I. Re-authorize the WBC Program including increasing current grant levels. Existing 

centers are restricted by a 30-year old cap on grant levels that they can receive through the 

program. Current legislation, already passed by the House of Representatives as part of the 

FY18 National Defense Authorization Act, should be supported in conference to increase 

the grant levels centers can receive. If Congress is unable to modernize this program, they 

will have restricted the ability of centers to assist in disaster recovery efforts. 

2. Appropriate additional funds for WBCs in disaster areas. The WBC Program is a 

proven network capable of assisting the businesses most affected by these disasters. 

Disaster relief funding should include $5 million for the program for centers in disaster 

areas as well as support for the sharing of best practices from centers with experience in 

disaster recovery. Such funding could be directly awarded to centers or shared under 

existing authorities like the RISE Act of2015. 

In closing, I appreciate the opportunity to update this committee on the efforts of WBCs to respond 

to the recent natural disasters and assist women business owners. There are significant challenges 

ahead, but with the help of the SBA, as well as the help of the WBC Program in facilitating loans 

and securing government contracts, I believe there is hope for the women entrepreneurs to quickly 

re-open their doors and once again contribute to their local economies. 

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Senate Committee on Small Business and Entrepreneurship Hearing 

September 27,2017 

Follow-Up Questions for the Record 

Questions for Mr. Daniel Davis 

Questions from: 

Senator Rubio 

Thank you for your willingness to come testify at today's hearing while you are dealing with the 

devastation Hurricane Irma has left behind back home. 

Over the last couple of weeks, I saw first-hand the destruction the storm surge from the hurricane 

caused to your member businesses in San Marco and Riverside, as well as rural businesses in 

Putnam and Flagler counties. 

JAX Chamber and Mayor Curry's leadership has been essential to help the city recover from this 

hurricane and I thank you for work. 

QUESTION!: 

At this point in the recovery process, what is the greatest need of your member businesses in and 

around Jacksonville? 

In your testimony you mention that Putnam County does not have an SBA Disaster Recovery 

Center at this moment. 

As I'm sure you're aware, St. Johns, Duval, and Clay Counties have these centers. 

QUESTION2: 

Do you feel the Recovery Centers currently open are in areas of your community that are most 

efficiently located to the businesses and individuals they are intended to support? 

On the issue of duplication of benefits, many have previously found themselves to be penalized 

should they even apply for an SBA loan when it comes to disaster grant assistance. You state in 

your testimony that businesses and individuals are worried about this, as they will lose federal 

disaster grant assistance even if they do not accept the loan. This is an issue I, along with 

Senators Comyn, Cassidy, Kennedy and Nelson wrote to Secretary Carson about yesterday, and I 

look forward to better guidance. 

QUESTION3: 

In your experience, how might the federal government more clearly coordinate overlapping 

disaster assistance programs and communicate how they interact to relief applicants? 
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November 2, 2017 

Ms. Kathryn Eden 

Chief Clerk 

Senate Committee on Small Business and Entrepreneurship 

428A Russell Senate Office Building 

Washington, DC 20510 

Dear Ms. Eden: 

.. .llt#-

JAXCHAMBER 

Connect. Grow. Prosper. 

Thank you for the opportunity to provide additional input to the Committee regarding their hearing entitle, "An 

Early Review of SBA's Response to the 2017 Hurricanes." 

Question 1 Response: 

At this point in the recovery process access to capital is still something that members need. As you drive through 

neighborhoods, particularly San Marco, there are many businesses that are still not opened and some may never 

open. Flood damage was extensive, and restaurants in this area are finding it particularly difficult to cope. 

Question 2 Response: 

Choosing a location will always be difficult, particularly with the size of Jacksonville. The current site of the 

recovery center in Duval County is located within the downtown area. We have not had any complaints to its 

location and would certainly be willing to help in the future to establish even more satellite locations to ensure 

impacted businesses have quick and easy access throughout the county. 

Question 3 Response: 

In our opinion, there needs to be coordination from the ground up and not top to bottom. We as the Chamber are 

best suited to help. We know the geography, the players and have a ready-made communications structure in 

place. We would recommend having a Chamber of Commerce be the Federal government's first point of contact 

as it relates to the business community and work with us to make sure information is properly distributed. The 

Chamber is also a known quantity and businesses will naturally come to us for guidance. Working together with 

the Federal Government would be key and allow the work to be done quickly and efficiently. 

Not only is this helpful in Duval country, but Chambers across the state stay in constant contact and pass 

information back and forth. Not only were we in communication with chambers in Northeast Florida, but also the 

Chambers in Miami, Tampa and Orlando. 

Sincerely/ 

Daniel Davis 

President & CEO 

lAX Chamber 
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Senate Committee on Small Business and Entrepreneurship Hearing 

September 27,2017 

Follow-Up Questions for the Record 

Questions for Dr. Steve Lawrence 

Questions from: Senator Rubio 

Thank you for coming to testify today to discuss Hurricane Harvey's impact in Texas. 

In your testimony, you mention the difficulty the Small Business Disaster Center encountered 

when trying to cmmnunicate with clients following the hurricane since many business owners 

were displaced and overwhelmed with loss. 

QUESTION 1: 

What were some ways you were able to break through the chaos and get in touch with the 

businesses and individuals who needed your help following the hurricane? 

Note- Texas has four SBDC networks due to its size, whereas Florida has just one state-wide SBDC 

network. Two of the Texas SBDC Networks cover 97% of the 61 disaster declared counties affected by 

Hurricane Harvey- the University of Houston Texas Gulf Coast SBDC Network (TGCN) and the University 

of Texas at San Antonio Southwest Texas Border SBDC (SWTB). 

For us, the key to reaching the businesses that needed our help was reacting quickly and connecting 

with our SBA partners and their disaster team. The two affected SBDC Networks contacted their 

respective SBA District offices two days after the hurricane's initial landfall while the storm was stalled 

over Houston. Our Texas Gulf Coast SBDC region office worked with the SBA Office of Disaster 

Assistance in Sacramento, CA to co-locate SBA Business Recovery Centers (BRCs) with SBDC offices 

throughout the disaster declared counties in our Network. The first BRC was opened in midtown 

Houston within SBDC offices 9 days after Hurricane Harvey made landfall, and only 4 days after the rain 

subsided. Three more BRCs were subsequently opened and co-located with SBDCs in our TGCN SBDC 

territory, and two additional BRCs in the were opened in the SWTB SBDC territory. The immediate and 

concrete response was simply a result of swift and collaborative teamwork among the various SBDC 

resource partners. 

We also sent alerts to our clients, used our website and social media, sent emails, and made personal 

calls to let clients know we were here to help them. We also reached out to chambers, local 

government guaranteed lenders, initiated radio and TV interviews, and used the support from our SBA 

district office and the SBA Office of Disaster Assistance to reach out to the public. While we have made 

concerted efforts to reach out to our clients, we have not been overwhelmed with requests for 

assistance from existing clients. Timing has been the issue- we are finding that people are still focusing 

on shelter, home and family. Only now are we seeing more clients coming to the SBDC and the BRC for 

physical and economic injury assistance. 

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QUESTION2: 

What local impediments did you encounter during and after the hurricane that you had not 

expected? 

While the damage in Florida from Hurricanes Irma and Maria was primarily from coastal flooding and 

high winds, the flooding created by Hurricane Harvey was unprecedented, and the damage caused was 

far more devastating than anyone could have imagined. The Houston area experienced the largest 

amount of rainwater ever recorded in the continental United States from a single storm (51.88 inches)'. 

Transportation was an immediate problem for many areas with so many major roadways underwater 

more than a week after the storm. More than three-quarters of a million people were evacuated from 

their homes. There were delays in cleanup and trash pickup- nine weeks later there are many 

neighborhoods and business centers that still have piles of flood debris torn from houses and businesses 

that have yet to be collected. Again, even for our small businesses, their priorities have been home and 

family first which has delayed the business recovery efforts. 

QUESTION3: 

Do you have any advice for the business community and Florida SBDCs who are now dealing 

with the aftermath of Hurricane Irma and Maria? 

The Florida SBDC, through its State Director Mike Myhre, is so well integrated with the state's many 

emergency response and recovery resources, we cannot imagine that there is anything that we can tell 

them that they don't already know and aren't currently doing. The destruction caused by the two 

hurricanes back to back in Florida covered a much wider geographic area than what Hurricane Harvey 

caused. This would make recovery much more complicated and challenging, involving many more 

municipalities, partnering organizations, and local officials. 

Just as the Florida SBDC did, Texas SBDCs implemented our disaster recovery plan immediately. We 

knew our facility capacities and identified the areas in the most need before the damage from the storm 

was fully realized. The crucial component to how quickly we were able to begin offering business 

recovery services was the immediate contact and cooperation between the SBDCs and the SBA and their 

disaster team. 

For both Texas and Florida, we need the ability to locate the businesses who still need our help. 

According to the SBA, FEMA referred nearly 98,000 applicants to the SBA for business disaster loans in 

Texas. Of these referrals, the SBA received only 7,SOO completed business disaster loan applications, 

and only 1,200 of the loan applications have been approved to date. The individuals we need to reach 

are those that were referred but did not complete the application or were denied a loan. Many of those 

individuals may not have qualified for the SBA disaster loan and could benefit greatly from SBDC 

assistance to help their businesses rebuild and recover. SBDCs do not have large marketing budgets. 

We need additional funding to blanket the affected areas with the message that we are here to help. In 

the case of Texas SBDCs, our state funding has just been cut by 34% for FY2018. For our Network, the 

areas that suffered the most damaged from the hurricane is where we have lost advising staff at local 

SBDC centers due to these budget cuts. If we are to do what we do best and help the small business 

communities in our respective states recover, additional funds for marketing and human resources are 

critically needed. 

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