Virginia lawmakers voted to redefine the term "small business" to follow regulations set by the Small Business Administration.
In a move that took two years to accomplish, Virginia
legislators voted to redefine small business to match the
Small Business Administration’s size standard.
However, the legislation
won’t go into effect for at least another year to allow for additional review.
Brought to the forefront by Del. Alfonso Lopez, the bill’s goal is to make it easier for
smaller businesses to qualify for state procurement jobs. Governor McAuliffe
approved the legislation in March.
The SBA has strict standards when it comes to determining
whether a business is considered small or not. This designation can have a big
impact on which businesses can apply for programs and federal procurement bids
on government contracts. The small business distinction is based on industry, with standards for net worth, gross
annual receipts and number of employees.
Virginia has a broader definition of small business than the
SBA. This includes 95 percent of Virginia businesses and allows larger
companies to utilize the small business distinction for state procurement bids.
Currently, a business is considered “small” in Virginia if it has fewer than
250 employees or average gross
annual receipts of $10 million or less over the previous three years.
By redefining which establishments qualify as a “small
business” in Virginia, there is hope that this will create an even playing
field for smaller companies.
“Virginia’s small businesses are the backbone of our economy
– we need to make sure they have every opportunity to grow and thrive,” Del.
Alfonso Lopez, patron of the Virginia house version of the bill, told Inside
NOVA.
The bill would also require the Secretary of Commerce and
Trade to create a group to examine the potential impact this new policy would
create. The group must report the findings to the General Assembly and Governor
of Virginia, according to the bill.
Similar bills are reaching the national level. U.S.
Representatives Mike Bost (R-IL) and Gerry Connolly (D-VA) have introduced a
bipartisan bill dubbed the Stronger Voice For Small Business Act. The bill
would enable businesses to appeal their designation as a small or big business
directly to the SBA’s Office of Hearings and Appeals. This may help more
businesses qualify for SBA programs.
“The SBA’s designation of a business as large or small has a
major impact in determining whether they can apply for lending or financial
assistance programs or whether they receive preference in the sale of goods and
services to the federal government,” Bost said in a statement. “In order to
grow jobs and hire more workers, small businesses must have certainty and a
clearer definition of the guidelines used to determine their size and status.”
If you have
concerns about the proposed new definition, contact Nicole Riley, Virginia
State Director, at 804-377-3661 or [email protected].
We will be participating with the workgroup over the next year.
