[Congressional Record (Bound Edition), Volume 148 (2002), Part 12]
[Senate]
[Pages 17282-17284]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   UNANIMOUS-CONSENT REQUEST--S. 2734

  Mr. KERRY. Mr. President, I am going to be asking unanimous consent 
to proceed forward on the bill, but I am not going to do that until 
someone is here from the other side. And I know they are going to 
object, or most likely will object.
  But let me bring to the attention of my colleagues in the Senate a 
situation that is not dissimilar to a situation we faced some months 
ago in trying to provide emergency assistance, under the Small Business 
Administration, to those who had been affected by the events of 
September 11 of last year.
  We had a lot of small businesses in the country that were hurting 
that had collateral damage, if you will, as a consequence of those 
events. Many, many small businesses were dependent on the economy as it 
flows through all sectors. So whether it was a small drycleaner that 
was affected because they were not doing as much business because 
hotels were not doing as much business or a limousine company or a taxi 
company, there are many people who were affected tangentially because 
of the dropoff in air travel, and so forth.
  It took us a number of months, almost six, unfortunately, in the 
Senate to respond in a way that many of us thought was both appropriate 
and adequate. And, again, we are sort of running into a strange kind of 
unexplained resistance by the administration to something that makes 
common sense, is very inexpensive but also very necessary for a lot of 
small entrepreneurs in our country. I am specifically referring to the 
Small Business Drought Relief Act.
  In more than 30 States in our country, we have a declared drought 
emergency. And the drought is as significant in some places as it was 
during the great Dust Bowl years of the Depression in the United 
States.
  Drought hurts more than farmers, more than ranchers. The purpose of 
this bill is to try to provide some emergency assistance, in an 
affordable and sensible way, for those small businesses that are not in 
agricultural-related fields but desperately cannot get help, and need 
it, and cannot get it because the SBA does not apply the law uniformly 
for all victims of drought.
  The SBA makes disaster loans to small businesses related to 
agriculture that are hurt by drought, but they are turning away small 
businesses that are in industries unrelated to agriculture, and 
claiming that those businesses are not entitled to it because drought 
does not fit the definition of disaster.
  That is just wrong. It is wrong because the law does not restrict 
them from making loans to those small businesses. It is wrong because 
that is not the intent of the Congress to turn away those small 
businesses, and they should be following the law and following the 
intent of Congress.
  I might add that the SBA has in effect right now disaster 
declarations in 30 States that I just talked about. For instance, in 
South Carolina, the entire State has been declared a disaster by the 
SBA, but the administration is not helping all of the drought victims 
in South Carolina that are looking for help.
  Let me share with you the declaration of drought itself. It addresses 
this question of intent.

       Small businesses located in all 46 counties may apply for 
     economic injury disaster loan assistance through the SBA.

  Let me 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 cooperatives are eligible to apply for 
     assistance. Nurseries are also eligible for economic injury 
     caused by drought conditions.

  What do I mean by other businesses that may be affected by drought? 
In South Carolina, conditions are so bad that small businesses 
dependent on lake and river tourism have seen their revenues drop 
anywhere from 17 to 80 percent. So you have victims of the drought that 
range from fish and tackle shops to rafting businesses, from 
restaurants to motels, from marinas to gas stations. Their livelihood 
is no less impacted and no less important than those who have been 
deemed to fit under only the agricultural definition.
  Thousands of small businesses make their living in tourism, 
recreation industries, not just in South Carolina but in many other 
parts of the country, including my State of Massachusetts, in Texas, 
Michigan, Delaware, and elsewhere.
  In fact, for a lot of States around the Great Lakes Basin, sport 
fishing, as reported by the Committee on Small Business and 
Entrepreneurship, brings into the region some $4 billion a year. There 
are many industries that are dependent on water that are affected by 
drought, and they ought to be eligible for this help.
  Is this opening Pandora's box with respect to a flow of lending that 
we cannot afford? The answer is definitively no. The SBA already has 
the authority, but its lawyers have decided not to help these 
industries based on their own interpretation of a definition, despite 
the fact that Congress believes otherwise.
  That defies both common sense and fairness. Small businesses with 
everything on the line desperately need this, especially at a time when 
capital is a lot tighter for working capital purposes, where the 
lending is significantly tighter from the banks and from other 
traditional credit sources.

[[Page 17283]]

  Our bill, the drought relief bill, does not expand the existing 
program. It simply clarifies existing authority. That is a matter of 
common sense.
  In terms of cost, the Congressional Budget Office estimates a cost of 
about $5 million annually. What we have here is a resistance by 
somebody in the U.S. Senate to allowing this to go forward based on 
about a $5 million annual estimate by CBO.
  This chart of CBO's estimate is a tally of the estimated spending 
under the SBA's disaster loan program which shows the differential with 
this particular bill.
  This bill is bipartisan. The principal cosponsors are Senator Bond 
and Senator Hollings. All the members of our committee--the Committee 
on Small Business and Entrepreneurship--voted in favor of this bill. 
There are 25 cosponsors, Democrats and Republicans; 17 Governors have 
written us to express their support of this legislation in hopes we 
will pass it, including 15 of the Southern Governors' Association.
  I ask unanimous consent that letter, and others, be printed 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 long 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. Paul E. 
           Patton of Kentucky, Gov. M.J. ``Mike'' Foster, Jr. of 
           Louisiana, Gov. Parris N. Glendening of Maryland, Gov. 
           Ronnie Musgrove of Mississippi, Gov. Bob Holden of 
           Missouri, Gov. Michael F. Easley of North Carolina, 
           Gov. Frank Keating of Oklahoma, Gov. Jim Hodges of 
           South Carolina, Gov. Don Sundquist of Tennessee, Gov. 
           Rick Perry of Texas, Gov. Mark Warner of Virginia, Gov. 
           Bob Wise of West Virginia.
                                  ____

                                          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 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.
                                  ____

                                          State of North Carolina,


                                       Office of the Governor,

                                       Raleigh, NC, July 18, 2002.
     Hon. Jesse Helms,
     U.S. Senate,
     Washington, DC.
       Dear Senator Helms: I am writing to urge your support for 
     legislation recently 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 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 Nevada,


                                       Office of the Governor,

                                   Carson City, NV, July 23, 2002.
     Hon. John F. Kerry,
     Chairman, Committee on Small Business,
     Washington, DC.
     Hon. Christopher Bond,
     Ranking Member,
     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

[[Page 17284]]

     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 
     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.
                                  ____

                                         Commonwealth of Kentucky,


                                       Office of the Governor,

                                     Frankfort, KY, July 23, 2002.
     Hon. John F. Kerry,
     Chairman, Committee on Small Business and Entrepreneurship, 
         U.S. Senate, Washington, DC.
     Hon. Christopher S. ``Kit'' Bond,
     Ranking Member, Committee on Small Business and 
         Entrepreneurship, U.S. Senate, Washington, DC.
       Dear Chairman Kerry and Senator Bond: As you know, much of 
     our nation is struggling to overcome ``moderate'' to 
     ``extreme'' drought conditions. Droughts, especially 
     prolonged droughts, have extensive, devastating effects that 
     damage crops and livestock, deteriorate soil, and fuel raging 
     wildfires. These are only some of the irreparable effects 
     that droughts can have on small businesses, communities, and 
     state and local economies.
       In general, federal disaster assistance is available for 
     agriculture and agriculture-related small businesses that are 
     impacted by drought. However, droughts hurt more than 
     agricultural, forestry, and livestock businesses.
       Prolonged drought also causes a drastic reduction in stream 
     and river flow levels. This can trigger such a significant 
     drop in the level of lakes that existing docks and boat ramps 
     cannot provide access to boats, which impacts many additional 
     small businesses.
       As a result, many non-farm small businesses that are water-
     reliant also suffer staggering revenue losses in the wake of 
     a drought disaster, yet they do not currently receive 
     disaster relief. Unlike other natural disasters such as 
     hurricanes or floods, the effects of drought build up over-
     time, last for several years, and are jeopardizing the future 
     of these small business owners. The lack of federal disaster 
     assistance available to these non-farm small businesses only 
     forces undue job layoffs and bankruptcies and further 
     disrupts drought-impacted communities.
       I thank you for recognizing that many fish and tackle 
     shops, rafting businesses, restaurants, motels, camp grounds, 
     marinas, gas stations, and other small businesses in Kentucky 
     and other states are severely impacted by drought but are 
     unable to receive federal disaster assistance. I strongly 
     support your resulting efforts, the Small Business Drought 
     Relief Act (S. 2734), which would allow the Small Business 
     Administration to offer low-interest disaster loans to these 
     businesses and afford them the same opportunity as 
     agriculture-related businesses to recover and survive.
       I appreciate your assistance and support and look forward 
     to working with you and your colleagues on this very 
     important matter.
           Sincerely,
                                                   Paul E. Patton,
                                                         Governor.

  Mr. KERRY. This is a letter from the Southern Governors' Association, 
with 15 southern Governors signing and asking us to pass this 
assistance. They have sent letters to Members of Congress asking them 
to support and pass the bill.
  Finally, we are not talking about grants. We are talking about loans. 
These are going to be repaid. The default record of the SBA over the 
last 10 years is really quite extraordinary on the positive side of the 
ledger. The question is whether we are going to look to small 
businesses that are equally hard working as anyone else in the country, 
who, like farmers, are suffering the economic consequences of a drought 
that is beyond their control.
  I thank Senator Bond for working with me to try to address this 
problem. I thank Senator Hollings, particularly, the chairman of the 
Commerce Committee, for introducing the bill with me. I am particularly 
grateful to the small business owners who have brought this issue to 
our attention and who hope we can break out of any partisan resistance 
within the Senate in order to do what is right.
  I hope my colleagues will permit us to proceed forward on this 
legislation.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KERRY. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KERRY. Mr. President, I ask unanimous consent that the Senate 
proceed to consideration of Calendar No. 535, S. 2734; and that the 
Bond amendment, which is at the desk, be considered and agreed to; the 
committee-reported substitute amendment, as amended, be considered and 
agreed to; the bill, as amended, be read three times, passed, and the 
motion to reconsider be laid upon the table; that any statements 
relating thereto be printed in the Record at the appropriate place as 
if read, without further intervening business or debate.
  The PRESIDING OFFICER. Is there objection?
  Mr. SANTORUM. Mr. President, I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. KERRY. Mr. President, my hope is, again, that Senators on the 
other side, who are also cosponsors of this bill, will assist us in 
trying to proceed forward because there is no rationale for delay--I 
underscore--there was an e-mail circulated by somebody with some 
gargantuan unofficial estimate of cost that has no relationship to any 
legitimate estimate that has been made here. The CBO estimate clearly 
demonstrates that this measure is sensible, with a cost of about $5 
million a year.
  What is happening is we are seeing a little bit of partisanship--
maybe we are seeing a lot of it these last days here in the Senate. I 
hope we can overcome this in the next days. I look forward to working 
with Senator Bond and others to see if we can proceed forward on this 
legislation.
  I yield the floor.

                          ____________________