APPENDIX 



Opening Statement of Congressman Peter G. Torkildsen, 

 Chairman, Government Programs Subcommittee House Com- 

 mittee on Small Business 



July 10, 1996 



Oversight Hearing on Massachusetts Request for Disaster 

 Funds From The SBA 



Good Morning. It is a pleasure as Chairman of the Small Busi- 

 ness Committee's Subcommittee on Government Programs to wel- 

 come our witnesses and guests today. The purpose of this hearing 

 is to focus on the Commonwealth of Massachusetts' request for dis- 

 aster assistance from the United States Small Business Adminis- 

 tration (SBA). The request was made on behalf of the fishermen of 

 Essex, Bristol, and Barnstable Counties, all who have suffered se- 

 vere economic losses because of the sudden collapse of cod, 

 yellowtail flounder and haddock fisheries in their region. 



Knowing that the vast majority of these fishermen and proc- 

 essors are small business owners, disaster assistance loans for fish- 

 ermen and processors in the Commonwealth under Section 7(b)(2) 

 of the Small Business Act, becomes a logical way to help. The cur- 

 rent plight of the fisheries in the Commonwealth can be character- 

 ized as a natural disaster under Section 3(k) of the Small Business 

 Act which includes "ocean conditions resulting in the closure of cus- 

 tomary fishing waters". While the definition has meant "sudden" 

 events, the federal government's actions precipitated this sudden 

 closure after years of pronouncements that the situation was under 

 control, and therefore, the request was justified. 



On April 30, 1996, Governor Weld sent a formal request to the 

 SBA certifying that at least five small businesses in each county 

 listed had suffered substantial economic injury as a direct result of 

 the sudden collapse of the fisheries. He further certified that the 

 degree of economic injury was so severe that financial assistance 

 at reasonable rates and terms was not otherwise available, thereby 

 creating the necessity for federal involvement in the form of sub- 

 sidized loans. 



On June 3, 1996, the Governor received correspondence from the 

 Associate Administrator for Disaster Assistance, Bernard Kulik, 

 stating that the request for disaster assistance had been denied. 

 Mr. Kulik admitted that the Massachusetts fishing industry was 

 hurting as a result of the closure of their usual fishing grounds. 

 Yet, he went on to say that "overfishing" is not a "sudden" event 

 as defined under the statute and the specific event cited as the 

 basis for the request, federal or governmental action, was repealed 

 several years earlier, therefore not justifying the request for funds. 



The Governor and I share a deep concern for the well-being for 

 the fishing communities that are so seriously threatened. It seems 

 ludicrous that the same federal government bureaucracy that con- 

 tributed to this dire situation would now decline to offer a helping 

 hand to those harmed. 



In an attempt to remedy this situation, during the Small Busi- 

 ness Committee's markup this afternoon, I plan to offer an amend- 

 ment that will make an addition to the definition of disaster. Mr. 



(31) 



