[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

                              ----------                              

                 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

                              ----------                              

                           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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