21 



has just been shown to us here. There are also distinctions that 

 don't make a difference. 



We have been told the money is not intended to give them the 

 ability to retrofit, it is to pay the costs they could have otherwise 

 paid. Those costs haven't gone away. There are bank loans to be 

 paid, suppliers and insurers to be paid. With these loans in place, 

 those costs could be met while other resources are devoted to the 

 retrofitting and the like that needs to occur. 



Chairman Torkildsen. Mr. Poshard? 



Mr. Poshard. Mr. Chairman, forgive me for not having complete 

 knowledge of the situation here. 



I have great deal of sympathy for your issue before the Sub- 

 committee. I represent a coal-mining area, high-sulfur coal-mining 

 area, and the Clean Air Act 5 years ago absolutely decimated our 

 entire area. We have lost nearly 70 percent of our mines now, thou- 

 sands of people out of work. But in addition to that, hundreds and 

 hundreds of small businesses that depended upon those coal min- 

 ers working have also disappeared in our small towns and villages. 

 So, I am sympathetic to the nature of your problem. 



I want to reverse gears here a little bit and ask Mr. Kulik, if I 

 may: My area in southern Illinois for the second time now in the 

 last 4 years has just undergone flooding. The SBA was magnificent, 

 working with FEMA in their approach to helping our small busi- 

 nesses that just literally were wiped out with those floods. 



I am needing to understand, because we were able to get emer- 

 gency declarations and so on and get assistance in very quickly, 

 working with Mr. Witt and with the SBA, how is that different, the 

 determination there to help our people, and the determination here 

 not to be able to help these folks? 



I am sorry I missed the earlier testimony, but I was tied up and 

 didn't get to hear it. 



Mr. Kulik. The disasters in Illinois, the flooding in Illinois, were 

 declared disasters by the President under the Stafford Act. That 

 brought into play not only the Federal Emergency Management 

 Agency's Programs, but also all of SBA's disaster programs. Those 

 were physical disasters. Even if they had not been declared by the 

 President, they would have fit the statutory definition that is con- 

 tained in the Small Business Act. 



What we are talking about in connection with the fisheries is not 

 a physical disaster. Nobody's property was destroyed. It is an eco- 

 nomic injury disaster. That operates under a different provision of 

 the law, and the specific disaster in question, which we have been 

 discussing back and forth, does not, in our opinion, fall within the 

 specific statutory definition. 



Mr. Poshard. Does it fall within any particular area of aid or as- 

 sistance that SBA could administer? 



Mr. Kulik. Yes, sir. Once again, our regular business lending 

 programs, the 7(a) Program, the 504 Program, are specifically de- 

 signed to handle such things as long-term retrofitting, as going into 

 new businesses, et cetera. But those are not part of the disaster 

 program. Unfortunately, those are bank guarantee programs, not 

 direct lending programs. 



