[House Report 116-344]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-344
======================================================================
PRISON TO PROPRIETORSHIP 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. 5078]
The Committee on Small Business, to whom was referred the
bill (H.R. 5078) to amend the Small Business Act to provide re-
entry entrepreneurship counseling and training services for
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........................................1
II. Background and Need for Legislation.............................2
III. Hearings........................................................3
IV. Committee Consideration.........................................4
V. Committee Votes.................................................4
VI. Section-by-Section Analysis for H.R. 5078.......................6
VII. Congressional Budget Office Cost Estimate.......................7
VIII. Unfunded Mandates...............................................7
IX. New Budget Authority, Entitlement Authority, and Tax Expenditure7
X. Oversight Findings..............................................8
XI. Statement of Constitutional Authority...........................8
XII. Congressional Accountability Act................................8
XIII. Federal Advisory Committee Act Statement........................8
XIV. Statement of No Earmarks........................................8
XV. Statement of Duplication of Federal Programs....................8
XVI. Disclosure of Directed Rule Makings.............................8
XVII. Performance Goals and Objectives................................8
XVIII.Changes in Existing Law, Made by the Bill, As Reported..........9
I. Purpose and Bill Summary
The purpose of H.R. 5078, the Prison to Proprietorship Act
is to provide in-depth entrepreneurship training to federal
prisoners.
II. Background and Need for Legislation
H.R. 5078, the Prison to Proprietorship Act was introduced
by Chairwoman Nydia Velazquez (D-NY) and Ranking Member Steve
Chabot (D-OH) 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 WBC. 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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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.\7\ 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.\8\ 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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\7\U.S. Small Bus. Admin., Office of Small Business Development
Centers, available at https://www.sba.gov/offices/headquarters/osbdc/
resources/11409.
\8\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.\9\ 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.\10\ 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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\9\ 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.
\10\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.
5078. 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.
5078 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. 5078 to the House at 11:44.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. Section-by-Section
Based on Committee outreach and hearings, Chairwoman
Velazquez and Ranking Member Chabot introduced H.R. 5078, the
``Prison to Proprietorship Act''.
Section 1. Short title
This section provides that the bill may be cited as the
``Prison to Proprietorship Act.''
Section 2. Re-entry entrepreneurship counseling and training for
incarcerated individuals
This section amends the Small Business Act (15 U.S.C.).
Subsection (a) requires the Administrator to work closely
with the Director of the Bureau of Prisons, to provide
entrepreneurship counseling and training services to covered
individuals.
Subsection (b) requires the Administrator to develop an
annual plan to match Women's Business Centers and Small
Business Development Centers with federal prisons, giving
priority to the centers in closest proximity to the applicable
Federal prison. If the closest Women's Business Center or Small
Business Development Center is unable to provide the services
at the federal prison, then another Women's Business Center,
Small Business Development Center, or relevant association
shall provide such services.
Subsection (c) delineates the services provided, which
include in-depth training on how to start and expand a small
business as well as the tools, skills, and knowledge required
to identify a business opportunity. More specifically, the
services will include but are not limited to, drafting a
resume, business plan, and transition plan, as well as
identifying sources of capital and connecting with local
resources regarding small business concerns. The Committee
learned that one of the biggest issues facing the formerly
incarcerated is finding gainful employment. For those locked
out of the labor market, the services provided will equip them
with the tools and skills necessary to overcome the barriers
associated with reentering the workforce.
Subsection (d) lists additional services provided under the
bill, which include a presentation on self-employment and small
business ownership, a self-study course manual geared towards
increasing financial literacy, five two-day sessions of
classroom instruction on the foundations of self-employment,
and in-depth training delivered through one-on-one mentorship,
particularly in the building of a business plan and relevant
strategies for starting a small business. A certificate is to
be presented upon successful completion of this extensive
training.
Subsection (e) requires the Administrator, to the extent
practicable, prioritize services for those inmates who are
scheduled to be released within 18 months.
Subsection (f) allows individuals receiving services in
prison to continue to receive services after release from
Federal custody.
Subsection (g) allows the Administrator to award a grant to
an association formed solely to protect the interests and
concerns of Small Business Development Centers or Women's
Business Centers to assist with the development of a
curriculum, training of mentors, identify opportunities to
access capital, and the establishment of a public-private
partnership to support covered individuals.
Subsection (h) requires the Administration to print
curriculum or course material and make it accessible to Women's
Business Centers and Small Business Development Centers.
Subsection (i) requires Women's Business Centers and Small
Business Development Centers to survey individuals receiving
services regarding their overall experience with the services
provided to them.
Subsection (j) requires the SBA to submit an annual report
on the performance and effectiveness of the services, beginning
one year after the date of the enactment of the legislation.
The report shall include: (1) the number of covered individuals
counseled or trained; (2) the number of hours of counseling
provided by each Women's Business Center and each Small
Business Development Center; (3) the number of certificates
presented; (4) the demographics of covered individuals who
received services, including age, gender, race, and ethnicity;
(5) the level of understanding of business concepts of covered
individuals upon completion of the counseling and training; (6)
a summary and analysis of surveys conducted by resource
partners and (i); any additional information the SBA may
require.
Subsection (k) defines a `covered individual' as an
individual who is incarcerated in a federal prison that the
Director of the Bureau of Prisons has designated as a minimum,
low, or medium security prison.
Subsection (l) allows the Administrator to reimburse
Women's Business Centers, Small Business Development Centers,
and all relevant associations of these centers, for service-
related costs, subject to the availability of resources.
VII. Congressional Budget Cost Estimate
At the time H.R. 5078 was reported to the House, the
Congressional Budget Office had not provided a cost-estimate.
VIII. Unfunded Mandates
H.R. 5078 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. 5078 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. 5078 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. 5078 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. 5078 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. 5078 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. 5078 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. 5078 would direct the Small Business Administration's
(SBA) resource partners--the Small Business Development Centers
(SBDCs) and Women's Business Centers (WBCs)--to provide
entrepreneurship training to federal prisoners.
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
INCARCERATED INDIVIDUALS.
(a) Services Required.--The Administrator, in coordination
with the Director of the Bureau of Prisons, shall require
women's business centers and small business development centers
identified under the plan described in subsection (b) to
provide entrepreneurship counseling and training services to
covered individuals.
(b) Plan.--
(1) In general.--The Administrator, in consultation
with an association formed to pursue matters of common
concern to women's business centers and an association
of small business development centers formed pursuant
to section 21(a)(3)(A), shall develop a plan, which
shall be updated annually, to match women's business
centers and small business development centers with
covered individuals in Federal prisons who are eligible
to receive services under this section.
(2) Matching.--In determining matches under paragraph
(1), the Administrator shall prioritize matching the
women's business center or small business development
center in closest proximity to the applicable Federal
prison to provide such services.
(3) Association responsibilities.--If the women's
business center or small business development center
identified under the plan in paragraph (1) is unable to
provide such services to covered individuals in such
Federal prison, another women's business center or
small business development center, an association of
women's business centers, or an association of small
business development centers shall provide such
services in accordance with the requirements of this
section.
(c) Goals.--The goal of the services provided under this
section is to provide covered individuals with the following:
(1) Assistance and in-depth training 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 resume, business plan, and
transition plan;
(B) identify sources of capital; and
(C) connect with local resources for small
business concerns.
(d) Additional Requirements.--The services provided under
this section shall include--
(1) a presentation providing exposure to the
opportunities involved in self-employment and ownership
of a small business concern;
(2) a self-study course manual focused on the basic
skills of entrepreneurship, financial literacy, the
language of business, and the considerations and life
skills relevant to self-employment and ownership of a
small business concern;
(3) five two-day sessions of in-depth classroom
instruction introducing the foundations of self-
employment and ownership of small business concerns,
including guided discussions to explore personal
entrepreneurial development interests;
(4) in-depth training delivered through one-on-one
mentorship, including individual support in the
development of a business plan, entrepreneurial skills,
and strategies for starting up a small business
concern; and
(5) upon completion of the counseling and training, a
presentation of a certificate.
(e) Priority.--The Administrator shall, to the extent
practicable, ensure that women's business centers and small
business development centers prioritize providing
entrepreneurship counseling and training services to covered
individuals who will be released from Federal custody not later
than 18 months after the date on which such a covered
individual begins to receive such services.
(f) Continuation of Services.--A covered individual receiving
services under this section may continue to receive such
services after release from Federal custody.
(g) Grant Authority.--In carrying out this section, the
Administrator may award a grant to an association formed to
pursue matters of common concern to women's business centers or
small business development centers to coordinate the services
described under this section, including to develop curriculum,
train mentors and instructors, and establish public-private
partnerships to support covered individuals and identify
opportunities to access capital.
(h) Curriculum.--The Administration shall print and make
available to women's business centers, small business
development centers, an association of women's business
centers, or an association of small business development
centers any curriculum or course materials developed pursuant
to this section.
(i) Survey.--Each women's business center or small business
development center that provided services under this section
shall survey covered individuals who received such services to
assess the satisfaction of such covered individuals with such
services.
(j) 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 counseled or
trained under this section;
(2) the number of hours of counseling provided by
each women's business center and each small business
development center under this section;
(3) the number of certificates presented under
subsection (d)(5);
(4) the demographics of covered individuals who
received services, including age, gender, race, and
ethnicity;
(5) the level of understanding of business concepts
of covered individuals upon completion of the
counseling and training described under this section;
(6) a summary and analysis of surveys conducted under
subsection (i); and
(7) any additional information the Administrator may
require.
(k) Covered Individual Defined.--In this section, the term
``covered individual'' means an individual incarcerated in a
Federal prison that the Director of the Bureau of Prisons has
designated as a minimum, low, or medium security prison.
(l) Funding.--Subject to the availability of appropriations,
the Administrator shall reimburse women's business centers,
small business development centers, an association of women's
business centers, or an association of small business
development centers for the costs relating to the services
provided under the section.
Sec. [49.] 50. All laws and parts of laws inconsistent with
this Act are hereby repealed to the extent of such
inconsistency.
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