[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
FULL COMMITTEE MARKUP OF DISASTER RELIEF
AND IMPROVED ACCESS TO
CAPITAL LEGISLATION
H.R. 1361, H.R. 1332 AND H.R. 1468
=======================================================================
COMMITTEE ON SMALL BUSINESS
UNITED STATES HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
MARCH 15, 2007
__________
Serial Number 110-8
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
JUANITA MILLENDER-McDONALD, STEVE CHABOT, Ohio, Ranking Member
California ROSCOE BARTLETT, Maryland
WILLIAM JEFFERSON, Louisiana SAM GRAVES, Missouri
HEATH SHULER, North Carolina TODD AKIN, Missouri
CHARLIE GONZALEZ, Texas BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington MARILYN MUSGRAVE, Colorado
RAUL GRIJALVA, Arizona STEVE KING, Iowa
MICHAEL MICHAUD, Maine JEFF FORTENBERRY, Nebraska
MELISSA BEAN, Illinois LYNN WESTMORELAND, Georgia
HENRY CUELLAR, Texas LOUIE GOHMERT, Texas
DAN LIPINSKI, Illinois DEAN HELLER, Nevada
GWEN MOORE, Wisconsin DAVID DAVIS, Tennessee
JASON ALTMIRE, Pennsylvania MARY FALLIN, Oklahoma
BRUCE BRALEY, Iowa VERN BUCHANAN, Florida
YVETTE CLARKE, New York JIM JORDAN, Ohio
BRAD ELLSWORTH, Indiana
HANK JOHNSON, Georgia
JOE SESTAK, Pennsylvania
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Kevin Fitzpatrick, Minority Staff Director
______
STANDING SUBCOMMITTEES
Subcommittee on Finance and Tax
MELISSA BEAN, Illinois, Chairwoman
RAUL GRIJALVA, Arizona DEAN HELLER, Nevada, Ranking
MICHAEL MICHAUD, Maine BILL SHUSTER, Pennsylvania
BRAD ELLSWORTH, Indiana STEVE KING, Iowa
HANK JOHNSON, Georgia VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania JIM JORDAN, Ohio
______
Subcommittee on Contracting and Technology
BRUCE BRALEY, IOWA, Chairman
WILLIAM JEFFERSON, Louisiana DAVID DAVIS, Tennessee, Ranking
HENRY CUELLAR, Texas ROSCOE BARTLETT, Maryland
GWEN MOORE, Wisconsin SAM GRAVES, Missouri
YVETTE CLARKE, New York TODD AKIN, Missouri
JOE SESTAK, Pennsylvania MARY FALLIN, Oklahoma
.........................................................
(ii)
Subcommittee on Regulations, Health Care and Trade
CHARLES GONZALEZ, Texas, Chairman
WILLIAM JEFFERSON, Louisiana LYNN WESTMORELAND, Georgia,
RICK LARSEN, Washington Ranking
DAN LIPINSKI, Illinois BILL SHUSTER, Pennsylvania
MELISSA BEAN, Illinois STEVE KING, Iowa
GWEN MOORE, Wisconsin MARILYN MUSGRAVE, Colorado
JASON ALTMIRE, Pennsylvania MARY FALLIN, Oklahoma
JOE SESTAK, Pennsylvania VERN BUCHANAN, Florida
JIM JORDAN, Ohio
______
Subcommittee on Urban and Rural Entrepreneurship
HEATH SHULER, North Carolina, Chairman
RICK LARSEN, Washington JEFF FORTENBERRY, Nebraska,
MICHAEL MICHAUD, Maine Ranking
GWEN MOORE, Wisconsin ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York MARILYN MUSGRAVE, Colorado
BRAD ELLSWORTH, Indiana DEAN HELLER, Nevada
HANK JOHNSON, Georgia DAVID DAVIS, Tennessee
______
Subcommittee on Investigations and Oversight
JASON ALTMIRE, PENNSYLVANIA, Chairman
JUANITA MILLENDER-McDONALD, LOUIE GOHMERT, Texas, Ranking
California LYNN WESTMORELAND, Georgia
CHARLIE GONZALEZ, Texas
RAUL GRIJALVA, Arizona
(iii)
C O N T E N T S
----------
OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M.........................................1,3,5,8
Chabot, Hon. Steve.............................................2,4,5,10
Jefferson, Hon. William.......................................... 4
Gonzalez, Hon. Charlie........................................... 6
Bean, Hon. Melissa............................................... 6
Fallin, Hon. Mary................................................ 8
APPENDIX
Prepared Statements:
Velazquez, Hon. Nydia M.......................................... 30
Chabot, Hon. Steve............................................... 32
Graves, Hon. Sam................................................. 34
(v)
FULL COMITTEE MARKUP ON
DISASTER RELIEF AND IMPROVED ACCESS
TO CAPITAL LEGISLATION
H.R. 1361, H.R. 1332 AND H.R. 1468
----------
THURSDAY, MARCH 15, 2007
U.S. House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2360 Rayburn House Office Building, Hon. Nydia Velazquez
[Chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Millender-McDonald,
Jefferson, Shuler, Gonzalez, Larsen, Grijalva, Michaud, Bean,
Cuellar, Lipinski, Moore, Altmire, Braley, Clarke, Ellsworth,
Johnson, Sestak, Chabot, Bartlett, Graves, Akin, Musgrave,
Fortenberry, Heller, Davis, Fallin, Buchanan and Jordan.
OPENING STATEMENT OF CHAIRWOMAN VELAZQUEZ
Chairwoman Velazquez. I call this meeting to order. Today's
order of business is the markup of legislation addressing three
very different but important roles that the Small Business
Administration plays: access to capital, disaster assistance,
and contracting.
This Committee has held a number of hearings on these
topics, heard from small business owners as well as small
business advocates. And these three bills address many of the
issues brought up during those discussions.
We did not agree on everything, but in the end, the
conversations that we have had and issues discussed were
helpful and productive.
It is my hope that our Committee continues to work in this
manner on our future legislative endeavors. There is no
question that many small businesses were affected by Hurricane
Katrina and that the SBA's disaster response was in question.
The RECOVER Act of 2007 requires that the SBA have a plan
in place for such disasters and makes tools available to
provide relief in a quicker, more efficient manner. I strongly
believe the RECOVER Act of 2007 will help prevent a situation
like what occurred after Hurricane Katrina from ever happening
again.
The devastation cost by Hurricane Katrina resulted in many
small firms losing out on a great deal of revenue. The
Disadvantaged Business Disaster Eligibility Act introduced by
Mr. Jefferson gives more time to entrepreneurs who have been
harmed by the Gulf Coast hurricanes to participate in federal
contracts.
The third bill, the Small Business Lending Improvements Act
of 2007, introduced by Ms. Bean and Mr. Chabot will reduce the
financial and regulatory burden placed on small businesses.
Most importantly, it will make loans more economical while
providing long-term stability.
With the adoption of these bills, we began work on bringing
the Small Business Administration back to its original mission,
providing entrepreneurs with competitive tools for today's
marketplace.
There is no doubt that these programs are valuable for
entrepreneurs. And today's legislation will help ensure SBA
will be the premier resource for our nation's 26 million small
businesses.
I would now like to yield to the ranking member, Mr.
Chabot, for his comments.
OPENING STATEMENT OF MR. CHABOT
Mr. Chabot. Thank you very much, Madam Chairwoman. And I
want to thank you for holding this important markup today to
consider a number of bills, among them being an important
bipartisan legislation that will improve and strengthen the
primary lending programs of the Small Business Administration,
the 7(a) and the 504 programs.
In regards to this bill, the Small Business Lending
Improvements Act of 2007, which is 1332, while many changes are
suggested for the 7(a) loan program, I believe one of the most
beneficial aspects of the program, its independence from
appropriations, is also an aspect that deserves fierce
protection. Nothing in H.R. 1332 alters that principle.
I do have one reservation about Title I of the bill. I am a
little concerned that the SBA may have technical difficulties
in adequately recalculating the fees to lenders and borrowers
on a quarterly basis. Even with this reservation, I believe
that the approach adopted in H.R. 1332 is the best means to
have the SBA reduce fees to both borrowers and lenders in the
7(a) loan program.
Title II of the bill provides much needed improvements to
strengthen the certified development company program, improve
its mission of community and local economic development, and
lower the costs of the program through improved returns on
liquidations of bad loans.
H.R. 1332 is an important bill that deserves strong
bipartisan support when it reaches the House floor. The other
two bills, we will also have the opportunity to consider the
RECOVER Act of 2007, which is 1361.
This bill is designed to improve the SBA's response, one
that was unacceptable, I think we all agree, in the aftermath
of Hurricane Katrina to future natural disasters.
I believe that this bill is well-intentioned and contains
some policies that would improve the agency's response in the
future. For example, the legislation would improve coordination
between the SBA and FEMA to reduce the loan processing time for
disaster victims.
However, despite some beneficial aspects of this
legislation, I remain troubled by specific provisions related
to grants, double compensation to disaster victims, and certain
congressional reporting requirements, that they be on a monthly
basis, rather than quarterly. I will be introducing some
amendments to address these issues during the course of this
markup.
The final bill that we will be marking up is the
Disadvantaged Business Eligibility Act. H.R. 1468 provides a
common sense approach to the time limit problem, many 8(a)
program participants who were located in Louisiana affected by
Hurricane Katrina.
The displacement associated with that hurricane certainly
made it difficult for 8(a) program participants to operate
their businesses and obtain federal government contracts. It
seems equitable to extend their participation by 18 months. In
addition, to simple fairness, the extension will help in the
necessary recovery of the area.
Finally, I would like to thank Chairwoman Velazquez for
incorporating a number of ideas proffered by myself and other
Republican members of the Committee into some of the amendments
that she will offer today.
Clearly there are disagreements, especially concerning the
most financially prudent means to respond to natural disasters.
Nevertheless, her staff did not let these differences interfere
with the sharing of ideas and legislative drafts needed to
improve legislation.
And while I expect other legislation to demonstrate
principled disagreements on issues, I am hopeful that we can
continue to have a frank and open discussion of legislation
among members and between our respective staffs. I want to
again commend you for working in a bipartisan manner.
I yield back.
Chairwoman Velazquez. Thank you, Mr. Chabot.
Do any other members wish to be recognized for the purpose
of making a statement?
[No response.]
STATEMENT OF CHAIRWOMAN VELAZQUEZ ON H.R. 1468
Chairwoman Velazquez. Well, our first order of business is
to consider H.R. 1468.
Chairwoman Velazquez. That is the Disadvantaged Business
Disaster Eligibility Act introduced by Representative
Jefferson.
This legislation allows 8(a) participants who have been
impacted by Hurricane Katrina to have 18 more months in the
program. This is not a significant amount of time, but it could
play a major role in assuring that these businesses are able to
participate in the rebuilding of their home states.
There are fewer than 225 current and former 8(a)
participants in the State of Louisiana that could be eligible
for this assistance. As currently structured, the program is
very limited as part of the length of time that companies are
allowed to participate. In this way, it is unlike any other SBA
procurement initiative. Others allow recertification in
increments of three years.
The 8(a) program is for nine years and nine years only. If
a company fails at any point during this time, the individual
owners may never be accepted into the program again.
In this respect, the program is unprepared for catastrophic
events, which not only force owners of participating businesses
to evacuate their location but also to in many cases rebuild
their companies from the ground up. That is why Mr. Jefferson's
bill is so important. This legislation is a common sense
approach to resolve a problem that the 8(a) program is not
currently structured to deal with.
I close by urging members to support this bill as I intend
to. I now recognize Mr. Chabot.
STATEMENT OF MR. CHABOT ON H.R. 1468
Mr. Chabot. Thank you, Madam Chairwoman. I will be very
brief.
As I mentioned in my opening statement, I believe that this
is a good piece of legislation. I think it is equitable to
extend participation by 18 months. It seems like simple
fairness to do that when one is considering the devastation
that these people went through.
And I would commend Mr. Jefferson for offering this
legislation, would urge my colleagues to support it, and yield
back my time.
Chairwoman Velazquez. I recognize the bill's sponsor, Mr.
Jefferson, for a statement.
STATEMENT OF MR. JEFFERSON ON H.R. 1468
Mr. Jefferson. Thank you, Madam Chair. And thank you, Mr.
Chabot. Particularly I appreciate the bipartisan approach to
this. And there is no point in my adding to the explanations
that have been made by you and the Chair Lady.
I will simply say that many of the 8(a) firms back home are
hoping to have a real chance at participating in the recovery
of the area. This permits them an opportunity to be involved in
bringing back their city and also into recovering the very
fundamentals of that business. So it is pretty important.
I thank the Committee for recognizing me. And I just urge
the committee to adopt the bill.
Chairwoman Velazquez. Thank you.
Do any other members wish to be recognized on the bill?
[No response.]
Chairwoman Velazquez. The bill is now open for amendment at
any time. Are there any amendments?
[No response.]
Chairwoman Velazquez. Seeing none, I move a Committee vote
on final passage of H.R. 1468. All of those in favor say
``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All those opposed say ``No.''
[No response.]
Chairwoman Velazquez. The bill is agreed to. I move that
the bill be reported and the staff be directed to make any
technical corrections prior to the filing of the bill. Without
objection, so ordered.
The next piece of legislation that the Committee will
consider is the Small Business Lending Improvements Act of
2007.
STATEMENT OF CHAIRWOMAN VELAZQUEZ ON H.R. 1332
Chairwoman Velazquez. While small businesses are this
nation's economic drivers, accessing the capital they need to
start and grow their firm is always challenging. SBA loan
programs are essential for small businesses. There is no
question there needs to be a decreasing cost and increasing
access to these programs in under-served areas.
The Small Business Lending Improvements Act of 2007 is a
bipartisan effort introduced by Ms. Bean and Mr. Chabot. This
bill will make loans more economical while providing long-term
stability.
H.R. 1332 will accomplish a number of important public
policy initiatives. It will allow for veterans to be able to
secure funds to start or expand their firms should they choose
to from F.Y. 2005 to F.Y. 2006. The number of loans to veterans
steadily decline. With veterans returning from Iraq and
Afghanistan, the need for affordable financing is more
important than ever. After the commitment they have made to
this country, it is important for us to show our commitment to
their entrepreneur success.
While enabling small businesses to thrive, H.R. 1332 would
also positively impact the community. It provides incentives
for medical professionals to locate to low-income areas. As we
heard from one of the witnesses in last week's hearing,
Kathleen Roth from the American Dental Association in support
of this legislation stated that those in under-served areas are
especially in need of such a provision.
One of the strengths of the Small Business Lending
Improvements Act of 2007 is that it touches every aspect of the
SBA lending initiatives. By making much needed and long overdue
changes, it secures ties between local CDCs and the community.
It also keeps the initiative affordable by enabling CDCs to
improve the liquidation process, making fees reasonable.
An important component of this bill is that it increases
the access to capital for socially and economically
disadvantaged small business owners and establishes a rural
lender program to attract small lenders back into the program.
Clearly the legislation under consideration today
strengthens the SBA access to capital programs, giving small
businesses the tools they need to be competitive and
successful. It ensures SBA programs are the premier lending
tool for entrepreneurs. And I strongly urge support of this
bill.
I would now like to yield to the ranking member, Mr.
Chabot, and sponsor of the bill for his comments.
STATEMENT OF MR. CHABOT ON H.R. 1332
Mr. Chabot. Thank you, Madam Chairman. I think you have
summed up what the bill does very well. And we agree with your
comments. So I won't repeat them in order to save time here.
I would note that one of our colleagues, Ms. Fallin from
Oklahoma, does have an amendment to offer at the appropriate
time.
Thank you. I yield back.
Chairwoman Velazquez. Mr. Gonzalez?
STATEMENT OF MR. GONZALEZ ON H.R. 1332
Mr. Gonzalez. Yes. I seek recognition at this time, Madam
Chairwoman, to enter a colloquy with you regarding section 104
of the proposed bill. And the question would go, as I
understand it--
Chairwoman Velazquez. The gentleman from Texas is
recognized.
Mr. Gonzalez. I'm sorry. Thank you very much, Madam Chair.
Section 104, medical professionals in designated shortage
area programs. And, of course, this is about loans to doctors
and dentists in these designated areas. And what I wanted to
make clear--and I know this is a pet project of mine, and so I
ask my colleagues to bear with me. But I wanted to make
absolutely clear that the purpose of these loans could go again
for the purchase and such and acquiring and obtaining health
information technology because I would hate to think that these
individuals in the under-served areas would be deprived of what
no doubt will be one of the most necessary tools to health care
professionals.
Chairwoman Velazquez. The loans that are provided under
this section of the bill can be used for the purposes mentioned
by the gentleman. And I agree about importance of health
information technology. I will make it clear that in the
Committee report language on the bill, it states that these
loans can be used for health IT.
Those in under-served areas should have access to the best
health care available. And it is clear that is the intent of
the gentleman from Texas.
Mr. Gonzalez. Thank you very much. I yield back.
Chairwoman Velazquez. And now I will recognize one of the
sponsors of the bill, Ms. Bean, for an opening statement or a
statement on the bill.
STATEMENT OF MS. BEAN ON H.R. 1332
Ms. Bean. Thank you, Madam Chair. I want to thank Chairman
Velazquez and Ranking Member Chabot for scheduling today's
markup on the Small Business Lending Improvements Act of 2007,
which I introduced earlier this month.
The expedited consideration of this bill as well as the
bipartisan support that it has received underscores the
importance of ensuring access to capital to our small business
community.
Coming from a business background, I have a special
appreciation for the need for entrepreneurs and small business
owners to have access to affordable capital. That is why I have
long been active in my support of measures to improve and
expand SBA loan programs which offer low interest, long-term
loans to business owners that many times wouldn't qualify for
assistance elsewhere. This bill is no exception.
H.R. 1332 makes much needed changes to SBA's lending
initiatives and, most importantly, helps preserve the original
intent of these programs to help make available affordable
sources of financing. This is of particular importance as the
cost of capital through these programs has risen rapidly over
the last few years. This bill helps to reverse this trend and
create long-term stability in the program in a fiscally sound
way.
In addition, H.R. 1332 addresses the need for lending in
our rural communities by restoring the low doc program and by
strengthening the 504 initiative, which is integral in
stimulating economic development in communities throughout the
nation. Together these initiatives will bring small lenders
back into SBA's lending programs and can spur economic
development in areas that need it the most.
Again, I commend this Committee under the leadership of
Chairwoman Velazquez for recognizing the importance of this
legislation. Small businesses are the backbone of our economy
driving domestic job growth. And their success as well as the
success of our economy is dependent upon their ability to grow
and expand. This legislation helps provide them with the
fundamental tools to do just that.
I urge your support of the bill. Thank you. And I yield
back my time.
Chairwoman Velazquez. Do any other members wish to be
recognized?
[No response.]
Chairwoman Velazquez. The Committee will now take up the
manager's amendment, which makes a series of technical changes.
Chairwoman Velazquez. Section 103 will be amended to
provide the SBA with additional flexibility that it needs to
ensure that the community express program can achieve its
mission of improving access to capital for socially and
economically disadvantaged small business owners.
Other changes were suggested by the minority and will
revise Title II of the bill to ensure that the appropriate
terminology is used in referring to the certified development,
economic development, loan program.
I urge adoption of the manager's amendment. And I yield to
the ranking member for his comments.
Mr. Chabot. Thank you, Madam Chair. We agree with the
manager's amendment. We appreciate your incorporating some of
our suggestions in that and yield back the balance of my time.
Chairwoman Velazquez. Thank you. Do any other members wish
to be recognized?
[No response.]
Chairwoman Velazquez. If no further members wish to be
recognized, we will move to the adoption of the manager's
amendment. All of those in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All opposed say ``Nay.''
[No response.]
Chairwoman Velazquez. The manager's amendment is agreed. I
ask unanimous consent that the text that is amended by the
manager's amendment be considered as the original text for the
purposes of amendments. The bill will be open for amendment at
any time.
Are there any amendments?
Mr. Chabot. Madam Chairman?
Chairwoman Velazquez. Yes?
Mr. Chabot. I believe Ms. Fallin has an amendment on our
side.
Chairwoman Velazquez. Ms. Fallin, you will be recognized.
And I ask the Clerk to distribute the amendment.
STATEMENT OF MS. FALLIN ON H.R. 1332
Ms. Fallin. Thank you, Madam Chairman, Chairman Velazquez.
I appreciate the time today. And thank you, Ranking Member
Chabot for the opportunity to speak.
I have an amendment on the floor that I would like to offer
and then immediately withdraw. And it's amendment H.R. 1332
that addresses the issue of certain franchises who, by all
intents and purposes, are small businesses but not being
allowed to receive the 7(a) loans to do their affiliation with
larger franchisers.
The intention of the amendment of H.R. 1332 was to modify
the SBA's affiliation standard to allow a business that if it
is affiliated with another business and, therefore, determined
to be something other than small, to still be eligible for a
loan if it had no financial recourse to its affiliates for
repayment of any of its debt.
And I understand, Ms. Chairman, that there are technical
issues that need to be addressed. And I would appreciate the
Chairwoman continuing to work with me and my staff in order to
ensure the legislation comes to the House floor and contains
language that would address this problem.
Chairwoman Velazquez. I thank the gentle lady for
withdrawing the amendment and also raising this important
issue. I agree this is an issue that we need to address. And I
will make a commitment that I will work with you and your staff
on this matter before the bill is considered on the floor.
Ms. Fallin. Thank you, Ms. Chairman.
Chairwoman Velazquez. Any other amendments?
[No response.]
Chairwoman Velazquez. Seeing no further amendments, I move
that the Committee vote on final passage of H.R. 1332. All of
those in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All those opposed say ``No.''
[No response.]
Chairwoman Velazquez. The bill is agreed to. I move that
the bill be reported as amended and the staff be directed to
make any technical corrections prior to the filing of the bill.
STATEMENT OF CHAIRWOMAN VELAZQUEZ ON H.R. 1361
Our next order of business is to consider H.R. 1361, the
RECOVER Act.
Chairwoman Velazquez. The 2005 Gulf Coast hurricanes
exposed numerous problems with the SBA ability to provide
timely and effective assistance to small businesses devastated
by a major disaster. In many instances, these problems could
have been avoided through improved planning.
Experts from small business and disaster readiness
organizations, including James Lee Witt, the former Director of
FEMA, has testified before this Committee that comprehensive
disaster planning will enable SBA to provide timely assistance
after a variety of different kinds of incidents. Many of the
problems that SBA borrowers experience began with root causes,
like failures to plan ahead for additional staff and space
needs.
The RECOVER Act provides for thorough disaster planning and
directs the SBA to ensure that they are prepared for a wide
range of disasters.
This legislation also adds to the tools SBA can use to help
small businesses who are facing difficult circumstances after a
disaster.
For many economically viable small businesses along the
Gulf Coast, SBA loans and state-run programs were not the right
solution. This legislation creates a grant program that will
allow the SBA to help those businesses that could be successful
contributors to their community's recovery barring any need of
an infusion of resources to get started again.
This new grant program is carefully targeted and will
enable small firms to grow stronger, hiring more employees, and
giving back to their neighborhoods. Both Congressman Richard
Baker and the National Black Chamber of Commerce made it clear
in their testimony that this program has brought and gives
support because it is vital to the recovery of the Gulf Coast.
I recognize that there is a cost associated with the grant
program proposed in this legislation. That cost has been
carefully considered. And we took steps to ensure that it was
as minimal as possible while still providing the assistance the
Gulf region needs.
The grant program is at the discretion of the SBA. If the
agency--and I just want to make this clear. If the
administrator and the agency decide that grants are not needed,
then it does not have to provide those grants.
In addition, the grant program is only for the major 2005
hurricanes. It does not create a permanent program going
forward.
Finally, based on specific criteria in the bill, only a
small subset of those businesses affected by Hurricane Katrina,
Rita, and Wilma will be able to actually receive a grant.
This bill also creates a one-time program to resolve the
problem with SBA coordination with state grants programs,
specifically the road home grants. Again, this provision just
applies to the major 2005 hurricanes and does not create a
permanent authority.
The bill permits the administrator to exclude these forms
of assistance, which in most cases are not duplicative when
considering the total damages victims are contending with. The
changes allow states and the federal government to work
together to get as much assistance as needed to capitalize
rebuilding to business owners as quickly as possible This
measure, while limited, will remove an obstacle that has caused
frustration and confusion.
In response to concerns raised by borrowers who found
themselves lost in the long processing system, the RECOVER Act
creates a private lending program to supplement SBA's lending
in times of heightened demand. In addition, this bill also
creates a short-term bridge loan to speed small loans to
businesses and help them return to work faster.
I urge my colleagues to consider the problems that small
businesses have asked us to address and to support this
important legislation. It is essential that we take steps now
to modernize and reform the SBA disaster program before the
next Katrina hits.
I now yield to Mr. Chabot.
STATEMENT OF MR. CHABOT ON H.R. 1332
Mr. Chabot. Thank you very much, Madam Chairwoman. I will
be brief.
As I mentioned in my opening statement, I do believe that
this bill is well-intentioned and contains some policies that
would improve the agency's response in the future; for example,
requiring better coordination between FEMA and the Small
Business Administration. We would be very supportive of that.
And reducing the loan processing time for disaster victims I
think also is very commendable.
However, there are a number of aspects which we will be
addressing in three amendments relative to the grants and also
the double compensation to disaster victims and the
congressional reporting requirements requiring that to be
monthly reports back to Congress at a time when a disaster
could be ongoing. And we are afraid that might slow our process
down.
So, for those reasons, we will be offering a few amendments
at the appropriate time. And I yield back. Thank you.
Chairwoman Velazquez. Thank you.
Are there any other members who wish to be recognized? Yes,
Mr. Akin?
Mr. Akin. Thank you, Madam Chair. I wanted to thank you for
working with us and our staff on essentially what was a bill
that we introduced the last year or two, which I believe you've
got in your manager's amendment, which is coming up. I just
wanted to thank you for the bipartisan way that you worked with
us.
Chairwoman Velazquez. That's correct.
Mr. Akin. And that is a provision which allows if somebody
is in the Reserve and they may be a key player in a small
business and, all of a sudden, they get a call that they are
going to go East about 8,000 miles, this is a way that we can
try to give a little bit of protection in a loan that they can
take to help cover their company in their absence.
And I think that is important, particularly with the people
that are on Reserve that are deployed now. And I thank you for
working with us on that.
Chairwoman Velazquez. Thank you.
Any other member who wishes to be recognized?
[No response.]
Chairwoman Velazquez. The Committee will now take up the
manager's amendment, which makes a series of changes that will
achieve three goals.
Chairwoman Velazquez. First, these changes will strengthen
the underlying bill and will make disaster assistance more
readily available to veterans.
Second, these changes will help ensure that taxpayers'
dollars are used responsibly in assisting the most severely
affected victims of the 2005 hurricanes.
Finally, this manager's amendment continues our efforts to
achieve bipartisan cooperation and has been shared with and
includes provisions from the minority.
Section 101 will be amended to require that the
comprehensive disaster response plan be developed and
maintained by an individual with substantial knowledge in the
field of disaster readiness and emergency response. This
amendment will assure that the SBA's disaster plan is developed
with the knowledge and expertise that a skilled disaster
planner can provide.
Improving the SBA disaster program will require enhanced
agency organization at the highest levels but should not result
in increased bureaucracy. For these reasons, section 106 will
be amended to clarify that the newly established director of
disaster planning and the director of disaster lending should
not directly result in an increase in the number of agency
full-time employees.
To ensure that the grant assistance only goes to the most
needy small businesses and is only used to spur redevelopment
in communities that have experienced a failure of market
forces, section 210 will be limited to businesses located in
the communities that were most severely affected by Hurricanes
Katrina, Rita, or Wilma.
Additionally, section 211, which addresses the duplication
of benefits by state grants programs, will be narrowed to only
include disaster victims affected by Hurricanes Katrina, Rita,
or Wilma.
To make the disaster program more responsive to the needs
of businesses affected by military deployments, a new provision
will be added extending to one year the period during which a
small business may apply for an economic injury loan as the
result of an essential employee being deployed for military
services. This provision will also enable these businesses to
file a preliminary application so that the disaster assistance
can be expedited when the employee is actually deployed.
Taken together, these amendments make H.R. 1361 a more
balanced and effective piece of legislation for ensuring that
the SBA has the tools it needs to carry out its disaster
assistance mission. I urge adoptions of the manager's
amendment. And I yield to the ranking member for his statement.
Mr. Chabot. Thank you, Madam Chairwoman. Once again, I will
be brief.
Because it narrows the scope of the applicability of the
bill, we would be supportive of this. In addition to that, it
includes a very welcome amendment by the gentleman from
Missouri, Mr. Akin, which we think is a very good amendment.
And so, for those reasons and others, we would welcome the
manager's amendment and support it.
Chairwoman Velazquez. Thank you. Do any other members wish
to be recognized?
[No response.]
Chairwoman Velazquez. If no further members wish to be
recognized, we will move to the adoption of the manager's
amendment. All in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All opposed say ``Nay.''
[No response.]
Chairwoman Velazquez. The manager's amendment is agreed to.
I ask unanimous consent that the text as amended by the
manager's amendment be considered as the original text for the
purposes of amendments. The bill will be open for amendment at
any time.
Are there any amendments?
Mr. Chabot. Madam Chair?
Chairwoman Velazquez. Yes? Mr. Chabot, you will be
recognized.
Mr. Chabot. Thank you, Madam Chair. I have three amendments
at the desk. I would like to start with amendment number
15.[The amendment offered by Mr. Chabot follows:]
Chairwoman Velazquez. The Clerk will report the amendment.
The Clerk. An amendment is offered by Mr. Chabot of Ohio to
strike section 210--
Chairwoman Velazquez. I ask unanimous consent to dispense
the reading. Without objection, so ordered.
Mr. Chabot. Thank you, Madam Chairman. Move to strike the
last word.
Chairwoman Velazquez. The gentleman is recognized for five
minutes.
Mr. Chabot. Thank you.
Madam Chair, I offer an amendment to strike section 210 of
H.R. 1361, the bill that we are considering at this time. The
grants are offered to those businesses that otherwise are not
eligible for an SBA loan.
In essence, this would authorize the administrator to give
grants to businesses that the administrator determined would
not have sufficient resources and prospects to repay a loan. I
cannot in good conscience support that type of government
spending.
We also have heard that large sums of grant money have not
been distributed to victims of Hurricane Katrina. And I think
the Congress should figure that out before launching yet
another program to offer grants.
And, finally, history demonstrates that Congress passes
special legislation to reply to disasters. And if grants are
needed, they should be considered at that time, not in
legislation designed to improve the overall capacity of the SBA
to respond to all disasters.
And, for those reasons, I would offer this amendment, urge
my colleagues to support it, and yield back the balance of my
time.
Chairwoman Velazquez. Thank you.
Let me just say, Mr. Chabot, what this grant does is that
it gives the administrator a choice. He could decide whether or
not to provide grants. It is a choice. It is not a mandate. And
while I appreciate your concern for this issue, this amendment
will eliminate an important tool for helping otherwise viable
businesses rebuilt in the most devastated communities. These
businesses need financial assistance that the disaster loan
program cannot provide.
This Committee is well-aware of the damage caused by the
2005 hurricanes. Entire communities were destroyed. In many
places, no homes, no businesses, no public institutions were
left standing. In these circumstances, ordinary market forces
cannot spur redevelopment. In these circumstances, there are no
market forces because there are no businesses and there are no
people.
This Committee has heard victims and experts testify that
the SBA's current disaster loan program is inadequate to help
victims in these circumstances. In this community, no small
business owner is willing to risk what little they have for a
loan to rebuild in a community where there are no homes for
their customers, no school for their children, and no place to
buy supplies for their businesses.
Under these circumstances, the disaster assistance program
cannot pursue a one size fits all approach. The SBA must have
tools that are more responsive to victims' needs.
H.R. 1361 will provide the SBA with authority to administer
a limited grant program to help the most severely affected
small businesses damaged by Katrina. To ensure that the grant
assistance only goes to the neediest small businesses and is
only used to spur redevelopment in communities where market
forces have failed, this legislation has been limited to very
narrow circumstances. So this program has been narrowly
tailored to ensure that the taxpayers' dollars are spent in a
responsible manner while providing vital support to the small
businesses.
So I urge members to oppose this amendment. Yes, Mr.
Gonzalez, you are recognized.
Mr. Gonzalez. Thank you, Madam Chair.
I would oppose the amendment by Mr. Chabot. Let me explain
why. Any of us who were present during the impassioned
testimony by our colleague Representative Baker I think would
understand that the relief that we are attempting to provide a
specific area, victims of specific hurricanes is really
extraordinary in many ways.
Mr. Baker even pointed out himself that for the first time
in his life, politically and otherwise, he realized there had
to be extraordinary measures, both from the government and the
private sector, to address the enormity of the problem and the
challenge. Otherwise the rebuilding of New Orleans and the rest
of the affected areas is not going to occur.
So I appreciate Mr. Chabot's good faith objection,
philosophically and otherwise, to this particular provision.
But I would ask that all of us would keep an open mind and be
more flexible when it comes to specific circumstances that
require extraordinary remedies. And if you want to classify
this as extraordinary, that's fine. But I think you are going
to see this replicated in other pieces of legislation.
And either we are truly dedicated to the proposition that
we can address the aftermath of these hurricanes or we
shouldn't be introducing the legislation and giving false hope
to the many people who are affected.
And, with that, I would yield back?
Chairwoman Velazquez. Any other member who seeks
recognition? And I would ask to be very brief because I would
like to take a vote before we go.
Mr. Jefferson. Madam Chair?
Chairwoman Velazquez. Mr. Buchanan?
Mr. Buchanan. Yes. I would only like to support Mr. Chabot
on this because in Florida, we have been hit by eight
hurricanes in a period of two years, completely devastated a
lot of our areas, like an area I represent. Charlie hit there.
We still have tarps on building. Unless the federal assistance
can be evenly handed, what right do we have to choose between
winners and losers?
And I just want to be careful about that because I think
our governor of state has been prepared. In dealing with these
disasters, I think Jeb Bush has done a great job, but we still
have a lot of folks who need help down in those areas. In a lot
of these areas, people are still waiting on assistance in
Florida. So I want to duly note that.
Mr. Jefferson. Madam Chair?
Chairwoman Velazquez. Yes, Mr. Jefferson?
Mr. Jefferson. If I might say briefly, the New Orleans
experience was extraordinary. We lost 80 percent of our city
under water. Twenty thousand businesses were lost. They lost
records. Most of the small business people now who would
attempt to go back are basically pioneers because the customers
aren't there.
They are ineligible for loans in many cases because they
can't make the argument that you usually make pro forma when
you gauge how many customers are going to be there to buy your
product. It is impossible to do it.
The SBA representative testified here that usually they
approve 60 percent of the loans that are made for after
disasters. In this case, 38 percent were approved because of
those reasons, some of which I have just mentioned.
Chairwoman Velazquez. But, Mr.--
Mr. Jefferson. So I will just leave it here, Madam Chair,
and urge the Committee to reject the amendment.
Chairwoman Velazquez. If we are doing a grant program for
Iraq business people, we can do it for the people of the Gulf
Coast.
Mr. Bartlett?
Mr. Bartlett. Thank you. Thank you, Madam Chair. I would
like to yield my time to Mr. Chabot.
Mr. Chabot. Thank you. Thanks for yielding. I will be very
brief.
I just want to reiterate that what we are talking about, it
has already been recognized that these are businesses that, in
all likelihood, won't be able to repay the loans. And when you
are giving tax dollars out in something like this, I just think
we have to be very prudent in our responsibility and how we
handle those tax dollars. And I don't think that is
particularly prudent.
The other thing is that also we know we have had testimony
here that a lot of the money that is available out there hasn't
even been given out. And it is not really a matter of just
throwing more money at the problem here. It is a matter of
getting to the bottom of why the money hasn't been distributed
that has already been allocated for this.
So I just think that this particular thing is unhelpful.
And so I would ask for a vote on the amendment.
Chairwoman Velazquez. The question is on the amendment
offered by Mr. Chabot. All of those in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All opposed say ``No.''
[Chorus of ``Noes.'']
Chairwoman Velazquez. In the opinion of the Chair, the noes
have it.
Mr. Chabot. Ask for a recorded vote.
Chairwoman Velazquez. Yes, a recorded vote is requested.
The Clerk shall call the roll.
The Clerk. Ms. Velazquez.
Chairwoman Velazquez. No.
The Clerk. Ms. Velazquez votes no. Ms. Millender-McDonald.
Ms. Millender-McDonald. No.
The Clerk. Ms. Millender-McDonald votes no. Mr. Jefferson.
Mr. Jefferson. No.
The Clerk. Mr. Jefferson votes no. Mr. Shuler.
Mr. Shuler. No.
The Clerk. Mr. Shuler votes no. Mr. Gonzalez.
Mr. Gonzalez. No.
The Clerk. Mr. Gonzalez votes no. Mr. Larsen.
Mr. Larsen. No.
The Clerk. Mr. Larsen votes no. Mr. Grijalva.
Mr. Grijalva. No.
The Clerk. Mr. Grijalva votes no. Mr. Michaud.
Mr. Michaud. No.
The Clerk. Mr. Michaud votes no. Ms. Bean.
[No response.]
The Clerk. Mr. Cuellar.
Mr. Cuellar. No.
The Clerk. Mr. Cuellar votes no. Mr. Lipinski.
Mr. Lipinski. No.
The Clerk. Mr. Lipinski votes no. Ms. Moore.
[No response.]
The Clerk. Mr. Altmire.
Mr. Altmire. No.
The Clerk. Mr. Altmire votes no. Mr. Braley.
Mr. Braley. No.
The Clerk. Mr. Braley votes no. Ms. Clarke.
Ms. Clarke. No.
The Clerk. Ms. Clarke votes no. Mr. Ellsworth.
Mr. Ellsworth. No.
The Clerk. Mr. Ellsworth votes no. Mr. Johnson.
Mr. Johnson. No.
The Clerk. Mr. Johnson votes no. Mr. Sestak.
Mr. Sestak. No.
The Clerk. Mr. Sestak votes no. Ms. Moore.
Ms. Moore. No.
The Clerk. Ms. Moore votes no. Mr. Chabot.
Mr. Chabot. Aye.
The Clerk. Mr. Chabot votes yes. Mr. Bartlett.
Mr. Bartlett. Yes.
The Clerk. Mr. Bartlett votes yes. Mr. Graves.
Mr. Graves. Yes.
The Clerk. Mr. Graves votes yes. Mr. Akin.
Mr. Akin. Yes.
The Clerk. Mr. Akin votes yes. Mr. Shuster.
[No response.]
The Clerk. Ms. Musgrave.
Ms. Musgrave. Yes.
The Clerk. Ms. Musgrave votes yes. Mr. King.
[No response.]
The Clerk. Mr. Fortenberry.
Mr. Fortenberry. Yes.
The Clerk. Mr. Fortenberry votes yes. Mr. Westmoreland.
[No response.]
The Clerk. Mr. Gohmert.
[No response.]
The Clerk. Mr. Heller.
[No response.]
The Clerk. Mr. David Davis.
Mr. Davis. Yes.
The Clerk. Mr. Davis votes yes. Ms. Fallin.
Ms. Fallin. Yes.
The Clerk. Ms. Fallin votes yes. Mr. Buchanan.
Mr. Buchanan. Yes.
The Clerk. Mr. Buchanan votes yes. Mr. Jordan.
Mr. Jordan. Yes.
The Clerk. Mr. Jordan votes yes.
Chairwoman Velazquez. The Clerk will report the vote.
The Clerk. Madam Chair, there are 10 yes votes and 17 no
votes.
Chairwoman Velazquez.The amendment is not agreed to. And we
will take a recess and go to the House and vote and then come
back here. Thank you.
[Brief recess.]
Chairwoman Velazquez. This hearing will come back to order.
I recognize Mr. Chabot for the purpose of offering his
amendment.
Mr. Chabot. Thank you, Madam Chair. I would move to have an
amendment at the desk, number 16.
Chairwoman Velazquez. The Clerk will report the amendment.
The Clerk. An amendment is offered by Mr. Chabot of Ohio to
strike section 211 of H.R.--
Chairwoman Velazquez. I ask unanimous consent to dispense
with the reading.
Mr. Chabot. I move to strike the last word.
Chairwoman Velazquez. The gentleman is recognized for five
minutes.
Mr. Chabot. Thank you, Madam Chair. And again I'll be
brief.
I certainly empathize with those who suffered as a result
of Hurricane Katrina. I know that we all do. We heard many
stories in committee about the devastation that was reaped
there. However, those who suffered should not be compensated
twice.
And, as I understand H.R. 1361, it prohibits the SBA from
counting grants as a duplication of benefits. Under the bill,
an applicant for an SBA disaster loan also could receive a
grant from some other source. Both would have been offered as
compensation for damages.
And a strong possibility exists that the individual would
have received compensation, once in a grant and once in a low-
cost loan twice for the same injury. We certainly don't allow
that in our courts. And I think in good conscience, we
shouldn't here. And, therefore, I can't support it.
And so I offer this amendment on that one narrow issue. And
I yield back.
Chairwoman Velazquez. Thank you. Let me just say again this
grant is optional. It gives the authority to the administrator.
And he will decide whether or not to issue waivers.
Let me talk about the road home grant. This was developed
primarily for housing assistance. We shouldn't penalize a small
business owner for needing assistance for both their home and
businesses.
So if a person in Louisiana lost his home, he cannot access
any grant to rebuild his home because he also lost his
business. And so he will have to make a choice whether he goes
for a small business loan for his business or a road grant to
rebuild his home. Well, if he doesn't have a business, why does
he want to rebuild his home if he can pay or sustain his
business to help him?
The adoption of this amendment will put a small business
owner in the predicament of having to choose between repairing
their home and repairing their business. And this is not a
situation that we should put them in.
Let me remind you that Mr. Baker came here. And he
testified. And he made it clear that there was not duplication
of benefits for victims who receive no assistance in the first
place.
So I will urge my colleagues to vote no on this amendment.
And any members who will seek recognition? Mr. Jefferson?
Mr. Jefferson. Thank you, Madam Chair Lady. I want to
subscribe to your remarks and to say that it is even more
complicated than that in some respects because people back home
now--remember, we lost 220,000 houses back home.
For small business people, when they go into business, the
home is usually the collateral for the loan. And most of them
now have to pay their mortgage in addition to seeking new
sources of support to get back in the house and back in the
business.
So assume you are a person who had a business and a loan on
it, your house collateralized it, and your home flooded. What
you do now is your home mortgage still stays there. You don't
get away from that. You still must pay that.
So you go to the SBA. And you don't qualify for as much as
you as need to build back your house because you still have
this outstanding requirement to pay your home mortgage. So you
always fall short on the SBA. So there is very little chance of
a duplication occurring here because you aren't going to
usually make it to that point.
And so the way the bill is tailored I think, as the Chair
Lady has said, there is a lot of discretion with the secretary.
There is a very limited opportunity here for any such problem
spoken of here. And on the up side, for the most part, this is
going to be extraordinarily helpful to the recovery.
And I appreciate this conclusion in the bill. And I will
join the Chair Lady in objecting to this amendment's adoption.
Chairwoman Velazquez. Does any other member seek
recognition on this amendment? Mr. Akin?
Mr. Akin. Madam Chair, would it be all right to inquire of
the maker of the amendment? I am just curious. Is this
theoretically somebody could get a state grant, somebody could
get a federal grant, and it could be both grants for the same
thing? Is that correct?
Chairwoman Velazquez. No. The state grant, in this case the
road grant, will be for rebuilding their homes. And the
business grant will be to help rebuild their businesses.
Mr. Chabot?
Mr. Chabot. My understanding is that yes, that is possible.
Now, before it gets to the floor, we can get more clarification
on that. But it is my understanding that is possible.
Mr. Akin. So this is to prevent double dipping, is what you
are trying to do?
Mr. Chabot. That's correct, yes. Again, if any of these
things come up, we can always get clarification prior to the
floor. But that is the reason for offering the amendment, that
we're trying to be as prudent as possible with limited tax
dollars and to avoid double dipping, which isn't fair to the
taxpayer.
Mr. Akin. If somebody had a home, would they have flood
insurance on that? So would insurance have covered that or was
that couldn't you get flood insurance down there?
Mr. Chabot. Would the gentleman yield?
Mr. Akin. Yes.
Mr. Chabot. Well, certainly it is possible. Many people
had. A lot of people didn't have flood insurance either. And
you couldn't double dip in that circumstance. But under this,
perhaps you could.
Mr. Akin. Thank you. Thank you, Madam Chair.
Chairwoman Velazquez. Any other member who seeks
recognition on this amendment?
[No response.]
Chairwoman Velazquez. Well, the question is on the
amendment offered by Mr. Chabot. All of those in favor say
``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All opposed say ``No.''
[Chorus of ``Noes.'']
Chairwoman Velazquez. In the opinion of the Chair, the noes
have it.
Mr. Chabot. Madam Chair, ask for a recorded vote.
Chairwoman Velazquez. The Clerk shall call the roll.
The Clerk. Ms. Velazquez.
Chairwoman Velazquez. No.
The Clerk. Ms. Velazquez votes no. Ms. Millender-McDonald.
Ms. Millender-McDonald. No.
The Clerk. Ms. Millender-McDonald votes no. Mr. Jefferson.
Mr. Jefferson.
Mr. Jefferson. No.
The Clerk. Mr. Jefferson votes no. Mr. Shuler.
[No response.]
The Clerk. Mr. Gonzalez.
Mr. Gonzalez. No.
The Clerk. Mr. Gonzalez votes no. Mr. Larsen.
[No response.]
The Clerk. Mr. Grijalva.
Mr. Grijalva. No.
The Clerk. Mr. Grijalva votes no. Mr. Michaud.
Mr. Michaud. No.
The Clerk. Mr. Michaud votes no. Ms. Bean.
Ms. Bean.. No.
The Clerk. Ms. Bean votes no. Mr. Cuellar.
Mr. Cuellar. No.
The Clerk. Mr. Cuellar votes no. Mr. Lipinski.
[No response.]
The Clerk. Ms. Moore.
[No response.]
The Clerk. Mr. Altmire.
[No response.]
The Clerk. Mr. Braley.
Mr. Braley. No.
The Clerk. Mr. Braley votes no. Ms. Clarke.
Ms. Clarke. No.
The Clerk. Ms. Clarke votes no. Mr. Ellsworth.
Mr. Ellsworth. No.
The Clerk. Mr. Ellsworth votes no. Mr. Johnson.
[No response.]
The Clerk. Mr. Sestak.
[No response.]
The Clerk. Mr. Shuler.
Mr. Shuler. No.
[No response.]
The Clerk. Mr. Shuler votes no. Ms. Moore.
Ms. Moore. A question, please. Sorry.
[Laughter.]
Ms. Moore. No.
The Clerk. Ms. Moore votes no. Mr. Chabot.
Mr. Chabot. Aye.
The Clerk. Mr. Chabot votes yes. Mr. Bartlett.
Mr. Bartlett. Yes.
The Clerk. Mr. Bartlett votes yes. Mr. Graves.
[No response.]
The Clerk. Mr. Akin.
Mr. Akin. Aye.
The Clerk. Mr. Akin votes yes. Mr. Shuster.
[No response.]
The Clerk. Ms. Musgrave.
Ms. Musgrave. Yes.
The Clerk. Ms. Musgrave votes yes. Mr. King.
[No response.]
The Clerk. Mr. Fortenberry.
Mr. Fortenberry. Yes.
The Clerk. Mr. Fortenberry votes yes. Mr. Westmoreland.
[No response.]
The Clerk. Mr. Gohmert.
[No response.]
The Clerk. Mr. Heller.
Mr. Heller.. Yes.
The Clerk. Mr. Heller votes yes. Mr. David Davis.
Mr. Davis. Yes.
The Clerk. Mr. Davis votes yes. Ms. Fallin.
[No response.]
The Clerk. Mr. Buchanan.
[No response.]
The Clerk. Mr. Jordan.
[No response.]
The Clerk. Mr. Larsen.
Mr. Larsen. No.
The Clerk. Mr. Larsen votes no.
Chairwoman Velazquez. The Clerk will report the vote.
The Clerk. Madam Chair, there are 14 no and 7 yes.
Chairwoman Velazquez. The amendment is not agreed to.
Mr. Chabot. Madam Chair?
Chairwoman Velazquez. Yes, Mr. Chabot?
Mr. Chabot. Thank you. I have one additional amendment at
the desk, amendment 17.[The amendment offered by Mr. Chabot
follows:]
Chairwoman Velazquez. The Clerk will report the amendment.
The Clerk. Mr. Chabot from Ohio has offered an amendment to
on page 26 of H.R. 1361 to stroke--
Chairwoman Velazquez. I ask unanimous consent that the
amendment be considered as read.
Mr. Chabot. Thank you, Madam Chair. Move to strike the last
word.
Chairwoman Velazquez. The gentleman is recognized for five
minutes.
Mr. Chabot. Thank you again. And I will try to be brief.
I certainly understand the need for Congress to be informed
of how Executive Branch agencies are carrying out their
statutory mandates. That requires these agencies to report to
Congress to report to us.
Given the recent history of the SBA, it certainly makes
sense to have the agency report annually to Congress on its
disaster response. However, the bill also requires the
administrator to report monthly during an incident of national
significance.
Given this Committee's complaint that the SBA's disaster
response, it seems somewhat illogical to divert resources, even
small amounts, from the pressing disasters, those that rise to
the level of an incident of national significance. I just think
it doesn't make sense to require a monthly type of report at a
time when their full resources ought to be devoted to
addressing the disaster and helping those who really need the
help.
So, for that reason, I would urge passage of this amendment
and yield back the balance of my time.
Chairwoman Velazquez. I will oppose this amendment. And,
Mr. Chabot, I understand your concern about the burden that it
might impose, but let me be clear. This amendment has no burden
on SBA. These are reports that they produce in a daily basis.
After Katrina, this Committee under the previous
administrator, we held so many hearings. Hector Barreto came
before this Committee and told us that everything was fine,
that nothing was creating any problems in terms of the disaster
relief that they were providing to the victims of Katrina.
And report after report, paper after paper in this country,
victims spoke about the inefficiency coming out of SBA. In
hearings after hearings, Katrina, the SBA told this Committee
that everything was fine.
Let me just say what this means is oversight. And the
problems that we saw during Katrina and the lack and inadequate
response that came out of SBA was a result of the lack of
oversight coming out of this Committee. And that is not going
to happen anymore.
So this agency in its oversight, especially during major
disaster, the American public and the American people, they
need to know that the federal government will do everything
they can to provide the assistance that we promise to them and
that we committed to provide.
Mr. Chabot. Would the gentle lady yield?
Chairwoman Velazquez. Sure.
Mr. Chabot. Okay. I thank the gentle lady for yielding.
And, again, I will be very brief.
I would just note that, even though it is a written report
that the administrator has to put together, I think the time
and effort that goes into that and the time of people
underneath the administrator to do that does take some
considerable period of time. And so I think that monthly is
just too often.
Chairwoman Velazquez. I respectfully disagree with the
gentleman. You know quite well that the DCMNS generates this
data on a daily basis, that if they have a disaster plan in
place, there has to be communication between the administrator
and the director of the disaster relief effort, that this
communication and information that they share is all we are
asking them to provide to us. So this provision has no cost.
This provision doesn't impose any burden upon the work that the
SBA and the administrator have to provide.
If any other member wishes to seek recognition? Yes?
Mr. Ellsworth. Madam Chair?
Chairwoman Velazquez. Mr. Ellsworth?
Mr. Ellsworth. As someone who has been through a natural
disaster not nearly the size of Katrina, but certainly in our
community it was devastating, this was something that required
a report in the days when we were talking about food, medicine,
and shelter, I could agree.
But in this world of mass media, they are asking us
questions immediately and for reports and expect us to know
that. So I don't think a 30-day report is too much to ask when
we are asked the questions when we go back home.
So I would not support this amendment.
Chairwoman Velazquez. Any other member wish to be
recognized?
[No response.]
Chairwoman Velazquez. The question is on the amendment
offered by Mr. Chabot. All of those in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All those opposed say ``No.''
[Chorus of ``Noes.'']
Chairwoman Velazquez. In the opinion of the Chair, the noes
have it. The amendment is not agreed to.
If there is any other member who wishes to be recognized
for the purpose of any amendment? Mr. Michaud?
Mr. Michaud. Thank you very much, Madam Chair. I have an
amendment at the desk numbered--[The amendment offered by Mr.
Michaud follows:]
Chairwoman Velazquez. The Clerk will report the amendment.
The Clerk. An amendment is offered by Mr. Michaud of Maine
at the end of Title II to add the following, section 216,
``Economic Injury''--
Chairwoman Velazquez. We ask unanimous consent that the
amendment be considered as read. Without objection, so ordered.
The gentleman is recognized for five minutes to discuss his
amendment.
Mr. Michaud. Thank you, Madam Chair.
The RECOVER Act is a great bill that makes a lot of needed
changes to the SBA disaster planning and assistance program. I
want to thank you and Mr. Chabot for having this markup today.
As you know, the SBA makes economic injury disaster loans
to small businesses that have been adversely affected by
specific disaster events. Last year SBA was newly authorized to
provide these loans in cases of drought. My amendment simply
adds the lack of snowfall as a category eligible for economic
injury disaster loan assistance.
Small community and businesses in the State of Maine, in
the north part of the state, and other states depend on winter
tourism traffic and other weekend outdoor activities. The lack
of snowfall can severely threaten their well-being. And,
unfortunately, these businesses cannot qualify currently under
SBA authority for drought assistance since lack of snowfall
doesn't meet the criteria of drought assistance.
My amendment simply offers equal treatment for small
businesses affected by the lack of snowfall that are currently
falling through the cracks. I hope the Committee will accept
the amendment.
I yield back, Madam Chair.
Chairwoman Velazquez. Does anyone else seek to be
recognized on this amendment?
Mr. Chabot. Madam Chair?
Chairwoman Velazquez. Mr. Chabot?
Mr. Chabot. Thank you, Madam Chair. I move opposition of
this particular amendment.
Chairwoman Velazquez. The gentleman is recognized for five
minutes.
Mr. Chabot. Thank you.
The concept behind this amendment is to address the problem
of lack of snowfall in areas that rely on providing winter
sports recreation. There are a number of problems with this
amendment in my view.
First, how does one measure the lack of snowfall,
especially in ski areas that can make snow?
Second, a lack of snowfall in areas actually affects all
businesses, including those that sell winter sports equipment,
even if they are not located in the area hit by a lack of
snowfall. Should those businesses be eligible? And if not, why
should only businesses located in an area with lack of snowfall
be subject to the disaster declaration?
Thirdly, how does one determine the scope of the area? What
happens if some facilities can make snow and others cannot?
Should the federal government declare a disaster area because
of lack of investment, for example? Does this mean that
recreational areas without snow-making equipment can apply for
a disaster mitigation loan to purchase such equipment?
Fourth, would a place that people who winter to avoid harsh
snow conditions be able to apply for a disaster loan because
people did not travel to avoid snow because of the lack of snow
in other areas? In other words, would parts of Florida be able
to claim a natural disaster for the lack of snow in the
Northeast because it cut down on the number of individuals
vacationing in Florida to avoid winter weather?
Obviously you could go on and on with this. So I just think
there is too much mischief possible in this particular
amendment and would strongly urge my colleagues to oppose it
and yield back the balance of my time.
Chairwoman Velazquez. Thank you.
Well, what I see here is another instance of language
within the Small Business Act being too restrictive for many
small businesses in need of assistance. And it will be
important that we look at areas of improvement within the act
as we continue our work on the reauthorization of the Small
Business Administration statute.
So given that fact, I just would ask the members of the
Committee to support this amendment.
Yes, Mr. Fortenberry?
Mr. Fortenberry. Madam Chairwoman, I actually intended to
support the underlying bill. However, if this amendment passes,
I will not because throwing open the door this wide with
limited ability to define or these definitions being so broad
in their scope and with, actually, a limited ability to have a
clear definition here, it would be just as easy for me to put
in a lack of rainfall as an amendment to this one.
And then suddenly the narrow scope of this bill, which I
think has some very good provisions that I intend to support,
in spite of some concerns brought up by the ranking member,
this would in my view undermine the very purposes, again, of
the narrow tailoring of the larger bill.
I yield back.
Chairwoman Velazquez. Does anyone else seek recognition on
this amendment? Mr. Michaud?
Mr. Michaud. Yes. Thank you. Just to address the concerns
that were raised, there is a process that you have to go to
through, the government would have to go through, as far as
declaring a natural disaster. And the process is already in the
statute. And this would follow through for that same process.
So I don't envision it to open up a wide door. This
definitely has affected a lot of small businesses in Maine
because of the lack of snow. And I would encourage my members
to support it because there is a process already in place to
declare a natural disaster. And I just want to include snowfall
in that.
Thank you.
Chairwoman Velazquez. Any other member who wishes to be
recognized?
[No response.]
Chairwoman Velazquez. The question is on the amendment
offered by Mr. Michaud. All of those in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All those opposed say ``No.''
[Chorus of ``Noes.'']
Chairwoman Velazquez. In the opinion of the Chair, the ayes
have it.
Mr. Michaud. Madam Chair?
Chairwoman Velazquez. Yes?
Mr. Michaud. Ask for a recorded vote on it.
Chairwoman Velazquez. A recorded vote is requested. The
Clerk will call the vote.
The Clerk. Ms. Velazquez.
Chairwoman Velazquez. Aye.
The Clerk. Chairwoman Velazquez votes yes. Ms. Millender-
McDonald.
Ms. Millender-McDonald. Aye.
The Clerk. Ms. Millender-McDonald votes yes. Mr. Jefferson.
Mr. Jefferson. Aye.
The Clerk. Mr. Jefferson votes yes. Mr. Shuler.
Mr. Shuler. No.
The Clerk. Mr. Shuler votes no. Mr. Gonzalez.
Mr. Gonzalez. Aye.
The Clerk. Mr. Gonzalez votes yes. Mr. Larsen.
Mr. Larsen. Yes.
The Clerk. Mr. Larsen votes yes. Mr. Grijalva.
[No response.]
The Clerk. Mr. Michaud.
Mr. Michaud. Yes.
The Clerk. Mr. Michaud votes yes. Ms. Bean.
Ms. Bean. Aye.
The Clerk. Ms. Bean votes yes. Mr. Cuellar.
Mr. Cuellar. Aye.
The Clerk. Mr. Cuellar votes yes. Mr. Lipinski.
Mr. Lipinski. Aye.
The Clerk. Mr. Lipinski votes yes. Ms. Moore.
Ms. Moore. Aye.
The Clerk. Ms. Moore votes yes. Mr. Altmire.
[No response.]
The Clerk. Mr. Braley.
Mr. Braley. Aye.
The Clerk. Mr. Braley votes yes. Ms. Clarke.
Ms. Clarke. Aye.
The Clerk. Ms. Clarke votes yes. Mr. Ellsworth.
Mr. Ellsworth. Yes.
The Clerk. Mr. Ellsworth votes yes. Mr. Johnson.
Mr. Johnson. Aye.
The Clerk. Mr. Johnson votes yes. Mr. Sestak.
Mr. Sestak. No.
The Clerk. Mr. Sestak votes no. Mr. Chabot.
Mr. Chabot. No.
The Clerk. Mr. Chabot votes no. Mr. Bartlett.
Mr. Bartlett. No.
The Clerk. Mr. Bartlett votes no. Mr. Graves.
[No response.]
The Clerk. Mr. Akin.
Mr. Akin. No.
The Clerk. Mr. Akin votes no. Mr. Shuster.
[No response.]
The Clerk. Ms. Musgrave.
Ms. Musgrave. No.
The Clerk. Ms. Musgrave votes no. Mr. King.
[No response.]
The Clerk. Mr. Fortenberry.
Mr. Fortenberry. No.
The Clerk. Mr. Fortenberry votes no. Mr. Westmoreland.
[No response.]
The Clerk. Mr. Gohmert.
[No response.]
The Clerk. Mr. Heller.
Mr. Heller. No.
The Clerk. Mr. Heller votes no. Mr. David Davis.
Mr. Davis. No.
The Clerk. Mr. Davis votes no. Ms. Fallin.
[No response.]
The Clerk. Mr. Buchanan.
Mr. Buchanan. No.
The Clerk. Mr. Buchanan votes no. Mr. Jordan.
Mr. Jordan. No.
The Clerk. Mr. Jordan votes no.
Chairwoman Velazquez. Any other member who wish to cast
their vote or change their vote?
[No response.]
Chairwoman Velazquez. The Clerk will report the vote.
The Clerk. Madam Chair, there are 14 yes votes, 11 no
votes.
Chairwoman Velazquez. The amendment is agreed to.
Mr. Chabot. We are getting closer.
Chairwoman Velazquez. Yes. Are there any other members who
wish to be recognized for the purpose of offering amendments?
Mr. Braley. Yes.
Chairwoman Velazquez. Mr. Braley?
Mr. Braley. Yes. Madam Chair, I have an amendment at the
desk.
Chairwoman Velazquez. The Clerk will report the amendment.
The Clerk. There is an amendment offered by Mr. Braley of
Iowa. At the end of Title II, add the following in section 216,
``Economic injury disaster''--
Chairwoman Velazquez. I ask unanimous consent that the
amendment be considered as read. Mr. Braley, you will be
recognized for five minutes.
Mr. Braley. Thank you.
Madam Chairwoman, Ranking Member Chabot, I am here today as
a voice for 350,000 Iowans who lost power during the recent ice
storm to offer an amendment to H.R. 1361, the RECOVER Act,
which would revise the language within the Small Business Act
to clarify the definition of the term ``disaster'' to include
blizzards and ice storms.
Just a couple of weeks ago, Iowa was hit with a massive ice
storm, one of the worst in its history, which caused extensive
damage throughout the state and left hundreds without power.
Weather in Iowa can be unpredictable and dangerous. And
this was no exception. I was personally affected by this ice
storm when a 40-foot ice-coated branch struck my home in
Waterloo. With the help of my neighbors and our chain saws, I
was able to cope with some personal property damage and
inconvenience. But my situation paled in comparison to the
constituents I met while visiting storm emergency shelters in
Iowa's First Congressional District.
These Iowans were there because they had been displaced
from their homes as a result of their ice storm, including many
from their businesses. Currently the SBA has to wait for the
President to declare something a disaster area before giving
disaster loans to small businesses.
There are well-known exceptions. These include severe
situations, such as floods, hurricanes, tornadoes, earthquakes,
fires, explosions, volcanoes, windstorms, landslides or mud
slides, tidal waves, commercial fishery failures, fishery
resource disasters, riots, civil disorders, etcetera.
This language in my amendment gives the SBA the authority
to make disaster loans in certain situations, even if the
President has not authorized the area as a disaster area.
Unfortunately, the terms ``ice storm'' and ``blizzard'' do not
appear on this list of exceptions.
The amendment I propose today would include these terms in
the definition of a disaster, strongly benefiting small
business owners who are trying to get back on their feet
following an ice storm or blizzard.
I urge my colleagues to recognize that some disasters,
which profoundly impact small businesses occur in the winter
and ask them to support this amendment. And I yield the balance
of my time.
Chairwoman Velazquez. Thank you.
I will support this amendment. I think that it is
important. Winter storm had a dramatic impact on Iowa's
economy. At the peak of losses, 250,000 customers were without
power, 60 counties were declared disaster areas.
Currently SBA is able to make disaster loans. When the
President has declared a disaster area or in certain other
specific situations, including everything from floods to
commercial fishery failures, extending this language to include
ice storms and blizzards fits within existing rationale.
So I will ask my colleagues to support this amendment. And
I will recognize Mr. Chabot.
Mr. Chabot. Thank you, Madam Chairwoman. And I move to
strike the last word.
Chairwoman Velazquez. The gentleman is recognized for five
minutes.
Mr. Chabot. Thank you. I won't take that time. I commend
Mr. Braley for offering an amendment. I think it is a good one.
Ice storms can and in many areas do as much damage, if not
more, than other events classified as natural disasters. It
seems to make sense that the definition of a disaster be
expanded to include ice storms.
It is important to note that an ice storm represents a very
measurable event. One knows when it starts. One knows when it
ends. And one can ascertain the damage from, for example, lost
fruit in the case of Florida or California, damage to goods
that lose refrigeration, et cetera, from the loss of
electricity. Blizzards are somewhat harder to define to be
getting around.
And it may be somewhat more difficult to assess the damage
associated with blizzards, but I still believe this is a very
good amendment and would urge my colleagues to support it and
yield back the balance of my time.
Chairwoman Velazquez. Any other member who seeks
recognition on this amendment, Mr. Braley's amendment?
[No response.]
Chairwoman Velazquez. The question is on the amendment
offered by Mr. Braley. All of those in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All those opposed say ``No.''
[Chorus of ``Noes.'']
Chairwoman Velazquez. In the opinion of the Chair, the ayes
have it.
Any other amendments or comments? Mr. Fortenberry?
Mr. Fortenberry. Thank you, Madam Chair.
Again I just want to say I was prepared to support the
underlying legislation, but given the fourth amendment that was
considered, it's too broad. I think it undermines the purpose
of why we are meeting today in this more narrow tailored bill.
I do appreciate all of the content, much of the content, of
this bill. And regarding the comments of the ranking member, I
supported his amendments as well but do note that his concerns
are mitigated by the fact that the administrator can waive the
provisions. It is up to his discretion, rather.
But, with that said, again, this last amendment regarding
snowfall is far too broad. It is inconsistent in my view with
the underlying legislation. And I cannot support it.
Thank you.
Chairwoman Velazquez. Any other member who wishes to be
recognized?
[No response.]
Chairwoman Velazquez. Seeing no further amendments, I move
that the Committee vote on final passage of H.R. 1361. All of
those in favor say ``Aye.''
[Chorus of ``Ayes.'']
Chairwoman Velazquez. All those opposed say ``No.''
[Chorus of ``Noes.'']
Chairwoman Velazquez. In the opinion of the Chair, the ayes
have it.
Mr. Braley. Madam Chair, I ask--
Chairwoman Velazquez. A recorded vote is requested. The
Clerk shall call the roll.
The Clerk. Ms. Velazquez.
Chairwoman Velazquez. Aye.
The Clerk. Chairwoman Velazquez votes yes. Ms. Millender-
McDonald.
Ms. Millender-McDonald. Aye.
The Clerk. Ms. Millender-McDonald votes yes. Mr. Jefferson.
Mr. Jefferson. Aye.
The Clerk. Mr. Jefferson votes yes. Mr. Shuler.
Mr. Shuler. Aye.
The Clerk. Mr. Shuler votes yes. Mr. Gonzalez.
Mr. Gonzalez. Aye.
The Clerk. Mr. Gonzalez votes yes. Mr. Larsen.
Mr. Larsen. Aye.
The Clerk. Mr. Larsen votes yes. Mr. Grijalva.
[No response.]
The Clerk. Mr. Michaud.
Mr. Michaud. Aye.
The Clerk. Mr. Michaud votes yes. Ms. Bean.
Ms. Bean. Aye.
The Clerk. Ms. Bean votes yes. Mr. Cuellar.
Mr. Cuellar. Aye.
The Clerk. Mr. Cuellar votes yes. Mr. Lipinski.
Mr. Lipinski. Aye.
The Clerk. Mr. Lipinski votes yes. Ms. Moore.
Ms. Moore. Aye.
The Clerk. Ms. Moore votes yes. Mr. Altmire.
Mr. Altmire. Aye.
The Clerk. Mr. Altmire votes yes. Mr. Braley.
Mr. Braley. Aye.
The Clerk. Mr. Braley votes yes. Ms. Clarke.
Ms. Clarke. Aye.
The Clerk. Ms. Clarke votes yes. Mr. Ellsworth.
Mr. Ellsworth. Yes.
The Clerk. Mr. Ellsworth votes yes. Mr. Johnson.
Mr. Johnson. Aye.
The Clerk. Mr. Johnson votes yes. Mr. Sestak.
Mr. Sestak. Yes.
The Clerk. Mr. Sestak votes yes. Mr. Chabot.
Mr. Chabot. No.
The Clerk. Mr. Chabot votes no. Mr. Bartlett.
Mr. Bartlett. No.
The Clerk. Mr. Bartlett votes no. Mr. Graves.
Mr. Graves. No.
The Clerk. Mr. Graves votes no. Mr. Akin.
Mr. Akin. No.
The Clerk. Mr. Akin votes no. Mr. Shuster.
[No response.]
The Clerk. Ms. Musgrave.
Ms. Musgrave. No.
The Clerk. Ms. Musgrave votes no. Mr. King.
[No response.]
The Clerk. Mr. Fortenberry.
Mr. Fortenberry. No.
The Clerk. Mr. Fortenberry votes no. Mr. Westmoreland.
[No response.]
The Clerk. Mr. Gohmert.
[No response.]
The Clerk. Mr. Heller.
Mr. Heller. No.
The Clerk. Mr. Heller votes no. Mr. David Davis.
Mr. Davis. No.
The Clerk. Mr. Davis votes no. Ms. Fallin.
[No response.]
The Clerk. Mr. Buchanan.
[No response.]
The Clerk. Mr. Jordan.
Mr. Jordan. No.
The Clerk. Mr. Jordan votes no.
Chairwoman Velazquez. Any other member who wish to cast
their vote or change their vote?
[No response.]
The Clerk. Madam Chair, the vote is 17 yes votes, 9 no
votes.
Chairwoman Velazquez. The bill is agreed to. I move that
the bill be reported as amended and the staff be directed to
make any technical corrections prior to the filing of the bill.
The markup adjourns.
[Whereupon, at 11:39 a.m., the foregoing matter was
concluded.]
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