[Congressional Record Volume 145, Number 22 (Monday, February 8, 1999)]
[Senate]
[Pages S1370-S1371]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CLELAND (for himself, Mr. Kerry, Mr. Hollings, Mr. Conrad, 
        Mrs. Boxer, Mr. Daschle, and Mr. Harkin):
  S. 388. A bill to authorize the establishment of a disaster 
mitigation pilot program in the Small Business Administration; to the 
Committee on Small Business.


             disaster mitigation pilot program legislation

 Mr. CLELAND. Mr. President, on behalf of my fellow original 
cosponsors, I am proud to introduce legislation which will provide a 
valuable protection for America's small businesses.
  This initiative would permit the Small Business Administration to use 
up to $15 million of existing disaster funds to establish a pilot 
program to provide small businesses with low-interest, long-term 
disaster loans to finance preventive measures before a disaster hits.
  Across the nation, increasing costs and personal devastation 
associated with disasters continually plague communities. While it may 
be impossible to prevent disasters, we believe that this legislation 
makes it possible to limit the number of disaster victims.
  In response to the financial and human toll caused by disasters, the 
administration launched an approach to emergency management that moves 
away from the current reliance on response and recovery to one that 
emphasizes preparedness and prevention. The Federal Emergency 
Management Agency established its Project Impact Program to assist 
disaster-prone communities in developing strategies to avoid the 
crippling effects of natural disasters.
  Our legislation supports this approach by allowing the SBA to begin a 
pilot program that would be limited to small businesses within those 
communities that are eligible to receive disaster loans after a 
disaster has been declared.
  Currently, SBA disaster loans may only be used to repair or replace 
existing protective devices that are destroyed or damaged by a 
disaster. The pilot program authorized by our proposal would allow 
funds to also be used to install new mitigation devices that will 
prevent future damage. We believe that such a program would address two 
areas of need for small business--reducing the costs of recovery from a 
disaster and reducing the costs of future disasters. Furthermore, by 
cutting those future costs, the program presents an excellent 
investment for taxpayers by decreasing the Federal and State funding 
required to meet future disaster relief needs. The ability of a small 
business to borrow money through the Disaster Loan Program to help make 
their facility disaster resistant could mean the difference as to 
whether that small business owner is able to reopen or forced to go out 
of business altogether after a disaster hits.
  On behalf of my fellow cosponsors, I urge my colleagues to support 
this effort to facilitate disaster prevention measures. Upon passage of 
this legislation, the costs in terms of property, taxpayer dollars, and 
lives will be reduced when nature strikes in the future.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 388

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DISASTER MITIGATION PILOT PROGRAM.

       (a) In General.--Section 7(b)(1) of the Small Business Act 
     (15 U.S.C. 636(b)(1)) is amended--
       (1) in subparagraph (B), by adding ``and'' at the end; and
       (2) by adding at the end the following:
       ``(C) during fiscal years 2000 through 2004, to establish a 
     predisaster mitigation program to make such loans (either 
     directly or in cooperation with banks or other lending 
     institutions through agreements to participate on an 
     immediate or deferred (guaranteed) basis), as the 
     Administrator may determine to be necessary or appropriate, 
     to enable small businesses to use mitigation techniques in 
     support of a formal mitigation program established by the 
     Federal Emergency Management Agency, except that no loan or 
     guarantee may be extended to a small business under this 
     subparagraph unless the Administration finds that the small 
     business is otherwise unable to obtain credit for the 
     purposes described in this subparagraph;''.
       (b) Authorization of Appropriations.--Section 20 of the 
     Small Business Act (15 U.S.C. 631 note) is amended by adding 
     at the end the following:
       ``(f) Disaster Mitigation Pilot Program.--The following 
     program levels are authorized for loans under section 
     7(b)(1)(C):
       ``(1) $15,000,000 for fiscal year 2000.
       ``(2) $15,000,000 for fiscal year 2001.
       ``(3) $15,000,000 for fiscal year 2002.
       ``(4) $15,000,000 for fiscal year 2003.
       ``(5) $15,000,000 for fiscal year 2004.''.
       (c) Evaluation.--On January 31, 2003, the Administrator of 
     the Small Business Administration shall submit to the 
     Committees on Small Business of the House of Representatives 
     and the Senate a report on the effectiveness of the pilot 
     program authorized by section 7(b)(1)(C) of the Small 
     Business Act

[[Page S1371]]

     (15 U.S.C. 636(b)(1)(C)), as added by subsection (a) of this 
     section, which report shall include--
       (1) information relating to--
       (A) the areas served under the pilot program;
       (B) the number and dollar value of loans made under the 
     pilot program; and
       (C) the estimated savings to the Federal Government 
     resulting from the pilot program; and
       (2) such other information as the Administrator determines 
     to be appropriate for evaluating the pilot program.

  Mr. KERRY. Mr. President, today I join my colleague, Senator Max 
Cleland, in introducing the Disaster Mitigation Coordination Act of 
1999, a bill that helps our nation's small businesses save money and 
prepare for natural disasters.
  We can't prevent disasters, but we can take measures to lessen and 
prevent the destruction that often hurts, and sometimes destroys, small 
businesses. Aside from avoiding inconveniences and disruptions, we know 
that there are cost-benefits to making meaningful improvements and 
changes to facilities before a disaster. According to the Federal 
Emergency Management Agency, which has a disaster mitigation program 
for communities, rather than businesses, we know that we save two 
dollars of disaster relief money for each dollar spent on disaster 
mitigation.
  I see a great need for this type of assistance in the small business 
community. This bill establishes a five-year pilot program that would 
make low-interest, long-term loans available to small business owners 
financing preventive measures to protect their businesses against, and 
lessen the extent of, future disaster damage. This pilot program is 
designed to help those small businesses that can't get credit elsewhere 
and that are located in disaster-prone areas.
  The small business pre-disaster mitigation loan pilot program would 
be run as part of the Small Business Administration's regular disaster 
loan program, testing the pros and cons of preparedness versus 
reaction. Up to $15 million will be set aside for this pilot if 
enacted.
  Only a portion of SBA's regular disaster loans, up to 20 percent, are 
available for mitigation after a recent natural disaster. In contrast, 
this legislation would allow 100 percent of an SBA disaster loan to be 
used for mitigation purposes within any area that the Federal Emergency 
Management Agency has designated as disaster-prone. In Massachusetts, 
that includes Marshfield and Quincy, two coastal communities that are 
prone to flooding, rainstorms and Nor'easters.
  Nationwide, whether you're a business in Missouri or Massachusetts, 
this pilot would allow you to take out a loan to make the improvements 
to your building or office to protect against disasters. For floods it 
can mean elevating the foundation or relocating. For tornados it can 
mean installing storm windows and building a stronger roof. For 
hurricanes it can mean reinforcing walls. And for fires it can mean 
adding sprinklers and flame-retardant building materials.
  The Administration supports this pilot program and included it in 
Clinton's budget request this fiscal year, and again for fiscal year 
2000. The President requests that up to $15 million of the total $358 
million proposed for disaster loans be used for disaster mitigation 
loans.
  Senator Cleland and I introduced this same legislation in the last 
Congress. And although it passed committee and the full Senate without 
opposition, the House did not have time to vote on its merits before 
the 105th Congress ended. I thank my colleagues, Senators Hollings, 
Conrad, Boxer, Daschle and Harkin for sharing our concern to meet the 
needs of our small business owners while also working to find solutions 
that are smarter, more pro-active and more cost-effective. Mr. 
President, I am pleased to cosponsor this legislation and am hopeful it 
will again receive the full support it deserves when it comes before 
the Senate this Congress.
                                 ______