[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.

                          ____________________