[Congressional Record (Bound Edition), Volume 162 (2016), Part 4]
[House]
[Pages 4546-4548]
[From the U.S. 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 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

[[Page 4547]]

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 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.

[[Page 4548]]

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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