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1 1 (June 28, 2022)

handle is hein.crs/govehxl0001 and id is 1 raw text is: Congressional Research Service gamaswaIm nforming the Iegitive debate since 1914 June 28, 2022 The Small Business Administration's State Trade Expansion Program American small businesses regularly export to international markets, contributing to both domestic and global economies by trading with approximately 95% of the world population living outside the United States. But due to factors such as lack of experience or resources, some small businesses may encounter initial challenges breaking into or expanding their operations in foreign countries. Starting in 2011, the Small Business Administration's (SBA's) State Trade Expansion Program (STEP) has helped address these hurdles by offering competitive grants for projects that help eligible small business concerns (ESBCs) build their export activities. STEP awards are one of several SBA programs to promote small business exports. While other programs offer loans and management and training assistance, STEP is unique in that it offers grants. STEP awards provide funding for a two-year period. For FY2022, the grants offered ranged from $100,000 to $2 million per year, for a maximum award of $4 million. For FY2020, the most recent year for which data is available, STEP awarded 47 grants totaling $18 million. The program has three specific goals: increase the number of small businesses exporting; increase the dollar value of U.S. small business exports; and increase the number of small businesses exploring significant new trade opportunities, which includes both new export opportunities and expansions. Recent Legslation STEP, which Congress permanently authorized in the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114- 125), has been the focus of significant legislative activity in recent years. In 2021, the House-passed Build Back Better Act (H.R. 5376) would appropriate $30 million for STEP from unappropriated Department of the Treasury funds each fiscal year from FY2022 to FY2025. The funds would remain available to the program for three fiscal years. The CARES Act (P.L. 116-136) extended the utilization period for STEP awards made in FY2018 and FY2019, making them available through FY2021. The CARES Act also allowed the SBA Administrator to reimburse grant recipients for financial losses related to canceled foreign trade shows and missions. The 116th Congress debated the STEP Improvement Act of 2020 (H.R. 6133). The bill would have required the SBA to collect additional performance data on the program and its recipients, including (1) the total number of ESBC awardees, disaggregated by socially and economically disadvantaged status, women-owned status, and rural status; (2) the number of ESBCs that have accessed a new market due to STEP; and (3) the number of small businesses that have created new jobs through STEP. The legislation also would have required the SBA to conduct an annual survey to gather feedback on STEP. In debate on the bill, some Members of Congress argued that STEP was especially important as the international economy recovered after the COVID-19 pandemic and exporting small businesses sought to reestablish operations. The bill passed the House and was referred to the Senate Committee on Small Business and Entrepreneurship, but did not advance further. ST EP Hkitory, Uses, and Outcomes Congress authorized the SBA to create a three-year State Trade and Export Promotion pilot grant program-a predecessor to the current STEP-in the Small Business and Jobs Act of 2010 (P.L. 111-240). Program advocates argued it would help small businesses and promote job creation following the Great Recession. The pilot program was funded for two years ($30 million in both FY2011 and FY2012), was not funded in FY2013, and the current version of STEP has received appropriations each year since ($20 million in FY2022). In 2016, Congress passed the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125), giving the program its current name and permanent statutory authority. This law authorized STEP to competitively award grants to all states, the District of Columbia, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. STEP grant funds may be used for the following purposes: 0 0 participation in foreign trade missions; Department of Commerce subscription services; website fee payment; marketing media design; trade show exhibition; participation in export training workshops; reverse trade missions; procurement of consulting services; and other export initiatives, which must be deemed appropriate by the SBA's Office of International Trade Associate Administrator or Deputy Associate Administrator. Other program provisions differ slightly among states. The 10 states with the largest number of small business exporters can receive no more than 40% of awarded STEP grants. STEP awards have a matching requirement. For

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