[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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.