[Congressional Record Volume 151, Number 100 (Thursday, July 21, 2005)]
[Senate]
[Pages S8682-S8683]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY:
  S. 1463. A bill to clarify that the Small Business Administration has 
authority to provide emergency assistance to non-farm-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 business 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--
buraucracy.
  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, in July of 2002, when this Act was 
originally introduced, the SBA had in effect drought disaster 
declarations in 36 States. As of July 2005, 11 States remain declared 
drought disasters and 19 States are suffering from severe to extreme 
drought conditions. Adding insult to injury, in those States where the 
Agency declares drought disaster, it limits assistance to only farm-
related small businesses. Take, for instance, South Carolina. A couple 
of years ago that entire State had been declared a disaster by the SBA, 
but the Administration would not help all drought victims. Let met read 
to you from the declaration:

       Small businesses located in all 46 counties may apply for 
     economic injury disaster loan assistance through the SBA. 
     These are working capital loans to help the business continue 
     to meet its obligations until the business returns to normal 
     conditions. . . . Only small, non-farm agriculture dependent 
     and small agricultural cooperative are eligible to apply for 
     assistance. Nurseries are also eligible for economic injury 
     caused by drought conditions.

  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 2005 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.
  Time is of the essence for drought victims, and I am hopeful that 
Congress will consider passing this legislation soon. This Act has been 
thoroughly reviewed, passing the committee of jurisdiction three times 
and the Senate twice, with supporters numbering up to 25, from both 
sides of the aisle. In addition to approval by the committee of 
jurisdiction, OMB approved virtually identical legislation in 2003. The 
bill I am introducing today includes those changes we worked out with 
the Administration, and I see no reason for delay.
  I thank Senators Snowe and Bond, our current and past chairs, both of 
whom have been supportive of this legislation each time it was 
introduced and passed.
  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. 1463

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

     SECTION 1. SHORT TITLE

       This Act may be cited as the as the ``Small Business 
     Drought Relief Act of 2005''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) as of July 2002, when this Act was originally 
     introduced in the 107th Congress as Senate Bill S. 2734, more 
     than 36 States (including Massachusetts, Montana, Texas, and 
     Nevada) had suffered from continuing drought conditions;
       (2) as of July 2005, drought continues to be a serious 
     national problem, with 19 States suffering from severe to 
     extreme drought conditions;
       (3) droughts have a negative effect on State and regional 
     economies;
       (4) 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;
       (5) many small businesses in the United States suffer 
     economic injury from drought conditions, leading to revenue 
     losses, job layoffs, and bankruptcies;
       (6) 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;
       (7) 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;
       (8) 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
       (9) it is necessary to amend the Small Business Act to 
     clarify that non-farm-related small businesses that have 
     suffered economic injury from drought are eligible to receive 
     financial assistance through Small Business Administration 
     Economic Injury Disaster Loans.

     SEC. 3. DISASTER RELIEF FOR SMALL BUSINESS CONCERNS DAMAGED 
                   BY DROUGHT.

       (a) 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 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 non-farm-related small business 
     concerns,'' 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 non-farm-related small business concerns, 
     subject to the other applicable requirements of this 
     paragraph''.
       (b) 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 each of fiscal years 2005 
     through 2008, to provide drought disaster loans to non-farm-
     related small business concerns in accordance with this Act 
     and the amendments made by this Act.

[[Page S8683]]

       (c) 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''.

     SEC. 4. 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.

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