H. Rept. 118–221: To Enhance the Office of Rural Affairs
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Summary
House Report 118-221, submitted September 26, 2023 by the Committee on Small Business in the 118th Congress, to accompany H.R. 5425, a bill to amend the Small Business Act to enhance the Office of Rural Affairs, reported favorably without amendment and together with minority views. It states that the bill would elevate the head of the Office from director to assistant administrator, set qualifications for that post, and require the Office to promote Administration and other federal programs to rural small business concerns. The bill would also require the Office to host webinars and outreach events inviting district offices, resource partners and federal and state agencies, and a report to Congress within 180 days and annually thereafter. The report records introduction on September 13, 2023 and a hearing on July 26, 2023.
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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 rec-
ommends 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 Expenditures 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
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XVIII. Minority Views ............................................................................................ 11
39–006
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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 re-
quire 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 ac-
tivity 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 out-
reach to the small business community, rural entrepreneurs can
often be more difficult to reach in favor of urban or more central-
ized 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 partner-
ship, 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 exam-
ining the issues covered in H.R. 5425. On July 26, 2023, the Com-
mittee held a hearing titled ‘‘Rural Entrepreneurship: Examining
the Challenges and State of Rural Small Business.’’ Witnesses de-
scribed 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 Representa-
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tives requires the Committee to list the recorded votes on the mo-
tion to report legislation and amendments thereto. The Committee
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voted to favorably report H.R. 5425 to the House of Representatives
at 11:40 AM.
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VI. SECTION-BY-SECTION OF H.R. 5425
Section 1—Office of Rural Affairs of the Small Business Adminis-
tration
This section rewrites the existing statute to appoint an Assistant
Administrator as the head of the Office of Rural Affairs. The As-
sistant Administrator shall have education or professional experi-
ence 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 con-
cerns. United States Tourism and Travel Administration is up-
dated 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, re-
source 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 Ad-
ministrator, the budget of the Office, and the number of full-time
employees of the Office. It will include a summary of outreach ac-
tivities, 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 Cen-
ter, 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 Adminis-
trator.
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 Con-
gressional 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 Budg-
et Act of 1974, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement author-
ity, 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 pursu-
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ant to Sec. 402 of the Congressional Budget Act of 1974, the Com-
mittee does not believe that there will be any additional costs at-
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tributable to this legislation. H.R. 5425 does not direct new spend-
ing, 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 over-
sight 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 re-
quirements 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 dupli-
cative 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 As-
sistance.
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 con-
tain 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 man-
dates 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
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The Committee finds that the legislation does not relate to the
terms and conditions of employment or access to public services or
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accommodations within the meaning of section 102(b)(3) of the Con-
gressional 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, § 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 omit-
ted 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 omit-
ted 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 Adminis-
tration an Office of Rural Affairs (hereafter in this section referred
to as the ‘‘Office’’).
ø(b) The Office shall be headed by a director who shall be ap-
pointed 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 As-
sistant Administrator, who shall be an employee in the competi-
tive 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 øsmall busi-
ness concerns located in rural areas¿ rural small business con-
cerns;
(2) to the extent practicable, compile annual statistics on
rural areas, including statistics concerning the population, pov-
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erty, job creation and retention, unemployment, business fail-
ures, and business startups;
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(3) øprovide information¿ promote to industries, organiza-
tions, and State and local governments øconcerning the assist-
ance 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, edu-
cational institutions, and State and local governments con-
cerning programs administered by private organizations, edu-
cational institutions, and Federal, State, and local govern-
ments which improve the economic opportunities of rural
citizensø; and¿;
(5) work with øthe United States Tourism and Travel Ad-
ministration¿ the National Travel and Tourism Office of the
Department of Commerce to assist øsmall businesses in rural
areas¿ rural small business concerns with tourism promotion
and developmentø.¿; and
(6) host webinars and outreach events for rural small busi-
ness 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 Adminis-
tration, 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 Busi-
ness 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 Of-
fice, and the number of full-time employees employed by or
detailed to the Office.
(B) A summary of the activities conducted under sub-
section (c).
(C) The number of webinars and outreach events con-
ducted by the Administration to promote policies and pro-
grams 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 Ad-
ministration in serving the needs of rural small business
concerns.
(E) Information gathered from any webinars and out-
reach events conducted by the Administration during the
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period covered by the report.
(f) DEFINITIONS.—In this section:
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(1) ASSISTANT ADMINISTRATOR.—The term ‘‘Assistant Admin-
istrator’’ 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.
* * * * * * *
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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 pro-
vide information and assistance to rural small businesses. The re-
sponsibilities of the Office include compiling statistics on rural
areas and small business concerns, distributing SBA financial as-
sistance 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 ei-
ther been dormant or the collateral duty of a Regional Adminis-
trator for a vast majority of the time since its establishment.
In the 116th and 117th Congresses, the Committee ensured nu-
merous 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 Entre-
preneurship. 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 Cen-
ters 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 Admin-
istrator Linda McMahon and urged the Administration to stand up
the Office. Committee Democrats were encouraged that the pre-
vious Administration hired additional staff in 2020 through fund-
ing from the CARES Act. The Office of Rural Affairs is also a pri-
ority for the current Administration, and in 2021, the SBA Admin-
istrator 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 func-
tioning Office of Rural Affairs. It is important for the Office to ac-
tively 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
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feedback from the small business community that will allow the
Federal Government insight into how to best use resources to sup-
port small businesses.
Sincerely,
NYDIA M. VELÁZQUEZ,
Ranking Member.
Æ
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