S-5633-119
Read twice and referred to the Committee on Small Business and Entrepreneurship.
Sponsored by Jeanne Shaheen (D-NH)
What it does
This bill would amend the Small Business Act to extend authorization of the State Trade Expansion Program (STEP) for fiscal years 2027 through 2031. It would set application and award deadlines, require a concise application, cap year-over-year grant cuts at 80 percent of the prior award (with exceptions), and set minimum state and territory shares. A formula based on export results and other factors would replace competitive awards once funding is at least $30 million for a second consecutive year. It would also add reporting, survey, and data-collection duties, allow states to revise budget plans, and limit the staff information the SBA may collect. Other limits apply.
Who benefits
State and territorial trade offices that run STEP and would gain predictable deadlines, a floor on funding cuts, faster reimbursement processing, and fewer reporting burdens. Small exporters, including first-time exporters, rural, women-owned, and economically distressed businesses, whose states may receive formula weight for serving them. Smaller states that would receive minimum shares of 0.75 percent (0.5 percent for territories). Congress, which would receive monthly obligation reports and more detailed performance data.
Who is hurt
States with strong export results that could receive less than under a purely competitive process, because of minimum shares and the 10-to-1 limit on formula spread. The SBA's Office of International Trade, which would take on added deadlines, surveys, reports, and reimbursement-timing duties, with cost and staffing effects uncertain. Taxpayers, since the bill would authorize federal spending for five more years. States that underuse grants or draw large amounts could see reduced future awards, and states must meet the non-federal matching requirement.
Supporters argue
Supporters argue the program helps small businesses reach foreign markets and that states need predictable timelines, clear award criteria, and protection against sudden cuts to plan trade staff and missions. They contend the formula, which rewards export sales, new exporters, and new markets, ties money to measurable results, while expanded reporting to Congress improves oversight and streamlined applications reduce administrative waste.
Opponents argue
Opponents argue that guaranteed minimum shares and caps on cuts would reduce the SBA's ability to direct money to the strongest applicants and could lock in funding regardless of performance. They contend the bill adds new reporting and survey duties for the agency and renews five years of spending authority without showing that the grants raise exports beyond what businesses would achieve anyway.
Constitutional context
Congress's authority rests on the Spending Clause and the Commerce Clause (Art. I, §8), including its power to promote foreign commerce, and conditions on state grants must be clearly stated and related to the program under South Dakota v. Dole (1987). The bill raises no significant constitutional question beyond those spending powers.
Checks and balances
Congress gains oversight through new reports and formula requirements that limit SBA discretion, while the SBA administers the grants; appropriations remain subject to annual congressional approval.
Historical precedent
Congress created STEP in the Small Business Jobs Act of 2010 and previously reauthorized it, most recently through fiscal year 2020 per the bill's text, and the bill references a 2024 modernization bill.