[Congressional Record Volume 165, Number 118 (Monday, July 15, 2019)]
[House]
[Pages H5810-H5812]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CLARIFYING THE SMALL BUSINESS RUNWAY EXTENSION ACT
Mr. DELGADO. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 2345) to amend the Small Business Act to clarify the
intention of Congress that the Administrator of the Small Business
Administration is subject to certain requirements with respect to
establishing size standards for small business concerns, and for other
purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2345
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 ``Clarifying the Small
Business Runway Extension Act''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) the Small Business Runway Extension Act of 2018 (Public
Law 115-324) applies to calculations of the size of a
business concern made by the Administrator of the Small
Business Administration;
(2) Federal agencies rely upon such calculations to award
contracts, including governmentwide acquisition contracts, to
small business concerns; and
(3) the Small Business Runway Extension Act of 2018 has
been effective since the date it was signed into law, on
December 17, 2018.
SEC. 3. CLARIFYING AMENDMENT TO THE SMALL BUSINESS RUNWAY
EXTENSION ACT OF 2018.
Section 3(a)(2)(C) of the Small Business Act (15 U.S.C.
632(a)(2)(C)) is amended by inserting ``(including the
Administration when acting pursuant to subparagraph (A))''
after ``no Federal department or agency''.
SEC. 4. FINALIZATION OF SMALL BUSINESS RUNWAY EXTENSION ACT
OF 2018 RULES.
The Administrator of the Small Business Administration
shall issue a final rule implementing the Small Business
Runway Extension Act of 2018 (Public Law 115-324) not later
than December 17, 2019.
SEC. 5. AMENDMENT TO SIZE STANDARDS FOR CERTAIN SMALL
BUSINESS CONCERNS.
(a) Size Standards for Small Business Concerns Providing
Services.--Section 3(a)(2)(C)(ii)(II) of the Small Business
Act (15 U.S.C. 632(a)(2)(C)(ii)(II)) is amended by striking
``not less than''.
(b) Size Standards for Other Business Concerns.--Section
3(a)(2)(C)(ii)(III) of the Small Business Act (15 U.S.C.
632(a)(2)(C)(ii)(III)) is amended by striking ``not less than
3 years'' and inserting ``5 years''.
SEC. 6. TRANSITION PLAN FOR THE SMALL BUSINESS RUNWAY
EXTENSION ACT OF 2018.
(a) Plan Required.--Not later than 90 days after the date
of the enactment of this Act, the Administrator of the Small
Business Administration shall implement a transition plan to
assist business concerns and Federal agencies with compliance
with the requirements of the Small Business Runway Extension
Act of 2018 (Public Law 115-324).
(b) 3-Year Calculation for Size Standards.--
(1) In general.--The transition plan described under
subsection (a) shall include a requirement that, during the
period beginning on December 17, 2018, and ending on the date
that is 6 months after the date on which the Administrator
issues final rules implementing the Small Business Runway
Extension Act of 2018 (Public Law 115-324), allows the use of
a 3-year calculation for a size standard to be applied to a
business concern if the use of such 3-year calculation allows
such concern to be considered a small business concern under
section 3(a)(1) of the Small Business Act (15 U.S.C.
632(a)(1)).
(2) 3-year calculation defined.--In this subsection, the
term ``3-year calculation'' means--
(A) with respect to a business concern providing services
described under clause (ii)(II) of such section, a
determination of the size of such concern on the basis of the
annual average gross receipts of such concern over a period
of 3 years; and
(B) with respect to a business concern described under
clause (ii)(III) of such section, a determination of the size
of such concern on the basis of data over a period of 3
years.
SEC. 7. REQUIREMENT TO UPDATE SAM.
Not later than 90 days after the date of the enactment of
this Act, the System for Award
[[Page H5811]]
Management (or any successor system) shall be updated to
comply with the requirements of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
York (Mr. Delgado) and the gentleman from Ohio (Mr. Chabot) each will
control 20 minutes.
The Chair recognizes the gentleman from New York.
General Leave
Mr. DELGADO. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on the measure under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New York?
There was no objection.
Mr. DELGADO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 2345, the Clarifying the Small
Business Runway Extension Act of 2019.
The Federal Government recognizes two categories of businesses: small
and other-than small. Since there is no Federal definition for ``other-
than small,'' this category can encompass firms that barely exceed the
SBA's small business size standards, up to the multibillion-dollar
household names.
To ease the transition from ``small'' to ``other-than small'' to give
growing businesses a real chance at competing against some of the
biggest companies in the world, we enacted the Small Business Runway
Extension Act last year.
By increasing the average-receipts-based calculation for SBA size
standards, transitioning firms will have more time to grow and develop
their competitiveness and infrastructure.
However, since the Runway Extension Act became law, its
interpretation and implementation have been thwarted by the agency
responsible for its implementation. This conflict between law and
regulation has created much confusion in the Federal contracting
community.
The bill before us today clearly and unequivocally states Congress'
intention regarding the Runway Extension Act of 2018. It sets forth a
specific date by which SBA must complete their rulemaking process while
also creating a transition plan for small firms caught up in this tug
of war.
Mr. Speaker, I commend Representatives Stauber and Golden for
collaborating to find a resolution to this issue, and I urge my
colleagues to support the bill.
Mr. Speaker, I reserve the balance of my time.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 2345, the Clarifying the Small
Business Runway Extension Act.
This important bipartisan legislation holds the SBA accountable for
implementing the will of Congress.
In the previous Congress, this committee undertook a deep-dive
examination of the effects of entering the middle market on small
contractors, and the Runway Extension Act of 2018 was the direct result
of these actions.
It was clear, under no uncertain terms, that the intent of the bill
was to apply to the SBA's own calculation of its receipts-based size
standards to small firms. However, the SBA took an opposing view, which
resulted in a conflict between law and regulation.
{time} 1715
H.R. 2345 is critical in that it mitigates this confusion and
restates the original intent of the Small Business Runway Extension Act
of 2018 to make clear that the law does, in fact, apply to the Small
Business Administration.
Additionally, H.R. 2345 responds to concerns raised by small
businesses and stakeholders after the bill's passage, such as its
effect on declining-revenue businesses and the need to provide the
executive branch and small businesses time to adjust to the new rule.
The transition plan offered by this bill will make significant strides
in easing the path for small businesses and Federal agencies alike.
I thank the gentleman from Minnesota (Mr. Stauber) and the gentleman
from Maine (Mr. Golden) for their leadership.
Mr. Speaker, I urge my colleagues to support the bill, and I reserve
the balance of my time.
Mr. DELGADO. Mr. Speaker, I yield 5 minutes to the gentleman from
Maine (Mr. Golden).
Mr. GOLDEN. Mr. Speaker, I appreciate the opportunity to speak about
the Clarifying the Small Business Runway Extension Act, a bill that I
am proud to lead alongside the gentleman from Minnesota (Mr. Stauber).
Mr. Speaker, Americans expect our government to work efficiently and
to follow through. They believe, and I agree with them, that when
Congress passes a law, Federal agencies should implement it.
Our goal with this bill is quite simple: to make sure that the Small
Business Administration respects the will of Congress as expressed in
the Small Business Runway Extension Act of 2018, a law that was enacted
in December 2018.
The bipartisan law was designed to ease the transition for businesses
between SBA's small and other-than-small categories for the purposes of
determining Federal contracting preferences.
Prior to the law, SBA evaluated eligibility by looking at 3 years of
a business' gross receipts. In the law, SBA was instructed to extend
that period to 5 years. The idea is that year-to-year changes in a
small business' receipts will now be less likely to create a sudden
loss of eligibility for this important contracting preference for small
businesses.
As I have heard many times from small business owners in Maine,
certainty is key to growth, and that is what the 5-year calculation is
designed to provide.
Unfortunately, SBA has dragged its feet implementing the law,
claiming that the fact that the law lacked an explicit effective date
meant that SBA did not have to implement it immediately. Aside from
being a questionable reading of the law, SBA's delay has created a lost
opportunity to improve the ability of SBA-eligible small businesses to
transition and grow in a predictable and sustainable way.
As chair and ranking member of the Subcommittee on Contracting and
Infrastructure of the House Committee on Small Business, Congressman
Stauber and I heard firsthand from experts and small business owners at
a March hearing about the uncertainty that has been created by this
delay in SBA's implementation of the 5-year change.
While we followed up on that hearing with a letter to SBA in April,
we have yet to resolve this issue, so we are turning to a legislative
solution. Our Nation's small businesses should be able to access the
contracting opportunities that they deserve.
The bill will require SBA to issue implementing regulations no later
than December of this year while creating a transition period for
businesses to grow and compete.
Mr. Speaker, I recognize Mr. Stauber, as well as Chair Velazquez and
Ranking Member Chabot, for their bipartisan work on this issue.
I particularly thank Congressman Stauber. I think the opportunity to
work together in our subcommittee has been a great one. I appreciate
his bipartisan focus and his desire to push through a real solution for
small businesses. I had a great time, as well, out in Minnesota, having
field hearings about small business issues. I can't wait to have him up
in Maine in the near future.
Mr. Speaker, I encourage my colleagues to support this bill. Let's
make sure there is no doubt about Congress' intent in this area.
Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the
gentleman from Minnesota (Mr. Stauber), the ranking member of the
Subcommittee on Contracting and Infrastructure.
Mr. STAUBER. Mr. Speaker, I thank Ranking Member Chabot for yielding.
Mr. Speaker, my bill, H.R. 2345, the Clarifying the Small Business
Runway Extension Act, is a bill that does exactly what it says: makes
clear the intent of the Small Business Runway Extension Act of 2018.
The Small Business Runway Extension Act of 2018 was simple,
straightforward, and unambiguous. It simply extended the Small Business
Administration's receipts-based size calculation from a 3-year average
to 5 years. Recognizing the significance of this bill for small
businesses, the Small Business Runway Extension Act of 2018 easily
passed through both the House and Senate and became law on December 17,
2018.
[[Page H5812]]
Within 4 days of the law's passage, the SBA stalled its
implementation, issuing an information notice that effectively
contradicted the Small Business Runway Extension Act of 2018 by
maintaining the 3-year calculation until the agency could go through
the rulemaking process. Coincidentally, or perhaps because of the
pressure exerted by Congress and the public, the SBA issued its
proposed rule for the Small Business Runway Extension Act of 2018 mere
days before Chairman Golden and I held a hearing in the Subcommittee on
Contracting and Infrastructure to hold the SBA accountable for its
delay. Unfortunately, the proposed rule still maintains the current 3-
year standard in SBA regulations.
During this hearing, we highlighted how this conflict in law versus
SBA regulation imposes significant, real-world challenges for small
businesses that may be teetering on the edge between small and other-
than-small business status. The need for clarity was a constant and
recurring theme, and this bill provides that clarity.
First, H.R. 2345 makes clear that the Small Business Runway Extension
Act of 2018 does, in fact, apply to the SBA and, therefore, should have
become effective on the date it was signed into law. Thus, businesses
relying on the 5-year average to remain in their small business status
were correct in their assessment and may continue to hold this status.
Second, the bill requires the Small Business Administration to
develop a transition plan for small businesses and Federal agencies as
they shift to the 5-year rule. The transition plan shall include a
buffer period in which firms that benefit from the old 3-year
calculation may continue to rely on that formula for a set amount of
time as they prepare for the eventual shift to the 5-year average
calculation.
In short, H.R. 2345 restates the intent of Congress as written in the
Small Business Runway Extension Act of 2018 and adopts solutions that
will create a smooth transition for all parties involved. This will
allow more businesses to retain access to SBA benefits, including loans
and contracts, that have allowed our small businesses to grow, thrive,
and greatly contribute to our economy.
Mr. Speaker, I thank Chairman Golden for his leadership on this act.
It was and is a privilege to work with him on the Small Business
Committee.
Mr. Speaker, I urge my colleagues to support H.R. 2345, the
Clarifying the Small Business Runway Extension Act.
Mr. DELGADO. Mr. Speaker, I reserve the balance of my time.
Mr. CHABOT. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I would like to reiterate that H.R. 2345 is important
not only to help small contractors once they graduate, but it also
holds the SBA accountable to the will of the people through an act of
Congress.
Small businesses have told us they need a runway to grow and they
need that runway now. We need to ensure that this is done, that the SBA
takes swift action. H.R. 2345 gets us there.
Mr. Speaker, I urge my colleagues to support the bill, and I yield
back the balance of my time.
Mr. DELGADO. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I thank Representative Stauber and Representative Golden
for working together on this important bill to ensure that
congressional intent is not thwarted when it comes to the adequate and
prompt implementation of the Small Business Runway Extension Act of
2018. That law was intended to make it easier for small Federal
contractors to transition into the open marketplace.
The SBA has interpreted that the Small Business Runway Extension Act
of 2018 applies to every other agency adopting its own size standard
but not the SBA itself. Many small businesses and legal experts
disagreed with the SBA's position, as did our committee.
This bipartisan bill reiterates that the law has been effective since
its enactment and requires the SBA to issue a final rule for its
implementation before the end of this year.
Mr. Speaker, I urge my colleagues to support the bill, and I yield
back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New York (Mr. Delgado) that the House suspend the rules
and pass the bill, H.R. 2345, 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.
____________________