[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[House]
[Pages 6143-6145]
[From the U.S. 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:

                                 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.

[[Page 6144]]

  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 
(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.

[[Page 6145]]

  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.
  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.

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