[House Report 118-221]
[From the U.S. Government Publishing Office]


118th Congress    }                                     {       Report
                          HOUSE OF REPRESENTATIVES
 1st Session      }                                     {      118-221

======================================================================

 
TO AMEND THE SMALL BUSINESS ACT TO ENHANCE THE OFFICE OF RURAL AFFAIRS, 
                         AND FOR OTHER PURPOSES

                                _______
                                

 September 26, 2023.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Williams of Texas, from the Committee on Small Business, submitted 
                             the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5425]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 5425) to amend the Small Business Act to enhance the 
Office of Rural Affairs, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
   I. Purpose and Bill Summary........................................2
  II. Need for Legislation............................................2
 III. Hearings........................................................2
  IV. Committee Consideration.........................................2
   V. Committee Votes.................................................2
  VI. Section-by-Section of H.R. 5425.................................6
 VII. Congressional Budget Office Cost Estimate.......................6
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditure6
  IX. Oversight Findings & Recommendations............................7
   X. Performance Goals and Objectives................................7
  XI. Statement of Duplication of Federal Programs....................7
 XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
      Benefits........................................................7
XIII. Federal Mandates Statement......................................7
 XIV. Federal Advisory Committee Statement............................7
  XV. Applicability to Legislative Branch.............................7
 XVI. Statement of Constitutional Authority...........................8
XVII. Changes in Existing Law, Made by the Bill, as Reported..........8
XVIII.Minority Views.................................................11


                      I. Purpose and Bill Summary

    On September 13, 2023, Rep. Golden, along with 
Representatives Mann, Pappas, and Tenney, introduced H.R. 5425. 
The purpose of H.R. 5425 is to enhance the activities of the 
SBA Office of Rural Affairs. This bill seeks to increase the 
activities of the SBA Office of Rural Affairs (the Office). 
Congress authorized the Office in 1990. However, the Office 
remained largely vacant until the Trump Administration. This 
bill would elevate the head of the Office from ``director'' to 
``assistant administrator.'' It would require the Office to 
promote information to rural small business concerns and 
require the Office to host webinars and outreach events for 
those businesses. The Office would be required to invite 
representatives from SBA District Offices, resource partners, 
Federal and State agencies, and other interested parties to 
participate. An annual activity report would be required to be 
submitted to Congress and be available online.

                        II. Need for Legislation

    The Office of Rural Affairs has been historically 
underutilized by the SBA, with its leading position remaining 
generally vacant. Rural entrepreneurs face unique challenges 
such as fewer federal resources being directed to them. While 
SBA already performs outreach to the small business community, 
rural entrepreneurs can often be more difficult to reach in 
favor of urban or more centralized partners. SBA can more 
effectively reach these entrepreneurs by dedicating outreach 
tailored to them.
    This bill encourages greater outreach to rural communities. 
This is a newly introduced bill. Mr. Golden expressed interest 
in this legislation based on a hearing on July 13, 2021, where 
he discussed that rural entrepreneurs do not know much about 
SBA's services, such as Small Business Development Centers or 
SCORE partnership, or believe that their SBA loans aren't 
competitive or come with too many bureaucratic strings 
attached.

                             III. Hearings

    In the 118th Congress, the Committee held one hearing 
examining the issues covered in H.R. 5425. On July 26, 2023, 
the Committee held a hearing titled ``Rural Entrepreneurship: 
Examining the Challenges and State of Rural Small Business.'' 
Witnesses described challenges rural entrepreneurs face 
including a lack of awareness of existing resources.

                      IV. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on September 14, 2023, and ordered H.R. 
5425 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 to favorably report H.R. 5425 to 
the House of Representatives at 11:40 AM.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  VI. Section-by-Section of H.R. 5425


Section 1--Office of Rural Affairs of the Small Business Administration

    This section rewrites the existing statute to appoint an 
Assistant Administrator as the head of the Office of Rural 
Affairs. The Assistant Administrator shall have education or 
professional experience with, or knowledge of, rural affairs 
and issues facing small businesses and have experience 
providing development assistance to rural small business 
concerns.
    The definition of rural small businesses is changed to 
rural small business concerns. The section changes the Office's 
responsibilities to include promoting policies and programs of 
the Administration and Federal departments for assisting rural 
small business concerns. United States Tourism and Travel 
Administration is updated to the National Travel and Tourism 
Office of the Department of Commerce. The Office will be 
responsible for hosting outreach events for rural small 
business concerns.
    The outreach shall be through hosting webinars and outreach 
events inviting various stakeholders including district 
offices, resource partners, and state and local governments.
    A report is due within 180 days on the activities, and 
annually thereafter. The report will include the name of the 
Assistant Administrator, the budget of the Office, and the 
number of full-time employees of the Office. It will include a 
summary of outreach activities, analysis of gaps in lending 
programs of the Administration, and information gathered from 
webinars and outreach events.
    This section defines Assistant Administrator as the head of 
the Office, Resource Partners as a Small Business Development 
Center, Women's Business Centers, SCORE Chapters, and Veterans 
Business Outreach Centers. It also defines rural small business 
concern as the meaning that is given by the Assistant 
Administrator.

             VII. Congressional Budget Office Cost Estimate

    Pursuant to clause 3(d)(1) of House rule XIII, the 
Committee adopts as its own the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974. The Committee has 
requested but not received from the Director of the 
Congressional Budget Office a cost estimate for the Committee's 
provisions. Once available, the cost estimate will be published 
in the Congressional Record.

         VIII. New Budget Authority, Entitlement Authority, and
                            Tax Expenditures

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a)(I) of the 
Congressional Budget Act of 1974, 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. H.R. 5425 does not direct new 
spending, but instead reallocates funding independently 
authorized and appropriated.

                IX. Oversight Findings & Recommendations

    In accordance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the oversight findings and recommendations of the Committee on 
Small Business with respect to the subject matter contained in 
H.R. 5425 are incorporated into the descriptive portions of 
this report.

                  X. Performance Goals and Objectives

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
performance goals and objectives of H.R. 5425 are to require 
additional reporting requirements in the annual Congressional 
Budget Justification that include appointment to the 
Interagency Task Force on Veterans Small Business Development 
and a plan for outreach to veterans. The GAO must report on 
credit availability to veterans, default rates, Federal lending 
programs available, gaps in access to capital, obstacles faced 
by veterans, impact of deployments, and awareness of programs 
available to veterans.

            XI. Statement of Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, no provision of H.R. 5425 is known to 
be duplicative of another Federal program, including any 
program that was included in a report to Congress pursuant to 
section 21 of Public Law 111-139 or the most recent Catalog of 
Federal Domestic Assistance.

 XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee finds that the bill 
does not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits as defined in clause 9(e), 
9(f), or 9(g) of rule XXI of the Rules of the House of 
Representatives.

                    XIII. Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

               XIV. Federal Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                XV. Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

               XVI. Statement of Constitutional Authority

    Pursuant to clause 7 of rule XII of the Rules of the House, 
the Committee finds that the authority for this legislation in 
Art. I, Sec. 8, cl.1 of the Constitution of the United States.

      XVII. 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 italics, 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 italics, and existing law in which no 
change is proposed is shown in roman):

                           SMALL BUSINESS ACT




           *       *       *       *       *       *       *
SEC. 26. OFFICE OF RURAL AFFAIRS.

  (a) There is hereby established in the Small Business 
Administration an Office of Rural Affairs (hereafter in this 
section referred to as the ``Office'').
  [(b) The Office shall be headed by a director who shall be 
appointed by the Administrator not later than 90 days after the 
date of the enactment of this section.]
  (b) Appointment of Assistant Administrator.--
          (1) In general.--The Office shall be administered by 
        an Assistant Administrator, who shall be an employee in 
        the competitive service.
          (2) Qualifications.--The Assistant Administrator 
        shall--
                  (A) have education or professional experience 
                with, or knowledge of, rural affairs and issues 
                relating to small business concerns; and
                  (B) have experience providing development 
                assistance to rural small business concerns.
  (c) The Office shall--
          (1) strive to achieve an equitable distribution of 
        the financial assistance available from the 
        Administration for [small business concerns located in 
        rural areas] rural small business concerns;
          (2) to the extent practicable, compile annual 
        statistics on rural areas, including statistics 
        concerning the population, poverty, job creation and 
        retention, unemployment, business failures, and 
        business startups;
          (3) [provide information] promote to industries, 
        organizations, and State and local governments 
        [concerning the assistance available to rural small 
        business concerns through the Administration and 
        through other Federal departments and agencies;] 
        policies and programs of the Administration and of 
        other Federal departments and agencies for assisting 
        rural small business concerns;
          (4) provide information to industries, organizations, 
        educational institutions, and State and local 
        governments concerning programs administered by private 
        organizations, educational institutions, and Federal, 
        State, and local governments which improve the economic 
        opportunities of rural citizens[; and];
          (5) work with [the United States Tourism and Travel 
        Administration] the National Travel and Tourism Office 
        of the Department of Commerce to assist [small 
        businesses in rural areas] rural small business 
        concerns with tourism promotion and development[.]; and
          (6) host webinars and outreach events for rural small 
        business concerns as described in subsection (d).
  (d) Outreach.--The Assistant Administrator shall--
          (1) host webinars and outreach events in various 
        regions of the United States for rural small business 
        concerns; and
          (2) invite representatives from district offices of 
        the Administration, resource partners, Federal and 
        State agencies, and other interested persons to 
        participate in such webinars and outreach events.
  (e) Report.--
          (1) In general.--Not later than 180 days after the 
        date of the enactment of this subsection, 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, and make publicly make 
        available on a website of the Administration, a report 
        on the activities of the Office during the one-year 
        period immediately preceding the date of submission of 
        the report.
          (2) Contents.--Each report required under paragraph 
        (1) shall include the following:
                  (A) The operational details of the Office, 
                including the name of the Assistant 
                Administrator, the budget of the Office, and 
                the number of full-time employees employed by 
                or detailed to the Office.
                  (B) A summary of the activities conducted 
                under subsection (c).
                  (C) The number of webinars and outreach 
                events conducted by the Administration to 
                promote policies and programs described in 
                paragraphs (3) of subsection (c) and to provide 
                information described in (4) of such 
                subsection.
                  (D) An analysis of gaps in lending programs 
                of the Administration in serving the needs of 
                rural small business concerns.
                  (E) Information gathered from any webinars 
                and outreach events conducted by the 
                Administration during the period covered by the 
                report.
  (f) Definitions.--In this section:
          (1) Assistant administrator.--The term ``Assistant 
        Administrator'' means the Assistant Administrator of 
        the Office of Rural Affairs appointed under subsection 
        (b).
          (2) Resource partners.--The term ``resource 
        partners'' means--
                  (A) small business development centers;
                  (B) women's business centers (described under 
                section 29);
                  (C) chapters of the Service Corps of Retired 
                Executives (established under section 
                8(b)(1)(B)); and
                  (D) Veteran Business Outreach Centers 
                (described under section 32).
          (3) Rural small business concern.--The term ``rural 
        small business concern'' means a small business concern 
        located in a rural area.

           *       *       *       *       *       *       *


                         XVIII. MINORITY VIEWS

                               BACKGROUND

    Small businesses are powerful drivers of economic growth 
across the United States, employing 46 percent of the U.S. 
workforce and generating two-thirds of new jobs. In rural 
areas, self-employment tends to be higher than in urban and 
suburban areas. However, rural small businesses face greater 
challenges, including access to affordable capital, unreliable 
internet access, and labor shortages.
    The Small Business Administration (SBA) Office of Rural 
Affairs (the Office) can play a key role in helping rural small 
businesses overcome these challenges. The Office was created in 
1990 to provide information and assistance to rural small 
businesses. The responsibilities of the Office include 
compiling statistics on rural areas and small business 
concerns, distributing SBA financial assistance programs 
equitably, providing information to stakeholders, and working 
with the National Travel and Tourism Office to assist small 
businesses in rural areas. Unfortunately, the Office has either 
been dormant or the collateral duty of a Regional Administrator 
for a vast majority of the time since its establishment.
    In the 116th and 117th Congresses, the Committee ensured 
numerous hearings were held to assess the state of economy in 
rural America. On July 13, 2021, Representative Jared Golden 
(D-ME), the Chairman of the Subcommittee on Underserved, 
Agricultural, and Rural Business Development, held a hearing 
entitled, the Rural American Recovery: The Role of Small 
Businesses and Entrepreneurship. At that hearing, Mr. Golden 
said that most of the rural small businesses owners in his 
district did not know much about SBA services, such as the 
Small Business Development Centers or SCORE, and he sought 
feedback from witnesses on how to strengthen the Office of 
Rural Affairs in order to support rural businesses.
    Moreover, Committee Democrats discussed concerns with 
Administrator Linda McMahon and urged the Administration to 
stand up the Office. Committee Democrats were encouraged that 
the previous Administration hired additional staff in 2020 
through funding from the CARES Act. The Office of Rural Affairs 
is also a priority for the current Administration, and in 2021, 
the SBA Administrator appointed a permanent, full-time career 
deputy director to stand up the Office and recently named a 
director to lead the office.
    Committee Democrats have long been committed to a fully 
functioning Office of Rural Affairs. It is important for the 
Office to actively help rural small businesses deal with the 
challenges facing them today. With clear lines of communication 
and the additional outreach that will come from the Office, 
small businesses will be able to access resources that should 
readily be available to them. Furthermore, the Office will 
provide a role in being able to receive feedback from the small 
business community that will allow the Federal Government 
insight into how to best use resources to support small 
businesses.
            Sincerely,
                                        Nydia M. Velazquez,
                                                    Ranking Member.

                                  [all]