[House Report 118-223]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 118-223
======================================================================
SMALL BUSINESS ADMINISTRATION
RURAL PERFORMANCE REPORT 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. 5265]
The Committee on Small Business, to whom was referred the
bill (H.R. 5265) to amend the Small Business Act to require a
report on the performance of the Office of Rural Affairs, to
require a report on the memorandum of understanding between the
Small Business Administration and the Department of Agriculture
entered into on April 4, 2018, 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......................................... 3
V. Committee Votes................................................. 3
VI. Section-by-Section of H.R. 5265................................. 6
VII. Congressional Budget Office Cost Estimate....................... 6
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditure 6
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................................................. 10
I. Purpose and Bill Summary
On August 25, 2023, Rep. Alford along with Representatives
Luetkemeyer, Ellzey, and Bean, introduced H.R. 5265. The
purpose of H.R. 5265, the ``SBA Rural Performance Report Act,''
is to require SBA to produce two reports on activities related
to rural entrepreneurs. The first report is on a Memorandum of
Understanding (MOU) between the Small Business Association
(SBA) and the U.S. Department of Agriculture (USDA) on
activities jointly performed to conduct outreach to rural
communities. The second report is an addition to SBA's annual
budget justification to include activities performed by SBA's
Office of Rural Affairs.
II. Need for Legislation
Small business owners face many challenges, especially in
rural areas. Rural communities depend on the success of their
small businesses. SBA's Office of Rural Affairs is charged with
ensuring adequate resource availability for rural
entrepreneurs. While Congress authorized this Office under the
George H.W. Bush presidency, the office was largely vacant
until the Trump Administration appointed a director. In 2018
the SBA and USDA entered into a five-year MOU to better
coordinate outreach and resources to rural entrepreneurs. While
there was clear coordination through events and other
activities, outcomes of the MOU remain unknown. Additionally,
the MOU was left to expire in April 2023. This bill will
require a report to understand the outcomes and successes of
the MOU and the future needs of greater agency coordination and
reduced duplication.
Currently there are no performance reporting requirements.
This bill requires SBA to detail exactly how it is elevating
small rural businesses by reporting on the activities of the
Office of Rural Affairs. The information required in SBA's
annual budget justification will include how the office
provides information about resources and programs in rural
areas. This bill will shed light on exactly what SBA is doing
to address rural entrepreneurs' needs.
III. Hearings
In the 118th Congress, the Committee held one hearing
examining the issues covered in H.R. 5265. On July 26, 2023,
the Committee held a hearing titled ``Rural Entrepreneurship:
Examining the Challenges and State of Rural Small Business.''
Witnesses discussed challenges they face as rural entrepreneurs
including a lack of awareness of existing resources. This bill
seeks to address challenges rural entrepreneurs face by holding
the SBA accountable and ensure it is meeting its mission to
assist rural entrepreneurs.
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.
5265 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. 5265 to
the House of Representatives at 11:43 a.m.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. Section-by-Section of H.R. 5265
Section 1. Short title
This section cites the bill as the Small Business
Administration Rural Performance Report Act.
Section 2. Small business rural performance reports
This section requires a report within 90 days to the House
and Senate Committees on Small Business. The report will
include information about the SBA Office of Rural Affairs
including how the office promotes financial assistance,
compiles annual statistics, provides information, the number of
outreach and information sharing events, details of
partnerships, and the name of the director of ORA. After the
initial report, this information will be required in the annual
budget justification provided to Congress.
A technical amendment updates the name of the United States
Tourism and Travel Administration to the National Travel and
Tourism Office of the Department of Commerce.
This section requires another report on the outcomes of the
2018 MOU between SBA and USDA. Information in the report will
include number of working groups, number of staff that were or
are engaged with MOU designated working groups, and the
findings on the MOU activities.
Section 3. Definitions
This section defines the Administrator as the SBA
Administrator, Administration as the Small Business
Administration, and the MOU as the agreement between SBA and
USDA entered on April 4, 2018.
Section 4. Compliance with CUTGO
This section states that no additional funds are authorized
to be appropriated to carry out the bill.
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. 5265 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. 5265 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. 5265 is to require
reporting about the findings of a USDA and SBA MOU, and the SBA
Office of Rural Affairs (ORA) to report how the Office promotes
financial assistance, compiles annual statistics, provides
information, the number of outreach and information sharing
efforts, details of partnerships, and the name of the director
of ORA.
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. 5265 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.
(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;
(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 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;
(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] National Travel and Tourism Office of
the Department of Commerce to assist small businesses
in rural areas with tourism promotion and development.
(d) Reports.--
(1) Initial report.--Not later than 90 days after the
date of the enactment of this subsection, the
Administrator shall make available on a website of the
Administration, and 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 activities of the Office during
the year preceding the date of the report that includes
the following elements:
(A) How the Office is promoting financial
assistance pursuant to subsection (c)(1).
(B) Annual statistics compiled pursuant to
subsection (c)(2).
(C) How the Office is providing information
pursuant to subsection (c)(3).
(D) How the Office is providing information
pursuant to subsection (c)(4).
(E) The number of outreach events conducted
by the Office to provide information described
in paragraphs (3) and (4) of subsection (c).
(F) Details of any partnerships that the
Office engaged in to provide the outreach
described in paragraph (5), including any
partnerships with the National Travel and
Tourism Office of the Department of Commerce.
(G) The name of the director of the Office
and the number of staff employed by the Office.
(2) Annual report.--The Administrator shall annually
submit, along with the budget the budget justification
materials submitted in support of the Small Business
Administration budget for a fiscal year (as submitted
with the budget of the President under section 1105(a)
of title 31), a report that includes the elements
described in paragraph (1).
* * * * * * *
XVIII. MINORITY VIEWS
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 appointed a permanent, full-time career deputy director
to stand up the Office and recently named a director to lead
the office.
H.R. 5265 would require the SBA to (1) issue an annual
performance report, as well as a specific budget justification
for the Office of Rural Affairs, and (2) issue a report on the
Memorandum of Understanding with the Department of Agriculture,
which expired on April 4, 2023.
While Committee Democrats support the ``Small Business
Administration Rural Performance Report Act,'' we remain
concerned with the statutory requirement for SBA to issue a
report on the Memorandum of Understanding with the Department
of Agriculture, which expired on April 4, 2023. Committee
Democrats believe the information could be obtained faster by
either placing a formal request for a briefing or sending a
letter to the Administrator.
Sincerely,
Nydia M. Velazquez,
Ranking Member.
[all]