[House Report 116-343]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-343
======================================================================
PRISON TO PROPRIETORSHIP FOR FORMERLY INCARCERATED ACT
_______
December 12, 2019.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Ms. Velazquez, from the Committee on Small Business, submitted the
following
R E P O R T
[To accompany H.R. 5065]
The Committee on Small Business, to whom was referred the
bill (H.R. 5065) to amend the Small Business Act to provide re-
entry entrepreneurship counseling and training services for
formerly incarcerated individuals, and for other purposes,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary........................................2
II. Background and Need for Legislation.............................2
III. Hearings........................................................4
IV. Committee Consideration.........................................4
V. Committee Votes.................................................4
VI. Section-by-Section Analysis for H.R. 5065.......................6
VII. Congressional Budget Office Cost Estimate.......................6
VIII. Unfunded Mandates...............................................6
IX. New Budget Authority, Entitlement Authority, and Tax Expenditure7
X. Oversight Findings..............................................7
XI. Statement of Constitutional Authority...........................7
XII. Congressional Accountability Act................................7
XIII. Federal Advisory Committee Act Statement........................7
XIV. Statement of No Earmarks........................................7
XV. Statement of Duplication of Federal Programs....................7
XVI. Disclosure of Directed Rule Makings.............................8
XVII. Performance Goals and Objectives................................8
XVIII.Changes in Existing Law, Made by the Bill, As Reported..........8
I. Purpose and Bill Summary
The purpose of H.R. 5065, the Prison to Proprietorship for
Formerly Incarcerated Act is to provide in-depth
entrepreneurship training to federal prisoners.
II. Background and Need for Legislation
H.R. 5065, the Prison to Proprietorship for Formerly
Incarcerated Act was introduced by Rep. Hakeem Jeffries (D-NY)
and Rep. Tim Burchett (R-TN) on November 13, 2019.
Every year, thousands of formerly incarcerated individuals
return to their communities seeking to rebuild their lives. In
2018, more than 37,000 incarcerated individuals were released
from federal prisons,\1\ and more than 97 percent of the
nation's 180,000 federal inmates will eventually be
released.\2\ Unfortunately, nearly half of those released will
be rearrested within 8 years.\3\ In 2016, the United States
Sentencing Commission (USSC) released a study that examined the
recidivism rates among 25,000 federal inmates who were released
in 2005. The study followed offenders and probationers for
eight years to determine rates of rearrest, reconviction, and
incarceration. About half of the offenders were rearrested for
a new crime or a violation within eight years, nearly a third
were reconvicted, and about a quarter were incarcerated. The
median time to first arrest was 21 months.\4\
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\1\Bureau of Fed. Prisons, https://www.bop.gov/about/statistics/
statistics_inmate_releases.jsp.
\2\Adam Gelb & John Gramlich, Recidivism Study Offers Lessons for
Federal Policy (The PEW Charitable Trusts, 2016).
\3\U.S. Sent'g Commission, Recidivism Among Federal Offenders: A
Comprehensive Overview, (2016).
\4\The PEW Charitable Trust, supra note 2.
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Entrepreneurship training can play a key role in helping
these individuals overcome barriers to re-entry and
successfully transition back into the workplace and their
communities. Programs focused on entrepreneurship can provide
the formerly incarcerated with support to create businesses
that not only build wealth but create greater economic
mobility. As noted above, lack of employment opportunities is a
significant factor resulting in recidivism. Providing a pathway
to entrepreneurship has the potential to empower former inmates
to start and run their business. Programs that focus on
leadership skills, financial literacy, developing a business
plan, and building networks have the potential to reduce
recidivism, provide a great return on investment by leading to
economic expansion and ultimately save the taxpayers millions
of dollars. As the flagship Agency tasked with supporting
entrepreneurs and small businesses, the SBA can play a pivotal
role in this regard.
The Small Business Administration (SBA) offers a wide range
of free or low-cost counseling and training services through
its entrepreneurial ecosystem to help entrepreneurs launch and
grow their small businesses. To deliver these resources, the
SBA relies on its primary resource partners: Small Business
Development Centers (SBDCs), Women's Business Centers (WBCs),
and SCORE.
The Women's Business Centers (WBCs) were created to assist
small businesses primarily owned by women, many of whom are
socially and economically disadvantaged. The WBC program funds
more than 100 centers nationwide and offers a full range of
counseling and training services for all stages of business
development.\5\ WBCs provide financial education and literacy
programs and are uniquely suited to provide the basic financial
literacy skills, which may be lacking with those who are
incarcerated. Several WBCs already provide entrepreneurship
training to incarcerated individuals. For example, the Center
in Spokane, Washington teaches financial literacy classes,
offers business training, coaches this population on ways to
avoid predators, the dangers of debt, and the difference
between consumer debt and capacity/asset debt.\6\
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\5\The Association of Women's Business Centers is the resource
partner for WBCs. WBC Resources, available at https://irp-
cdn.multiscreensite.com/fb72abcb/files/uploaded/WBC-One-Pager-and-2018-
Policy-Priorities.pdf.
\6\Prison to Proprietorship: Entrepreneurship Opportunities for the
Formerly Incarcerated: Hearing Before The Comm. on Small Business,
116th Cong. (2016) (statement of Corinne Hodges, CEO of the Association
of Women's Business Centers).
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SCORE utilizes an expansive network of volunteers to
provide free or low-cost mentoring and training to
entrepreneurs throughout the country. It is the largest network
of volunteers, with more than 11,000 expert business advisors
at 350 chapters nationwide.\7\ SCORE provides personalized one-
on-one counseling to help entrepreneurs start, grow, and manage
their small business, as well as workshops, either on-line or
in local communities. Among other services, SCORE aids with
developing a business plan, building a website, growing an
online brand, managing cash flow, and determining a company's
legal structure.
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\7\SBA FY 2020 Budget, supra note 16.
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The largest of the resource partners within SBA's
entrepreneurial ecosystem, the Small Business Development
Center (SBDC) network is comprised of 63 lead organizations and
more than 900 subcenters.\8\ They are in rural, urban, and
suburban communities nationwide, and many are housed at
universities or state agencies. The network delivers free face-
to-face counseling and at-cost training in all aspects of small
business management to new and existing small businesses. The
services include, but are not limited to, assisting small
businesses with developing a business plan, accessing capital,
marketing, regulatory compliance, technology development, and
international trade.\9\ Their nearly forty-year history of
providing counseling and training, coupled with their far-
reaching network makes them well-positioned to provide these
services in federal prisons.
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\8\U.S. Small Bus. Admin., Office of Small Business Development
Centers, available at https://www.sba.gov/offices/headquarters/osbdc/
resources/11409.
\9\America's SBDCs is the association for SBDCs, SBDC Web
Resources, available at https://americassbdc.org/about-us/.
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Education is known to be a great equalizer as it can boost
economic mobility and reduce recidivism, yet approximately 30
percent of incarcerated individuals do not hold a high school
diploma.\10\ As a result, securing employment without an
education or job skills can be difficult for those individuals
reentering society. In 2016, a Rand Corporations report found
that individuals ``who participated in any type of educational
program--from remedial math to vocational auto shop to college
level courses--while in prison were 43 percent less likely to
return to prison.'' They also are far more likely to find a job
after release.\11\ While studies have shown that employment is
central to the successful reintegration into the communities,
it can be elusive for the reasons mentioned above. Encouraging
entrepreneurship can be a viable option for formerly
incarcerated individuals who are committed to rebuilding their
lives. Moreover, it can reduce recidivism with the added
benefit of creating jobs on Main Street.
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\10\U.S. Dep't of Educ., International Center for Education
Statistics, Highlights from the U.S. PIAAC Survey of Incarcerated
Adults: Their Skills, Work Experience, Education and Training, 2014.
\11\Rand Corporation, The Case for Correctional Education In U.S.
Prisons, Jan. 3, 2016.
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III. Hearings
In the 116th Congress, the Committee held a hearing titled
``Prison to Proprietorship: Entrepreneurship Opportunities for
the Formerly Incarcerated'' on October 23, 2019 to develop H.R.
5065. The hearing examined the role entrepreneurship can play
in overcoming barriers to employment for the formerly
incarcerated and reducing recidivism. It also examined
entrepreneurship training options for incarcerated and formerly
incarcerated individuals.
IV. Committee Consideration
The Committee on Small Business met in open session, with a
quorum being present, on November 20, 2019, and ordered H.R.
5065 reported favorably to the House of Representatives. During
the markup, no amendments were offered.
V. Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted by voice vote to favorably report
H.R. 5065 to the House at 11:53.
VI. Section-by-Section
Based on Committee outreach and hearings, Representative
Jeffries and Representative Burchett introduced H.R. 5065, the
``the Prison to Proprietorship for Formerly Incarcerated Act.''
Section 1. Short title
This section provides that the bill may be cited as the
``Prison to Proprietorship for Formerly Incarcerated Act.''
Section 2. Re-entry entrepreneurship counseling and training for
formerly incarcerated individuals
This section amends the Small Business Act (15 U.S.C.).
Subsection (a) requires the Administrator to work with the
Director of the Bureau of Prisons to ensure that the Service
Corps of Retired Executives (SCORE) provides entrepreneurship
counseling and training services to the formerly incarcerated
(who served time in a Federal prison).
Subsection (b) requires SCORE to provide the formerly
incarcerated with mentoring, workshops, and instructional
videos designed specifically to gain a better understanding of
business fundamentals and small business issue areas.
Additionally, SCORE will provide the formerly incarcerated with
the several tools, skills, and knowledge necessary to identify
a business opportunity, including how to draft a resume and
business plan, as well connecting with local resources for
small business concerns and identifying sources of capital.
Subsection (c) requires SCORE to provide regular
individualized mentoring sessions over the course of a year,
assistance with identifying local resources for small business
concerns, assistance in identifying sources of capital, and
when appropriate, support with loan applications and other
alternative funding opportunities, as well as workshops on
topics specifically tailored to meet the needs of covered
individuals.
Subsection (d) requires SCORE to survey clients to assess
their level of satisfaction with the services provided.
Subsection (e) requires SBA to submit an annual report to
the House Committee on Small Business and the Committee on
Small Business and Entrepreneurship of the Senate. The report
will include: the number of covered individuals, the number of
hours of mentorship provided by SCORE, the demographics of
covered individuals who received services, including age,
gender, race, and ethnicity, a summary and analysis of surveys,
and any additional information the administration may require.
VII. Congressional Budget Cost Estimate
At the time H.R. 5065 was reported to the House, the
Congressional Budget Office had not provided a cost-estimate.
VIII. Unfunded Mandates
H.R. 5065 contains no intergovernmental or private sector
mandates as defined in the Unfunded Mandates Reform Act, Public
Law No. 104-4, and would impose no costs on state, local, or
tribal governments.
IX. New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement
authority, and tax expenditures. While the Committee has not
received an estimate of new budget authority contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to Sec. 402 of the Congressional Budget
Act of 1974, the Committee does not believe that there will be
any additional costs attributable to this legislation because
all authorizations would be subject to future appropriation
action.
X. Oversight Findings
In accordance with clause 2(b)(1) of rule X of the Rules of
the House, the oversight findings and recommendations of the
Committee on Small Business with respect to the subject matter
contained in H.R. 5065 are incorporated into the descriptive
portions of this report.
XI. Statement of Constitutional Authority
Pursuant to clause 7 of rule XII of the Rules of the House,
the Committee finds the authority for this legislation in Art.
I, Sec. 8, cl. 1.
XII. Congressional Accountability Act
H.R. 5065 does not relate to the terms and conditions of
employment or access to public services or accommodations
within the meaning of Sec. 102(b)(3) of Public Law 104-1.
XIII. Federal Advisory Committee Act Statement
H.R. 5065 does not establish or authorize the establishment
of any new advisory committees as that term is defined in the
Federal Advisory Committee Act, 5 U.S.C. App. 2.
XIV. Statement of No Earmarks
Pursuant to clause 9 of rule XXI, H.R. 5065 does not
contain any congressional earmarks, limited tax benefits, or
limited tariff benefits as defined in subsections (d), (e), or
(f) of clause 9 of rule XXI of the Rules of the House.
XV. Statement of Duplication of Federal Programs
Pursuant to clause 3 of rule XIII of the Rules of the
House, no provision of H.R. 5065 establishes or reauthorizes a
program of the federal government known to be duplicative of
another federal program, a program that was included in any
report from the United States Government Accountability Office
pursuant to Sec. 21 of Pub. L. No. 111-139, or a program
related to a program identified in the most recent catalog of
federal domestic assistance.
XVI. Disclosure of Directed Rulemakings
Pursuant to clause 3 of rule XIII of the Rules of the
House, H.R. 5065 does not direct any rulemaking.
XVII. Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XII of the Rules of the
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
H.R. 5065 would direct the Small Business Administration's
(SBA) resource partner, SCORE, assist formerly incarcerated
individuals with entrepreneurship training upon release.
XVIII. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause (E) of rule XIII of the Rules of
the House, changes in existing law made by the bill, as
reported, as shown as follows: existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
SEC. 49. RE-ENTRY ENTREPRENEURSHIP COUNSELING AND TRAINING FOR FORMERLY
INCARCERATED INDIVIDUALS.
(a) Services Required.--The Administrator, in coordination
with the Director of the Bureau of Prisons, shall require the
Service Corps of Retired Executives to provide entrepreneurship
counseling and training services to individuals formerly
incarcerated in a Federal prison (hereinafter referred to as
``covered individuals'') on a nationwide basis.
(b) Goals.--The goal of the services provided under this
section is to provide covered individuals with the following:
(1) Mentoring, workshops, and instructional videos
designed specifically for covered individuals on how to
start or expand a small business concern.
(2) Tools, skills, and knowledge necessary to
identify a business opportunity, including how to--
(A) draft a skills profile, business plan,
and transition plan;
(B) identify sources of capital; and
(C) connect with local resources for small
business concerns.
(c) Additional Requirements.--The services provided under
this section shall include--
(1) regular individualized mentoring sessions, to
take place over the course of a year, to support
development of the business plans of covered
individuals and the growth of covered individuals as
entrepreneurs;
(2) assistance with identifying of local resources
for small business concerns for covered individuals;
(3) assistance with identifying sources of capital,
and when appropriate, assistance with preparing
applications for loans and other funding opportunities;
and
(4) workshops on topics specifically tailored to meet
the needs of covered individuals.
(d) Survey.--The Service Corps of Retired Executives shall
survey covered individuals who received services under this
section to assess the satisfaction of such covered individuals
with such services.
(e) Report.--Not later than 1 year after the date of the
enactment of this section and annually thereafter, the
Administrator shall submit to the Committee on Small Business
of the House of Representatives and the Committee on Small
Business and Entrepreneurship of the Senate a report on the
performance and effectiveness of the services provided under
this section, which may be included as part of another report
submitted to such committees by the Administrator, and which
shall include--
(1) the number of covered individuals mentored under
this section;
(2) the number of hours of mentorship provided by the
Service Corps of Retired Executives under this section;
(3) the demographics of covered individuals who
received services, including age, gender, race, and
ethnicity;
(4) a summary and analysis of surveys conducted under
subsection (d); and
(5) any additional information the Administrator may
require.
Sec. [49.] 50. All laws and parts of laws inconsistent with
this Act are hereby repealed to the extent of such
inconsistency.