[Senate Report 111-341]
[From the U.S. Government Publishing Office]
Calendar No. 633
111th Congress Report
SENATE
2d Session 111-341
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SMALL BUSINESS EXPORT ENHANCEMENT AND INTERNATIONAL TRADE ACT OF 2009
_______
September 29, 2010.--Ordered to be printed
_______
Ms. Landrieu, from the Committee on Small Business and
Entrepreneurship, submitted the following
R E P O R T
[To accompany S. 2862]
The Committee on Small Business and Entrepreneurship, to
which was referred the bill (S. 2862) to improve the Office of
International Trade and for other purposes, having considered
the same, reports favorably thereon and recommends that the
bill pass.
I. INTRODUCTION
The Small Business Export Enhancement and International
Trade Act of 2009 (S. 2862) was introduced by the Committee's
Ranking Member, Senator Olympia J. Snowe, for herself and the
Chair, Senator Mary L. Landrieu, on December 9, 2009.
The bill elevates the U.S. Small Business Administration's
(SBA) Office of International Trade (OIT) and updates the
Agency's international trade and export promotion programs
administered through the office. Additionally, the bill
authorizes one new pilot program and seeks to improve
coordination between the SBA and other federal agencies
involved in promoting export opportunities for small business.
During markup of the bill, the Committee approved the
legislation by a roll call vote of 18-0.
II. PURPOSE AND NEED FOR LEGISLATION
The purpose of the Small Business Export Enhancement and
International Trade Act is to improve and modernize the SBA's
international trade and export assistance programs. These
programs, administered through OIT, assist small businesses
seeking to export their goods and services by providing them
with vital international trade financing assistance and
business counseling services. Through these programs, the SBA
reaches several thousand small businesses annually.
The Committee is concerned that the SBA is not reaching
enough small businesses through these programs, nor is the
Agency doing enough to provide small businesses with the
resources and tools they need to become successful exporters.
For example, in FY 2009, the SBA funded more than 1,393 loan
guarantees to small exporters and counseled 5,100 small
businesses on export-related activities.\1\ While the SBA's
programs enabled these 6,493 small exporters to post more than
$1.6 billion in export sales in FY 2009, SBA-supported export
sales accounted for less than 1 percent of the total export
volume produced by all U.S. small businesses during that fiscal
year. Furthermore, the 6,493 small businesses assisted by the
SBA in FY 2009 represented fewer than 3 percent of all
identified small U.S. exporters.\2\
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\1\United States Small Business Administration, Fiscal Year 2011
Congressional Budget Justification, pg. 48.
\2\United States Department of Commerce, Exporter Database, Small
and Medium-Sized Exporting Companies: Statistical Overview 2007.
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Overall, U.S. small businesses represent 97 percent of all
identified U.S. exporting companies. These 259,381 small
businesses account for 30.2 percent, or about $312 billion, of
our nation's annual export volume.\3\ According to the U.S.
Department of Treasury, approximately 57 million American
workers are employed by firms that engage in international
trade, representing about 40 percent of the private sector
workforce.\4\
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\3\United States Department of Commerce, Exporter Database, Small
and Medium-Sized Exporting Companies: Statistical Overview 2007.
\4\United States Senate Committee on Commerce, Science and
Transportation, Subcommittee on Competitiveness, Innovation, and Export
Promotion. Hearing: ``A World of Opportunity: Promoting Export Success
for Small and Medium-Sized Businesses.'' Congressional Testimony of Ms.
Liz Reilly, U.S. Chamber of Commerce, October 6, 2009, pg. 1.
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While these statistics are impressive, they do not
accurately portray the small business exporting landscape. For
example, while small businesses make up a majority of U.S.
exporting companies, of our nation's nearly 29 million small
businesses, less than 1 percent currently exports their goods
and services. The Committee believes that more needs to be done
to encourage small businesses to export and, specifically, to
increase the number of small businesses that do not currently
sell to foreign customers.
The Committee also believes in the vigorous promotion of
those small businesses that currently export by helping them
expand to additional foreign markets and increase the value of
their exports. Overall, U.S. export volume has grown from
$500.7 billion in 1996 to $1.287 trillion in 2008, an increase
of nearly 100 percent.\5\ Unfortunately, small businesses have
not benefited from this tremendous growth in export volume.
While the number of small exporters more than doubled during
this same time period, their share of the total known value of
exports has fallen from 31.1 to 30.2 percent.\6\
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\5\United States Department of Commerce, Profile of U.S. Exporting
Companies, 2007-2008. Released April 13, 2010, pg. 1.
\6\United States Department of Commerce, Exporter Database,
Overview: SME Exporters by State 2007.
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This suggests that small businesses, particularly those
that are already involved in exporting, have not fully taken
advantage of their global export potential. According to data
from the U.S. Department of Commerce, this is indeed the case.
At present, 59 percent of all small exporters posted sales to
only one foreign market. This figure stands in stark contrast
to large exporters (defined as exporting companies with more
than 500 employees), 55 percent of who recorded export sales to
five or more foreign markets in 2008.\7\ The ability of large
exporters to reach multiple markets is what allows them to
account for 60 percent of our nation's export volume annually,
despite representing less than 3 percent of all identified U.S.
exporters.\8\ With 95 percent of the world's population living
outside of the United States, small exporters stand to benefit
immensely by exporting to numerous foreign markets.\9\
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\7\United States Department of Commerce, Small & Medium-Sized
Exporting Companies: Statistical Overview, 2008.
\8\United States Department of Commerce, Exporter Database, Small
and Medium-Sized Exporting Companies: Statistical Overview, 2008.
\9\United States Department of Commerce, International Trade
Administration, Benefits of Exporting--Why Consider Exporting?,
, 2009.
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The Committee believes that encouraging more small
businesses to export will not only help these businesses
increase their customer base and create new jobs, it will also
have tremendous economic benefits for our economy. Jobs created
or supported by exporting pay, on average, 13 to 18 percent
more than domestically created jobs and thus help to reduce the
trade deficit.\10\ Further, there is substantive evidence to
suggest that every dollar invested in government-sponsored
export promotion programs results in a considerable return on
investment. A recent World Bank study estimated that every
dollar invested in export promotion brings back an average 40-
fold increase in exports. According to the study, the U.S.
currently spends one-sixth of the international average on
export promotion, suggesting that the U.S. would stand to
benefit exponentially from even a minimal change in
expenditures supporting export promotion.\11\
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\10\Office of the United States Trade Representative, Executive
Office of the President, Benefits of Trade, , 2009.
\11\The World Bank, Development Economics Research Group, Export
Promotion Agencies: What Works and What Doesn't, Lerderman, Olarreaga,
Payton, ed. 2008.
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Additionally, investing in small exporters could help to
lead the country out of its current recession. A recent study
by the U.S. Census Bureau found that small businesses,
especially very small firms with fewer than 20 employees,
create jobs faster than their larger counterparts following a
recession.\12\ Presently, more than 83 percent of all U.S.
exporting firms have fewer than 20 employees, suggesting that
small exporters are uniquely positioned to help lead us out of
our current economic recession by creating new and higher
paying jobs.
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\12\United States Small Business Administration, Office of
Advocacy, Small Business Economy Report to the President, 2009 Edition,
p. 10.
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Finally, with more than 20 federal agencies involved in
export promotion, many small businesses do not know where to
start when seeking assistance to export their goods and
services. To help fill this void, the Committee believes that
as the primary federal agency responsible for assisting U.S.
small businesses, the SBA should take a more proactive role in
export promotion. However, for the SBA to successfully do so,
the Committee believes that the following changes to SBA
programs are needed: Elevation of OIT; the establishment of an
Associate Administrator position to head OIT; updates to SBA
trade finance programs; expansion of the export finance
specialist program; improvements to coordination processes and
efforts undertaken with other federal agencies; improvements to
internal performance and oversight metrics; and, the creation
of new outreach and assistance initiatives to help existing
small exporters and small businesses with export potential. The
Small Business Export Enhancement and International Trade Act
of 2009 makes these changes to ensure that the SBA is a more
robust and practical resource for existing and potential small
exporters.
III. HISTORY OF LEGISLATION
S. 2862 draws its provisions from two separate bills
introduced by the Committee Chair and Ranking Member on June 8,
2009: S. 1196, the Small Business International Trade
Enhancements Act of 2009, introduced by Chair Landrieu and
cosponsored by Senator Jeanne Shaheen, and S. 1208, the Small
Business Export Opportunity Development Act of 2009, introduced
by Ranking Member Snowe.
S. 1196, building upon legislation introduced and passed by
the Committee in previous Congresses, sought to elevate OIT,
establish an Associate Administrator position to head the
office, improve the SBA's international trade financing
programs, increase staff, improve inter-agency coordination,
and establish new goals to ensure the success of the office.
Also expanding upon legislation from previous Congresses, S.
1208 sought to establish an Office of Export Development and
Promotion within the SBA, led by an Associate Administrator for
Export Development and Promotion. The purpose of the office was
to undertake specified activities, such as financing and
counseling, to facilitate the development and promotion of
small business goods and services abroad. S. 2862, introduced
by Ranking Member Snowe and cosponsored by Chair Landrieu,
Senators Shaheen, Bayh and Cardin, combines provisions from
both S. 1196 and S. 1208, and builds upon the Committee's
bipartisan work from the current and previous Congresses as
described below.
During the 110th Congress, Senator Landrieu introduced S.
738, the Small Business International Trade Enhancements Act of
2007, cosponsored by Ranking Member Snowe, then Chairman Kerry,
and Senators Coleman and Pryor. Containing many provisions
similar to those included in bills introduced this Congress (S.
2862, S. 1196, and S. 1208, S. 738), S. 738 included
improvements to the operations and structure of the SBA's
Office of International Trade, changes to SBA's trade and
export financing programs, increased staffing levels, and
improved coordination between the SBA and other Agencies
involved in export promotion.
Provisions from S. 738 were ultimately included in three of
the Committee's reauthorization bills during the 110th
Congress: S. 1256, the Small Business Lending Reauthorization
and Improvements Act of 2007; S. 1671, the Entrepreneurial
Development Reauthorization Act of 2007; and S. 2920, the SBA
Reauthorization and Improvements Act of 2008. S. 1256 was
reported favorably out of Committee by a unanimous vote of 19-0
on May 16, 2007, and S. 1671 was reported out of Committee
unanimously by a vote of 19-0 on June 26, 2007. However,
neither S. 1256 nor S. 1671 made it out of the Senate before
the adjournment of the 110th Congress. An attempt to move these
bills by combining them into a comprehensive and bipartisan
reauthorization bill, S. 2920, also did not advance through the
Senate before the adjournment of the 110th Congress.
In the 109th Congress, Senator Landrieu, along with then
Ranking Member Kerry and Senators Bayh and Pryor, introduced S.
3663, the Small Business International Trade Enhancement Act of
2006. A number of the provisions from S. 2862, S. 1196, and S.
738 originated in S. 3663. Many of these provisions were also
included in the Committee's comprehensive reauthorization bill,
S. 3778, the Small Business Reauthorization and Improvements
Act of 2006, introduced by then Chair Snowe. Despite passing
out of Committee by a vote of 18-0 on August 2, 2006, S. 3778
was not considered by the full Senate before the close of the
109th Congress.
Additionally, during the 109th Congress, Senator Landrieu
introduced S. 2482, the Gulf Coast Open for Business Act of
2006, which contained provisions requiring the SBA to hire a
full-time international finance specialist to carry out export
promotion efforts in Louisiana, Mississippi, Alabama, and
Arkansas during recovery efforts resulting from Hurricanes
Katrina and Rita. This legislation was cosponsored by then
Ranking Member Kerry and Senator Bayh. Finally, during the
109th Congress, Senator Landrieu introduced S. 1765, the
Louisiana Katrina Reconstruction Act, which was cosponsored by
Senator Vitter. Section 530 of this legislation created a new
grant program at the Department of Commerce to assist
businesses impacted by the 2005 hurricanes with export-related
opportunities.
In the 108th Congress, then Chair Snowe introduced S. 2821,
the Small Business Reauthorization and Manufacturing Assistance
Act of 2004. S. 2821 served to amend the Small Business Act
through the modification of international trade loan program
provisions. Cosponsored by Senators Bond and Roberts,
provisions included financing for acquisition, construction,
renovation, modernization, improvement, or expansion of
facilities or equipment to be used in the United States in the
production of goods and services involved in international
trade as well as the refinancing of existing indebtedness to
ensure reasonable terms and conditions.
Additionally, during the 108th Congress, then Chair Snowe
introduced S. 1977, the Small Manufacturers Assistance,
Recovery, and Trade Act, cosponsored by Senators Voinovich,
Collins, and Cochran, to established an Assistant United States
Trade Representative (AUSTR) for Small Business. This
legislation also contained provisions to include small business
manufacturing within the SBA loan and international trade
programs. Finally, Chair Snowe introduced S. 2193, the Small
Business Loan Revitalization Act, requiring any small
businesses that received SBA export working capital financing
previous to January 1, 2004 and requesting a financing renewal,
have their request approved regardless of the size of such
financing, if the small business was otherwise eligible.
IV. HEARINGS AND ROUNDTABLES
On June 30, 2009, the Committee held a field hearing
titled, ``Keeping America Competitive: Federal Programs that
Promote Small Business Exporting.'' SBA Administrator Karen G.
Mills, United States Trade Representative (USTR) Ronald Kirk,
U.S. Export-Import Bank (Ex-Im Bank) Chairman and President
Fred Hochberg, and Acting Deputy Assistant Secretary for
Domestic Operations of the International Trade Administration
(ITA) Patricia Sefcik, all testified on the first hearing
panel. Representatives from the World Trade Center of New
Orleans (WTCNO), the Ark-LA-Tex Export & Technology Center, the
Louisiana District Export Council (LA-DEC), and the Southern
United States Trade Association (SUSTA) testified on the second
panel.
The purpose of the hearing was to raise awareness of export
promotion programs and opportunities available through the
Federal government, as well as to explore the challenges faced
by small exporters. Two themes emerged from witness testimony:
first, many small exporters are unaware of the programs and
resources available to them through the Federal government; and
second, that many of these programs, particularly those offered
by the SBA, are in need of modernization and overall
improvement to reflect the high cost of doing business
internationally. The Committee has attempted to address those
two issues in S. 2862.
On June 11, 2009, the Committee held a roundtable titled,
``Investing in Small Business.'' The purpose of the roundtable
was to discuss the state of the SBA's Entrepreneurial
Development programs. Trade issues were addressed in a portion
of the roundtable and representatives from the SBA, Small
Business Exporters Association (SBEA), U.S. Chamber of
Commerce, and the Branch Banking and Trust Company (BB&T Bank)
participated in the roundtable. Specific topics discussed
during the roundtable included the elevation of OIT, staffing
levels of SBA export finance specialists assigned to U.S.
Export Assistance Centers (USEACs) operated by the Department
of Commerce, improvements to the Agency's export and trade
finance programs, as well as a discussion of a proposed small
business export promotion grant program designed to remove
trade barriers for small businesses who wish to export.
During the 110th Congress under the Chairmanship of Senator
Kerry, on May 2, 2007, the Committee held a roundtable titled,
``SBA Reauthorization: Small Business Loan Programs.'' The
purpose of this hearing was to discuss proposals to improve and
reauthorize the SBA's lending programs, including the Agency's
international trade loan programs. An array of stakeholders
participated in the roundtable, including representatives of
the SBEA and National Black Chamber of Commerce. Both groups
expressed their support for increasing the maximum amount of
financing available through the Agency's international trade
programs.
SBEA also expressed their support for the trade loan
provisions modifying the SBA's International Trade Loan program
(ITL) included in S. 1256, the Small Business Lending
Reauthorization and Improvements Act of 2007, that increased
the maximum amount of financing available, adjusted the
guarantee amount of loans made through the program, and
established improved collateral and refinancing requirements
for the program. These provisions originated in S. 3663, the
Small Business International Trade Enhancement Act of 2006
introduced by Senator Landrieu in the 109th Congress, and were
also included in S. 738, the Small Business International Trade
Enhancements Act of 2007, introduced by Senator Landrieu during
the 110th Congress.
On February 28, 2007, the Committee held a hearing titled,
``The President's Fiscal Year 2008 Budget Request for the Small
Business Administration.'' The purpose of this hearing was to
review the President's FY 2008 budget request for the SBA.
During the hearing and in follow-up questions for the record
posed by Senator Landrieu, staffing levels of the Agency's
international trade programs were addressed. Specifically, the
SBA's failure to fully staff export finance specialist
vacancies at USEACs located in high export volume areas, such
as Louisiana, New York, and other states that had been without
a specialist since 2003, were addressed.
V. DESCRIPTION OF BILL
Section 1--Short title
Section 2--Definitions
Section 3--Office of International Trade
Section 3 of the bill seeks to update and improve OIT. OIT
was established by the Small Business Export Expansion Act of
1980 (P.L. 96-481) and was later modified by provisions in the
Small Business International Trade and Competitiveness Act of
1988 (P.L. 100-418). In the late 1990's, OIT was folded into
the SBA's Office of Capital Access (OCA) where it has remained
since that time. Although the Agency has made internal
improvements to the office, the statutes authorizing and
dictating the responsibilities of the office have not been
significantly updated since 1988.
The Committee is concerned that since being folded into
OCA, OIT has not received adequate attention or resources to
fulfill its mission. In an effort to raise its profile within
the Agency, this bill elevates OIT by removing it from within
OCA, thus creating a new office headed by an Associate
Administrator for International Trade who would be directly
accountable to the SBA Administrator. The bill also clarifies
that the primary focus and mission of the office should be to
increase the number of small businesses that export, as well as
to increase the volume of exports by small businesses.
Section 4--Duties of the Office of International Trade
Section 4 of the bill seeks to update the duties and
responsibilities of the office. Currently, the Small Business
Act requires that the SBA, ``assist in developing a
distribution network for existing trade promotion, finance,
trade adjustment, trade remedy assistance and data collection
programs.'' This concept originated with P.L. 100-418.
As the primary Federal agency responsible for assisting
U.S. small businesses, the Committee believes that the SBA
should take a more active role in maintaining a distribution
network in coordination with other federal agencies involved in
promoting export opportunities for small businesses.
Specifically, this network should incorporate the Department of
Commerce, the USTR, Ex-Im Bank, and the Overseas Private
Investment Corporation (OPIC). This network should also be
extended to include all SBA resource partners that provide
business counseling or technical assistance services, including
regional and district offices of the Administration, Small
Business Development Centers (SBDC), Women's Business Centers
(WBC), the Service Corps of Retired Executives (SCORE), and
USEACs operated by the Department of Commerce. OIT is also
required to provide information on exporting trends, market-
specific growth, industry trends and international prospects
for exports, and to aggressively market and promote export
assistance and trade programs available to small businesses.
Current statute dictates that the SBA is required to
maintain a full-time export development specialist in every
Agency regional office, responsible for overseeing and
performing export development in each region. To complement
this, current statute also requires that the SBA designate one
individual in each district office to be accountable for export
development on a more localized basis. The Committee is
concerned that the SBA has not properly staffed these positions
in recent years, and it is unclear how the Agency has
compensated for any resulting vacancies. To provide a more
complete network of trade and export assistance services, this
bill directs the SBA to ensure that these positions are fully
staffed and requires that the names and contact information of
SBA personnel assigned to these positions or designated with
these responsibilities, are published on the Agency's Web site.
The bill also establishes new training requirements for OIT
personnel. Specifically, the bill directs the SBA to establish
annual training programs for employees that focus on the
current needs of small businesses. Additionally, the bill
requires the SBA to lead and conduct annual training programs
for exporters and lenders in conjunction with representatives
from other federal agencies involved in export promotion,
including Commerce, Ex-Im Bank, and OPIC, as well as SBA
resource partners and staff assigned to USEACs.
To complement the SBA's export finance specialist program
and other SBA export development staff, S. 2862 seeks to assist
the Agency in improving its outreach mechanisms to small
exporters by requiring employees of each state SBDC network to
become certified in providing export assistance. Specifically,
the bill requires that either 5 employees or 10 percent of the
total number of employees in a state network (or whichever is
lesser, as appropriate) become certified in providing export
assistance under criteria developed by the Administrator.
Networks of WBCs are also eligible to participate in the
program, but are not required to have a certain number of
employees certified. Additionally, this section allows the
Administrator, subject to appropriations, to reimburse
participating SBDCs and WBCs for all costs related to the
certification process as developed by the Agency.
To ensure that the OIT is achieving the mission and goals
set forth by S. 2862, this section of the bill establishes a
variety of new performance metrics and reporting requirements.
Specifically, the Committee believes that the SBA needs to
establish a better system to collect data and information
related to how they serve small exporters. Accordingly, the
bill directs the SBA to track, in coordination with other
federal agencies and departments represented on the Trade
Promotion Coordinating Committee (TPCC): The number of small
businesses that are new to exporting; the number of small
business that have previously received assistance from other
federal export promotion resources; the number of small
businesses referred to or from other federal export promotion
resources; the export revenues of those small businesses
assisted by the SBA; and the number of small businesses
referred to various SBA resource partners for assistance.
According to a recent report by the SBA's Office of
Advocacy, small exporters often face a variety of barriers to
trade including exchange rate risk, strong global competition,
a variety of regulatory and legal frameworks, and intellectual
property concerns. While the removal of trade barriers is
crucial to the opening of previously untapped markets and
encouraging more small businesses to become involved in
international trade, many firms still do not feel it is worth
the risk to export. The same study also found that small
exporters, who produce 13 times more patents per employee than
large patenting firms, are less likely to seek copyright
protection making them vulnerable to piracy or intellectual
property theft.
Consequently, this bill directs the Administrator to carry
out a comprehensive program to provide technical assistance,
counseling services, and reference materials to assist in the
resolution of international trade disputes, or to address
unfair international trade practices. As part of the program,
the bill directs SBA District Offices to provide information on
services that assist small businesses with the resolution of
international trade disputes and also to provide them with
referrals to other existing providers or programs. This bill
also requires the SBA to establish relationships with providers
of legal services and, working in conjunction with the United
States Patent and Trademark Office (PTO) and the Register of
Copyrights, to establish counseling services and materials for
small business concerns regarding intellectual property
protection in other countries.
This section of the bill also requires the SBA to develop
joint performance measures for District Offices and USEACs.
Specifically, the SBA is required to develop metrics to track
the number of loans made under each of the Agency's
international trade financing programs, including the
International Trade Loan program (ITL), the Export Working
Capital program (EWCP), the Preferred Lenders Program (PLP),
and the Export Express Loan Program, at each District Office
and USEAC.
Finally, in addition to establishing annual reporting
requirements for OIT, the bill requires the SBA to report back
to its Congressional authorizing committees within 60 days of
enactment regarding any official travel undertaken by employees
of the office, dating back to FY 2004. The Committee believes
that employees of the office, particularly export finance
specialists assigned to USEACs, should continue to perform
outreach and travel within their assigned areas. However, as an
Agency with a primarily domestic focus, the Committee believes
that international travel undertaken by employees of the office
should be limited and that more emphasis should be placed on
domestic outreach.
Section 5--Export assistance centers
The SBA currently employs 18 export finance specialists who
provide small or medium-sized businesses with technical
assistance and business counseling services. Working in
conjunction with Commerce, the specialists are posted in USEACs
located throughout the country. In FY09, at a minimal cost to
the taxpayer, these specialists helped to facilitate 1,498 SBA
export finance loans worth approximately $582,783,928, creating
or saving approximately 17,660 jobs. However, it is important
to note that the SBA's trade finance programs were not immune
to the global credit crisis and these programs experienced a
nearly 53-percent decrease in the volume of loans made. Due to
a thawing credit market, it is likely that changes made to the
SBA's trade and export financing programs by this bill, coupled
with an increase in the number of specialists, will lead to a
substantial increase in the volume of loans and subsequently,
the creation of more jobs in FY2010 and beyond.
The Committee is concerned that SBA has not devoted
sufficient resources to the USEAC program. As recently as 2003,
the SBA employed 22 specialists. Currently, the SBA maintains
only 18 specialists and, in 2007, the program experienced a
record staffing low of 16 specialists. These vacancies force
the current staff of specialists to cover more extensive
territory often with limited travel budgets, thus negatively
impacting the export potential of small businesses in high
export markets. Despite repeated requests by the Committee to
increase the number of specialists, the SBA has only recently
begun to re-staff these long vacant positions.
To address concerns about this program, the Committee has
included provisions in the bill establishing a base staff of 22
specialists. This will ensure that the SBA maintains an export
assistance network encompassing several of the highest
exporting areas of the country. The bill also requires that the
SBA assign no fewer than three specialists to USEACs in each of
the SBA's 10 regions, bringing the total number of specialists
to at least 30 within two years of the enactment of the
legislation, providing more complete coverage of the country.
In an effort to ensure that staffing levels are maintained, the
bill also requires the SBA to designate an individual within
the Office to oversee all activities conducted by SBA employees
assigned to USEACs. To better leverage other existing federal
resources designed to assist small businesses, the bill
requires the SBA, Commerce, Ex-Im Bank, and OPIC to develop
shared annual goals for USEACs.
Finally, to help the SBA identify current gaps in coverage
due to the lack of specialists and guide future assignments,
the bill requires the SBA to conduct a study of the
availability of export finance specialists in both high and low
export volume areas. This will ensure that future assignments
are made to those areas most in need of federal export
assistance resources. The study also requires the SBA to take
into account the number of small exporters, the percentage of
small businesses that are exporters, and growth in the number
of small exporters in recent years when putting together their
recommendations. The Administrator is required to submit a
report to Congress on the results of the study, as well as
recommendations regarding future assignments of export finance
specialists.
Section 6--International trade finance programs
One issue consistently raised by small business owners
testifying before the Committee is the inability to access
adequate amounts of capital. This is especially true of small
businesses involved in exporting due to the inherent risks of
doing business internationally. Currently, several Agencies
including the SBA, Ex-Im Bank and OPIC provide various
financing solutions for small exporters. However, as the
largest of these agencies and the primary Agency responsible
for assisting U.S. small businesses, the Committee believes
that the SBA should be a leading source of export financing for
small businesses.
SBA lending programs provide an estimated 40 percent of all
long-term financing to our nation's entrepreneurs. However,
many of the SBA lending programs, in particular their trade and
export loan programs, have not been updated in some time. As a
result, these programs no longer represent viable financing
solutions for small businesses seeking trade or export
financing. In FY 2009, the SBA funded only 1,498 loans to small
exporters, reaching less than one half of one percent of our
nation's approximately 259,381 small exporters. Although
neither the SBA nor the export community were immune to the
global credit crisis in FY 2009, the number of export loans
made by the Agency in FY 2008 was 3,234, the largest number of
trade and export loans made by the SBA in recent years.
However, despite making a record number of loans in FY 2008,
the SBA was only able to reach or assist just over one percent
of our nation's small exporters.
In testimony before the Committee, numerous small business
owners and advocacy groups have verified that while the SBA
could be an excellent resource for small exporters, their trade
and export finance programs have two significant issues that
prevent this. First, the programs do not offer a sufficient
amount of financing. Currently, the SBA's trade finance
programs offer exporters up to $2 million in loans, an amount
that is no longer sufficient to finance international business
transactions. Second, due to the inherent risk of conducting
business internationally, low loan guarantees by the SBA leave
lenders with little incentive to participate in or promote
these programs to small businesses. S. 2862 attempts to address
both of these issues by making key changes to the SBA's three
trade and export loan programs.
Since FY 2003, the International Trade Loan (ITL) program
has experienced a 90-percent decline in its loan volume, from a
high of 71 loans made in 2003 down to seven loans in 2009. In
2007, this program experienced a record low of three loans
made, representing a decrease of nearly 97 percent from 2003.
In testimony before the Committee, small business owners and
trade associations alike expressed their belief that this
program no longer a viable financing option for small
businesses seeking export financing.
The provisions in the bill that address the ITL program
seek to revitalize the program and create a more attractive and
practical option for small businesses seeking trade and export
financing, while providing lenders with further incentive to
participate in the program. Current statute inadvertently has
the maximum loan guaranty and maximum loan amount working at
cross purposes and, as a result, small businesses no longer
consider this program a viable source of export and trade
financing.
To correct these problems, the bill seeks to expand
financing to small exporters by increasing the maximum amount
of an ITL from $2 million to $5 million, which is consistent
with other legislative changes that both the current
Administration and the Committee have advocated for.
Additionally, the bill establishes a maximum guarantee
percentage of 90 percent for the ITL program. When the program
was first established by Congress in 1980 by PL 96-487, it was
Congressional intent that the SBA would establish a 90-percent
guarantee for the program. However, the guarantee was never
established in statute, and it is currently set at 75 percent.
The Committee believes that a 90-percent guarantee for the
program is needed to provide incentive for both borrowers and
lenders to participate in this program, as well as to make the
program consistent with Export Working Capital Program (EWCP).
The bill also allows working capital--one of the most
frequently needed types of capital for exporters--to be
permitted as an eligible use of loan proceeds. Participants of
the program would be able to use up to $4.5 million of the loan
for that purpose. This bill also makes ITL's consistent with
regular SBA 7(a) loans by allowing the same collateral and
refinancing terms offered to borrowers through the 7(a)
program.
Much like the ITL program, the EWCP program has also
experienced a significant decline in recent years. In FY 2009,
142 loans were made through the program, representing a 31-
percent decrease from FY 2003. The Committee is also concerned
about the EWCP Co-Guaranty program operating in conjunction
with Ex-Im Bank. Since signing a memorandum of understanding
with the Ex-Im Bank in 2006, the volume of this program has
remained stagnant, with the SBA making a high of 14 loans per
year. In FY 2009, only 10 loans were made through this program.
As with the ITL program, this section seeks to improve the
EWCP program by making it a more attractive and user friendly
financing option for small businesses. To that end, the
legislation increases the maximum amount of an EWCP loan from
$2 million to $5 million. The legislation also allows any
lender participating in Ex-Im Bank's Delegated Authority Lender
Program to participate in the SBA's Preferred Lenders Program.
Additionally, this section prohibits the Administrator from
collecting a fee on a EWCP loan more than once a year and
prevents the Administration from assessing a fee on capital
that is not accessed by a small business. Currently, the SBA
fee on the EWCP loan is assessed on a monthly basis for the
loan amount draw down. Due to the inherent risk of export and
trade finance loans, the current arrangement places a
significant burden on borrowers and also creates problems for
lenders administering the loan.
This section of the legislation also updates and codifies
the SBA's Export Express Loan Program. The Export Express Loan
program enables small exporters to obtain SBA backed financing,
loans, and lines of credit of up to $250,000. The SBA provides
expedited eligibility review and provides a response in less
than 24 hours enabling small exporters to obtain access to
their funds faster. Currently, the maximum Export Express line
of credit or loan amount is $250,000. Participating banks
receive an 85-percent guarantee on loan amounts up to $150,000,
and 75 percent on loan amounts between $150,000 and $250,000.
Despite several years of declining loan volume for the
program, in FY 2009 the Export Express Loan Program doubled in
volume and was by far the most popular SBA trade loan program
that fiscal year. Accordingly, this section of the bill
establishes the Export Express Loan Program as a permanent SBA
international trade finance program. The bill also raises the
maximum amount of an Export Express loan from $250,000 to
$500,000, and adjusts the guarantee percentage on a loan made
through the program, increasing the guarantee from 85 percent
to 90 percent for a loan of less than $350,000, and sets a 75-
percent guarantee for a loan of $350,000 to $500,000.
Finally, in an effort to facilitate an awareness for the
SBA's export and trade financing programs among the small
business community, this legislation requires the SBA to
publish an annual listing of banks or lending institutions that
have participated in any of the SBA's export or trade finance
programs in the previous fiscal year, including the ITL, EWCP,
and Export Express loan programs. Currently, each SBA District
Office publishes a list of lenders or lending institutions that
participate in the Agency's major lending programs, such as the
7(a) and 504 loan programs.
However, the list does not specify lenders that participate
in these specific programs and knowledge of the SBA's export
and trade financing lies primarily with the 18 export finance
specialists assigned to USEACs and 9 OIT staff members based in
Washington, DC. As part of the SBA's efforts to better market
and promote their trade financing programs and reach more small
businesses with export potential, the Committee would like to
see a renewed emphasis on making this and other information
related to export opportunities for small businesses, readily
available among District Office staff and also on the SBA's Web
site.
Section 7--State Trade and Export Promotion Program (STEP)
While the SBA should be doing more to reach out to small
businesses with export potential, the Committee realizes that
presently, the Agency has limited resources for this purpose.
Although the improvements made by S. 2862 will, in time, enable
the SBA to perform more outreach to the small business
community, the Committee believes the Agency should attempt to
bridge this gap through programs operated in conjunction with
existing trade and export promotion programs, particularly on
the state level.
In an effort to accomplish these goals, S. 2862 establishes
a three-year State Trade and Export Promotion (STEP) pilot
program to be administered by the SBA. Modeled after the SBA's
Small Business Innovation Research (SBIR) Federal and State
Technology (FAST) program, this program will allow the SBA to
make grants to states with the goal of establishing or
supplementing existing export promotion programs. Specifically,
grants made through the program can be used by states to assist
eligible small businesses in obtaining or using export related
resources, removing trade barriers, participation in foreign
trade missions, foreign market sales trips, subscriptions to
Department of Commerce services, payment of Web site
translation fees, design of international marketing media,
trade show exhibitions, participation in training workshops,
and other initiatives or other export related activities, as
defined by the SBA.
The Committee intends for the STEP program to be accessible
to all states, but particularly those that have demonstrated
success in promoting export opportunities for small businesses,
as well as those states that have demonstrated success in
promoting exports from small businesses in underserved
populations. Accordingly, the STEP program gives priority to
applications by states that: operate existing export promotion
programs with a focus on small business; have demonstrated
success in promoting exports for socially and economically
disadvantaged small businesses, including small businesses
owned or controlled by women and rural small businesses; a
state that does not have one of the top 10 highest percentages
of small exporters; or a state that promotes new-to-market
export opportunities to the People's Republic of China.
To protect taxpayer dollars and mitigate the SBA's risk,
states participating in the program are required to provide
matching funds. Grants are made on a competitive basis and
states may only submit one application per fiscal year. For
states with a high export volume, the federal share of the
program cost is 65 percent. For states that do not have a high
export volume, the federal share of the cost is 75 percent. The
program also includes numerous performance metrics and
oversight mechanisms, including annual reports to congressional
authorizing Committees detailing the number and amount of
grants made by the program during the preceding year, a list of
the states receiving grants through the program, and the
activities being performed with the grant by each state.
Additionally, the SBA Inspector General is required to conduct
a review of the program and report back to Congressional
authorizing Committees on the program's effectiveness,
management structure and oversight mechanisms.
Section 8--Rural export promotion
The SBA's Office of Advocacy estimates that 20 percent, or
about 5.5 million of our nation's 27.7 million small
businesses, are located in rural areas. Small businesses
located in or serving rural communities often faced high fixed
costs when doing business due in large part to difficulties
accessing basic resources such as technology, transportation,
and other business services. As a result, many small businesses
located in rural areas face significant obstacles when
attempting to expand their customer base.
The total number of small businesses located in rural areas
that currently export their goods and services is unclear.
However, according to the most recent data available, the known
value of exports from non-metropolitan statistical areas (rural
regions) equaled $79.7 billion, accounting for about 10 percent
of total U.S. export volume. Despite high, fixed costs
associated with operating a business located in a rural area,
this data suggests that a significant number of businesses
located in rural areas have not only surmounted these
obstacles, but they have also overcome traditional barriers to
trade. This also suggests many other small businesses located
in rural areas have the potential to expand their businesses
through exporting, if provided adequate access to resources and
services to overcome traditional barriers to trade.
The Committee believes that more should be done to assist
small businesses located in rural areas, particularly those
looking to expand their customer base through exporting.
Accordingly, this section of the bill requires those agencies
most closely involved with either export promotion or rural
development for small business, including Department of
Commerce, the Department of Agriculture (USDA) and the SBA, to
report back to the Committee detailing any programs or services
that promote exporting opportunities for rural small
businesses. The report will include information regarding the
level of coordination between these agencies, the effectiveness
of existing rural export promotion programs, efforts to market
existing international trade finance programs through lenders
that serve rural small businesses or those that participate in
USDA financing programs, and recommendations to improve the
existing business counseling and financing programs for each
Agency.
Section 9--International trade cooperation by small business
development centers
In an effort to better leverage existing federal and local
export assistance resources, this legislation requires SBDCs
offering international trade and export counseling services to
consult regularly with state trade promotion agencies and
USEACs. Although the SBA has begun working to incorporate other
existing federal and state-based export assistance resources
into their resource partner network, there are, at most, 35-40
international trade centers currently associated with the SBDC
program. This section of the bill also requires SBDCs to refer
small businesses to these resources when adequate counseling
and technical assistance services are not available at a
center.
Section 10--Small business trade policy
In addition to improving coordination between federal
agencies directly involved in export promotion for small
business, the Committee is concerned that needs and opinions of
small businesses are not being adequately addressed during the
negotiation of trade agreements, particularly as it relates to
trade barriers affecting small businesses. Accordingly, this
bill directs USTR to notify the SBA Administrator 90 days prior
to the start of negotiations on a trade deal, allowing the SBA
time to gather information on the concerns, needs, and opinions
of the small business community. To ensure that this
information is taken into account and incorporated into
negotiations and trade agreements, the SBA Administrator is
required to submit recommendations to USTR no later than 30
days before the negotiations.
VI. COMMITTEE VOTE
In compliance with rule XXVI 7(b) of the Standing Rules of
the Senate, the following vote was recorded on December 17,
2009.
A motion by the Chair to adopt the Small Business Export
Enhancement and International Trade Act of 2009, to reauthorize
the Small Business Administration's (SBA) international trade
programs, was approved by an 18-0 recorded vote with the
following Senators voting in the affirmative: Landrieu, Kerry,
Levin, Harkin, Lieberman, Cantwell, Bayh, Pryor, Cardin,
Shaheen, Hagan, Snowe, Bond, Vitter, Thune, Enzi, Isakson, and
Risch. Senator Wicker: did not vote.
VII. COST ESTIMATE
In compliance with rule XXVI 11(a)(1) of the Standing Rules
of the Senate, the Committee estimates the cost of the
legislation will be equal to the amounts discussed in the
following letter from the Congressional Budget Office:
January 21, 2010.
Hon. Mary L. Landrieu,
Chair, Committee on Small Business and Entrepreneurship,
U.S. Senate, Washington, DC.
Dear Madam Chair: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2862, the Small
Business Export Enhancement and International Trade Act of
2009.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
S. 2862--Small Business Export Enhancement and International Trade Act
of 2009
Summary: S. 2862 would require the Small Business
Administration's (SBA's) Office of International Trade (OIT) to
develop policies and programs to increase the capacity of small
businesses to engage in trade with foreign countries. The bill
would authorize SBA to increase the number of trade finance
specialists working in SBA's export assistance centers and
establish a grant program that would provide funds to states to
help small businesses expand into foreign markets. Finally, the
bill would make several changes to the 7(a) loan program to
ease the financial requirements for loan guarantees to small
businesses engaged in international trade. Assuming
appropriation of the necessary amounts, CBO estimates that
implementing S. 2862 would cost $69 million over the 2010-2015
period. Enacting S. 2862 would not affect direct spending or
revenues.
S. 2862 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 2862 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------
2010 2011 2012 2013 2014 2015 2010-2015
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Grants to States:
Authorization Level.............................. 15 15 15 0 0 0 45
Estimated Outlays................................ 6 20 15 3 1 0 45
Performance Tracking System:
Estimate Authorization Level..................... 1 2 1 1 1 1 7
Estimated Outlays................................ 0 2 1 1 1 1 6
Additional Staff and Costs:
Estimated Authorization Level.................... 2 3 4 4 4 4 21
Estimated Outlays................................ 1 2 3 4 4 4 18
Total:
Estimated Authorization Level.................... 18 20 20 5 5 5 73
Estimated Outlays................................ 7 24 19 8 6 5 69
----------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that S.
2862 will be enacted early in 2010, that appropriations will be
provided in each fiscal year, and that spending will follow
historical patterns. Based on information from SBA, CBO
estimates that implementing S. 2862 would cost $69 million over
the 2010-2015 period.
Grants to states
S. 2862 would authorize the appropriation of $15 million in
each of fiscal years 2010, 2011, and 2012 to establish a pilot
program that would make grants to states to provide assistance
to small businesses that are planning to expand into foreign
markets. CBO estimates that implementing the pilot program
would cost $45 million over the 2010-2015 period, assuming
appropriation of the specified amounts.
Performance tracking system
S. 2862 would require SBA to develop a system to track the
volume of exports produced by small businesses as well as the
OIT's performance toward goals related to increasing export
growth. Based on information from SBA, CBO expects that the
agency would test the tracking system using a pilot program in
the first year and complete full development of the system two
years after enactment of the bill. CBO estimates that
developing and maintaining the system would cost $6 million
over the 2010-2015 period, assuming appropriation of the
necessary amounts.
Additional staff and costs
S. 2862 would direct SBA to fill certain positions to
support trade financing for small businesses that have been
vacant since 2003. Further, SBA would be required to increase
the number of export finance specialists working at its export
assistance centers within two years of the bill's enactment.
Based on information from SBA, CBO estimates that 10 additional
staff positions (two to fill vacancies and eight authorized by
the bill) would be required and would cost $9 million over the
2010-2015 period.
The bill also would require the OIT to develop strategies
and programs to aid small businesses that are engaged in or
affected by international trade. Based on information from SBA,
CBO expects that an additional eight positions would be added
to the OIT to develop programs that provide technical
assistance and counseling in areas such as trade disputes and
remedies as well as intellectual property protection. CBO
estimates that the additional OIT staff would cost $7 million
over the 2010-2015 period.
The bill also would establish a program to certify certain
employees to provide export assistance services to small
businesses. The bill would authorize $350,000 per year for SBA
to reimburse participating business centers for costs incurred
for the certification program. Based on information from SBA,
CBO estimates that implementing this provision would cost $2
million over the 2010-2015 period, assuming appropriation of
the necessary amounts.
SBA loans
Finally, the bill would increase the guarantee amount and
the maximum loan limit for 7(a) loans that would be used for
international trade or foreign market development. Based on
information from SBA, CBO expects that these changes to loan
terms would not have a significant effect on the cost of the
program because of the small number of international trade
loans. CBO estimates that implementing these changes would not
significantly affect discretionary spending.
Intergovernmental and private-sector impact: S. 2862
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would benefit state governments by
establishing a grant program for states to help small
businesses increase their exports. Any costs to state
governments participating in the program would be incurred
voluntarily.
Estimate prepared by: Federal costs: Susan Willie; Impact
on State, local, and Tribal Governments: Elizabeth Cove
Delisle; Impact on the private sector: Sam Wice.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
VIII. EVALUATION OF REGULATORY IMPACT
In compliance with rule XXVI 11(b) of the Standing Rules of
the Senate, it is the opinion of the Committee that no
significant additional regulatory impact will be incurred in
carrying out the provisions of this legislation. There will be
no additional impact on the personal privacy of companies or
individuals who utilize the services provided.
IX. SECTION-BY-SECTION ANALYSIS
Section-by-Section Summary
Section 1. Short title
Section 2. Definitions
Section 3. Office of International Trade
Amends the Small Business Act to establish an Associate
Administrator for International Trade responsible for
administering and overseeing the SBA's international trade
programs and export promotion efforts.
Section 4. Duties of the Office of International Trade
Information distribution network
Requires the Associate Administrator to maintain a
distribution network in cooperation with other Federal
agencies, utilizing SBA regional and district offices, SDBCs,
WBCs, and other SBA resource partners to disseminate
information regarding trade promotion, trade finance, trade
adjustment, and trade assistance programs to small businesses.
Requires OIT to establish annual goals related to the
enhancement of export capabilities of small businesses and
small manufacturers, enabling them to better compete against
foreign entities. Finally, this section requires the office
aggressively market and promote trade programs available
through the SBA.
Regional and district office staffing
Requires the Associate Administrator to ensure that each
SBA regional office is staffed by a full time export
development specialist and also requires that one employee in
each district office be designated as the primary contact for
small business owners seeking information on the SBA's export
and trade assistance programs.
Training programs
Establishes annual training programs for employees of OIT
and also requires the Associate Administrator to develop
training programs for exporters and lenders in conjunction with
the Commerce and other relevant federal agencies.
Export and trade counseling
Requires the SBA to develop criteria to certify employees
of each SBDC state network in export assistance counseling.
WBCs are also eligible to participate in the program. The
Administrator is required to reimburse SBDCs and WBCs for any
fees associated with the certification process.
Trade dispute assistance
Directs the Associate Administrator to carry out a
comprehensive program to provide technical assistance and
reference materials to small businesses for the purpose of
resolving trade disputes, or to address unfair international
trade law practices.
Oversight of export finance programs
Directs the Associate Administrator to appoint at least one
trade finance specialist within OIT to oversee the agency's
export finance programs and to assist SBA employees with trade
finance issues.
Performance metrics and reporting requirements
Directs the Associate Administrator, in coordination with
TPCC member agencies and the SBDC network, to develop and
establish a system for tracking exports by small businesses.
This section also directs the Associate Administrator to
develop performance measures to support and assist with
development of export growth goals for the office.
Finally, this section also establishes annual reporting
metrics for OIT and requires the Administrator to submit a
report to Congress within 60 days of enactment of the
legislation, regarding the travel activities of the office
during the last five years.
Section 5. Export assistance centers
Export finance specialist staffing levels
Directs the SBA Administrator to ensure that there are at
least 22 SBA specialists assigned to USEACs by January 1, 2010.
Additionally, this section requires that at least three export
finance specialists are assigned to each SBA region within two
years of enactment, bringing the total number to 30.
Assignment of export finance specialists and annual goals
Gives priority of placement in filling staff vacancies to
those centers that have been without an export finance
specialist since 2003, and requires that the Associate
Administrator designate an individual within OIT to oversee the
activities of export finance specialists assigned to USEACs.
Additionally, the legislation directs the Associate
Administrator to establish shared annual goals for the centers
in cooperation with Commerce and Ex-Im Bank.
Study on high and low volume export areas
This section directs the SBA to conduct a bi-annual study
analyzing gaps in coverage for export finance specialists
assigned to USEACs located in high and low-volume export areas.
The Administrator is required to submit a report to Congress on
the results of the study, as well as recommendations regarding
future assignments of specialists.
Section 6. International trade finance programs
International trade loans (ITL)
This section raises the maximum amount of an ITL from $2
million to $5 million and increases the total outstanding
amount of an ITL guaranteed by the SBA from $1.5 million to
$4.5 million, reflecting a newly established 90-percent
guarantee for the program. It allows working capital as an
eligible use of ITLs, and increases the maximum amount
available for export working capital, supplies, or financing.
In addition, it allows ITLs to be secured by a second lien
position on property or equipment financed by the loan, or on
other assets of the small business.
Export working capital loan program (EWCP)
Increases the maximum amount of an EWCP from $2 million to
$5 million, and allows any lender participating in the Ex-Im
Bank's Delegated Authority Lender Program to participate in the
SBA's Preferred Lenders Program. Additionally, this section
prohibits the Administrator from collecting a fee on a EWCP
loan more than once a year and prevents the Administration from
assessing a fee on capital that is not accessed by a small
business.
Export express program
Raises the maximum amount of an Export Express loan from
$250,000 to $500,000. This section also adjusts the guarantee
on a loan made through the program, increasing the guarantee
from 85-percent to 90-percent for a loan that is less than
$350,000, and establishes a 75-percent guarantee for a loan of
$350,000 to $500,000.
Annual listing of export finance lenders
Requires the Administrator to publish an annual listing of
banks or lending institutions that participated in any of the
SBA's export or trade finance programs in the previous fiscal
year, including the ITL, EWCP, and Export Express loan
programs.
Section 7. State Trade and Export Promotion Grant Program (STEP)
Establishment and eligibility
Establishes a three-year trade and export promotion pilot
program. Modeled after the SBA's SBIR-FAST program, the purpose
of STEP is to make grants to states with the goal of increasing
the number of small businesses that export, or to increase the
value of the exports by small businesses. Grants can be used to
assist eligible small businesses in obtaining or using export
related resources or removing trade barriers, including
participation in foreign trade missions, foreign market sales
trips, subscriptions to Department of Commerce services,
payment of website translation fees, the design of
international marketing media, trade show exhibitions,
participation in training workshops, and other initiatives as
determined by the SBA.
Priority is given to applicants from states that: operate
export promotion programs with a focus on small business; have
demonstrated success in promoting exports for socially and
economically disadvantaged small businesses, small businesses
owned or controlled by women and rural small businesses; do not
have one of the top 10 highest percentages of small exporters;
or a state that promotes new-to-market export opportunities to
the People's Republic of China.
Competitive requirements and federal share
Grants are made on a competitive basis and states may only
submit one application per fiscal year. The total amount of
funding awarded to the 10 states with the highest percentage of
small exporters cannot be more than 50-percent of funds
appropriated in a fiscal year. The federal share of the costs
is not more than 65-percent for a state with a high export
volume, and not more than 75-percent for a state that does not
have a high export volume.
Reporting requirements
Requires the Associate Administrator to submit a report to
Congress that includes a description of the procedures for
administering the program, as well as a management plan and a
description of the merit based review process.
This section also requires the Associate Administrator to
submit an annual report to Congress outlining the number and
dollar amount of grants made under the program during the
preceding year, the activities being performed with the grant,
and the effect of each grant on exports by eligible small
businesses in states participating in the program. A review of
the program by the SBA's Inspector General is also required.
Authorization of appropriations
The bill authorizes $15 million to be appropriated for each
fiscal year, FY 2010-FY 2012, to carry out the program.
Section 8. Rural export promotion
This section requires the Administrator, in coordination
with the Secretary of Commerce and the Secretary of
Agriculture, to submit a report to Congress detailing any
programs offered by their respective agencies that promote
export opportunities for rural small businesses. The report
will detail the level of coordination between agencies involved
administering these programs, and will provide recommendations
regarding improvements to existing programs, or for the
creation of new rural export promotion programs for small
businesses.
Section 9. International trade cooperation by small business
development centers
Requires that SBDCs offering international trade counseling
services consult with state trade promotion agencies and
USEACs. This provision also requires SBDCs to refer small
businesses to these resources as appropriate.
Section 10. Small business trade policy
Directs USTR to notify the SBA 90 days prior to the start
of trade negotiations. This section also requires SBA to submit
recommendations to the USTR no later than 30 days before the
start of trade negotiations.