[Senate Report 117-103]
[From the U.S. Government Publishing Office]


                                                     Calendar No. 278
117th Congress         }                        {             Report
                                 SENATE 
 2d Session            }                        {             117-103

======================================================================



 
             DISASTER ASSISTANCE FOR RURAL COMMUNITIES ACT

                                _______
                                

                  May 3, 2022.--Ordered to be printed

                                _______
                                

Mr. Cardin, from the Committee on Small Business and Entrepreneurship, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1617]

    The Committee on Small Business and Entrepreneurship, to 
which was referred the bill (S. 1617) to modify the 
requirements for the Administrator of the Small Business 
Administration relating to declaring a disaster in a rural 
area, and for other purposes, reports favorably thereon, with 
an amendment in the nature of a substitute, and recommends that 
the bill, as amended, do pass.

                            I. INTRODUCTION

    A bill to authorize the SBA to declare a disaster in rural 
areas where significant damage has been incurred to provide 
disaster assistance was introduced by Senators Jim Risch, 
Jeanne Shaheen, Maggie Hassan, John Kennedy, and Mike Braun on 
May 13, 2021.
    This bill allows the Administrator to declare a disaster in 
a rural area for which a major disaster was declared by the 
President under section 401 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act, and for which individual 
assistance was not authorized, if the Governor of the State or 
the Chief Executive of the Indian tribal government in which 
the rural area is located requests such a declaration; and any 
home, small business concern, private nonprofit organization, 
or small agricultural cooperative has incurred significant 
damage in the rural area.
    The bill requires SBA to issue annual reports, including 
the number of requests for assistance under this Act, and any 
changes to regulations that affect rural disaster assistance. 
This bill requires regulations to be promulgated within 120 
days to carry out the Act. The bill also mandates GAO issue a 
report within 1 year of enactment detailing any unique 
circumstances rural communities may face in obtaining SBA 
disaster assistance, and provide legislative recommendations to 
improve such access.
    During the markup of the bill, the Risch substitute 
amendment to the bill was approved by a voice vote as part of a 
manager's package. The Risch substitute amendment changes the 
definition of rural area to mean any county or other political 
subdivision of a State, the District of Columbia, or a 
territory or possession of the United States that is designated 
as a rural area by the Bureau of the Census. The amendment also 
allows the Chief Executive of the Indian tribal government in 
which the rural area is located to request a disaster 
declaration from SBA. Lastly, the amendment clarifies that an 
SBA disaster declaration made pursuant to the bill would be 
triggered only under situations when the President declares a 
Public Assistance-only declaration. The bill, as amended, was 
also approved by a voice vote as part of a manager's package.

              II. HISTORY (PURPOSE & NEED FOR LEGISLATION)

    The SBA disaster loan program is designed to help 
homeowners and small business recover from natural disasters. 
In order for homeowners and small businesses to access funding 
under the program, the SBA must issue a disaster declaration. 
Applicants are limited to entities located in the geographic 
areas designated in such declaration. Presidentially-declared 
natural disasters authorize FEMA to provide individual and 
public assistance, while SBA issues its own declarations to 
determine eligibility for disaster loans. SBA is precluded from 
issuing a disaster declaration unless a base level of 
businesses or homes are certified by local authorities as 
having been impacted by the natural disaster. This can lead to 
situations in which natural disasters can significantly impact 
a large percentage of a small rural community but, due to 
sparse populations, still fail to reach the current threshold 
of impacted homes and businesses necessary to be eligible for a 
SBA disaster declaration.

                      III. HEARINGS & ROUNDTABLES

    The Committee held a hearing in the 116th Congress entitled 
``Examining SBA's Office of Disaster Assistance and the 
Response to Recent Catastrophic Floods.'' During the hearing 
Lisa Shimkat, State Director of the Iowa Small Business 
Development Center in Ames, Iowa, described the challenges of 
responding to disasters in rural areas, particularly when 
damage occurs over a widespread area. Several committee members 
drew attention to the unique challenges rural areas face when 
disasters strike. Both Ms. Shimkat and witness Robin Barnes of 
the Greater New Orleans organization both testified that SBA 
must ensure post-natural disaster resources are available to 
disaster victims in need.

                        IV. DESCRIPTION OF BILL

    This bill amends section 7(b) of the Small Business Act by 
adding a new paragraph 16 regarding disaster declarations in 
rural areas. The new paragraph includes definitions for ``rural 
areas'' and ``significant damage'' which are necessary for the 
Administrator to determine how to declare a disaster under the 
paragraph. The new provision creates a new authority under 
which the Administrator may declare a disaster in a rural area 
for which a major disaster was declared by the President under 
section 401 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, and for which individual assistance 
was not authorized, if the Governor of the State or the Chief 
Executive of the Indian tribal government in which the rural 
area is located requests such a declaration; and any home, 
small business concern, private nonprofit organization, or 
small agricultural cooperative has incurred significant damage 
in the rural area. The SBA declaration authorized under 
paragraph 16 of section 7(b) may not be applied to contiguous 
counties. By declaring a disaster under this paragraph, the 
Administrator would then be authorized to make physical loans 
(section 7(b)(1)) and economic injury disaster loans (section 
7(b)(2)).
    The new paragraph 16, as added by this Act, requires SBA to 
issue annual reports, including the number of requests for 
assistance under this Act, and any changes to regulations that 
affect rural disaster assistance. Finally, the bill mandates a 
one-time GAO report within 1 year of enactment detailing any 
unique circumstances facing rural communities may face 
obtaining SBA disaster assistance, and provide legislative 
recommendations to improve such access.

                           V. COMMITTEE VOTE

    In compliance with rule XXVI (7)(b) of the Standing Rules 
of the Senate, the following vote was recorded on February 15, 
2022.
    A motion to adopt S. 1617, a bill to authorize the Small 
Business Administration (SBA) to declare a disaster in rural 
areas where significant damage has been incurred, as amended by 
the Risch substitute amendment, was agreed to by a majority 
voice vote of a quorum present as part of a manager's package.

                           VI. COST ESTIMATE

    The Committee has not yet received the Congressional Budget 
Office's estimate of the cost of S. 1617 as ordered reported. 
When the Congressional Budget Office completes its cost 
estimate, it will be posted on the Internet at www.cbo.gov.

                  VII. EVALUATION OF REGULATORY IMPACT

    In compliance with rule XXVI (11)(b) of the Standing Rules 
of the Senate, it is the opinion of the Committee that no 
significant additional regulatory impact will be incurred in 
carrying out the provisions of this legislation.

                   VIII. SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    This section designates the act as the ``Disaster 
Assistance for Rural Communities Act''.

Sec. 2. Disaster declaration in rural areas

    This section defines terms, and creates new authority for 
the SBA Administrator to declare disasters in rural areas where 
significant damage has been incurred. The section outlines the 
necessary requirements to make a rural disaster declaration 
under this Act, and requires SBA to report to Congress annually 
regarding activities undertaken under the provisions of this 
Act.
    This section requires regulations to be promulgated within 
120 days to carry out the Act and mandates GAO issue a report 
within 1 year of enactment detailing any unique circumstances 
facing rural communities may face obtaining SBA disaster 
assistance, and provide legislative recommendations to improve 
such access.

                                  [all]