428A Russell Senate Office Building, Washington, DC 2:00pm EST
Chairman David Vitter
Good afternoon and thank you for joining me today for the Senate Small Business and Entrepreneurship Committee Hearing on recent disaster recovery efforts and SBA’s progress in implementing the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE Act).
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 assistance from the SBA. It’s unfortunate, yet remains true; disasters of this scope are an indiscriminant and sweeping fact of life. They affect the livelihoods of families and businesses 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.
Small businesses, in particular, are often among those hit the hardest, and experience long-lasting effects when a disaster occurs. As the driving force of our nation’s growth and workforce, small businesses need extra help to get back on their feet as quickly as possible, and we need to make sure that they are receiving the help they need. This includes small businesses in rural communities, which face their own unique challenges, and the long-term recovery assistance we provide is often vital to ensuring they don’t have to close their doors.
That’s 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, the RISE Act was signed into law last fall.
A major problem for small businesses after a disaster is access to capital, and we made sure the RISE Act included language to improve the SBA’s loan programs, and their administration. so that a small business owner can recover quickly. Considering the SBA’s significant shortcomings in the past, particularly in its disaster recovery efforts in response to Hurricanes Katrina in 2005 and Sandy in 2012, the Act codifies a number of recommendations from the Sandy Rebuilding Taskforce, and also provided more time to those impacted by Hurricane Sandy to apply for assistance if they hadn’t done so 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 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 pre-existing 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’ve discussed with FEMA and SBA in prior hearings and roundtables, it’s important for local small businesses to take the lead in rebuilding and 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. 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 nation-wide assistance from Small Business Development Centers (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 a part of the RISE Act build on the already substantial progress that FEMA and 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’s why it’s so important not only to better prepare the public for the inevitability of disaster, but to also identify and execute tangible improvements in FEMA and SBA’s response.
We all recognize the important role that small businesses play in each of our local communities and economy, so when it comes to helping small businesses recover after a major natural disaster, the conversation is not so much political as it is tactical.
I look forward to today’s discussion. Thanks to everyone for being here today. With that, I’d like to turn it over to my colleague, Senator Booker, who has been a great partner here in the Senate as we worked together to pass the RISE Act.