[Congressional Record (Bound Edition), Volume 148 (2002), Part 17]
[Senate]
[Pages 23140-23141]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 THE SMALL BUSINESS DROUGHT RELIEF ACT

  Mr. KERRY. Mr. President, as the Senate and the House prepare to 
bring the 107th session to a close, we leave some important small 
business legislation unfinished. Regrettably, that includes passage of 
the Small Business Drought Relief Act because of serial holds from 
Republicans since August 1--3 and a half months. This emergency 
legislation passed our committee with unanimous support, and yet 
Senators with no jurisdiction in small business, instigated by an 
administration that claims to support small business, obstructed 
passage.
  The committee reached out to those Senate members and their staffs 
time and again, and there was no cooperation. Sixteen Governors--
Governor Hodges of South Carolina, Governor Easley of North Carolina, 
Governor Barnes of Georgia, Governor Foster of Louisiana, Governor 
Musgrove of Mississippi, Governor Perry of Texas, Governor Wise of West 
Virginia, Governor Patton of Kentucky, Governor Glendening of Maryland, 
Governor Holden of Missouri, Governor Keating of Oklahoma, Governor 
Sundquist of Tennessee, Governor Warner of Virginia, Governor Siegelman 
of Alabama, Governor Huckabee of Arkansas, and Governor Guinn of 
Nevada--reached out to the Congress asking for us to pass this bill, 
and they got no cooperation. The committee was ultimately able to 
overcome tremendous differences between CBO's cost estimate and OMB's 
cost estimate to reach agreement with the Office of Management and 
Budget on passing this emergency legislation last week, but not even 
that moved the Republican leadership to cooperate.
  So we go home tonight, and our small businesses--main street 
America--needlessly struggle to make ends meet, keep their doors open 
and employees on the payroll, because of partisan politics.
  For those who don't remember, this is emergency legislation to help 
small non-farm-related businesses across this Nation that are in dire 
straits because of drought conditions in their State. Just like the 
farmers and ranchers, the owners of rafting businesses, marinas, and 
bait and tackle shops lose a lot of business because of drought.
  Right now these small businesses can't get help through the SBA's 
disaster loan program because of something taxpayers hate about 
government--bureaucracy. 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. Contrary to the Agency's 
position that drought is not a disaster, as of July 16, 2002, the day 
we introduced this bill, the SBA had in effect drought disaster 
declarations in 36 States. Unfortunately, the assistance was limited to 
farm-related small businesses.
  The 36 States include: Arizona, California, Colorado, Delaware, 
Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, 
Massachusetts, Michigan, Montana, Nebraska, Nevada, New Mexico, New 
York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, 
Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, 
Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
  The situation has only gotten worse judging by SBA's own numbers. 
Since the bill was introduced, the SBA has declared disasters in two 
more States and the District of Columbia. Instead of rising to the 
occasion and using their statutory authority to help the small 
businesses in these areas, they continue to deny them access to 
disaster loans, hiding behind a legal opinion--a legal opinion that 
they will not provide to the committee.
  To make sure the facts of this legislation are accurate, let the 
record show that this bill does not expand the SBA disaster loan 
program. SBA already has this authority, and this bill simply restates 
and clarifies that authority to ensure that the law is applied fairly. 
Let the record show that SBA, contrary to its claims, has the expertise 
to determine when a drought is a disaster. First, the SBA already 
declares drought disasters and does so mainly by working with the U.S. 
Secretary of Agriculture. Second, in addition to working with the 
Secretary of Agriculture, there are existing SBA guidelines for 
declaring disasters, and those guidelines apply to drought too. For 
example, the Governor of a State can request a declaration from the 
Administrator of the SBA after certifying that more than five small 
businesses have suffered economic injury because of a disaster. Last, 
let the record show that this legislation is modest in cost. CBO 
estimated that this bill would cost $5 million per year for 5 years, 
far less than OMB's estimate of approximately $100 million per year. 
And last week, as I referenced earlier, we were able to reach an 
agreement with OMB that capped the cost at $9 million for fiscal year 
2003, enough to cover the cost of the bill as passed by the committee 
and the Bond/Enzi/Burns/Crapo amendment. Unfortunately, even OMB's 
concurrence and the support of many Senators and Governors did not 
persuade the remaining Senator blocking passage of the bill to put 
aside his differences for the sake of small businesses and permit it to 
pass.
  I thank the many supporters of this bill. My 22 colleagues who are 
cosponsors--Senators Bond, Hollings, Landrieu, Baucus, Bingaman, 
Daschle, Johnson, Edwards, Carnahan Cleland, Enzi, Lieberman, Harkin, 
Ensign, Reid, Helms, Allen, Bennett, Torricelli, Levin, Crapo and 
Thurmond. All the Governors who put small businesses first and politics 
last. Mr. Donald Wilhite, director of the National Drought Mitigation 
Center at the University of Nebraska in Lincoln, for all his assistance 
to my staff in understanding the scope of drought in this country and 
for writing in support of the legislation. National

[[Page 23141]]

Small Business United, for always being there to stand up for small 
businesses. The many small business owners and small business 
advocates, such as Wildlife Action, in South Carolina, who took the 
time to write me regarding the drought and their problems with the SBA. 
And last, but certainly not least, from my home State, I thank Bob 
Durand of the Massachusetts Emergency Management Association for his 
help and support. We will take this fight up again in the next 
Congress.
  Mr. President, I ask unanimous consent that several letters of 
support and my remarks be included 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 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,
         Governors Don Siegelman of Alabama, Mike Huckabee of 
           Arkansas, Roy E. Barnes of Georgia, Paul E. Patton of 
           Kentucky, M.J. ``Mike'' Foster, Jr. of Louisiana, 
           Parris N. Glendening of Maryland, Ronnie Musgrove of 
           Mississippi, Bob Holden of Missouri, Michael F. Easley 
           of North Carolina, Frank Keating of Oklahoma, Jim 
           Hodges of South Carolina, Don Sundquist of Tennessee, 
           Rick Perry of Texas, Mark Warner of Virginia, Bob Wise 
           of West Virginia.
                                  ____

                                           Office of the Governor,


                                      State of South Carolina,

                                       Columbia, SC, July 9, 2002.
     Hon. John Kerry,
     U.S. Senate, Russell Building,
     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.

                          ____________________