[Senate Hearing 107-788]
[From the U.S. Government Publishing Office]
S. Hrg. 107-788
PROMOTING SMALL BUSINESS REGULATORY
COMPLIANCE AND ENTREPRENEURIAL
EDUCATION: THE ROLE OF THE SBDC NETWORK
=======================================================================
ROUNDTABLE
BEFORE THE
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
AUGUST 1, 2002
__________
Printed for the Committee on Small Business and Entrepreneurship
__________
Available via the World Wide Web: http://www.access.gpo.gov/congress/
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
.........................................................
ONE HUNDRED SEVENTH CONGRESS
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JOHN F. KERRY, Massachusetts, Chairman
CARL LEVIN, Michigan CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa CONRAD BURNS, Montana
JOSEPH I. LIEBERMAN, Connecticut ROBERT F. BENNETT, Utah
PAUL D. WELLSTONE, Minnesota OLYMPIA J. SNOWE, Maine
MAX CLELAND, Georgia MICHAEL ENZI, Wyoming
MARY LANDRIEU, Louisiana PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina MIKE CRAPO, Idaho
MARIA CANTWELL, Washington GEORGE ALLEN, Virginia
JEAN CARNAHAN, Missouri JOHN ENSIGN, Nevada
Patricia R. Forbes, Democratic Staff Director and Chief Counsel
Emilia DiSanto, Republican Staff Director
Paul H. Cooksey, Republican Chief Counsel
C O N T E N T S
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Opening Statements
Page
Kerry, The Honorable John F., Chairman, Committee on Small
Business and Entrepreneurship, and a United States Senator from
Massachussetts................................................. 17
Cleland, The Honorable Max, a United States Senator from Georgia. 1
Bond, The Honorable Christopher S., Ranking Member, Committee on
Small Business and Entrepreneurship, and a United States
Senator from Missouri.......................................... 3
----------
Witness Testimony
Benforado, Jay, Deputy Associate Administrator for Policy,
Economics and Innovation, U.S. Environmental Protection Agency,
Washington, DC................................................. *
Blanchard, Lloyd A., Ph.D., Chief Operating Officer, U.S. Small
Business Administration, Washington, DC........................ *
Barrara, Michael, National Ombudsman, U.S. Small Business
Administration, Washington, DC................................. *
Conroy, Christian, Associate State Director, Pennsylvania Small
Business Development Centers, Philadelphia, PA................. *
Higgins, Gregory L., Jr., State Director, Pennsylvania Small
Business Development Centers, Philadelphia, PA................. *
Hughes, Robert, President, National Association for the Self-
Employed, Washington, DC....................................... *
King, Nancy, Career Experience Specialist, Office of Professional
Studies, Fairfax County Public Schools, Falls Church, VA....... *
Long, Brenda, Ph.D., President, Virginia Association for Career
and Technical Education, Stafford, VA.......................... *
Lund, Lisa, Deputy Director, Office of Compliance of OECA, U.S.
Environmental Protection Agency, Washington, DC................ *
Males, Sam, State Director, Nevada Small Business Development
Center, Reno, NV............................................... *
McCracken, Todd, President, National Small Business United,
Washington, DC................................................. *
Satagaj, John, President and General Counsel, Small Business
Legislative Council, Washington, DC............................ *
Shanahan, Mark R. Ph.D., Executive Director, Ohio Clean Air
Resource Center, Columbus, OH.................................. *
Visscher, Gary, Deputy Assistant Secretary for OSHA, Department
of Labor, Washington, DC....................................... *
Wilson, Don, President and CEO, Association of Small Business
Development Centers, Burke, VA................................. *
Zarker, Ken, Manager of P2, Industry Assistance Section, Small
Business and Environmental Assistance Division, Texas Natural
Resources Conservation Commission, Austin, TX.................. *
* Comments, if any, located between pages 6 and 148.
Alphabetical Listing and Appendix Material Submitted
Page
Benforado, Jay:
Prepared testimony........................................... 22
Blanchard, Lloyd, Ph.D.:
Prepared testimony........................................... 105
Brown, Karen:
Information regarding Small Business Compliance Assistance... 229
Eckert, Nancy, Executive Director, DC Metropolitan Subcontractors
Association, Washington, DC, letter supporting H.R. 2666....... 222
Ensign, The Honorable John:
Prepared testimony........................................... 18
Gunn, Thomas, Jr., Executive Director, Arizona Small Business
Association, Tuscon, AZ, letter supporting S. 2483............. 223
Hogge, Jim, State Director, Idaho Small Business Development
Center; C. Stephen Allred, Director, Department of
Environmental Quality; Lisa Hill, Program Director, Idaho OSHA
Consultation Program, Boise, ID, letter regarding S. 2483...... 224
Higgins, Gregory:
Prepared testimony........................................... 99
Kerry, The Honorable John F.:
Opening statement............................................ 17
Letters for the record....................................... 110
S. 2483 analysis and text.................................... 150
H.R. 203, report and text.................................... 163
H.R. 2666, analysis, report and text......................... 200
Letter from Hector V. Barreto................................ 218
Letter from Kaaren Johnson Street for Representative Manzullo 220
Males, Sam:
Prepared testimony........................................... 115
O'Brien, Nancy:
Prepared testimony........................................... 125
Shanahan, Mark:
Prepared testimony........................................... 120
Letter supporting S. 2483.................................... 225
Wilson, Don:
Prepared testimony........................................... 8
Letter supporting S. 2483.................................... 225
Wolverton, Diane, Chairman of the Board, Association of Small
Business Development Centers, Laramie, WY, statement for the
record......................................................... 227
PROMOTING SMALL BUSINESS REGULATORY
COMPLIANCE AND ENTREPRENEURIAL
EDUCATION: THE ROLE OF THE
SBDC NETWORK
----------
THURSDAY, AUGUST 1, 2002
United States Senate,
Committee on Small Business and Entrepreneurship,
Washington, D.C.
The Committee met, pursuant to notice, at 2:11 p.m., in
room SR-428A, Russell Senate Office Building, the Honorable
John F. Kerry (Chairman of the Committee) presiding.
Present: Senators Kerry, Cleland, and Bond.
OPENING STATEMENT OF THE HONORABLE MAX CLELAND,
A UNITED STATES SENATOR FROM GEORGIA
Senator Cleland [presiding]. Our roundtable will come to
order. I have been informed that Chairman Kerry has been
delayed, but he would like us to go ahead and begin the
roundtable.
I would like to thank everybody for participating in what I
believe will be a good discussion about the merits of two
pieces of legislation passed by the Committee last week to
grant additional resources to the Small Business Development
Centers so that they can provide regulatory compliance
assistance to small businesses and entrepreneurial training to
vocational education students.
I once was in the State legislature and a guy read
everything that was on the sheet. He came to the bottom and it
said ``tell a joke.'' So this says ``turn to opening
statements.''
[Laughter.]
Thank you all for being here. My thanks to the Chairman and
to Kit, Senator Bond, and all the others and your staffs.
Congressman Sweeney and the Association of Small Business
Development Centers put together the Senate version of the
National Small Business Regulatory Assistance Act.
S. 2483 makes substantial improvements to the House-passed
version, we think, of this legislation including an improved
funding formula to ensure all States participating in the pilot
program receive resources to run the program effectively, a
streamlined study on the types of regulatory assistance
provided to small businesses under the pilot program, a
revamped provision on privacy rights for SBDC clients derived
from a memorandum of understanding between the SBDCs and the
Small Business Administration, as well as technical changes
such as updating the list of where SBDC services are provided.
I believe the support expressed for S. 2483 by a number of
the Small Business Development Centers around the country, the
National Association of Small Business, the National
Association of the Self-Employed, and the chair of the National
Steering Committee of the Ombudsman Small Business Assistance
Program, as well as the letter from the House sponsor of the
bill, Congressman Sweeney, Republican of New York, requesting
that the Committee mark up S. 2483, are overwhelming and
indicative of the strong grass roots support for my
legislation.
It is no secret that small businesses want to comply with
Federal regulations but often lack the knowledge of how to do
so, and may be afraid to go to a regulatory agency for advice.
S. 2483 will allow these small businesses to work with their
trusted SBDC counselor, who can provide the confidential, free
of charge, in-depth regulatory compliance assistance so
desperately needed.
SBDCs can also coordinate with other service delivery
organizations to arrange for additional and more in-depth
compliance assistance.
I understand the SBA may be opposed to S. 2483, as it was
opposed to the House version which passed the House on October
2, 2001. I am actually really troubled by the letter that SBA
Administrator Barreto sent to the Commerce chairman the night
before the markup, raising concerns about this legislation and
stating that it duplicated other compliance assistance
programs. I disagree and would point out that there is a
provision in my legislation requiring the SBDCs to work with
other compliance assistance programs to make sure that this
does not occur.
In 1999 EPA's Innovations Task Force released a report
entitled ``Aiming for Excellence: Actions to Encourage
Stewardship and Accelerate Environmental Progress.'' That
report contained several action items, one of which was to
``support a network of public and private organizations that
provide assistance on environmental compliance.''
According to that report, ``many regulated groups,
especially small and mid-sized businesses, are wary of seeking
help from EPA and other Federal agencies. Because of this we
are not in the best position to offer--'' this is the letter
now ``--the best position to offer direct compliance
assistance. But there are many organizations that are in a good
position to help because they already have contact with a large
number of regulated entities.''
``Some examples are State and local governments, small
business assistance programs, and Small Business Development
Centers. These organizations already have an infrastructure in
place to deliver information and assistance and businesses
often turn to them.'' That's a great quote.
In addition, the legislation does not seek to duplicate
current efforts underway at EPA or other regulatory agencies.
Rather, it requires the SBDCs to form partnerships with Federal
compliance programs. In fact, the SBDC Association is currently
negotiating a memorandum of understanding with the EPA Section
507 Compliance Program Network to provide just this type of
service in the anticipation of legislation.
I understand that similar concerns were expressed during
the House's consideration of this version of my legislation and
that some believe the SBDCs would somehow ``take over''
regulatory compliance assistance.
I would just like to stress that this legislation does not
seek to put forward the SBDCs as the lead provider of
regulatory compliance assistance. But the fact does remain
small businesses trust their local SBDCs and are demanding
these services. That being said, as included in the House
report, I would support the inclusion of report language
stating that the SBDCs must form partnerships in order to
participate in the pilot program.
Once again, I would like to thank the Chairman, Senator
Kerry, and Senator Bond for their involvement. We look forward
to today's discussion.
Senator Bond.
OPENING STATEMENT OF THE HONORABLE CHRISTOPHER S. BOND, A
UNITED STATES SENATOR FROM MISSOURI
Senator Bond. Thank you very much, Senator Cleland. I want
to thank all of the participants who showed up for the
roundtable on short notice, after last weeks' markup. We are
very busy, in the Senate, with the defense appropriations bill
on the floor, but it is always important for us in this
Committee to take time out to listen to what our friends in the
small business community and the organizations and associations
that work with them have to say.
Usually, I guess, to paraphrase Yogi Berra, ``you can hear
a lot just by listening.'' We try to apply that task.
Today's roundtable obviously focuses on the Small Business
Development Centers and the role they can play in bringing
regulatory compliance and entrepreneurial education to the
small business communities.
For many years, those of you who work with SBDCs know that
in spite of the fact that they've brought very valuable help
and assistance to the small business community in many, many
areas, they have always had to fight hard for the funding.
Despite the fact that millions of small businesses and budding
entrepreneurs have been helped, we in the Senate frequently
have had to fight battles to restore budget cuts. Some of you
may remember when we enacted legislation in 1997 to counter the
insistence from the last administration to move the SBDCs to
the segment of the small business community least capable of
making these payments. Fortunately, I am proud to say we won
the battles to maintain the annual appropriations to SBDCs, and
the Bush Administration's Budget for fiscal year 2003 asks for
$88 million, the same amount that Congress approved for the
current year.
I wish the amount was higher, but given the pressing
demands of homeland security, national defense, prescription
drugs, and on and on, we are fortunate to be in a position
where we are not struggling to restore budget cuts. I guess
that is a small step forward for us.
Now we are looking to the SBDCs to help Federal agencies
deliver regulatory compliance and entrepreneurial education to
help strengthen the small business sector. These are all large
tasks, particularly in the area of regulatory compliance
assistance.
Now trying to convince EPA and OSHA to provide compliance
assistance to small businesses has been a long-held goal of
mine, since I came to the Senate as a matter of fact. When I
took over as Chairman of this Committee in 1995, there had been
a regular chorus of small businesses complaining about the
difficulty and even, I would say, the impossibility of
complying with the multitude of Federal and State regulations.
This led to our inclusion in my Red Tape Reduction Act of a
requirement that agencies create small entity compliance guides
for those regulations that would significantly impact a
substantial number of small entities. The Red Tape Reduction
Act passed the Senate with no votes against it, was passed
unanimously out of the House, and signed by the President in
1996.
As Chairman of the VA/HUD and Independent Agencies
Appropriations Subcommittee--and this was during the same
time--I tried for a number of years to convince, or perhaps the
more appropriate verb would be coerce, the EPA to understand
that their efforts to improve the environment would be more
effective if they would reach out and help the small business
community.
Year after year, we would add money, directives, and
pressure on the EPA to improve and expand its level of
regulatory compliance assistance to small entities. We won some
battles, but we also lost a few. Let me share one example of
the battles we fought.
In the fiscal year 2000 Budget request, compliance
assistance was assigned a very low priority by that
Administration. The EPA, under the previous administrator,
sought to reduce funding for small business compliance
assistance by $5 million, which would have been about a 22
percent cut. These cuts were restored on a bipartisan basis in
our Appropriations Committee, which I was chairing at the time,
I am pleased to say.
It is no secret that if you make regulatory compliance
assistance available to small business you create a win-win
situation. Small businesses win because they can be more
effective in wading through the maze of Federal and State
requirements. We can achieve a greater compliance with and
achievement of both the rules and the goals of improving our
environment, improving the safety of our workplaces, and a wide
range of other requirements to aid employees.
For years I have received reports about the success of Sam
Males, the director of the Nevada SBDC, who has been able to
join us today. Sam and the Nevada SBDC have demonstrated how
compliance assistance can help small business. His demonstrated
success is much of the driving force behind legislation before
the Committee today.
To provide effective regulatory compliance assistance, we
should not give the Federal regulators however, in my view, a
free pass by dumping all of their responsibilities in the laps
of the SBDC community. Over the last 18 months, I have been
pleased to see change in the attitude toward small business
compliance assistance at the EPA and at OSHA.
The Bush Administration has made providing compliance
assistance a high priority. It has implemented an ambitious
plan to reach out and provide small businesses with the help
they need to understand and comply with the myriad
environmental regulations that they face.
At the same time, OSHA has established what may be a model
for agency relationships with the SBDCs by entering into a
partnership with SBDCs to facilitate and promote small business
compliance assistance related to OSHA. Their partnership
agreement makes it clear that OSHA will be the source of
expertise and training information regarding how to comply with
OSHA regulations. The SBDCs are to function with them as part
of the delivery system for this information. That seems to make
sense.
Equally important, the SBDC/OSHA partnership was struck
because the Bush Administration recognized the imperative to do
as much as possible to assist small businesses in complying
with regulations and to explore all possible opportunities to
create new methods of delivering this assistance to small
businesses.
Significantly, and maybe as a result of, this landmark
partnership was reached without specific mandates from
Congress. We did not act, but good things happened.
Today we are fortunate to have key officials from the EPA
and OSHA to help us analyze whether this legislation before us
is on target. That is, whether the legislation as written helps
bring their ongoing compliance assistance initiatives to the
small business. Specifically, from the EPA I welcome Jay
Benforado, EPA's Deputy Associate Administrator for Policy,
Economics, and Innovation; and Lisa Lund, the Deputy Director
for the EPA Office of Compliance. They are joined by Gary
Visscher, the Deputy Assistant Secretary for OSHA at the
Department of Labor.
I cannot ignore my good friend from the SBA, Lloyd
Blanchard, the SBA COO is here with the Agency's Ombudsman and
fellow Missourian, Michael Barrera. I think we have brought
together an excellent group for the roundtable. We have
officials from the State level, key players from the SBDC
community, as well as the key central players at the Federal
agency level.
I ask that you take a hard look at the bills we consider
this week and give us your best guidance. For example, I notice
in both the House and Senate versions of the Small Business
Regulatory Compliance Assistance Bills, there is only a passing
reference to the partnership or relationships between the SBDCs
and the Federal agencies. At the same time, S. 2483 directs the
SBDCs to establish programs similar to those established under
Section 507 of the Clean Air Act Amendments of 1990.
With the initiatives currently underway at OSHA and EPA, I
would urge the participants in the Roundtable to take a hard
look at what the relationship should be between the SBDCs and
the Federal agencies. Please help us address those roles in the
bill. Let us not duplicate what the Federal agencies are
supposed to be doing. Let us see that the job gets done and
gets done very well.
It would be difficult, in my view, to convince
appropriators to fund a program, a new program, when money is
already being given to Federal agencies for the same task
unless we can show that there is a significantly improved
delivery of that kind of a assistance. Perhaps we could create
a pilot program to deliver regulatory compliance assistance to
small businesses by having SBDCs deliver valuable technical
information to the small business community and serve perhaps
as conduits for questions and answers.
Perhaps we could have the SBDCs side by side with small
businesses as they navigate Federal environmental and work
safety rules that otherwise could be very daunting roadblocks
for most small businesses.
I appreciate the chance to address you and look forward to
reading the comments we develop in this roundtable. I ask your
forgiveness because we do have a lot of other matters going on
in the Senate. There will be a full transcript of the
proceedings available to all of the Members of the Committee. I
expect that the real life information you give us from the
constituencies and the agencies you represent will be of
invaluable assistance to us in crafting something that helps
move the ball forward and assures that we can have increased,
more efficient, and more hassle-free compliance.
With that, I turn my side of the program over to my trusty
staff, always willing, always anxious to hear good ideas, ask
piercing questions, and provide wise observations on the
proceedings.
Senator Cleland, I turn it back over to you.
Senator Cleland. Thank you very much, Senator Bond. I would
like to call on Don Wilson, president of the Association of
Small Business Development Centers for his presentation
regarding SBDC services, current and proposed.
Mr. Wilson.
STATEMENT OF DONALD WILSON, PRESIDENT, ASSOCIATION OF SMALL
BUSINESS DEVELOPMENT CENTERS, BURKE, VA
Mr. Wilson. Mr. Chairman, I appreciate very much your
inviting the ASBDC here today, and I appreciate your leadership
and that of Chairman Kerry and Ranking Member Bond, and all of
the Members of the Committee who last week looked favorably on
this legislation.
We understand there are some questions. I think your rather
eloquent statement at the start hopefully will put to rest some
of the kind of urban rumors that SBDCs are trying to take over
small business compliance assistance. Your legislation very
clearly sets it up as a partnership program. I think Ranking
Member Bond's reference to the landmark agreement with John
Hinshaw and the folks at OSHA indicate that that is what SBDCs
are all about.
SBDCs, for 20 years, have stressed partnerships. We partner
with Congress. We partner with SBA. We partner with financial
institutions. We partner with corporate entities, public
entities, small businesses of all sorts in everything that we
do. That is our model, is partnerships. For anyone to believe
that what we are trying to do, or certainly what you are trying
to do, Senator Cleland, with this legislation is to create a
monopoly position for SBDCs, they need only to read the bill or
to read your very eloquent statement.
SBDCs are in a unique position. We see 600,000 small
businesses or pre-venture clients every year. That is for an
hour face-to-face, or more. There is no other delivery system
in the country that sees that many people face-to-face for that
length of time. There is nothing comparable.
We have 1,000 brick and mortar centers across the country.
Congress has invested millions of dollars in this remarkable
infrastructure. It needs to be utilized to the max.
As your statement said, and as I think the various folks,
Mr. Hughes, Mr. McCracken, and Mr. Satagaj know, constantly
they hear, as I am sure you hear on the Hill, the regulatory
burden, the regulatory burden. Our friends at SBA, the studies
out of the Advocate's Office and other places, document how
disproportionate the burden is on small businesses, how much
more costly per employee it is for someone with one to 20
employees, or 20 to 50, compared to someone with 50 to 100.
Our clients, when they come in wanting to start a business
or come in with other problems, or wanting to expand the
business, they want to be sure that they are in compliance with
regulations. Why would that be true? Their family, their
nephews, their aunts, their uncles, their spouses work in these
businesses. They do not want unsafe workplaces for their
children or their brother or their wife. They want to know what
the regulations are, and they want to know how to comply with
them in the most effective, cost efficient way. And they ask us
that constantly, and we need the resources to help deliver
that.
We work in partnerships right now with all kinds of service
providers. We work with the 507 program, the pollution
prevention people. Sam's program in Nevada is an absolute
model. We want to continue these partnerships. We want to
expand the level of services because there is clearly, clearly
a yawning gap between the availability of services and the
need.
Certainly this legislation which Senator Cleland and
Representative Sweeney, and the other Members of this Committee
supported last week, will move us in that direction and direct
the SBDCs to work jointly with all the other providers simply
to expand the levels of service.
Mr. Chairman, we thank you for the time you have given us
and we will be glad to respond to any questions that you may
have.
[The prepared statement of Mr. Wilson follows:]
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OPENING STATEMENT OF JOHN F. KERRY, CHAIRMAN, SENATE COMMITTEE
ON SMALL BUSINESS AND ENTREPRENEURSHIP, AND A UNITED STATES
SENATOR FROM MASSACHUSETTS
Chairman Kerry [presiding]. Thank you very much, Don.
Let me just apologize to everybody for my absence from the
beginning here, but I think, as I hope somebody told you, I was
down at a signing at the White House of a piece of legislation
that I initiated called the Nurse Reinvestment Act, which is an
effort to expand the availability of professional nursing in
America. I apologize again for being late here.
Second, let me thank all those who helped us so much to get
through a fairly steep markup agenda just a few days ago, which
we did get through with the understanding we would proceed not
only to have this roundtable, but to build the record
appropriately so that colleagues were comfortable with where we
are heading here. I am very appreciative to everybody on short
notice coming together to help us do that.
I do not want to interrupt the flow at all. I can stay for
a little bit, not long unfortunately, but I do want to just
emphasize that I think that the regulatory side of the piece
here that Senator Cleland and I particularly--and I am grateful
to my colleague, who I know had to leave, for opening in my
absence--that he is co-championing, along with myself and
others, is really geared to try to facilitate the regulatory
process. We are anxious to minimize the load on people,
maximize the level of understanding, and compliance. Hopefully,
people will feel this helps do it.
On the second piece, I know Senator Ensign has a statement
in support and I would like to submit that to the record.
[The prepared statement of Senator Ensign follows:]
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Chairman Kerry. Second, on the second component of this,
the entrepreneurial vocational technical component of it, I
just want to suggest that that is very much in keeping with
sort of the larger purpose of the SBIC program and the small
business efforts to help people transition, especially from
trades and elsewhere where they may have a good idea and not a
lot of knowledge to go with it. I think it is a really good
complement to that effort.
So that is the spirit of being here and we certainly look
forward to all of your practical input in the course of
building this record so we can hopefully go to the floor. I
think there is a lot of good will toward both of these bills,
but perhaps not a full understanding of all of the components
or some concerns about a piece here and there.
I certainly hope to work with Senator Bond on this issue. I
think we can work out some language that hopefully meets both
parties' interest with respect to that.
Then, when we get back, my hopes would be we could pass
this in September. But I am very, very grateful to everybody
for taking part in this today, and I do not want to interrupt
further.
Jay Benforado, if we could go now immediately to you, thank
you.
STATEMENT OF JAY BENFORADO, DEPUTY ASSOCIATE ADMINISTRATOR,
OFFICE OF POLICY, ECONOMICS AND INNOVATION, U.S. ENVIRONMENTAL
PROTECTION AGENCY, WASHINGTON, D.C.
Mr. Benforado. Thank you, Mr. Chairman. Good afternoon, we
appreciate the opportunity to participate in this roundtable
discussion.
EPA has a long history of assistance to small business. In
1982, EPA established a program to provide regulatory
compliance assistance for small business and we have grown
since then. In particular, in 1996 this Committee passed the
Small Business Regulatory Enforcement Fairness Act which
provided the agency further impetus to improve its rulemaking
process and regulatory compliance assistance to small business.
I would like today to describe the four main elements of
our work. First, we have a Small Business Ombudsman Office,
Karen Brown, sitting behind me, which is the one-stop gateway
for small businesses to get information. The Small Business
Ombudsman is an advocate for small business at EPA and provides
several important services: toll-free hotline, answering over
1,000 calls a month; a newsletter with alerts and timely
information; a dedicated small business website that provides
immediate access; support to the State Small Business
Assistance Programs, as mandated under the Clean Air Act; and
finally, we've worked with the EPA programs to develop the
compliance guides and the fact sheets and the checklists that
need to accompany all rules.
The second area is the implementation of SBREFA, which
focuses attention on small business issues prior to rulemaking
and then after rulemaking during the compliance period. We
actively encourage participation by small businesses in
rulemaking. We have held about 25 SBREFA panels to date. Most
importantly, I think there has been a growth in change in EPA
culture about the importance of addressing needs of small
business concerns.
We have issued recently six SBREFA compliance guides and
routinely develop the guidance material for rules with impacts
of greater than $100 million per year.
The third area we operate is the National Regulatory
Compliance Assistance program, which is the network that we use
to get material to environmental assistance providers. We work
with everyone--Small Business Development Centers, Small
Business Assistance Providers, pollution prevention, Small
Business Trade Associations, OSHA, SBA, Tribal Governments just
to name a few.
We have learned that no one provider can really provide all
the infrastructure tools, delivery mechanisms expertise needed
to reach the multitude of small businesses, so we see ourselves
more as a wholesaler. Let me give a few examples.
We do provide tools to assist other assistance providers.
We have a National Environmental Compliance Clearinghouse which
is a repository of over 5,000 State and Federal environmental
compliance assistance documents. We produce sector notebooks--
33 so far--that are guides that include the Federal regulatory
requirements and pollution prevention information.
We also provide grants to States. Two years ago we provided
over $1 million to actually evaluate the effectiveness so we
can improve compliance assistance.
We also host conferences that link compliance assistance
providers. We have 10 compliance assistance centers. In a 2001
survey, we found 90 percent of respondents found the centers
helped them get the right information. 73 percent said they
actually took actions after visiting a center.
Fourth and final area is EPA's technical and pollution
prevention assistance programs. Since 1989 we have provided
over $70 million to develop pollution prevention assistance
programs and infrastructure in every State. We have a design
for the environment program which is one of our first voluntary
programs to help small businesses adopt environmentally
friendly but cost effective technology.
Our most recent venture is a pollution prevention resource
exchange, P2Rx, which is a national network of eight regional
centers.
In closing, EPA has made great strides in our regulatory
compliance assistance programs for small business. The key to
success, as has already been said by the Senators and other
panelists, is the partnerships to get the right people together
to deliver information to small business.
I would like to just offer for the record, and I have
handed out to the panel, background information about the
publications and material we have at EPA.
Thank you and I look forward to the discussion.
[The prepared statement of Mr. Benforado follows:]
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Chairman Kerry. Thank you.
I just received notice that we have two roll call votes
coming up in a few minutes.
Greg Higgins, thank you. Welcome, good to have you here.
STATEMENT OF GREGORY L. HIGGINS, JR., STATE DIRECTOR,
PENNSYLVANIA SMALL BUSINESS DEVELOPMENT CENTERS, PHILADELPHIA,
PA
Mr. Higgins. Thank you, Mr. Chairman. It is a pleasure to
be here and have this opportunity.
I want to very quickly summarize a few things relative to
the vocational technical entrepreneurship bill. First of all, I
would like to speak to the need for the program, the SBDC's
performance relative to meeting the need, the proposal itself,
and the perceived benefits.
Relative to the need, it is no secret to the folks in this
room that small businesses are responsible for creating almost
all the net new jobs in the current economy. The good news is
that at any one time in the United States, about 10 percent of
the adult population is considering starting a business. The
bad news is that they fail at a significant rate.
We think we have a pretty good handle on why they fail. If
you look at the clients of the Small Business Development
Centers you find that about 80 percent of the people who are
coming to us for business assistance have not been in business
before. And 80 percent of the businesses, these are individuals
who are coming to us, do not have an educational background
that would provide them the kind of management skills they need
to successfully start and operate a business.
I think when you wonder about why that happens, the reality
is that in the United States, most of the publicly funded
educational systems do not provide a coherent curriculum on how
to start and operate a business. And this goes to the high
schools, it goes to the vocational and technical schools, it
includes the community colleges and quite frankly, it includes
the colleges and universities as well. So we have an economy
substantially dependent upon small business and an educational
system that really doesn't deliver the tools that people need
to compete in that business.
Let me turn then to the SBDCs' performance. We know--and we
have been operating these programs now for better than 20
years--we know that if we work with small businesses we can
greatly increase their level of success, their capacity to
survive, and the rate of growth of those businesses. The firms
that we work with have a 35 percent higher survival rate than
other small businesses. At 8 years, 60 percent of the firms we
are working with are still in business.
We also know that they grow much faster. The firms that we
have surveyed in Pennsylvania grow at a compound rate of about
20 percent a year over 5 years. They also increase employment
at a much higher rate than other small businesses, about 16
percent a year.
So currently you have a program that is meeting this, I
think, clearly demonstrated need in terms of the educational
system. But the reality is that Small Business Development
Centers can only touch a tiny percentage of the individuals out
there, the 10 percent, that are looking to start a business.
So in that context, the question becomes what are we going
to do about it? It seems to me, and Senator Bond spoke to the
Senate's efforts to help us obtain funding in the past. But the
reality is we understand that the Small Business Development
Centers by themselves are never going to meet all of the demand
that is out there. It makes more sense for us to take the
knowledge that we have gained over 20 years of doing this, and
export it to the institutions that are touching businesses
first.
Particularly, we think it is a very good idea to start with
the vocational and technical schools because we know by looking
at our client base and by looking at what the vocational and
technical schools are doing that they are graduating people
with terrific technical expertise but who, in most cases, lack
the business management expertise it takes to start and be
successful. Your own experience probably with small businesses
of that sort in your community would verify that.
What the Act proposes that we do is work with these schools
to provide the kind of curriculum that small businesses and
potential small business owners need in order to succeed.
The primary benefit is fairly obvious. We think through
this we can greatly reduce the failure rate of many of these
folks coming out of these institutions that are interested in
starting a business.
A second benefit is, even if you're not starting a business
coming right out of a school, it is our sense that you make a
much better employee, if you understand customer relations, if
you understand how money is made in a business, you are a
significantly better employee than if you just understand the
technical aspects of the job.
The third benefit is that if these folks are starting
businesses, then they are going to be creating additional
employment. They are going to be hiring other people that are
also going to be adding value to the economy.
So in summary, we think there is a clear need for this. You
have two sets of institutions that I think perform very well in
their separate responsibilities, and we think it makes great
good sense to put these two together to benefit the small
business population of the United States.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Higgins follows:]
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Chairman Kerry. Thank you, Greg.
Our fourth and final presenter, Dr. Lloyd Blanchard, the
COO of SBA. Thank you.
STATEMENT OF LLOYD A. BLANCHARD, Ph.D., CHIEF OPERATING
OFFICER, U.S. SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C.
Dr. Blanchard. Thank you, Mr. Chairman, and good afternoon.
I want to thank the Committee for holding this roundtable
and inviting SBA to share its concerns in the National Small
Business Regulatory Assistance Act, S. 2483, and the Vocational
and Technical Entrepreneurship Development Act, H.R. 2666.
S. 2483 would establish a 4-year pilot program under which
Small Business Development Centers, SBDCs, would provide
regulatory compliance assistance to small businesses. We note,
however, that Section 21(c)(3)(H) of the Small Business Act
already requires SBDCs to maintain current information
concerning Federal, State and local regulations that affect
small businesses and counsel small businesses on the methods of
compliance.
In addition, Section 21(c)(3)(Q) mandates that SBDCs
provide information to small business concerns regarding
compliance with regulatory requirements.
These mandates are part of the annual SBDC program
announcement and are included in the cooperative agreement.
This bill would not only duplicate activities already mandated
for SBDCs, but would also duplicate activities mandated for the
Office of Advocacy and the National ombudsman, Michael Barrera,
who is here with me today.
Despite our concerns, we agree that small businesses face
an overwhelming maze of regulations. In fact, as part of the
President's management and small business agendas, SBA has
already started to create an Internet-based business compliance
one-stop. Toward this effort, SBA is the managing partner of a
24-agency working group designed to compile all Federal and
State regulations that affect small businesses into a single
portal called BusinessLaw.gov.
This portal goes beyond serving simply as a library of
information. It provides expert tools to walk the small
business owner through the compliance process. The biggest
advantage of this portal is that it would be available anywhere
and any time to all small businesses, a feat that one-on-one
service providers cannot match.
The other bill we are discussing today, H.R. 2666, would
establish a vocational and technical entrepreneurship
development program to provide grants to SBDCs, to assist
secondary schools or postsecondary vocational or technical
schools in developing curricula to promote entrepreneurship.
SBA's programs, including its technical assistance
programs, are designed to assist small businesses and
entrepreneurs, not schools. SBA believes that this is an
educational development program more properly administered by
the Department of Education.
Moreover, Section 18 of the Small Business Act expressly
prohibits SBA from duplicating activities of other Federal
agencies. The Department of Education already has programs
headed by the Assistant Secretary for Vocational and Adult
Education which offer support in designing high quality
vocational and technical programs.
In conclusion, SBA believes that these two bills are
redundant of existing programs and authority. Nevertheless, SBA
stands ready to work more closely with the SBDCs to determine
whether their existing efforts for regulatory compliance
assistance meet the goals of this Committee.
Thank you for the opportunity to address this roundtable.
We look forward to a productive discussion.
[The prepared statement of Dr. Blanchard follows:]
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Mr. DaSilva [presiding]. Thank you, Dr. Blanchard.
My name is John DaSilva. I work for Chairman Kerry. He had
to leave for the floor votes. I am the staff person who is
going to be conducting the roundtable and serving as the
moderator today.
I am going to be including, at this time, two items into
the record on behalf of the Chairman. One is a letter to the
Chairman from Congressman Robert Brady of Pennsylvania in
support of his legislation, H.R. 2666.
The second is a letter from SBA's Chief Counsel for the
Office of Advocacy, Thomas Sullivan, in support of Senator
Cleland's legislation, S. 2483, the National Small Business
Regulatory Assistance Act.
[The letters referred to follow:]
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Mr. DaSilva. Before we begin, I would just like to go over
a couple of housekeeping items for everyone participating in
today's roundtable.
Today's meeting is an official function of the Committee on
Small Business and Entrepreneurship, and as such there will be
a record of today's discussion. I would ask that before making
any comments, you remember to clearly state your name so that
the court reporter can indicate who is speaking for the record.
Participants are asked to keep their remarks as concise as
possible, as discussion time tends to move quickly and everyone
deserves a chance to be heard.
If you have a comment or a question you would like to say,
please turn your name card up like so and you will be placed in
the speaking order. Please wait to be called upon by the
moderator before addressing the group.
The Chairman has stated that he would like the record held
open for 2 weeks for people to submit additional comments. So
if anybody does not get a chance to address a topic today, you
can submit comments for the record by contacting the Committee
clerk, Jaime Hyatt.
At this time, I would like to have all the participants
briefly state their name and affiliation and introduce
themselves. If we could begin to my right with Paul Cooksey of
Ranking Member Bond's staff.
Mr. Cooksey. I am Paul Cooksey. I am Minority Chief Counsel
for the Small Business Committee.
Mr. Freedman. I'm Marc Freedman, I am Regulatory Counsel
for Senator Bond.
Mr. Higgins. I am Greg Higgins. I am the State Director of
the Pennsylvania Small Business Development Centers at the
Wharton School of the University of Pennsylvania.
Mr. Conroy. Good afternoon. I am Christian Conroy. I am the
Associate State Director with the Pennsylvania Small Business
Development Centers.
Mr. Wilson. My name is Don Wilson. I am president of the
Association of Small Business Development Centers.
Mr. Males. I am Sam Males. I am the State Director for the
Nevada Small Business Development Center and Co-Chairman of the
ASBDC Regulatory Interest Section Group.
[The prepared testimony of Mr. Males follows:]
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Mr. Visscher. Gary Visscher. I am the Deputy Assistant
Secretary for OSHA.
Mr. Barrera. I am Michael Barrera, National Ombudsman,
Small Business Administration.
Dr. Blanchard. Lloyd Blanchard, Chief Operating Officer,
Small Business Administration.
Ms. Lund. Lisa Lund, Deputy Director of the Office of
Compliance with the U.S. Environmental Protection Agency.
Mr. Benforado. Jay Benforado, Deputy Associate
Administrator for EPA's Policy Office.
Mr. Zarker. My name is Ken Zarker. I am the manager for
Pollution Prevention and Industry Assistance at the Texas
Natural Resource Conservation Commission, and also chair of the
National Pollution Prevention Roundtable.
Mr. Shanahan. I am Mark Shanahan. I am the Small Business
Ombudsman for the Clean Air Act for the State of Ohio. I also
serve as the chair of the National Steering Committee for the
507 Program.
[The statement of Mr. Shanahan follows:]
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Mr. Satagaj. John Satagaj, President and General Counsel,
the Small Business Legislative Council.
Mr. McCracken. I am Todd McCracken. I am President of
National Small Business United.
Ms. Long. Brenda Long, President of the Virginia
Association for Career Technical Education.
[The statement of Ms. Long follows:]
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Ms. King. Nancy King, Career Experience specialist, Fairfax
County Public Schools.
Mr. Hughes. Robert Hughes, president, National Association
for the Self-Employed and also a self-employed CPA from Dallas,
Texas.
Mr. DaSilva. Thank you, everybody.
At this point I would like to open up the roundtable
discussion. I am going to begin the discussion today on Federal
regulatory compliance assistance. The first question I am going
to put out before the group is: Are small businesses being
adequately served through current Federal programs? Anybody who
wants to address the topic can turn up their card and I will
place them into the speaking order.
Mr. Satagaj. First of all, we can solve this problem with
less regulation rather than more regulatory assistance, so why
do we not start with that?
The second thing, we clone Karen. We tried to do that in
SBREFA. If we had more Karen Browns, we would also have a lot
better assistance.
And third, the SBDC is a great program. If you look far
enough back in the record, you would have to look a long way.
There is more and more programs, unfortunately I have been
around longer than the programs have, and this is one of them.
But if you look back at its beginnings, I was one of the great
skeptics about the SBDC. I talked all the time when it was
first started up that this thing was going to be a waste of
money.
You get this on the record, John Satagaj admits I was
wrong. It does not happen often.
It worked well, it has worked well all these years. You can
never get enough assistance. I think the Senators all alluded
to it, some of the statements did, you cannot reach everybody
through any single program. So we have to use a variety of ways
to reach folks. And the SBDC does reach a part of the community
that no one else does.
Greg said it well, we all know about checkbook business
people. A lot of folks that really, whether it is from the
regulatory environment or whatever, they do not have the
opportunity to go to a wonderful site, and I am sure
BusinessLaw is going to be terrific. But unless somebody is
there helping them through it, they are still not going to get
through it, no matter how much you do. That is what these folks
do better than anybody, is take those folks, work with them,
and take them, whether it is balancing the checkbook or whether
it is dealing with the regulatory responsibility, they still
need the help. All the websites in the world will not solve
that problem. You still need that one-on-one help.
So the answer is yes, we need it very much and let us go to
it.
Mr. DaSilva. Thank you, John.
Dr. Blanchard.
Dr. Blanchard. Yes, thank you, John.
I agree with John, in the statements he just made. We do
need less regulation, in response to what the real problem for
small businesses is.
In reducing that regulation, the role of the National
Ombudsman and the role of the Chief Counsel for Advocacy spend
all of their time fighting agencies to help think more about
small businesses in the development of their regulations.
With regard to the question that you posed, are small
businesses currently being properly served? The Administration
believes they are not being properly served. That is precisely
why it has begun an interagency initiative to build the
business compliance one-stop which is a one-stop portal that
will consolidate all regulations.
Is that enough? Of course not. There is a role for one-on-
one counseling for small businesses in assisting them to comply
with regulations. That role is already authorized in the Small
Business Act and we believe that the SBDCs do a good job in
this area. But for some reason, I am confused about their
support for this bill because it seems as if they feel as if
they do not have enough authority to meet this particular goal.
Mr. DaSilva. Thank you, Dr. Blanchard.
Mark Shanahan.
Mr. Shanahan. I guess from the perspective of programs that
deliver the assistance on the ground, obviously we agree that
there does need to be an increase in the resources and the
service provision to small businesses, but I think the issue in
this bill that we find particularly encouraging is the
provision of resources that encourage and provide incentive for
the building of partnerships that let us make use of the
existing successful expert networks that are out there, but who
are stretched to their limit in terms of the services they can
provide.
We need help in developing pilot programs to learn better
how to interact without duplicating resources and recreating
expertise that is already there, but instead to figure out
better ways to efficiently deliver the combined services in a
way that gets to the small businesses in a useful manner.
We believe that the 507 Program represented a real vision
when Congress included that in the Clean Air Act Amendments of
1990, that very specific recognition that small businesses face
different challenges dealing with regulations. So we are very
supportive of the notion of encouraging new types of
partnerships and experiments to deliver that service
efficiently.
Mr. DaSilva. Thank you.
Sam Males.
Mr. Males. Yes, thank you.
First of all, I would like to say thank you to everybody
that made kind remarks about the Nevada SBDC and being actively
involved in this. We certainly appreciate it. I wish I could
take all the credit, but the credit goes to the partnership
that we developed with our State of Nevada Division of
Environmental Protection and working together to solve a
problem.
I just heard Dr. Blanchard say about the SBDCs having the
authority. That is correct. What we do not have is the
resources to address those issues. What we have is a tremendous
bunch of small business counselors that are well-versed in a
lot of different areas, but not necessarily in technical
expertise.
If we go back to our beginnings, when we started our
program in 1988, we were approached to provide assistance for
regulatory outreach and the reason they came to us is they were
not very successful in outreaching to small businesses.
Our program just started with training. But by 1990, when
we got a full-time person, it began to flourish. Somebody that
was able, within our network, to work with the technical
assistance providers and work with them on all kinds of not
only the technical consistency within the program, what the
State was trying to accomplish, but outreaching through the
small business network, which is the Chambers of Commerce, the
economic development authorities, and everybody else involved
in small and medium-sized communities to understand what is
taking place and getting information, confidential, friend to
business.
Once that began to occur, our program has begun to
flourish. Just for the record, we use no funds from our SBDC
allotment from SBA. We get funds from alternative areas. Again,
a lot of that credit goes to our State for seeing the vision.
But there is a lot of my compatriots and colleagues out there
that need some support so that they can get engaged in the
program.
Mr. DaSilva. Michael Barrera.
Mr. Barrera. Good afternoon, everyone.
First of all, I want to thank the SBDCs, they have been a
good partner of mine. As you know, I have hearings all across
the country and I have had the chance to talk to businesses all
across the country about some of the issues that they have. Of
course, they really want to cut down on regulations.
But I think by adding another statute, we are just creating
more of a maze of red tape. We have got two statutes that
really address this already. If you look at SBREFA, this thing
almost mirrors what SBREFA has in it. As far as SBREFA, there
is a section that says the agencies are to provide compliance
guides for the specific trades.
So I think what we've got to do is if you look at SBREFA,
we have to make sure it is working. The stuff is already there.
We have to make sure that we are measuring it and that we are
seeing what kind of results are coming out of it.
I think we also have the Small Business Paper Reduction
Act. In the Small Business Paper Reduction Act, it calls for a
task force of the SBA, Advocacy, OMB, EPA, USDA, and all the
major agencies to really look at some of the paper maze for
small businesses and see how we can reduce that and make it
easier for them.
That Act, that was just passed, also calls for us to
develop a Government Internet portal for small business to go
to. So a lot of the things that we are talking about, it is
already in the statutes. So I do not think we need to recreate
the wheel. I think we need to let that one wheel that we have
go all the way around and see if it works.
This task force that is supposed to be formed on the Small
Business Paper Reduction Act, we ought to let this task force
get together and come back with some findings and they should
work with the Pennsylvanias, the Nevadas, and see what systems
are working. Let us come up with recommendations from the task
force, because right now, like we said, one of the things we
are trying to cut down is regulations. But now we are creating
another law which basically says the same thing.
So that would be my comments for this.
Mr. DaSilva. Ken.
Mr. Zarker. For the record, I am Ken Zarker with the Texas
Natural Resource Conservation Commission.
I would also like just to join my colleagues Sam and Mark,
in terms of the types of deliveries of services that we provide
on the front lines at the local level.
The National Pollution Prevention Roundtable is a coalition
of States, local governments, businesses, NGO's that have been
working collaboratively to promote pollution prevention,
helping small businesses comply with regulations, plus to show
them ways that they can save money in terms of their
environmental costs.
We support the goals of the bill, but we think that under
the Section 3(c)(1) where it talks about the agreements
established by the Administrator to provide the Small Business
Development Centers, the development of these partnerships, I
believe it would be helpful to have a more formal mechanism,
through something like a memorandum of agreements among these
service providers.
What we have done traditionally in the past is worked
together informally. I think we are now at the point, through
this legislation, where we can begin to build a more formal
partnership with the various service providers out there.
So we stand ready to do that. A number of our programs have
been funded under the Pollution Prevention Act of 1990 which
Jay Benforado had referred to in terms of the State grants that
are out there. So I think we can collectively leverage our
Federal dollars in a way that promotes compliance assistance,
promotes pollution prevention, and stewardship among the small
businesses that we work with.
We thank you for the opportunity to participate today.
Mr. DaSilva. Thank you. Ken, if I can just ask you a quick
follow-up on Section 3(c)(1) and requiring agreements, I am
just highlighting quickly the legislation. Section 3(c)(1)
starts out in carrying out the pilot program established under
this section, the Administrator shall enter into arrangements
with participating Small Business Development Centers. Such
centers shall list A, B, C, D, and then E is give referrals to
experts and other providers of compliance assistance who meet
such standards for educational, technical and professional
competency as are established by the Administrator and form
partnerships with Federal compliance programs.
So you are saying in addition to the requirements that they
form partnerships and give referrals to experts, what more
would be needed, in your view?
Mr. Zarker. Well, we had suggested a couple of items i
there. One, in addition to referencing the Section 507 programs
under the Federal Clean Air Act, we thought it would be helpful
to reference Section 13-104 of the Pollution Prevention Act of
1990.
We also thought that, for those SBDCs that have not
developed environmental assistance capacity, that they refer
those small businesses to existing environmental compliance
assistance programs where that capacity does not really exist
at the SBDC.
In terms of the partnerships under item F, we think that we
should maybe expand that language a little bit so that we
should form partnerships with local, State, and Federal
compliance programs.
Finally, the idea of this memorandum of agreement, we think
there should be a formal memorandum of agreement with the local
and State programs to buildupon the existing compliance and
environmental assistance programs, again to leverage our
Federal funding, share information and resources, and to build
these partnerships that we are talking about today.
Mr. DaSilva. Thank you.
Todd McCracken.
Mr. McCracken. Thank you very much.
I want to just make a general comment and then start
talking specifically about this bill. One thing we cannot, I
think, underestimate and I think often gets overlooked when you
are talking about the small business community as if it were
one monolithic thing, is the incredible size and diversity of
the small business community.
To think and suggest for a minute that we can say whether
small businesses are being adequately served by current Federal
programs, I think sort of misses the point. That is that I
think many kinds of small businesses probably are very
adequately served by the current system. But there is a whole
section of them that inevitably gets missed. When we have a
small business community as enormous and as versatile as we
have in this country, we need a lot of different ways of
reaching those people and lots of different avenues for talking
to them.
That is why involving the SBDCs, I think really makes
sense. Is a company that has 200 employees and simply has a
technical question on some regulation going to rely on SBDCs
for assistance? Of course not. But there is a whole swath of
companies out there, that in many cases do not even know that
they are supposed to be complying with those particular kinds
of regulations. They may be in visiting the SBDC for a totally
unrelated reason, but they have that expertise in-house to say
you know, something else you need to be thinking about, given
the kind of business you are in, is X, Y and Z. That could be
an enormous benefit to a part of the small business community
that I do not think is very well touched by the programs that
we have now.
If you do not know you are supposed to be complying with
regulation Y, why would you go to the EPA website to find out
about it? But there has to be a certain level of expertise
within the SBDCs for them to offer up those opinions in the
first place.
So the discussion, to me, of whether it is redundant or not
is sort of beside the point because lots of different kinds of
businesses get touched in lots of different ways. We just have
to remember that.
Mr. DaSilva. Thank you, Todd.
Marc.
Mr. Freedman. Thank you, John.
So you all did not get the impression that only the
Democrats had questions here, I just want to pose a little
thought to the folks from the SBDCs and the groups that work
most closely with them.
As Mr. Higgins pointed out earlier, in his statement, the
SBDCs can only really touch a very small percentage of the
small business out there, I think is the way you phrased it. I
have seen some numbers out of the NFIB that indicate only about
12 percent of small businesses turn to the SBDCs for assistance
in the last 5 years.
So my basic question is, to the folks from the SBDCs and
some of the agencies who are in touch with them and the other
interest groups that connect with them, what ideas do you have
for increasing the traffic into your centers from the small
businesses so that they can take advantage of all this great
work that is going on?
I do not think anybody disputes the idea that there is some
tremendous information available and assistance that small
businesses can get through the SBDCs. My big question, I think,
is given this new program idea, how are we going to make it
work well? And how are we going to justify it in the context of
getting more people to know about it?
Mr. DaSilva. Don.
Mr. Wilson. I am really taken aback by the question. The
issue that we are only serving 12 percent of the population
probably says we only have so many counselors. And as Greg and
Sam can tell you, in some centers you have folks who are
waiting 2 weeks, a month, 45 days to see a counselor. It is
lack of capacity because of lack of resources.
I am very disheartened by my good friend, Dr. Blanchard's
comments. Yes, we have been given the authority earlier to do
this, in 1996. The fact of the matter is from 1996 to 1999, 40
of the 58 SBDCs were level-funded. How could we take on a new
responsibility when we were not even keeping up with inflation.
Then we came to the Census. As a result of the Census, 24
States were scheduled to lose dollars, significant dollars.
To say that we are not serving enough people is to say no,
we do not have enough resources. What I would like to hear from
the SBA quite frankly, is to say why, with small businesses
sending 42 percent of the revenues to the Treasury, that agency
gets .04 percent of the budget?
Mr. DaSilva. I think the Chairman would like to know the
answer to that, as well.
Mr. Freedman. If I could just comment on the question that
I asked, my thought is that more people, more of the small
business community, needs to be turned on to what you do. Not
that you are not working at your capacity, but how do we bring
more people and make them aware of your efforts and get them
to, as Todd suggested, when they find out they have a
regulation they need to deal with, how do we get them to come
to you?
Mr. Wilson. Marc, I think one of the issues is they are
already coming to us. When folks are starting businesses, I can
tell you very few of them have ever heard of the general duty
clause. So when you are starting a business or you are starting
a retread plant and you do not even know you are supposed to
have a baghouse for your buffing dust, that is the type of
information that our counselors can provide because they work
very closely with EPA and OSHA.
Let me tell you, I ran a small business regulatory hotline
for 15 years. Thousands of phone calls came in every year from
the automotive industry. Who did I work with? I worked with
OSHA and I worked with EPA to have that information. They have
wonderful programs.
I can tell you there is not a greater--in my opinion--
public servant in this city than that lady right there. Any
time I called her, Karen Brown would get me any information
that I needed, and we disseminated tons of EPA information to
our members.
That is what I began to try to do when I got here and found
people like Sam and others who were trying to do it. We lack
the resources. Do Sam and Greg get out and market for more
people when they cannot even handle the people they have got
now? They have got waiting lists. Why would they invest money
in marketing to try to get more clients in the door when they
cannot serve the ones they have got?
We need resources. This bill needs resources. I am
astounded that my good friends at the SBA would not back that
concept.
Mr. DaSilva. I would turn to Dr. Blanchard next.
Dr. Blanchard. Thank you and thank you for considering me a
friend, Don.
Mr. Wilson. I certainly do, always have.
Dr. Blanchard. Obviously, there are resource tradeoffs that
have to be made in this society, in general, this government,
and of course in any agency including the SBA and its fine
partner, the SBDCs.
If 1,000 centers only serve 12 percent of the small
businesses, then it takes 2,000 to serve 24 percent. If you
keep going on and on, you're talking about somewhere upwards of
8,000 centers if we're working at the full capacity that I am
sure the SBDCs work at.
It is very difficult, given the resource constraints, to
serve all small businesses and to provide the kind of
regulatory relief assistance that we all, I think, are
interested in providing. That is why this President has not
only blessed the efforts that have already been undertaken in
the area of the Small Business Compliance Alliance, where the
Iowa SBDC is working on this, they are managing the alliance.
The Southern Texas SBDC is working with IRS on their
regulations. Nevada has already been mentioned, working with
OSHA. And others out there are already doing this. The
authority is already there.
What we need is a mechanism by which we can reach many more
small businesses at a more cost effective and efficient
fashion. What we are trying to do, in addition again to the
work of our National Ombudsman and our Office of Advocacy, and
the fine work that has been laid out by my partners in Labor
and EPA, is to create this portal, this business compliance
one-stop where businesses can dial into one website, have all
regulations of participating States, as well as all regulations
in the Federal Government, compiled in such a way that it is
not just a library, but that has expert tools that walks the
small business owner through the process of complying with the
regulation. So that by the time they leave that website they
are done complying with the regulations they need to move
forward.
Now this is something that could be made available to the
Small Business Development Centers. The Paperwork Relief Act
and the web portals that it authorizes, as well as the SBREFA
provisions, the Small Business Development Centers can work
with these sorts of things.
We do not disagree that this is an important component of
your job in helping small businesses. We simply believe that
the authority is there and if we are lacking in our ability to
address this important need, we need to work more closely
together.
This bill that addresses this need is simply duplicative.
Thank you.
Mr. DaSilva. Let me ask you, in his letter to the Committee
regarding S. 2483, SBA Administrator Barreto stated that, in
addition to the concerns that you mentioned that it duplicates
existing programs, he believed the legislation would also open
the SBDCs to possible liability issues.
I know when Senator Cleland, who drafted the legislation,
in his remarks today had stressed the legislation was one of
forming partnerships with the Federal agencies that are out
there providing these sorts of regulatory compliance
assistance. I have read through the legislation, the Chairman
has read through the legislation. And I cannot find anything
within the Act that is duplicative of something that is
currently going on within the Federal Government, unless you
count the fact that some SBDCs currently provide these
services.
To me it seems as if the portal program you are talking
about, it sounds as if that is not off the ground yet. And you
are also not talking about the counselor role that the SBDCs
play.
I would like to give you a chance to respond to that, and I
would also like to give the SBDCs a chance to respond to that,
as well.
Dr. Blanchard. You are right, the portal is not off the
ground. We are working, this is something that has been
proposed in the President's Budget for 2003. Five million
dollars has been proposed for the building of this portal. We
have already begun work in this area with resources that we
have already identified across agencies. But this is something
that we are asking for in the 2003 Budget.
With regard to the work that SBDCs already provide, they
provide excellent work. We do not dispute the need for the
SBDCs to address this important issue for small businesses. The
authority is there. We are simply confused why it is being
reauthorized.
Mr. DaSilva. Don or Sam.
Mr. Males. There is a basic assumption here that small
businesses one, have the time to look at regulatory issues that
are confronting them and they are going to go through a website
or something of that nature. In reality, that is not true.
The small businesses, in many cases, the regulatory manager
is the financial manager is the marketing manager, and is
constantly exposed to all these different ideas. The things
that rise to the top are what they address first, of their most
pressing concern.
What they want, and my experience in 14 years is they want
the information what is required of them, and then leave them
alone. It is pretty simple, but if somebody can give it and
they feel comfortable with them that they are working on their
behalf, and you have to build trust over time. It is not
necessarily a regulatory agency. But if they trust you, you
give them the information, and we find that the vast majority
of the small businesses want to comply. Give them the
information and leave them alone.
Mr. DaSilva. Greg.
Mr. Higgins. I guess I would just simply reiterate what Sam
said. Number 1, regulatory issues are not at the top of the
list of things that small businesses or individuals are looking
at when they are starting small businesses.
Number 2, we think that the best time to deal with these
regulatory issues is when they are starting the business. In
Pennsylvania, and I expect the same is true in Nevada, and I
know it is true around the United States, about half of the
folks that we are dealing with are in the process of starting a
business.
The question is where you get to them. That is the key
place at which an intervention can make some difference. They
are not going to look at the website, I am sorry. Pennsylvania
has websites, everybody has got websites. Not many people are
very interested, I am sorry. That is the reality.
Mr. DaSilva. Thank you, Greg.
I am going to switch topics right now and we can come back
to the regulatory issue, but I do want to make sure that the
roundtable does address all the topics that were on the agenda
for today. We are going to switch topics now to the need for
vocational entrepreneurial training. I am going to put out the
first question for the group.
I understand that according to the House Committee report
on this legislation, H.R. 2666, it concluded that there is a
critical need for vocational entrepreneurial training. I wanted
to put out a general question.
What are the benefits of providing entrepreneurial training
to vocational students, and what is the need for it?
Ms. Long. The Association for Career and Technical
Education represents educators across the country who provide
career-related programs to students in both secondary and post-
secondary. In many States, career and technical education
starts even earlier at even elementary and middle school.
Notice that I say career and technical education, rather than
vocational education.
Entrepreneurship and education is an integral part of
career and technical education programs, as it should be since
small businesses play such a vital role in the global economy.
We also know that State and local school districts take
differing approaches to this entrepreneurship education,
whether it is a stand-alone training class, whether it is
integrated within the career technical programs within the
school and curriculum.
The Federal role in education has been to assist in
creating educational opportunities for individuals in
communities, as well as to focus on management issues and
management importance.
With the role of small businesses in the economy, it is
fitting that Congress seek ways to assist local schools in
providing effective entrepreneurship education. I can speak as
a career and technical educator that we would like nothing more
than to be involved in partnering with businesses to work with
and to develop and expand and enhance entrepreneurship
programs.
We do encourage you to look at and coordinate your efforts
with the initiatives under the Quality Vocational and Technical
Education Act and work to ensure that a duplication is avoided
and that funds are used effectively and efficiently, so that we
can merge and mesh these two processes together.
We also encourage you to focus not only on the technical
assistance to schools, but to provide seed money to schools to
start entrepreneurship education or to upgrade existing
programs. Again, as I see it, we would take and love to take
the opportunity to enhance, expand and develop that partnership
with small businesses.
Mr. DaSilva. Thank you very much.
Nancy.
Ms. King. Nancy King, Fairfax County Public Schools.
Fairfax County, which is right across the river, has 24
high schools and 24 middle schools, and many more elementary
schools. We are the 11th largest school system in the country.
Frankly, we piloted entrepreneurship education, a separate
program, 12 years ago for the State. What happened at that time
is it did not go. We tried a separate stand-alone course, it
was a semester course, and it did not make, mainly because
graduation requirements today are becoming more and more
dramatic for students. This is considered an elective program.
In addition to that, we have a lot more accountability issues
today in core courses and our SOLs, of course, which we have
all read about.
We choose to deliver entrepreneurship education through our
career and technical courses. Frankly, 85 percent of students
in middle and high schools in Fairfax County take those career
and technical courses at some point. It may be one class, it
may be what we call completer classes, which means they take
two or more classes in their high school or middle school
education.
In addition to that, what has happened in Fairfax County is
5 years ago we added an academy concept where we have higher
level career and technical education courses and, through that,
we have two components which is career experience, which is
what I do. I work with businesses in the community to provide
career experiences for students. All students who go through
our academies are required to have a career experience.
In addition, we have a Career Connections program which is
K-12. Frankly, I think most of our academy students express a
desire to open their own business one day.
Anyway, what we like to see is some more career experiences
that include entrepreneurship activities. I work a lot with
large businesses, but frankly, small businesses--and I realize
they do not have the time to mentor or to take on job shadow
day opportunities--but they are a perfect opportunity for
students to get basic entrepreneurship information by going out
and spending a day with a small business owner.
We would also like to see more funding at the local level
to implement more programs, to deliver more entrepreneurship
education to these students.
As Brenda said, the Carl Perkins Funds drive what happens
in our career and technical programs. It could possibly be a
duplication. We would love to see the inclusion of
entrepreneurship education throughout our programs and feel
that it would be win-win.
Mr. DaSilva. Thank you, Nancy.
I am going to throw out another question on this topic.
Mr. Cooksey. Could I ask a question? Thank you, John.
Nancy, I am a resident of Fairfax County and I have four
children in your school system, four very lucky kids because it
is an excellent school system.
And my son, this past school year, one of the programs he
was involved in he was led through the process and created his
own business with a financial plan and a management plan and
all the hoo-haa that goes with it.
Mr. DaSilva. You did not help him with that, did you?
Mr. Cooksey. No, as a matter of fact, if I had helped him
he probably would have failed. He succeeded in spite of my
help, let us say.
But you raised a point, and I want to touch on something
that Dr. Blanchard has talked about when he started talking
about the duplication. And then Brenda brought up Carl Perkins
money. Unfortunately, people from the Department of Education
are not here, because this would have been something I would
have hoped that the Assistant Secretary for Vocational and
Adult Education would have been able to address.
As I understand it, and you mentioned something about
duplication just now. As I understand it, the Carl Perkins
Funds, not the student loan funds, but the voc-ed type funds,
they go as a block grant to the State education department. And
then the State education department makes subgrants to whatever
the local education group is, the school boards here, the
independent school districts in Texas or wherever.
Are you saying that when those funds are coming down there
is insufficient funds or there are no funds or you are not
permitted to use these funds to provide this kind of
entrepreneurial education at the vocational and technical
level?
Ms. Long. No, we certainly can use those funds for any
career and technical program that has been approved by your
State office as a part of that curriculum. So we certainly can
use that.
Any time though that you are talking about resources, you
are talking about career and technical education programs, you
are talking about a large amount of resources required to keep
these programs updated so that we are preparing our students
for the work force that small businesses need.
So these funds are available, if not always sufficient.
Mr. Cooksey. In the amount or in the scope that you can use
them for?
Ms. Long. In the amount. The scope that we can use them
for, yes. We have, in the State of Virginia, we embed and have
tried to embed entrepreneurship education within each of our
career and technical programs, whether they are technology
programs, whether they are trade programs, business, whatever.
So we have the flexibility of using our funds in any of our
career and technical programs. But as in any fund or grant that
you get, you always need additional resources, and we
supplement that from funds from the local school budget.
But we certainly can use those funds for entrepreneurship
and we do use those because, as I said in Virginia--and I do
not know what the other States do--but in Virginia it is
embedded within the competencies that we teach, for each
program across the board.
Mr. Cooksey. This vocational adult education legislation,
this Carl Perkins legislation, is up for renewal next year and
Congress will be, for a good portion of next year at the
committee level and the floor, will be debating this.
Obviously, this kind of practical input from the ground level,
in order to make sure that the legislation meets the needs of
the local areas.
Ms. Long. One of the things that we do as a part of our
national association, the Association for Career and Technical
Education, is work very closely with that committee in
providing input on whatever they request. At the State levels,
across the Nation, our career and technical educators certainly
network with their Congressmen and Representatives to support
that legislation and to support the funding.
We can show you where the impact comes right back to the
individual school districts, the localities, and how that
funding impacts that. So we certainly do provide that.
Mr. Cooksey. Thank you, Brenda.
Mr. DaSilva. Christian.
Mr. Conroy. I am Christian Conroy, Pennsylvania Small
Business Development Centers.
I wanted to just comment on the issue and the concern about
duplication of services. It is something that we are very
sensitive to in this program. We have structured our program,
as we have developed it, to ensure that it does not duplicate
other programs and services that are out there.
In Pennsylvania, we have been doing this since 1980, so 22
years. Over the course of that we have developed some strong
partnerships with the various types of organizations and
institutions that are out there in the community. It is from
that experience that we have brought this bill, we have worked
with Congressman Brady to develop the Vocational and Technical
Entrepreneurship Development Program.
One of the things about the Carl Perkins program out of the
Department of Education, that is really focused on developing
people for employment. There is not anything in there, in terms
of our interpretation, that really directs that to gear people
toward operating their own business.
So what we are looking at here is this would be taking an
established program that has been proven to work, that has over
20 years of experience, that has been fine-tuned and has
demonstrated an impact, and using that as a resource to reach
more people.
Mr. DaSilva. Thank you.
Brenda.
Ms. Long. I would just like to say that we would like to
use every effort to work with the Small Business Development
Centers to partner with you on developing and expanding
entrepreneurship programs. It is certainly what our association
would look at to want to be that positive part.
I guess we talk about it in terms of coordinating our
efforts. You have the expertise, we have the students. So we
need to come together in that vein.
Mr. DaSilva. Brenda, I take it that you feel that the SBDCs
are the appropriate folks to provide that kind of expertise?
Nancy.
Ms. King. I agree 100 percent with Brenda, and I do not
think I meant duplication in the vein that you took it. What is
important to us is to work--we already partner a lot with local
businesses, as I said. We send students out a lot in Career
Experiences with local businesses. The only reason the small
businesses have not taken part in that is because they are just
too busy. But we would love to have--we will welcome any
training we can get.
One of the questions I had was how that would be delivered,
too? Is that training for our educators? Guest speakers in the
classroom? Whatever we can take, we would be very happy to get.
Mr. Cooksey. Real quickly, a clarification here.
Your opinion, Christian, is that the Carl Perkins funds are
more for job training and not entrepreneurship or training to
start up and run a company. Is that your understanding?
Ms. Long. It is embedded. Entrepreneurship is embedded as a
part of career and technical education. So it is embedded in
the Perkins legislation. It is part of that. Entrepreneurship
is also a part of career and technical programs, so it is
embedded in that.
Mr. DaSilva. I am going to turn to Dr. Blanchard.
Dr. Blanchard. Thanks, John.
I think, as was mentioned by our colleagues, Nancy King and
Brenda Long, entrepreneurship education exists all around the
country. Do we need more to help small businesses and small
business startups? Sure.
But the real question is what is the means by which we
create more entrepreneurial education? The SBDCs do very well
to provide technical assistance and counseling to small
business and would-be entrepreneurs. They do very well at this.
The question is should they extend their role to do this
for schools and for school teachers to develop curricula? This
is the problem. Administrator Barreto has charged this agency
with really focusing on what we do very well. Resources are
tight and there are many programs that our agency has that
sometimes are so diffuse that we are not able to really do well
on the most effective programs.
The SBDC program is an effective program. We simply want to
be careful with expanding their role in areas where provision
is already there. The Department of Education is the
appropriate department to provide curricula assistance, to
schools. The SBDCs are the appropriate means for providing
technical assistance to entrepreneurs. Thank you.
Mr. DaSilva. Gregory.
Mr. Higgins. Let me respond to this mission issue because
every year the Small Business Development Centers respond to a
program announcement which is put out by SBA. Let me quote from
the activities in the program announcement on whether this is
an appropriate role.
It says:
Activities which promote and/or develop other funding
partners to assist the SBDC in its mission. Activities may
include recruiting, developing and overseeing private and
public resource organization individuals for the purpose of
providing business development, counseling, training, and
outreach efforts.
That, essentially, is what we are proposing to do in this
bill. We are not going to take over the career and vocational
operations. We cannot do it. We acknowledge that from the
outset. What we are proposing to do is work with them to work
with their clients, their students, to make them more effective
business owners.
Now I recognize that in many systems there are courses that
are described as entrepreneurial education, business education.
Our point is that there is not a coherent curriculum. There is
no question that there is some in some places, but for the most
part there is not a coherent curriculum that would teach
somebody the step-by-step process to starting and managing a
business.
That is what we do, we think, very well. But we think the
impact of our program has been demonstrated year after year. It
is that that we want to work with these other institutions to
increase their capability at the same time helping students. I
think we are doing both, Dr. Blanchard, working with businesses
while we are trying to help other organizations increase their
capacity, which is something that SBA charges us to do every
year.
Mr. DaSilva. Christian.
Mr. Conroy. I just want to follow up on Greg. I would hate
to put an age limit on the availability of SBDC assistance for
folks who are looking to start a business by saying you need to
be over 18 and having graduated from high school, because
otherwise we are not going to make this training available.
The other thing I think that is important is the training
for folks here is not just for folks who are in high school. I
mean, people who are in vocational and technical schools, in
community colleges, many times this is after they have
graduated from high school.
One other point I just wanted to comment on, getting back
to the Perkins Act, is I think one of the interesting points
that Brenda pointed out is that when the money is given out,
decisions have to be made as to what that is going to be used
for. That all gets back down to what Don had said initially. It
is about resources.
What this bill is looking to do is it is looking to provide
additional resources so that more folks who are interested in
starting a business have access to the type of information that
they need to be successful when they venture into that.
Mr. DaSilva. Nancy.
Ms. King. I just wanted to address how we embed
entrepreneurship in our career and technical programs. I taught
for 25 years in a career and technical classroom. I probably
was able to touch on entrepreneurship for about 3 weeks out of
that 36-week course. I was able to most likely give some
competency awareness of entrepreneurship through my vocational
student organization. I was able to give students creative
applications, doing the kinds of projects that your son was
able to do.
What we cannot touch on in the local school system is the
startup. That person who has decided ``now I am going to do
it.'' And also those people that decide they want to grow their
business. I am sure that those are the ones that come through
your door.
I just wanted to address what Christian just said and say
that yes, beyond that, those career and technical schools are
probably good venues for that, as well.
Mr. DaSilva. I am going to let Don make a comment and then
I want to turn it over to specific questions regarding the
bills themselves.
Don.
Mr. Wilson. Thank you, John, very much.
Let me harken back to a previous life of mine, when I was
in the automotive aftermarket industry. The Nation had a
terrible, terrible shortage of auto mechanics. It was a huge
issue for the industry and finding trained workers continues to
be a major problem for businesses.
But as we delved into that issue and looked at what was
being provided, we discovered that whether it was auto
mechanics, brick masons, or whatever, vo-tech schools in many
areas--now I live in Fairfax County, too, and my children are
products or Fairfax County Public Schools. They have some
outstanding curriculums that are certainly head and shoulders
above so many school systems around the country.
But whether it is in the general secondary schools or vo-
tech schools, so much of the vocational and technical education
is teaching someone to be a brick mason, teaching someone to be
an auto mechanic, teaching someone to be an electrician. They
get out of that course and, at some point in their life, maybe
originally or a few years later, they suddenly decide ``Gee, I
would like to do it myself.'' We would refer our people who did
that constantly to the SBDCs when I was in the automotive
aftermarket.
But what Greg understands is failure rates. People without
some exposure in their education to what entrepreneurship is,
and meaningful exposure, will often try it and fail. What we
want to reduce is the failures. We know who is creating jobs in
this country. We know who is driving this economy. We know that
1-in-10 want to do it.
The last 3 days, the newspaper indicated that of people who
are now working, who are now employed, I think it is something
like 30 percent expect to be doing something else within the
year. A significant number of those want to form small
businesses.
Now we have got to expand entrepreneurial training. These
people have the expertise to work with these people. They want
to do it. They want to partner. I think this Government, with
this kind of dollars--and $7 million is not a whole lot--can
find the resources to create these kind of partnerships to
improve the entrepreneurial climate in this country.
Mr. DaSilva. Paul has some specific questions he wants to
propose to the group on the legislation.
Mr. Cooksey. I want to refer back to S. 2483, the Small
Business Regulatory Compliance bill, because I have listened
intently to everything that has been said. I met with Sam Males
for a while yesterday afternoon and we talked some about this.
Everything seems to center around partnerships between the
SBDCs and the Federal regulatory agencies. It talks about the
two working together, going to and going out and helping small
businesses contend with Federal regulations.
The legislation that is before the Committee is different
from that. The legislation does refer to partnership in two
places. Under what it directs SBDCs to do, it is the sixth
thing listed. After the SBDCs are directed to set up programs
similar to the 507 program, to conduct training and educational
activities, to offer confidential free-of-charge counseling, to
provide technical assistance, to give referrals. Then it
mentions partnerships at the end.
I have spent a little bit of time at SBA and spent a little
bit of time here and one thing I have learned is if you want to
get something done with SBA, you better be very specific about
exactly what it is you want them to do. Because if you kind of
waffle around it and are not specific about it, heaven knows
where you are going to end up.
It almost seemed to me today, based on the discussion, that
the bill should be talking about the Federal regulatory
compliance assistance partnership act, and it should define
what that partnership should be. What this bill does not even
begin to address, it should define the relationship between the
SBDCs and the Federal regulatory agencies.
None of that is done here. But that is what we have to have
if we are going to have effective legislation. Because what
Senator Bond--and he would go off and be much more eloquent on
this than I am and much more specific. But the problems that he
would have to face is going to the appropriators because John,
you say the regulatory bill is $5 million a year, the education
bill is $7 million. In the overall scheme of things it is a
drop in the bucket. But still, you have got to go to the CJS
Appropriations Subcommittee.
If you have a program that looks like something that is
already there and Federal agencies that say it is duplicative
of what is already being done, you have got one chance out of
one-hundred that you may get partial funding.
On the other hand, if you have got legislation that has
been developed working with the Federal regulatory agencies,
working with Gary Visscher and his team at OSHA did in
developing the partnership and have them working with you on
developing the legislation, working with Jay and Lisa and their
team at EPA, and defining the partnership and the role.
Then you have legislation which I think we could probably
convince the 19 Senators on this Committee to unanimously
support. But that also the Federal agencies would say yes, this
make sense.
Mr. DaSilva. Paul, I am sorry. Is there a question in there
for the group?
Mr. Cooksey. What I am trying to get to is what is it that
you are trying to do? Is it that you are really trying to do a
partnership? Or are you trying to do what is set forth in this
bill?
Mr. Wilson. I think, Paul, that Mr. Sweeney, the unanimous
vote of the House Small Business Committee, and it seemed to me
the vote last week, and certainly Senator Cleland's very
eloquent comments today made clear that we are trying to
establish partnerships.
Now you and I know that when you draft legislation, most of
the time you leave things to regs. One of the things we
discovered is that there are certain folks that like to
micromanage things. We did not need any micromanagement for
SBDCs to go to their States or go to their 507s or go to the
pollution prevention people. Did not need micromanagement for
me to go down and work with John Hinshaw and his remarkable
staff. Did not need micromanagement for me to go and work with
Karen Brown.
It is very clear that SBDCs, the statute already says, that
we are to provide regulatory management assistance. It
stresses--that is one of the great things in this legislation--
it stresses that we are to establish partnerships. It is really
rather clear.
I do not think there is not anybody in this room that does
not understand from listening to Senator Cleland's comments,
and I know the comments that Ms. Velazquez and Chairman
Manzullo and Mr. Sweeney, Mr. Smith and folks on the other
side, they all understood that this bill was about partnerships
and that we were to go out and establish them, enhance them,
nourish them.
We know who the other deliverers are. We know that Karen
Brown has resources and Mr. Visscher has resources. That is
what we do. We go and find those resources, utilize them,
maximize them, coordinate them.
Now I read through this thing over and over and over and
over again and if the appropriators do not understand that we
are trying to set up partnerships and maximize things,
certainly Mr. Sweeney is an appropriator on the House side and
he understands it thoroughly.
I have not met anybody on the Senate Appropriations
Committee who cannot read this bill and understand what we are
trying to do. But if there needs some clarification, I would be
delighted, and I am sure all the folks in this room would be
glad to try to do that.
But what we truly hope is that this discussion that we have
got to tinker and tinker and tinker, you know this bill has
been around for a long time. We have been talking about doing
this for about 8 years. You have been a friend on this, and so
forth.
What I would hate to see, after 2 years of solid work in
this Congress, for us to tinker around and everybody go home
and it still not get done. Because the people who would be the
real losers are the small businesses out there in America's
economy.
Now we can tinker and we can keep trying to find
perfection, but there will always be somebody who will say
``that phrase bothers me a little bit.'' You keep referring
that we are going to create duplicate programs to the 507, but
the way I read it is that we are to use them as a resource, the
reference to the 507 program. I may be reading that
incorrectly, and you are far sharper at reading legislation
than I.
But I think everybody knows what is trying to be done here.
We have got a small window of opportunity. If we fail to
achieve this opportunity and let this Congress run out, we will
have to start all over again for 2 years. Once again, I am sure
there will be somebody that it is not quite right for them. So
let us decide whether or not we want to help small businesses
in this country with the--you know, I noticed that since 1996,
21,000 new regs and so forth.
My good friend down here in the corner, he is working to
help all he can. But you know, 21,000 new regs that apply to
small businesses. They are just swamped, Paul. Let us get the
job done. We can work with regulations. We work with SBA. We
can work with EPA. We have proved it with OSHA.
Let us get the job done and focus on who the client is, the
small business people in this economy.
Mr. DaSilva. Thank you, Don.
Mark.
Mr. Shanahan. Mark Shanahan.
I guess I would raise the issue, really a question for you,
Paul. It is something that you said in your statement.
Certainly, my network had the concern and then we read the
bill. I, also, I guess am echoing Don and saying from our
perspective I want to make sure we are reading it correctly.
We also had a concern that the legislation said that SBDCs
should create something like the 507 program, and then looked
at this language. It appeared to us that what the language says
is they shall provide access to programs like ours, which we
interpreted to include other programs like the P2 programs and
similar programs on non-environmental issues.
Our whole network would be very concerned if they felt that
the language does not say what we think it does, because that
is certainly the concept we are supportive of.
Mr. DaSilva. Mark, let me just quote the language. It says:
Specifically provide access to information and resources,
including current Federal and State, non-punitive compliance
and technical assistance programs similar to those established
under Section 507 of the Clean Air Act Amendments of 1990.
So it says ``provide access to information and resources.''
Mr. Wilson. That seems pretty clear to me.
Mr. DaSilva. Dr. Blanchard.
Dr. Blanchard. Yes, thank you, John.
Mr. Wilson, I will tell you, we all share your passion to
help small businesses. We surely applaud, and I speak for SBA
obviously, we applaud your efforts, your ingenuity and your
initiative to establish the partnerships that you have with the
agencies represented here today. We support your further
initiative to establish other partnerships with similar
agencies who impose onerous regulations on small businesses.
What does this bill provide you that you are not already
authorized to do? That is all I have to ask.
Mr. Wilson. Doctor, I think it expresses very clearly and
very articulately the will of Congress that we establish
partnerships so that it is perfectly clear to everyone
concerned, and it also authorizes new resources that this
program has not had since Congress first told us to help small
businesses deal with their regulatory burdens.
Mr. DaSilva. John.
Mr. Satagaj. It is all about the money. I mean, let us get
it on the table. I am tired of this debate only in who cares,
the U.S. statutes are replete with redundant deals. I mean, we
would not have, Michael, as good a job as you do, if it was up
to me we would not have your office because we have the Office
of Advocacy.
When they were developing these things, and Paul knows
this, as the legislation was developed, I said why do we have
to have an Ombudsman for? We have got an Office of Advocacy.
Well, you do a great job. So we got it right there. The
truth is it is another way to try and find money.
Mr. Barrera. You do not like things starting out, do you?
[Laughter.]
Mr. Satagaj. No, I do not. But I can be proven wrong more
than once.
The point is on the table, if it is redundant, so what? Let
it be on the books because there are a zillion other ones
redundant.
Is it the point that you do not want it to go for more
money a different way? If it is, let us get that on the table
and understand it, rather than this debate on these other
things. I mean, let us say what it really is. Let us make some
progress here instead of it is in, it is out.
Are you against the funding of the program from another
way?
Dr. Blanchard. You know, I work with other program offices
within the agency to develop a resource base that we can use to
support and help small businesses, whether it is through our
finance programs, through our entrepreneurial training
programs, or our programs that help provide access to
Government contracting.
Obviously, we do not exist in a vacuum. There are other
demands on resources that are managed by agencies that are
mandated to manage those.
Am I against having more resources? No. Am I able and
willing to manage and try to fund ways to increase our ability
to serve small businesses with the resources that the President
has provided us? Yes.
Mr. DaSilva. I would also like to point out one particular
instance, in regard to the resource issue, that I think we are
overlooking in the legislation. Within the authorization for
the legislation, unless I am completely misremembering, but
since I have it highlighted I can just read it.
Limitation on the use of other funds. The Administrator may
carry out the pilot program only with amounts appropriated in
advance specifically to carry out this section. Meaning if the
appropriation does not happen, the money does not come, the SBA
does not do the program.
So I think the concern that SBA is going to have to do this
regardless does not really factor in here, at least just
looking at the legislation the way it is drafted. There is a
limitation. So if the money is not appropriated, the program
does not happen.
Dr. Blanchard. We understand that.
Mr. DaSilva. Then is the objection to the appropriators
giving more money to the program?
Dr. Blanchard. The Administration, this is an
Administration position, John. We are at war. Resources are
very, very tight. SBA just received--there was just a
rescission that was made. Rescissions are being made across the
Government to help pay for the new Homeland Security
Department.
The Administration is managing the resources that it has.
This President pushed for a tax cut for the American people and
small businesses, more than any group in this country,
benefited from that tax cut. The President ran and is being
successful in managing fiscal resources in a way that few have.
He faces a difficult challenge now with the challenges we face
in regards to the war on terrorism, providing economic security
which means providing economic security for small businesses,
and to provide homeland security.
The resources are tight. The Administration is not in a
position to ask for more money for a program that has
resources, plenty of resources, that are leveraged sometimes 2-
, 3-, 4-to-1. That is based on the success of the SBDCs. They
are a wonderful partner to have. But those resources that are
provided are leveraged very, very well.
To ask for more money suggests that this group, this
organization, this partnership, this network is operating at
100 percent and cannot go farther without it.
Mr. DaSilva. So the objection is to the funding?
Dr. Blanchard. The objection is to the duplication of the
authorization.
Mr. DaSilva. Let me ask you a question, since you mentioned
the President's agenda and SBA's opposition to the legislation,
of all the legislation that has passed the House Committee and
the Senate Committee in this Congress, has the Administration
supported any piece of legislation passed out of the
committees?
Dr. Blanchard. I am sure the Administration is in the
process of reviewing that legislation and will soon come up
with a position on each one of those.
Mr. DaSilva. The Administration has sent up some letters in
opposition to several pieces of legislation? Have they sent up
any letters in support of any of the legislation?
Dr. Blanchard. I do not believe they have. I do not believe
they have just yet.
Mr. DaSilva. Thank you.
Don.
Mr. Wilson. Mr. DaSilva, no one could be more cognizant of
the difficult job that the President has and OMB in trying to
allocate resources. And I appreciate Dr. Blanchard, who is from
OMB, reflecting that position.
But in the 27 years that I have been in this city, I must
be very candid with you, I have rarely seen OMB be an advocate
for resources for small business. They advocate all manner of
programs for all manner of groups, but rarely do they advocate
for small business.
Now what I am going to say is politically incorrect and I
apologize if I offend anybody, because the struggle for how to
find the resources is always there. I noticed recently in the
House, and you are talking about the lack of resources and the
difficulty of the economy and fighting a war on two fronts, at
home and abroad.
But we found $10 million for the National Endowment for the
Arts, new money. Now if the National Endowment for the Arts is
a higher priority for our Government than the small business
community that drives this economy, then there are some
misplaced priorities, in my personal opinion. But that is my
personal opinion.
I noticed in the Ag bill that you will probably do about $8
million for oilseed farmers. You could probably get all of them
in this room. You could not get 25 million small businesses in
this room.
So it is a matter of how you allocate those resources and
we just believe that with a little effort Dr. Blanchard and his
friends at SBA and others could reflect the will of so many we
find in the Congress who understand that if we are going to get
the resources to run these other programs, we have got to get
the economy going again.
If the economy is going to go again, the only person who
has done it--just look at the last recession. Who got us out of
the last recession? It was not big business. Look what is
happening with the Fortune 500 laying off people. If we get out
of this current recession and the 1 percent growth that was
about one-third of what people had predicted, it is going to be
small business.
So you better start taking care of the golden goose or the
egg is not going to come out.
Mr. DaSilva. Thank you, Don. Any further comments?
I am going to propose a question on the second bill before
the Committee, H.R. 2666. I am going to ask specifically for
the SBDCs, since they would be the primary beneficiary of the
grants, in regard to the authorized level and the grant funding
level within the legislation, if they felt that the specific
level set and the minimum grant level of $200,000 was enough to
provide these programs, to run these programs effectively?
Mr. Higgins. Yes.
Mr. DaSilva. So that is a yes.
I am going to ask the same of the SBDCs, one of the
differences between the Cleland bill and the Sweeney bill is in
regard to the funding formula. The Cleland bill has a simpler
funding formula of grants between, I believe $150,000 and
$200,000, depending on the State's size. I wanted to know if
that was an adequate level that was set for the pilot program?
Mr. Wilson. Mr. DaSilva, as you know, we had had some
discussions on the House side about the funding formula and
there is an anomaly there that if certain large States were
chosen for grants with a group of small States, there would be
a great unevenness there and would probably result in some of
the smaller States not having the adequate resources.
We appreciate the work of Senator Cleland and Senator
Kerry's staff, we think, in improving that. I think Mr.
Sweeney, in his letter to you in supporting this bill, fully
understands that the language in this bill is an improvement in
the funding formula and we fully support and are grateful for
it.
Mr. Males. I would just like to second that, as well. I
think having that flexibility gives the States the opportunity
to meet their needs. Some may not need the dollar amount that
is listed there as a minimum, and I think by raising it
somewhat it will help the larger States who will need those
resources to meet their demand.
Mr. DaSilva. Did anybody have any questions specifically?
Mike.
Mr. Barrera. I'm looking at the bill, getting off all the
funding stuff. I'm staying away from that specifically.
On the bill itself, you talk about giving referrals to
experts and other providers of compliance assistance, and it is
up to the Administrator to come up with a way to determine
whether these experts are going to be acceptable. That is
putting the SBA in a situation that we are supposed to
determine whether someone is an expert or not, or can they be
an expert.
Mr. DaSilva. A regulatory role, yes.
Mr. Barrera. A regulatory, so you are going to put us in
the role of determining whether EPA's people are going to be a
proper expert. With EPA you have got several, Clean Air Act,
Superfund stuff. Even though you are talking about funds, you
are putting a lot of extra, I guess time and resources to
determining who is going to be an expert or not.
We talked about the potential legal liability. I am a
former lawyer and if we have some SBDCs possibly referring
people to an expert and that person is not an expert and that
small business gets into trouble, that is where you may run
into some potential problems. An inventive lawyer will find
ways.
I just wanted to make that comment.
Mr. DaSilva. Thank you. Any further comments?
I thank the participants for coming today. We ran a little
over, which is not unusual for the Committee. With the
Chairman's compliments, I thank you for coming.
The record will be held open for 2 weeks. With that, we're
adjourned.
[Whereupon, at 4:03 p.m., the roundtable was adjourned.]
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