[Senate Report 117-103]
[From the U.S. Government Publishing Office]
Calendar No. 278
117th Congress } { Report
SENATE
2d Session } { 117-103
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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.
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