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[Congressional Record Volume 158, Number 127 (Wednesday, September 19, 2012)]
[House]
[Pages H6115-H6118]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                   DISASTER LOAN FAIRNESS ACT OF 2012

  Mr. BARLETTA. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6296) to amend the Small Business Act to provide the 
interest rate for certain disaster related loans, and for other 
purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6296

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Disaster Loan Fairness Act 
     of 2012''.

     SEC. 2. INTEREST RATE FOR CERTAIN DISASTER RELATED LOANS.

       Section 7(d) of the Small Business Act is amended by adding 
     at the end the following:
       ``(8)(A) Upon application, the Administration shall grant 
     an interest rate determined under this paragraph with respect 
     to any qualifying disaster loan.
       ``(B) For the purposes of this paragraph a qualifying 
     disaster loan is the Administration's share of a loan--
       ``(i) for which the interest rate would be set pursuant to 
     paragraph (5) but for the operation of this paragraph;
       ``(ii) which is or was made with respect to activity in an 
     area when the President has declared a major disaster in that 
     area under section 401 of the Stafford Act; and
       ``(iii) which is or was made during the period beginning 
     January 1, 2011, and ending on the date that is 4 years after 
     the date of the enactment of the Disaster Loan Fairness Act 
     of 2012.
       ``(C) The Administrator shall determine the interest rate 
     for each calendar year to be the lesser of--
       ``(i) 4 percent; and
       ``(ii) a rate equivalent to \1/2\ the rate prevailing in 
     the private market for similar

[[Page H6116]]

     loans for those unable to attain credit elsewhere and \3/4\ 
     of that prevailing rate for those able to attain credit 
     elsewhere.
       ``(D) The Administrator shall refund excess interest 
     payments to borrowers whose interest rate on already made 
     loans is lowered by reason of the operation of the paragraph.
       ``(E) Not later than one year after the date of the 
     enactment of the Disaster Loan Fairness Act of 2012, the 
     Administrator shall report to Congress as part of the annual 
     report under Section 10(a) on whether the interest rate 
     provided by this paragraph has resulted in any or all of the 
     following:
       ``(i) A greater number of applications for disaster related 
     loans.
       ``(ii) A greater number of approvals of disaster related 
     loans.
       ``(iii) A decreased default rate on disaster related 
     loans.''.

     SEC. 3. TERMINATION OF USE OF PUBLIC FUNDS FOR POLITICAL 
                   PARTY NOMINATING CONVENTIONS.

       Section 9008 of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new subsection:
       ``(i) Termination of Use of Funds for Conventions.--
     Notwithstanding any other provision of this section, in the 
     case of any presidential election held after 2012--
       ``(1) the Secretary shall not make any payments under 
     subsection (b)(3) to any national committee of a major party 
     or minor party;
       ``(2) on November 1 of the year prior to the year in which 
     the election is held, the Secretary shall determine--
       ``(A) in the case of the first such election, the amount 
     which is equal to the aggregate amount of the payments which 
     were made under subsection (b)(3) to the national committees 
     of a major party or minor party for the presidential election 
     held in 2012, adjusted in the manner described in subsection 
     (b)(5), or
       ``(B) in the case of any subsequent election, the amount 
     which is equal to the amount determined under subparagraph 
     (A), adjusted in the manner described in subsection (b)(5); 
     and
       ``(3) at the time the Secretary makes the determination 
     under paragraph (2), an amount equal to the amount determined 
     under paragraph (2) shall be permanently rescinded from the 
     fund and returned to the general fund.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania (Mr. Barletta) and the gentlewoman from New York (Ms. 
Velazquez) each will control 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania.

                             General Leave

  Mr. BARLETTA. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  Mr. BARLETTA. Mr. Speaker, I yield myself such time as I may consume.
  Just over a year ago, the people of the 11th Congressional District 
of Pennsylvania endured some of the worst flooding that we have ever 
experienced. In the aftermath of both a hurricane and a tropical storm, 
the Susquehanna River and streams flowing into it surged out of their 
banks, washing out homes and businesses and roads and bridges.
  I spent days traveling across my district consoling my constituents. 
I was with them as they had to throw out photo albums, their children's 
toys, their clothing, their furniture, their lives' possessions. I 
stood on muddy porches and cried with my constituents.
  Time after time they asked me how the Federal Government was going to 
help them recover. Time after time, business owners asked me if the 
Federal Government was able to provide low-interest loans so they could 
rebuild, reopen, and bring back their workers. Time after time, I would 
tell them the government of the United States was going to offer them 
loans at a 6 percent interest rate. That's right, 6 percent.

                              {time}  1800

  A 6 percent loan isn't going to help a business owner rebuild and 
reopen, and the hardworking people of northeastern Pennsylvania knew 
that. A 6 percent loan isn't going to help a family rebuild a flooded 
home. I was embarrassed to tell the mothers and fathers and 
grandmothers and grandfathers and business owners of my district that 
the Federal Government, through the Small Business Administration, was 
going to give them a 6 percent loan to help them get back on their 
feet.
  I was even more embarrassed--and even shocked--when I started looking 
at our budget for foreign disaster relief. This government gave $215 
million of flood relief to Pakistan. And what rate do we charge foreign 
countries when we rebuild their infrastructure? Zero percent. We don't 
charge foreign countries any interest. The taxpayer money they receive 
from the United States is a giveaway. But this government was going to 
charge American homeowners and American business owners 6 percent 
interest on loans they were going to use to rebuild.
  Now, the United States of America is one of the most generous, 
compassionate countries when it comes to providing global aid. When 
disaster strikes anywhere in the world, the United States is the first 
country to help them rebuild. But when disaster strikes right here in 
our own country, we need to start rebuilding here first. Let's help 
Americans first. We must restore American lives, save American 
businesses, and protect American jobs.
  Now, I know hundreds of my colleagues have had similar conversations 
with their constituents after they experienced natural disasters in 
their districts. Since the start of the 112th Congress, communities in 
over 200 congressional districts in 46 States have been flooded by a 
tropical storm or a hurricane, burned by wildfire, crippled by a 
snowstorm, or destroyed by a tornado, resulting in a disaster 
declaration by the President. Constituents across the country have 
heard the same news--the Federal Government can provide help in the 
form of a high-interest loan.
  Fortunately, this is something that we can fix. I introduced the 
Disaster Loan Fairness Act of 2012, which would dramatically change the 
way the SBA provides disaster recovery loans. This bill would lower the 
interest rate for borrowers with no credit available elsewhere to one-
half of the prevailing rate, and it would cap the interest rate at 4 
percent. For those who can get credit elsewhere, this bill would lower 
the interest rate to three-quarters of the prevailing rate, again, 
capping the maximum interest rate at 4 percent.
  The Disaster Loan Fairness Act is retroactive to January 1, 2011. 
This means the SBA is required to refund excess interest payments for 
disaster loans made since this date. Homeowners and business owners who 
took out these loans will receive refunds for their excess interest 
payments.
  To offset the direct spending, this bill terminates the use of public 
taxpayer funds for political party conventions in the elections 
occurring after 2012. Simply put, this bill prioritizes disaster 
victims over the subsidizing of political party conventions. We are 
literally putting the American people ahead of politics.
  This bill will provide serious, substantial, necessary help to the 
hundreds of thousands of Americans who have endured horrible loss 
during natural disasters. It will provide relief to the millions of 
Americans who will suffer loss in future disasters.
  I ask my colleagues to support the Disaster Loan Fairness Act of 
2012, H.R. 6296, and provide relief for so many Americans that need 
that help.
  I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  (Ms. VELAZQUEZ asked and was given permission to revise and extend 
her remarks.)
  Ms. VELAZQUEZ. Mr. Speaker, natural disasters profoundly impacted our 
Nation this year. From wildfires out west to drought in the Plains to 
violent storms in the Northeast, millions of households were affected. 
These unanticipated events leave families and small businesses facing 
significant costs when rebuilding.
  Typically, insurance covers monetary losses, but that is not always 
the case. To complement insurance coverage, Congress authorized the SBA 
to provide disaster loans to affected families and small businesses. 
Since its inception in 1953, the SBA has approved roughly 1.9 million 
disaster loans, amounting to approximately $47 billion.
  Over the years, the program has evolved to better assist victims. As 
chairwoman of the Small Business Committee, I worked to incorporate 
bipartisan reforms in the 2008 farm bill to help disaster victims get 
back on their feet. These included new disaster

[[Page H6117]]

bridge loans, greater loan amounts, extending deferment periods, and 
enabling more private sector involvement.
  The current program makes the government the lender of last resort by 
subsidizing reduced interest rates only for those who cannot get credit 
elsewhere. The goal is to assist as many victims as possible and ensure 
risk-sharing remains a public-private partnership. This bill, however, 
would eliminate the ``credit elsewhere'' test, offering taxpayer-
subsidized, low-interest loans to all applicants. At a time when 
government resources are scarce, we should not be shifting more 
borrowers and additional risk into this initiative.
  This is not my only concern. The bill also arbitrarily limits 
interest rates--with no empirical data to show why these levels are 
appropriate. Capping interest rates could greatly increase the 
taxpayers' burden in the future as costs rise and revenue remains flat. 
The SBA is also directed to issue refunds on previously approved loans. 
The bill is silent on how to carry that out, creating an administrative 
nightmare for the SBA.
  Continuing to improve the program is important, but in doing so, we 
should not create unintended consequences. If the regular committee 
hearing and markup process had been followed, Members could have 
addressed this bill's shortcomings. Placing it on suspension has 
further limited Members' participation.
  I would like to direct the attention of my colleagues on both sides 
of the aisle to the fact that this bill creates $50 million in direct 
spending. To offset the cost, it will eliminate public funding of 
political conventions, undoing years of campaign finance reform in the 
process.
  Today, Federal election rules seek to keep soft money and undue 
influence out of the Presidential race. Since the Supreme Court's 
Citizens United decision, it's become clear that powerful stakeholders 
will spend millions to help a candidate win. If public funding were 
terminated, special interests will once again compete to curry favor 
with Presidential candidates by bankrolling nominating conventions.
  Mr. Speaker, it is certainly appropriate to provide relief to 
homeowners and businesses affected by a disaster; however, it is 
inconsistent with the intent of the program to ask taxpayers to 
subsidize loans for those who can get credit elsewhere. Is this the 
best use of government resources? I don't know. But I'm confident we 
could have investigated this and other concerns if the committee 
process were not bypassed in favor of today's suspension vote.
  With that, I reserve the balance of my time.
  Mr. BARLETTA. Mr. Speaker, I yield 3 minutes to the gentleman from 
Pennsylvania (Mr. Marino).
  Mr. MARINO. Mr. Speaker, I rise today in strong support of H.R. 6296, 
the Disaster Loan Fairness Act of 2012, introduced by my colleague from 
Pennsylvania, Representative Barletta.
  Our districts cross each other in several counties, so we both have 
experienced the disaster that took place in the 10th and 11th District.

                              {time}  1810

  At the end of August 2011, Hurricane Irene caused severe flooding and 
widespread power outages in eastern Pennsylvania. With the ground 
saturated and waterways at a very high level, Tropical Storm Lee 
arrived about one week later, causing historic widespread flooding in 
most of central and eastern Pennsylvania. The 10th Congressional 
District that I represent was particularly hit hard.
  Ten of the 14 counties in the district were impacted by the flood. 
The storm knew no boundaries. It hit homes and businesses, government 
offices and schools, farms, cemeteries, and churches. I visited with 
families and individuals who had lost everything.
  I traveled to many businesses, both large and small, that were 
affected, like the Knoebels Amusement Park in Northumberland County, 
where I watched workers and owner clean up four inches of mud that 
covered the ground across the entire park.
  While the people of my district have made heroic efforts to rebuild, 
they have faced many obstacles. One of these is finding loan 
opportunities which they need to finance the rebuilding of their homes 
and businesses.
  Unless you have lived through a disaster and visited with families 
that have been through the experience, it is hard to imagine the 
hopelessness and desperation that people experience when the rebuilding 
process begins.
  H.R. 6296 will provide critical relief to disaster victims in my 
district and across the country by lowering the interest rate on SBA 
disaster loans. This legislation, which will, on average, lower rates 
on SBA disaster loans by 1\1/2\ to 2 percent, will give Americans 
impacted by disaster the ability to begin the process of rebuilding 
their lives and livelihoods.
  I had the occasion to hear a little of the argument prior to this 
concerning the conventions getting money, and there was an issue raised 
about it's only $36 million. Well, there's nobody in this room that 
doesn't think $1 million is a lot of money, and I certainly think $36 
million is a whole heck of a lot of money.
  Now, we can send money to conventions. That should be the 
responsibility of each party, regardless of what side of the aisle 
you're on.
  But we also send taxpayer money to countries that hate us, so I think 
it's about time we start helping the American people with their own tax 
dollars.
  I urge all of my colleagues to join with me and Representative 
Barletta in support of this important legislation.
  I had one experience that just stuck in my mind. During the flood, I 
visited a family who wasn't in their house.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. BARLETTA. I yield the gentleman 1 additional minute.
  Mr. MARINO. I want to share an experience I had touring the same 
areas that Lou did. And it was a family of six; they weren't able to be 
in their house. It was a blue collar family. It was half a double.
  They wouldn't even be able to sit on their porch or stand in their 
front yard. That's how bad the flood was. Most of their furniture and 
belongings were out on the front yard, just totally lost.
  They sat on the back of a pickup truck. A 6-year-old little girl, 6 
or 8 years old, said to me, Are you here to help, because we don't have 
a bed to sleep in and we don't have a room to sleep in. What are we 
going to do tonight?
  That is what we're faced with. We're supposed to be helping our 
people in our district, and I urge my colleagues to support this 
legislation.
  Ms. VELAZQUEZ. Mr. Speaker, I yield 1 minute to the gentleman from 
New York (Mr. Owens).
  Mr. OWENS. Mr. Speaker, I was a cosponsor of the original version of 
this bipartisan bill and rise to support the modified legislation we 
are considering today. I want to thank Mr. Barletta for his work on 
this important legislation in the aftermath of Hurricane Irene and 
Tropical Storm Lee.
  These two disasters caused millions in damage in northern New York. 
One year later, small businesses and homeowners are still recovering.
  As I walked around my district immediately after, I saw people 
shoveling out mud, throwing out heirlooms, and struggling to understand 
what had happened to them. Many of the businesses were ruined, along 
with homes.
  But I also saw something else. I saw people helping people. What 
we're doing here today is having the government help people. We're 
following the example of our constituents.
  Currently, the Small Business Administration offers disaster recovery 
loans to small businesses and homeowners for as low as 4 percent and up 
to 8 percent if credit is available elsewhere. To date, nearly 100 
small businesses and homeowners in my congressional district have been 
approved for more than $5.8 million in disaster loans. But I have heard 
from many constituents that the interest rates are simply too high to 
take advantage of these loans.
  This bipartisan bill would lower the interest rate on disaster loans.
  Mr. BARLETTA. Mr. Speaker, I have no more speakers and I am prepared 
to close.
  I reserve the balance of my time.
  Ms. VELAZQUEZ. I yield back the balance of my time.
  Mr. BARLETTA. Mr. Speaker, I yield myself the balance of my time.
  When disaster strikes around the world, America is always the first 
to help, and I'm proud of that. I'm proud

[[Page H6118]]

of our country. I'm proud that when countries need help, we're there.
  But when disasters strike right here at home, I do believe that we 
should help Americans first, and we don't know when or where the next 
disaster will occur. It could be tonight, could be tomorrow, could be 
next week. But let's make sure, before we leave here today, that we 
tell our neighbors and friends back home and around this great Nation 
that, in their greatest time of need, their country will be there for 
them.
  With all the devastation and destruction that happened from last 
year's flood, I saw the greatness of America. I saw neighbors helping 
neighbors. I saw strangers helping people. I saw students helping the 
elderly. I saw what makes this country great, and I saw the American 
people come together.
  It's time that this Congress comes together. I urge my colleagues to 
support this bill.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Pennsylvania (Mr. Barletta) that the House suspend the 
rules and pass the bill, H.R. 6296, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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