Bill to clarify Runway Extension Act

Declares Runway Extension Act effective since 12/17/2018

      The House Small Business Committee is addressing the controversy over the effective date of last year’s Small Business Runway Extension Act.

      The act was approved by Congress last year but there is an ongoing dispute over whether it is in effect.

      The small business committee on May 1 approved HR 2345, “Clarifying the Small Business Runway Extension Act,” with an amendment that states that the runway law has been in effect since Dec. 17, 2018.

      The runway law allows contractors with revenues-based size standards to calculate their average revenues over five years, rather than three years as was previously the rule. This allows some firms to remain small for a longer period of time.

      The law was signed by the president in December 2018 without stating an effective date. While industry members have asserted that the law went into effect immediately, the Small Business Administration has said the law won’t be effective until regulations are promulgated and made final. SBA officials additionally have stated that the law does not apply to SBA.

      “The SBA has postponed its implementation, creating confusion and challenges for small businesses competing for federal contracts,” small business committee Chair Nydia Velazquez, D-NY, wrote in a press release.

      Under the so-called “clarifying” legislation, introduced by Reps. Pete Stabuer, R-MN, and Jared Golden, D-ME, the SBA would be subject to the law, and it directs the SBA to issue a final rule implementing the law no later than Dec. 17, 2019. The committee unanimously backed an amendment stating that the runway law has been in effect since Dec. 17, 2018.

      The committee approved five additional legislative proposals:

• HR 277 - raises the minimum loan amount for which SBA may require collateral to $25,000, from $14,000;
• HR 2142, which sets up an SBA website to help small businesses comply with new laws and regulations;
• HR 2331, which would strengthen the SBA’s handling and reporting of cyber threats affecting small businesses;
• HR 1649, which would require the SBA to establish, or certify, an existing cyber counseling certification program to certify employees at small business development centers; and
• HR 1648, which establishes SBA’s Small Business Development Centers as the primary interface for federal small business information sharing.

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