[Congressional Record Volume 162, Number 60 (Tuesday, April 19, 2016)]
[House]
[Pages H1831-H1833]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL AGRICULTURE PRODUCER SIZE STANDARDS IMPROVEMENTS ACT OF 2015
Mr. CHABOT. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 3714) to amend the Small Business Act to allow the Small
Business Administration to establish size standards for small
agricultural enterprises using the same process for establishing size
standards for small business concerns, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3714
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 ``Small Agriculture Producer
Size Standards Improvements Act of 2015''.
SEC. 2. AMENDMENT TO DEFINITION OF AGRICULTURAL ENTERPRISES.
Paragraph (1) of section 18(b) of the Small Business Act
(15 U.S.C. 647(b)(1)) is amended by striking ``businesses''
and inserting ``small business concerns''.
SEC. 3. EQUAL TREATMENT OF SMALL FARMS.
Paragraph (1) of section 3(a) of the Small Business Act (15
U.S.C. 632(a)(1)) is amended by striking ``operation:
Provided,'' and all that follows through the period at the
end and inserting ``operation.''.
SEC. 4. UPDATED SIZE STANDARDS.
(a) In General.--Not later than 18 months after the date of
enactment of this Act, the Administrator of the Small
Business Administration shall, by rule, establish size
standards in accordance with section 3 of the Small Business
Act (15 U.S.C. 632) for agricultural enterprises (as such
term is defined in section 18(b)(1) of such Act).
(b) Review.--Size standards established under subsection
(a) are subject to the rolling review procedures established
under section 1344(a) of the Small Business Jobs Act of 2010
(15 U.S.C. 632 note).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Chabot) and the gentlewoman from New York (Ms. Velazquez)
each will control 20 minutes.
The Chair recognizes the gentleman from Ohio.
General Leave
Mr. CHABOT. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days to revise and extend their remarks and include
extraneous materials on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, pursuant to the Small Business Act, the Small Business
Administration sets size standards for approximately 1,100 industries
every 5 years.
These standards determine what is a small business for purposes of
regulatory analyses, procurement programs, capital access, and
technical entrepreneurial development assistance.
The SBA sets these size standards in accordance with statutory
guidelines and using notice and comment rulemaking. The Small Business
Committee and, in particular, my colleague from Illinois (Mr. Bost),
has spent a great deal of effort to make sure this is a transparent and
accountable process.
However, agricultural enterprises have not been able to benefit from
these advances due to a historic anomaly. Forty-six different
industries, as diverse as cattle ranching and citrus
[[Page H1832]]
farming, are all subject to a single size standard that hasn't changed
in nearly 20 years.
That means that, to qualify as small, a poultry farmer or a soybean
producer can only have $750,000 in receipts each year. That is
receipts, not revenues. For some agricultural producers, $750,000 does
not cover the cost of a hobby farm.
H.R. 3714 levels the playing field for these small farmers. It does
not set a size standard, but instead requires that the SBA examine the
characteristics of these industries to develop size standards using the
normal process. Recognizing that a small dairy doesn't look like a
small corn farm is common sense.
My colleague, Mr. Curbelo of Florida, who chairs the Agriculture,
Energy, and Trade Subcommittee of the Small Business Committee, held a
hearing examining H.R. 3714, and the witnesses overwhelmingly supported
this legislation.
H.R. 3714 was then included as part of a larger bill that passed the
Small Business Committee in January, and it received bipartisan
support.
I urge my colleagues to support and pass H.R. 3714.
I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
I rise in support of H.R. 3714, the Small Agriculture Producer Size
Standards Improvements Act of 2015.
Small businesses play a critical role in the American economy. They
make up the vast majority of employer firms and create nearly two-
thirds of new jobs.
Over the years, Congress has created numerous Federal program set-
asides, tax preferences, and SBA loan programs to help small firms
succeed.
Last year small businesses were able to access over $28 billion in
capital and $90 billion in contracting opportunities because they met
the definition of small. Many businesses used long-term loan proceeds
to keep their doors open, retain employees, and create new jobs.
Since yesterday was tax day, I would also like to mention that small
business-oriented tax provisions allow firms to write off expenses
quickly, putting money back in their hands to create new avenues for
growth.
However, the advantages conferred by this program can only occur if a
business can show that they meet the industry-based definition of small
business.
While, generally, SBA is tasked with defining size standards for over
1,100 industries that establish eligibility for its programs,
agricultural standards have been exempted from this process.
Instead, Congress set a rigid gross revenue-base standard for all
agriculture industries that has not been adjusted since 2000. However,
since the time Congress first began setting the size standard,
agricultural production has shifted dramatically.
The Small Agriculture Producer Size Standards Improvements Act,
introduced by Mr. Bost and cosponsored by Ms. Meng, will eliminate the
outdated size standard and gives SBA the authority to tailor standards
that are reflective of the changes the industry has experienced as well
as the variety of agricultural businesses across our country.
What is small for a cattleman is not the same for fresh produce
producers or dairy farmers. The bill requires SBA to apply their
current methodology, solicit feedback from industry stakeholders, and
implement specific standards that can be tweaked periodically to
respond to changes in the industry.
I, therefore, ask my fellow Members to support this bill.
I reserve the balance of my time.
{time} 1515
Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the
gentleman from Illinois (Mr. Bost), who put a lot of hard work and
thought into this, and I thank him for his leadership on this matter.
Mr. BOST. Mr. Speaker, I thank the gentleman for yielding and for his
support of this legislation to update and modernize the agricultural
producers' small business size standards.
President Eisenhower once said: Farming looks mighty easy if your
plow is a pencil and the closest cornfield is a thousand miles away.
Unfortunately, this quote is accurate when describing the statutorily
established size standards for agriculture producers.
Agricultural production is an important contributor to the American
economy. According to the USDA, the total value of farm production
exceeds $390 billion, and the agricultural industry supports 16 million
domestic jobs. Farmers and ranchers provide the food, fiber, and fuel
that are critical to our daily lives.
Family-owned farms still account for the majority of farms and
ranches in the United States. However, the advance of new technology
has created increased productivity, leading to lower prices for many
commodities. This downward pressure on prices is expected to increase,
and newer technology will be adopted. As margins continue to thin, more
and more single-owned family operations will consolidate into somewhat
larger, multifamily-owned operations, but these are still small
businesses.
Unfortunately, the current small business size standard for
agriculture has been set in statute and is outdated. The standard is
too low for a vast majority of farms and ranches to participate in
potential government contracts and subcontracting opportunities.
Also, the SBA size standards are often used for Federal agencies to
determine their obligations under the Regulatory Flexibility Act. This
law helps ensure that the Federal agency establishes the potential
impacts of proposed regulations on small businesses. It also informs
the consideration of less burdensome regulatory alternatives.
Unfortunately, the statutory standard has no rational basis. It
appears that the number was just grabbed out of the air by a previous
Congress. As a result, small business agriculture producers do not
enjoy the potential benefit of small business classifications.
In the 30 years since the enactment of the statutory size standard,
the Small Business Administration has specifically improved its process
for determining small business size standards. This should address
whatever issue previous Congresses had when it established these size
standards.
Now, I believe it is important that the Congress and the Federal
agencies promote consistency in policymaking. My legislation will help
ensure that consistency.
I do want to thank the ranking member and the chairman for their
support of this bill, and I appreciate the help and support that they
have given.
Ms. VELAZQUEZ. Mr. Speaker, I reserve the balance of my time.
Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the
gentleman from Florida (Mr. Curbelo), who is chairman of the
Subcommittee on Agriculture, Energy and Trade.
Mr. CURBELO of Florida. I thank the chairman for his steadfast
leadership and advocacy on behalf of our Nation's small entrepreneurs.
Mr. Speaker, small business size standards are used by the Federal
Government to determine eligibility to receive certain Federal
contracts and SBA guarantee loans. They are also used by Federal
agencies when they analyze the economic impact of new regulations on
small businesses.
Size standards for most industries are developed through a
congressionally mandated rulemaking process that is transparent and
allows small businesses to provide input. The Small Business
Administration analyzes a number of factors--average firm size, startup
costs, entry barriers, industry competition, and the distribution of
firms by size--and then proposes changes to small business size
standards through the notice and comment rulemaking process. However,
there is one glaring exception: the existing size standard for
agricultural enterprises is established in statute and has not been
updated in over 15 years.
The current standard for small farmers is $750,000 in annual
receipts. It applies to 46 different agricultural subsectors, from
citrus groves to beef cattle ranching.
Small farmers and ranchers have been neglected for too long. The size
standard setting process for agricultural enterprises needs to be
modernized. The existing statutory size standard does not account for
changes in industry structure, cost of production, economic conditions,
or other factors.
Florida is the country's largest producer of squash, fresh tomatoes,
and
[[Page H1833]]
fresh snap beans, among a great deal of other fruits and vegetables.
Obviously, this would not be possible without the hard work of our
Nation's small farmers and ranchers.
I am proud to join Ranking Member Meng in cosponsoring the Small
Agriculture Producer Size Standards Improvements Act, which was
introduced by Representative Bost.
H.R. 3714 would strike the $750,000 statutory size standard and
require the SBA to establish size standards for agricultural
enterprises through the notice and comment rulemaking process.
It would also require those size standards to be periodically
reviewed at least every 5 years. This will ensure that size standards
for small farmers and ranchers are up to date so that they are able to
compete for Federal contracts, have access to SBA guaranteed loans, and
are considered when agencies draft new regulations.
Again, I want to thank Mr. Bost and Ranking Member Meng for their
legislation. I also want to thank Chairman Chabot and Ranking Member
Velazquez.
These are the types of bipartisan bills that will really improve the
quality of life for our farmers and for all Americans. I urge passage.
Ms. VELAZQUEZ. Mr. Speaker, like all other industries, the
agricultural industry has changed over the last 30 years.
With new technologies, many agricultural businesses have been able to
increase their production rates. The last Census of Agriculture found
U.S. farms sold nearly $395 billion in agricultural products, a 33
percent increase from the sales of 2007. Crop sales also increased by
48 percent.
The changes made in H.R. 3714 will give SBA the tools necessary to
set size standards for those in agricultural production. The bill
ensures these adjustments are done with careful consideration as to the
effects on small farms. I once again would urge my colleagues to
support this measure.
I yield back the balance of my time.
Mr. CHABOT. Mr. Speaker, in closing, allowing the SBA to develop
rational size standards for small farmers, rather than perpetuating a
one-size-fits-all approach, simply makes sense. It will allow these
farmers to access the appropriate SBA programs and helps ensure that
regulations are properly crafted.
The provision doesn't have any cost since SBA is already doing this
for all other industries. This bill deserves the support of the House,
and I would urge my colleagues to vote to suspend the rules and pass
H.R. 3714.
Again, I want to thank the ranking member and the other Members that
have been mentioned here today for their work on this important
measure.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Ohio (Mr. Chabot) that the House suspend the rules and
pass the bill, H.R. 3714.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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