Clarifying the Small Business Runway Extension Act

Floor Speech

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Mr. STAUBER. Mr. Speaker, I thank Ranking Member Chabot for yielding.

Mr. Speaker, my bill, H.R. 2345, the Clarifying the Small Business Runway Extension Act, is a bill that does exactly what it says: makes clear the intent of the Small Business Runway Extension Act of 2018. The Small Business Runway Extension Act of 2018 was simple, straightforward, and unambiguous. It simply extended the Small Business Administration's receipts-based size calculation from a 3-year average to 5 years. Recognizing the significance of this bill for small businesses, the Small Business Runway Extension Act of 2018 easily passed through both the House and Senate and became law on December 17, 2018.

Within 4 days of the law's passage, the SBA stalled its implementation, issuing an information notice that effectively contradicted the Small Business Runway Extension Act of 2018 by maintaining the 3-year calculation until the agency could go through the rulemaking process. Coincidentally, or perhaps because of the pressure exerted by Congress and the public, the SBA issued its proposed rule for the Small Business Runway Extension Act of 2018 mere days before Chairman Golden and I held a hearing in the Subcommittee on Contracting and Infrastructure to hold the SBA accountable for its delay. Unfortunately, the proposed rule still maintains the current 3- year standard in SBA regulations.

During this hearing, we highlighted how this conflict in law versus SBA regulation imposes significant, real-world challenges for small businesses that may be teetering on the edge between small and other- than-small business status. The need for clarity was a constant and recurring theme, and this bill provides that clarity.

First, H.R. 2345 makes clear that the Small Business Runway Extension Act of 2018 does, in fact, apply to the SBA and, therefore, should have become effective on the date it was signed into law. Thus, businesses relying on the 5-year average to remain in their small business status were correct in their assessment and may continue to hold this status.

Second, the bill requires the Small Business Administration to develop a transition plan for small businesses and Federal agencies as they shift to the 5-year rule. The transition plan shall include a buffer period in which firms that benefit from the old 3-year calculation may continue to rely on that formula for a set amount of time as they prepare for the eventual shift to the 5-year average calculation.

In short, H.R. 2345 restates the intent of Congress as written in the Small Business Runway Extension Act of 2018 and adopts solutions that will create a smooth transition for all parties involved. This will allow more businesses to retain access to SBA benefits, including loans and contracts, that have allowed our small businesses to grow, thrive, and greatly contribute to our economy.

Mr. Speaker, I thank Chairman Golden for his leadership on this act. It was and is a privilege to work with him on the Small Business Committee.

Mr. Speaker, I urge my colleagues to support H.R. 2345, the Clarifying the Small Business Runway Extension Act.

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