[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]