[House Hearing, 107 Congress]
[From the U.S. Government Printing Office]




  TO INVESTIGATE THE LEGISLATION THAT WOULD INCREASE THE EXTENT AND 
 SCOPE OF THE SERVICES PROVIDED BY SMALL BUSINESS DEVELOPMENT CENTERS

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON WORKFORCE,
                  EMPOWERMENT, AND GOVERNMENT PROGRAMS

                                 of the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                     WASHINGTON, DC, JULY 19, 2001

                               __________

                           Serial No. 107-20

                               __________

         Printed for the use of the Committee on Small Business


                   U.S. GOVERNMENT PRINTING OFFICE
75-226                     WASHINGTON : 2001

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                      COMMITTEE ON SMALL BUSINESS

                  DONALD MANZULLO, Illinois, Chairman
LARRY COMBEST, Texas                 NYDIA M. VELAZQUEZ, New York
JOEL HEFLEY, Colorado                JUANITA MILLENDER-McDONALD, 
ROSCOE G. BARTLETT, Maryland             California
FRANK A. LoBIONDO, New Jersey        DANNY K. DAVIS, Illinois
SUE W. KELLY, New York               WILLIAM PASCRELL, New Jersey
STEVEN J. CHABOT, Ohio               DONNA M. CHRISTIAN-CHRISTENSEN, 
PATRICK J. TOOMEY, Pennsylvania          Virgin Islands
JIM DeMINT, South Carolina           ROBERT A. BRADY, Pennsylvania
JOHN THUNE, South Dakota             TOM UDALL, New Mexico
MIKE PENCE, Indiana                  STEPHANIE TUBBS JONES, Ohio
MIKE FERGUSON, New Jersey            CHARLES A. GONZALEZ, Texas
DARRELL E. ISSA, California          DAVID D. PHELPS, Illinois
SAM GRAVES, Missouri                 GRACE F. NAPOLITANO, California
EDWARD L. SCHROCK, Virginia          BRIAN BAIRD, Washington
FELIX J. GRUCCI, Jr., New York       MARK UDALL, Colorado
TODD W. AKIN, Missouri               JAMES R. LANGEVIN, Rhode Island
SHELLEY MOORE CAPITO, West Virginia  MIKE ROSS, Arkansas
BILL SHUSTER, Pennsylvania           BRAD CARSON, Oklahoma
                                     ANIBAL ACEVEDO-VILA, Puerto Rico
                  Phil Eskeland, Deputy Staff Director
                  Michael Day, Minority Staff Director
                                 ------                                

    Subcommittee on Workforce, Empowerment, and Government Programs

                  JIM DeMINT, South Carolina, Chairman
FRANK LoBIONDO, New Jersey           JUANITA MILLENDER-McDONALD, 
MIKE FERGUSON, New Jersey                California
FELIX GRUCCI, New York               DANNY DAVIS, Illinois
DARRELL ISSA, California             STEPHANIE TUBBS JONES, Ohio
ED SCHROCK, Virginia                 CHARLES GONZALEZ, Texas
SHELLY MOORE CAPITO, West Virginia   MIKE ROSS, Arkansas
                                     DONNA CHRISTIAN-CHRISTENSEN, 
                                         Virgin Islands
                  Nelson Crowther, Professional Staff


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 19, 2001....................................     1

                               Witnesses

Sweeney, Hon. John E., Member, U.S. House of Representatives.....     2
Udall, Hon. Tom, Member, U.S. House of Representatives...........     4
Brady, Hon. Robert A., Member, U.S. House of Representatives.....     5
Wilson, Donald T., Executive Director, Association of Small 
  Business Development Centers...................................     9
Grumbles, Thomas G., Vice President, American Industrial Hygiene 
  Association....................................................    10
Cartier, Rudolph, Small Business Ombudsman, State of New 
  Hampshire......................................................    12
Conroy, Christian, Associate State Director, Pennsylvania Small 
  Business Development Centers...................................    14
Lopez, Leonard, Sun Valley Express (Convenience Store)...........    16

                                Appendix

Opening statements:
    DeMint, Hon. Jim.............................................    24
Prepared statements:
    Sweeney, Hon. John E.........................................    27
    Udall, Hon. Tom..............................................    30
    Brady, Hon. Robert A.........................................    36
    Wilson, Donald T.............................................    37
    Grumbles, Thomas G...........................................    45
    Cartier, Rudolph.............................................    57
    Conroy, Christian............................................    61
    Lopez, Leonard...............................................    67

 
TO INVESTIGATE THE LEGISLATION THAT WOULD INCREASE THE EXTENT AND SCOPE 
     OF THE SERVICES PROVIDED BY SMALL BUSINESS DEVELOPMENT CENTERS

                              ----------                              


                        THURSDAY, JULY 19, 2001

Subcommittee on Workforce, Empowerment, and
                               Government Programs,
                               Committee on Small Business,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m. in 
room 311, Cannon House Office Building, Hon. Jim DeMint 
[chairman of the Subcommittee] presiding.
    Mr. DeMint. We are officially convened. I appreciate 
everyone being here. As you know, we will probably have a vote 
very quickly and we will adjourn, but it would probably be a 
good idea to go ahead and begin the hearing to see if we can 
get in some of the testimony before the first vote.
    I do want to welcome all of you and particularly you, Mr. 
Sweeney. I appreciate the ideas behind your bill and your being 
here to tell us a little bit about it, so I look forward to 
that.
    Today, the Subcommittee has three bills before us that 
would expand the extent and the scope of the services provided 
by the Small Business Development Centers that we usually refer 
to as the SBDCs. There are three legislative proposals under 
consideration that we will hear about.
    The first is H.R. 203, the National Small Business 
Regulatory Assistance Act of 2001, introduced by Congressman 
Sweeney of New York. This would direct the Administrator of the 
Small Business Administration to establish a pilot program to 
provide regulatory compliance assistance to small business 
concerns through participating SBDCs.
    Under H.R. 203, small businesses would be able to receive 
confidential counseling regarding compliance with federal 
regulations, provided that such counseling does not constitute 
the practice of law. In addition, SBDCs would provide to small 
businesses training and educational activities, technical 
assistance and referrals to experts and other providers of 
compliance assistance. The bill is aimed at helping small 
businesses cope with the maze of federal regulations, a good 
example of the federal government creating the problem and then 
coming in to solve it.
    The next legislative proposal, sponsored by Congressman 
Brady of Pennsylvania, who I assume will be here after the 
vote, would permit the SBA to make grants to SBDCs to enable 
them to provide technical assistance to secondary schools or to 
post secondary vocational and technical schools for the 
development and implementation of curricula designed to promote 
vocational and technical entrepreneurship.
    The third which has been dropped, H.R. 2538, is sponsored 
by Congressman Udall of New Mexico. It would authorize the SBA 
to make grants to SBDCs for the purpose of providing 
entrepreneurial assistance to Native Americans, Native Alaskans 
and Native Hawaiians in starting, operating and growing small 
businesses. The legislation is aimed at stimulating the 
economies of areas served and to promote job creation.
    The Subcommittee would appreciate everyone's views. We will 
be looking forward to hearing everyone. John, I think the best 
idea, if you do not mind, is we will go vote and come back, 
unless you would prefer to make your statement and then we will 
go vote.
    [Mr. DeMint's statement may be found in appendix.]
    Mr. Sweeney. Well, Mr. Chairman, my statement is very 
brief, so I think I could actually make the statement and get 
us over there. How much time do we have?
    Mr. DeMint. I would like the Ranking Member to have the 
opportunity to make a statement. Let us see if we can fit in 
these two statements before we vote.
    Ms. Millender-McDonald.
    Ms. Millender-McDonald. Thank you. Good morning, Mr. 
Chairman.
    Since I will be here for a little while after we return 
back, I will defer to our colleague, Congressman Sweeney, if 
you have a short one so that we can get to the Floor to vote 
and then return back. At that time, I will make my statement if 
it is okay with you.
    Mr. DeMint. Thank you. Thank you very much.
    Congressman Sweeney.
    Mr. Sweeney. I thank the Chairman and the Ranking Member, 
and I will shock you both by giving a very brief statement.
    Mr. DeMint. I will be shocked.
    Mr. Sweeney. I also want to compliment you on your choice 
of hearing rooms. This is a great historic place, and I think 
it showed some real contemplation.
    I am going to submit for the record an extended statement.

 STATEMENT OF CONGRESSMAN JOHN E. SWEENEY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Sweeney. For nearly 25 years, Congress has recognized 
that small businesses face substantial regulatory burdens. I, 
like you, have a substantial number of constituents in jobs 
created out of my district by small businesses, some 90 percent 
in New York's 22nd Congressional District, and I think that 
mirrors the vast majority of Members of Congress.
    In the spirit of helping these entrepreneurs, I have 
introduced H.R. 203, the National Small Business Regulatory 
Assistance Act. This legislation would assist small businesses 
in successfully finding their way through the maze of 
regulations that have proliferated in recent years.
    Last year, after a great deal of effort during the 106th 
Congress, and I was proud to be a Member of this Committee, we 
breathed new life into what began as an outstanding initiative, 
but had little prospect for implementation. This improved 
legislation has a proven record of support as witnessed on 
September 26 of last year when the House passed the National 
Small Business Regulatory Assistance Act by voice vote.
    H.R. 203 would amend the Small Business Act to establish a 
pilot program in 20 states. The Administrator, in consultation 
with the National Association of Small Business Development 
Centers, SBDCs, would select two states from each of the ten 
federal regions for participation in the program. This is a 
compromise that has been worked out over the last year.
    Within the pilot program, SBDCs would develop partnerships 
with federal agencies and be a point of contact for small 
businesses to turn to free of charge for confidential advice 
concerning regulatory compliance. This type of cooperation, Mr. 
Chairman and Ranking Member, is not new. Some SBDCs have 
already been thinking outside the box and providing that kind 
of service. They have fostered relationships with different 
federal agencies and independent compliance groups to build 
upon each other's resources.
    H.R. 203 is not meant to replace current regulatory 
compliance programs, but supplement them when relevant 
participating SBDCs may refer businesses to existing regulatory 
compliance programs. This bill is intended to take these 
successes and apply them nationwide to ensure safety in the 
workplace, to ensure compliance with all sorts of different 
regulatory requirements of the federal government.
    There are a number of examples, including examples within 
my own district, and I simply would say that as a former 
regulator--I was New York's Labor Commissioner before coming to 
Congress--I recognize both the importance that the government 
plays, the important role the government plays in providing 
regulatory oversight for the safety and health of both people 
who work at businesses or people who are using those 
businesses, and I also understand the need to try to link and 
better link those in the business community to those regulatory 
underpinnings so that we achieve the fundamental goal.
    It simply is not a matter of having more regulation and 
more rules, Mr. Chairman. It is really a matter of finding the 
easy and the right way or, I should say, the correct way, not 
the easy way, for businesses to be able to comply.
    With that, I will thank you again, submit my statement for 
the record and answer any questions you might have.
    [Mr. Sweeney's statement may be found in appendix.]
    Mr. DeMint. Thank you, Congressman. We do need to leave, 
but if there is a quick question from the Ranking Member?
    Ms. Millender-McDonald. Just one question, Mr. Chairman. 
Thank you so much for your indulgence.
    Mr. Sweeney, thank you so much for your presentation. We 
will submit your statement for the record. I just wanted to ask 
the funding source, given that there is no authorization levels 
in this proposal.
    Mr. Sweeney. And there is not a need to. This is without 
cost because the SBDCs have already indicated the capacity to 
be able to provide this service, and indeed they have in some 
areas. This is an attempt on our part to nationalize what we 
think is a program within the SBDCs that has worked.
    Mr. DeMint. Thank you. We are adjourned until 10:30.
    [Recess.]
    Mr. DeMint. Let us continue with the testimony. I assume 
some of our colleagues will join us later, but since we have a 
bipartisan mix here in the room, Tom, we will continue.
    We want to hear from two additional Congressmen on two 
additional pieces of legislation. Tom, since you are to my 
immediate left we will hear from Congressman Tom Udall from New 
Mexico, and then we will go to Congressman Robert Brady.
    Is that okay, that order?
    Mr. Brady. Sure.

 STATEMENT OF CONGRESSMAN TOM UDALL, A REPRESENTATIVE FROM THE 
                      STATE OF NEW MEXICO

    Mr. Udall. Thank you. Thank you very much, Chairman DeMint. 
It is a pleasure to be here with you today.
    Good morning, and I thank you for this opportunity to speak 
to the Committee about my proposal, which would establish a 
three year pilot project providing grants to SBDCs for 
assisting Native American, Native Alaskan and Native Hawaiian 
populations with their small business development needs.
    Today we have demonstrated how important small business 
enterprise is to the health of our economy, but there are still 
places in this country where economic prosperity has often 
failed to reach. These areas deserve our attention and 
assistance.
    Consider this. Nowhere in America has poverty persisted 
longer than on or near Native American reservations, which 
suffer an average unemployment rate of 45 percent. However, the 
number of businesses owned by Indian tribe members and Native 
Alaskans grew by 84 percent from 1992 to 1997, and their gross 
receipts grew by 179 percent in that period. This is compared 
to all businesses, which grew by seven percent, and their total 
gross receipts grew by 40 percent in that period.
    I would like to continue this growth and expansion of small 
enterprise with the Native American Small Business Development 
Act, H.R. 2538. My bill ensures that Native Americans, Native 
Alaskans and Native Hawaiians seeking to create, develop and 
expand small businesses have full access to the counseling and 
technical assistance available through the SBA's SBDC program.
    The business development tools offered by the SBDCs can 
assist Native Americans with the information and opportunity to 
build sustainable businesses in their communities. The Native 
American Small Business Development Act would permit state 
Small Business Development Centers to apply for federal grants 
to establish one or more Native American Small Business 
Development Centers.
    In an effort to ensure the quality and success of the 
program, the proposal requires grant applicants to provide SBA 
with their goals and objectives, including their experience in 
assisting entrepreneurs with the difficulties in operating a 
small business.
    In addition, the applicant must show their ability to 
provide training and services to a representative number of 
Native Americans, Native Alaskans and Native Hawaiians. Most 
importantly, applicants must seek the advice of the local 
native population on the specific needs and location of these 
services they will provide.
    It is clear we can do more to aid Native American 
entrepreneurs. No doubt, not enough has been done to assist 
Native Americans in building their businesses, which in turn 
helps benefit their community. I hope to change that with my 
proposal.
    In closing, I would like to mention that we will be 
receiving testimony from Mr. Leonard Lopez of Bloomfield, New 
Mexico. Mr. Lopez is opening a convenience store called Sun 
Valley Express on the Navajo Reservation in Shiprock, New 
Mexico. I know that he will provide the Committee with 
firsthand information on the strengths of the SBDC and how this 
proposal will further assist the development of small 
businesses for Native Americans, Alaskans and Hawaiians.
    I would also like to acknowledge the presence of Mr. Roy 
Miller, who is New Mexico's SBDC state director. He is here in 
the crowd.
    I thank the Chair for the opportunity to discuss these 
issues today. Thank you very much, Mr. Chairman.
    [Mr. Udall's statement may be found in appendix.]
    Mr. DeMint. Thank you, Congressman Udall. Can you stay with 
us a few minutes?
    I will hold my questions until we hear from Congressman 
Robert Brady. Thank you for being here.

 STATEMENT OF CONGRESSMAN ROBERT A. BRADY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF PENNSYLVANIA

    Mr. Brady. Thank you, Mr. Chairman. I appreciate this 
opportunity and look forward to discussing my proposal with you 
and with this Committee.
    I would like to introduce Christian Conroy, who is the 
assistant director at our Philadelphia SBDC in Wharton. I asked 
him to join me. I believe he is on the panel, but I asked him 
to join me up here in case you do have questions that I know he 
can answer that I cannot.
    It is the American value of hard work and valuable skill 
that makes our standard of living possible. From machinists and 
carpenters to auto mechanics and computer technicians, skilled 
work has made our life better for laborers and consumers.
    In a more competitive and global economy, it is a bedrock 
truth that to succeed you must be skilled, but there is another 
step to be taken toward a better life, and it, too, is a part 
of the American character. That is entrepreneurship, talented 
individuals starting their own businesses. Small business forms 
the backbone of our economy.
    The businesses create half of all jobs and do it more than 
60 percent faster than larger firms. Small businesses employ 
our mechanics, technicians, builders, machinists and draftsmen. 
My bill would for the first time create a training program to 
help these skilled workers become entrepreneurs themselves.
    It is important to realize that many of these very skilled 
laborers do not have business experience or training that would 
help them succeed. We want them to succeed, so we should help 
them all we can. How do we propose to do this? I propose the 
Vocational and Technical Entrepreneurship Development Act to 
provide the resources necessary to help skilled workers learn 
new skills; how to build their own business and make it thrive.
    My bill would establish a program for vocational and 
technical entrepreneurship development. Through SBA we would 
provide grants to Small Business Development Centers to provide 
assistance to high schools, universities or vo-techs to develop 
and implement curriculum promoting entrepreneurship.
    With over 20 years of experience helping hundreds of 
thousands of people turn their dreams into profitable 
businesses, the Small Business Development Centers have 
developed excellent education programs to train people on what 
is required to operate a successful business.
    I thank you very much for the opportunity to speak to this 
Committee.
    [Mr. Brady's statement may be found in appendix.]
    Mr. DeMint. Thank you both.
    I just have a couple of brief questions, and then we can 
hear from some of the witnesses that you have been a part of 
inviting.
    Congressman Udall, as we look at providing I guess focused 
services or special services to particular groups, there are I 
guess many individuals who are disadvantaged for socio-economic 
reasons not necessarily related to their ethnic connections or 
whatever.
    Is there a reason we should focus these grants on Native 
Americans instead of including them in I guess a grant package 
that would go for disadvantaged areas, particularly areas that 
might have socio-economic problems?
    I just wanted to hear why the focus on just particular 
groups rather than a focus on the nature of the problem as a 
whole?
    Mr. Udall. Thank you very much, Chairman DeMint, for that 
question.
    The issue of unemployment in Native American communities is 
really a chronic and a longstanding one, and I do not think 
there is any place else in the country that has the dismal 
unemployment record of Native Americans. You heard me mention 
in my testimony an average of 40 percent. Many of the 
reservations in my state the unemployment is closer to 75 and 
80 percent, and it has been like that for over 100 years.
    What we are trying to do with this bill in setting up a 
pilot is see that if we move some of these centers nearer to 
the reservation we cannot stimulate the kind of activity that 
could bring down those unemployment rates. Up until now, SBDC 
centers, which I think are required under current law to serve 
everyone in a state.
    In my state, which is a very large, rural state with 
hundreds of miles to travel, it may well be that an 
entrepreneur that needs assistance cannot travel 300 miles in 
order to get to that center, and so I think if we have this 
pilot that tries to locate these centers closer to where the 
problem is and to where the high unemployment is we may see 
more assistance. That would be my answer.
    I have also been joined up here, and I neglected to mention 
it, by Don Wilson, who is the president of the Association of 
Small Business Development Centers. He may assist me in some of 
these questions, too.
    Thank you for that question.
    Mr. DeMint. Thank you very much.
    Mr. Wilson. Mr. Chairman, if I could interrupt----
    Mr. DeMint. Sure. Please.
    Mr. Wilson [continuing]. And just add to that? I know, for 
example, I believe the county in South Dakota, Congressman 
Thune's district and state, the Pine Ridge Reservation, I think 
that county has the highest level of poverty of any county in 
the nation.
    These patterns on Native American reservations are fairly 
consistent. SBDCs have done outreach in a number of these 
reservations and so forth, but when they go they may be out 
there once a month or, you know, once every two weeks, this 
sort of thing, because of the limited resources we have.
    I believe if we could concentrate it on the reservation and 
have a full-time operation that we could begin to break this 
terrible cycle of poverty that Congressman Udall has so 
eloquently referred to.
    Mr. DeMint. Let me see if I have a question for Congressman 
Brady here.
    Congressman Brady, I know that particularly in the post 
secondary vocational schools, community colleges, that 
sometimes they do have funds available to contract for various 
types of educational services. Do you envision that with the 
additional funds for the SBDCs we will provide free services to 
these colleges or look at doing it on some kind of partnership 
basis where there is some funding on a contract basis?
    To put the question in the context. Are there things like 
this happening now where the SBDCs are actually working with 
community colleges, vocational colleges? Is there payment for 
this? Is it being done free now, or are we proposing something 
that is actually different?
    Mr. Brady. I do not know other than where I am from. In the 
City of Philadelphia, that does not happen. Our vo-techs are 
gone.
    Mr. DeMint. Right.
    Mr. Brady. I really do not know about the rest of the parts 
of the country, but in the City ofPhiladelphia there is hardly 
any more vo-techs out there.
    It would be a partnership. The school would have to apply. 
They would apply, and there would be a clearinghouse, one 
clearinghouse throughout the country, that would supply maybe 
up to 33 schools or universities that would get these grants. 
It would be a partnership, but I do not know about the rest.
    Maybe Christian can help. I know in the city we do not have 
many more vo-techs that use your services. I do not know again 
through the rest of the country. Do you know?
    Mr. Conroy. Sure. Actually, part of the reason for the 
development of this proposal is in, for instance, Lancaster, 
Pennsylvania, we have worked with the Stevens College of 
Technology, which is a vocational school, and we have an 
outreach office that is located there.
    The reason we are able to have an outreach office there is 
that the college provides funding to the local Small Business 
Development Center that serves that area, which is operated out 
of the university.
    What we envision would happen with this is that yes, it 
would be a competitive process where vocational schools would 
apply to offer this type of training to their students.
    Mr. DeMint. Would the grant go to the school or to the 
SBDC?
    Mr. Conroy. It would go initially to the SBDC, and then we 
would put it out for competitive bids to various vocational-
technical schools throughout the state.
    What that would allow then is the flexibility for different 
schools to tailor their programming to best reflect the 
strengths of the programs that they have. For instance, if one 
school is particularly strong in doing computer IT type of 
training, we could tailor the program so that it focuses on 
those areas that are relevant to that particular industry.
    Mr. DeMint. If there are no additional comments, we will 
dismiss this panel and move to Panel II. I want to thank both 
of my colleagues for being here.
    Let us just take a couple minutes and rotate the witnesses.
    Mr. Udall. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Sweeney. Thank you, Mr. Chairman.
    [Pause.]
    Mr. DeMint. Let us convene our second panel. I want to 
thank all of you gentlemen for taking the time to share your 
thoughts with us today.
    We have with us today Thomas Grumbles, who is vice-
president of the American Industrial Hygiene Association. We 
have Don Wilson, president and CEO of the Association of Small 
Business Development Centers. We have Mr. Rudy Cartier, small 
business ombudsman for the State of New Hampshire; and 
Christian Conroy, the associate state director for Pennsylvania 
Small Business Development Centers; and Leonard Lopez, Sun 
Valley Express, Navajo Reservation, Shiprock, New Mexico.
    Congressman Udall would like to say a few words about our 
guest, Mr. Lopez, before we get started.
    Mr. Udall. Thank you, Chairman DeMint. Let me just say 
about Mr. Lopez, who is one of my constituents, and give you a 
little bit of an introduction and background.
    He is presently the president of L&A Enterprise, Inc., in 
Bloomfield, New Mexico. He is an enrolled and registered member 
of the Navajo Nation. Mr. Lopez was born in Geezi, New Mexico, 
and attended high school in Bloomfield, and he attended San 
Juan College in Farmington, New Mexico. He received his B.S. in 
Business Education from Brigham Young University.
    Leonard has worked extensively in the field of natural gas 
production in gas control analysis and training. He was the 
lead plant operator and was responsible for managing his crew. 
He has also worked in the field of education, teaching 
accounting and computer applications at the high school level. 
He is married and has five children. It is an honor to 
introduce and have a member of my constituency of the 3rd 
Congressional District here.
    Thank you very much, and I look forward to hearing from all 
of the panel members here today. Welcome to all of you.
    Mr. DeMint. Thank you, Congressman Udall.
    Gentlemen, will you try to keep your comments within about 
five minutes. We will let you all have a chance to speak, and 
then we will ask a few questions if that is okay.
    We will run the clock, so you will have some idea of how 
long you are taking. When you see it turning yellow, you will 
know the red light is right after that.
    We will begin with Donald Wilson. Donald?

 STATEMENT OF DONALD T. WILSON, PRESIDENT AND CEO, ASSOCIATION 
             OF SMALL BUSINESS DEVELOPMENT CENTERS

    Mr. Wilson. Mr. Chairman, thank you very much. I am Don 
Wilson, president of the Association of Small Business 
Development Centers. The Association represents 58 small 
Business Development Center programs in all 50 states, the 
District of Columbia, American Samoa, Virgin Islands and Guam.
    I want to thank you for letting us testify this morning on 
legislation that I think is extremely important to the nation's 
small business community, H.R. 203, Congressman Sweeney's 
legislation.
    I think, Congressman, you and your colleagues probably know 
that small business views federal regulations and state 
regulations to be somewhat of a burden. I think my written 
testimony documents that very well. For example, since April of 
1996, federal agencies have adopted 21,653 major and minor 
rules. The Code of Federal Regulations as of 1998 filled 201 
volumes with a total of 134,723 pages. The Code currently 
occupies 19 feet of shelf space.
    If you are a small businessman, you are looking at dealing 
with IRS regulations, social security regulations, medicare 
regulations, federal unemployment insurance regulations, Fair 
Labor Standards Act, workers compensation, the Equal Pay Act, 
the Americans With Disabilities Act, Family and Medical Leave 
Act, Title VII of the Civil Rights Act, Federal Mine and 
Safety, the Rehabilitation Act of 1973, the Worker Adjustment 
and Retraining Act, Migrant and Seasonal Agricultural Worker 
Protection Act, Immigration Control Act, et cetera, et cetera, 
et cetera.
    I think, you know, if you are a small businessman, a mom 
and pop operation, and you are trying to be familiar with all 
of the rules and regulations that you must comply with it is a 
pretty daunting task.
    In 1996, the Congress asked the SBDC program to begin to 
provide compliance assistance. Unfortunately, the program did 
not get the resources that were needed to fully implement that. 
From 1996 to 1999, in fact, 44 of the programs in the country 
were level funded, and in 2000 and 2001 we basically received 
cost of living increases.
    I believe Congressman Sweeney's legislation, H.R. 203, the 
pilot program proposed for 20 SBDCs in the ten SBA regions, 
will provide the resources to bring on staff the necessary core 
competencies to begin to work in an expanded program of 
compliance assistance. A number of our states have developed 
very solid partnerships with the 507 SBAP program and SBO 
programs. Some of ours already refer, constituents and clients, 
to industrial hygienists and others to assist them.
    I envision in some degree that your SBDCs would be like a 
general practitioner dealing with the less complicated cases, 
and the more complicated cases they would be referring them to 
the partners. I believe with the 600,000 or 700,000 small 
businesses that come through our doors needing compliance 
assistance, you will probably actually see those numbers grow 
when they became fully aware of the assistance that was 
available.
    We have worked with the Department of Labor on a cross cut 
program, the IRS and others on pilots, but this would expand 
it. This would give additional dollars that are badly needed so 
that small business people who are disproportionately affected, 
Mr. Chairman, by regulations could cope with those regulations 
and run their business and focus on the requirements of 
marketing and finance and the core issues rather than being 
absorbed in spending inordinate amounts of time and dollars 
complying with federal regulation.
    We would like to commend this legislation to you. We would 
like to see it grow. We believe funding would be absolutely 
necessary to implement this to the extent that we believe the 
small business community needs it, and we look forward to 
working with you and the other Members of the Small Business 
Committee to try to make this legislation a reality.
    [Mr. Wilson's statement may be found in appendix.]
    Mr. DeMint. Thank you, Mr. Wilson.
    Mr. Grumbles.

 STATEMENT OF THOMAS G. GRUMBLES, CIH VICE PRESIDENT, AMERICAN 
                 INDUSTRIAL HYGIENE ASSOCIATION

    Mr. Grumbles. Chairman DeMint and Members of the 
Subcommittee, my name is Tom Grumbles, and I am vice-president 
of the American Industrial Hygiene Association. I am a 
certified industrial hygienist and have been in the 
occupational health and safety profession for more than 25 
years.
    I appreciate the opportunity to provide testimony on H.R. 
203 to improve small business compliance with the federal 
regulations. AIHA is particularly interested in regulations 
addressing occupational health and safety in the workplace. 
AIHA is the world's largest association of occupational and 
environmental health professionals, and our members serve on 
the front line of worker health and safety. One of AIHA's goals 
is to bring good science and the benefit of our experience to 
public policy issues.
    A.I.H.A. supports H.R. 203, specifically ways to comply 
with the numerous and complex regulations of OSHA. I have not 
quantified it to the extent that Don did, but they are large. 
Of the myriad of federal regulations small businesses must 
comply with, in our opinion none is more important than 
protecting the health and safety of workers.
    As the front line stewards of occupational health and 
safety, however, we are aware of government and business 
limitations. OSHA, like the rest of government, has to 
accomplish more with less. No one is sure of the time it might 
take for an OSHA inspector to visit all covered sites, but most 
agree it is unlikely more than once every 50 to 80 years. It is 
also difficult for business to receive OSHA consultation 
service because of the length of time required before OSHA can 
respond to those requests.
    A 1990s NIOSH study found over 90 percent of the work sites 
are comprised of 50 or fewer employees that may have no 
industrial hygiene or safety expertise on staff, are not 
regularlyinspected by OSHA and may have little information 
about health, safety or industrial hygiene. If Congress is interested 
in improving worker health and safety, small business concerns must be 
met by working with them to address this issue.
    A.I.H.A.'s effort in this interest is not new. In the mid 
1990s, AIHA decided to proactively assist small businesses 
unlikely or unwilling to look at occupational health and safety 
in their workplace. In consultation with OSHA, AIHA developed a 
pro bono assistance program for small businesses utilizing AIHA 
members. Five pilot projects were conducted.
    While the training that was provided was good and well 
received, the real success was one-on-one follow up 
consultation. Many small businesses, however, were 
uncomfortable with OSHA's involvement. While OSHA's profile was 
very low, most were convinced that OSHA would place them on a 
list of upcoming inspections if they attended.
    A.I.H.A. believes the approach taken in H.R. 203 is 
correct. Any successful program targeting small business should 
target businesses with less than 50 employees, have as a goal 
one-on-one consultation, be administered through a third party 
such as the SBDC, involve occupational health and safety 
professionals when addressing health and safety regulations, 
and assure that only competent and qualified individuals are 
involved in providing the education, training and/or 
consultation services.
    This last point is of great interest to AIHA. AIHA would 
like to offer a suggestion relative to the experts. The bill 
does say that assistance to small business concerns should 
include referrals to experts. We are pleased this section was 
added from previous versions of the bill. This was a 
recommendation from AIHA made in earlier testimony.
    However, we would like to see this section expanded. We 
recommend the referral of experts section be amended by adding 
language stating, ``provided that such experts meet 
educational, technical and professional standards established 
by the Administrator.'' This would provide assurance that only 
competent and qualified individuals are involved in providing 
the training and education.
    Further to that point, AIHA also suggests the legislation 
or report language and language that clarifies the competency 
requirement stating that, ``In the case of small businesses 
needing assistance with the rules promulgated by OSHA, the 
committee believes an expert should be a certified industrial 
hygienist, a certified safety professional, an occupational 
health physician, an occupational health nurse or their 
equivalent in other professions.'' A copy of our 
recommendations is attached to our testimony.
    This language should relieve the Small Business 
Association, OSHA or the SBDCs from having to develop 
regulations to identify certified individuals to conduct the 
education, training or consultations.
    The occupational health and safety profession has 
nationally recognized certification programs to qualify 
individuals and assure competency. As an example, a certified 
industrial hygienist must have at a minimum a Bachelor's degree 
in one of the sciences, five years of experience and undergo a 
two-day examination for being certified.
    In closing, most workplaces will never see an OSHA 
compliance officer. The new OSHA is one that does not focus 
necessarily on enforcement, but builds partnerships with 
business. AIHA has long supported pro bono assistance or a 
third party workplace review program such as that proposed by 
Senator Michael Enzi in the 106th Congress.
    We appreciate you giving us this opportunity to testify and 
ask that our written testimony be put in the record. Thank you.
    [Mr. Grumbles's statement may be found in appendix.]
    Mr. DeMint. Thank you, Mr. Grumbles.
    Mr. Cartier.

 STATEMENT OF RUDOLPH CARTIER, JR., SMALL BUSINESS OMBUDSMAN, 
                     STATE OF NEW HAMPSHIRE

    Mr. Cartier. Thank you, Chairman DeMint. Good morning, 
Chairman DeMint and Members of the Subcommittee. I thank you 
for the invitation and the opportunity to present testimony to 
the Subcommittee on H.R. 203.
    As stated, my name is Rudy Cartier. I am the New Hampshire 
Department of Environmental Services Small Business Ombudsman. 
I appear before you today as the chair of the National Steering 
Committee of the Small Business Technical Assistance Programs 
and Small Business Ombudsmen created under Section 507 of the 
Clean Air Act amendments of 1990.
    Section 507 of the Clean Air Act directed each state to 
develop a state specific technical assistance and advocacy 
program to help small businesses understand, comply with and 
have representation in the development of regulations 
promulgated under the Clean Air Act with an impact on small 
business.
    In addition, most programs have an appointed Compliance 
Advisory Panel made up of small business owners or their 
representatives, a representative from the environmental 
regulatory agency and at least two members of the general 
public to oversee the effectiveness of the programs.
    Although initially created to address Clean Air Act issues, 
all the programs have evolved into repositories and/or referral 
agencies where small business owners and operators can go for a 
myriad of environmental assistance and direction to other 
business services. This is accomplished through a variety of 
options, including formal and, in some cases, informal state 
level expansion of the program responsibilities, development of 
networking systems and, most importantly, the development of 
strategic partnerships with other assistance providers.
    Indeed, the vast majority of states have developed 
effective outreach assistance efforts in conjunction with state 
pollution prevention programs, Small Business Development 
Centers, economic development agencies, trade associations and 
local government agencies, to name a few. In addition, the 
partners regularly conduct regional and national conferences, 
seminars and workshops to increase our effectiveness to provide 
accurate, timely and appropriate assistance.
    The programs were also instrumental in the formulation and 
development of what is called the 507 Enforcement Response 
Policy and the Small Business Compliance Incentives Policy with 
the Environmental Protection Agency, which for the first time 
granted ``safe haven'' status for small business owners who 
voluntarily identified and agreed to remedy violations of 
environmental regulations. These policies encourage sound 
environmental practices and minimize the threat of punitive 
fines or the need to remain confidential.
    I am very pleased to be able to report that the programs 
are active in all 50 states and U.S. territories and are very 
well received by small business. Collectively, we provide 
environmentally related assistance to over 1,000,000 businesses 
and owners yearly through direct contact and in partnership 
with others.
    I appear before the Committee today to offer our support of 
legislation such as H.R. 203, which has the potential for 
increasing the effectiveness of all our efforts to provide the 
highest level of service to our small business clients. We see 
this bill as an opportunity for Congress to provide incentives 
to continue the cooperation and coordination among all programs 
that deliver regulatory assistance to small businesses, 
especially our SBDC partners.
    It is essential that the expertise found in all small 
business assistance programs be woven together through 
partnerships utilizing the expertise presently in place in each 
of these programs to ensure we are appropriately meeting the 
true needs of businesses. Our programs, along with those of our 
numerous partners, are proof that well crafted and coordinated 
technical and compliance assistance programs are extremely 
valuable to small businesses.
    We applaud Congress for recognizing the successes that have 
been the hallmark of each of these programs. We encourage your 
efforts to build and expand on this experience in delivering 
small business assistance to cover these and other pressing 
small business issues. We would note, however, that although 
pilot programs can provide support for creative breakthroughs, 
we would encourage Congress to also recognize the critical 
nature of the continuing need for stable financial support for 
these programs.
    The Small Business Technical Assistance Programs across the 
country are committed to remaining on the path of continued 
cooperation and coordination of our environmental assistance 
services. We appreciate your work to support this effort and 
look forward to additional targeted assistance by federal 
agencies with a commitment to specific, accurate and timely 
assistance.
    We on the state level will continue our commitment to 
fostering strategic and appropriate partnerships within our 
individual states. We have found that the most appropriate 
method for delivering useful assistance must be developed to 
meet the unique needs of businesses in each of the individual 
states. We certainly are supportive of efforts to direct any 
potential federal funding to these partnership programs to 
increase the resources availability and capabilities of 
assistance providers in meeting these needs.
    Again, thank you for this opportunity to provide this 
testimony to you today. I would be pleased to make myself 
available to the Committee for any other assistance deemed 
appropriate.
    [Mr. Cartier's statement may be found in appendix.]
    Mr. DeMint. Thank you, Mr. Cartier.
    Mr. Conroy.

   STATEMENT OF CHRISTIAN CONROY, ASSOCIATE STATE DIRECTOR, 
        PENNSYLVANIA SMALL BUSINESS DEVELOPMENT CENTERS

    Mr. Conroy. Good morning. Chairman DeMint and Members of 
the Committee, I am Christian Conroy, the Associate State 
Director of the Pennsylvania Small Business Development 
Centers. I would like to thank you, Mr. Chairman and Members of 
the Committee, for inviting me to testify at this hearing on 
the Vocational and Technical Entrepreneurship Development 
Program Act of 2001.
    As you are all very well aware, small business is the 
engine of the economy in Pennsylvania, as well as in the 
nation. There are currently over 22,000,000 small businesses in 
America. They account for 99 percent of all businesses and 
employ 53 percent of the private workforce and contribute over 
half of the nation's gross domestic product.
    For the past 20 years, the Pennsylvania Small Business 
Development Centers have been helping entrepreneurs start and 
grow successful businesses. During that period, we have seen a 
number of changes that have affected small firms, things such 
as the development of sophisticated management software tools 
such as spreadsheets and databases, the increasing 
globalization of trade, the advent of the internet just to name 
a few. One thing that has remained constant, unfortunately, is 
the lack of entrepreneurial educational experience that the 
majority ofpeople who come to the Small Business Development 
Center for help in starting their business have.
    What we continue to see on a daily basis is many people who 
have excellent technical skills and an entrepreneurial 
disposition, but no formal training that will prepare them to 
start and grow a business. Eighty percent of our pre-venture 
clients have not owned or operated a business before, and 80 
percent of our clients do not have an educational background to 
prepare them to start and operate a business.
    If you consider the courses of study that are offered in 
our principal educational systems--high schools, community 
colleges and vocational and technical schools--the lack of 
preparation should not come as a surprise. With few exceptions, 
these institutions do not offer a comprehensive, coherent 
course of study to prepare students to become competent 
business owners.
    What we have in Pennsylvania, and I would argue in the 
nation as well, is an economy that is dependent upon the 
initiation and growth of small business for its vitality and a 
set of educational institutions doing little to prepare 
students to participate in that entrepreneurial economy.
    When Congressman Brady requested information on how to 
increase support for entrepreneurship, we were delighted to 
work with him on developing the Vocational and Technical 
Entrepreneurship Development Program Act of 2001, which will 
provide resources to the Small Business Development Centers to 
adapt and apply our curriculum on how to start a business in 
select vocational and technical schools throughout the country.
    You are likely asking yourself why are the Small Business 
Development Centers not already doing this? Simply it is 
because our resources are such that we cannot currently meet 
the demand for assistance in starting a business.
    Present survey research indicates that five in ten people 
in the 21 to 30 age bracket are considering starting a firm, 
and about 7.7 million Americans are actively engaged in 
starting a business. That number is substantially greater than 
the number of people who get married each year.
    Currently in Pennsylvania, the SBDCs are operating at 
capacity, and we can only assist a tiny fraction of this huge 
population so thus if the Small Business Development Centers 
are going to serve a greater proportion of these potential 
entrepreneurs we must transfer our knowledge of the 
entrepreneurial process to those educational systems that have 
the capacity to reach and to educate a much larger segment of 
the population than can currently be served by the SBDCs.
    With this bill, what will happen is the SBDCs will adapt 
their business management training programs to develop a 
cohesive curriculum on starting and operating a successful 
business that can be provided to students in vocational and 
technical schools. The training will focus on the essential 
business operational areas such as management, marketing and 
finance, and additionally the programs will be modified to 
provide information that is relevant to the particular industry 
sectors in which the students are learning skills.
    The SBDCs will not conduct the training of students, but 
rather will train teachers on how to deliver training on 
starting and operating successful businesses. Thus, far more 
students will benefit from this training than if the SBDCs use 
their limited resources to conduct the training.
    As we see it, there are three benefits to this bill. The 
first and most obvious benefit is the training of potential 
entrepreneurs so when they do decide to start firms they will 
be prepared to succeed.
    The second benefit accrues to employers of individuals who 
have gone through this training. Whether or not a person starts 
a business, the knowledge of such key aspects of operating a 
business as customer relations, controlling costs and how money 
is made creates a more effective employee.
    Third, once we demonstrate the value of this type of 
training in the context of one set of educational institutions, 
it will, we believe, be easier to transfer these processes to 
other educational systems such as high schools, community 
colleges and universities.
    In the long term, we believe entrepreneurship education 
should be an option available through high schools, community 
colleges and four year colleges and institutions. This bill 
represents an excellent vehicle to combine the resources of two 
well established proven programs, vocational and technical 
schools and the Small Business Development Centers, to begin to 
make entrepreneurship education available to more students. Our 
economy and our communities depend upon it.
    I urge the Committee's approval of this bill. Thank you.
    [Mr. Conroy's statement may be found in appendix.]
    Mr. DeMint. Thank you, Mr. Conroy.
    Mr. Lopez.

  STATEMENT OF LEONARD LOPEZ, SUN VALLEY EXPRESS (CONVENIENCE 
        STORE), NAVAJO RESERVATION, SHIPROCK, NEW MEXICO

    Mr. Lopez. Good morning, Mr. Chairman and Members of the 
Committee. My name is Leonard Lopez, and I live in Bloomfield, 
New Mexico. My wife and I are members of the Navajo Tribe, and 
we both grew up on the Navajo Reservation in New Mexico.
    I appreciate the opportunity to appear before the 
Subcommittee today on behalf of Congressman Tom Udall's bill to 
provide Small Business Development Centers with resources to 
assist National American populations.
    My wife and I began working on the idea of opening our own 
business, a convenience store/filling station, on the Navajo 
Reservation in Shiprock, New Mexico, in April, 1995. Four years 
later, after much red tape with the tribal and BIA regulations 
and the required signatures, we were finally granted our 
business site lease.
    For five years we aggressively wrote our business plan, 
gathered our financial projections, completed the environmental 
and archeological studies, the traffic study surveys, and the 
list goes on. We knew we were in for a long haul of getting a 
business started on the reservation. We were told that it would 
be discouraging and difficult to work with the tribal 
officials. Our friends were right.
    When it came time for us to approach the lending 
institution for a loan on our business, we received minimal 
support. We thought we were well prepared to submit our 
application for a business loan, but later found that there was 
just as much information needed and time required to secure a 
loan as getting a business site lease with the tribe.
    We are proud of ourselves that we were able to be 
convincing enough to be approved for approximately $700,000 
from Bank of America and an SBA 504 loan of $330,000 that we 
are close to finalizing the agreement. I believe that had we 
been guided and coached from the beginning by a knowledgeable 
small business counselor like Orestes Hubbard at our SBDC, we 
would have avoided many unnecessary delays. Not only would this 
have been to our advantage, I believe we would have had our 
doors open for business by now.
    There are a few small business assistance providers we 
received assistance from, which are Southern Utah College Small 
Business Department in Blanding, Utah, and the Regional 
Business Development Office, RBDO, of the Navajo Nation in 
Shiprock, New Mexico. Basically we were left to ourselves to 
figure out what we needed to do.
    My wife and I did all the work in seeking our resources 
that helped us complete our project. I am not saying that 
someone should have done all my work while I sat around. No. I 
only needed directions.
    We finally received the directions we needed when we 
approached Mr. Orestes Hubbard, manager of the Small Business 
Development Center, SBDC, at San Juan College in Farmington, 
New Mexico. I first met Mr. Hubbard when I attended a Meet Your 
Lender seminar held at the college by the SBDC a year ago last 
spring.
    I was hesitant at first to solicit his help because I 
figured he might direct me to speak with the RBDO people in 
Shiprock, as has been the case with the previous directors. 
After explaining to him my goals and my desire of opening a 
business on the reservation, Mr. Hubbard made arrangements to 
meet with me personally to discuss my project. He evaluated my 
business plan and suggested a few changes and recommendations.
    According to his list of requirements, we had met all the 
requirements. He then recommended a number of lending 
institutions that we should contact for a loan. At this time, 
three lending establishments had already turned us down.
    The SBDC has been following up on the progress of our 
project. It was either Orestes personally or one of his staff 
who contacted us for updates. He has invited us to small 
business seminars and conferences held at the college. He keeps 
abreast of our progress and is very helpful in giving 
suggestions.
    I believe a Small Business Development Center on the 
reservation would be an advantage and benefit to those Native 
Americans who desire to start their own business. With an SBDC 
nearby, anyone can plan to work on starting a business. They 
will learn the techniques of starting a business, as well as 
how to manage a business.
    The center could also provide information on available 
resources. The personnel could be there for consultation. They 
could provide guidelines for writing a business plan, the 
implementation and the components of a business, namely 
financing, marketing, operations, management and technology.
    The Native American SBDC could also work closely with the 
San Juan College Small Business Development Center where they 
have, in addition, a department specializing in business 
incubation that helps companies grow and succeed.
    For these reasons, Mr. Chairman, I support Congressman 
Udall's effort to strengthen the outreach of the SBDC program 
to more Native Americans. I urge your Committee to support 
Congressman Udall in his efforts.
    [Mr. Lopez's statement may be found in appendix.]
    Mr. DeMint. Thank you, Mr. Lopez, and all our witnesses. It 
has been very informative and persuasive.
    I would like to offer my colleagues the opportunity to ask 
any of you questions. We will begin with Congressman Udall. 
Would you like to ask any of the panelists questions?
    Mr. Udall. Yes. Thank you, Chairman DeMint.
    My first question is for Don Wilson. Earlier Congressman 
Sweeney testified that his proposal would not require 
additional funding. Can the existing funding for the SBDC 
program accommodate Mr. Sweeney's proposal?
    Mr. Wilson. Congressman Udall, I do not know how that would 
be possible under the appropriation recently approved by the 
House Appropriations Committee. Although it is levelfunding for 
the network, due to the census and the way our formula is tied to the 
census 24 states will lose up to 20 percent of their funding. To 
anticipate that we could now launch the Sweeney bill or the Udall bill 
with those kinds of cuts in our program funding is just simply not 
realistic.
    As I believe my testimony mentions with regard to the 
Sweeney bill, from fiscal year 1996 through fiscal year 1999 
roughly 44 percent of the state programs did not see a dollar's 
worth of increase in funding. Then in 2000 and 2001 they 
basically received roughly cost of living increases, so you see 
since 1996 over the last half decade these programs have been 
struggling. In fact, considering cost of operating the program, 
paying cost of living increases to counselors and so forth, the 
program has been going backwards.
    To launch initiatives like this, which I think are 
incredibly worthwhile, would just not be possible without some 
new authorization, some new resources.
    Mr. Udall. Thank you, Mr. Wilson. We obviously feel the 
SBDC program is an important one and should be funded at a 
level that is really going to provide the assistance out there.
    My next question is for Mr. Lopez. You mention in your 
testimony that it took you four years, and you say after much 
red tape with the tribe and the BIA regulations. Was it 
actually four years to get through the tribal process and the 
BIA regulatory process?
    Mr. Lopez. In the beginning there was the submission of 
our--Mr. Chairman, I am sorry. I am not used to this.
    Mr. Chairman, at the beginning of our idea of starting our 
business we submitted an application to the tribe which 
generated the process to get the lease. From the time that we 
started to the time that we had the paper signed it took three 
years and nine months to complete.
    Mr. Udall. That is pretty surprising to me.
    Mr. Lopez. And this was with exerted effort, too, being at 
their doorstep as frequently as we could.
    Mr. Udall. Trying to push it along?
    Mr. Lopez. Yes.
    Mr. Udall. Have you had contact with other business people 
that have had similar experiences?
    Mr. Lopez. Yes, sir. Some of them have said it took them 
about almost ten years just to get the lease on the 
reservation.
    Mr. Udall. One of the issues we talked about earlier in my 
testimony and others that have testified here is why you would 
locate an SBDC either near or right on a reservation.
    Can you tell me why you think it might be more helpful to 
have an SBDC on the reservation, for example, at Windowrock or 
Shiprock or someplace like that and why it might generate more 
business activity and more people would be employed?
    Mr. Lopez. See, I have also worked with the RBDO, which is 
the Regional Business Development Office, with the tribe, which 
is located in Shiprock, and through the agencies. There are 
several agencies on the reservation. We worked with the 
Shiprock agency. Often times it was difficult to get 
information from them. As far as expertise in setting up a 
business, they lacked so I had to seek assistance from 
elsewhere.
    I feel if we were to set up an SBDC right there in 
Shiprock, let us say, I believe that if we were to staff it 
with professional business oriented people and those who would 
be familiar with the laws of the Navajo Nation in conjunction 
with their expertise, I believe that it would lessen the time 
frame in which to start a business.
    Mr. Udall. And do you also believe that it would be more 
accessible and more business friendly to budding entrepreneurs 
that would want to seek assistance?
    Mr. Lopez. I believe it will be, and I also believe that 
the SBDC has to become very much aware of what the laws are of 
the Navajo Nations as far as business and economic development.
    Mr. Udall. So the second part of your answer is that there 
are a number of requirements that the Navajo Nation has, that 
the Bureau of Indian Affairs have, that are an essential part 
of starting a business and so the SBDC personnel would have to 
specialize in those in addition in those kinds of regulatory 
hurdles in order to assist the entrepreneur to get their 
business started, up and running and going?
    Mr. Lopez. Yes, sir.
    Mr. Udall. Okay. Thank you very much, Mr. Chairman.
    Mr. DeMint. Thank you, Mr. Udall.
    Mrs. Christian-Christensen.
    Mrs. Christian-Christensen. Thank you, Mr. Chairman. I do 
not have any questions. I just want to thank the panelists for 
taking the time to come and give us their testimony. The SBDC 
program is very important to my community, as it is to 
communities across the country, and I think any way that we can 
enhance its services helps our communities to grow even more.
    I am just glad that you were able to come with some of your 
opinions and your experience and bring it to bear on our 
discussions this morning. Thank you.
    Mr. DeMint. Thank you very much.
    Ms. Tubbs-Jones.
    Mrs. Jones. Mr. Chairman, thank you. Mr. Chairman, to my 
colleagues and to the people who are testifying this morning, 
welcome to Capitol Hill, and thank you for your testimony.
    I want to tell you, Mr. Lopez, I made it to Shiprock, New 
Mexico. I managed to get there with my colleague, Mr. Udall, 
and President Clinton when we were doing the digital divide 
tour. I regretted only that I did not have enough time to 
really get around and get to meet and greet the people of 
Shiprock, New Mexico. I also wanted to do a little bit of 
shopping. I wanted to leave my $2 in the economy of Shiprock, 
but I did not have time to do that either.
    I am glad to have you here and want to say that this is my 
second term as a Member of the Small Business Committee, and I 
am very happy to serve here and I am very supportive of SBDCs. 
We have a great network of SBDCs in the State of Ohio. I hail 
from Cleveland, Ohio, and the Growth Association is actually in 
my area. I have been working very hard. I support increased 
dollars for SBDCs.
    I also have had the pleasure very recently of, and I do not 
travel all the time, but every once in a while I get a chance. 
I went to visit the Small Business Development Center and the 
Women's Business Center in the State of Hawaii. Actually, I was 
on the island of Honolulu, and I forgot what city. I am really 
just learning that there is an island called Hawaii in the 
State of Hawaii. That was new for me. My geography kind of got 
lost somewhere in the process.
    One of the issues that was faced in Hawaii was the fact 
that there are so many different islands all around that it is 
very difficult for them to be able to provide services to the 
small businesses around the islands. What they were really 
excited about was recently having the opportunity to get 
computers wherein they were able to have the person being 
interviewed, the new small business person, on the computer 
talking to the counselor/advisor on another island and be able 
to see them face to face and provide advice.
    I would hope that each of you would think through over and 
above your testimony recommendations that you could give to us 
that would improve the operation and opportunity for small 
business in this country.
    We are all alarmed by the fact that the Small Business 
Administration budget was cut so significantly and did have a 
little success yesterday on the Floor of the House through the 
leadership of our Ranking Member, Nydia Velazquez, and Sue 
Kelly to increase some of the dollars for small business.
    I would encourage you to have all your members write to the 
President to encourage him to increase funding for small 
business and just keep doing all the work that you do, but as 
well to let us know what is not working. We may not always have 
the opportunity to have a hearing where you come and testify, 
but our offices are available to each and every one of you to 
provide information and service.
    After that long good morning and so forth and so on, I 
would give any of you who want to comment over and above your 
testimony some of my time to so do. If you do not, fine also.
    Mrs. Christian-Christensen. Would you yield so that I can--
--
    Mrs. Jones. Absolutely. I will yield.
    Mrs. Christian-Christensen [continuing]. Bring in a 
question? Thank you.
    I do have a question, and it is an important question to 
Mr. Wilson in follow up to the question that Mr. Udall asked 
about the funding. Can you tell us how much money you would 
need to implement Mr. Sweeney's bill?
    Mr. Wilson. I would envision roughly $5 million, Mr. 
Chairman, would enable us to launch the initial 20. That is 
roughly a quarter of a million dollars per program, which I 
think would be a good start.
    If we are going to launch it, what we would envision is 
perhaps an authorization that would provide $5 million the 
first year, $10 million the second and perhaps another $10 
million the third because it will take roughly $5 million to do 
20, and we have 58 programs. You can do the math. I think it 
would take roughly $15 million when the project is completed to 
be able to provide these type of services nationwide.
    Obviously, you know, if you have 40 states that are not 
participating they are going to be very anxious. It is a 
competitive process, and the Sweeney bill is designed and the 
language is such that it will reward those grant applicants who 
already have or can demonstrate partnerships with folks like 
the 507 program from SBA, the SBO programs that Mr. Cartier 
represents, working with the industrial hygienists and others.
    I think that will get the biggest bang for the buck is 
those who can demonstrate the partnerships, but I think there 
is a commitment to the partnerships throughout the network, and 
I believe it would be ideal if after three years we could have 
all 58 programs active in the program in the pilot. That would 
require roughly $15 million by the third year.
    Mr. Conroy. Is there any way to proceed without additional 
funding?
    Mr. Wilson. I truly do not know how that would be done. 
Simply the resources are not there.
    For example, Representative Tubbs-Jones, in Ohio I believe 
with level funding, $88 million level funding, I believe Ohio 
will lose about $150,000 if my memory is correct. I cannot cite 
all of our states, but I believe $150,000 or $157,000, if I 
recall.
    Holly Schick, who is an outstanding director, state 
director in Ohio, is facing those kinds of cuts in her program. 
You are facing closing centers. We are in crisis.
    Mrs. Christian-Christensen. Thank you.
    Mr. Wilson. The key thing, if I may interrupt one more 
time, is with the slowdown in the economy the Department of 
Labor recently released a report that said when unemployment 
goes up self-employment goes up. We are seeing that around the 
country.
    When major industries or major plants have layoffs, those 
people who are now unemployedand often do not find jobs in 
their fields, they may be creative. They may be talented. They turn to 
the idea of trying to start their own business using perhaps pension 
funds, savings or whatever to start their own business. They come into 
the SBDCs.
    It is just a pattern that is repeated over and over. When 
there are periods of slow economic growth, the demand for our 
services increase. Right now we are seeing that demand increase 
when we are seeing the resources decline in 24 states. I think 
that is very unfortunate.
    Mrs. Christian-Christensen. Thank you.
    I yield back.
    Mrs. Jones. Just finally I meant to mention this, and I 
forgot. I am very much supportive of the vocational and 
technical entrepreneurship development portion.
    In the City of Cleveland, we have a school system that 
really needs some stirring up, and I think part of the need 
comes from the lack of recognition that all young people are 
not going to college. What do we do to teach them a trade or a 
skill that they can be useful citizens in our community and 
maybe pass it on through their entrepreneurship, going on and 
being able to be successful? I just want to also add that in of 
how supportive I am of that.
    Mr. Chairman, if I have any time I yield back the balance. 
Thank you very much.
    Mr. DeMint. Thank you very much. I think as the witnesses 
can tell, you have a lot of support for all three of the ideas 
today. Our hope is to get adequate funding.
    I would like to just ask a couple of brief questions. One 
of the primary goals of this Committee is to reduce the 
regulatory burden on small businesses, make it easier for them 
to start so that we will not have to have experts to help them 
navigate the regulatory process.
    Mr. Wilson, I mentioned to you before we got started an 
idea, if we are adequately funded and if we can expand your 
services to include support of small businesses in dealing with 
compliance issues.
    One of the best helps to us as a committee would be if 
there was some formal reporting system back to us about the 
regulations that cause the most trouble and for the SBDCs to 
give us specific recommendations on what changes they would 
recommend to us so that we can be an advocate for changes in 
federal policy.
    Is that possible, and would you have any brief 
recommendations on how we could do that?
    Mr. Wilson. Historically the program has tried not to get 
involved in policy issues, but I think there would be no 
problem with the network reporting back to the Committee on 
what it finds the most troublesome and burdensome to the small 
business clients that we see on a regular basis.
    We would be glad to work with you and your staff to try to 
develop something like that, Mr. Chairman.
    Mr. DeMint. Yes. A similar question, Mr. Conroy. As we 
begin to fund cooperative arrangements with secondary/ post 
secondary schools to train for entrepreneurship, can you 
envision any way where we can actually measure the impact of 
such an effort, or is that just wishful thinking?
    Mr. Conroy. Oh, no. Actually, impact and measuring the 
impact and outcome of the program is something that we take 
very seriously. It is something that we do on an annual basis 
for the basic program, and as part of this proposal actually 
the legislation does call for an evaluative component.
    I would envision that that would entail a number of 
different things. We would have an evaluation of the course 
once it is completed so that we can make adjustments and adapt 
it to go forward to make improvements to it, and then I would 
look to see that we would do follow up studies with the 
students who went through the program to find out really what 
kind of value was it and how did it affect and impact their 
efforts to start a business.
    Then what we would do also is compare that to a base group 
of folks who did not go through the training to make a 
determination as to really what is the value of that kind of 
training.
    Mr. DeMint. I think the key to long-term successful funding 
of all of our programs is to be able to document success and to 
what degree. You can be helpful with that long-term. I think it 
would help us in considering additional funding for a program.
    If there are not any additional questions, I would like to 
again thank the witnesses and my colleagues for being here.
    This hearing is adjourned.
    [Whereupon, at 11:40 a.m. the Subcommittee was adjourned.]

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