[Congressional Record (Bound Edition), Volume 145 (1999), Part 4]
[Senate]
[Pages 6016-6017]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                   DISASTER MITIGATION PILOT PROGRAM

 Mr. BOND. Mr. President, for the second time in less than a 
year, the Senate is considering legislation to establish a pilot 
disaster mitigation loan program at the Small Business Administration 
(SBA). Last year, the Committee on Small Business voted unanimously to 
include a proposal to establish a disaster mitigation pilot program 
introduced by my colleague from

[[Page 6017]]

Georgia, Senator Cleland, as an amendment to H.R. 3412, the ``Year 2000 
Readiness and Small Business Programs Restructuring and Reform Act of 
1998.'' H.R. 3412 passed the Senate on September 30, 1998; however, the 
House of Representatives was not able to consider the bill before 
Congress adjourned last fall.
  As the Chairman of Appropriations Subcommittee on VA, HUD and 
Independent Agencies, I have been concerned about our Nation's disaster 
relief program. I have worked at length with FEMA Director Witt and 
other Administration officials over the past several years to address 
the escalating costs of disaster relief and the need to tighten up this 
program. Since 1989, we have spent $25 billion on FEMA disaster relief, 
and there remains more than $2.6 billion in anticipated costs 
associated with open disasters. Much work needs to be accomplished to 
tighten the criteria for declaring disasters and eligibility for 
disaster relief funding, as well as stronger insurance requirements, so 
that we can bring these ever-escalating costs under control.
  One way to mitigate against future disaster losses is to undertake 
preventive measures. Preventive measures to mitigate against future 
disaster losses, rather than the current strategy of response and 
recovery, could save as much as 50 percent of projected disaster relief 
loan costs.
  S. 388 would create the Disaster Mitigation Pilot Program, which will 
permit SBA to establish a pilot program using up to $15 million of 
disaster loans annually from FY 2000-2004 to provide small businesses 
located in disaster prone areas with low interest, long-term disaster 
loans to finance preventive measures to mitigate against future 
disaster losses. The pilot program would operate in disaster prone 
areas designated by the Federal Emergency Management Agency (FEMA). 
FEMA has launched ``Project Impact,'' which emphasizes emergency 
preparedness, in response to the problem of increased costs and 
personal devastation caused by repeated natural disasters. I continue 
to have concerns about the criteria under Project Impact and urge FEMA 
to work to strengthen the criteria. I expect that SBA will develop the 
appropriate criteria for this new loan program that is consistent with 
FEMA's efforts to make improvements in this area. In the end, I do not 
believe we should have a proliferation of independent mitigation 
programs housed in numerous Federal agencies, and we should be working 
to develop a cohesive national strategy to deliver disaster relief 
assistance.
  Under current law, SBA disaster loans may be used for mitigation 
purposes only to the extent that includes repairing or replacing 
existing protective devices that are destroyed or damaged in an area 
that has recently suffered a natural disaster. In addition, up to 20 
percent of the disaster loan amount may be used to install new 
mitigation devices that will prevent future damage. Under S. 388, the 
Disaster Mitigation Pilot Program, a small business borrower would be 
allowed to use 100 percent of an SBA disaster loan for disaster 
mitigation purposes within an area designated by FEMA.
  Mr. President, S. 388, the Disaster Mitigation Pilot Program, makes 
sense. It is a worthy program that needs to be tested, and I urge my 
colleagues to vote in favor of this bill.

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