American Entrepreneurs First Act of 2025 (H. Rept. 119–112)
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Summary
House Report 119–112 of the 119th Congress, 1st Session, submitted May 21, 2025 by Mr. Williams of Texas from the Committee on Small Business to accompany H.R. 2966, the American Entrepreneurs First Act of 2025. The committee reports the bill favorably with an amendment in the nature of a substitute, which requires SBA loan applications under section 7(a) of the Small Business Act and title V of the Small Business Investment Act of 1958 to include dates of birth and citizenship certifications, and makes applicants ineligible if any owner is an ineligible person as the bill defines it. The report states the committee ordered the bill reported on April 30, 2025, and that a cost estimate from the Congressional Budget Office was requested but not received. It closes with minority views signed by Ranking Member Nydia M. Velázquez opposing the bill.
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119TH CONGRESS REPORT
" HOUSE OF REPRESENTATIVES !
1st Session 119–112
AMERICAN ENTREPRENEURS FIRST ACT OF 2025
MAY 21, 2025.—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. 2966]
The Committee on Small Business, to whom was referred the bill
(H.R. 2966) to require the Administrator of the Small Business Ad-
ministration to require an applicant for certain loans of the Admin-
istration to provide certain citizenship status documentation, and
for other purposes, having considered the same, reports favorably
thereon with an amendment and recommends that the bill as
amended do pass.
CONTENTS
Page
I. Purpose and Bill Summary ........................................................................ 2
II. Need for Legislation .................................................................................... 2
III. Hearings ....................................................................................................... 3
IV. Committee Consideration ........................................................................... 3
V. Committee Votes ......................................................................................... 3
VI. Section-by-Section of H.R. 2966 ................................................................. 5
VII. Congressional Budget Office Cost Estimate ............................................. 5
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 5
IX. Oversight Findings & Recommendations .................................................. 5
X. Performance Goals and Objectives ............................................................ 5
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
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XVI. Statement of Constitutional Authority ...................................................... 6
XVII. Minority Views ............................................................................................ 7
59–006
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The amendment is as follows:
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘American Entrepreneurs First Act of 2025’’.
SEC. 2. REQUIREMENTS FOR CITIZENSHIP STATUS DOCUMENTATION FOR CERTAIN LOAN
PROGRAMS OF THE SMALL BUSINESS ADMINISTRATION.
(a) IN GENERAL.—The Administrator of the Small Business Administration shall
ensure that any application for a loan submitted under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)) or title V of the Small Business Investment Act of
1958 (15 U.S.C. 695 et seq.) includes the following information:
(1) The date of birth for each individual applicant for such loan or for each
individual owner of an applicant concern.
(2) Certification that—
(A) an individual applicant for such loan is a citizen of the United States,
a national of the United States, or a lawful permanent resident of the
United States; or
(B) an applicant concern for such loan or a guarantor for such loan is 100
percent beneficially owned by individuals who are either citizens of the
United States, nationals of the United States, or lawful permanent resi-
dents of the United States.
(3) Certification that no direct or indirect owner of an applicant concern for
such loan is an ineligible person.
(4) Documentation of the alien registration number of any lawful permanent
resident who is—
(A) an individual applicant for such loan; or
(B) an owner of an applicant concern.
(b) PROHIBITION.—An applicant for a loan under section 7(a) of the Small Busi-
ness Act (15 U.S.C. 636(a)) or title V of the Small Business Investment Act of 1958
(15 U.S.C. 695 et seq.) is ineligible for such loan if—
(1) the applicant submits the application for such loan after the date of the
enactment of this Act and such application does not contain the information re-
quired under subsection (a);
(2) in the case such applicant is an applicant concern, any direct or indirect
owner of such applicant concern is an ineligible person; or
(3) in the case such applicant is an individual applicant, such applicant is an
ineligible person.
(c) INELIGIBLE PERSON DEFINED.—In this Act, the term ‘‘ineligible person’’
means—
(1) an asylee;
(2) a refugee;
(3) an individual issued a visa to remain in the United States;
(4) an alien classified as a nonimmigrant under any subparagraph of section
101(a)(15) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15));
(5) an alien to whom deferred action has been granted pursuant to the De-
ferred Action for Childhood Arrivals policy announced by the Secretary of
Homeland Security on June 15, 2012; or
(6) an alien present in the United States without lawful status under the im-
migration laws (as such term is defined in section 101(a) of the Immigration
and Nationality Act (8 U.S.C. 1101(a))).
I. PURPOSE AND BILL SUMMARY
On April 17, 2025, Rep. Van Duyne, along with Rep. Cloud, in-
troduced H.R. 2966, the American Entrepreneurs First Act. H.R.
2966 requires citizenship verification for Small Business Adminis-
tration (SBA) loan applications.
II. NEED FOR LEGISLATION
Under the Biden-Harris Administration, criminal illegal immi-
grants jeopardized the lives of citizens throughout the country, in-
cluding small business owners. At the same time, the Biden-Harris
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SBA loosened guardrails and approved loans for ineligible appli-
cants. This bill is needed to ensure that zero taxpayer dollars fund
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3
SBA assistance and loans for illegal immigrants and ineligible ap-
plicants.
On March 6, 2025, SBA Administrator Loeffler announced that
the agency found that the Biden-Harris SBA approved a $783,000
SBA loan application in June 2024 for a small business that was
49 percent owned by an illegal immigrant.1 Thankfully, Adminis-
trator Loeffler halted the loan to the illegal immigrant prior to it
being disbursed. Through SBA Policy Notice 5000–865754, the SBA
implemented new citizenship verification requirements on SBA
loans to end taxpayer benefits to illegal immigrants.2
Additionally, H.R. 2966 codifies President Trump’s Executive
Order (EO) 14218, ‘‘Ending Taxpayer Subsidization of Open Bor-
ders,’’ and EO 14159, ‘‘Protecting the American People Against In-
vasion.’’ 3
III. HEARINGS
On March 11, 2025, the Subcommittee on Oversight, Investiga-
tions, and Regulations of the Committee on Small Business held a
hearing examining matters related to H.R. 2966, entitled ‘‘Restor-
ing the SBA: Putting Main Street America First.’’
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on April 30, 2025, and ordered H.R. 2966,
as amended, to be reported favorably to the House of Representa-
tives. During the markup, the Committee adopted an amendment
in the nature of a substitute offered by Rep. Van Duyne by voice
vote.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representa-
tives requires the Committee to list the recorded votes on the mo-
tion to report legislation and amendments thereto. The Committee
voted to favorably report H.R. 2966, as amended, to the House of
Representatives at 6:13 PM.
1 News Release, U.S. Small Bus. Admin., Administrator Loeffler Announces SBA Reforms to
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Put American Citizens First (Mar. 6, 2025), https://www.sba.gov/article/2025/03/06/adminis-
trator-loeffler-announces-sba-reforms-put-american-citizens-first.
2 U.S. SMALL BUS. ADMIN., POLICY NOTICE NO. 5000–865754 (Mar. 7, 2025).
3 Exec Order No. 14,218, 90 Fed. Reg. 10581 (2025).
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VI. SECTION-BY-SECTION OF H.R. 2966
Section 1—Short title
This Act may be cited as the ‘‘American Entrepreneurs First
Act.’’
Section 2—Requirements for citizenship status documentation for
certain loan programs of the Small Business Administration
This section requires the submission of the date of birth for each
individual applicant or business owner; certification that each ap-
plicant is a U.S. citizen, U.S. national, or lawful permanent resi-
dent; the alien registration numbers for lawful permanent resi-
dents; and certification that no direct or indirect business owner is
an ‘‘ineligible person,’’ including asylees, refugees, visa holders, De-
ferred Action for Childhood Arrivals (DACA) recipients, or undocu-
mented individuals.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to 3(c)(3) of rule XIII of the Rules of the House of Rep-
resentatives, the Committee adopts as its own the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant 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.
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-
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-
tributable to this legislation. H.R. 2966 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. 2966
are incorporated into the descriptive portions of this report.
X. PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(4) of rule XIII of
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the Rules of the House of Representatives, there are no specific
performance goals and objectives of H.R. 2966 applicable.
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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. 2966 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
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 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.
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XVII. MINORITY VIEWS
H.R. 2966, the ‘‘American Entrepreneurs First Act’’ introduced by
Representatives Beth Van Duyne (R, TX) and Michael Cloud (R,
TX) mandates that the Administrator of the Small Business Ad-
ministration (‘‘SBA’’) verify the age and citizenship status of each
individual applicant or business owner in order for the applicant
business to receive financing under either the SBA’s 7(a) or 504
programs.
The legislation follows President Donald Trump’s Executive
Order 14159 1 (E.O. 14159) issued on January 20, directing the
White House Office of Management and Budget (OMB) to ensure
all federal agencies identify and stop the provision of any public
benefit to any illegal alien not authorized to receive them under
the Immigration and Nationality Act 2 and a subsequent Policy No-
tice released by the SBA on March 7, announcing policy updates
and citizenship requirements for applicants to obtain a 7(a) or 504
loan in order to comply with E.O. 14159.3
H.R. 2966 is solution in search of a problem and seems to be pre-
mised on the notion that certain segments of the American popu-
lation are receiving SBA 7(a) and 504 loans when they otherwise
shouldn’t. For example, during the Committee’s markup session,
Chairman Williams stated that the Biden Administration ‘‘ap-
proved [SBA] loans for illegal immigrants.’’ However, as Ranking
Member Velázquez rightly stated, the Committee has not received
‘‘any shred of evidence that undocumented immigrants have been
given any [SBA] loans.’’ Committee Democrats have never received
any evidence, credible or otherwise, that large numbers of individ-
uals in the U.S. without legal authorization are receiving access to
SBA financing and loan products.
During the markup debate, the Republican-majority also argued
that passage of H.R. 2966 is necessary in order to ensure SBA
loans are made to American entrepreneurs and businesses. Yet, the
Republican-majority failed to recognize that previous rules issued
by the SBA prior to President Trump’s E.O. 14159 already required
a business applicant to need at least a 51 percent ownership stake
be held by a U.S. citizen, U.S. national, or permanent resident in
order to receive SBA financing.4 The Republican-majority also ref-
erenced a loan approval made by the SBA in June 2024 for a small
business that was 49 percent owned by an undocumented indi-
vidual. Yet, again, the Republican-majority only told half the story
and failed to also acknowledge that the internal processes the SBA
1 EXEC. Order. 14159, 90 Fed. Reg. 8443.
2 8 U.S.C. § 1101(a)(15).
3 U.S. SMALL BUSINESS ADMINISTRATION. ‘‘Policy updates to comply with Executive
Order 14159 regarding citizenship requirements for obtaining 7(a) and 504 loans.’’ Policy No-
tice–5000–865754 (March 7, 2025).
4 OFF. OF FIN. ASSISTANCE. ‘‘SOP 50 10 7.1.’’ U.S. SMALL BUS. ADMIN. (NOV. 15, 2023).
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(7)
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had in place at the time identified the individual as an ineligible
borrower and prevented the loan from being originated.
The bill moves both the 7(a) and the 504 programs away from
their original purposes and their use of prudent underwriting
standards to evaluate originations. The main purpose of the 7(a)
program is to provide creditworthy small business borrowers that
demonstrate an ability to repay, and who cannot find credit else-
where, with access to loans and loan guarantees. The legal status
of a borrower has no bearing on their creditworthiness or their
ability to repay and should not be used as a proxy for prudent un-
derwriting determinations. Moreover, the credit elsewhere provi-
sion of the 7(a) program creates a situation where small busi-
nesses, either partially- or fully-owned by individuals already le-
gally permitted to be in the U.S., with nowhere else to turn for
their credit needs threatening the livelihoods of these small busi-
nesses and the communities they serve.
This bill also prevents U.S. majority-owned small businesses
with minority-ownership from participating in SBA lending pro-
grams. One prominent SBA program lender has already expressed
to Committee Democrats that their institution was unable to mod-
ify a loan for a small business owned by a husband and wife, in
which the business was majority owned by a U.S. citizen, shortly
after the SBA’s new policy notice was issued solely because one of
the individuals in the couple was a citizen of a European country.5
If H.R. 2966 were to become law, the Committee Democrats expect
examples like these to become more pervasive.
In some ways it’s ironic that the Majority is marking up this bill
now. Under the terms of this bill and the recent SBA policy
changes that were issued in March, banks, credit unions, and other
SBA-lenders will need to create new compliance regimes to certify
the citizenship status of individuals and comply with the 100 per-
cent U.S. beneficial ownership requirements in the bill. Ironically,
these questions and compliance procedures are similar to the ones
the Majority and Republicans across the House Caucus have ar-
gued for years are either too complex, too costly, or too invasive for
lenders to comply with the CFPB’s Section 1071 rule,6 in order to
ensure institutions’ compliance with fair lending requirements, and
the Corporate Transparency Act’s Beneficial Ownership require-
ment,7 to ensure anonymous shell companies in the U.S. are not
being used to facilitate terrorism, sex trafficking, money laun-
dering, and other illicit schemes. Both the Section 1071 rule and
the Beneficial Ownership rule have safe harbors, remedies for good
faith mistakes, and, in some situations, opportunities for applicants
to decline to provide their information altogether. H.R. 2966 is si-
lent on all of these and seems to require maximum compliance
from all applicants at all times with no exceptions.
The bill as written also creates practical challenges for program
lenders and threatens future operations of both programs. For ex-
ample, the Equal Credit Opportunity Act 8 (‘‘ECOA’’) prohibits
creditors from discriminating against credit applicants on the basis
5 Example is on file with Committee and is available for review upon request.
6 12 C.F.R. Part 1002.
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7 15 U.S.C. § 5336.
8 15 U.S.C. § 1691.
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of race, color, religion, national origin, sex, marital status, or age.
H.R. 2966 seems to make both age and national origin a threshold
requirement in order for the borrower to qualify for a 7(a) or 504
loan. As such, some program lenders have already expressed to
Committee Democrats that verifying a borrower’s date of birth and
citizenship status in order to comply with H.R. 2966 could expose
their institutions to legal violations under ECOA.
Further, the SBA recently issued a new Standard Operating Pro-
cedure (SOP), 50 10–8,9 in April 2025, which becomes effective on
June 1. The new SOP specifically precludes 7(a) Preferred Lender
Program (PLP) participants from reaching out to the SBA’s general
processing center regarding questions pertaining to a borrower’s
application and to confirm SBA policy requirements. The citizen-
ship verification requirements contained in H.R. 2966, coupled with
the new SOP procedure precluding SBA PLP participants from con-
tacting SBA’s general processing center, are likely to cause ques-
tions from lenders to go unanswered and create uncertainty regard-
ing the institution’s ability to originate the loan. Instead of expos-
ing their institution to possible legal violations, lenders will instead
choose to pull back and stop issuing new originations under both
programs in order to avoid liability.
As practical matter, in order for the SBA Administrator to en-
sure the citizenship status of each borrower individual and comply
with the 100 percent U.S. beneficial ownership requirements in the
bill, in the 7(a) program, the lender will be required to upload the
citizenship information the borrower has certified to the lender in
the SBA’s electronic loan submission platform, E-Tran. Yet, the E-
Tran system currently only enables lenders to submit up to 81 per-
cent of a business’ beneficial ownership information for loan ap-
proval, not 100 percent as required in bill. In this very uncertain
environment, 7(a) lenders have already expressed concern that the
inability of the E-Tran System to accept submissions of the remain-
ing 19 percent of a business borrower’s beneficial ownership infor-
mation could, again, open them up to legal liability and cause them
to decrease their SBA-lending order to avoid exposure. The 504
program will seem to suffer a similar fate under the terms of H.R.
2966. Most 504 program loans are non-delegated loans and require
additional processing and review by the SBA. Requiring the Ad-
ministration to 100-percent certify the business borrower’s owner-
ship by US citizens, nationals, or lawful permanent residents is ex-
pected to result in additional processing times, delays, and costs,
not only for the SBA, but for the lender and the small business bor-
rower as well.
Finally, concern has already been expressed to Committee Demo-
crats that the SBA could sign a memorandum of understanding
with the U.S. Department of Homeland Security (DHS), similar to
the agreement that DHS recently signed with the Internal Revenue
Services (IRS),10 to share the citizenship information an individual
borrower or business applicant has provided to the SBA under the
terms of H.R. 2966. A partnership between the SBA and DHS to
share small business borrowers’ citizenship information is without
9 OFF. OF FIN. ASSISTANCE. ‘‘SOP 50 10 8.’’ U.S. SMALL BUS. ADMIN. (Jun. 1, 2025).
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10 ROSE, JOEL. ‘‘The IRS finalizes a deal to share tax information with immigration authori-
ties.’’ NPR. (Apr. 8, 2025).
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unprecedent and could weaponize the SBA and SBA-program lend-
ers as immigration enforcement officers, threatening the safety of
thousands of small business owners.
Small businesses are the backbone of our nation’s economy. Ac-
cess to capital has been a major challenge for American small busi-
nesses for decades and SBA’s capital access programs have tried to
bridge the gap for the small businesses left behind by the conven-
tional markets. Yet, H.R. 2966 takes us back and creates oper-
ational challenges for program participants. Instead of denying
more American small businesses access to the affordable capital
that so many of them need, Democrats believe the Committee
should be working to strengthen SBA’s capital access programs and
increase financing opportunities for more small businesses in order
to improve our local economies and our nation’s Gross Domestic
Product overall.
NYDIA M. VELÁZQUEZ,
Ranking Member.
Æ
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