Throughout 2018, CAMEO’s advocacy efforts included backing policies that increased support for small business and community development institutions, programs for rural entrepreneurs, more funding for microloans, and an improved tax code to benefit microentrepreneurs. While we saw advancements in some of these priorities, others saw little to no action from lawmakers.
Here are the results of last year’s advocacy – many of these line items hopefully will be worked out in the next couple of weeks now that the government is back to work:
Increase Support for Community Development Financial Institutions (CDFI)
Community Development Financial Institutions (CDFIs) are private financial institutions that are 100% dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged communities.
CAMEO supports increasing funding for the CDFI Fund to $300M and for CDFI BGP to $1B for FY2019.
Outcome: The Senate bill funds the CDFI Fund at $250M and BGP at $500M. The House bill funds the CDFI Fund at $216M and BGP at $500M. These bills have not been reconciled.
Increase Support for Small Business Development Centers (SBDCs)
SBDC advisors provide small business owners a variety of free business consulting and low-cost training services including: business plan development, manufacturing assistance, financial packaging and lending assistance, exporting and importing support, disaster recovery assistance, procurement and contracting aid, market research help, 8(a) program support, and healthcare guidance.
CAMEO supports increasing funding for SBDCs to $140M for FY2019.
Outcome: The Senate and House bills fund SBDCs at $130M.
Support Women’s Business Centers
Women’s Business Centers help women succeed in business by providing training, mentoring, business development and financing opportunities.
CAMEO supports an increase in funding for WBCs to $21.75M for FY2019.
Outcome: The Senate bill funds WBCs at $18M. The House bill funds WBCs at $19M thanks to an amendment by Stephanie Murphy (D-FL). We have advocated for adoption of the House level. The bills have yet to be reconciled.
Increase Support for PRIME
SBA’s Program for Investment in Microentrepreneurs (PRIME) creates an on-ramp for low-income entrepreneurs by providing grants to intermediary organizations to help low-income entrepreneurs who lack sufficient training and education with technical assistance (TA) as they prepare to seek access to capital.
CAMEO supports increasing PRIME funding to $10M for FY2019.
Outcome: The Senate bill funds PRIME at $2.5M. The House bill funds PRIME at $5M. We have advocated for adoption of the House level. The bills have yet to be reconciled.
Continue Support for Rural Entrepreneurs
Rural entrepreneurial programs are vital to the survival and success of microentrepreneurs in California. CAMEO supports maintaining the following USDA programs:
- Intermediary Relending Program: This USDA community development program is designed to alleviate poverty, create jobs, and spur economic development in rural areas near towns with a population of 50,000 or less.
CAMEO supports a program level of $19M for FY2019.
Outcome: The Senate bill funds IRP at $20M. The Senate bill funds IRP at $18.9M. The bills have not yet been reconciled.
- Rural Business Development Grants (RBDG): These competitive business development grants provide targeted technical assistance to rural small businesses with less than $1M in revenue and fewer than 50 employees.
CAMEO supports a program level of $35M for FY2018.
Outcome: The House bill funds RBDG at $34M. The Senate bill funds RBDG at $40.3M. The bills have not yet been reconciled.
- Value-Added Producer Grants: The Value-Added Producer Grant Program (VAPG) offers competitive grants to farmers and ranchers to develop farm and food-related businesses that boost overall farm income and create jobs.
CAMEO supports a program level of $11M for FY2019.
Outcome: The House and Senate bills fund VAPG at $17.5M.
- Rural Microentrepreneur Assistance Program: This program provides business training and microloans to owner-operated businesses with up to ten employees. It targets rural small business development and is the only federal program that finances the capitalization of revolving microloan funds for rural areas.
CAMEO supports a program level of $3M for FY2018.
Outcome: The House and Senate bills both zeroed out RMAP.
Improve Microloan Technical Assistance
The SBA Microloan program provides loans to qualified non-profit, community-based organizations, known as intermediaries, who then provide short-term loans, of up to $50,000, to eligible entrepreneurs and small business owner.
The program’s lending cap is $5M, and it includes a provision known as the 25/75 technical assistance rule, where micro-lenders are required to spend at least 75% of their technical assistance grant funding on actual microloan borrowers (post-loan technical assistance), and only 25% of expenditures on up-front, pre-loan technical assistance. The repeal of the 25/75 rule would provide intermediaries with more flexibility to design support services that address the specific needs of borrowers and help get more borrowers loan ready.
Outcome: CAMEO supported the Microloan Modernization Act of 2017, which passed in different forms in 2018: The bill Increases from $5M to $6M the total amount of loans outstanding and committed to any intermediary from the SBA loan and investment fund for the remainder of the intermediary’s participation in the program. This portion passed the Senate by voice vote over the summer (no action was taken in the House). The bill also allows Intermediaries to expend up to 50% (previously 25%) of TA funds. This portion of the bill passed as part of the NDAA.
Improve the Tax Code for Microentrepreneurs
The “Tax Cuts and Jobs Act” provided much-needed tax relief and parity for entrepreneurs and microbusinesses. However, complexity and uncertainty remain. H.R. 3717, a bipartisan bill introduced by House Small Business Committee Chair Steve Chabot and Ranking Member Nydia Velazquez, will improve the “Tax Cuts and Jobs Act” for entrepreneurs and microbusinesses. Over the past 30 years, our economy has undergone a seismic technological and demographic shift. Tech-savvy millennials are now the largest segment of the U.S. workforce, and tech firms such as Uber and Lyft have fueled an explosion of the “gig economy.” This evolution has created a nebulous understanding of the difference between an “employee” and a “contractor” with regard to tax compliance.
CAMEO supports the inclusion of H.R. 3717 as part of legislation to improve the “Tax Cuts and Jobs Act.”
Outcome: No action was taken on this bill in either Chamber.