There are a number of things that we can do to help the farmer. We consider a farmer, since Public Law 94-305 came into existence, we handle them like a small business.

We can take care of his short-term debts. We can bring his long-term debts current.

Senator NUNN. And that is all under 7(b) (2)?

Mr. ALEXANDER. Yes.

Senator NUNN. Still, we are talking about in the first place, whether the person is eligible.

Mr. ALEXANDER. Well, you are talking about whether he has ability to repay the loan.

That is the only time we would say he would not be eligible for a a loan. If he is a small business, and has the ability to repay, we can do this.

There are lots of reasons the banks turn him down. In the first place, the bank will say we cannot give the same interest rate as the SBA can make the loan.

They will turn him down for a number of reasons. He may be over-obligated to the bank right now.

So it is a lot of flexibility in this EIDL program that we have. Senator NUNN. That is encouraging to know that.

Do you have any personnel out there in the field, in these drought areas to be able to handle the job?

Mr. ALEXANDER. We hope so. We are in constant contact with our regional offices.

All they have to do is tell us they need somebody, and we will be glad to send somebody.

Senator NUNN. You have some people you can send down?

Mr. ALEXANDER. Yes, sir.

Mr. GENNETTI. In disaster situations, we have authority to take on temporary employees, and that is usually what we do.

Senator NUNN. Have you done that yet?

Mr. GENNETTI. They have not called.

Mr. ALEXANDER. Atlanta has not called for any additional, but they have some 60-odd people working now.

Senator NUNN. Once it is you tell me what kind of loans you can make, and we get some concrete examples, and I put out some press releases, and they run in the papers, you will need some more people out there.

Mr. ALEXANDER. We do our best.

Senator NUNN. I am very encouraged by your attitude, and I would appreciate anything we can do to clarify these areas, to make sure we know what your authority is.

Senator Haskell has asked me to adjourn the hearing.

We appreciate your attendance.

The committee stands adjourned. Thank you.

[Whereupon, the committee was adjourned at 10:30 a.m.]

APPENDIX

STATEMENT OF SENATOR CHURCH
BEFORE SENATE SMALL BUSINESS
COMMITTEE

S. 1306

DROUGHT RELIEF FOR SMALL BUSINESSES

Mr. Chairman, I strongly support this legislation and the necessary assistance that it will bring to small businesses which suffer due to the drought.

I would first like to address myself to a particular problem being experienced by one business concern in my State. Bogus Basin Recreational Association operates a ski area 18 miles outside of Boise, Idaho. The Association operates the ski area on a non-profit basis and, as a result, will be precluded from receiving assistance from the Small Business Administration for economic injury suffered as a result of record low snow fall.

Other ski areas similarly afflicted will be eligible, since they operate on a for-profit basis. This is an unfortunate oversight in our disaster relief programs that excludes worthy recipients from necessary aid. The SBA is the only vehicle to assist Bogus Basin and it would be a great inequity if it were denied aid due to its non-profit status. I submit for the Committee's consideration, a statement from Mr. Robert B. Loughrey, General Manager of Bogus Basin Ski Area.

Another overlooked class are those who do not operate a farm or business and do not live in a community eligible for water development assistance through FmHA or EDA. There is no question that a number of individuals, due to their remote locations, are left without any help in developing new sources of water to supplement their existing supply.

I urge the Committee to consider filling some of the gaps that exist in our drought relief effort. Due to the nature of the emergency, some of the gaps could be filled on a one-time basis in order to prevent the inequity of denying aid to those who deserve it, but are prevented from receiving assistance due to the oversight of Congress.

I do not intend to take any more of the Committee's time, the Senate has a very heavy schedule and my support for comprehensive Federal drought relief is well-known. This bill has my full support, and together with the changes I have mentioned, would go a long way to meeting the needs of those suffering under the burden of drought.

June 15, 1977

Formal Statement on Senate Bill 1306 Regarding Drought Disaster Relief

The 1976-77 winter season is one to be long remembered by the skiing public and the ski industry in the West, particularly in Idaho and the Pacific Northwest. Bogus Basin's experience is typical of most of the areas in Idaho, Oregon and Washington. We operated 59 days compared to a normal 140. On January 15, 1977, we had 12" of snow on the ground containing 1.7 inches of water. Our official Soil Conservation Service snow course has been measured monthly since 1942. The worst year in that time was 1963 when we also had 12" of snow in mid January but with 3" of water. A month later this year,

the situation was not improved. We opened the ski area marginally on January 5, 1977, operated for 15 days and closed. We could not open again until February 26, 1977. By then, many skiers were out of the mood as reflected by our revenues. Our total gross volume for the season was $467,000.00 compared to $1,368,000.00 in the 1975-76 season, a reduction of 66%. We were 72% below projected revenue. We had 59,000 skier days compared to 243,000 a year previous. Our net losses will exceed $500,000.00.

In late December, we started investigating the possibilities of disaster relief in anticipation of a continuation of the weather situation caused by the high pressure system covering the Western part of the United States. At the suggestion of the local Small Business Administration office, we gathered information from areas in Idaho and eastern Oregon to demonstrate the effect of the drought. I was informed our non-profit status would not affect our eligibility to apply for an Economic Injury Disaster Loan if a disaster declaration was forthcoming from the Federal Government. Thus encouraged I continued my efforts on behalf of the ski industry in Idaho only to find out that we were precluded due to our corporate structure. As I understand the problem, we would qualify if we could demonstrate physical damage but do not qualify if we suffer only economic injury. Obviously, the lack of snow did no physical damage to the ski area. Later on, when that same lack of snow fails to grow grass for cattle it is considered physical damage. Seems to me to be a very fine line.

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Continued

The disaster declaration for Blaine and surrounding counties and the proposed declaration for the balance of Idaho's counties will be of great help to the States Ski Industry. Unless some change can be effected in S 1306, it will not help Bogus Basin.

I fully understand the intent of the Samll Business Act and agree with the concept of providing loans for tax paying businesses. I do not agree with the idea of precluding a non-profit company from applying for much needed disaster relief. The SBA is only

a vehicle for the administration of the Federal Disaster Relief program and I sincerely hope hope S 1306 can be modified to eliminate this inequity.