U.S. GOVERNMENT PUBLISHING OFFICE

31–443 WASHINGTON : 2019

SURVEYING STORMS: A DEEPER DIVE INTO SBA’S 

DISASTER RESPONSE 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

SEPTEMBER 5, 2018 

Small Business Committee Document Number 115–088 

Available via the GPO Website: www.govinfo.gov 

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Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

TRENT KELLY, Mississippi 

ROD BLUM, Iowa 

JAMES COMER, Kentucky 

JENNIFFER GONZA ́ LEZ-COLO ́ N, Puerto Rico 

BRIAN FITZPATRICK, Pennsylvania 

ROGER MARSHALL, Kansas 

RALPH NORMAN, South Carolina 

JOHN CURTIS, Utah 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

DWIGHT EVANS, Pennsylvania 

STEPHANIE MURPHY, Florida 

AL LAWSON, JR., Florida 

YVETTE CLARKE, New York 

JUDY CHU, California 

ALMA ADAMS, North Carolina 

ADRIANO ESPAILLAT, New York 

BRAD SCHNEIDER, Illinois 

VACANT 

KEVIN FITZPATRICK, Majority Staff Director 

JAN OLIVER, Majority Deputy Staff Director and Chief Counsel 

ADAM MINEHARDT, Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Steve Chabot ................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESS 

Mr. James Rivera, Associate Administrator, Office of Disaster Assistance, 

United States Small Business Administration, Washington, DC .................... 4 

APPENDIX 

Prepared Statement: 

Mr. James Rivera, Associate Administrator, Office of Disaster Assistance, 

United States Small Business Administration, Washington, DC ............. 26 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

Letter from Hon. Jennifer Gonza ́lez-Colo ́n to Hon. Linda McMahon, Administrator, Small Business Administration .............................................. 31 

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SURVEYING STORMS: A DEEPER DIVE INTO 

SBA’S DISASTER RESPONSE 

WEDNESDAY, SEPTEMBER 5, 2018 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC. 

The Committee met, pursuant to call, at 11:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Steve Chabot [chairman of the Committee] presiding. 

Present: Representatives Chabot, Kelly, Blum, Gonza ́lez-Colo ́n, 

Fitzpatrick, Curtis, Vela ́zquez, Evans, Clarke, Chu, Adams, 

Espaillat, and Schneider. 

Chairman CHABOT. The Committee will come to order. 

As you can see, there is no problem too big or too small that this 

Committee cannot deal with in a hurricane or anything else. So 

thank you all for being here. 

On April 5th last year, soon after being confirmed, Administrator 

McMahon provided testimony to this Committee. At that hearing, 

the Administrator said SBA’s Disaster Relief Program is ‘‘paramount’’. 

Approximately 5 months after she testified at that hearing, Hurricane Harvey made landfall in Texas. A few days later Hurricane 

Irma hit Florida. And again, a few days later, Hurricane Maria 

devastated Puerto Rico and the U.S. Virgin Islands. 

The 2017 storm season, by all accounts, was historic. The nation 

was responding to three devastating hurricanes all at the same 

time. As we know, SBA plays a large role in the long-term recovery 

needs for the United States. Its Disaster Loan Program, which provides fixed-term and low-interest direct loans to victims, is vital for 

businesses and homeowners as they begin to replace, repair, and 

rebuild. 

Given that we are roughly a year out from those massive and 

damaging storms making landfall, it is imperative that we spend 

time reviewing the SBA’s response efforts. Going back many years, 

Hurricane Katrina and Hurricane Sandy proved extremely challenging for SBA at that time. 

We are here today to gain a better understanding of whether the 

changes made over the years at the SBA have made improvements 

in their disaster response. I look forward to hearing more about the 

outreach SBA made during the 2017 storm season to victims on the 

ground after these disasters. Additionally, I am interested in hearing how efficiently and quickly the SBA was able process loans to 

those impacted by the storms. And finally, I hope we will hear 

more about what SBA learned from the 2017 storm season and how 

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they are preparing for future disasters, including Tropical Storm 

Gordon that is hitting the Gulf Coast and Mississippi as we speak. 

As rebuilding efforts are ongoing and continue even today, it is 

important we evaluate the 2017 response. Victims of storms count 

on the SBA and their response during their darkest days. I agree 

with Administrator McMahon, this program is paramount. 

I would now like to yield to the Ranking Member for her opening 

remarks. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

A little less than a year ago, Hurricane Maria made landfall in 

my hometown of Yabucoa, Puerto Rico. In the following days, Puerto Rico and the U.S. Virgin Islands suffered historic devastation. 

Sustained winds exceeding 150 miles per hour, ravaged bridges, 

roads, and seriously damaged more than 472,000 homes. Physical 

damage is estimated to be over $90 billion just for Puerto Rico. 

The entire Commonwealth, all 3.4 million American citizens lost 

power. Thousands of businesses and hundreds of thousands of residents would not regain electricity for 9 months, marking the longest blackout in American history. It will probably remain unknown 

the exact number of Puerto Ricans who lost their lives as a result 

of Hurricane Maria. 

Just last week, the Government of Puerto Rico finally acknowledged that Maria actually killed nearly 3,000 Puerto Ricans after 

9 months of insisting that the official death count was 64. This 

would make Maria among the deadliest hurricanes to strike the 

U.S. 

FEMA’s own After-Action Report acknowledged that the administration deployed resources that were inadequate in terms of the response. And while President Trump may believe his response to 

Maria was fantastic, I know the people of Puerto Rico viscerally 

disagree. 

While Maria was historic in scope, 2017 was a project year for 

natural disasters throughout our nation. Harvey devastated Southeastern Texas and caused an estimated $125 billion in damage. 

Irma, on the other hand, was one of the strongest hurricanes in recorded history. At the same time out west, California experienced 

the most destructive wildfire season on record. 

While it is certainly the subject of much debate, I believe that 

as our planet continues to warm, the intensity and frequency of 

natural disasters like these will increase. No matter the scope or 

the cost of a disaster, the first weeks are critical for small businesses. FEMA estimates that between 40 and 60 percent of businesses impacted by natural disasters fail to fully recover. 

Recognizing this need, Congress created the SBA low-interest 

Disaster Loan Program to serve as a lifeline to aid both businesses 

and homeowners. As such, it is critical that SBA process and disburse disaster loans quickly. I must acknowledge that responding 

to three major hurricanes in the span of just one month presents 

significant challenges. 

However, the three OIG reports evaluating SBA’s response to 

each of the storms highlight ways SBA’s response fell short. OIG 

identified several reasons for SBA’s disaster response shortcomings. These included failing to quickly staff-up; underutilizing 

staffing management tools; not including performance standards in 

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purchase agreements; and underestimating the extent to which 

Spanish language translation services would be needed to help hurricane victims in Puerto Rico. 

Given the shock, all disaster agencies failed during the 2017 hurricane season. It is imperative that they all, including SBA, learn 

hard lessons from their shortcomings. SBA must work now to improve and optimize their system and procedures before the next 

Maria strikes. Should this require further legislative action, I am 

confident that this is an area where we can work together to ensure these programs operate efficiently and effectively, and that entrepreneurs and homeowners harmed by disaster receive the assistance they need. 

I want to thank the witness for his participation, and I yield 

back, Mr. Chairman. 

Chairman CHABOT. Thank you very much. The gentlelady 

yields back. 

And the chair would like to recognize and thank both the Ranking Member, Ms. Vela ́zquez, as well as Ms. Gonza ́lez-Colo ́n for 

their leadership and their hard work and their dedication in assisting the people of Puerto Rico through the devastation that they suffered as a result of Hurricane Maria. 

And I would now like to recognize Ms. Gonza ́lez-Colo ́n for 2 minutes for an opening statement. 

Ms. GONZA ́ LEZ-COLO ́ N. Thank you, Mr. Chairman. 

First of all, thank you for having this hearing and having SBA 

here. 

You all know about the landfall of Hurricane Maria, but the 

magnitude of the devastation of this hurricane includes the total 

collapse of the electrical system on the island, the total collapse of 

the telecoms on the island, and even 70 percent of the drinking 

water treatment and distribution system even failed. Ninety-one 

percent of the cellular towers were lost, schools remained closed for 

about a month, and more than half a million housing units suffered 

major damages. 

Even the Small Business Administration recognized that they received from FEMA more than 468,000 referrals for home loans and 

77,000 for business loans. Of them, when approved, $1.6 billion for 

the home loan and $182 million for the business loan. We also 

know that thanks to the communities, our fellow Americans in the 

continental U.S. and, of course, the intervention of the Federal 

Government, without that kind of help we will never receive the 

water, the food, and the medical assistance for our communities, 

especially those in the center part of the island. 

We are still struggling for the complete recovery of the island. It 

has been identified by the fiscal, but more than $139 billion are 

going to be needed for the reconstruction of the island. Of those, 

just $45 billion have been allocated by the House and the Senate 

and the President, so we still have a long path to that recovery. 

And as the sole representative for the District of Puerto Rico here, 

I want to thank the Small Business Committee and all the members and the Ranking Member for allowing us to receive those allocation of funds that continues public hearings and oversight we are 

doing for a lot of those agencies. Without that kind of help, we do 

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not have two senators. I cannot even vote on the floor. So you became my tools to help the island of Puerto Rico. 

So thank you, and with that I yield back. And I welcome the remarks of Mr. Rivera. 

Chairman CHABOT. Thank you very much. The gentlelady 

yields back. 

And if other members have opening statements, I ask they be 

submitted for the record. 

And I would like to take just a moment to explain our timing 

lights, Mr. Rivera, although you have testified before the Committee before so you are familiar with them. The green light will 

be on for 4 minutes. The yellow light lets you know you have a 

minute to wrap up, and then the red light will come on. And I request that you stay within those, but if you go over a little bit we 

will understand. 

And I would now like to introduce our witness. Mr. James Rivera 

is the associate administrator for the Office of Disaster Assistance 

at the Small Business Administration (SBA). In this capacity, Mr. 

Rivera directs the Disaster Loan Program. He began his SBA career on the ground in Texas in 1989 serving as a disaster loan specialist. Mr. Rivera then transitioned to the Washington office for 

the SBA in 1994. Over his nearly 30-year SBA career there, he has 

also served as the associate administrator for the Office of Financial Assistance, and prior to his public service, Mr. Rivera was a 

commercial loan officer in the private sector. And you are an expert 

on the Disaster Loan Program, Mr. Rivera, and we are very anxious to hear what you have to say and answer our questions. 

And we welcome you back to the Committee, and you are recognized for 5 minutes. 

STATEMENT OF JAMES RIVERA, ASSOCIATE ADMINISTRATOR, 

OFFICE OF DISASTER ASSISTANCE, U.S. SMALL BUSINESS 

ADMINISTRATION 

Mr. RIVERA. Good morning, Chairman Chabot, Ranking Member Vela ́zquez, and members of the Committee. I appreciate the opportunity to testify about SBA’s Disaster Assistance response to the 

2017 hurricanes, and also to share the outlook for the 2018 hurricanes. 

One year ago, the agency was in the early stages of responding 

to Hurricane Harvey. Little did we know that we were about to experience Hurricanes Irma and Maria and embark on a much broader agency effort. 

When I look back on last year, I am incredibly proud of the work 

done by our SBA staff. We went from a core staff of around 800 

employees to over 5,000 at the height of our hurricane response, accomplished in the span of 90 days. To date, we have received over 

1.2 million calls for assistance from disaster survivors. We received 

over 339,000 applications, processed on average in 17 days. We approved over 140,000 loans to homeowners and businesses. For all 

three hurricanes combined, these loan approvals total over $7.5 billion. This marks the second largest disaster event in SBA history. 

At the same time, the agency experienced a very high volume of 

other disasters. In fiscal year 2017, SBA dealt with 23 presidentially declared disasters. We also administered 53 agency decSBR002 with DISTILLER

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larations. We would not be able to sustain this level of activity 

were it not for the oncoming support of the Committee. We want 

to thank you for the key initiative you sponsored as part of the 

RISE Act. Among those provisions were important measures for 

disaster survivors, such as increasing the unsecured threshold from 

$14,000 to $25,000 for the amount of money a disaster survivor can 

receive in their initial loan disbursement. This provision unfortunately sunsets in November, and we look forward to working with 

the Committee on a potential renewal. 

Other measures, like mitigation assistance and the creation of a 

Disaster Loan Assistance Portal have had very significant impact 

as well. The portal has provided disaster survivors with quick and 

easy access to filing requirements, their loan application status, 

and has enabled document uploads and electronic signature. This 

advancement has allowed us to more effectively and efficiently 

process applications, cutting in half the time it takes the agency to 

approve loans. 

In less than 45 days, SBA has approved over $1 billion for Hurricanes Harvey, Irma and Maria combined. This record time compares to past major disaster events such as Hurricanes Katrina, 

Rita and Wilma; Superstorm Sandy; and the Northridge Earthquake in 1994, which all took over 90 days to reach the $1 billion 

milestone. 

While I have been part of the Disaster Assistance office for over 

20 years, I have only had the opportunity to work for Administrator McMahon for the past year. During this time, I have appreciated her direction and how she has challenged SBA to be prepared for large-scale disasters, the magnitude of what we experienced with the 2017 hurricanes. In leading SBA, the administrator 

has pushed us to test our disaster response models and for our program to be proactive and not reactive. 

In the months leading to the 2017 hurricane season, we tested 

our system along the lines of Hurricane Katrina times three. That 

foresight played a large role in our agency’s preparedness and subsequent response. 

At the administrator’s direction, we also continue to review and 

evaluate lessons learned and best practices and apply them to our 

2018 disaster response. Recently, we implemented a new Disaster 

Credit Management System, which will allow us to even further increase our loan processing cycle times. We have also conducted internal after-action reports and evaluated the inspector general inspection reports. These are areas in which we may not have performed as effectively as desired, and we continue to work to address them. 

Over the past year, the agency has communicated with the Committee to share data and inform you on the disaster response to the 

hurricanes. We hope that the information has been of value to the 

Committee members and staff in understanding our programs and 

activities, and we continue to communicate with you throughout 

the 2018 season. 

So far this year, the agency is dealing with 10 presidential disaster declarations and 33 agency declarations. We are providing 

disaster assistance across 22 states in response to severe storms, 

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tornados, wildfires, floods, and even lava flows. We have also just 

approved an agency declaration for toxic algae bloom and red tide. 

With Hurricane Elaine, and as Tropical Storm Gordon reaches 

the Gulf Coast states, we stand ready on these and other potential 

disasters that might impact states across the country. 

Mr. Chairman and Committee members, thank you again for the 

opportunity to testify, and I look forward to your questions. 

Chairman CHABOT. Thank you very much. 

And I will begin with myself for 5 minutes. And I will begin with 

a general question. 

By all accounts, the 2017 storm season was monumental. Broadly speaking, how do you think the SBA responded to Hurricanes 

Harvey, Irma, and Maria? 

Mr. RIVERA. As you mentioned, I have been with the Small 

Business Administration for 30 years. We have never been faster. 

We have never provided assistance quicker. So generally, you 

know, at the 50,000 foot level, we were as quick as we possibly 

could. We did the best possible job we could. And there is room for 

improvement. But at the same time, I am proud of what we have 

been able to do overall. 

We have cut times from 70 days in Katrina to 40 days in Sandy 

to 25 days for businesses in Harvey, Irma, and Maria. And on the 

home side it is much quicker. 

Chairman CHABOT. Thank you very much. 

And as you know, significant reforms were instituted at the SBA 

after Hurricane Katrina in 2005 and Hurricane Sandy in 2012. You 

mentioned the time, that we are doing it more quickly than we did 

before. Are there any other reforms that helped that you could specifically point out to and say, yeah, we changed this and this made 

a difference to these. 

Mr. RIVERA. So two thoughts come to mind immediately. You 

gave us the ability, or actually, required us to go out and get an 

electronic disaster portal. So in the past, we would get stressed at 

the call center because a lot of people would call the call center for 

status, where now you can go online through the Disaster Loan Application Portal. Ninety-seven percent of our applications come 

through the electronic loan application portal. You can find out 

your status. You can do an electronic upload for your tax transcript 

request. There is just a host of opportunities. We give you the status of where you are at as far as if you are in the approval que, 

and then disbursement que, what you need to do. You can upload, 

download documents, so forth and so on. 

The one that I am hoping that we can work together on is the 

sunset of the RISE. As a result of the RISE Act, the unsecured 

threshold of $14,000 to $25,000, if it sunsets—it does sunset in November of this year and the unsecured threshold would go back to 

$14,000. So we would prefer to be consistent and stay at that 

$25,000 level because that initial disbursement, as all of you have 

mentioned before, is very important for that initial cash infusion 

for the disaster borrower. 

Chairman CHABOT. Thank you very much. 

And although the response efforts continue, what did you learn 

from 2017, this past year, the storm season, and how is the SBA 

preparing for the next big one? And obviously, we have something 

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occurring currently. Hopefully, it is not going to be to the magnitude of the ones that we are discussing here this morning, but 

what preparations are you looking at down the road to improve? 

Mr. RIVERA. So I have to give a lot of credit to Administrator 

McMahon. I have worked for several Administrators. I have never 

had an Administrator that actually has challenged me to the level 

that she has challenged me. In her first couple of months in the 

agency, we ran a scenario of 100,000 application disaster. It was 

pretty much cookie-cutter from our perspective. That is within our 

sweet spot. And she says, well, that is nice, but I want you to look 

at Katrina times three on your models, and what does that do to 

the agency? And then she also said, you need to make your jobs 

simpler by doing, you know, leaning forward and preparing more 

and stop being so reactive from that perspective. So it is true criticism that I took, you know, head on. We are much more prepared 

now. 

We have still 2,200 employees onboard. We are still in Puerto 

Rico. We have 350 staff on the ground in 50 locations. But from my 

perspective, we are much better prepared. 

And then we are taking advantage of technology like we have 

never taken before. We are trying to simplify our processes internally, and on the flip side, making the process for the disaster survivors as simple as possible. 

Chairman CHABOT. Okay. Thank you. 

And then one final point. I represent Ohio, and Ohioans sometimes spend half the time or more in Ohio and they are retired now 

and they maybe have some property down in Florida. And I was 

discussing last weekend or the weekend before with some folk in 

that circumstance, they were talking about the red tide and what 

a disaster it has been this year recently. Could you discuss that 

just a little bit? It is a little bit different from what we were talking 

here but for them it is clear disaster. 

Mr. RIVERA. Absolutely. So we declared two disaster declarations yesterday for Florida. One is for Lake Okeechobee, and it is 

the toxic algae bloom. It is that green-bluish stuff. There is a 

strong odor to it and it keeps fishermen away. It keeps tourist industry away. And then along the gulf side on the southern part of 

Florida is this red tide. So toxic algae bloom is freshwater and red 

tide is salt water. And what that does is, you know, the tourism 

industry, the supply side of a restaurant, you know, who supplies 

the restaurant, so forth and so on. And so we are providing the 

working capital loan for those businesses that are impacted by that 

specific event. 

Chairman CHABOT. Thank you very much. My time has expired. 

The Ranking Member is recognized for 5 minutes. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

As you know, Maria caused an island-wide blackout that took almost a year completely to fix. Do you think that the blackout negatively impacted the ability of Puerto Rican survivors of Maria to 

apply for SBA disaster loans? 

Mr. RIVERA. The blackout did stress our ability to respond from 

a technology perspective. We did have a lot of—— 

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Ms. VELA ́ ZQUEZ. Yes, for the administration. But in terms of 

survivors not having access to internet or electricity, my question 

is, do you have the numbers as far as how many businesses applied 

for Hurricane Hugo and Georges compared to now where this was 

an epic, monumental destruction of Puerto Rico? 

Mr. RIVERA. I do not have the numbers of Hugo with me but 

I can get back to you for the record. 

Ms. VELA ́ ZQUEZ. So only 10,000 businesses have applied for 

disaster loans. I found that very, very, very small. You mentioned 

the RISE Act, legislation that I introduced and was enacted into 

law. Given those dynamics, I intend to reintroduce similar language and hopefully work with the administration to open up the 

program so that we provide the ability for survivors, businesses 

and homeowners, to be able to apply for disaster loans. 

Any comments on that? 

Mr. RIVERA. We welcome working with you on the RISE Act. I 

think that is—— 

Ms. VELA ́ ZQUEZ. So in the last 2 weeks after the deadline expired and we worked with FEMA to extend the deadline, 400 businesses in Puerto Rico applied only in 2 weeks. What does that tell 

you? 

Mr. RIVERA. Well, so, a lot of businesses are usually, they wait 

to see what kind of insurance recovery they have. They wait to see 

what resources are available from that perspective. So historically, 

the businesses do apply later. But as I mentioned earlier, we are 

still co-located with FEMA, 50 different locations. We have 350 

people on the ground and we will be there for the long term. 

Ms. VELA ́ ZQUEZ. So as I mentioned to you, the number of applications is low, very low, and then the fact that only in 2 weeks, 

the last 2 weeks, 400 had applied shows the need for extending the 

program. 

Mr. Rivera, the OIG also found that as of the end of March 2018, 

only 22 percent of the loans approved for Hurricane Maria victims 

have been disbursed. That is over 6 months after the storm. Why 

is it that it is taking this long to disburse these approved loans? 

Mr. RIVERA. So that was a snapshot that was done when they 

did the audit, I am sorry, the inspection back several months ago. 

We are currently at about 80 percent of the numbers, and about 

60 percent of the dollars have been disbursed. So we do not do one 

disbursement for the full amount. We disburse up to that unsecured threshold, $25,000, and we follow the building project, like 

the private sector does. So the IG is factual. At the time they did 

the snapshot, they were in that process. 

Ms. VELA ́ ZQUEZ. And after the end of March, do you have any 

data? 

Mr. RIVERA. I do not have as of the end of March but I can get 

back to you. 

Ms. VELA ́ ZQUEZ. I would like to get that data. 

Mr. RIVERA. Okay. Sure. 

Ms. VELA ́ ZQUEZ. The OIG reports for Hurricane Harvey and 

Irma do not contain similar data on loan disbursement; yet this information is critical for evaluating disbursement rates across the 

hurricanes. What are the disbursement rates for Hurricanes Harvey and Irma, and why was the data not shared with OIG? 

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Mr. RIVERA. Oh, I believe the data was shared with OIG. I am 

shocked that they would say that if that is what they are saying. 

We are very transparent with respect to—— 

Ms. VELA ́ ZQUEZ. Well, what I am saying, it is not in the report. 

Mr. RIVERA. Well, I do not write the report. 

Ms. VELA ́ ZQUEZ. I understand that. So I would like for me and 

for the Committee to have the ability to assess whether or not the 

disbursement rates regarding Puerto Rico compare to the disbursement rates for Hurricanes Harvey and Irma. 

Mr. RIVERA. Okay. Absolutely. 

Ms. VELA ́ ZQUEZ. According to the IG, there were serious problems with Spanish translation services that resulted in many disaster survivors having their calls to SBA dropped. In other cases, 

wait times exceeded 45 minutes, which is simply unacceptable. 

What did SBA do to keep track of dropped calls? 

Mr. RIVERA. So what happened is Harvey hit? There is a pretty 

big Hispanic population in Texas. Irma hit. There is a pretty big 

population in Florida. And then Maria hit. And obviously, there is 

a big Spanish-speaking population in Puerto Rico. So we had one 

contract at the time. It was small. It had worked for the last 10 

years. What we did not realize is that we got stressed based on 

that. What we have done since then—— 

Ms. VELA ́ ZQUEZ. And you terminated that contract? 

Mr. RIVERA. Yes, ma’am. 

Ms. VELA ́ ZQUEZ. Yeah? What was the reason? 

Mr. RIVERA. Performance. 

Ms. VELA ́ ZQUEZ. Performance? 

Mr. RIVERA. Yes, ma’am. 

Ms. VELA ́ ZQUEZ. So that is what I am saying. You know, it is 

important that we have a disaster preparedness plan that is comprehensive, that you have a list of potential vendors that provide 

Spanish translation services. 

Mr. RIVERA. Yeah, I agree. 

Ms. VELA ́ ZQUEZ. Or bilingual services. 

Mr. RIVERA. So we have gone from a $50,000 contract—— 

Chairman CHABOT. The gentlelady’s time has expired but you 

can go ahead and answer. 

Mr. RIVERA. We spent $2 million on language services, and we 

have taken 600,000 calls. I mean, so absolutely, it was a stress 

point for us. I do not disagree with what you are saying from that 

perspective. 

Chairman CHABOT. And the Ranking Member’s time has expired. 

Ms. VELA ́ ZQUEZ. Thank you. 

Chairman CHABOT. And the gentleman from Mississippi, 

Mr. Kelly, who is the Chairman of the Subcommittee on Investigations, Oversight, and Regulations, is recognized for 5 minutes. 

Mr. KELLY. Thank you, Mr. Chairman. 

Mr. Rivera, thank you for being here. 

Kind of going back and touching on the last question, I have 

spent a lot of time in the military in my life and you constantly 

get lessons learned and refine plans to make sure that you can respond. And also, going from that same strategy thing, you know, 

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we are prepared to respond to different levels of threats throughout 

the world in the military. 

So prior to this you had never seen the Spanish-speaking requirements that you had in this one? The last 10 years it was fine 

and all of a sudden you have a new requirement that is there that 

you were not prepared for. And I totally understand that. And you 

also did not have this many major disasters in this quick of a time 

frame as you did in this one. 

So what is the SBA prepared to respond to now? Did you change 

what you are prepare? Can you respond to two simultaneous disasters at the same time, two and a half, 1.5? Have you started planning in that way? And how many are you prepared, the SBA, to 

respond right now simultaneously or in close proximity. 

Mr. RIVERA. That is a great question, and thank you for that 

question. 

So we have a Disaster Preparedness and Response Plan. As I 

mentioned earlier, the Spanish language line did trip us up. The 

contract was 10,000. It worked for the last 10 years. We get 

stressed with the Spanish line. We did a new contract. We have 

three contracts now. We have segmented out. I mean, we have exercised this a couple of months ago at the national level exercise. 

We can handle up to X number amount. It just depends based on 

the funding level. So we did do 360,000 applications in 18 days— 

17-18 days overall. Our response time was pretty quick. It was the 

quickest we have ever had. Technology is a big asset for us, and 

we continue to exercise from that perspective. The administrator 

flipped it on us. She said Katrina times three, so that is a million 

two. So that is what our charge is, a million two in 90 days. 

Mr. KELLY. You know, I represent the northern part of Mississippi, so I do not have the Mississippi Gulf Coast where hurricanes hit, but I feel a deep obligation to my friends and neighbors 

and state, people in the south. What organizations does SBA use 

to get out the good word of what you can provide and what services 

you can provide? Because there are a lot of other organizations, 

and a lot of times people are not aware of what products or what 

services are available. So what other organizations, whether that 

be FEMA, the National Guard of that State, or any other thing, 

what resources do you use? What other resources do you use to get 

out word of what is available? 

Mr. RIVERA. So we start with the SBA resources, our Small 

Business Development Centers, SCORE, Women’s Business Centers. We also just recently signed a memorandum of understanding 

with the Institute for Business and Home Safety (IBHS), who is a 

big industry player when it comes to disaster assistance. We also 

work closely with FEMA. Wherever FEMA is at, SBA is at. Obviously, the President gives FEMA the opportunity to be the lead, 

but we are not far behind from that perspective. And we work with 

state and local governments. We are reaching out to counties and 

mayors and trying to cascade as much as we can. On the preparedness side, and that is back to the Administrator’s message. Let’s 

talk about preparedness before it happens so we can all understand 

what we need to do versus being reactive as we have been historically. 

SBR002 with DISTILLER

11 

Mr. KELLY. You must have been reading my mind. That is kind 

of in the realm of my next question or suggestion or a combination 

of both. Mississippi responded well to Katrina, and that was based 

on our National Guard response and years and years of rehearsals 

for a hurricane that we hoped and prayed would never happen, but 

it did happen. And so every year since I have been in for almost 

33 years, and every year I can remember being in the Mississippi 

National Guard, around March or April, non-hurricane season, we 

do a statewide rehearsal of how we are going to respond to not only 

hurricanes but to earthquake on the fault line near Memphis and 

those things, or tornados or other disasters. Does SBA get involved 

in those rehearsals? Because most states, whether it is wildfires in 

California, or earthquakes in California, or hurricanes or tornadoes 

in Mississippi or Oklahoma, do you get involved in the planning 

process and meet all those key people early in the rehearsal process so that you are more prepared? 

Mr. RIVERA. Yes, sir, we do. We participate in all the national 

level exercises under the national disaster recovery framework. 

With Department of Homeland Security, FEMA, we are on the recovery side, but we participate on the response and the recovery. 

Mr. KELLY. I would just maybe make a suggestion; look at the 

state level organizations because that is who bears the brunt of 

those things. And rehearsing with those National Guards and their 

disaster response, I think you would get a lot of value and meet 

a lot of people up front. 

My time has expired, Mr. Chairman. 

Chairman CHABOT. Thank you very much. The gentleman’s 

time has expired. 

The gentlelady from California, Ms. Chu, is recognized for 5 minutes. 

Ms. CHU. Thank you. 

Mr. Rivera, I know that the primary topic of this hearing is hurricane disaster response, but I would like to talk about an issue 

that is severely impacting the small businesses and the communities in my state of California, and that is wildfires. 

Wildfires have devastated California in recent years, but in particular, in 2017, nearly 1.2 million acres of land were burned and 

10,800 structures and 46 people were killed. So this is extremely 

devastating. And SBA was active in responding to some of the disasters at the request of Governor Brown, but could you tell us 

SBA’s timeline for processing disaster loan applications for the 

California wildfires and whether SBA has met those goals? 

Mr. RIVERA. So to answer your question, on average, we do it 

in 18 days; 14 days for homes and 18 days for businesses. 

When we respond to disasters, we intentionally focus on different 

disasters that may be occurring at the same time we are responding to larger disasters. So we make sure that we take care of, from 

my perspective, it does not matter where the disaster is. If you are 

a disaster survivor, that is the most important thing to your business or your home, so we spread out teams that focus on, for example, the California wildfires, the lava flows in Hawaii, the flooding 

up in the Midwest. So we make sure that we are servicing the entire country as best we can at the same time. 

SBR002 with DISTILLER

12 

So generally speaking, I can get the exact specific turn times on 

that, and I can get that for the record, but generally, we are in that 

14 to 18 day timeframe for an approval, withdrawal, or decline. 

Ms. CHU. Yeah. I would like to know how many have applied 

and how many of the applications have been processed and by what 

kind of timeline. 

Mr. RIVERA. Okay. Absolutely. 

Ms. CHU. And do you know, you said an 18-day framework, but 

what are the biggest challenges to ensuring this short processing 

time for the loan applicants? 

Mr. RIVERA. Usually it is data that we request. Now, we have 

streamlined our application and we streamlined the data request 

that we have. So from our perspective, fires are horrific, especially 

when everything is burned down. So we have to rely on third-party 

resources. So for repayment ability, we rely on the Internal Revenue Service and whatever they provide from a tax perspective. We 

get an electronic feed from the IRS once we get the access from the 

disaster survivor. We used to go on the ground and do field inspections and send somebody out to a pad that was completely burned 

down. We now have changed. This was a result of Harvey, Irma, 

Maria, since then. We do a desktop verification. And what we do 

is we get a footprint of the home and then we call the disaster survivor. We can tell from what they are talking about and what the 

estimate is. We have models that say based on the footprint of the 

home. We can do that for floods or for fires from that perspective. 

So that is a process improvement. 

And if I can just spend one more second. Superstorm Sandy, it 

took us 10 days to be on the ground to do a field inspection. We 

cut it to 6 days in Harvey, Irma, Maria because we did a desktop 

verification. So those are some of the small things we do internally 

to try to speed up the timeframe. 

Ms. CHU. I understand that through California, 3,527 SBA loan 

applications were received from those affected by separate fires in 

eight counties last year. How many of these were home loans and 

how many of these were business loans, and ultimately, how many 

were approved? 

Mr. RIVERA. I will have to get back to you for the record. I 

apologize; I do not have the California numbers. But the general 

rule of thumb is 80/20. It is 80 percent homeowners to 20 percent 

businesses, and the dollars are 50/50. Fifty percent of what we approve across board. I really apologize; I have my sheet here but I 

do not want to waste time flipping through it. 

Ms. CHU. Yeah, again, I would appreciate that information. 

So the wildfires are caused largely by weather changes, which 

means that wildfires are an ongoing problem in California and will 

likely continue. Right now there are 21 wildfires over 500 acres in 

California that are burning. Given the constant nature of this disaster, is the SBA ready to take steps to ensure that California businesses and homes are ready to access SBA assistance in the future? 

Mr. RIVERA. Oh, absolutely. I mean, as soon as the governor 

says that they have been overwhelmed and they need the request 

and they need the financial assistance from a Federal perspective, 

we are ready and prepared. 

Ms. CHU. Okay, thank you. 

SBR002 with DISTILLER

13 

Mr. RIVERA. Thank you. 

Chairman CHABOT. Thank you. The gentlelady’s time has expired. 

The gentlelady from Puerto Rico, Ms. Gonza ́lez-Colo ́n, is recognized for 5 minutes. 

Ms. GONZA ́ LEZ-COLO ́ N. Thank you, Mr. Chairman. And thank 

you, Mr. Rivera. 

I was reviewing how long it took for SBA to process the business 

loan and the home loan, taking the experience of Sandy, Katrina, 

and Maria. And you say that in Katrina it was 60 days for business 

and 74 for home; Sandy, 45 days for business, 38 for home; and in 

the case of Maria, it is in the high 20s and in the low, 30 days in 

home assistance. That is correct? 

Mr. RIVERA. Yes, ma’am, overall. 

Ms. GONZA ́ LEZ-COLO ́ N. Overall. Then my main problem will 

be is that most of the cases that we are receiving in my office from 

small businesses is that once their loan is approved, it takes from 

2 to 6 months to get a disbursement. So why, if you are taking less 

than 20 days or 30 days in making that application reviewed and 

approved, why then is it taking up to 6 months for the small businesses on the island to get the disbursement? 

Mr. RIVERA. So it is a partnership. Once we make the loan as 

a lender, we need the disaster borrower to sign the loan closing 

documents. We give them 60 days to sign the loan closing documents. We do not push them to close the loan. We are patient with 

them. We let them figure out what insurance they have, what other 

personal resources they have. We could take the opposite approach 

though. We could drive them to a disbursement, but we take kind 

of a very passive approach. When they need the money, we call 

them. We assign a case manager and we serially disburse based on 

that. 

Ms. GONZA ́ LEZ-COLO ́ N. My question with that is that we do 

not have as many banks on the island as we used to have before, 

so the lenders that we do have on the island, this continues to be 

the main source of controversy by the small businesses on the island because of the time of the waiting. What can SBA do to rectify 

or help us out to get new steps on how to make this process a more 

streamlined process? 

Mr. RIVERA. Well, if there is a lender out there that wants to 

make a bridge loan, we are glad to take a look at that and take 

out that bridge loan. I mean, that has always been the practice 

from the Disaster Loan Program. If a bank is out there and can 

make a temporary loan in the interim for us, I mean, we are glad 

to do that. 

But the disbursement process, I just need to be really clear. We 

just need to get the documents we requested and then we just need 

to provide the disbursement. It is pretty clear-cut. Some of the wait 

times are based on they are waiting for a contractor to start the 

rebuilding process. I mean, there is a host of issues that result in 

that. It is not because we are sitting back and doing nothing. In 

most instances it is we are just waiting for the disaster survivor 

to start the rebuilding from that perspective. 

Ms. GONZA ́ LEZ-COLO ́ N. One of the main problems we have got 

is that in order to get some of the assistance from FEMA, you need 

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14 

to go through the SBA application to know if you are going to get 

a loan by SBA or if you do not qualify to have a loan being approved, even business or home by SBA. Then you will get the assistance from FEMA. So the whole process, I mean, we have got 

more than 50 percent of the applications coming from FEMA being 

denied. Most of them, they need to wait through the processing 

SBA. 

So I was in a briefing last week, and we were wondering why it 

takes so long for the SBA to review that application, then going 

again back to FEMA, how is the interaction between SBA and 

FEMA in order to let the people know? I, even myself, submitted 

the application. It was so complicated to the regular citizen on the 

island that I decided to see how many papers they needed to sign. 

And when we saw that, the process is so long, so difficult, it is not 

a clear path to getting a loan being approved. It is not a clear path 

to get FEMA assistance being approved. And I think that process 

should be streamlined between SBA and FEMA, and I want to 

know if you already got meetings to get something done in that regard. 

Mr. RIVERA. We are continuously working with FEMA. I am a 

little bit confused on the comment of why it takes so long. I mean, 

we are processing these loans in 18 days for a home—17, 18 days 

for a home, and 20-something for a business. 

Ms. GONZA ́ LEZ-COLO ́ N. But people need to wait 6 months to 

get it. 

Mr. RIVERA. Yeah, but again, I mean, in all due respect, it is 

a partnership. We cannot make a disbursement. We have our own 

internal controls. We have responsibility to the taxpayer. 

Ms. GONZA ́ LEZ-COLO ́ N. Then let us know how we can help to 

streamline that process. And that is the question I am doing today. 

It is not about that it is your fault; it is how we can make that 

process to be a streamlined one so the people can get the resources 

that I provided for them. Because you are doing the whole process 

in less than 20 days but, you know, you do not have power. You 

do not have water. You do not have telecoms on the island. The 

whole business community gets affected. But then you need to wait 

6 months to get the money. So most of these small businesses are 

still closed because of that. Thank God this Congress approved a 

reimbursement for all the employers that still paid their payroll 

during that time. And with that kind of money, some of those small 

businesses are opening their workshops. 

I know my time has expired, but thank you, Chairman. 

Chairman CHABOT. Thank you very much. The gentlelady’s 

time has expired. 

The gentleman from Illinois, Mr. Schneider, who is the Ranking 

Member of the Subcommittee on Agriculture, Energy, and Trade, 

is recognized for 5 minutes. 

Mr. SCHNEIDER. Thank you very much. And Mr. Rivera, thank 

you for your time here today for the work you are doing. 

I have a lot of questions, but you touched on something you were 

talking about specifically right now, the red wave and the algae 

blooms in Florida. We, this summer, have seen the horrific fires on 

the West Coast, record-setting fires. We talked about last year 

record-setting pace between Harvey, Irma, Maria, and other crises. 

SBR002 with DISTILLER

15 

And the charges that you were given by the administrator was let’s 

figure out how to do Katrina times three. And you talked about 

achieving that. But it still seems from where I am sitting that we 

are running faster and barely keeping on pace. In fact, running 

times three may even be leaving us behind. And it seems the common thread through all of these is climate change. 

So my question to you is, how is the SBA adapting to the expected increase in incidents that next year is probably going to be 

worse than last year? We are going to see increasing impact, higher 

intensity, more frequency. How do we make sure that we have the 

resources and are able to provide the services to small businesses 

dealing with the impacts of these storms and other aspects of climate change? 

Mr. RIVERA. So I have been with the Small Business Administration for 30 years. I mean, I do not know. I am not in a position 

to talk about climate change. I am in a position from SBA to, as 

the head of the—— 

Mr. SCHNEIDER. I appreciate that, but we are seeing this increasing pace. The fires—— 

Mr. RIVERA. It has always been like this. 

Mr. SCHNEIDER. No, the fires we have seen have never been 

like this. We have had earlier and longer and more intense, ever 

record-setting. We are seeing an increase. Am I am not talking 

about—I am not trying to debate with you the causes of climate 

change. What I am saying is our communities, our nation, our 

small businesses are seeing more severe impacts from natural disasters, and how do we make sure that we have the resources available to them? 

Mr. RIVERA. So they are in place. I mean, we had a Disaster 

Preparedness and Recovery Plan. I have 1,000 core employees. I 

have 4,000 reservists. We can service up to 350,000 applications 

within 20 days, 18 days. We just experienced that in 2017. So we 

are at that point there. I cannot predict what is going to happen 

next year. This year we are off to a slow start with the hurricane 

season. We just had our first experience in Mississippi. Hurricane 

Layne was 100 miles south of Hawaii. There is just minimal damage from that perspective. So I can tell you we are prepared. The 

overarching goal is a good stretch goal. I think we can meet it with 

technology and ability to use third-party independent verifications. 

I think we can move faster, and we can provide the best service 

that we can from that perspective. 

Mr. SCHNEIDER. Are there any steps we can take to help small 

businesses prepare better for disasters to mitigate the impact after 

the event by taking steps now to prevent? As my colleague from 

Mississippi mentioned, working to help National Guard and other 

agencies respond more quickly? 

Mr. RIVERA. Part of our outreach plan is to reach out to the 

local communities, so forth and so on. My experience has been we 

teach everybody to get a business plan; right? But we do not teach 

them what happens in a disaster. I mean, so from a social media 

perspective, when are you going to reopen? From a supply chain, 

you know, where is your list of your vendors and what happens if 

your primary vendor is impacted, so forth and so on. So those are 

the kind of things that we are pushing out now. We have a really 

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good partnership with Institute for Business and Home Safety. I 

think that is going to launch us, and then we are going to continue 

to push forward on the preparedness side. 

Mr. SCHNEIDER. Shifting gears a little bit but still related, last 

summer in my district we had record-setting floods, and the floods 

caused devastating damage. It was a one-two punch. We had direct 

rainfall that caused unprecedented damage. And then from rains 

further north, as the rivers rose, we had a second flooding event. 

It did not qualify for FEMA relief. The SBA, because there is a 

lower threshold for disaster assistance, the SBA did provide help. 

But can you talk about how SBA’s assistance helps fill the gap by 

disasters that have a serious economic impact on a community but 

are not large enough for FEMA assistance? 

Mr. RIVERA. Yes, I can. We have, the SBA, in our Code of Federal Regulations, we have by regulation what the thresholds are for 

disaster declaration. So it is really easy from our perspective—easy, 

I say, going out and doing a survey and estimating what it costs 

to repair or replace a property. But FEMA’s guidance is much 

broader. It is based on the economic impact that it has to the GDP 

of that state, so forth and so on. So ours is more focused and more 

scoped. I should not say focused, more scoped, and it is very clear. 

It is pretty black and white. Twenty-five homes or businesses 

which sustain 40 percent or more uninsured loss. That is for an 

agency. Five businesses the governor needs to certify for just an 

economic injury disaster threshold. So it is pretty clear-cut from 

our perspective. And I am glad we are able to provide the support 

and that is the purpose of it. Not everything meets the threshold 

of a presidential declaration, but we are there to serve. Because all 

disasters are local from that perspective. 

Mr. SCHNEIDER. Absolutely. And I am out of time, but thank 

you again. I yield back. 

Mr. KELLY. [Presiding] The gentleman’s time has expired. 

I now recognize Mr. Curtis from Utah. 

Mr. CURTIS. Thank you, Mr. Chairman, and the Ranking Member for holding this important hearing. And thank you, Mr. Rivera, 

for being here to help us better understand the Small Business Administration’s disaster relief operation. 

In Utah, we are no stranger to natural disasters, but I can only 

remember one hurricane in 60 years. But this summer, almost 

every morning we wake up to the news of a new fire, mostly caused 

by nature. This year we are looking at 875 different fires. 

I recently drove by one of these fires, the Dollar Ridge Fire in 

Duchesne and Wasatch County that consumed 70,000 acres. It is 

almost out thankfully, but we actually predict that we will see 

smoke from that fire until the snow falls later this year. 

My understanding is SBA’s disaster response has not been involved in the Utah fires. And can you walk me through a scenario 

where you would be involved in the fires and help me understand 

what triggers that decision. 

Mr. RIVERA. Yes, sir, thank you. 

From SBA’s perspective, as I mentioned earlier, we have regulatory guidance. Fires, generally there is insurance involved, and 

most homeowners do have homeowner’s, a hazard policy that includes if their home gets burned they are covered by hazard insurSBR002 with DISTILLER

17 

ance from that perspective. One of the things that we do is when 

we go out and do an assessment, we need to find a population that 

shows sufficient damage to meet the threshold for us to meet from 

that perspective. There are some fires where it is just an open area 

and there is not any damages to any businesses or any homeowners, but when there is a pocket of businesses or homes in a 

general area we can go in and step in. 

Mr. CURTIS. We face this problem in rural Utah where numbers 

do not add up. They would in a more dense area. And so while it 

can be extremely devastating to a rancher or even the tourist business, they are few and far between out in these rural areas. And 

I guess one of my questions is, is that a policy that can be visited 

to see even though we do not have thousands of businesses being 

impacted, the only ones that care are those that are being impacted 

and that may be one. 

Mr. RIVERA. No, I agree. I agree with you. 

So the threshold for an economic injury disaster loan is for the 

governor to find 5 small businesses that have sustained substantial 

economic injury. I do not know if we can move that. We can definitely continue the conversation offline as far as if there are pockets in your state that are not being identified, we would be glad 

to reach out and figure out how to make this work. 

Mr. CURTIS. Terrific. Thank you. 

Can you help me identify the difficulties of responding to a fire 

versus some of these other natural disasters? 

Mr. RIVERA. Fires are challenging from the perspective of there 

is just no documentation. No tax records, no paperwork. So we 

have leaned on technology. I mean, we get a copy of a tax transcript. Part of our application you can submit a request for us to 

get a copy of a tax transcript from the IRS. So that eliminates that 

need for that additional paperwork. We do a footprint of a home 

or a business, and we estimate based on that footprint of that home 

and the structure and the makeup of the facilities what we can 

make for a loan and estimate based on that. 

The biggest challenge we have in fires is most people do not want 

to borrow even though it is at a low-interest rate. They want to collect from their insurance claim. But we will work. We encourage 

everybody to go and apply. It does not cost anything, and we can 

make a commitment up front, a loan commitment up front, and we 

can work with the insurance company on the backside. 

Mr. CURTIS. Thank you. 

Mr. Chairman, I would like to yield the balance of my time to 

my colleague, Ms. Gonza ́lez-Colo ́n. 

Mr. KELLY. Without objection. 

Ms. GONZA ́ LEZ-COLO ́ N. Thank you, Mr. Chairman. And thank 

you, Congressman Curtis, for letting us that time. 

Some of the people that are presenting cases in my office regarding the SBA is the issue of doing business as or the DBAs. Most 

of the people that are filing for an application to get a loan are filing those using the model of doing business, the DBA model, but 

those cases are not being approved. Is there any reason why SBA 

is not managing the DBA business structure in order to get the 

loans being approved? 

SBR002 with DISTILLER

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Mr. RIVERA. I am not quite clear on why you would be hearing 

that. A sole proprietor, doing business as a sole proprietor. So for 

example, if it is me, I am doing business as something else, we 

would look at my individual tax return and it would be a Schedule 

C or Schedule E or Schedule, you know. 

Ms. GONZA ́ LEZ-COLO ́ N. Yeah. It is the personal tax—— 

Mr. RIVERA. Right. But I would like to reach out to you and see 

if there are specific issues, because I am not aware of any DBA 

issues as a sole proprietor. 

Ms. GONZA ́ LEZ-COLO ́ N. We have plenty of cases of DBAs applying and not getting their application being approved. 

Mr. RIVERA. Okay. 

Ms. GONZA ́ LEZ-COLO ́ N. Thank you, Mr. Chairman. 

Mr. KELLY. The gentleman’s time has expired. 

I now recognize the gentleman from Pennsylvania, Mr. Evans, 

the Ranking Member on the Subcommittee of Economic Growth, 

Tax, and Capital Access. 

Mr. EVANS. Thank you, Mr. Chair. 

Mr. Rivera, do you have any statistics on the number of small 

businesses who have requested and received $25,000 under the 

new revised, unsecured loan limits? 

Mr. RIVERA. So we do not make a loan based on the unsecured 

threshold; we make a loan based on the amount of damage that 

they have. So if you have $50,000 worth of damage, the loan commitment will be at $50,000. If the individual homeowner or business opts to only borrow $25,000 and they have means for the additional $25,000, we will go ahead and move forward with that loan 

commitment. 

Mr. EVANS. So you do not keep track of number? 

Mr. RIVERA. Well, for the record, I can get back to you the 

breakdown between unsecured and secured between that $25,000. 

Mr. EVANS. Okay. Because you said that is going to be sunset. 

Mr. RIVERA. Yes, sir. So the initial disbursement currently allows us to go up to $25,000, but it used to be $14,000, but because 

of the RISE Act we are able to maintain that $25,000 threshold. 

But I can provide you that information. 

Mr. EVANS. Okay. 

Mr. Chairman, for the balance of time, I would like to yield my 

time to the Ranking Member so she can follow up. 

Mr. KELLY. Without objection. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. And thank you, 

Mr. Evans. 

Mr. Rivera, the OIG reports show the same disaster loan process 

applied for Hurricanes Harvey and Irma. However, the OIG found 

a much longer and burdensome process applied to victims in Puerto 

Rico. Can you explain to me why they have to go through all this 

burdensome, complex process compared to those who were victims 

in the mainland that applied for disaster loans during Harvey and 

Irma? 

Mr. RIVERA. I do not have a copy of the report. I cannot see 

what you are pointing to. 

Ms. VELA ́ ZQUEZ. But do you know that the process for the people of Puerto Rico to apply for a disaster loan was much longer? 

Mr. RIVERA. It is the same process. 

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19 

Ms. VELA ́ ZQUEZ. And many more complex requirements? 

Mr. RIVERA. It is the same process. The only difference is that 

we—— 

Ms. VELA ́ ZQUEZ. So the OIG is wrong? 

Mr. RIVERA. I am not saying the OIG is wrong. All I am saying 

is that it is the same process as if you are in the island of Puerto 

Rico as if you are in any of the islands, Guam, American Samoa. 

The Hacienda Taxing Authority is the equivalent of the IRS and 

we just need to get a copy of the taxing authority as far as for a 

primary source of repayment. 

Ms. VELA ́ ZQUEZ. So you are telling me that the OIG is wrong 

in his—— 

Mr. RIVERA. No, I am not. 

Ms. VELA ́ ZQUEZ.—in his assertion—— 

Mr. RIVERA. No, ma’am. That is absolutely incorrect. 

Ms. VELA ́ ZQUEZ.—that the process to apply for disaster loans 

in Puerto Rico was more burdensome and complex? 

Mr. RIVERA. I disagree. The IG is just simply stating that there 

are more steps in that process because of the Taxing Authority. 

Ms. VELA ́ ZQUEZ. I yield back, Mr. Chairman. 

Mr. KELLY. Mr. Evans, do you yield back? 

Mr. EVANS. As of 6 months following Hurricane Maria, only 

about 20 percent of all approved loans have been disbursed. Why 

is that rate so low? Can you speak to that? 

Mr. RIVERA. Yes. That is a snapshot of when the inspector general did the inspection. We are currently at 80 percent of loans are 

disbursed and 50 percent of the dollars. So, I mean, that was early 

on in the disaster and it is more mature at this point. 

Mr. EVANS. I yield back the balance of my time. 

Mr. KELLY. The gentleman yields back. 

I now recognize Mr. Fitzpatrick from Pennsylvania for 5 minutes. 

Mr. FITZPATRICK. Thank you, Mr. Chairman. Thank you, Mr. 

Rivera for being here. 

I want to focus on Puerto Rico, specifically. I had the opportunity 

to be there with my friend and colleague, Ms. Gonza ́lez-Colo ́n, over 

Thanksgiving to inspect what at the time was the Convention Center in San Juan and all the different components to the recovery 

operation. 

Did SBA have a presence there initially? 

Mr. RIVERA. Yes, sir. We have been co-located with FEMA since 

the very beginning. 

Mr. FITZPATRICK. So I guess my question is what has the 

interface been? Because I also, in addition to this Committee, I sit 

on the Committee on Homeland Security. We have oversight over 

FEMA. What has the interface been? What is working? What is not 

working? And I know it was originally centered in the Convention 

Center. It has since been disbursed to various sites and locations 

across the island. 

Mr. RIVERA. On the technology side, we have a computer 

matching agreement with FEMA. SBA and FEMA do. So we share 

data constantly back and forth. When we approve a loan, when 

they approve a grant, so that information flows freely back and 

forth between the agencies. 

SBR002 with DISTILLER

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We are co-located with FEMA in all their centers. They started 

the disaster recovery centers. We have our own business recovery 

centers, and we invite FEMA to join us at the business recovery 

centers. We are now transitioning into community recovery centers. 

We still have 350 people there in 50 centers, so we are there for 

the long term. 

Mr. FITZPATRICK. Thank you. 

So has this Committee given SBA what it needs to fully effectuate the mission on the island? Is there anything more that you 

need? 

Mr. RIVERA. I believe this Committee has been really helpful 

throughout this process. I mean, I have given examples about the 

RISE Act. I have given examples about the Disaster Loan Application Portal. There is a lot of positive coming from the Committee 

to the program. It is very helpful for the disaster survivors. 

Mr. FITZPATRICK. Mr. Chairman, I am going to yield the balance of my time to my colleague from Puerto Rico, Ms. Gonza ́lezColo ́n. 

Mr. KELLY. Without objection. 

Ms. GONZA ́ LEZ-COLO ́ N. Thank you, Mr. Chairman. And thank 

you, Mr. Fitzpatrick, not just for lending us the time now but your 

visit to the island during the difficult process and all the help for 

the different bills we have been approving here. 

One of the issues that I just want you to tell me, you got 51,000 

loans approved to the island. How many of them are still waiting 

for disbursement? 

Mr. RIVERA. I can get back to you for the record or I can look 

real quick. 

Ms. GONZA ́ LEZ-COLO ́ N. Please get back with the information 

for the record. 

And we sent a letter to the SBA Administrator because I know 

the new goals for the small business technology development centers and the one in Puerto Rico just increased a lot of the requirements for business start. One hundred seventy new businesses, an 

increase of 57 percent from the last year, and capital information, 

an increase of 85 percent. And when you compare those numbers 

with the numbers of 2017 for the island, we are still recovering in 

an economy that a lot of those businesses closed because of the 

hurricane. So I am asking SBA to review the goals imposed, in this 

case to Puerto Rico after the hurricane because we are not going 

to meet all those new goals and provisions and that will affect directly the amount of money and funds that small business technology centers on the island will receive as part of that. And that 

includes the jobs supported when you are losing a lot of those small 

businesses. I do not know if you are aware about that. 

Mr. RIVERA. That is a different division, but we will go back 

and we will communicate this to them. 

Ms. GONZA ́ LEZ-COLO ́ N. The other area that I was telling you 

before was how the process between FEMA and Small Business are 

managing up with the centers that you have still got on the island? 

There are still many centers and you still got personnel in those 

centers. Many of the people that applied for the first assistance 

from FEMA were denied. A lot of them were denied. We were managing to have different codels to the island, and FEMA are just acSBR002 with DISTILLER

21 

cepting again all the applications and reviewing them, and that 

means that the SBA process is getting involved again in that. So 

having that information, do SBA have enough resources to face not 

just the 2017 hurricane, but another hurricane in this season? Or 

do we need to fund again SBA? 

Mr. RIVERA. I think we have plenty of resources currently. And 

when there is a FEMA appeal with the disaster survivor, that does 

not have to come back through SBA. If somebody is with FEMA, 

they stay with FEMA. If they are referred to SBA, they have to get 

declined to get back to FEMA. That is the federal process. But if 

they ask for an appeal through FEMA, that does not need to come 

back to SBA. So I can reach back and we can clarify on that. 

Ms. GONZA ́ LEZ-COLO ́ N. Yes. Because the information, I mean, 

we are having the revenue from the centers. And even the FEMA 

directors on the island it is different. 

Mr. RIVERA. Okay. Thank you. 

Ms. GONZA ́ LEZ-COLO ́ N. I yield back. 

Mr. KELLY. The gentlelady’s time has expired. 

I now recognize the gentlelady from New York, Ms. Clarke, for 

5 minutes. 

Ms. CLARKE. I thank you, Mr. Chairman. I thank our Ranking 

Member. I thank you, Mr. Rivera, for your testimony here today. 

The SBA’s Disaster Loan Program is an essential component to 

the Federal Government’s efforts in providing relief to American 

citizens in the wake of natural disasters. Nearly 75 percent of 

small businesses lack disaster relief plans, and despite 70 percent 

of small businesses feeling vulnerable to natural disasters, when 

natural disasters do hit, as was the case with Hurricanes Harvey, 

Irma, Maria, which ravaged Houston, the U.S. Virgin Islands, and 

Puerto Rico, they can lead to damage that permanently shutters 40 

to 60 percent of small businesses. When businesses are not forced 

to close, they can expect to pay between $100,000 to $250,000 on 

average, as was the case with many businesses in my district of 

Central Brooklyn in the wake of Superstorm Sandy. 

The SBA’s Disaster Loan Program helps address these challenges 

by providing personal loans of up to $200,000 in small business 

loans, of up to $2 million in the wake of disasters. While these 

loans are essential to helping small businesses in the wake of crises, a series of SBA OIG reports recently highlighted ways in 

which the SBA could improve its functioning. 

So Mr. Rivera, the Inspector General Report for Hurricane Harvey concluded that a significant percentage of calls went unanswered, despite the increasing number of available agents. While 

I understand that three hurricanes can overwhelm an agency, it is 

still alarming that the 90 percent goal of incoming calls was never 

achieved. What are the primary challenges in answering calls? And 

was it staffing levels? Was it funding? 

Mr. RIVERA. So we were stressed, obviously. So we received 1.2 

million calls. As the calls come in, often what happens is there is 

a wait time associated with it, but from our perspective, we learned 

a lot from that. We are retooling the way we handle calls. We are 

using technology as much as we can. One of the things, for example, we have a callback feature now. So instead of calling and waiting 30 minutes, you can call and you can do the callback feature 

SBR002 with DISTILLER

22 

and then we can queue you up for a conversation later on. Some 

of the times we call and then they are not available, the survivor 

is not available from the call center to tell them to apply with an 

SBA loan and they push the callback number. So that self-imposed 

a lot of calls from that perspective. 

The IG’s report just basically highlighted. In week four, we have 

two sister offices, one in Atlanta, one in Sacramento that back up 

the call center in Buffalo, New York. And what happened is we deployed for Harvey and Irma and we dropped the number of agents. 

In hindsight—— 

Ms. CLARKE. But ironically, the wait times, nor the option to return phone calls was available to customers following the recent 

hurricanes. 

Mr. RIVERA. So 65 percent of the calls were answered. Let me 

just be really clear. Sixty-five percent of the calls were answered, 

so only 35 percent were not answered on a million two. 

Ms. CLARKE. Listen, if you want to believe that and you think 

that is great, that is fine. What I am saying to you today is that 

we got to find a way to make sure that the agency has the resources it needs to answer calls of distress and be able to make 

sure that we are reaching everyone in need of your services. So it 

is not about being defensive about what the agency does; it is how 

we can be helpful in making sure that you have what you need to 

answer these calls when they come in and that we are communicating effectively with the public about what they need to do. Because I can tell you that every single day that a small business is 

shuttered and unable to access you, it is a hardship. Not only are 

you stressed, our communities become stressed. 

Let me also add to this that we are going to be seeing more and 

more simultaneous events, so that is only going to add even more 

stress to your agency. So my hope is that we can recognize the efforts of the agency while simultaneously recognizing that we either 

need to build redundancy somewhere else. We need to have a contingency plan in place. Because when you have wildfires, you have 

hurricane season, you have volcano eruptions all happening at the 

same time, everyone can recognize an agency becoming stressed. 

Mr. RIVERA. We agree. 

Ms. CLARKE. All right. That is what I needed. 

With that, Mr. Chairman, I yield back. 

Mr. KELLY. The gentlelady’s time has expired. 

I now recognize the gentleman from Mr. York, Mr. Espaillat, for 

5 minutes. 

Mr. ESPAILLAT. Thank you, Mr. Chairman, Madam Ranking 

Member. 

First, I would like to, Mr. Rivera, I know that with FEMA and 

the grants that they provided for home relief, there was a persistent and serious problem with regard to applicants having their 

deeds or documentation that establish ownership or residency of 

those homes. Was that a prevalent problem for these businesses 

that apply for loans? 

Mr. RIVERA. No, sir. We use a third-party contract where we 

independently verify, based on a contract, the owner of the property. So we do not ask for a copy of the deed anymore. We used 

to back in the old days but we do not anymore. That is a process 

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23 

improvement. So we look at a contract that they tell us who the 

property owner is. 

Mr. ESPAILLAT. And was there any issue with that at all? 

Mr. RIVERA. No, sir. Not to my knowledge. 

Mr. ESPAILLAT. And what percentage again of the loan applications are granted? 

Mr. RIVERA. In Puerto Rico, 63 percent; Virgin Islands, 65 percent; it was in the mid-40s in Harvey and about close to 50 percent 

in Florida. 

Mr. ESPAILLAT. And you found that one of these stumbling 

blocks for these applicants to get their loans was translation services? Is that one of the major—— 

Mr. RIVERA. Well, it is one of the stress points we had is that 

at first we did not have—the contract we had in place was not sufficient to handle the throughput because of Harvey, Irma, and 

Maria, and the Spanish speakers in Texas, Florida, and then in 

Puerto Rico. But we went from a $50,000 contract to up to a $2 

million contract now. We have three separate contracts that can 

service and handle this type of volume. 

Mr. ESPAILLAT. That is troubling that an agency as important 

as the SBA that deals with small businesses and many of the small 

businesses across the country are run or owned by folks who speak 

other languages, new immigrants that are entrepreneurs, that you 

do not have the infrastructure to respond to language needs of your 

clients. Google has like translation services. We are not splicing 

atoms here. I cannot believe that you do not have access to technologies that are available right now on your phone to provide immediate and efficient translation of documents, of any type of interaction that you may have with your customers which are small 

businesses. Have you looked at the possibility of utilizing modern 

technology that is available right now? So if you like, I will go over 

and sit with you and I will show you what I can get on my 

phone—— 

Mr. RIVERA. Thank you. 

Mr. ESPAILLAT.—to translate, not just to Spanish but to any 

other language in the world. 

Mr. RIVERA. Thank you. 

Mr. ESPAILLAT. So how is it that a Federal agency that addresses business needs does not even—and is supposed to be at the 

cutting edge of technology, you do not have that availability for 

your customers? 

Mr. RIVERA. We do. We do. 

Mr. ESPAILLAT. That is unreal. So why did you not use it? 

Mr. RIVERA. Well, back at the very beginning of the hurricanes 

we pivoted. We learned from what happened. We were stressed by 

the calls and by the Spanish speaking. And now we spend $2 million a year. We have three separate contracts. 

Mr. ESPAILLAT. Mr. Chairman and Madam Rank, we sit here 

on an ongoing basis all the time addressing the need of small business owners. And very often what we discuss here is the need for 

them to have access to new and modern technology that will give 

them a real advantage to do business. And yet, the agency that is 

supposed to provide that opportunity to them does not have it 

itself. And in the middle of a storm where we saw thousands of 

SBR002 with DISTILLER

24 

people die and thousands of businesses destroyed, you have to go 

into like, you have to think about it? Unacceptable, Mr. Chairman. 

Unacceptable. 

Ms. VELA ́ ZQUEZ. Will the gentleman yield? 

Mr. ESPAILLAT. Yes, I will. 

Ms. VELA ́ ZQUEZ. Mr. Rivera, I would like to hear from you, 

what do you say or how did you respond to Mr. Espaillat’s assertion that what happened to those businesses or homeowners that 

did not have a deed? What was your response to that? 

Mr. RIVERA. We have a contract that goes and identifies who 

the property owner is. We do not ask individuals for copies of their 

deeds. 

Ms. VELA ́ ZQUEZ. But here in the disaster loan process it says 

that a Puerto Rico borrower has to submit title report to SBA to 

proceed with second closing appointment. 

Mr. RIVERA. Right. That is in the event we cannot identify the 

property. So if we can identify the property, it is not a requirement. 

Ms. VELA ́ ZQUEZ. Okay. Thank you. 

Mr. ESPAILLAT. Mr. Chairman, I yield back the remaining part 

of my time. Thank you so much. 

Mr. KELLY. The gentleman’s time has expired. 

I now recognize the gentlelady from North Carolina and the 

Ranking Member of the Subcommittee on Investigations, Oversight, and Regulations, for 5 minutes. 

Ms. ADAMS. Thank you, Mr. Chairman. Thank you, Ranking 

Member Vela ́zquez. Mr. Rivera, thank you for being here. 

Today’s hearing is primarily focused on the agency’s response to 

last year’s hurricane season, but I would like to get a sense of how 

SBA’s response efforts have improved over the past 15 years. Looking back on some of our major disasters starting with Hurricane 

Katrina, then Superstorm Sandy, and then in my state of North 

Carolina, Hurricane Matthew, was the most powerful storm of the 

2016 Atlantic Hurricane Season. Matthew brought devastating 

flooding, strong winds and storm surge to the Eastern Coast, and 

finally, going through last year’s historic and destructive hurricane 

season. So in addition to what you have said, what has SBA’s 

greatest challenges and lessons learned been? 

Mr. RIVERA. We have taken advantage of technology. And as I 

mentioned earlier, we are trying to streamline wherever processes 

are and use technology. I go back to the example of we now do 

desktop verifications. Our field inspectors no longer go on the 

ground. And Sandy took us 10 days for a field inspector to do an 

inspection on a home. Now, on average, we can do it in 6 days by 

somebody doing a desktop verification. They get a copy, for example, like a Zillow or Realtor.com, a footprint of the home. And then 

what we can do is we can have a discussion over the phone with 

the disaster survivor which cuts some time. 

Ms. ADAMS. Thank you. 

How has SBA insured the facilitation of more contracting opportunities for small businesses, particularly minority, women, and 

veteran-owned from all Federal agencies through your procurement 

center representatives in the rebuilding and debris removal process 

after the disasters? 

SBR002 with DISTILLER

25 

Mr. RIVERA. So FEMA has done a really good job. I mean, they 

are tasked with doing mission assignments and in the category of 

debris removal, they went from national contracts to now where 

they go to local small businesses, have an opportunity to compete 

for those type of contracts. If you have a trucking company that 

can support debris removal, they will now allow those trucking 

companies to step in. 

Ms. ADAMS. Thank you. 

What specific steps has SBA taken through your PCRs to advocate that disaster contracting actions benefit small businesses local 

to the disaster to the maximum extent possible? 

Mr. RIVERA. So we do focus with our government contracting 

team. In the disaster, the PCRs are well aware of the disaster contracting opportunities, and we do connect them with FEMA and 

with all the other Federal agencies that need to provide contractor 

support. 

Ms. ADAMS. Okay. Thank you. 

And can you speak generally on the approval and decline rates 

of loans received for each hurricane? For example, following Matthew, 19,816 applications were processed, and of those only 7,374 

were approved. 

Mr. RIVERA. Yes, ma’am. It is the footprint of the disaster. Like, 

when I was in the private sector, I could pick who came in to my 

office. We do not get that opportunity. We service all disaster survivors coming in. Sometimes the disaster footprint hits higher income areas. Sometimes it hits lower income areas. We try to do our 

best to try to approve every possible loan that comes through the 

door. 

Ms. ADAMS. Thank you. Thank you, Mr. Chair. I yield back. 

Mr. KELLY. The gentlelady yields back. 

I would like to thank you, Mr. Rivera, for being here today. 

The 2017 storm season was clearly—— 

For what purpose does the gentlelady from Puerto Rico seek recognition? 

Ms. GONZA ́ LEZ-COLO ́ N. Mr. Chairman, I just want to—sorry 

about the interruption—to provide for the record and make part of 

this hearing, a letter that I submitted to SBA Administrator Linda 

McMahon, regarding the Small Business Administration—— 

Mr. KELLY. Without objection. 

Ms. GONZA ́ LEZ-COLO ́ N. Thank you. 

Mr. KELLY. As we continue to examine the Federal Government’s response, today’s hearing will help us better understand 

SBA’s efforts in helping victims replace and rebuild their businesses and homes. This Committee will continue to look at ways 

to ensure the Disaster Loan Program is operating efficiently and effectively. This discussion today will help us in this endeavor. 

I ask unanimous consent that members have 5 legislative days 

to submit statements and supporting materials for the record. 

Without objection, so ordered. 

This hearing is now adjourned. 

[Whereupon, at 12:22 p.m., the Committee was adjourned.] 

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A P P E N D I X 

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Statement of James Rivera 

Associate Administrator 

Office of Disaster Assistance 

U.S. Small Business Administration 

before the 

House Committee on Small Business 

Hearing on "Surveying Storms: A Deeper Dive 

into SBA's Disaster Response" 

September 5, 2018 

Chainnan Chabot, Ranking Member Velazquez, and members of the committee, thank 

you for the opportunity to testify about SBA's Office of Disaster Assistance. 

Let me start by saying, on behalf of Administrator Linda McMahon and the entire 

agency, we appreciate your strong support of our disaster assistance mission and your continued 

leadership to ensure that, as a country, we are able to meet the challenges of disaster events like 

the ones we experienced in 2017. 

SBA's disaster assistance mission is to provide affordable, timely and accessible financial 

assistance following a declared disaster to businesses of all sizes, private non-profit 

organizations as well as homeowners and renters. This financial assistance is available in the 

fonn of low-interest, long-tenn direct federal loans for disaster losses not covered by insurance 

or other recoveries. Since SBA's inception in 1953, we have provided over two million disaster 

loans for more than $63 billion dollars. SBA disaster loans are a critical part of the federal 

government's response and recovery effort because they help to rebuild homes and businesses, 

replace contents, preserve jobs and spur economic recovery. 

About the SBA Disaster Loan Program 

Even though SBA is on the ground immediately following a disaster, we are not a "first 

responder" agency. Our primary focus is to provide affordable disaster loans for privately-owned 

property losses as part of the recovery effort in coordination with other federal, state, local, 

territories, and tribal partners. The SBA, through the Federal Emergency Management Agency 

(FEMA) as the coordinating agency, partners to ensure disaster survivors are being referred to 

appropriate sources of disaster assistance. For Presidential disaster declarations including 

Individual Assistance, disaster survivors should first register on DisasterAssistance.gov to see 

what types of assistance they are eligible for, and what best meets their immediate needs. 

As part of an overall effort to assist disaster survivors to get back on their feet, SBA 

provides loan assistance up to $200,000 to help homeowners repair or replace their damaged or 

destroyed primary residence. We also provide up to $40,000 to help homeowners and renters 

replace damaged or destroyed personal property such as furniture, clothing, appliances, and 

vehicles. For businesses of all sizes and private non-profit organizations, SBA provides up to $2 

million dollars to repair or replace damaged real estate, leasehold improvements, furniture and 

fixtures, inventory, and machinery and equipment. 
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Additionally, SBA offers Economic Injury Disaster Loans (EIDL) to small businesses, 

small agricultural cooperatives, and most private non-profit organizations that have suffered 

economic injury caused by a disaster. These loans provide working capital to a business or 

organization until normal operations can resume following a disaster. 

SBA also provides additional loan funds for mitigation- up to 20 percent of the total 

physical losses as verified by SBA- for protective measures to help prevent damages from 

similar disaster events which may occur in the future. In some cases, SBA can also provide 

additional funds to refinance existing mortgages in order to help make recovery affordable for 

the disaster survivor. SBA disaster loan funds can only be used for uninsured, underinsured or 

uncompensated losses. However, in order to expedite the availability of much needed disaster 

assistance to survivors, SBA can approve and disburse loan funds even if the insurance claim is 

still pending by taking an assignment of the insurance proceeds. 

Agenev/General Disaster Preparation 

Over the past several years, SBA has made a number of key improvements that help us to 

better respond to disaster survivors. We have implemented streamlined process improvements 

that utilize technology and private-sector lending practices to upgrade the SBA Disaster Loan 

Program so that it improves the overall applicant experience. For example, we now use creditscoring business rules as a tool to make expedited credit decisions and desktop verifications to 

quickly estimate property damages. These streamlined process improvements are especially 

important during such an active hurricane season like 2017 because they increase our bandwidth 

to provide timely credit decisions to a larger number of applicants. 

I want to thank this Committee for meaningful change through the Recovery 

Improvements for Small Entities After Disaster Act of2015 (RISE Act). Among those 

provisions were important measures for disaster survivors, such as increasing the unsecured loan 

limit from $14,000 to $25,000; expanding mitigation assistance to include safe rooms and storm 

shelters; and the creation of a Disaster Loan Assistance Portal that provides disaster survivors 

with quick and easy access to their loan application status, filing requirements, document 

uploads, and introduced electronic signature capability. 

Increasing the unsecured loan limit to $25,000 for physical damage loans makes a real 

difference to the disaster survivor who is rebuilding a home or business. SBA typically makes an 

initial disbursement within five days of receiving the borrower's signed loan closing documents 

(other than the security documents), but instead of a business or homeowner only receiving 

$14,000, they can now receive $25,000, helping to speed reconstruction. 

Similarly, a small business that has both physical damage and economic injury can now 

receive $50,000 in an initial disbursement- $25,000 for the physical repairs and $25,000 for 

working capital within five days of returning the signed loan closing documents. This results in 

SBA getting more disaster loan funds into the hands of disaster survivors faster. As many of you 

may know, the increase in the unsecured loan limit is temporary and authority will sunset in 

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November 2018. We look forward to working with the committee to extend this provision before 

the November expiration. 

The creation of the Disaster Loan Assistance Portal has changed the way SBA interacts 

with disaster survivors. Prior to the launch of the portal, the primary way for disaster survivors to 

check on the status oftheir loan application was to call the customer service center. While our 

customer service representatives are helpful and quick to respond, disaster survivors deserve 

more options and expect online access, especially during spikes in activity like we experienced 

this past Hurricane Season. The portal provides disaster survivors with online communications 

regarding the status of their application, access to filing requirements and SBA forms, even the 

ability to electronically sign the IRS Form 4506-T, which is needed to verify income and 

establish repayment ability. To maintain pace with the lending industry online advancements, 

SBA plans to continue enhancing the portal so that disaster survivors receive the best customer 

service experience possible when applying for SBA assistance. 

2017 Activity 

The 2017 Hurricane Season was the most active season SBA has responded to since the 

2005 Gulf Coast Hurricanes Katrina, Rita and Wilma. The President declared a major disaster for 

Hurricane Harvey in Texas on August 25, 2017. The U.S. Virgin Islands received a major 

disaster declaration for Hurricane Irma on September 7, 201 7; Florida and the Commonwealth of 

Puerto Rico were declared on September 10, with various states like Georgia, South Carolina, 

Alabama, and Louisiana receiving related declarations. Hurricane Maria struck the U.S. Virgin 

Islands on September 16 and Puerto Rico on September 17. To put this in perspective, in a 

three-week period, three major disaster events struck the U.S. in three separate locations. On its 

o\'in, the disaster loan approval activity for Hurricane Harvey rises to the level of the second 

largest event in SBA's history. Despite this unprecedented disaster activity, SBA responded 

immediately to each declaration and had staff on the ground within 48 hours to coordinate 

federal, state and local recovery efforts. 

Our staff on the ground was co-located at all FEMA-State Disaster Recovery Centers to 

assist disaster survivors in person, one-on-one with their SBA disaster loan application. SBA 

also opened Business Recovery Centers throughout the disaster areas to provide assistance to 

business owners. SBA worked closely with its Resource Partners Small Business Development 

Centers, SCORE Counseling Centers and Women's Business Centers to go beyond disaster 

loans and connect businesses with free technical assistance and business counseling services. 

Our strong partnership with SBA Resource Partners enabled us to respond quickly to business 

community needs. 

In less than 45 days, SBA approved over $1 billion for Hurricanes Harvey, Irma and 

Maria combined. This is record time compared to past major disaster events such as Hurricanes 

Katrina, Rita and Wilma in 2005; Superstorm Sandy in 2012; and the Northridge Earthquake in 

1994; which all took over 90 days to reach the $1 billion milestone. As of August 30, 2018, SBA 

has approved 43,493 disaster loans for a total of over $3.4 billion for Hurricane Harvey; 41,349 

disaster loans for a total of $1.73 billion for Hurricane Irma; and 55,763 disaster loans for $2.07 

billion for Hurricane Maria. In total, we have approved over $7.2 billion in disaster loan 

3 
29 

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assistance in response to the 2017 Hurricane Season. Currently, we're still approving more than 

$5 million per day in disaster loan funds for the 2017 hurricanes. 

Under normal conditions, and per SBA's Disaster Preparedness and Response Plan, ODA 

maintains 1,750 workstations in our Fort Worth Processing and Disbursement Center and 350 

more surge workstations in our Sacramento Disaster Center. We also expand the loan processing 

footprint to include 50 additional workstations at the Buffalo Call Center. At the peak of our 

response to Hurricanes Harvey, Irma and Maria, we reached a total staffing level of over 5,000 

disaster personnel. 

In addition to the three hurricanes, and the loan figures and personnel numbers shared in 

response to them, SBA's Office of Disaster Assistance dealt with a very high overall volume of 

activity in 2017. The agency serviced 23 presidentially declared disasters, as well as 53 SBA 

declared disasters. These ranged from the aforementioned hurricanes to flooding, tornadoes, 

wildfires, and mudflows. Overall, we provided $1.6 billion in total loan assistance in Fiscal Year 

2017. Most of the loan approval activity for Hurricanes Harvey, Irma and Maria is recorded in 

Fiscal Year 2018 activity. 

Agency After-Action Response 

In April, our program office conducted an after-action workshop with our senior 

leadership to review our performance during Hurricanes Harvey, Irma and Maria. The group 

captured best practices and lessons learned. Later, we discussed those items among the agency's 

senior staff as well as with the Administrator. 

Among those key areas are to continue improving how we establish and maintain our 

Office of Disaster Assistance staff and customer service presence in the areas affected by a 

disaster. We also want to ensure that our Electronic Loan Application process remains robust and 

can handle the requisite volume of application activity, that we effectively assess and verify 

property damage, and that we can efficiently staff and identify any barrier to overall application 

processing. We are also modernizing our Disaster Credit Management System to maximize 

technology in order to improve business processes and enhance volume processing functions 

such as auto-decisioning and parallel actions. Lastly, we want to make the end-process of closing 

and disbursing the disaster loans as expedient as possible for the disaster survivor. 

2018 Activity 

So far, disaster activity has been active and diverse. To date, there have been ten 

presidentially declared disasters and 33 SBA agency declarations. SBA is providing disaster 

assistance across 22 states in response to severe storms, tornadoes, wildfires, floods, and lava 

flows, to name a few. 

In looking at states represented by this committee, we have declarations for wildfires in 

California, a tropical storm in American Samoa, hurricanes in Florida and Puerto Rico, flooding 

in Illinois, Kentucky and New York, and severe storms and tornadoes in Iowa, Mississippi, 

4 
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Pennsylvania and Virginia. As Tropical Storm Gordon approaches the Gulf Coast, and as other 

potential future disasters impact states across the country, SBA will continue to answer the call. 

In closing, I appreciate the opportunity to update this committee on SBA's disaster 

recovery efforts. We firmly believe that reforms we instituted enabled us to be better prepared to 

respond to the 2017 Hurricane Season, and we are implementing further changes to improve our 

2018 efforts. Administrator McMahon had pushed us to be ready for the 2017 season, and I am 

proud of the hard work and many long hours put in by our Office of Disaster Assistance staff. I 

also want to recognize the support of my SBA colleagues, as well as the response from other 

federal agencies and our federal disaster assistance partners. This collective effort, in my view, 

contributed to a successful disaster and hurricane response effort by the agency. 

Thank you, Mr. Chairman, and committee members. I look forward to answering any 

questions you may have. 

5 
31 

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JENNIFFER GONzALEZ-COLON 

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WASHINGTONOFI'ICE 

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{102)2:.16-2615 FAX:!202)225-2154 

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August 31, 2018 

-Qtongre~~ of tl)e UlnttdJ ~tat~ 

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~ilt!,lton, JK 20515-5400 

The Honorable Linda McMahon 

Administrator 

Small Business Administration 

409 3rd StSW 

Washington, DC 20024 

Dear Administrator McMahon: 

COMMmE~S: 

NATURAL RESOURCES 

SMALL BUSINESS 

VETERANS' AFFAIRS 

First, I want to thank the efforts of the Small Business Administration to assist our 

constituency in the aftermath of Hurricane Maria through the allocation of additional 

resources and funds so much needed for the Island's recovery. 

During recent conversations with the Puerto Rico Small Business Technology 

Development Center (PR SBTDC), we knew about the programmatic goats for FY 2019 

issued by the Office of Small Business Development Centers (OSBDC). In the case of 

Puerto Rico, such goats could not be achieved due to our economic reality, worsened 

with the landfall of Hurricane Maria. Additionally, OSBDC is rolling out new goals for 

the Island with no additional money. The aforesaid changes are summarized as follows: 

• 173 new businesses started: an increase of 57% from 2017 results (110 new 

businesses); 

• $59,549,450 in capital formation: an increase of 85% from 2017 results ($32.4M); 

• 9,203 jobs supported: an increase of 129% from 2017 results (4,005 jobs); 

• 2,549 clients served: is achievable given that PR SBTDC served 2,833 clients 

during 2017. 

According to the latest data collected by the State Data Center of Puerto Rico, 300,000 

residents have departed from the Island in the last five years. Furthermore, a decrease 

of 11.2% of the population is projected over the next six years. 

On the other hand, the local economy has impacted the lending sector. Pursuant to a 

report published by the Puerto Rico Commissioner of Financial Institutions, during the 

first quarter of 2018, commerdalloans have decreased over $12 billion and $34 billion 

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