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24–852 PDF 2017

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 

( 

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

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(II) 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED FOURTEENTH CONGRESS 

DAVID VITTER, Louisiana, Chairman 

JEANNE SHAHEEN, New Hampshire, Ranking Member 

JAMES E. RISCH, Idaho 

MARCO RUBIO, Florida 

RAND PAUL, Kentucky 

TIM SCOTT, South Carolina 

DEB FISCHER, Nebraska 

CORY GARDNER, Colorado 

JONI ERNST, Iowa 

KELLY AYOTTE, New Hampshire 

MICHAEL B. ENZI, Wyoming 

MARIA CANTWELL, Washington 

BENJAMIN L. CARDIN, Maryland 

HEIDI HEITKAMP, North Dakota 

EDWARD J. MARKEY, Massachusetts 

CORY A. BOOKER, New Jersey 

CHRISTOPHER A. COONS, Delaware 

MAZIE K. HIRONO, Hawaii 

GARY C. PETERS, Michigan 

MEREDITH WEST, Republican Staff Director 

ROBERT DIZNOFF, Democratic Staff Director 

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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 

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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 

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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 

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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, 

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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. 

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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 

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6 

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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'1'.,._ l'i'53 ·"' 'VIS1'\II." 

U.S. Small Business Administration 

TESTIMONY of 

DOUGLAS KRAMER 

Deputy Administrator 

U.S. Small Business Administration 

U.S. Senate Small Business and Entrepreneurship Committee 

Wednesday, April6 2016 
8 

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Insert offset folio 3 here 24852.003

Chairman Vitter and Senator Booker, thank you for this opportunity to testify about SBA's 

commitment to provide timely disaster assistance- and to update you on our efforts in response 

to last month's Presidential disaster declaration for flooding in Louisiana and our work to 

redouble our efforts on behalf of those still impacted by Superstorm Sandy. 

I was confirmed as Deputy Administrator last June. At the open let me share my observation that 

SBA's vital role in providing disaster assistance is felt deeply by SBA employees who work 

diligently to be ready to provide services at unknown times in unknown places in a way that 

shows compassion for disaster survivors. And I have come to be inspired by and share their 

conviction. On the worst days of people's lives, SBA must be at our best, to provide financing, 

resources and counseling to help Americans rebuild. 

Last year alone, SBA was on the ground for II 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 more than 30,000 applications; and disbursed more than $340 million in 

loans to disaster survivors. 

SBA's committed professionals have been doing this work for a very long time. In fact, our 

Office of Disaster Assistance reached a historic milestone last year: We surpassed 2 million 

disaster loans approved since our founding in 1953. Over those years, we've awarded more than 

$54 billion in disaster loans for small business owners, nonprofits, homeowners 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 30 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 members on 

the ground across Louisiana, working in concert with FEMA. To date, we've received 2,221 loan 

applications and approved $14.2 million in financing, with millions more expected in the coming 

days and weeks. 

I also want to thank Senator Vitter, Senator Booker and members of this 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 an impact. 

As this Committee knows, the devastation caused by Sandy was historic and far-reaching. It was 

the second-costliest Atlantic storm in American history, after Hurricane Katrina. Sandy claimed 

162 lives, displaced 775,000 Americans, and destroyed hundreds of thousands of homes and 

businesses. In response, SBA has approved more than $2.5 billion in low-interest loans to more 

than 37,000 individuals and businesses affected. 

Long after the mainstream media turned its focus away from the devastation wrought by this 

disaster, this Committee kept fighting for Sandy's survivors. Your bipartisan leadership has 

enabled SBA to re-open the disaster loan application process this year for those still working to 

rebuild in Sandy's aftermath. 
9 

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Since the RISE act authorized re-opening assistance to Sandy victims four months ago, we've 

received more than I ,879 applications. We opened 29 centers in 9 states and maintained a field 

presence for I 05 days. During that time we serviced more than I ,505 disaster survivors that 

visited the centers and conducted more than 330 loan closings. Our average processing time on 

these applications has been reduced to just 9 days, and we've already approved an additional 

$34.8 million in disaster assistance. 

SBA learned some valuable lessons after Sandy; now we're applying them. As you'll recall, after 

Sandy, too many storm victims had to wait a month or longer to get their disaster claims 

processed by SBA. That's unacceptable, and we've taken steps to ensure this never happens 

again. 

Prior to Administrator Contreras-Sweet's arrival at SBA two years ago, it was the agency's longstanding policy to process loan requests on a first-come, first-served basis regardless whether 

they came from homeowners or business owners. After Sandy, home loan applications were filed 

more quickly than those for business loans, because it often takes entrepreneurs longer to make 

damage assessments and evaluate their economic losses. As a result, many of the 4,200 business 

owners who requested disaster loans ended up near the back of the queue. As a member of the 

Hurricane Sandy Rebuilding Task Force, SBA worked to institute new and innovate process 

improvements and created separate tracks for processing business loans and home loans, so small 

business owners will not be unduly delayed. In business, time is money. Our new processing 

system is geared toward helping small businesses rebuild and reopen as soon as possible. 

I've 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 are particularly well suited to the demands ofODA's 

work, which requires flexibility and the need to scale up in just a few days. 

Some of the improvements have already been implemented. We have updated our online 

disaster loan application, so applicants can fill out a form on SBA's secure website and submit it 

digitally. Today, 90 percent ofSBA disaster loans are being submitted online. We know that 

applications that are intuitive and accessible will lead to faster to survivors getting back to predisaster conditions quickly. We have also recently launched Phase I of the web portal that 

provides information on the status of the disaster survivor's application. 

We have automated our loan application review, which has transformed our workflow process to 

prevent backlogs for all applicants. We have implemented an expedited approval process on 

loans where an immediate decision can be made due to an applicant's strong credit and 

confidence about the damage assessment. This allows us to turn more quickly to applications that 

require additional time to complete. 

As a result of these changes, SBA has reduced our processing time to 6 days for home loans, and 

I 0 days for business loans. We are now disbursing funds faster than ever before. Additionally, as 

a result of the RISE Act, we raised our limit on unsecured loans from $14,000 to $25,000 for 

physical repairs or economic losses. We've shaved weeks off disbursement times by relaxing 
10 

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these collateral rules on small loans. These changes help business owners and homeowners 

quickly jump-start rebuilding projects. 

And where disaster survivors need a little help making sense of it all- when they need to be 

more than a credit score and a damage estimate- we've overhauled our staffing models into 

integrated teams with a case manager for each applicant. And we expect by next year, our new 

DCMS 2.0 system will be live, which provides a completely automated system that will bring 

together in one place the application system, our processing I approval system, and permit 

applicants to track every step of their applications in real time. We expect significant benefits in 

terms of our speed and scope of operations. 

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 counseling 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, I've had the opportunity to visit our SBA Disaster Processing Center in Texas, as 

well as Disaster Recovery Centers in Louisiana and Missouri. I've 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 the most. I am proud to work with them, encouraged by the 

improvements we've 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 your support, and I would be happy to answer any questions. 
11 

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. 

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12 

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. 

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13 

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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STATEMENT 

OF 

ELIZABETH A. ZIMMERMAN 

ASSOCIATE ADMINISTRATOR 

OFFICE OF RESPONSE AND RECOVERY 

FEDERAL EMERGENCY MANAGEMENT AGENCY 

U.S. DEPARTMENT OF HOMELAND SECURITY 

BEFORE 

THE 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

U.S. SENATE 

WASHINGTON, D.C. 

"Federal Disaster Response and SBA Implementation of the RISE Act" 

Submitted 

By 

Federal Emergency Management Agency 

500 C Street SW 

Washington, D.C. 20472 

April 6, 2016 
15 

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Introduction 

Good afternoon Chairman Vitter, Ranking Member Shaheen, and Members of the Committee. 

My name is Elizabeth Zimmerman and I am the Associate Administrator for the Office of 

Response and Recovery at FEMA, responsible for directing the Agency's response, recovery, 

and logistics programs and field operations. Thank you for the opportunity to testify about 

FEMA's support of the private sector during the disaster response and recovery process. 

At FEMA, we recognize how important it is for a community's recovery following a disaster to 

get local businesses, large and small, back up and running. Local businesses are where survivors 

work, get their resources, and connect with other members of their community. 

Today, I will provide an overview ofFEMA's disaster assistance programs and the initiatives 

we've established to coordinate with and assist the private sector during disaster recovery. I will 

also discuss specific support we are providing to local businesses during the current response in 

Louisiana. Finally, I will highlight some of the work we do during steady-state to help better 

prepare businesses to be more resilient in the event of a disaster. 

FEMA's Disaster Assistance Programs 

Following a Presidential disaster declaration, FEMA has three primary disaster assistance 

programs that can be activated to support affected communities: the Individual Assistance 

Program, the Public Assistance Program, and the Hazard Mitigation Grant Program (HMGP). 

The Individual Assistance program provides support for individual survivors, including grants 

for temporary housing and home repair or replacement for their primary residence, as well as 

other disaster-related needs such as medical, dental, child care, and funeral expenses. FEMA 's 

Public Assistance program provides supplemental federal funding to state, local, tribal, and 

territorial governments and certain non-profits on a cost-sharing basis for emergency work costs 

and repair or replacement to public infrastructure damaged during the disaster. The HMGP 

provides federal funding for hazard mitigation measures throughout a declared state or tribal 

nation to help build more resilient communities and reduce risk before the next event. 

Upon a major disaster declaration that authorizes Individual Assistance, the U.S. Small Business 

Administration's (SBA) low-interest disaster loan program is activated that includes loans for 

damaged property as well as Economic Injury Disaster Loans to help small businesses meet 

working capital needs. This program is the primary source of federal funding for affected 

businesses in the aftermath of a declared disaster. FEMA works closely with the SBA during a 

response, co-located at the Joint Field Office (JFO) in the affected area, to coordinate outreach to 

local businesses and educate them on these available assistance programs. 

Following a disaster declaration, FEMA deploys personnel dedicated to private sector 

coordination. These staff engage local chambers of commerce, business industry associations, 

and major local employers to ensure that FEMA understands the impacts of the disaster on the 

local business community. They also provide information to business leaders on the SBA's 

disaster loan program as well as FEMA's Individual Assistance program so that employers can 

help their staff get any assistance they may need for their homes and families. 
16 

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FEMA private sector specialists also collaborate with local private sector partners to provide 

information on how to do business with FEMA, which may include presentations to chamber or 

association membership groups outlining the requirements to be considered for potential 

contracting opportunities. 

Contracting with Local Firms to Support Community Recovery 

Section 307 of The Robert T. Stafford Emergency Relief and Disaster Assistance Act (P.L. 93-

288, as amended, 42 U.S.C. 5121-5207) directs FEMA, to the extent feasible and possible, to 

contract with local firms in the affected area for disaster response and recovery activities. 

To ensure there are no delays in getting support to survivors, at the beginning of a response 

FEMA relies on national surge contracts, interagency agreements, or mission assignments to 

other federal agencies. The Agency then transitions some of these functions, when practical and 

feasible, to local business contracts. The Stafford Act requirement is met during a disaster 

response by either establishing set-asides or an evaluation preference to local firms, as outlined 

in the Federal Acquisitions Regulation. 

All Procurement Unit Leads deployed to a disaster response are trained on local contract 

transition considerations, and how to identify local businesses that could be used for response 

activities. From 2010-2015, FEMA awarded more than $88 million in contracts to local firms 

for response activities. 

Local Hire Process 

In addition to supporting existing local businesses in disaster response efforts, FEMA also 

directly employs members of affected communities through our Local Hire process. As a 

disaster response progresses, FEMA will hire and train members of the community for positions 

across a wide variety of functions. This not only helps provide employment opportunity to 

survivors who may have been affected by the disaster, but also allows FEMA to employ staff 

who have connections to the community and understand the unique recovery challenges they 

face. 

National Disaster Recovery Framework 

Published in 2011, the National Disaster Recovery Framework (NDRF) identifies core recovery 

principles, establishes six federal Recovery Support Functions (RSFs), defines roles and 

responsibilities of recovery coordinators, and outlines the organizational structure for a federal 

recovery coordination mission to support state, local, tribal, and territorial governments. This 

framework, through the activation of the Economic Recovery RSF, provides a national 

coordination model that taps into whole community resources to support businesses and the local 

economy as it recovers. 

National Business Emergency Operations Center 

In 2012, FEMA established the National Business Emergency Operations Center (NBEOC), 

which facilitates two-way information flow between FEMA, impacted states, and the private 

sector during a disaster response. The NBEOC allows us to engage with key private sector 

stakeholders who bring resources, capabilities, and expertise to bear during a disaster response to 

determine impacts on their ability to provide services to the public. Participation in the NBEOC 
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is open to all members of the private sector, including large and small businesses, associations, 

universities, think tanks, and non-profits. 

NBEOC personnel, along with FEMA's Region VI Private Sector Liaison, worked closely with 

the Louisiana Business Emergency Operations Center at the onset of the March 2016 flooding to 

provide key response information to the affected business community and assess initial impacts. 

Ongoing Response in Louisiana to the March 2016 Severe Storms and Flooding 

On March 13, 2016, President Obama issued a Major Disaster Declaration for Louisiana (DR4263-LA) in response to severe storms and flooding. This declaration, and subsequent 

amendments, made funding available to both eligible individuals and state, local, and tribal 

governments in 30 parishes through FEMA's Individual and Public Assistance programs. The 

Hazard Mitigation Grant Program was also activated state-wide. 

Once the disaster was declared, more than 1,100 federal employees were deployed to support the 

state and implement the federal disaster assistance programs. Both FEMA and SBA deployed 

staff to directly support local business recovery. FEMA currently has six employees in 

Louisiana specifically dedicated to private sector coordination. These personnel are deployed 

throughout the designated parishes and are coordinating outreach and support to businesses 

through partnerships with: 

• counterparts at the Small Business Administration; 

• the Private Sector Coordinator in the Governor's Office of Homeland Security and 

Emergency Preparedness; 

• the Louisiana Business Emergency Operations Center; 

• local Chambers of Commerce; 

• State business and trade associations; and 

FEMA's Disaster Survivor Assistance Teams that deploy to affected areas and meet with 

affected individuals and businesses to provide information about federal assistance 

programs. 

Thanks to these partnerships, FEMA was able to immediately tap into business networks 

following the declaration and provide information about available assistance programs to the 

private sector. These businesses have also become partners in sharing that information 

throughout the whole community. For example, businesses are sharing FEMA Individual 

Assistance registration information on Outdoor Advertising digital billboards and Walgreens 

reader boards throughout the designated parishes. FEMA has also coordinated with a local utility 

company to print registration information on the billing statements of more than 200,000 

customers. 

Within ten days of the Louisiana disaster declaration, state and federal partners opened up eight 

Disaster Recovery Centers (ORCs) across the designated parishes, with more to follow. These 

centers are "one-stop-shops" for individuals and businesses to get information about available 

recovery programs. Representatives from FEMA's Individual Assistance Program and the SBA 

are available at all DRC locations to provide information and answer questions. 
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In coordination with SBA, FEMA's private sector specialists in Louisiana are sharing timely and 

relevant recovery information to affected businesses and monitoring emerging issues and trends 

in order to address high-level concerns if needed. FEMA private sector staff also support 

partners to facilitate events which can include Business Recovery Fairs, forums on business 

continuity and preparedness, and roundtables to discuss industry-specific issues. 

In the first ten days following the Louisiana declaration, FEMA contracted with multiple local 

firms resulting in more than $600,000 to the local economy for goods and services such as JFO 

security guards, translators and interpreters, and office supplies. 

Business Preparedness 

While this hearing is focused on disaster recovery efforts, it is also important to note that FEMA 

headquarters and all ten FEMA regions work year-round to engage businesses and encourage 

emergency and business continuity planning to help them recover more quickly in the event of a 

disaster. Preparing small businesses for all-hazards is a shared goal between FEMA and the 

SBA, with FEMA actively supporting SBA efforts to improve small business resilience. 

FEMA's Private Sector Division developed a Small Business Toolkit to make resources from 

across government agencies available to small businesses in one centralized location. This 

material is part of the larger Ready Business Campaign which is designed to help owners and 

managers of businesses prepare their employees, operations, and assets in the event of an 

emergency. The primary elements of Ready Business include web content for comprehensive 

business preparedness and Ad Council PSAs delivered through television, radio, print, outdoor 

advertising. The Ready Business website also hosts the Business Continuity Planning Suite 

developed by the DHS National Protection and Programs Directorate and FEMA. 

Each year FEMA collaborates with the DHS Private Sector and Infrastructure Protection Offices 

and with NORTHCOM/NORAD to plan a public-private partnership conference. In December 

2015, FEMA hosted the "Fifth Annual Business Resilience through Public-Private Partnerships" 

conference in New Orleans. Nearly 400 attendees from private sector businesses, non-profits, 

and state, local, and tribal governments gathered to pursue strategies to build a more resilient 

nation through community resilience. Conference participants developed action plans and a 

collection of shared resources to further their organization's resilience and nurture new 

partnerships. 

The Ready Campaign, FEMA Private Sector Division, and the Individual and Community 

Preparedness Division are also currently developing regional preparedness and operational 

coordination workshops for small business preparedness and how to develop public-private 

coordination mechanisms during disasters. These regional events are scheduled to begin in May. 

Conclusion 

At FEMA, we subscribe to a whole community approach to emergency management. All sectors 

of a community, including the private sector and specifically local businesses, need to be 

involved in preparing for, protecting against, responding to, recovering from, and mitigating 

against disasters in order for us, as a nation, to be more resilient. The federal family continues to 

work with businesses before, during, and after a disaster to support community resiliency and 

recovery. 

Again, thank you for the opportunity to testify today. I look forward to any questions the 

Committee may have. 
19 

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? 

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20 

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 

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21 

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? 

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22 

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 longterm 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. 

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23 

ality 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. 

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24 

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? 

LAP51NQ082 with DISTILLER

25 

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 megacontracts, 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. 

LAP51NQ082 with DISTILLER

26 

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? 

LAP51NQ082 with DISTILLER

27 

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 

LAP51NQ082 with DISTILLER

28 

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 

LAP51NQ082 with DISTILLER

29 

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. 

LAP51NQ082 with DISTILLER

30 

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. 

LAP51NQ082 with DISTILLER

31 

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 

LAP51NQ082 with DISTILLER

32 

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 contracLAP51NQ082 with DISTILLER

33 

tors, 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 

LAP51NQ082 with DISTILLER

34 

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. 

LAP51NQ082 with DISTILLER

35 

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. 

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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, 

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37 

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. 

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38 

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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APPENDIX MATERIAL SUBMITTED 

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Insert offset folio 1 here 24852.001

Opening Statement by Senator Jeanne Shaheen: 

Hearing: "Federal Disaster Response and SBA Implementation of the RISE Act" 

Senate Committee on Small Business and Entrepreneurship 

Wednesday, April6, 2016 

Good afternoon. Thank you to both of our witnesses for being here today to 

testify. 

When disasters occur and damage small businesses, we need federal recovery 

programs to work effectively and quickly. SBA and FEMA both play important 

roles during federal disaster responses. SBA aids long-term recovery and 

mitigation efforts through low interest loans, while FEMA is responsible for 

coordinating response and recovery efforts in the immediate aftermath of a 

disaster. 

This hearing is an opportunity to discuss ongoing efforts by FEMA and the SBA to 

enact the bipartisan RISE Act, which was signed into law on November, 25, 2015. 

As many know, the RISE Act is a broad disaster bill intended to provide support 

for victims recovering from disasters. Among other items, the RISE Act reopens 

disaster assistance loans for Hurricane Sandy victims for one year. 

This is important because Hurricane Sandy was the second most costly hurricane 

in U.S. history. In the aftermath, there were a number of concerns with the 

effectiveness and timelines of SBA's response. Victims applying for relief 

complained oflong application processing times, and requests to submit duplicate 

paperwork. It is my hope that ongoing efforts to improve SBA disaster response 

via the provisions in the RISE Act will help us prevent similar problems should 

disasters unfortunately strike communities in the future. 

I want to thank both SBA and FEMA for joining us today, and I look forward to 

learning more about the ongoing efforts to implement the remaining sections of the 

RISE Act. Thank you, Mr. Chairman.