Build Back Better Act: Small Business Administration Sections — IF11980 (November 23, 2021)

Summary

A Congressional Research Service product, IF11980, dated November 23, 2021, titled "Build Back Better Act: Small Business Administration Sections." It states that the Build Back Better Act (H.R. 5376), passed by the House on November 19, 2021, includes 19 sections that would provide more than $5 billion for SBA programs. It describes each section with its amount and availability, among them $1 billion for Uplift Incubators, $275.9 million for Community Advantage loans, $1.9646 billion for a Small Dollar Direct Lending Program and $950 million to extend temporary fee reductions and loan modifications. The authors are Robert Jay Dilger and Anthony A. Cilluffo.

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                                                                                                         November 23, 2021
Build Back Better Act: Small Business Administration Sections
The Build Back Better Act (BBBA; H.R. 5376), passed by          Americans, Native Hawaiian Organizations, Alaska Native
the House on November 19, 2021, includes 19 sections that       Corporations, and Indian tribes) and management and
would provide a total of more than $5 billion for U.S. Small    training for Native American-owned small businesses.
Business Administration (SBA) programs.
                                                                Office of Rural Affairs
Veteran Federal Procurement                                     Section 100203: $10 million in FY2022, to remain
Entrepreneurship Training Program                               available until September 30, 2029—for an annual Rural
Section 100101: $35 million in FY2022, to remain                Small Business Conference, to be held in various regions of
available until September 30, 2030—for competitive grants       the country.
to nonprofit entities to provide training to veteran-owned
small businesses to increase their likelihood of being          Office of Emerging Markets
awarded federal contracts.                                      Section 100204: $10 million in FY2022, to remain
                                                                available until September 30, 2029—to establish an office
Expanding the Surety Bond Program                               of emerging markets to enhance the well-being of small
Section 100102: $100 million in FY2022, including $15           businesses in an emerging market as defined in the bill
million for administrative expenses, to remain available        (e.g., located in a low- or moderate-income area for
until September 30, 2031—to increase the guarantee on bid,      purposes of the Community Development Block Grant
performance, and payment surety bonds for small                 program, located in a HUBZone, is a startup or is owned
businesses from $6.5 million ($10 million if a federal          and controlled by veterans or individuals with disabilities).
contracting officer certifies that such a guarantee is
necessary) to $10 million ($20 million if a federal             State Trade Expansion Program
contracting officer certifies that such a guarantee is          Section 100205: $31.71 million in FY2023 and in FY2024,
necessary).                                                     with each appropriation to remain available until September
                                                                30, 2027—for additional State Trade Expansion Program
Uplift Incubators                                               grants.
Section 100201: $1 billion in FY2022, including $150
million for administrative expenses, to remain available        Growth Accelerators
until September 30, 2031—to provide competitive grants or       Section 100301: $200 million in FY2022, including $10
contracts to economic development organizations, SBA            million for administrative expenses, to remain available
management and training partner organizations, historically     until September 30, 2031—for additional growth
black colleges and universities, colleges that primarily        accelerator grants. The growth accelerators program is also
educate minority students, and junior or community              provided statutory authorization as the Growth Accelerator
colleges to establish business incubators to assist small       Competition, with awards of at least $100,000.
businesses that are in the planning stages or in business for
not more than five years, small business contractors, or        Emerging Managers Program (Increasing
businesses owned and controlled by one or more members          Equity Investments in the SBIC
of an underrepresented community as defined in the bill         Program)
(e.g., resident of a low-income community as defined in         Section 100401: $20 million in FY2022, to remain
section 45D(e) of the Internal Revenue Code, located in a       available until September 30, 2031—to establish a Small
HUBZone, member of an Indian or Alaska Native tribe) or         Business Investment Company (SBIC) emerging managers
a Native entity. The incubators are to provide a wide range     program for managers that meet at least two of a list of
of management and training assistance, including training       specified criteria, such as having less than 10 years of
to enhance access to capital, help new business owners          combined investment experience, a focus on underserved
become business ready, and help all participants become         markets, or being majority owned by members of an
ready to submit bids for federal contracts.                     underserved community. The program encourages specified
                                                                investments, including in infrastructure, defined broadly to
Office of Native Affairs                                        include child and elder care, manufacturing, low-income
Section 100202: $10 million in FY2022, to remain                communities, and small businesses owned by veterans,
available until September 30, 2029—to establish an Office       Native Americans, and individuals with disabilities.
of Native Affairs, which will create and administer a Native
American Outreach Program. The Outreach Program would           Microcap SBIC license
provide information to state, local, and tribal governments     Section 100402: $40 million in FY2022, to remain
about federal assistance available to Native American-          available until September 30, 2031—to establish a
owned small businesses (defined to include Native               Microcap SBIC license for prospective SBIC managers that

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                                                               Build Back Better Act: Small Business Administration Sections

lack required investment experience but would otherwise be      cooperative lending pilot program, including employee-
issued a SBIC license. SBIC leverage to these companies is      owned entities as determined by the SBA Administrator,
limited to $50 million and at least 50% of their investments    without the requirement of a personal or entity guarantee.
must be in the Emerging Managers program’s covered
investments (e.g., infrastructure, manufacturing, low-          Reentry Training for Incarcerated and
income communities). Not more than 33% of those                 Formerly Incarcerated Individuals
investments are to be in small business concerns in             Section 100601: $35 million in FY2022, to remain
infrastructure or manufacturing.                                available until September 30, 2029—for grants to Small
                                                                Business Development Centers (SBDCs), Women Business
SBIC Outreach                                                   Centers (WBCs), and associations formed to pursue matters
Section 100403: $2.5 million in FY2022, to remain               of mutual common concerns to SBDCs and WBCs to
available until September 30, 2031—for a program to             provide entrepreneurship counseling and training to
conduct outreach to, and educate, prospective licensees on      incarcerated individuals completing imprisonment in a
SBIC licensing procedures.                                      minimum, low, or medium security facility.

Community Advantage Loans                                       Section 100601: $35 million in FY2022, to remain
Section 100501: $275.9 million in FY2022, to remain             available until September 30, 2029—for grants to SCORE
available until September 30, 2031—for the Community            (formerly known as the Service Corps of Retired
Advantage loan program, including $47.1 million for             Executives) to provide entrepreneurship counseling and
administrative expenses and $4 million for training             training to formerly incarcerated individuals.
community advantage lenders. The Community Advantage
loan program is also provided statutory authorization. At       New Start Entrepreneurial Development
least 60% of community advantage loans must be made to          Program for Formerly Incarcerated
small businesses located in an underserved market as            Individuals
defined in the bill (e.g., located in a low- to moderate-       Section 100602: $35 million in FY2022, to remain
income community, a HUBZone, a rural area). The                 available until September 30, 2029—for a pilot program to
maximum loan amount is generally $250,000, but may be           award competitive grants (with a 25% matching
up to $350,000 with SBA approval or if the small business       requirement) to organizations, or partnerships of
is located in a major disaster area.                            organizations, to provide entrepreneurial counseling and
                                                                training to formerly incarcerated individuals. Legislative
Small Dollar Direct Lending Program                             language implies that SBDCs, WBCs, SCORE, and Veteran
Section 100502: $1.9646 billion in FY2022, to remain            Business Outreach Centers may be provided priority. An
available until September 30, 2031, including $484 million      applicant must demonstrate, among other things, that it has
for administrative expenses and $25 million—for outreach        a partnership with, or is, a Microloan intermediary and has
grants, for a direct lending program for loans of up to         the ability to provide a full range of entrepreneurial
$150,000, or not more than $1 million for small                 programming.
manufacturers or small government contractors.
                                                                SBA Administrative Expenses
Extension of Temporary Fee Reductions                           Section 100701: $125 million in FY2022, to remain
and Loan Modifications                                          available until September 30, 2030—for administrative
Section 100503: $950 million in FY2022, to remain               expenses to carry out these programs, except as otherwise
available until September 30, 2026—to (1) extend                provided.
temporary 7(a) and 504/CDC loan guarantee fee reductions
from September 30, 2021, to September 20, 2026; (2)             SBA Office of Inspector General
extend the temporary increase in the 7(a) loan guaranty         Section 100702: $12.5 million in FY2022, to remain
program’s loan guarantee from 75% or 85%, depending on          available until September 30, 2030—for audits,
the loan amount, to 90% regardless of the loan amount from      investigations, and other oversight of these programs.
October 1, 2021, to October 1, 2026; and (3) extend the
temporary increase in the SBAExpress loan guaranty              Robert Jay Dilger, Senior Specialist in American National
program’s maximum loan amount from $500,000 to $1               Government
million from October 1, 2021, to October 1, 2026.               Anthony A. Cilluffo, Analyst in Public Finance
Funding for Cooperatives                                                                                            IF11980
Section 100504: $100 million in FY2022, to remain
available until September 30, 2031—for a five-year




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                                                             Build Back Better Act: Small Business Administration Sections




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