MASSACHUSETTS' REQUEST FOR DISASTER 

 FUNDS FROM THE SBA 



WEDNESDAY, JULY 10, 1996 



House of Representatives, 

 Subcommittee on Government Programs, 



Committee on Small Business, 



Washington, DC. 



The Subcommittee met, pursuant to notice, at 10:50 a.m., in 

 room 2359, Rayburn House Office Building, Hon. Peter G. 

 Torkildsen (Chairman of the Subcommittee) presiding. 



Chairman Torkildsen. Good morning. It is a pleasure as chair 

 of the Small Business Subcommittee on Government Programs to 

 welcome our witnesses and guests today. 



I apologize for the lateness of the start of this hearing. The 

 Prime Minister of Israel just concluded his remarks to a joint ses- 

 sion of Congress, and, as I believe everyone was informed, that was 

 the reason for the delay. 



The purpose of this hearing is to focus on the Commonwealth of 

 Massachusetts's request for disaster assistance from the U.S. Small 

 Business Administration. The request was made on behalf of the 

 fishermen of Essex, Bristol, and Barnstable Counties, all who have 

 suffered severe economic losses because of the sudden collapse of 

 cod, yellowtail flounder, and haddock fisheries in their region. 



Knowing that the vast majority of these families and processors 

 are small business owners, disaster assistance loans for these fami- 

 lies and processors in the Commonwealth under section 7(b)(2) of 

 the Small Business Act became a logical way to help. 



The current plight of the fisheries in the Commonwealth can be 

 characterized as a natural disaster under section 3(k) of the Small 

 Business Act, which includes "ocean conditions resulting in the 

 closing of customary 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, there- 

 fore, 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. 



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