[House Report 118-222]
[From the U.S. Government Publishing Office]


118th Congress   }                                      {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                      {      118-222

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



 
                        MAIN STREET COMPETES ACT

                                _______
                                

 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. 5424]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 5424) to amend the Small Business Economic Policy 
Act of 1980 to examine how the competitiveness of small 
businesses is affected by the enforcement of Federal antitrust 
laws, 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. 5424.................................  5
 VII.  Congressional Budget Office Cost Estimate.......................  5
VIII.  New Budget Authority, Entitlement Authority, and Tax Expenditure  5
  IX.  Oversight Findings & Recommendations............................  5
   X.  Performance Goals and Objectives................................  6
  XI.  Statement of Duplication of Federal Programs....................  6
 XII.  Congressional Earmarks, Limited Tax Benefits, and Limited Tariff   
       Benefits........................................................  6
XIII.  Federal Mandates Statement......................................  6
 XIV.  Federal Advisory Committee Statement............................  6
  XV.  Applicability to Legislative Branch.............................  6
 XVI.  Statement of Constitutional Authority...........................  6
XVII.  Changes in Existing Law, Made by the Bill, As Reported..........  6
XVIII. Minority Views.................................................  11 


                      I. Purpose and Bill Summary

    On September 13, 2023, Rep. Scholten, along with 
Representatives Luetkemeyer, Velazquez, and Tenney, introduced 
H.R. 5424. The purpose of H.R. 5424, the Main Street Competes 
Act, is to require the Small Business Administration (SBA) to 
study and report on the extent that existing antitrust 
enforcement laws and regulations protect small businesses' 
ability to compete.
    Specifically, the Department of Justice (DOJ) and the 
Federal Trade Commission (FTC) must issue a report to the SBA's 
Office of Advocacy (Advocacy) on how antitrust laws are being 
enforced to deter and remedy anticompetitive conduct that hurts 
small businesses. Advocacy must then evaluate these reports and 
submit a subsequent report to Congress.

                        II. Need for Legislation

    Currently, the SBA does not study the impact of 
anticompetitive behavior on small businesses. Consolidation in 
industries ranging from technology to agriculture has caused 
the market to be increasingly dominated by big companies. Small 
businesses deserve an advocate to ensure that they can remain 
economically competitive.

                             III. Hearings

    In the 118th Congress, the Committee held one hearing 
examining the issues covered in H.R. 5424. On September 13, 
2023, the Subcommittee on Economic Growth, Tax, and Capital 
Access held a hearing titled ``Enabling Success: Examining the 
Competitive Landscape for Small Businesses.'' During the 
hearing, witnesses testified to the challenges small businesses 
are facing in today's regulatory and legal landscape. Further, 
the hearing discussed how the current landscape poses a 
challenge for small businesses to remain competitive against 
their larger competitors.

                      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. 
5424 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. 5424 to 
the House of Representatives at 11:38 AM.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  VI. Section-by-Section of H.R. 5424


Section 1. Short title

    This section cites the bill as the Main Street Competes 
Act.

Section 2. Congressional Declaration of Small Business Economic Policy

    This section amends the Congressional Declaration of Small 
Business Economic Policy at 15 U.S.C. Sec. 631a to include 
promoting competitive markets, consumer choice, and business 
ownership through enforcement of Federal antitrust laws when 
small businesses are harmed.

Section 3. State of small business

    This section requires the DOJ and FTC to report to Advocacy 
on how antitrust laws are being enforced to deter and remedy 
anticompetitive conduct that hurts small businesses. It further 
requires the Chief Counsel for Advocacy to submit a summary of 
these reports to Congress.

             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. 5424 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. 5424 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. 5424 are to require 
annual reports from the DOJ and FTC on how antitrust laws are 
being enforced to deter and remedy anticompetitive behavior 
that hurts small businesses. Advocacy must then issue a report 
summarizing and evaluating how effective agencies were in 
enforcing antitrust measures during the previous fiscal year.

            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. 5424 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 ECONOMIC POLICY ACT OF 1980


TITLE III--SMALL BUSINESS ECONOMIC POLICY

           *       *       *       *       *       *       *



             declaration of small business economic policy

  Sec. 302. (a) For the purpose of preserving and promoting a 
competitive free enterprise economic system, Congress hereby 
declares that it is the continuing policy and responsibility of 
the Federal Government to use all practical means and to take 
such actions as are necessary, consistent with its needs and 
obligations and other essential considerations of national 
policy, to implement and coordinate all Federal department, 
agency, and instrumentality policies, programs, and activities 
in order to: foster the economic interests of small businesses; 
insure a competitive economic climate conducive to the 
development, growth and expansion of small businesses; 
establish incentives to assure that adequate capital and other 
resources at competitive prices are available to small 
businesses; reduce the concentration of economic resources and 
expand competition; [and provide] provide an opportunity for 
entrepreneurship, inventiveness, and the creation and growth of 
small businesses[.]; and promote competitive markets, consumer 
choice, and business ownership through enforcement of Federal 
antitrust laws in the case of anticompetitive conduct that 
harms small businesses and the growth of small businesses.
  (b) Congress further declares that the Federal Government is 
committed to a policy of utilizing all reasonable means, 
consistent with the overall economic policy goals of the Nation 
and the preserva- tion of the competitive free enterprise 
system of the Nation, to establish private sector incentives 
that will help assure that adequate capital at competitive 
prices is available to small businesses. To fulfill this 
policy, departments, agencies, and instrumentalities of the 
Federal Government shall use all reasonable means to 
coordinate, create, and sustain policies and programs which 
promote investment in small businesses, including those 
investments which expand employment opportunities and which 
foster the effective and efficient use of human and natural 
resources in the economy of the Nation.

                        [state of small business

  [Sec. 303. (a) The president shall transmit to the congress 
not later than January 20 of each year a report on small 
business and competition which shall--
          [(1) examine the current role of small business in 
        the economy on an industry-by-industry basis;
          [(2) present current and historical data on 
        production, employment, investment, population, job 
        creation and retention, annual business failures, 
        annual business startups, and other economic variables 
        for small business in the economy as a whole and for 
        small business in each sector of the economy, with, to 
        the extent practicable, specific statistics divided as 
        to urban, suburban, and rural areas;
          [(3) identify economic trends which will or may 
        affect the small business sector and the state of 
        competition;
          [(4) examine the effects on small business and 
        competition of policies, programs, and activities, 
        including, but not limited to the Internal Revenue 
        Code, the Employee Retirement Income Security Act, the 
        Securities Act of 1933, and the Securities Exchange Act 
        of 1934, and regulations promulgated thereunder; 
        identify problems generated by such policies, programs, 
        and activities; and recommend legislative and 
        administrative solutions to such problems; and
          [(5) recommend a program for carrying out the policy 
        declared in section 302 of this Act, together with such 
        recommendations for legislation as he may deem 
        necessary or desirable.
  [(b) The President also shall transmit simultaneously as an 
appendix to such annual report, a report, by agency and 
department, on the to total dollar value of all Federal 
contracts exceeding $10,000 in amount and the dollar amount 
(including the subcontracts thereunder in excess of $10,000) 
awarded to small, minority-owned, female-owned, and veteran-
owned businesses.
  [(c) The President may transmit from time to time to the 
Congress Supplementary reports supplementary to the Report on 
Small Business and Competition, each of which shall include 
such supplementary or revised, recommendations as he may deem 
necessary or desirable to achieve the policy declared in 
section 302 of this Act.
  [(d) The Report on Small Business and Competition and all 
supplementary reports transmitted under subsections (b) and (c) 
of this section shall, when transmitted to Congress, be 
referred to the Senate Select Committee on Small Business and 
the Committee on Small Business of the House of 
Representatives.
  [(e) The information and data required to be reported 
pursuant to subsection (a) shall separately detail those 
portions of such information and data that are relevant to--
          [(1) small business concerns owned and controlled by 
        socially and economically disadvantaged individuals, by 
        gender, as defined pursuant to section 8(d) of the 
        Small Business Act;
          [(2) small business concerns owned and controlled by 
        women; and
          [(3) qualified HUBZone small business concern (as 
        defined in section 3(p) of the Small Business Act).
          [(3) small business concerns owned and controlled by 
        veterans, as defined in section 3(q) of the Small 
        Business Act (15 U.S.C. 632(q)), and small business 
        concerns owned and controlled by service-disabled 
        veterans, as defined in such section 3(q).]

SEC. 303. REPORT ON THE STATE OF SMALL BUSINESS CONCERNS.

  (a) Specified Entity Report.--Not later than 180 days after 
the end of fiscal year 2023 and each fiscal year thereafter, 
the head of each specified entity shall submit to the Chief 
Counsel for Advocacy of the Office of Advocacy of the Small 
Business Administration a report including--
          (1) an analysis of how enforcement by the specified 
        entity of Federal antitrust laws promoted competition 
        during the preceding fiscal year by deterring and 
        remedying anticompetitive conduct that harms small 
        businesses and the growth of small businesses;
          (2) the number of complaints of alleged antitrust 
        violations filed by small businesses with the specified 
        entity during such fiscal year, disaggregated by 
        category of the alleged antitrust violation, type of 
        offense, and the specific Federal antitrust laws 
        allegedly violated;
          (3) the number of inquiries, investigations, and 
        enforcement actions undertaken by the specified entity 
        in response to complaints filed by small businesses 
        with the specified entity during such fiscal year; and
          (4) the number of inquiries, investigations, and 
        enforcement actions undertaken by the specified entity 
        during such fiscal year pursuant to an alleged 
        antitrust violation, opened for a reason other than 
        described in paragraph (3), to deter and remedy 
        anticompetitive conduct that harms small businesses and 
        the growth of small businesses.
  (b) Office of Advocacy Report.--Not later than 180 days after 
receipt of the report required by subsection (a), the Chief 
Counsel for Advocacy shall submit to the Committee on Small 
Business of the House of Representatives and the Committee on 
Small Business and Entrepreneurship of Senate a report that 
includes--
          (1) a summary of the report submitted under 
        subsection (a);
          (2) an analysis of the data in such report, 
        disaggregated by industry category;
          (3) an evaluation of the issues identified in such 
        report relating to--
                  (A) anticompetitive conduct that harmed small 
                businesses and the growth of small businesses; 
                and
                  (B) administrative actions that promoted 
                competition and growth of small businesses;
          (4) as appropriate, recommendations for 
        administrative actions that could--
                  (A) promote competition;
                  (B) deter anticompetitive conduct that harmed 
                small business and the growth of small 
                businesses; and
                  (C) remedy such anticompetitive conduct; and
          (5) as appropriate, recommendations for legislative 
        actions that could--
                  (A) promote competition;
                  (B) deter anticompetitive conduct that harmed 
                small business and the growth of small 
                businesses; and
                  (C) remedy such anticompetitive conduct.

SEC. 304. DEFINITIONS.

  In this title:
          (1) Antitrust violation.--The term ``antitrust 
        violation'' means any violation of Federal antitrust 
        laws.
          (2) Federal antitrust laws.--The term ``Federal 
        antitrust laws'' has the meaning given the term 
        ``antitrust laws'' in subsection (a) of the first 
        section of the Clayton Act (15 U.S.C. 12(a)), except 
        that such term shall also include section 5 of the 
        Federal Trade Commission Act (15 U.S.C. 45) to the 
        extent that such section 5 applies to unfair methods of 
        competition.
          (3) Small business.--The term ``small business'' has 
        the meaning given ``small business concern'' under 
        section 3 of the Small Business Act (15 U.S.C. 632).
          (4) Specified entity.--The term ``specified entity'' 
        means--
                  (A) the Department of Justice; and
                  (B) the Federal Trade Commission.

           *       *       *       *       *       *       *


                         XVIII. MINORITY VIEWS

    The minority supports H.R. 5424, the Main Street Competes 
Act of 2023. A competitive business environment is the 
lifeblood of a thriving free enterprise economy, spurring 
innovation, driving productivity, and fostering consumer choice 
at fair prices. America's main street businesses are a critical 
component of our economy, and their success hinges on a 
competitive marketplace. Unfortunately, this competitive 
landscape has been eroded for decades, as large companies have 
broadly consolidated much of the economy. Federal antitrust 
laws are critical tools protecting the competitive environment, 
but their limited use in recent decades has contributed to the 
ongoing concentration of industries.
    The SBA's Office of Advocacy has a broad mandate to 
advocate for small businesses within the federal government. 
Its primary functions include the requirement to ``recommend 
specific measures for creating an environment in which all 
businesses will have the opportunity to compete effectively and 
expand to their full potential.'' Given its mandate, it is 
uniquely positioned to work with antitrust enforcement bodies 
like the Federal Trade Commission (FTC) and the Department of 
Justice (DOJ). While these agencies have the power to enforce 
these laws, they may have the direct input from small 
businesses necessary to make important decisions on enforcement 
action. By fostering collaboration between these enforcement 
agencies and the Office of Advocacy, Congress can ensure the 
input of small businesses are considered and reaffirm the 
Office of Advocacy's commitment to being the voice for small 
businesses within the federal government.
    The Committee has heard testimony on numerous occasions 
about the importance of antitrust enforcement when it comes to 
supporting main street. For instance, in March 2022, the 
Committee held a hearing called, ``Competition and the Small 
Business Landscape: Fair Competition and a Level Playing 
Field,'' in which members heard from experts about the value of 
antitrust for small businesses.
            Sincerely,
                                        Nydia M. Velazquez,
                                                    Ranking Member.

                                  [all]