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[Senate Hearing 114-636]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-636
 
    FEDERAL DISASTER RESPONSE AND SBA IMPLEMENTATION OF THE RISE ACT

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 6, 2016

                               __________

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                              ----------                              
                   DAVID VITTER, Louisiana, Chairman
             JEANNE SHAHEEN, New Hampshire, Ranking Member
JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 BENJAMIN L. CARDIN, Maryland
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
TIM SCOTT, South Carolina            EDWARD J. MARKEY, Massachusetts
DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
JONI ERNST, Iowa                     MAZIE K. HIRONO, Hawaii
KELLY AYOTTE, New Hampshire          GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming
                Meredith West, Republican Staff Director
               Robert Diznoff, Democratic Staff Director
               
               
               
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Vitter, Hon. David, Chairman, and a U.S. Senator from Louisiana..     1
Booker, Hon. Cory A., a U.S. Senator from New Jersey.............     3

                               Witnesses

Kramer, Douglas J., Deputy Administrator, U.S. Small Business 
  Administration, Washington, DC.................................     5
Zimmerman, Elizabeth, Associate Administrator for Response and 
  Recovery, Federal Emergency Management Agency, Washington, DC..    11

          Alphabetical Listing and Appendix Material Submitted

Booker, Hon. Cory A.
    Opening statement............................................     3
Kramer, Douglas J.
    Testimony....................................................     5
    Prepared statement...........................................     7
Shaheen, Hon. Jeanne
    Prepared statement...........................................    40
Vitter, Hon. David
    Opening statement............................................     1
Zimmerman, Elizabeth
    Testimony....................................................    11
    Prepared statement...........................................    14

    FEDERAL DISASTER RESPONSE AND SBA IMPLEMENTATION OF THE RISE ACT

                              ----------                              

                        WEDNESDAY, APRIL 6, 2016

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:00 p.m., in 
Room 428A, Russell Senate Office Building, Hon. David Vitter, 
Chairman of the Committee, presiding.
    Present: Senators Vitter, Rubio, Scott, Fischer, Gardner, 
Ernst, Ayotte, Cantwell, Heitkamp, Markey, Booker, and Peters.

 OPENING STATEMENT OF HON. DAVID VITTER, CHAIRMAN, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chairman Vitter. Well, good afternoon, everyone. We are 
going to go ahead and get started, and we are going to be 
joined momentarily by Senators Booker, Rubio, and perhaps some 
others.
    Thank you all for joining me today for the Senate Small 
Business and Entrepreneurship Committee's Hearing on recent 
disaster recovery efforts and SBA's progress in implementing 
the Recovery Improvements for Small Entities After Disaster Act 
of 2015, also known as the RISE Act.
    Now this year alone, FEMA and SBA have been responsible for 
responding to numerous disasters. FEMA currently has 21 
disaster declarations since January while the SBA has 5 agency 
declarations of its own.
    Among those are declarations that include my home State of 
Louisiana, which experienced historic flooding last month. 
Although Louisiana knows better than anyone the challenges of 
rebuilding after a storm, the historic flooding we saw left 
nearly half the state under a FEMA disaster declaration, with 
even more parishes qualifying for SBA assistance.
    It is unfortunate, but it remains true; disasters of this 
scope are an indiscriminate and sweeping fact of life. They 
affect the livelihoods of families and business alike and 
require a speedy and effective response. Today's hearing will 
take a close look at how well the Federal Government is 
responding to these major natural disasters.
    Of course, small businesses in particular are often among 
those hit the hardest and experience long-lasting effects when 
disasters occur. As the driving force of our nation's growth 
and workforce, small businesses need extra help to get back on 
their feet as quickly as possible, and we need to make sure 
that they are receiving the help they need. This includes small 
businesses in rural communities, which face their own unique 
challenges, and the long-term recovery assistance we provide is 
often vital in ensuring that they do not have to close their 
doors.
    That is why I made it a top priority last year to introduce 
and pass legislation that would improve the SBA's disaster 
recovery programs, and with the help of my colleagues on this 
Committee, that RISE Act was signed into law last fall.
    Now a major problem for small businesses after a disaster 
is access to capital, and so we made sure the RISE Act included 
language to improve the SBA's loan programs and their 
administration so that small businesses can recover quickly. 
Considering the SBA's significant shortcomings in the past, 
particularly in its disaster recovery efforts in response to 
Hurricane Katrina in 2005 and Superstorm Sandy in 2012, the Act 
codifies a number of recommendations from the Sandy Rebuilding 
Task Force and also provides more time to those impacted by 
Sandy to apply for assistance if they had not already.
    The Act also established the Recovery Opportunity Loan 
Program which provides long-term disaster recovery assistance 
to affected businesses after the closure of SBA's application 
period for traditional disaster loan programs. With the SBA's 
failure to stand up similar programs in the past, the Act 
sought to ensure its success and to expedite loan-making and 
processing by building the mandate for the Recovery Opportunity 
Program on the preexisting 7(a) framework, utilizing existing 
SBA lenders.
    In addition to these key loan provisions, my colleagues and 
I sought to help small business owners impacted by disasters to 
compete for and win Federal grants and contracts. As I have 
discussed with FEMA and the SBA in prior roundtables, it is 
important for local small businesses to take the lead in 
rebuilding and in cleanup efforts. While FEMA has previously 
attested to their efforts to push their own contractors to 
quickly turn over such responsibility to local small 
businesses, the RISE Act finally grants them preference, 
leveling the playing field when competing with larger firms.
    More generally, there is a need to ensure small businesses 
are supported and protected beyond their capital needs, too. My 
colleagues and I ensured the RISE Act takes that into account 
by authorizing a number of actions to do so. This includes 
allowing for nationwide assistance from the SBDCs, additional 
funding authority for counseling and technical assistance, and 
allowing physical damage disaster loans to be used for life-
saving measures like safe rooms.
    The improvements passed as part of the RISE Act build on 
the already substantial progress that FEMA and the SBA have 
made in the last decade. Still, because such disasters can 
leave complete devastation in their wake, we continue to face 
challenges in carrying out an effective response. That is why 
it is so important not only to become better prepared, and to 
better prepare the public, for disasters but to also identify 
and execute tangible improvements in FEMA and SBA responses.
    We all recognize the important role that small businesses 
play in each of our local communities and economies. So when it 
comes to helping small business' recovery after a major natural 
disaster, the conversation is not so much political as it is 
tactical, thank goodness.
    I look forward to today's discussion. Thanks to everyone 
for being here today.
    With that, I want to turn it over to my colleague, Senator 
Booker. He has been a great partner here in the Senate, 
including on the RISE Act, particularly given his Superstorm 
Sandy experience, and he is sitting in as Ranking Member for 
Senator Shaheen who could not be here today because of an 
absolute conflict.
    Senator.

 OPENING STATEMENT OF HON. CORY A. BOOKER, A U.S. SENATOR FROM 
                           NEW JERSEY

    Senator Booker. Thank you very much, and I really do 
appreciate your leadership on the RISE Act.
    It is good to be here today. It is Jeanne Shaheen who I am 
thanking for being Ranking. That was a rhyme; I do not know if 
you noticed that. But she has been pulled away on other 
business.
    I really appreciate Senator Heitkamp and Senator Fischer 
for being here. They are to this Committee like Bruce 
Springsteen and Bon Jovi are to the State of New Jersey.
    So I want to recognize the incredible resiliency of New 
Jersey. We, as a State, endured a superstorm and recently the 
Storm Jonas, and our State has shown incredible strength, but 
this truly has been a partnership as well with a lot of 
different actors who have helped us become strong.
    I saw firsthand, as a mayor, the devastation of Sandy hit 
our largest city as well as throughout our coast, and I could 
not be prouder of the way that the people in our State really 
pulled together to demonstrate New Jersey's strength. 
Communities throughout our State are still, though, 
unfortunately, working to recover fully from Superstorm Sandy. 
There is a lot more to be done.
    The passage of the RISE Act, which again I do want to thank 
Senator Vitter for his leadership, really has helped New Jersey 
communities to heal. As of March 31st, the SBA disaster loan 
program has provided my State with over $863 million in loans 
for small businesses and homes--about $848 million during the 
original relief effort and over $15 million in loans in the 3 
months since the disaster loan program reopened in December 
2015.
    In total, the SBA program has approved $2.5 billion in 
loans in areas that have been negatively impacted by Superstorm 
Sandy. Unfortunately, we have increased intense weather events 
over the past couple of years. These challenges seem to be 
coming and coming and coming.
    I spent time back home this past winter, helping New 
Jerseyans deal with the damage from Jonas and documenting the 
devastating impacts that flooding can have on a home or a small 
business. I am pleased that the SBA accepted the SBA disaster 
declaration requested by Governor Christie in February that 
Senator Menendez and I, along with our House colleagues, do 
support.
    I am hopeful that the changes within the SBA can make the 
program strong and the improvements that are included in the 
RISE Act can really help to make sure that after such weather 
events, New Jersey, as well as other areas across our country, 
can be granted expeditious and efficient help.
    So while we continue to help Sandy and Jonas survivors, I 
am eager to see the efforts that have been made to improve the 
disaster relief program moving forward by both the SBA and 
FEMA. I am confident that our businesses will recover. I am 
confident that our State will stand stronger than ever before.
    And, I want to thank the distinguished panelists for all 
your hard work as civil servants in serving our country. I am 
truly grateful for what you all do every day. You do not get 
the gratitude, I think publically, as often as you and your 
team members deserve.
    I am also proud to be on this Committee and to be able to 
work on behalf of small business owners and Americans impacted 
by natural disasters all over our country.
    Mr. Chairman, again, thank you for your leadership, your 
partnership, and I look forward to this discussion today.
    Chairman Vitter. Thank you very much, Senator Booker.
    And, as is our custom, we want to get to the witnesses as 
soon as possible. All other members are welcome to submit any 
statements for the record, and obviously, you will have a 
question time.
    Both of our witnesses today are deeply involved in the 
Federal Government's disaster response efforts, either as on-
the-ground first responders or as coordinators of much needed 
long-term financing for rebuilding. They will speak today on 
the successes and challenges of recent disasters and the 
progress they have made in implementing the RISE Act.
    Our first witness is Mr. Douglas Kramer, Deputy 
Administrator at the U.S. Small Business Administration. Prior 
to his confirmation as Deputy Administrator, Mr. Kramer served 
as General Counsel for USAID from March to November 2015. In 
his time as a member of this administration, he has also served 
in the Office of the White House Counsel and as Deputy 
Assistant to the President.
    And then we will hear from Ms. Elizabeth Zimmerman, 
Associate Administrator for Response and Recovery at FEMA, the 
Federal Emergency Management Agency. Prior to her appointment 
there, she was involved with emergency management in Utah and 
served as Assistant Director of Recovery for the State of 
Arizona. In her time at FEMA, she has sought to improve 
coordination between the Federal, state, local, and tribal 
governments through the development and publication of the 
National Disaster Recovery Framework, and also coordinated 
implementation of the Sandy Recovery Improvement Act of 2013 
which authorized several significant changes to the way FEMA 
can deliver disaster assistance.
    We look forward to hearing from you both. You have five 
minutes each. I believe our electronic clock is out right now, 
but you will get cues from staff about that wind-down. We look 
forward to hearing from you.
    Mr. Kramer.

  STATEMENT OF DOUGLAS J. KRAMER, DEPUTY ADMINISTRATOR, U.S. 
                 SMALL BUSINESS ADMINISTRATION

    Mr. Kramer. Thank you, Chairman Vitter and Senator Booker 
and all members of the Committee, for this opportunity to 
testify about SBA's commitment to providing timely disaster 
assistance and to update you on our efforts in response to last 
month's presidential declaration for flooding in Louisiana and 
our work to redouble our efforts on behalf of those still 
impacted by Superstorm Sandy.
    Last year alone, SBA was on the ground for 11 
presidentially declared disasters including flooding in Detroit 
and Texas, an earthquake in Napa Valley, wildfires in Southern 
California, and record flooding in South Carolina. For the 
year, SBA's team fielded more than 145,000 calls, deployed more 
than 400 personnel to disaster zones, inspected more than 
19,000 damaged properties, processed 30,000 applications, and 
disbursed more than $340 million to disaster survivors.
    SBA's committed professionals have been doing this work for 
a long time. In fact, our Office of Disaster Assistance reached 
a milestone last year; we surpassed 2 million disaster loans 
approved since our founding in 1953. Over those years, we have 
awarded more than $54 billion in disaster loans for small 
businesses, homeowners, nonprofits, and renters.
    On Monday, I toured SBA's Disaster Recovery Center in 
Slidell, Louisiana, to get a firsthand look at our efforts to 
deliver aid in 35 parishes declared Federal Disaster Areas 
after the recent flooding. All of us understand well the 
urgency of the situation and appreciate Chairman Vitter's 
hands-on leadership in speeding help to so many in need.
    SBA currently has 85 staff on the ground across Louisiana, 
working in concert with FEMA. To date, we have received more 
than 2,500 loan applications and approved more than $18 million 
in financing, with millions more expected in the coming days 
and weeks.
    I also want to thank Chairman Vitter, Senator Booker, and 
the members of the Committee for your passion and persistence 
on behalf of the survivors of Superstorm Sandy. Your leadership 
in getting the RISE Act through Congress is already making a 
significant impact. Long after the mainstream media may have 
turned its focus away from the devastation wrought by this 
disaster, the Committee kept fighting for Sandy survivors. Your 
bipartisan leadership has enabled SBA to reopen loan 
application processes this year for those still working to 
rebuild in Sandy's aftermath.
    Since the RISE Act authorized reopening assistance to Sandy 
victims four months ago, we have received more than 1,800 
applications, opened 29 centers in 9 states, and maintained a 
field presence for more than 100 days. During that time, we 
serviced 1,500 disaster survivors and conducted more than 330 
loan closings. Our average processing time, importantly, on 
those applications was reduced to just nine days. And, we have 
already approved an additional $34 million in disaster 
assistance.
    SBA did learn some important lessons after Sandy, and now 
we are applying them. As you will recall, after Sandy, too many 
storm victims had to wait several months to get their disaster 
claims processed by SBA, and that is simply unacceptable. We 
have taken steps to ensure that never happens again.
    I have been directly and repeatedly engaged with our Office 
of Disaster Assistance Leadership on their efforts to automate 
and streamline our application approval and distribution 
processes. The promise of new technology and automation is 
particularly well suited to the demands of ODA's work, which 
requires flexibility and the need to scale up in just a few 
days.
    Some of the improvements have already been implemented, and 
we have updated our online disaster loan application so 
applicants can fill out a form on SBA's secure web site and 
submit it digitally. Ninety percent of SBA disaster loans today 
are being submitted online. We know that applications that are 
intuitive and accessible will lead survivors to getting back to 
pre-disaster situations quickly. And we have also recently 
instituted phase one of the web portal that will allow disaster 
survivors to go online and see the exact step in the process 
where their application is sitting.
    Our work to fully implement the RISE Act is ongoing. We are 
publishing rules to implement the RISE Act changes in the 
disaster loan program. We recognize the value of providing not 
only financing but also high-quality business counsel and 
disaster mitigation strategies to help recovering small 
businesses. SBA staff is currently finalizing our regulatory 
strategy under the RISE Act to institutionalize our ability to 
award additional disaster counseling funds when necessary.
    Mr. Chairman, SBA Administrator Maria Contreras-Sweet and I 
have visited several of our disaster operations in the field. I 
have had the opportunity to visit our SBA processing center in 
Texas as well as Disaster Recovery Centers in Louisiana and 
Missouri.
    I have seen how hard our committed staff works. They are a 
knowledgeable, experienced, and caring group of public servants 
who are ready to uproot their own lives and respond to chaotic 
and stressful circumstances when the American people need us 
most. I am proud to work with them, encouraged by the 
improvements we have already made, and look forward to working 
with this Committee to make additional improvements wherever 
they may be needed.
    Thank you for your leadership and support, and I would be 
happy to answer any questions you have.
    [The prepared statement of Mr. Kramer follows:]
    
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    Chairman Vitter. Thank you very much, Mr. Kramer, and we 
will certainly be getting to those questions.
    Now, Ms. Zimmerman.

 STATEMENT OF ELIZABETH ZIMMERMAN, ASSOCIATE ADMINISTRATOR FOR 
   RESPONSE AND RECOVERY, FEDERAL EMERGENCY MANAGEMENT AGENCY

    Ms. Zimmerman. Good afternoon, Chairman Vitter, Senator 
Booker, and members of the Committee. Thank you very much for 
the opportunity to be here today to testify on FEMA's support 
to the private sector during the disaster response and recovery 
process.
    At FEMA, we recognize how important it is for the 
community's recovery following a disaster to get local 
businesses back up and running. Local businesses are where our 
survivors work, get their resources, and where they connect 
with other members of their community.
    I am pleased to provide you an overview of FEMA's disaster 
assistance programs and their initiatives we have established 
to coordinate with and assist the private sector during 
disaster recovery. I also will discuss specific support we are 
providing to local businesses during the current response to 
Louisiana.
    Following a presidential disaster declaration, FEMA has 
three primary disaster assistance programs that can be 
activated--the Individual Assistance Program, the Public 
Assistance Program, and the Hazard Mitigation Grant Program.
    The IA Program provides support to individual survivors, 
including grants for temporary housing, and home repair or 
replacement, as well as other disaster-related expenses. FEMA's 
individual assistance applicants must first apply to SBA before 
we can provide some types of disaster assistance.
    The Public Assistance Program provides Federal funding to 
state, local, tribal, territorial governments, and certain 
nonprofit organizations for emergency works, expenses, and 
repairs or replacements of public infrastructure.
    The Hazard Mitigation Grant Program provides Federal 
funding for mitigation measures throughout the declared state 
or tribal nation to help reduce risk before the next event.
    During a presidential disaster declaration that authorizes 
individual assistance, the U.S. Small Business Administration's 
low-interest loan program is also activated, which includes 
funding for damaged property or economic injury. The SBA 
program is a primary source of Federal funding for affected 
businesses in the aftermath of a declared disaster. FEMA does 
not have the authority to provide Federal assistance to 
businesses, and our partner, SBA, is the key to that assistance 
for them.
    Following a disaster declaration, FEMA deploys private 
sector staff dedicated to engaging the business community to 
ensure that FEMA understands the impacts of the disaster on the 
local economy. They also connect businesses to SBA's loan 
program liaisons, as well as FEMA's Individual Assistance 
Program, so that they can help their employers help themselves 
and keep staff working in the affected area and to get the 
assistance they might need for their families.
    FEMA also contracts with local firms during disaster 
response to support the community recovery. Section 307 of the 
Stafford Act directs FEMA, to the extent feasible and possible, 
to contract with local firms for disaster response activities. 
All procurement unit leads in the joint field office that are 
deployed to a disaster response are trained on local contract 
considerations and how to identify local businesses that could 
be used. From 2010 to 2015, FEMA awarded more than $88 million 
in contracts to local firms during response activities.
    We want to use local businesses, but we also do not want to 
compete against those in the community that may need the same 
resources. Much of the support to local businesses is conducted 
indirectly through the grants that we provide to local, state, 
and tribal governments.
    FEMA also directly employs members of affected communities 
through our local hire process. This not only helps provide 
employment opportunity for survivors who may have been impacted 
by a disaster but also allows FEMA to hire staff who have 
connections to the community and understand the unique recovery 
challenges that they face. Several Katrina-impacted Louisianans 
still currently work at FEMA that were hired on immediately 
following Katrina.
    As outlined in the National Disaster Recovery Framework, 
the Federal interagency also works with the impacted state to 
determine whether they need to activate the Economic Recovery 
Support Function, which provides long-term Federal support to 
help coordinate resources and provide technical assistance to 
rebuild a local economy post-disaster.
    Now I would like to give you a brief update regarding the 
ongoing response in Louisiana to the severe storms and flooding 
last month. I was able to go down there three days after the 
President declared the disaster to meet with both the State's 
and our folks that were deployed immediately after.
    On March 13th, the President did issue the major disaster 
declaration for Louisiana. This declaration and subsequent 
amendments made funding available to both eligible individuals 
and governments in 35 parishes through FEMA's Individual 
Assistance and Public Assistance Programs and Hazard Mitigation 
Assistance statewide.
    Since the disaster was declared, more than 1,100 Federal 
employees were deployed to support the State and implement the 
Federal disaster assistance programs. FEMA's private sector 
staff are coordinating outreach to businesses through 
partnerships with SBA, a private sector coordinator at the 
Governor's Office of Homeland Security and Emergency 
Preparedness, the local Chambers of Commerce, and state 
business and trade associations.
    In the first 20 days following the declaration, FEMA has 
contracted with multiple local firms, resulting in more than 
$715,000 to the local economy for goods and services such as 
the Joint Field Office security guards, translators and 
interpreters, and office supplies.
    FEMA has also deployed a Federal Disaster Recovery 
Coordinator to Louisiana, who is currently working with the 
State counterparts to determine the recovery coordination 
needs.
    In conclusion, here at FEMA we subscribe to a whole-
community approach to emergency management. All sectors of the 
community, including the private sector, need to be involved in 
the preparing for, protecting against, responding to, 
recovering from, and mitigating future disasters in order for 
us as a nation to be more resilient.
    Thank you again, Chairman, for having me testify today, and 
I look forward to answering any questions the Committee may 
have.
    [The prepared statement of Ms. Zimmerman follows:]
    
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    Chairman Vitter. Great. Thank you very much, Ms. Zimmerman.
    I know Senator Rubio has an upcoming commitment. So I am 
going to trade slots with him so he can ask questions before he 
has to leave.
    Senator.
    Senator Rubio. Thank you. I appreciate your indulgence on 
this. The Foreign Relations Committee has a meeting I need to 
get to as well, so I appreciate you.
    Chairman Vitter. Sure.
    Senator Rubio. I will not use the full time.
    But the first question, Mr. Kramer, as you may know my home 
State is not a stranger to severe weather. We had a wetter than 
average winter that caused Lake Okeechobee's levels to climb, 
and as a result the U.S. Army Corps of Engineers began 
discharging billions of gallons of water to the east through 
the St. Lucie River and to the west as well. And the discharges 
have had a dramatic and negative consequence on hundreds of 
businesses that rely on healthy rivers, including, for example, 
the commercial fishermen. And, of course, tourism results have 
seen a decline in various parts of the State.
    So I will continue to work on the Central Everglades 
Planning Project, which is more of a long-term solution. But in 
the short term, we should help these businesses that have been 
harmed to recover, and here is how we can.
    On the 17th of March of this year, the Secretary of 
Agriculture issued a disaster declaration for several Florida 
counties as a result of flooding due to heavy rains. This 
declaration triggered the eligibility for SBA assistance. It is 
my understanding that SBA is considering extending eligibility 
under this same declaration to businesses affected by these 
discharges from Lake Okeechobee, and of course, that is 
something I would strongly consider--strongly encourage the SBA 
to approve.
    Can you update me on what the status is and the estimated 
timing for a decision on that?
    Mr. Kramer. Sure, Senator. Thank you for that question.
    I am aware of the situation. I am aware that the Secretary 
of Agriculture has made a declaration, a disaster declaration, 
for that area. I am not aware, though, that--for an SBA 
declaration in the absence of a presidential declaration we 
have to receive an application from the governor for our 
services and our declaration.
    The governor has made such a declaration with regard to two 
different events in late February related to tornadoes that 
were in Florida, and so we have worked with them on that. And I 
know that those came to us just last week, and we should have 
an approval. I expect a decision in a matter of days on those.
    I am not aware yet, though, that we have received a request 
for a declaration on the other one, although I can contact our 
staff and make sure they use the established lines of 
communication they have.
    Senator Rubio. So by issuing the declaration by the 
Secretary of Agriculture for these counties, as a result of 
flooding, this in and of itself does not trigger eligibility 
for SBA assistance?
    Mr. Kramer. I will confirm. My understanding is that when 
there is a presidential declaration our services are 
automatically triggered. Otherwise, there is a separate process 
by which we make a declaration. Oftentimes, it can happen in 
concert with the other ones, but the Secretary of Agriculture 
declaration would not necessarily trigger our services. But I 
will confirm that----
    Senator Rubio. Okay.
    Mr. Kramer [continuing]. And make sure that we follow up.
    Senator Rubio. Well, if there is something missing from the 
State side, we would like to know about so they can address it.
    It related to the event you talked about, Ms. Zimmerman. My 
question is with regards to both Escambia and Santa Rosa 
Counties. They were ravaged by storms. The first had one 
tornado hit the Town of Century, hit over 100 homes and 
commercial buildings, caused about 3.9 million in damages. And 
then the second hit Ferry Pass just a few days later and 
destroyed, or severely damaged, about 300 homes and buildings. 
And, the total damage, about $18 million.
    So the governors made these requests, and I wrote the 
President twice in support of two separate disaster 
declarations--first, for an emergency declaration which was 
denied, and then subsequently, a major disaster declaration 
which was also denied.
    So the Pensacola News Journal has reported that one of the 
reasons that the State will not receive disaster assistance is 
because, independently, the storms failed to meet a damage cost 
threshold for Federal assistance. The Journal says that FEMA 
refused--this is a quote--``refused to let the State roll the 
damage amounts for the two tornadoes into one request.''
    However, given that these storms occurred in the same week 
and were only 30 miles apart, I believe FEMA should be able to 
roll the damage totals from the area into one request. It is my 
understanding that this has been done in the past for similar 
disasters.
    So what are the guidelines for assessing the cumulative 
effects from storms in close proximity and time? And I guess 
what are the guidelines? I know that has happened in the past.
    Ms. Zimmerman. Thank you, Senator.
    Yes, when storms impact communities, we look; we work with 
our partners at the National Weather Service to identify 
whether storms are of the same system or if they are of 
separate systems, and so we rely on them as another Federal 
agency to tell us if they are one system or not.
    When we look at disaster damages and the impacts, we look 
at that first, but we look at the overall impacts of those 
disasters and get the requests from the governors, which we did 
have a request from the governor for the storm that hit 
Escambia and Santa Rosa, and they requested for individual 
assistance.
    We went out and performed damage assessments alongside the 
state and local communities and identified a total of 45 homes 
destroyed and 40 with major damages, so looking at just about 
85 homes, major damage or destroyed. So that was of a level 
that it was felt that the State would be able to handle that.
    Senator Rubio. Okay. Well, just in closing, I just want to 
hopefully be able to work with you on this because this has 
been a recurring issue in Florida. Florida is victim to 
multiple storms that occur within a short period of time. In 
and of themselves, the one storm, the one tornado may not reach 
the threshold, but when you combine all these events happening 
in the same geographic area within a close proximity of time 
and space, if you add those up, it gets pretty dramatic. And 
Florida seems to be repeatedly impacted by this.
    I hope we can establish guidelines that allow us to meet 
that threshold, and I am sure we will work with your agency to 
do that, I hope.
    All right, thank you.
    Thank you, Chairman.
    Chairman Vitter. Great. Thank you very much.
    Senator Booker.
    Senator Booker. Mr. Chairman, with your indulgence and 
thanks to your example, I am going to allow Senator Heitkamp to 
go next.
    Chairman Vitter. Okay.
    Senator Heitkamp. He said he would only do that if I made 
it a big public display that he was so gracious, but . . . no.
    [Laughter.]
    Senator Heitkamp. Actually, I think that----
    Chairman Vitter. I do not think Marco spent enough time 
pointing that you are on our side. So maybe you can.
    Senator Heitkamp. Example, right?
    I think it is interesting when you look around this podium 
here to see that there is not a state that is not impacted by 
disaster. And you know, you can have a state as large as 
Florida, as large as New Jersey, rural like North Dakota and 
like Louisiana, and we all know that it is some of the most 
trying times for so many of our people.
    And certainly, when we think about disaster in North 
Dakota, we think about flooding. And it is not the kind of gush 
flooding that you see come down a valley. It is the slow rising 
of water that spreads out of the banks and literally can 
destroy a whole town, similar to what happened in Grand Forks, 
North Dakota.
    Now being a kind of veteran of the programs, obviously, we 
were participating and glad to see the Chairman's emphasis on 
the RISE Act, see it passing, but also want to make sure that 
implementation is done in a way that we think that was intended 
by Congress.
    And one of the criticisms that I frequently hear, 
especially of the SBA programs, is the criticism that you 
have--it seems like there is one hand taking, or one hand 
extended while the other hand is taking. And way too often, for 
small businesses it is not just their business that is 
affected; there also is their home.
    And so we were pretty insistent that a provision needed to 
be placed that would prohibit SBA from collateralizing 
someone's home because then literally their whole life is at 
risk, unless that was necessary.
    Mr. Kramer, can you tell me what is the timeline in 
implementation of that provision? Because as I understand it, 
it is one of the provisions of the RISE Act that has not yet 
received implementation, has not been implemented.
    And, if it has not been implemented, then what is your time 
frame in which you will see it being implemented?
    Mr. Kramer. Well, thank you, Senator, for that question, 
and I think you hit in the question on some of the challenges 
that we face in providing disaster assistance and running a 
prudently managed program.
    On the one hand, we go into these difficult circumstances. 
We are the loan side of the operation, not the grant side of 
the operation. So, in addition to providing support, we are 
creating a long-term relationship.
    Under existing laws and regulations, we are required to 
take the best available collateral in order to protect the 
long-term sustainability and integrity of the program. But I 
think when you talk to all of our folks who work in the Office 
of Disaster Assistance, they know well how to be both competent 
and also compassionate of the circumstances that people are 
going through.
    So as I think we are looking right now at writing 
regulations that enforce the specific language of the RISE Act 
with regard to taking collateralization of the home, and I 
expect that at some point this summer we will have a draft of 
that because we are trying right now to figure out how to do 
exactly what you just said--to be compassionate and 
understanding about people's need to keep their home after a 
disaster, but also to do it in a way that also serves the other 
obligations that we have, to take collateral in these loan 
programs, maintain the subsidy rate that we operate with, and 
all that.
    So I can tell you that all of those aspects of your 
question are being given due consideration. We are in the 
process of working on a regulation this year that I think we 
will have in draft form by sometime this summer.
    Senator Heitkamp. So you anticipate that by this summer we 
will at least know what the draft regulation looks like, with 
implementation probably by the end of the year?
    Mr. Kramer. I think that is probably the schedule.
    Senator Heitkamp. What would you do in the meantime? The 
old rules would remain in existence until you change, or would 
there be an ad hoc determination?
    Let's say we had a disaster tomorrow in North Dakota.
    Mr. Kramer. Right.
    Senator Heitkamp. With SBA funding for small business, how 
would--given that this law is in effect, how would you then 
implement this provision without a regulation?
    Mr. Kramer. You know, I asked our staff a very similar 
question to that--what we are doing in the interim, and how 
often it is the case that we go in and actually take and try to 
foreclose on the property of a disaster survivor. And my 
understanding is because of what we do and the other resources 
we have in the field actually foreclosing on someone's home as 
collateral is an act of absolute last resort that we do not see 
happen very often.
    And so I have made clear to that staff that before we would 
take some action we would need to think clearly about how to 
make sure that we are in compliance with the new terms of the 
statute. But it is something, frankly, that I do not think we 
expect to happen in the short term while we are doing this.
    Senator Heitkamp. Well, obviously, I am deeply concerned 
because a lot of times second and third mortgages on homes is a 
reality for homes that are devastated by a natural disaster. 
And simply to--you know, if you are a homeowner, one would 
question why you would ever hang on, and that is not good for 
the community either. So, if we are going to see communities 
recover, we need to make sure that there is a possibility of 
recovery in a way that is maybe more humane than what we have 
had before.
    Ms. Zimmerman, I think we have come a long way on disaster 
response and recovery, and certainly, with the passage of the 
RISE Act. But there is always room for improvement. And I know 
when we look at the challenges in a rural state, like North 
Dakota, getting out there and getting people to kind of 
appreciate what the unique challenges are in a rural community.
    Can you just tell me what you see as necessary next steps 
to provide coverage not just in large urban areas but also 
rural areas in terms of recovery from natural disasters?
    Ms. Zimmerman. Sure. As we are out in any disaster, it is 
challenging, when you are in a rural community that has been 
impacted by disasters, to make sure we go to the people. And 
that is one of the things that we, over the last few years, 
have been concentrating on with FEMA, to make sure we have 
staff going out in the field to meet the disaster survivors 
where they are at, where they are trying to recover, and not 
making them come to us.
    So by having mobile centers that we move around and take 
people so that they can be walking the streets in those rural 
communities or driving to where the people live to make sure 
they are getting the assistance, whether it be that assistance 
that FEMA could provide or from any of the voluntary agencies, 
we are working very closely with other partners that we have in 
the emergency management/disaster response world.
    Senator Heitkamp. I think one of the great challenges here 
in terms of disaster relief is that the balance between wanting 
it to be self-contained and have no subsidization from Federal 
taxpayer dollars, and then recognizing that the taxpayer input 
and dollars that we can bring to help a community recover is 
good overall for the economy of this country but also is a good 
investment. So it is a tough balance.
    And so you see it right now with flood insurance. I am 
trying to figure out if we are going to cash-flow flood 
insurance entirely on its own or whether we are going to have 
some kind of subsidization that recognizes a universal risk 
that we all take and that we are all in it together.
    So I think these are issues that we are going to have to 
work through in Congress.
    But we certainly appreciate the work that both of you do, 
and I am grateful, as is my State, for all of the assistance 
FEMA has given us as we experience, whether it is a tornado or 
whether it is devastating flooding in my State. Thank you again 
for your public service.
    Chairman Vitter. Great. Thank you, Senator.
    I will go to my questions now. First, I want to thank both 
of you and your agencies for your response recently in 
Louisiana. It has been very proactive and very aggressive, and 
we appreciate that. And I think all of our goals is to make 
that the new normal in every state after every disaster from 
now on.
    Let me go back to the RISE Act. One significant provision 
in the RISE Act was the Recovery Opportunity Loan Program, and 
that is a big priority of mine in the RISE Act, and we want to 
get that up and going.
    Now we were concerned when we were writing the RISE Act 
that if you look at, say, the 2008 Farm Bill, with disasters 
programs in it like the Immediate Disaster Assistance Program, 
that is still not implemented. It is still without regs, 
without guidance, basically with no substantial action, Mr. 
Kramer, from the SBA. We do not want that to happen. It should 
not be happening there.
    We certainly do not want it to happen in the Recovery 
Opportunity Loan Program. For that reason, one thing we did is 
design and stand up that Recovery Opportunity Loan Program on 
the existing 7(a) loan program platform, which should mean the 
process to implementation should be a lot quicker.
    So what is the update on that, and what is a specific 
timeline on this implementation of the Recovery Opportunity 
Loan Program?
    Mr. Kramer. Well, thank you, Senator Vitter, and I think a 
lot of my response will agree with some of what you just said.
    I think the Recovery Opportunity Loan Program in the RISE 
Act has a good opportunity for success in great part because of 
what you just said about the fact that it is an idea built upon 
our existing 7(a) loan platform.
    Outside of the straight disaster loan context, most of our 
other business finance programs operate as guarantees where we 
are not making the loans, and so we need a willing partner, 
that bank that is going to go out and make a loan to a small 
business that we then guarantee, which takes some of our direct 
control out of that system. And I will talk about, you know, 
the IDAP, EDAP, and PDAP in a second, which is, I think, part 
of the frustration we are running into in getting those up and 
running.
    On Recovery Opportunity, though, to make sure that I answer 
your question up front, we are looking right now at modeling 
how we can get the regulations written on this. I would expect 
that sometime this summer we will have regulations out on 
Recovery Opportunity.
    Frankly, I will tell you the one issue that we are trying 
to get through right now is the opportunity in the Recovery 
Opportunity loans is that it takes a normal 7(a) loan and 
increases our guarantee up from what is usually 50 percent to 
85 percent. And I think we try to use that 35 percent to 
incentivize the banks to become partners in helping us in 
disaster response, which is a great idea.
    At the same time, though, our fees have to remain the same, 
and we have to operate that program at zero subsidy. So, in 
order to roll that out, we need to do the modeling to make sure 
that we can take on that additional guarantee amount without 
changing the fee structure of the subsidy amount, but we are 
doing that work right now. Once we figure that out, it will 
lead us to writing regulations, which we expect to do this 
summer and have those.
    Chairman Vitter. And so this summer would be the end of 
that whole process?
    Mr. Kramer. I think the end of the process, where we have 
looked at that and we are then writing the regulations and then 
putting them into a clearance process and putting them out for 
comment.
    Chairman Vitter. Well, I do not want to eat up all my time 
on this.
    Mr. Kramer. Sure.
    Chairman Vitter. But could you follow up in writing with a 
schedule of the entire rollout process to completion of this? 
My experience in life with myself, among others, is that you 
will never stay on a reasonable schedule unless you first have 
a reasonable schedule. I mean acknowledge a goal. And so, if 
you can give that to us in writing, that will be a great step 
with regard to staying on some reasonable schedule.
    Another big concern that we tried to address in the RISE 
Act certainly comes out of my Katrina and Rita experience. One 
of the most frustrating things I saw was enormous, mostly FEMA, 
dollars coming into Louisiana for all sorts of things like 
debris removal, just to take an obvious category, and almost 
all of it going to mega-contracts, to mega-firms, outside 
Louisiana. And the only Louisiana small business participation 
was six rungs of subcontracts down, pennies on the dollar.
    And we did some analysis comparing that, for instance, to 
local jurisdictions that had preexisting debris removal 
contracts with local, and those were much more efficient, much 
lower cost for the taxpayer, much bigger positive impact for 
local businesses, which helped with the recovery.
    So we tried to address that in the RISE Act.
    Going back to Mr. Kramer, there has been real delay in 
SBA's formulation of guidelines for Federal agencies to meet 
that local requirement. What is the cause for delay? How are we 
going to break through that?
    Mr. Kramer. So, on that specific provision, we do have a 
draft of rules that we are currently consulting with the FAR 
Council because eventually the way we expect that process to go 
is we would take the regulations on the local contracting 
preference and incorporate that into the general Federal 
procurement policy rules. And so we are in that stage of the 
discussion right now with them to get those provisions 
implemented.
    Chairman Vitter. Okay. Again, if you could follow up with a 
specific timeline that we can stick to because this is another 
big, big priority of many members on this Committee and 
otherwise.
    Okay, now we will go to Senator Peters. I think that order 
is right.
    Senator Peters. I will be happy to go. But Senator Booker, 
were you?
    Senator Booker. No, sir. It is on you, Senator Peters.
    Senator Peters. Well, thank you, and my accolades to you as 
well for passing because you were here before me. So I 
appreciate that.
    Senator Booker. I appreciate it. Feel free to take more 
time up if you would like to give me more accolades.
    Senator Peters. Thank you.
    Thank you, Mr. Kramer and Ms. Zimmerman. I appreciate your 
being here, and I want to echo what my colleagues have said. We 
appreciate your work in standing up for emergencies that occur 
around the country. It is something that we must do as a 
nation, to stand with those who are facing a crisis in whatever 
form. It goes to the core of who we are as a people, I believe.
    And that is why it has been somewhat concerning, and 
disappointing I think, with what has happened with the 
situation in my State with the City of Flint, which I think 
most everyone would agree has been absolutely a catastrophic 
disaster that impacted an entire community. You have poisoning 
of water that has impacted every citizen but in particular the 
children. As you know, lead poisoning can have an impact on 
brain development at an early age of exposure, which will carry 
on for an entire lifetime.
    We were pleased that the President declare an emergency, 
which has been helpful with both SBA as well as FEMA resources. 
But as you know, under the Stafford Act, it is not categorized 
as a major disaster, and a request from the State to have it 
categorized as a major disaster has been denied.
    Although, I can assure you if you ask any resident of the 
City of Flint if this is a major disaster they will not have to 
think very hard or long about that. And certainly, if you ask a 
child if this is a major disaster, given the situation that 
they may have been poisoned for their rest of their life, it is 
pretty clear to parents and everyone around them that it is a 
major catastrophe.
    So I guess we probably need to change that, and I certainly 
think we need to work on thinking through how we define 
disasters.
    But perhaps, Ms. Zimmerman, you could explain to me some of 
the limitations that are placed on FEMA as well as the SBA 
without a major disaster declaration, although we do have this 
emergency declaration. What are some of those limitations, and 
how is FEMA's ability to respond impacted by the definition?
    Ms. Zimmerman. Sure. Thank you, Senator.
    As you stated, there is an emergency declaration, and we 
have an authority to respond whether it is an emergency 
declaration or a major disaster declaration. Based on the 
governor's request to have assistance with bringing in the 
water, the cartridges, the filters, and the test kits, we have 
been doing that since January 15th when the major disaster 
declaration was made, making those resources available to the 
State and on down to the community of Flint so that they have 
that and have the accessibility of all of those commodities. So 
there is no difference between the emergency declaration and a 
major disaster declaration in us being able to provide what was 
being asked for.
    And we are working side by side with the State and with 
HHS, Health and Human Services, who has the lead for this event 
on the other side, to make sure that as the governor's office 
has stood up in the local community, to have their long-term 
recovery committee looking at this and the full impacts of that 
and what might be needed in the future. So we are participating 
also with that on that side of it.
    Senator Peters. Although I understand the emergency 
declaration has been extended just to August?
    Ms. Zimmerman. The governor asked for it to be extended 
until August 15th, and we have done that.
    Senator Peters. But my understanding is that FEMA also said 
that this would be the last extension. Is that correct?
    Ms. Zimmerman. So, yeah. So emergency declarations are 
meant to be in an immediate emergency. It is usually between 60 
and 90 days. This one we have extended for seven months, for a 
total of seven months. So, looking at that, we would be looking 
to the governor's committee on long-term recovery as well as 
the Flint Recovery Group to be looking at what actions they are 
going to be taking and how this situation will be addressed.
    Senator Peters. So even though the statement was made that 
this would be the last extension until August, is it possible 
to extend it beyond that? Because it is clear that this is an 
emergency that is going to last well beyond August?
    And my concern, quite frankly, for Flint, is that although 
it is receiving a lot of national attention now, there are TV 
cameras, and the lights are shining very brightly, eventually, 
that all goes away. And the problem is still very much there 
and will continue to be an insidious problem for decades to 
come.
    How can we work with FEMA to extend? And if the governor 
requested, what is the process to get additional Federal 
assistance?
    Ms. Zimmerman. Sure. Thank you, Senator.
    So, yeah. So the intent of an emergency declaration, as was 
given to us by Congress, was for those situations that are of 
immediate impact--as I say, 30, 60, 90 days. So we have 
extended it.
    Emergency work, if you do have a major disaster 
declaration, the most that usually goes for is six months. So 
we would have to look at this because the intent of the 
emergency declaration is not to go on for years, but something 
that would be handled, and then you would look for what is the 
longer-term solution to the issue.
    Senator Peters. Right.
    Ms. Zimmerman. So we would be happy to--we are 
participating in those discussions, as I say, with the 
governor's recovery committee as well as the Flint Recovery 
Group.
    Senator Peters. Great. Well, I appreciate it. I see my time 
is expired.
    And, Mr. Kramer, I appreciate the SBA's efforts on loan 
assistance as well in the City of Flint.
    But it is just my hope that both of your agencies 
appreciate, and I believe you do--you have folks on the 
ground--and realize the long-term nature of this.
    And when it comes to the recovery of small businesses in 
particular, it is definitely long term in the fact you have 
reputational risk, especially for our restaurants and other 
places in Flint, where it may be a long time for people to come 
back to those types of businesses, which is much different than 
what you have in a natural disaster. When the hurricanes pass, 
it is past. This is something that may have lingering, residual 
impact, and I certainly hope the SBA will continue to be there 
helping our local businesses.
    Mr. Kramer. Yes, Senator, we plan to be. I think you have 
seen in our response, in addition to our traditional loan 
programs, which is often what we bring to disaster areas, I 
think we identified in Flint that there was a need for 
additional business counseling services, additional micro-loan 
services. Administrator Contreras-Sweet went out and announced 
some of those efforts. So I think we realized it was a unique 
situation, different from some of the other disasters we have 
seen, and I think have put in place some support that will help 
that long-term recovery.
    Senator Peters. Great. Thank you. Thank you both.
    Senator Booker [presiding]. Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman, and certainly 
appreciate your discretion in allowing us to ask questions 
before you.
    Like many of my colleagues who have asked questions about 
disasters that have already occurred, I do, too. And so 
although I want to point out that we are doing a big Cascadia 
exercise in Washington in a few weeks, or actually I think it 
is in June, where nearly 6,000 people are going to participate 
in a response plan for a possible tsunami event or something in 
the Cascadia subduction zone. So we are talking about 
something, you know, on a grand scale that could impact 
thousands of people. So definitely appreciate FEMA's 
participation in that.
    But, two things. One, in the fires that we have had, we saw 
both the declaration by FEMA that there was not enough housing 
density to reimburse on the housing issue, and I feel like 
there is basically a prejudice against our rural communities 
that are clearly communities. If you have a valley community, 
which is what the Twisp Valley was, and yet because it is not 
in a dense concentration, and yet when hundreds of homes are 
wiped out by a fire--and it is a tourism area. So if you do not 
have workers to rebuild the homes, then you are not going to 
have the same economy, which affects our whole state economy.
    So I wonder what FEMA is willing to do to review that. You 
turned down the request, but I do not even mean the specific 
request now. I mean, what do you think about this issue that 
there is a prejudice against areas that are not as dense? 
Because I just do not think you are taking into consideration 
the economic footprint of a rural economy and in these cases 
where you are talking about whitewater rafting, skiing--you 
know, again, destination tourism areas.
    The second issue that has come up in both the Oso disaster 
and the two fire seasons that we have had, which have been the 
worst, I think the cost is--we think one of our tribes probably 
had a $2 billion timber loss. That is how much economic impact 
we are talking about.
    That we do not have a good communication plan--there seems 
to be a chicken and an egg between when a broadband 
communication system is going to be deployed because no one 
knows who is going to pay for that.
    So, in the Oso case, literally, two communities were 
separated by a mudslide that was devastating, and the broadband 
was knocked out. And so the question was: Who is going to pay 
for the communications? Who is going to pay for the disaster?
    In the two fires, one, the fire basically burned up the 
broadband, and so it was gone. And in the second fire, 
literally, a similar situation happened. A command center was 
trying to provide response to this whole county about whether 
they should evacuate or not, but no one had any way to 
communicate with anybody.
    So I would rather see some temporary deployment of 
broadband communication by FEMA, emergency response in the 
emergency, and us not worrying about this issue of, okay, well, 
now we have to gather all the information, have to submit it, 
wait to see if there is a declaration before we are going to 
provide the communication.
    If these people are responsible in the middle of a fire 
season for the evacuation plan, whether the valley should 
evacuate, and yet we have no broadband and no one wants to 
deploy the emergency communication, how is that an emergency 
response?
    So, Ms. Zimmerman, I do not know if you have some 
suggestions for either of those problems.
    Ms. Zimmerman. So, yes. Thank you, Senator.
    So on the first one, for individuals. So density of the 
houses is just one of the criteria that we look at. So, 
obviously, we look at overall population but what the impacts 
are. We look at the demographics of those that were impacted by 
the disaster.
    We look at what the state should be able to assist with. As 
we know, when the local community gets impacted, then it goes 
up to what the county can assist with, as well as what the 
state can assist with, before it rises to the level of what the 
Federal Government and what the impacts would be that would 
have us come into it.
    So we look at many different factors. One of the things----
    Senator Cantwell. And is that an economic issue, do you 
think? Is there some economic threshold?
    Ms. Zimmerman. We look at the economic, but we cannot do 
anything for the economic side. That is where we rely on our 
partners at SBA for economic recovery from events. So as we 
look that--but that is something that has been an issue for a 
long time.
    And from the Sandy Recovery Improvement Act--back in 2013, 
that was passed--it gave us the ability to look at the 
individual assistance and to be able to look at the criteria 
that we would be looking at and how we would be able to say 
whether or not a state can handle it, what is the state's 
responsibility, the state's capabilities, and to be able to 
look at that. So that is some guidance that we have looked at.
    We have worked with our state and local partners to 
identify how should we be looking at individual assistance 
differently. So I can tell you that that guidance--we are 
working together. We published some information in the Federal 
Register, we got comments on that, and we about to--I would 
hope before the end of the year, we would be publishing the new 
criteria for individual assistance. So that is something we 
have been working hand-in-and with----
    Senator Cantwell. Is there anything about this density 
issue?
    Ms. Zimmerman. So, yes. So that is part of what it is that 
we are looking at, as well as how we can truly look at the 
financial capability. A lot of it comes down to what financial 
resources are available at both the local and the state 
governments. So that is something we looked at.
    So, as I say, that should be coming out here before the end 
of the calendar year.
    Senator Cantwell. Okay. And what about the communication, 
broadband communication?
    Ms. Zimmerman. Communication. You know, we have our mobile 
emergency response communications that we can dispatch when it 
is needed. When you were talking about you have to gather all 
the costs to see who is going to reimburse, if it is coming to 
rebuilding something, that does come after a presidential 
disaster declaration.
    But when us--looking when you are talking about fires, in 
the U.S. Forest Service and their efforts, they are the lead 
when it comes to forest fires and the resources and things that 
go out for that. So not being able to look at that, what 
resources they have, but if we are called in to assist we can 
do that with--we have mobile communications vans and trucks 
that go out.
    Senator Cantwell. I see my time is expired, but I want to 
follow up with you on that because I really do think there is a 
gap here. And I am happy to put it in writing and maybe get 
some response.
    Ms. Zimmerman. That would be good. We would look----
    Senator Cantwell. But I definitely feel like we are still 
in the emergency and there is no broadband communication and it 
does not get deployed. So I still feel like there is a chicken 
and egg here.
    And I would appreciate if you would also look at--there is 
a--after the Carlton Complex, which at that moment was the 
biggest fire in our State's history. There are some FEMA 
requests that are still unresolved in that Carlton Complex as 
far as water main damage that was done. So if you could get us 
a response on that, and we will get that to you in writing.
    Thank you.
    Chairman Vitter [presiding]. Great.
    Senator Booker.
    Senator Booker. Thank you very much, Mr. Chairman.
    Before I start my remarks, I just want to give an 
acknowledgment to the staffer in the back there who is holding 
up the number sign. He is going above and beyond the call 
today. And I will also mention that he has----
    Chairman Vitter. Oh, I thought that was a rating, actually.
    [Laughter.]
    Senator Booker. Let's also mention for the record----
    Chairman Vitter. I was noting that none of us were getting 
above 5.
    Senator Booker. No, no.
    [Laughter.]
    Chairman Vitter. I am glad to see it is the time.
    Senator Booker. Which, as you know, these days for 
Congress, that is still a generous rating.
    But I will note that he has the second-best haircut in the 
room right now.
    So I just, again, want to--I cannot say how grateful I am 
and my office is since, literally, the week that I arrived, in 
fact before I was sworn in, in the special election, we began 
working closely with FEMA and then the SBA on the urgencies 
around Sandy. It has not always been a road without bumps, but 
we have been so grateful for the responsiveness, corrective 
actions, and even partnering with people like Senator Vitter 
with the RISE Act, in trying to make sure that we are doing 
everything possible.
    I will note that the reopening of the centers has resulted 
in tremendous resources being brought to businesses in my home 
State. And so I really cannot say enough with the open lines of 
communication, the partnership, the working together, and 
really what this is all about, which is helping people in our 
respective states. So thank you all for that.
    I am just going to go with some general questions because, 
obviously, I feel very much that I am getting a lot of the more 
particular questions regarding Jonas and Sandy.
    But just generally, you know, the destruction of 
residential homes and displaced local populations takes a major 
toll on local economies. There is incredible evidence showing 
that a dollar spent for mitigations before a disaster strikes 
saves about four bucks in the aftermath. It is just sort of 
common sense and even fiscal conservatism. It is like, where 
would you rather put the resources?
    But from 2011 to 2014, FEMA Spent 14 times more within its 
mitigation programs after rather than before a disaster. So 
just as a matter of thought on this and your input for the 
record, Ms. Zimmerman, how can FEMA correct this seeming 
imbalance in its approach to pre- and post-disaster mitigation?
    Ms. Zimmerman. Sure. Thank you, Senator.
    So the--I am not going to--the pre-disaster mitigation 
program does not fall within my purview but very well aware of 
the Hazard Mitigation Grant Program. So, after disasters, 
communities get 15 percent of the total cost for individual 
assistance and public assistance combined, an additional 15 
percent on top of that. That then gets expended for mitigation 
grant projects, which the state then administers, makes the 
selection of those projects.
    And if a state has an Enhanced Mitigation Plan, they can 
get 20 percent of that total cost of the disaster.
    Senator Booker. Right. But just in general--and I 
understand that.
    Ms. Zimmerman. Yeah.
    Senator Booker. And these are great programs that we have 
taken advantage of.
    Ms. Zimmerman. Yes.
    Senator Booker. But don't you think a rebalancing, seeing 
what you are doing after the fact, that it could have maybe 
even prevented if we had done work? Don't you think it requires 
a rebalancing? I am asking you to opine here if you would.
    Ms. Zimmerman. So for us, I mean, we are given the dollars 
that we are given to work with and the statutes that allow us 
where we can pay for mitigation.
    So a lot of--I have to give accolades to a number of states 
and local communities that put their state and local dollars 
into the mitigation projects that they do. A lot of them do far 
more than is provided by the Federal Government when it comes 
to mitigation ahead of time.
    Senator Booker. No. I appreciate that.
    And then just real quickly in the two minutes I have 
remaining, you know, it is about to be hurricane season right 
now, and I just want to know--maybe I will turn to the SBA. Are 
you doing anything to prepare for--you know, we have heard from 
everywhere from Florida to, obviously, concerns I have, and 
Louisiana. Are we doing anything to be proactive, learning what 
we have from storms like Jonas and Sandy?
    Mr. Kramer. Absolutely. So in response, I mean, we are 
still, as I suggested in my opening remarks, implementing the 
solutions to the lessons we learned from Sandy. A lot of that 
for us is centered around automating our programs. We are a 
good deal of the way down that road but not all the way there 
yet, but we expect that over the next 6 to 12 to 18 months we 
will have a fully automated system online.
    We have found in some of the larger disasters we have 
responded to in the last couple of years--the flooding in 
Dallas, the flooding in South Carolina--that we have been able 
to significantly reduce our response times, to get answers to 
people applying for our loan programs, down to a matter of 10 
days or so, a few days longer for businesses, shorter for 
homeowners.
    And we have confidence that we will be able to scale that 
up to respond to even a much larger incident like a hurricane. 
Our application process, the way we process those loans and 
distribute them, I think are all far down the road of being in 
a fully automated system so that we will be able to respond 
more quickly even when we do have to scale up to hurricane 
levels.
    Senator Booker. Thank you, Mr. Chairman.
    Chairman Vitter. Thank you very much.
    Senator Markey, perfect timing. If you are ready, you are 
up. Otherwise, I can go on a second round.
    Senator Markey. I might need FEMA relief here.
    Senator Booker. You, sir, are not a disaster.
    [Laughter.]
    Senator Markey. May I hold just for a minute?
    Chairman Vitter. Yes. I am going to go to a second round. 
Maybe you can follow me if that is okay.
    Ms. Zimmerman, you heard my concerns about involving local 
small business in recovery and cleanup. You mentioned that 
issue in your comments, and previously Ms. Gerilee Bennett from 
FEMA in a roundtable discussion commented on FEMA efforts to 
better involve local small business. What is being done from 
the FEMA perspective? Because I think that is such a missed 
opportunity in the past in helping the economy recover through 
these local small businesses.
    Ms. Zimmerman. Sure. I appreciate that, Chairman.
    So, as we are looking at disaster recovery work, FEMA 
ourselves does not contract with small businesses to do debris 
removal and to do other projects. That is through the grant 
money that we give to the states, tribes, and local 
communities.
    But what we do when we set up our joint field offices is 
any staff that we need to hire, such as the security, do local 
hire programs so that we, as you say, bring back into the 
community. Then also, as we go out and purchase, if we need to 
purchase commodities or things, we try to do that on the local 
basis. And then also, encouraging folks.
    One of the great elements of the Sandy Recovery Improvement 
Act is for the debris removal, and as you noted in your 
comments. So being able to pay local communities that have gone 
to the effort to put together a debris plan, to put together 
pre-identified contractors, local contractors that they could 
call upon in times of need and to be able to do their debris 
removal, as well as to be able to reimburse those local 
communities if they use their own workforces to do that debris, 
which would not be part of their normal job duties.
    So those efforts from the Sandy Recovery Improvement Act 
have really--we have seen a lot more debris being removed 
quicker, as well as less expensively, and to employ both local 
contractors as well as the local community through their own 
efforts.
    Chairman Vitter. Okay. Great. Thank you.
    Mr. Kramer, I mentioned previously the lack of 
implementation of programs in the 2008 Farm Bill. Has SBA 
completed revising its own planning documents. If not, when is 
that going to happen, and why hasn't SBA reported to Congress 
on issues it has with implementing those mandated programs, if 
there are problems or obstacles?
    Mr. Kramer. Thank you, Chairman. I am happy to provide that 
update.
    As we addressed before, with the three different forms of 
those programs--the IDAP, EDAP, and PDAP.
    On the IDAP, we issued regulations on that program to 
implement that program in October of 2010. We have not yet, 
though, had utilization of that program because, again, the 
banks that are making the loans have not sought to utilize that 
program.
    So in order to modify that program to increase utilization, 
and also figure out how to design the other programs so that 
they would not run into similar obstacles, we recently put out 
all three for an ANPRM to get comments from the banks 
themselves about the programs and what they would like to see. 
We recently closed that. We received about 20 comments 
including from the 2 largest industry groups, and there was 
decent expression of frustration by those banks about how they 
could make this work.
    And so we are engaged in a dialogue with them right now 
about how we can redesign the programs to make it something 
that they would choose to take on. There are some risks that 
the banks would take on in those programs, and they are trying 
to figure out what we can do to support them in doing that in a 
way that would be beneficial to them.
    So we are reviewing those comments right now, and I would 
be happy to have our staff reach out to your staff once they 
have reviewed those comments and provide a report on what we 
are hearing about those programs and to talk about a way 
forward.
    Chairman Vitter. Okay. Could you also--I know I sound like 
a broken record. Can you also give us a timetable about how we 
are going to work this?
    Mr. Kramer. Yeah. And I think that one--
    Chairman Vitter. This stuff does go back to the 2008 Farm 
Bill.
    Mr. Kramer. We will do that.
    Chairman Vitter. Okay. And then finally, Mr. Kramer, one 
significant need for a lot of this to move more effectively is, 
in some cases, automating the approval process for disaster 
loans, other technology, IT issues. However, SBA has had 
difficulty in the past in implementing large IT and technology 
projects. What is the SBA doing to ensure that its IT 
modernization projects, including DCMS 2.0, will be completed 
on time?
    Mr. Kramer. We have a five-minute limit for this? I could--
we have been working--I have been working directly on some of 
the IT challenges at the agency since the day I got there a 
year ago, and we are working on this on a number of different 
fronts.
    One of the things we have done that might get most directly 
to part of your question is that we have identified the parts 
of our IT system that are--you could argue it is all essential, 
but--the most essential. When you look at our financial 
systems, it is our capital access program and our disaster 
systems. We have taken efforts to sort of prioritize and 
emphasize those processes.
    And so I think we do have sufficient funding in place. We 
are sufficiently far down the road in procuring the contractor, 
who has already done this sort of scope of work, to implement 
DCMS 2.0, and that is on track. And I think that is something 
that we will do successfully on time because we have already 
taken a couple of steps in that direction.
    We have successfully implemented the online application, 
which is now being utilized in 90 percent of circumstances of 
people applying.
    We also, just within the last couple of weeks, set up phase 
one of our web portal, which is the external-facing part that 
allows disaster survivors who have applied for a loan to go 
online and see exactly where their loan is in the process.
    The part in the middle that remains is to make sure that we 
take our processing systems and fully automate them so they can 
be flexible and scalable as well.
    But I think with the success we have had to this point I 
think we will continue to have that in rolling out DCMS 2.0.
    And I think when you look at what we have done with SBA 
One, and the success we have had in sort of building up the 
automation we have for our lending programs, and rolling that 
out, I think we have seen good success in that regard.
    So this is certainly not an issue that I will be resting 
on. There are a number of IT challenges across the agency. But 
I do think that we are making positive efforts and moving 
forward on a number of them.
    Chairman Vitter. Okay. Now we will turn to Senator Markey.
    Senator Markey. Thank you, Mr. Chairman, very much.
    And we thank all of you for your great work. I want to 
begin by first thanking FEMA for your great work in helping us 
up in Massachusetts after our 111 inches of snow last winter. 
FEMA was just great, and I want to put that on the record.
    We had 111 inches of snow, and Anchorage, Alaska had 20. 
They had to actually truck in snow to begin the Iditarod race. 
They had to do the same thing again this year. So, clearly, the 
weather is changing, and FEMA has to adapt to it, and we thank 
you so much for that.
    And to the SBA, thank you so much. You were there after the 
tragic Boston Marathon bombings. And when tornadoes swept 
through the Cities of Revere and Springfield, the SBA made 
Federal disaster loans to those communities.
    And we in Massachusetts, we say, ``There but for the grace 
of God goes us.'' If Hurricane Sandy had just been another 
degree off and just hit us, we would still be in recovery.
    So may I ask this? As FEMA and the SBA look at this change 
in climate and the impact that it can have, especially on small 
businesses, I look at a restaurant, Haddad's, down on the south 
shore of Massachusetts that 10 years ago was told that they 
were too close to the ocean. So they had to move it actually up 
onto the side of a hill. And then the new maps came out two 
years ago, and they were told that that is now no longer 
acceptable, that they have to go even higher if they want to be 
able to--in the long run, be able to qualify for low-cost 
insurance.
    So can you talk a little bit about that issue, and 
especially how it impacts the SBA, and what planning FEMA has 
in place in order to deal with that issue of the ever-rising 
tides related to the warming of the oceans and the 
intensification of the storms?
    Up in New England, actually, our oceans are warming faster 
than just about any other place in the world right now. So 
could you deal with that, Ms. Zimmerman or Mr. Kramer?
    Mr. Kramer. Thank you, Senator, for that question.
    As a part of what we do, I would say that our first 
response, or our first priority in providing a response, to 
disaster survivors is to allow them to rebuild and get back to 
a life as normal as it could have been before the disaster. In 
doing that, we do make sure in the disbursement process that 
people who are going through a moment of crisis have been 
thoughtful and prudent about what they plan to do as far as the 
disaster recovery goes and so that they are going to be doing 
sufficient repairs to make sure that they have a sustainable 
structure and home once they are done building.
    And adding in the RISE Act the ability for them to put a 
safe room into that dwelling is one advance in that direction, 
trying to have that sort of advance thought.
    I know that we continually look in the demands that we put 
on folks to do prudent rebuilding. We are looking all the time 
at these same sorts of issues of what are responsible ways to 
rebuild and what standards we are----
    Senator Markey. So looking out in the years ahead, do you 
think that the SBA's budget and FEMA's budget will actually 
have to be increased in order to deal with the ever-increasing 
power of these storms to damage small businesses, Ms. 
Zimmerman?
    Ms. Zimmerman. So, yes. So from FEMA's side, we rely on SBA 
because we do not have the authority to provide assistance to 
small businesses. But, yes, definitely looking at the extreme 
weather that we have seen and that we know we are going to see 
more of and the changing climates and everything else.
    So, really, what we have been focused on is taking a look 
at not necessarily--most of our programs were rebuild to what 
had been in the past, but really taking that emphasis look on 
what could happen in the future and how can that risk, how can 
the rebuilding and the recovery that we have a part of make 
that be so it is insurable going forward, and so that we are 
looking to what could happen in the future instead of always 
looking backwards as our programs have previously.
    Senator Markey. Do you think that Congress should amend the 
Stafford Act to allow for adaptive rebuilding for communities 
after natural disasters like Hurricane Sandy?
    Ms. Zimmerman. So, I mean, we are constantly looking at our 
programs, and what it is we can do under the wide range and the 
ability with the Stafford Act, and how we can best support that 
to be building and rebuilding for the future.
    Senator Markey. And do you have specific recommendations as 
to how the agency can improve its response to a similar 
disaster like we had last winter in Massachusetts?
    Ms. Zimmerman. So, for us, working hand in hand with the 
state is very important for us to make sure that we are there 
in support of them as we have been trying to lean forward when 
it comes to disaster response. So as we see things happening 
when we do have a notice for them, to make sure that we have 
whether it is our commodities out there, our folks working side 
by side in the emergency operations center there, just to be 
able to be there and to get that knowledge, and to be able to 
make sure that the resources flow shortly thereafter.
    When you do have 111 inches of snow, you have got to make 
sure people are safe and those actions that those local 
communities can take so that residents are not in harm's way.
    Senator Markey. And does the SBA have any plans for helping 
to adapt to this climate change which is taking place? Is that 
part of your thinking at all at this point?
    Mr. Kramer. When you look at our role in the disaster 
response, it is generally working on an individual basis with 
disaster survivors, be them businessowners or homeowners, and 
doing that sort of one-on-one relationship.
    Generally, the sort of larger communitywide planning and 
working with community institutions to take those sorts of 
steps are things that are handled by our colleagues at FEMA and 
other Federal agencies.
    So to the extent that we can do that, and making sure that 
businesses and individuals are being responsible in the way 
that they rebuild, that is the way it usually manifests in our 
program.
    Senator Markey. Excellent. Thank you.
    Thank you, Mr. Chairman.
    Chairman Vitter. Okay. Thank you.
    Senator Scott.
    Senator Scott. Thank you, Mr. Chairman, and thank you to 
both the witnesses for being here today.
    As you both, I am sure, are very aware the fact that my 
State, South Carolina, experienced devastating floods back in 
October, which led to, of course, a recovery effort to rebuild 
our communities, our homes, our businesses, and especially our 
farms. Our farming community was--agricultural community was 
devastated in many ways, and certainly the resources necessary 
to rebuild are still in question, and we are still looking for 
ways to be of assistance to our farming community and our 
agriculture community.
    In many ways, our State recovers quickly, but the only way 
that we have been able to recover truly has been through the 
assistance of both the SBA and FEMA. You guys have provided a 
lot of boots on the ground, a lot of manpower, a number of 
hours, and frankly, a lot of dollars and resources going into 
South Carolina that we are very thankful for.
    When I think about the impact of the storm on my community, 
I think about the fact that Chairman Vitter was kind enough to 
allow me to hold a hearing in South Carolina. What we heard 
from that hearing was many of our citizens were very thankful 
for the responsiveness of both agencies, very thankful for 
their interactions and their communications on a consistent 
basis, seemed to be positive which, of course, in the midst of 
a storm is not necessarily always what one would expect.
    There were some challenges, of course, and I would like to 
ask a couple of questions about some of those challenges.
    Ms. Zimmerman, I understand that over the past few months 
FEMA issued over $150 million in loans and several million more 
in grants to South Carolina residents. However, there were 
still some FEMA claims that are outstanding, still pending. I 
am not sure if you have an idea of how many cases or claims 
that are still pending. Do you have an idea of what that number 
would be for South Carolina?
    Ms. Zimmerman. Thank you, Senator.
    I do not, if you are talking about flood insurance claims 
or--because just note that our Individual Assistance Program is 
not a loan; those are grants that go out to the homeowners.
    Senator Scott. Yes.
    Ms. Zimmerman. And so if you are talking about flood 
insurance claims, I do not know how many are still pending, but 
I can get that information.
    Senator Scott. That would be great if you could get that 
for me.
    Ms. Zimmerman. Sure.
    Senator Scott. Another question for you, ma'am. Do you have 
any recommendations for ways to reduce the hurdles or the 
bureaucracy that is in your agency to make it easier and 
perhaps more efficient for folks who are waiting for those 
claims to be finished up? Is there any way that we could 
expedite that process, or do you see any hurdles that we can 
work on clearing out of the way?
    Ms. Zimmerman. Yes. So, if those are the flood insurance 
claims----
    Senator Scott. Yes.
    Ms. Zimmerman [continuing]. That does not fall in my 
purview in response and recovery, but I will definitely go back 
and meet with Roy Wright, who is our Associate Administrator 
over flood insurance, and be happy to get that information and 
to provide any additional assistance that we think could help, 
if there is anything that we need from the State to help 
process those claims.
    Senator Scott. Okay. Thank you very much.
    Ms. Zimmerman. Sure.
    Senator Scott. Thank you, Mr. Chairman.
    Chairman Vitter. Okay. That wraps up our discussion.
    Thank you both very much for this discussion and exchange 
and also, even more importantly, for your ongoing work in all 
of our states, certainly including mine right now due to the 
recent flooding.
    We identified a number of things where we requested 
information and will actively follow up. So we will follow up 
on all of that and have as a goal working to improve responses 
in all of these areas.
    Thank you very much.
    [Whereupon, at 3:22 p.m., the hearing was adjourned.]

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