[Congressional Record Volume 145, Number 49 (Monday, April 12, 1999)]
[House]
[Pages H1814-H1817]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AUTHORIZING ESTABLISHMENT OF DISASTER MITIGATION PILOT PROGRAM IN THE
SMALL BUSINESS ADMINISTRATION
Mr. THUNE. Mr. Speaker, I move to suspend the rules and pass the
Senate bill (S. 388) to authorize the establishment of a disaster
mitigation pilot program in the Small Business Administration.
The Clerk read as follows:
[[Page H1815]]
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 (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.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
South Dakota (Mr. Thune) and the gentleman from Washington (Mr. Baird)
each will control 20 minutes.
The Chair recognizes the gentleman from South Dakota (Mr. Thune).
Mr. THUNE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, let me begin by thanking my colleagues on the House
Committee on Small Business, particularly the distinguished gentleman
from Missouri (Mr. Talent) for his leadership in moving this measure
forward, as well as the gentlewoman from New York (Ms. Velazquez), the
ranking member on that committee, and my friend from Washington (Mr.
Baird) who is on the floor this afternoon.
Mr. Speaker, S. 388, a measure drafted and introduced by Senator Max
Cleland, is a commonsense approach to applying the principle of
preventive care when coping with natural disasters. S. 388 is
substantially identical to H.R. 818, the Disaster Mitigation Act of
1999, which passed the House on March 2 of this year. It is part of the
administration's budget request and has substantial bipartisan and
bicameral support.
Since 1953, the Small Business Administration has administered the
disaster loan program authorized by Section 7(b) of the Small Business
Act. This program provides loans to help small businesses to rebuild
after natural disasters.
In past years the loan program has spent billions of dollars helping
small businesses and homeowners recover from natural disasters. In
fiscal year 1998 the SBA lent $728 million for 30,154 disaster loans.
In 1997 it lent $1.1 billion for 49,515 disaster loans. In 1994 the
SBA's highest demand came when it loaned over $4.1 billion for damage
due to the North Ridge earthquake in California.
Mr. Speaker, the cost of disaster assistance has risen over the past
several years due to increases in construction and other costs. It is
clear that efforts must be made to hold down these costs. Implementing
a program to help small businesses use techniques to lessen damage
caused by natural disasters offers the potential to save millions of
dollars in the future.
The Federal Emergency Management Agency, FEMA, currently manages
Project Impact, which works in conjunction with communities and
businesses on such mitigation policies and techniques. Passage of S.
388 will complement and further these efforts of mitigation by offering
small businesses low-interest loans for disaster mitigation through the
Small Business Administration.
S. 388 authorizes the SBA to establish a pilot program to make loans
to small businesses for the purpose of mitigating the effects of
natural disasters. These loans will be made in support of the
mitigation program established at the Federal Emergency Management
Agency. These mitigation techniques are varied and include a wide range
of activities including building improvements, relocation and others.
S. 388 will authorize SBA to lend up to $15 million each year through
2004 in support of the Disaster Mitigation Pilot Program. These funds
will come from existing section 7(b) disaster loan appropriations and
will be subject to appropriations available for that program. This bill
will not authorize any new Federal spending.
Finally, S. 388 will require the SBA to report to Congress by January
31, 2003. The report will document the number of loans made, the area
served by the pilot, and the estimated savings to the government as a
result of the program.
Let me again thank my colleagues the gentleman from Missouri (Mr.
Talent) and the ranking member, the gentlewoman from New York (Ms.
Velazquez), and the committee staff for their assistance in moving the
measure before us, Mr. Speaker, and I want to urge my colleagues to
support S. 388.
Mr. Speaker, I reserve the balance of my time.
Mr. BAIRD. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank my distinguished colleague from South Dakota and
also express my gratitude to the chairman of our committee, the
gentleman from Missouri (Mr. Talent) and to the ranking member from New
York (Ms. Velazquez). Together they have worked to develop this bill
which I think has a wonderful potential to help small business owners
reduce the cost of disasters before they happen rather than after.
As the gentleman from South Dakota has indicated, the bill before us
today is virtually identical to a bill that this House passed on March
2. It establishes a demonstration project at the SBA to make financing
available to small businesses so they can make improvements to
businesses that just might reduce property loss and could increase
worker safety in the event of a natural disaster.
Mr. Speaker, my district in southwest Washington happens to be one of
the more disaster-prone in the Nation: We have Mount Saint Helens, we
have periodic flooding, and recently in the towns of Kelso and Olympia
we have had landslides which have claimed in the case of Kelso more
than 140 homes, and in the case of Olympia more than 60 homes have been
rendered unstable. I have been working with these good people since
before I came to office, and I feel we have to be working more to help
people prepare for disasters before they happen as well as cope with
disasters after the fact.
That is what this bill does, is helps people prepare for disasters.
It authorizes up to $15 million in SBA loans each year for the next 5
years to be used for mitigation efforts so businesses can make
structural or interior changes to their businesses that can result in
significant savings.
The program runs for five years. It requires a report to Congress on
the use and effectiveness of the mitigation loans, so it includes a key
and important accountability provision.
This is sensible good government, and it is a costs savings measure.
It has been estimated that for every dollar we spend in disaster
prevention we could save up to $2 or $3 in disaster recovery.
So I join with my colleague from South Dakota (Mr. Thune), and I urge
all of my colleagues in the House today to support this commonsense
legislation and help get this program underway.
Mr. Speaker, I yield such time as she may consume to the gentlewoman
from New York (Ms. Velazquez).
Ms. VELAZQUEZ. Mr. Speaker, I thank the gentleman from Washington
[[Page H1816]]
(Mr. Baird) for yielding this time to me.
Mr. Speaker, I rise today in strong support of S. 388, the Disaster
Mitigation Pilot Program. Traditionally business owners have only been
able to get help after a natural disaster has struck and caused damage
to their business. For many small businesses this assistance comes too
late to save them from economic ruin. The loss of revenue and time
needed to recover causes countless businesses to fail. Instead of being
able to rebuild, many communities are faced with loss of jobs as many
businesses permanently close after a disaster. We have seen this happen
again and again over the past few years. Hurricanes, floods and
wildfires have threatened the economic stability and future of
communities across this Nation.
However, until today businesses have only been able to get help after
it is too late. Today's legislation will change this story. Today we
are taking an important step in being proactive rather than just
reactive to natural disasters.
S. 388 is identical to H.R. 818, which the House passed on March 2 of
this year with only a few minor changes in wording. The result is the
same. This legislation authorizes $75 million to be used by SBA in
cooperation with FEMA over the next 5 years to help businesses in
disaster-prone areas take preventive measures to avert or minimize
damage should disaster strike.
{time} 1445
By enabling businesses to take preventive measures which mitigate the
damage caused by floods, hurricanes and other natural disasters, this
program will allow them to recover much faster. Therefore, instead of
going out of business, they will be able to get back to business much
quicker than ever before.
The disaster mitigation program is a common-sense approach to helping
businesses cope with disasters. The program also makes fiscal sense.
Some estimates show that every dollar spent on mitigation saves $2 in
money that would otherwise have to be spent on post-disaster response.
Not only will businesses and taxpayers come out ahead, but the American
economy will as well.
Finally, I would like to thank the gentleman from Washington (Mr.
Baird). His constituents face the threat of natural disaster, and his
insight and hard work on this legislation have been a great help to all
of us. I strongly support S. 388 and I urge my colleagues to vote for
this important piece of legislation.
Mr. BAIRD. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would like to just offer a couple of closing comments.
Let me just briefly reiterate the common sense behind this proposal. It
provides low-interest loans up front so small business owners can
prepare for disasters before they happen. They can prepare for
earthquakes or floods or fires or hurricanes. By spending money up
front, through low-interest loans, they will save the taxpayers dollars
down the road.
That is why this bill makes so much sense; it will save taxpayers
money. It will help small businesses out and it will reduce the overall
net cost of disaster response. That is the kind of bill we should be
putting forward, and I thank my colleague from South Dakota (Mr. Thune)
for doing so.
Mr. Speaker, I yield back the balance of my time.
Mr. THUNE. Mr. Speaker, I yield myself such time as I may consume for
closing.
Mr. Speaker, I want to thank the gentleman from Washington (Mr.
Baird) and the gentlewoman from New York (Ms. Velazquez) for their work
on this and again would just simply say that in Washington we are
always looking for win/win solutions. I think this really is a win/win.
It is a win not only for disaster victims. It is also a win for the
taxpayers.
My State of South Dakota has been no stranger to disasters in the
last few years, and consistently we find that FEMA is called on to the
spot, SBA and other agencies that deal with disaster assistance, but it
is always after the fact.
We have an opportunity here to provide a mechanism whereby businesses
and others can prepare in advance for disasters and take those steps
that are necessary to try and see that the taxpayers are not called
upon after an event to deal with it.
I would again urge my colleagues in the House to support this
measure. It is a common-sense approach to legislating solutions on
disaster assistance, and hopefully, we will be able to take this and
work collectively as partners with FEMA and the SBA and others to see
that we do the best job we can on the front end to protect disaster
victims, as well as to protect the taxpayers from unnecessary needed
expense.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I am pleased to rise in
support of S. 388. This bill will establish a pilot program for the
implementation of disaster mitigation measures by small businesses to
help them to better prepare for natural disasters.
Small businesses from Texas to New York play a vital role in the
health of our economy. They account for 99.7 percent of America's
employers. In fact, Small businesses employ 53 percent of the private
work force, contribute 47 percent of all sales in the country, and are
also responsible for 50 percent of the private gross domestic product.
Unfortunately, it is a fact that Small Businesses are ill equipped to
deal with natural disasters.
Under this bill, the Small Business Administration, in conjunction
with the Federal Emergency Management Agency, would begin a 5-year
program to provide loans to small businesses to implement mitigation
techniques. These loans would provide funds for proactive measures
designed to limit damages from natural disasters. These projects
include for example elevating a foundation in case of a flood or
strengthening walls in case of an earthquake.
Last year natural disasters cost Americans more than $10 billion.
This is the third worst year this decade. I am told that the last three
years have been the most active period in history for Atlantic
hurricanes. Unfortunately the 1999 hurricane season will be active
again this year and other natural disasters are going to occur. Small
Businesses will and do suffer economically from these natural
disasters.
Under this bill, the loans would be made either directly or in
cooperation with banks or other lending institutions through agreements
to participate on an immediate or deferred basis. This program is
designed to provide these loans to small businesses in disaster-prone
areas that would otherwise be unable to obtain credit for such
preventative measures.
This bill will help businesses across this country to better prepare
for disasters. I support this bill because it aggressively prepares
small businesses located in disaster-prone areas to prepare for
disasters. I urge my colleagues to support small businesses by
supporting this bill.
Mr. UNDERWOOD. Mr. Speaker, for many people nationwide, Guam is
synonymous with a number of things. One of them is certainly natural
disasters. Guam's location in the Pacific Ocean's typhoon alley makes
it regularly susceptible to annual storms that bring destruction to our
community. In this decade alone, Guam has been subjected to at least a
dozen typhoons. Even though the destruction brought about by a storm is
uncommon, it is a common occurrence for the island of Guam. At one
time, five typhoons had hit Guam in the span of 3 months.
As many may recall, the most recent storm, Super Typhoon Paka,
devastated the island in December of 1997 and caused property damage of
over $100 million. On top of these storms, Guam also became a victim of
an 8.2 earthquake in 1994, which has been one of the strongest recorded
in the Pacific in this century.
S. 388 is good legislation. It is proactive and it will prepare small
businesses for recovery. Most often, disaster related programs are
targeted to homeowners and gain the bulk of their popularity in the
aftermath of destruction. S. 388 and its companion legislation H.R.
818, passed by the House last month, addresses the concerns of small
businesses that do not receive the same type of disaster attention
given to homeowners. The recovery of a community in the wake of
disaster can be bolstered by the level of preparation to mitigate
against damage by our business communities. Small businesses help
generate economic activity crucial for the recovery of a stricken
community.
Reacting to a storm plagues many communities with confusion. This
pilot program aims to empower the business community with information
and mitigation activities which will prevent serious losses. An
appropriation of $15 million is a very small amount compared to
potential losses without this sort of program.
I understand that the territories are full partners in this program.
I certainly hope that in coming years the amounts will be expanded and
we will do everything we can to make sure this pilot program is a
success.
[[Page H1817]]
I commend the authors of this legislation from both the House and
Senate and encourage my colleagues to vote in favor of this measure.
Mr. THUNE. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Stearns). The question is on the motion
offered by the gentleman from South Dakota (Mr. Thune) that the House
suspend the rules and pass the Senate bill, S. 388.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the Senate bill was passed.
A motion to reconsider was laid on the table.
____________________