[Congressional Record Volume 149, Number 21 (Wednesday, February 5, 2003)]
[Senate]
[Pages S2003-S2004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself, Mr. Bond, Ms. Landrieu, Mr. Edwards, 
        Mr. Johnson, Mr. Bingaman, Mr. Levin, Mr. Baucus, Mr. Daschle, 
        Mr. Hollings, Mr. Lieberman, Mr. Warner, Mr. Crapo, Mr. Harkin, 
        and Mr Reid):
  S. 318. A bill to provide emergency assistance to nonfarm-related 
small business concerns that have suffered substantial economic harm 
from drought; to the Committee on Small Business and Entrepreneurship.
  Mr. KERRY. Mr. President, drought continues to be a serious problem 
for many States in this country, and I rise to re-introduce legislation 
to help small businesses that need disaster assistance but can't get it 
through the Small Business Administration's disaster loan program.
  You see, the SBA doesn't treat all drought victims the same. The 
Agency only helps those small businesses whose income is tied to 
farming and agriculture. However, farmers and ranchers are not the only 
small businesses owners whose livelihoods are at risk when drought hits 
their communities. The impact can be just as devastating to the owners 
of rafting businesses, marinas, and bait and tackle shops. Sadly, these 
small businesses cannot get help through the SBA's disaster loan 
program because of something taxpayers hate about government, 
bureaucracy.
  The 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. However, contrary to the Agency's position that 
drought is not a disaster, as of July 16, 2002, the day this 
legislation was introduced last year, the SBA had in effect drought 
disaster declarations in 36 States. And adding insult to injury, in 
those States where the Agency declared drought disasters, it limited 
assistance to only farm-related small businesses.
  My friends, the SBA has the authority to help all small businesses 
hurt by drought in declared disaster areas, but the Agency won't do it. 
For years the Agency has been applying the law unfairly, helping some 
and not others, and it is out of compliance with the law. The Small 
Business Drought Relief Act of 2003 would force SBA to comply with 
existing law, restoring fairness to an unfair system, and get help to 
small business drought victims that need it.
  This bill deserves quick consideration. Time is of the essence for 
drought victims. This legislation has been through a thorough review, 
and there is no reason to duplicate our efforts. The Committee 
considered virtually identical legislation last year and voted 
unanimously to pass it. In addition to approval by the committee of 
jurisdiction, OMB approved identical legislation last year. The bill I 
am introducing today includes those changes we worked out with the 
Administration, and I see no reason to delay passage.
  Senator Bond has been a real champion on this issue, and I thank him. 
I look forward to having a similar partnership with Senator Snowe. I 
thank all my colleagues who are cosponsors, Senators Bond, Landrieu, 
Edwards, Johnson, Bingaman, Levin, Baucus, Daschle, Hollings, 
Lieberman, Warner, Crapo, Harkin, and Reid.
  I ask unanimous consent that the text of the bill, and letters of 
support from governors who advocated prompt passage of this legislation 
last year, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 318

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

     SECTION 1. LOANS TO SMALL BUSINESS CONCERNS DAMAGED BY 
                   DROUGHT.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Drought Relief Act of 2003''.
       (b) Findings.--Congress finds that--
       (1) as of July 2002, more than 36 States (including 
     Massachusetts, South Carolina, and Louisiana) have suffered 
     from continuing drought conditions;
       (2) droughts have a negative effect on State and regional 
     economies;
       (3) many small businesses in the United States sell, 
     distribute, market, or otherwise engage in commerce related 
     to water and water sources, such as lakes, rivers, and 
     streams;
       (4) many small businesses in the United States suffer 
     economic injury from drought conditions, leading to revenue 
     losses, job layoffs, and bankruptcies;
       (5) these small businesses need access to low-interest 
     loans for business-related purposes, including paying their 
     bills and making payroll until business returns to normal;
       (6) absent a legislative change, the practice of the Small 
     Business Administration of permitting only agriculture and 
     agriculture-related businesses to be eligible for Federal 
     disaster loan assistance as a result of drought conditions 
     would likely continue;
       (7) during the past several years small businesses that 
     rely on the Great Lakes have suffered economic injury as a 
     result of lower than average water levels, resulting from low 
     precipitation and increased evaporation, and there are 
     concerns that small businesses in other regions could suffer 
     similar hardships beyond their control and that they should 
     also be eligible for assistance; and
       (8) it is necessary to amend the Small Business Act to 
     clarify that nonfarm-related small businesses that have 
     suffered economic injury from drought are eligible to receive 
     financial assistance through Small Business Administration 
     Economic Injury Disaster Loans.
       (c) Drought Disaster Authority.--
       (1) Definition of disaster.--Section 3(k) of the Small 
     Business Act (15 U.S.C. 632(k)) is amended--
       (A) by inserting ``(1)'' after ``(k)''; and
       (B) by adding at the end the following:
       ``(2) For purposes of section 7(b)(2), the term `disaster' 
     includes--
       ``(A) drought; and
       ``(B) below average water levels in the Great Lakes, or on 
     any body of water in the

[[Page S2004]]

     United States that supports commerce by small business 
     concerns.''.
       (2) Drought disaster relief authority.--Section 7(b)(2) of 
     the Small Business Act (15 U.S.C. 636(b)(2)) is amended--
       (A) by inserting ``including drought, with respect to both 
     farm-related and nonfarm-related small business concerns 
     affected by drought,'' before ``if the Administration''; and
       (B) in subparagraph (B), by striking ``the Consolidated 
     Farmers Home Administration Act of 1961 (7 U.S.C. 1961)'' and 
     inserting the following: ``section 321 of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1961), in which 
     case, assistance under this paragraph may be provided to 
     farm-related and nonfarm-related small business concerns, 
     subject to the other applicable requirements of this 
     paragraph''.
       (d) Prompt Response to Disaster Requests.--Section 
     7(b)(2)(D) of the Small Business Act (15 U.S.C. 636(b)(2)(D)) 
     is amended by striking ``Upon receipt of such certification, 
     the Administration may'' and inserting ``Not later than 30 
     days after the date of receipt of such certification by a 
     Governor of a State, the Administration shall respond in 
     writing to that Governor on its determination and the reasons 
     therefore, and may''.
       (e) Limitation on Loans.--From funds otherwise appropriated 
     for loans under section 7(b) of the Small Business Act (15 
     U.S.C. 636(b)), not more than $9,000,000 may be used during 
     fiscal year 2003 to provide drought disaster loans to non-
     farm related small business concerns.
       (f) Rulemaking.--Not later than 45 days after the date of 
     enactment of this Act, the Administrator of the Small 
     Business Administration shall promulgate final rules to carry 
     out this Act and the amendments made by this Act.
                                  ____



                              Southern Governors' Association,

                                                  August 19, 2002.
     Hon. John Kerry,
     U.S. Senate, 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. 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,
         Gov. Don Siegelman of Alabama; Gov. Mike Huckabee of 
           Arkansas; Gov. Roy E. Barnes of Georgia; Gov. M.J. 
           ``Mike'' Foster, Jr. of Louisiana; Gov. Ronnie Musgrove 
           of Mississippi; Gov. Michael F. Easley of North 
           Carolina; Gov. Jim Hodges of South Carolina; Gov. Rick 
           Perry of Texas; Gov. Bob Wise of West Virginia; Gov. 
           Paul E. Patton of Kentucky; Gov. Parris N. Glendening 
           of Maryland; Gov. Bob Holden of Missouri; Gov. Frank 
           Keating of Oklahoma; Gov. Don Sundquist of Tennessee; 
           and Gov. Mark Warner of Virginia.
                                  ____



                                        Ofice of the Governor,

                                                    July 23, 2002.
     Hon. John F. Kerry,
     Chairman, Committee on Small Business, Washington, DC.
     Hon. Christopher Bond,
     Ranking Member, Committee on Small Business, Washington, DC.
       Dear Senators Kerry and Bond: Much of Nevada and the Nation 
     have been experiencing extreme drought over the past several 
     years. In Nevada we have seen the effects of this situation 
     through catastrophic range and forest fires, insect 
     infestations and loss of crops and livestock.
       Prolonged drought causes a drastic reduction in stream and 
     river flow levels. This can cause the level of lakes to drop 
     so significantly that existing docks and boat ramps cannot 
     provide access to boats. In the case of range and forest 
     fires we have seen small innkeepers and hunting and fishing 
     related businesses that have their entire season wiped out in 
     a matter of a few hours.
       Unfortunately for some small businesses, drought assistance 
     is available only for agriculture related small businesses, 
     such as feed and seed stores. For businesses that are based 
     on tourism around lakes and rivers, there is currently no 
     drought assistance available.
       The Small Business Administration (SBA) is not currently 
     authorized to help these businesses because a drought is not 
     a sudden occurrence. Nonetheless, a drought is an ongoing 
     natural disaster that causes great damage to these small 
     businesses.
       I would like to lend my support to S. 2734, The Small 
     Business Drought Relief Act. This bill would amend the 
     guidelines and authorize the SBA to offer assistance to small 
     businesses affected by prolonged drought. With passage of 
     this bill, Governors would be allowed to ask SBA for an 
     administrative declarations 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 economically viable for future operation.
           Sincerely,
                                                   Kenny C. Guinn,
     Governor.
                                  ____



              State of North Carolina, Office of the Governor,

                                       Raleigh, NC, July 18, 2002.
     Hon. John Edwards,
     U.S. Senate, Washington, DC.
       Dear Senator Edwards: I am writing to thank you for your 
     support for legislation introduced in the Senate to add 
     drought as a condition for which small businesses may apply 
     for Small Business Administration Economic Injury Disaster 
     Loans.
       The Small Business Drought Relief Act (S. 2734) will 
     correct the current situation facing our small businesses in 
     North Carolina. SBA disaster assistance is not available 
     despite a historic drought that is impacting not just our 
     agriculture sector, but causing real business and revenue 
     losses, which threaten some firms with job layoffs or even 
     bankruptcy.
       These businesses need help, and access to low-interest SBA 
     loans can offer a lifeline to allow paying bills and making 
     payrolls until business returns to normal.
       I urge you to push for rapid action on this important 
     enhancement to SBA's ability to help our people through this 
     time of trouble.
       With kindest regards, I remain
           Very truly yours,
                                                Michael F. Easley,
     Governor.
                                  ____

                                          State of South Carolina,


                                       Office of the Governor,

                                       Columbia, SC, July 9, 2002.
     Hon. John Kerry,
     U.S. Senate, 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 if in severe drought status.
       Ninety-nine percent of our streams are flowing at less than 
     10 percent of their average flow for this time of year. 60 
     percent 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 percent to 80 percent declines in 
     revenue. The average decline in revenue is probably near 50 
     percent 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.
                                 ______