[Congressional Record Volume 148, Number 150 (Tuesday, November 19, 2002)]
[Senate]
[Pages S11546-S11547]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE SMALL BUSINESS DROUGHT RELIEF ACT
Mr. KERRY. Mr. President, as the Senate and the House prepare to
bring the 107th session to a close, we leave some important small
business legislation unfinished. Regrettably, that includes passage of
the Small Business Drought Relief Act because of serial holds from
Republicans since August 1-3 and a half months. This emergency
legislation passed our committee with unanimous support, and yet
Senators with no jurisdiction in small business, instigated by an
administration that claims to support small business, obstructed
passage.
The committee reached out to those Senate members and their staffs
time and again, and there was no cooperation. Sixteen Governors--
Governor Hodges of South Carolina, Governor Easley of North Carolina,
Governor Barnes of Georgia, Governor Foster of Louisiana, Governor
Musgrove of Mississippi, Governor Perry of Texas, Governor Wise of West
Virginia, Governor Patton of Kentucky, Governor Glendening of Maryland,
Governor Holden of Missouri, Governor Keating of Oklahoma, Governor
Sundquist of Tennessee, Governor Warner of Virginia, Governor Siegel
man of Alabama, Governor Huckabee of Arkansas, and Governor Guinn of
Nevada--reached out to the Congress asking for us to pass this bill,
and they got no cooperation. The committee was ultimately able to
overcome tremendous differences between CBO's cost estimate and OMB's
cost estimate to reach agreement with the Office of Management and
Budget on passing this emergency legislation last week, but not even
that moved the Republican leadership to cooperate.
So we go home tonight, and our small businesses--main street
America--needlessly struggle to make ends meet, keep their doors open
and employees on the payroll, because of partisan politics.
For those who don't remember, this is emergency legislation to help
small non-farm-related businesses across this Nation that are in dire
straits because of drought conditions in their State. Just like the
farmers and ranchers, the owners of rafting businesses, marinas, and
bait and tackle shops lose a lot of business because of drought.
Right now these small businesses can't get help through the SBA's
disaster loan program because of something taxpayers hate about
government--bureaucracy. SBA denies these businesses access to disaster
loans because its lawyers say drought is not a sudden event and
therefore it is not a disaster by definition. Contrary to the Agency's
position that drought is not a disaster, as of July 16, 2002, the day
we introduced this bill, the SBA had in effect drought disaster
declarations in 36 States. Unfortunately, the assistance was limited to
farm-related small businesses.
The 36 States include: Arizona, California, Colorado, Delaware,
Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland,
Massachusetts, Michigan, Montana, Nebraska, Nevada, New Mexico, New
York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah,
Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
The situation has only gotten worse judging by SBA's own numbers.
Since the bill was introduced, the SBA has declared disasters in two
more States and the District of Columbia. Instead of rising to the
occasion and using their statutory authority to help the small
businesses in these areas, they continue to deny them access to
disaster loans, hiding behind a legal opinion--a legal opinion that
they will not provide to the committee.
To make sure the facts of this legislation are accurate, let the
record show that this bill does not expand the SBA disaster loan
program. SBA already has this authority, and this bill simply restates
and clarifies that authority to ensure that the law is applied fairly.
Let the record show that SBA, contrary to its claims, has the expertise
to determine when a drought is a disaster. First, the SBA already
declares drought disasters and does so mainly by working with the U.S.
Secretary of Agriculture. Second, in addition to working with the
Secretary of Agriculture, there are existing SBA guidelines for
declaring disasters, and those guidelines apply to drought too. For
example, the Governor of a State can request a declaration from the
Administrator of the SBA after certifying that more than five small
businesses have suffered economic injury because of a disaster. Last,
let the record show that this legislation is modest in cost. CBO
estimated that this bill would cost $5 million per year for 5 years,
far less than OMB's estimate of approximately $100 million per year.
And last week, as I referenced earlier, we were able to reach an
agreement with OMB that capped the cost at $9 million for fiscal year
2003, enough to cover the cost of the bill as passed by the committee
and the Bond/Enzi/Burns/Crapo amendment. Unfortunately, even OMB's
concurrence and the support of many Senators and Governors did not
persuade the remaining Senator blocking passage of the bill to put
aside his differences for the sake of small businesses and permit it to
pass.
I thank the many supporters of this bill. My 22 colleagues who are
cosponsors--Senators Bond, Hollings, Landrieu, Baucus, Bingaman,
Daschle, Johnson, Edwards, Carnahan Cleland, Enzi, Lieberman, Harkin,
Ensign, Reid, Helms, Allen, Bennett, Torricelli, Levin, Crapo and
Thurmond. All the Governors who put small businesses first and politics
last. Mr. Donald Wilhite, director of the National Drought Mitigation
Center at the University of Nebraska in Lincoln, for all his assistance
to my staff in understanding the scope of drought in this country and
for writing in support of the legislation. National Small Business
United, for always being there to stand up for small businesses. The
many small business owners and small business advocates, such as
Wildlife Action, in South Carolina, who took the time to write me
regarding the drought and their problems with the SBA. And last, but
certainly not least, from my home State, I thank Bob Durand of the
Massachusetts Emergency Management Association for his help and
support. We will take this fight up again in the next Congress.
Mr. President, I ask unanimous consent that several letters of
support and my remarks be included in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Southern Governors' Association,
Washington, DC, August 19, 2002.
Hon. John Kerry,
U.S. Senate, Russell Senate Office Building,
Washington, DC.
Dear Senator Kerry: We are deeply concerned that small
businesses in states experiencing drought are being
devastated by drought conditions that are expected to
continue through the end of the summer. We urge you to
support legislation that would allow small businesses to
protect themselves against the detrimental effects of
drought.
Much like other natural disasters, the effects of drought
on local economies can be crippling. Farmers and farm-related
businesses can turn in times of drought to the U.S.
Department of Agriculture. However, non-farm small businesses
have nowhere to go, not even the Small Business
Administration (SBA), because their disaster loans are not
made available for damage due to drought.
To remedy this omission, Sen. John Kerry (D-Mass.)
introduced the Small Business Drought Relief Act (S. 2734) on
July 16, 2002, to make SBA disaster loans available to those
small businesses debilitated by prolonged drought conditions.
This bill was passed by the Senate Small Business Committee
just eight days later. Also, the companion legislation (H.R.
5197) was introduced by Rep. Jim DeMint (R-S.C.) on July 24,
2002.
[[Page S11547]]
Both bills are gaining bipartisan support, and we hope you
will cosponsor this important legislation and push for its
rapid enactment in the 107th Congress.
As 11 southern states are presently experiencing moderate
to exceptional drought conditions this summer, we cannot
afford to wait to act. We urge you to cosponsor the Small
Business Drought Relief Act and push for its consideration as
soon as possible.
Sincerely,
Governors Don Siegelman of Alabama, Mike Huckabee of
Arkansas, Roy E. Barnes of Georgia, Paul E. Patton of
Kentucky, M.J. ``Mike'' Foster, Jr. of Louisiana,
Parris N. Glendening of Maryland, Ronnie Musgrove of
Mississippi, Bob Holden of Missouri, Michael F. Easley
of North Carolina, Frank Keating of Oklahoma, Jim
Hodges of South Carolina, Don Sundquist of Tennessee,
Rick Perry of Texas, Mark Warner of Virginia, Bob Wise
of West Virginia.
____
Office of the Governor,
State of South Carolina,
Columbia, SC, July 9, 2002.
Hon. John Kerry,
U.S. Senate, Russell Building,
Washington, DC.
Dear Senator Kerry: The State of South Carolina is in its
fifth year of drought status, the worst in over fifty years.
Some parts of the state are in extreme drought status and the
rest is in severe drought status.
99% of our streams are flowing at less than 10% of their
average flow for this time of year. 60% of those same streams
are running at lowest flow on record for this date. The
levels of South Carolina's lakes have dropped anywhere from
five feet to twenty feet. Some lakes have experienced a drop
in water level so significant that tourist and recreational
use has diminished.
State and national climatologists are not hopeful that we
will receive any significant rainfall in the near future. To
end our current drought, we would need an extended period of
average to above average rainfall.
Droughts, particularly prolonged ones such as we are
experiencing now, have extensive economic effects. For
farmers who experience the economic effects of such a
drought, assistance is available through the USDA. For small
businesses, assistance is available only for agriculture
related small businesses, i.e. feed and seed stores. For
businesses that are based on tourism around Lakes and Rivers,
there is currently no assistance available.
We have reports of lake and river tourism dependent
businesses experiencing 17% to 80% declines in revenue. The
average decline in revenue is probably near 50% across the
board.
My staff has contacted Small Business Administration and
they are not authorized to offer assistance to these
businesses because a drought is not defined as a sudden
occurrence. Nonetheless, a drought is an ongoing natural
disaster that is causing great economic damage to these small
business owners.
I am requesting that you assist us in this situation by
proposing that the Small Business and Entrepreneurship
Committee take action to at least temporarily amend the SBA
authorizing language and allow them to offer assistance to
small businesses affected by prolonged drought. This would
allow Governors to ask SBA for an administrative declaration
of economic injury because of drought. The low interest loans
SBA can offer these businesses would allow many of them to
weather the drought and remain in business for the long run.
My staff has also been in contact with Senator Hollings'
legislative staff. I hope together, we can find an expedient
solution to the plight of these small business owners. Short
of finding a way to control the weather, this may be our only
option to help their dire situation.
Sincerely,
Jim Hodges,
Governor.
____________________