[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
FULL COMMITTEE LEGISLATIVE HEARING ON
ENERGY, VETERANS ENTREPRENEURSHIP,
AND THE SBA'S ENTREPRENEURIAL
DEVELOPMENT PROGRAMS
=======================================================================
COMMITTEE ON SMALL BUSINESS
UNITED STATES HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
MAY 16, 2007
__________
Serial Number 110-22
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
U.S. GOVERNMENT PRINTING OFFICE
34-834 PDF WASHINGTON DC: 2007
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
DC area (202)512-1800 Fax: (202) 512-2250 Mail Stop SSOP,
Washington, DC 20402-0001
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
WILLIAM JEFFERSON, Louisiana STEVE CHABOT, Ohio, Ranking Member
HEATH SHULER, North Carolina ROSCOE BARTLETT, Maryland
CHARLIE GONZALEZ, Texas SAM GRAVES, Missouri
RICK LARSEN, Washington TODD AKIN, Missouri
RAUL GRIJALVA, Arizona BILL SHUSTER, Pennsylvania
MICHAEL MICHAUD, Maine MARILYN MUSGRAVE, Colorado
MELISSA BEAN, Illinois STEVE KING, Iowa
HENRY CUELLAR, Texas JEFF FORTENBERRY, Nebraska
DAN LIPINSKI, Illinois LYNN WESTMORELAND, Georgia
GWEN MOORE, Wisconsin LOUIE GOHMERT, Texas
JASON ALTMIRE, Pennsylvania DEAN HELLER, Nevada
BRUCE BRALEY, Iowa DAVID DAVIS, Tennessee
YVETTE CLARKE, New York MARY FALLIN, Oklahoma
BRAD ELLSWORTH, Indiana VERN BUCHANAN, Florida
HANK JOHNSON, Georgia JIM JORDAN, Ohio
JOE SESTAK, Pennsylvania
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Kevin Fitzpatrick, Minority Staff Director
______
STANDING SUBCOMMITTEES
Subcommittee on Finance and Tax
MELISSA BEAN, Illinois, Chairwoman
RAUL GRIJALVA, Arizona DEAN HELLER, Nevada, Ranking
MICHAEL MICHAUD, Maine BILL SHUSTER, Pennsylvania
BRAD ELLSWORTH, Indiana STEVE KING, Iowa
HANK JOHNSON, Georgia VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania JIM JORDAN, Ohio
______
Subcommittee on Contracting and Technology
BRUCE BRALEY, IOWA, Chairman
WILLIAM JEFFERSON, Louisiana DAVID DAVIS, Tennessee, Ranking
HENRY CUELLAR, Texas ROSCOE BARTLETT, Maryland
GWEN MOORE, Wisconsin SAM GRAVES, Missouri
YVETTE CLARKE, New York TODD AKIN, Missouri
JOE SESTAK, Pennsylvania MARY FALLIN, Oklahoma
.........................................................
(ii)
Subcommittee on Regulations, Health Care and Trade
CHARLES GONZALEZ, Texas, Chairman
WILLIAM JEFFERSON, Louisiana LYNN WESTMORELAND, Georgia,
RICK LARSEN, Washington Ranking
DAN LIPINSKI, Illinois BILL SHUSTER, Pennsylvania
MELISSA BEAN, Illinois STEVE KING, Iowa
GWEN MOORE, Wisconsin MARILYN MUSGRAVE, Colorado
JASON ALTMIRE, Pennsylvania MARY FALLIN, Oklahoma
JOE SESTAK, Pennsylvania VERN BUCHANAN, Florida
JIM JORDAN, Ohio
______
Subcommittee on Urban and Rural Entrepreneurship
HEATH SHULER, North Carolina, Chairman
RICK LARSEN, Washington JEFF FORTENBERRY, Nebraska,
MICHAEL MICHAUD, Maine Ranking
GWEN MOORE, Wisconsin ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York MARILYN MUSGRAVE, Colorado
BRAD ELLSWORTH, Indiana DEAN HELLER, Nevada
HANK JOHNSON, Georgia DAVID DAVIS, Tennessee
______
Subcommittee on Investigations and Oversight
JASON ALTMIRE, PENNSYLVANIA, Chairman
CHARLIE GONZALEZ, Texas LOUIE GOHMERT, Texas, Ranking
RAUL GRIJALVA, Arizona LYNN WESTMORELAND, Georgia
(iii)
C O N T E N T S
----------
OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M.......................................... 1
Chabot, Hon. Steve............................................... 2
Sestak, Hon. Joe................................................. 4
WITNESSES
PANEL
Goldstein, Wilma, Acting Assistant Administrator for the Office
of Entrepreneurial Development, United States Small Business
Administration................................................. 5
Rowe, C.E. Tee, Associate Administrator of Congressional
Legislative Affairs, United States Small Business
Administration................................................. 8
Higgins, Gregory L. Jr., Pennsylvania Small Business Development
Centers........................................................ 9
John, David L., New Mexico SBDC Statewide Advisory Council....... 12
Wrigley, Barbara, Women's Business Center of Northern Virginia... 14
Sklar, Scott, Committee of the Sustainable Energy Coalition...... 16
APPENDIX
Prepared Statements:
Velazquez, Hon. Nydia M.......................................... 31
Chabot, Hon. Steve............................................... 33
Sestak, Hon. Joe................................................. 35
Altmire, Hon. Jason.............................................. 37
Goldstein, Wilma, United States Small Business Administration.... 38
Higgins, Gregory L. Jr., Pennsylvania Small Business Development
Centers........................................................ 45
John, David L., New Mexico SBDC Statewide Advisory Council....... 50
Wrigley, Barbara, Women's Business Center of Northern Virginia... 52
Sklar, Scott, Committee of the Sustainable Energy Coalition...... 55
(v)
FULL COMMITTEE LEGISLATIVE HEARING
ON ENERGY, VETERANS ENTREPRENEURSHIP,
AND THE SBA'S ENTREPRENEURIAL
DEVELOPMENT PROGRAMS
----------
WEDNESDAY, MAY 16, 2007
U.S. House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2360 Rayburn House Office Building, Hon. Nydia Velazquez
[Chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Jefferson, Shuler,
Cuellar, Ellsworth, Johnson, Sestak, Chabot, Heller, and
Jordan.
OPENING STATEMENT OF CHAIRWOMAN VELAZQUEZ
ChairwomanVelazquez. Good morning. I am very pleased to
call this morning's hearing on proposals to reauthorize the
SBA's entrepreneurial development programs to order.
Over 400,000 new businesses are created each month during
an outage year. As Americans pursue self-employment, most find
it both a challenge as well as a rewarding adventure. Time and
time again, entrepreneurs have found that strong sustainable
enterprises result from steady commitment to developing a well-
formulated business plan. The plans that are most likely to
succeed are those that detail long-term strategies to obtain
affordable capital, manage operational processes, and address
human resources issues.
As part of its mandate to ensure small business owners can
be competitive in the marketplace, the Small Business
Administration administers a portfolio of entrepreneurial
development programs. These include small business development
centers, women business centers, SCORE, Native American, and
veterans' business average programs.
All of these initiatives support business development by
providing counseling, technical assistance, research, and
mentorship to entrepreneurs throughout the country.
This program has a proven record of success. In fact, the
businesses that utilize these initiatives are twice as likely
to succeed. Over the past few years, as more and more Americans
have decided to make their dreams of business ownership a
reality, we have seen an increased demand for these services.
Yet, despite the increasing need for entrepreneurial
development initiatives, this program has not been modernized
in the past six years.
Today's hearing will provide us with an opportunity to
examine five proposals that aim to enhance these programs. The
modifications will establish new initiatives and improved
program operations to effectively fulfill the needs of small
businesses. Most importantly, the proposals enable SBA programs
to assist the next generation of entrepreneurs. By tailoring
proposals to the current economic demand facing small
businesses and the emerging sector of entrepreneurs, this
initiative will promote business development in communities
nationwide.
The face of small business is changing today. Over the past
two decades, women-owned businesses have increased at twice the
rate of all firms. We are also seeing more minority
entrepreneurs. In 2002, they owned 18 percent of all small
firms. Veterans represent 14 percent of small business owners.
And that number only continues to grow as more return from Iraq
and Afghanistan.
A key component to ensuring SBA's entrepreneurial
development programs are effectively assisting entrepreneurs is
not only making sure the needs of these growing sectors are
being met but also that changing economic conditions are being
accounted for.
Today entrepreneurs are being hit with a whole new set of
challenges different from the ones many struggle with, even if
they get a goal. To address these challenges, the proposal
before us creates a new subprogram within the SBDC program to
help entrepreneurs deal with health care, energy, tax, and
regulatory costs.
We are also expanding the number of veterans' business
centers and restructuring the women's business centers to open
additional spaces. Part of the proposal also includes launching
a new initiative to help senior citizens who are interested in
becoming a small business owner to get those ventures off the
ground.
The proposal before us today provides SBA entrepreneurial
development programs with a capacity to develop training,
technology, and informational resources to ensure small
businesses can address their specific challenges.
This process to modernize SBA's entrepreneurial development
programs has evolved from lessons learned. They will be
revisited as we continue to look for ways to strengthen the
entrepreneurial sector.
To support business ownership in the Twenty-First Century,
it is critical that we build upon an already strong foundation.
Making this change is a first step toward ensuring our small
business owners have what they need to keep this economy strong
for generations to come.
I now recognize Ranking Member Chabot for his opening
statement.
OPENING STATEMENT OF MR. CHABOT
Mr.Chabot. Thank you, Madam Chair. And I want to thank you
for holding this hearing to review the entrepreneurial
development programs administered by the Small Business
Administration, the SBA.
I also want to thank our witnesses for their testimony that
we will be hearing here shortly. I know we look forward to
hearing their views on the legislation that the Committee will
be considering in next week's markup also.
The SBA's entrepreneurial development programs can play an
important role in helping small business owners succeed. These
programs range from narrowly targeted programs to very broad
programs that take advantage of the resources of America's
higher education system and retired business executives.
The programs that we'll be considering today, SCORE, the
small business development centers, and women's business
centers, haven't been reviewed, it's our understanding, by this
Committee since 2003. So it's certainly timely that we do this,
and I want to commend you for doing this.
It's important to ensure that these programs are doing what
they're intended to do, which is help small business men and
business women. We will also be looking at proposals to
increase veterans' entrepreneurial opportunities, ways to
improve the SBA's Native American outreach, and potential
changes to the Small Business Investment Act that would
increase investment in renewable energy technology development
by small businesses.
As anyone who has bought gas in the last few weeks knows,
prices at the pump are over three dollars a gallon. And that's
just unacceptable. In my view, the most effective solution to
this problem is to increase domestic oil production in the
outer continental shelf, for example, and in ANWAR and to
improve this nation's ability to refine crude oil into gasoline
while we work on developing promising new technologies that
will serve us in the future.
Regardless of where one stands on the energy debate, I
think we can all agree that it's critical that we become much
more energy-independent as quickly as possible.
I want to again thank Chairwoman Velazquez for this
opportunity to thoroughly review the SBA's entrepreneurial
development programs and look forward to working with her in
strengthening them.
And I yield back.
ChairwomanVelazquez. Thank you, Mr. Chabot. And I also
would like at this point to recognize any member who has been
working on this proposal from both sides of the aisle. If you
wish to be recognized, I will do so now.
Mr. Shuler?
Mr.Shuler. Madam Chair, Ranking Member Chabot, thank you
for holding this hearing today. I am particularly pleased that
we are considering Small Energy Efficiency Business Act. Small
businesses are the first to be affected by the rising energy
prices. And small business will be the first to find the
solution.
This bill will give them the tools that they need to lead
our nation in energy efficiency and independence. And I want to
commend the two of you again for your hard work and your
dedication in truly making this Committee what it should be and
continue to be a very active part of our small business
environment and throughout our whole society commend both of
you for your hard work and dedication.
ChairwomanVelazquez. any other member who wishes to be
recognized at this point? Mr. Sestak?
OPENING STATEMENT OF MR. SESTAK
Mr.Sestak. Thank you, Madam Chair and Ranking Member
Chabot.
I would like to take a few moments and follow up. Let me
speak on a piece of legislation that I will be introducing
later this week. And it's to enhance two important Small
Business Administration programs: the SBDCs and the Service
Corps for Retired Executives, SCORE.
I serve as a representative in a district that is
economically driven by a very vibrant local small business
economy. And so I am very appreciative of the entrepreneurial
assistance that SBA provides.
We know that the entrepreneurial development assistance
programs do work, as Madam Chair had mentioned. And, as she had
said, this entrepreneurial assistance, businesses that gain
this type of assistance are twice as likely to succeed. In
addition, for every federal dollar that is spent on
entrepreneurial development, it generates seven dollars in
increased tax revenue.
However,in the past three years, my district has actually
lost 607 small businesses. And, in fact, one out of five
manufacturing establishments have disappeared.
The trend I am committed to reversing and fostering
entrepreneurial development and creating the right conditions
to help businesses flourish, stay, and be attracted to the
district.
I know that in 1980, Congress actually took the step
forward and established the SBDC program to do exactly what is
needed, to foster economic development by providing the
managerial, technical, and research assistance to both current
and prospective small businesses.
As you know, SBDCs do provide services which include, but
aren't limited to, assisting small business financial
marketing, organization engineering, technical problems, and
other types of feasibility studies.
The SBDC program also represents an efficient and effective
use of allocated monies from the federal government to both I
think particularly important public and private ventures in
collaboration. To that end, SBDCs are funded by matching monies
by state legislatures, local Chambers of Commerce, and
technical schools and other institutions. In fact, it seems to
go so well that we find that we are exceeding the minimum 50
percent matching share now.
I am very fortunate that both Widner, University of Penn,
Mr. Higgins, as you well know. We have near my district. With
all of that in mind, I see that while there are SBDCs, programs
that are extremely effective, I do think there are certain
operational improvements that could be implemented that help
increase the flexibility of SBDCs to better support small
businesses and entrepreneurs.
And to that end, the changes that I will be proposing in
legislation to help ensure the quality of grants will be those
that do the following: ensure the quality of grant recipients
to host SBDCs, to help SBDCs maintain their autonomy from undue
SBA interference, to protect the confidentiality of SBDC
clients, and ensure that taxpayers' dollars are being spent as
efficiently as possible by not using SBDC funds except for the
sole purpose of business development.
And by allowing exemptions to deter and cap on non-matching
portability grants in the bed of federally designated natural
human-caused disasters, I also think it's important to
strengthen SBDC core program by establishing specific grant
programs that will allow SBDCs to tailor their services to meet
the particular needs of their business constituencies; for
example, the capital access initiative, which will establish
grants to assist entrepreneurs in processing loan applications
and attaining private equity.
An innovation and competitiveness initiative, which will
establish grants to allow SBDCs become technology centers to
help market technologies and advanced products to
manufacturers; and a disaster recovery program to establish
grants to allow SBDCs to assist and coordinate the federal
response for small disaster victims.
There are others, which I won't bother to go into now, such
as the older entrepreneur assistance sustainability initiative
and the national regulatory assistance initiative.
The second program, which I won't go into except to
mention, SCORE, which, as you know, provides entrepreneurs free
counseling assistance by former executives, is very important.
And I believe it provides a valuable service to small
businesses and can be even stronger with the provision to
actively recruit volunteer mentors, who will then greater
reflect the social and economic diversity of those who utilize
SBA services.
So, with that, I very much appreciate it, Madam Chair, to
give me the opportunity to talk on this that we will introduce
later this week. And I look forward to today's hearings.
ChairwomanVelazquez. Thank you. And I want to express my
appreciation for members from both sides who have been working
on these proposals.
With that, we are going to start our hearing. I just want
to express my appreciation to all of the witnesses, especially
those who come up from across the country to be here today and
share with us your insights on the differing issues that we are
going to be dealing with.
Our first witness is Ms. Wilma Goldstein. She is the Small
Business Administration's Acting Assistant Administrator for
the Office of Entrepreneurial Development.
Ms. Goldstein, you have five minutes to make your
presentation. And you can enter your entire testimony into the
record without objection.
STATEMENT OF WILMA GOLDSTEIN, ACTING ASSISTANT ADMINISTRATOR
FOR THE OFFICE OF ENTREPRENEURIAL DEVELOPMENT, UNITED STATES
SMALL BUSINESS ADMINISTRATION
Ms.Goldstein. Thank you. Thank you, Chairwoman Velazquez,
Ranking Member Chabot, distinguished members of the Committee,
for your invitation and the opportunity to share with this
Committee the work of the Small Business Administration's
Office of Entrepreneurial Development and what we are doing to
help serve America's entrepreneurs in small business.
I am Wilma Goldstein, as Chairwoman Velazquez said. And on
behalf of Administrator Preston, I am pleased to be here to
share with you the operations and successes of SBA's programs
and to briefly discuss with you some of our plans for the
future.
The Office of Entrepreneurial Development manages a strong
distribution channel of service centers that provide business
and management assistance to people who need guidance on how to
start, grow, or better manage their small businesses. We do
that through our three resource partners, who have been
mentioned while we have been here this morning: small business
development centers, women's business centers, and SCORE.
In F.Y. 2006, our resource partners trained and counseled
over 1.2 million clients. In addition, 315,154 to be exact
clients registered for one of our 23 courses offered online
through our small business training network, SBTN. And over 12
million new visitors accessed the SBA Web site.
SBA and, in particular, ED, has long recognized the value
in being able to measure and validate the work that we do. One
important way we can now measure our programs is through the
data collected in the entrepreneurial development management
information system known as EDMIS. We collect that data
quarterly from each of our resource partners telling us how
many they have trained and counseled.
F.Y. 2006 marked the completion of the first full year of
EDMIS implementation with all of our programs. If you will
allow me a slight digression, I just want to add that I am
extremely proud to be associated with the group that got EDMIS
up and running.
In the first half of its second year, I can report that it
is running smoothly. We still monitor it regularly with
conference calls between headquarters and our resource partners
about once a month. And we are in the process of looking at
upgrades so that we can do more with it than gather
information.
A further commitment on our part to assessing our
performance is the impact survey. Interviewing is now beginning
on the fourth year of this longitudinal study. And we continue
to find that businesses that receive management assistance from
SBA's resource partners give it high ratings to the usefulness
of that assistance.
Let me also touch briefly on our small business training
network, which is our online training vehicle. It is having a
banner year. And I thin you will be pleased to hear the
following. We now have more than 25 free online business
courses.
We introduced this year the small business primer, which is
an interactive assessment tool to help people determine their
readiness for starting a business and guide them to the
training they may need to be better prepared.
We have partnered with Capital Access and government
contracting to other parts of the SBA to create similar online
assessment tools for community express loans and the 8(a)
program.
Then much has been said already about modernization. And I
want to tell you about one way that we are trying to help our
resource partners keep up with changing technologies.
This coming week all three of our resource partners and
SBTN are holding a technology summit here in D.C. Knowing that
some of our centers with smaller budgets have difficulty
keeping up with advances in technology, we sponsored a
competition for new ideas in technology. We would be featuring
the winners. And each will be questioned by a panel of experts.
We hope this will become an ongoing event and the result would
be that we will find ways to help our centers make better and
more affordable technology decisions.
We had a good year in ED, in which all the programs
produced better that expected counseling and training numbers,
which we provide to the Congress each year. So let me just
mention a few things that go beyond those numbers.
SBDC is proud of its many changes and improvements. I would
like to mention two in particular. In anticipation of the need
for all of us to expand our reach to veterans, the New York
Veterans Outreach Program was implemented and during the past
five years has counseled and trained over 8,000 veterans, many
of them Service-disabled.
The New York SBDC also recently developed EntreSkills for
Veterans, a comprehensive interactive educational tool
developed by veterans for veterans and members of the Reserve
and National Guard.
Before I conclude my testimony, I just want to very briefly
communicate for the Committee's consideration some of our
legislative proposals that we believe will bring greater
efficiencies to the operation of our programs as well as
enhance and expand our client services and base.
In our F.Y. 2008 legislative package, SBA requests that the
Committee provide SBA with authorization to have full access to
client information obtained by the SBDCs as part of their SBDC
program administration that allows us to continue doing the
impact survey. Such access will allow SBDA to more effectively
manage the program and to measure the program impact through
client surveys, and their privacy will be guarded.
We would also like an expansion of eligible applicants for
SBDC lead centers. This provision opens up eligible entities to
include public or private nonprofit organizations.
SBA also requests the authority to determine the number of
SBDC lead centers that are funded in each state on the
individual circumstances in the state. We believe that this
authority will provide SBA with the necessary flexibility to
ensure that specific small business community needs are best
served in various circumstances.
Chairwoman Velazquez, that concludes my testimony. I look
forward to answering any questions.
[The prepared statement of Wilma Goldstein may be found in
the Appendix on page 38.]
ChairwomanVelazquez. Thank you, Ms. Goldstein.
Our next witness is Mr. Tee Rowe. He is the Associate
Administrator of Congressional and Legislative Affairs for the
Small Business Administration. He also worked in this
Committee, the Small Business Committee, under the leadership
of Chairman Talent as the senior counsel for the Committee.
Tee, you are most welcome.
Mr.Rowe. Thank you very much, Chairwoman Velazquez. It is a
little different being on this side of the microphone.
STATEMENT OF C. E. ``TEE'' ROWE, ASSOCIATE ADMINISTRATOR OF
CONGRESSIONAL LEGISLATIVE AFFAIRS, UNITED SATES SMALL BUSINESS
ADMINISTRATION
Mr.Rowe. Chairwoman Velazquez, Ranking Member Chabot,
members of the Committee, my name is Tee Rowe. And I am the
Associate Administrator of Congressional and Legislative
Affairs at SBA.
I want to thank you all very much for inviting me to
testify on the provisions of the draft legislation before the
Committee. I appreciate your desire to seek the
administration's input, and I will do my best to respond to
your questions as fully as possible.
Unfortunately, I only received the Committee's invitation
yesterday. And I haven't had time to prepare full written
remarks, though I would very much appreciate the opportunity to
get some remarks to you all prior to the markup.
We also only received some of the final legislative
language and summaries yesterday. However, based on a brief
review of the drafts, allow me to make some of the following
comments.
As Wilma pointed out, SBA would like increased competition
and access in the SBDC program. And to that extent, the
administration would object to restricting SBDC grants solely
to institutions of higher education.
We believe the competition for these grants would foster
expansion and innovation in the program. For instance, we
support providing SBDC assistance to Native American
communities. And the administration has to wonder if an open
and competitive process would not have already resulted in that
assistance, rather than raising the need for an adjunct program
to provide that assistance now.
With regards to the draft legislation concerning outreach
to veterans, the administration supports this effort and the
support that it offers to our veterans of both current and past
conflicts.
As Wilma has already talked about the women's business
center program pretty fully, I will leave that to her, but
speaking briefly as a former staffer to the Committee, I
appreciate the Committee's recognition of the fact that the
intent of the women's business program has already been to
create self-sustaining women's business centers. The question
before the Committee really is how long is that process going
to take and how much accounting do we need to make for the
different capabilities of the participants in the program?
Lastly, let me just address the provisions of the draft
energy bill. In general, the administration supports fostering
energy conservation and innovation in energy technology. That
has long been a component of the Small Business Act. Support
for energy measures through the 7(a) program has been a part of
section 3 of the act since 1981.
SBA believes that educating small businesses on energy
conservation is an appropriate function of the SBDC program.
However, we would like to point out that regarding the
provision on having SBA establish an energy education program,
that language is a little bit redundant of authority and
responsibilities we already have under the Energy Policy Act of
2005. We are carrying that program out right now in conjunction
with our colleagues from the Department of Energy and the EPA.
Finally, just regarding the SBIC provisions of the bill,
these raise some interesting possibilities. We haven't had time
to fully assess the costs of the proposals or their
marketability, but we would appreciate an opportunity to work
with the Committee more fully to develop some of these
proposals.
Again, thank you very much for inviting me to testify. And
I apologize for not being able to offer more complete remarks
to you all. However, I hope I can assist the Committee with its
questions. Thank you.
ChairwomanVelazquez. Thank you.
Our next witness is Mr. Gregory Higgins. Mr. Higgins is the
State Director of the Pennsylvania Small Business Development
Center, which assists more than 150,000 clients each year. Mr.
Higgins has previously served two terms as President of the
Association of Small Business Development Centers.
Welcome, sir.
STATEMENT OF GREGORY L. HIGGINS, JR., STATE DIRECTOR,
PENNSYLVANIA SMALL BUSINESS DEVELOPMENT CENTERS, THE WHARTON
SCHOOL OF THE UNIVERSITY OF PENNSYLVANIA
Mr.Higgins. Good morning, Chairwoman Velazquez, Ranking
Member Chabot, members of the Committee, I surely appreciate
this opportunity to provide some comments on the
entrepreneurial development program's reauthorization draft.
I would begin by indicating that with these initiatives, I
believe the Committee has identified several of the most
critical issues that are confronting the small business
community today. Since the draft addresses both procedural
changes and initiatives, let me spend just a couple of seconds
on the procedural changes before I move to the programmatic
initiatives.
There's a requirement that SBDCs operate out of accredited
institutions of higher education. I think it makes perfect
sense. We have an accreditation program with the Congress
mandated for SBDCs.
One of our strengths is being able to utilize the resources
of institutions of higher education. And a requirement for
accreditation of those institutions makes certain that those
resources are available to the small business community.
SBA involvement in hiring. We are all grownups operating in
pretty complex organizations that have pretty well-defined
processes for recruitment and hiring. And we do not think that
it's appropriate to have SBA involved in that process.
Privacy of consulting. For us to be affected, we have to be
able to ensure that our clients are--all the information they
provide is maintained in complete competence. And the language
in the draft certainly strengthens that. And we surely support
it.
Prohibition of use of SBA funds on the examination. With as
limited as SBDC funds are, I don't think it makes any sense to
allocate SBDC funds to the examination process. In fact, I
wonder since we're all subject to federal law that's under A-
133 and we also all undergo state audits, whether the
examination process really adds any value to the SBDC program.
On the elimination of the cap on non-matching portability,
this makes great good sense. All you have to know is that in
the aftermath of Hurricanes Rita and Katrina, not only did it
take six months to process the portability grant applications,
but the Louisiana SBDC was required to submit six separate
applications, the six separate scopes of work. Now, in a time
like that to spend time putting together proposals simply
doesn't make an awful lot of sense.
Now I would like to comment on the initiatives. And since
time is really limited, I feel like saying they're all good,
but let me give you a little more than that. And maybe the best
thing I can do in this is to tell you why I think all of these
make tremendous sense for this system.
Over the years, the Congress has invested public funds to
build an information and services distribution system, the
SBDCs, that now reaches every part of the country through more
than 1,000 offices. You built the infrastructure.
In addition to the national coverage, there are several
other aspects of the SBDC's program that make it especially
effective in delivery. First, it's founded in local
institutions with close ties to the business and civic
communities.
It has a proven record of success. Several folks here have
mentioned, including Congressman Sestak, the return on
investment. So it's not just a program that reaches a lot of
folks. It makes a difference when it does.
The SBDCs have knowledge in networking with all of the
other state, local, and federal programs that also have to be
engaged in providing business assistance. The SBDCs have access
to the resources of a very powerful set of institutions of
higher education. And the SBDCs have the flexibility to
identify local and regional business issues and to develop
programs as envisioned in this legislation to address those
issues.
And, finally, the SBDCs have an accreditation process
mandated by Congress that ensures that anybody walking into an
SBDC anywhere in the United States is assured of high-quality
service.
So, in summary, you know, over the past 27 years now, you
have appropriated funds to build a system, delivery system, for
small business that is second to none. And I think that each of
these initiatives takes advantage of the value of that system.
Rather than comment on all of the initiatives, let me just
hit a couple of them. One is disaster recovery. In Florida,
North Carolina, Louisiana, Mississippi, the SBDCs have
demonstrated again and again their capacity to help businesses
recover from the devastation of hurricanes.
In many other states, including my own, we have been called
in after disasters, which are clearly much less serious than
the ones mentioned previously, but for the business owner
affected, they are deadly serious. And the SBDCs have been able
to assist in that.
In New York and in the adjacent states, all of the SBDCs
were effectively engaged in helping businesses recover from the
terrorist attacks of 9/11. And this initiative in this
legislation recognizes and takes advantage of the experience
that SBDCs have gained in responding to disasters.
Innovation and competitiveness is another initiative.
Innovation is the heart of America's competitive advantage.
Sixty-seven percent of all innovation and 95 percent of all
radical innovation occurs in small businesses. If we are going
to help the United States remain competitive, particularly the
manufacturers, we have got to have the capacity to help
businesses identify and introduce innovation that is going to
increase their competitive position and allow them to bring
their ideas to market. So I think the competitiveness
initiative is a very good one.
Mature entrepreneurs. Throughout the United States and
particularly in a lot of rural areas, there is a generation, my
own, I expect, that is getting ready to retire and who have
been operating successful businesses. The danger is that as
these folks retire, absent an exit strategy, a transition plan,
not only are you going to lose the entrepreneur. You are quite
likely to lose those businesses as well. There is no plan for
how these things are going to be maintained.
We think the SBDCs are in a terrific position to identify
those types of businesses to hep them develop exit strategies,
transition plans, to help identify folks who might be the next
generation of entrepreneurs and hep them develop the skills to
come into those businesses and to maintain them in those areas.
Finally, the last one I would comment on is energy
conservation. We have some experience in Pennsylvania with
that. We have found in our energy conservation program that we
can reduce energy consumption in small business, easily reduce
energy consumption in the small businesses we work with,
between 20 and 30 percent.
If you look at what that could mean on a national level,
that would mean that we could if this initiative is fully
implemented help small businesses reduce carbon dioxide
emissions by up to 140 million tons a year while saving
businesses an estimated 18.75 billion.
Now, that's complete. But, you know, obviously the more you
put into it, the more impact we are going to have. I think it's
a terrific idea. And it's one we support, as we do all of the
initiatives outlined here.
Thank you, Madam Chair.
[The prepared statement of Gregory Higgins may be found in
the Appendix on page 45.]
ChairwomanVelazquez. Thank you, Mr. Higgins.
Our next witness is Mr. David John. Mr. John is a member of
the New Mexico SBDC Statewide Advisory Council. He is a small
business owner and a member of the Navajo nation.
Welcome, sir.
Mr.John. Thank you.
ChairwomanVelazquez. You will have five minutes.
Mr.John. Thank you, Honorable Nydia M. Velazquez and
Ranking Member Mr. Chabot and staff and ladies and gentlemen in
the audience.
STATEMENT OF DAVID L. JOHN, FORMER NAVAJO NATION TRIBAL COUNCIL
REPRESENTATIVE, FORMER SBDC CLIENT OF THE SAN JUAN COLLEGE SBDC
IN FARMINGTON ON BEHALF OF NEW MEXICO SBDC STATEWIDE ADVISORY
COUNCIL
Mr.John. My name is David L. John. Thank you for inviting
me to testify before you today. I am very honored.
I am a member of the Navajo nation. And I am also a Navajo
businessman for the past 35 years in the Four Corners region. I
am here before you today on behalf of New Mexico Small Business
Development Center Statewide Advisory Council.
I am self-employed. Professionally I am by profession a
hair stylist and a barber and owner of other several businesses
in the Four Corners region. I am the President of Northern
Navajo Medical Center Health Board. I was a member, past
member, of the Navajo Nation Council for three terms. I was a
Chairman of the Economic Development Committee while I was on
the council the whole time.
As a member of the Navajo Nation Council and being the
Chairman of the Economic Development Committee, we have
experienced on Indian land how it is to start a business on
Indian land. It is very obstacle. And people call it red tape
to start a business on the reservation.
We start with a land lease called business site lease. The
procedure consists of sometimes 60 steps to go through to start
a business on Indian land; whereas, compared to off the
reservation, private land, you can start business within the
week. And you're in business. And sometimes it takes two to
three years to go through this process on this private property
you go through within a week.
I think one of the first steps that I would like to share
with you is get a consent from the home site lease and business
site lease that goes through the permit, grazing permit holder
and where the potential site for business is going to go.
That goes through the Navajo Nation called Regional
Business Development Office of each agency. The application
usually requires a business plan, what kind of financial
package, including banking institution and projection for the
few years that you are going to be in business.
The lease lasts for about 25 years or sometime more
depending what kind of business, the term of the lease
agreement based on the profit and loss gross receipts, tax
structure, statement on land use approved and appraised by the
BIA, which stands for Bureau of Indian Affairs.
It is very hard to get a loan for a business on Indian land
because of lack of collateral since the business site is on
federal property. All the reservations are usually known as
federal property. You can't own land on these properties. You
only can lease on tribal land, where off the reservation you
can own land where you can get a loan against it.
Because Indian land is federal property, BIA has the final
authority. No matter what, they still have to sign off. And so
there is a duplication of service right there going through the
tribe and then the BIA again.
Economic Development Committee gives approval. And then it
goes to the BIA. By this time, you know, sometimes some of
these steps that I'm talking about are not complete or
sometimes they expire within all these times. And then you have
to go back and start all over again. That's when some of these
business people get frustrated, and they just quit.
And so just imagine starting a business on federal property
like Bureau of Land Management, for example, what kind of
headache you are going to go through. And that's the same
scenario in this issue here.
Now I have told you about all the problems of starting a
business on Indian land. The passage of this bill will help the
Navajo and Native American small business people improve their
lives, stimulate economic development on Indian land, and
assisting creating new small business owned by the Indian
tribal members. It will also help advise the local tribal
council and tribal government where small business assistance
is in dire need. Also, this will provide greater access to
existing business council and technical assistance available
though the small business development center program.
I have been a member of a local small business development
council for Farmington, New Mexico through San Juan College.
I've recently joined New Mexico Statewide Small Business
Advisory Council to provide input on Native American business
issue providing some assistance to small businesses with
initiative access funding amending some of these they are
already doing but limited for funding and so forth. This
amendment in the act is very important to Indian tribal
economic development on Indian land because it ensures more
convenient access to tribal services provided.
Lastly, I would like to thank you for allowing me to
testify today. And thank you for supporting small business and
also Native American small business.
I would also like to special thank Mr. Tom Udall, members
of the Congress District 3 from the great State of New Mexico
for sponsoring some of this amendment. Thank you very much.
[The prepared statement of David John may be found in the
Appendix on page 50.]
ChairwomanVelazquez. Thank you.
Our next witness is Ms. Barbara Wrigley. She is the
Executive Director of the Women's Business Center of Northern
Virginia. She is speaking on behalf of the Association of
Women's Business Centers, which represents women business
owners through a network of women business centers that serve
nearly 150,000 entrepreneurs across the country.
Welcome. And you have five minutes to make your
presentation.
Ms.Wrigley. Thank you. Madam Chair and Ranking Member
Chabot, thank you so much, distinguished members of the
Committee. I really appreciate the opportunity to be here.
ChairwomanVelazquez. Without objection
STATEMENT OF BARBARA WRIGLEY, EXECUTIVE DIRECTOR, WOMEN'S
BUSINESS CENTER OF NORTHERN VIRGINIA ON BEHALF OF THE
ASSOCIATION OF WOMEN'S BUSINESS CENTERS
Ms.Wrigley. My name is Barbara Wrigley. And I am delighted
to serve as chair-elect for the Board of Directors of the
Association of Women's Business Centers. In addition, as the
Chair mentioned, I am the Executive Director of the Women's
Business Center of Northern Virginia and had the privilege of
starting that center in 2001.
I am honored today to speak on behalf of the Association of
Women's Business Centers in support of the SBA Women's Business
Programs Act of 2007. The association has submitted formal
testimony. And I ask that those written remarks be entered into
the record.
ChairwomanVelazquez. Without objection.
Ms.Wrigley. Thank you.
Specifically, the AWBC's testimony speaks to three points.
Point one, women's business centers are past the point of
demonstration and should be evaluated and funded on an ongoing
basis on par with other SBA business assistance programs.
Despite a remarkable record of achievement over the past 18
years as the program has come into its own, its growth has
recently stalled due to funding decisions. We know that when
our program performance is measured against any other
enterprise program, we will meet or exceed performance
benchmarks.
Point two, funding allocations between new and existing
centers should recognize the value of the longitudinal approach
that WBCs take to client service and should not vary from year
to year.
The SBA Women's Business Programs Act of 2007 will remove
the funding uncertainty that WBCs have had to endure by
establishing three tiers of funding and setting funding levels
and budget allocations for each. We believe that the 40-20-40
allocation is eminently fair and recognizes the economic
contributions made by WBCs that have an established track
record of service.
Point three, program grant disbursements should be made in
a timely manner to ensure that client services are not
interrupted. We are in solid agreement that awards should be
made public and should be paid in a timely manner.
The new SBA Women's Programs Act of 2007 would go a long
way to addressing our concerns. And we applaud Congresswoman
Velazquez for her leadership in introducing this bill. This
bill will help solidify the standing of the women's business
center program, both in terms of ongoing funding and with
respect to how program funds are allocated among the centers.
Women's business centers have struggled in recent years
with a great deal of uncertainty, not only regarding whether or
not they will receive funding but how much funding they will be
given. It's a huge worry for all of us because our communities
rely on us.
Since we are forbidden to raise funds while being paid by
the SBA, many of us put in long hours of our own time to build
the relationships necessary to ensure federal and ongoing
matching funds.
I applaud the Committee for recognizing that the WBC
program has proven its impact and deserves to be treated as
such. Your support will not only be felt on the national level.
It will be strikingly apparent at the center level as well.
Allow me to tell you about the Women's Business Center of
Northern Virginia. At the WBC in northern Virginia, we are
proud of the fact that since opening our doors on January 3rd,
2001, we have run over 530 classes attended by over 10,000
women, and have provided over 1,600 hours of free one-on-one
technical assistance counseling, all with a full-time staff of
2. Fully two-thirds of our clients are women of color and new
Americans. And, in fact, within five miles of our center in
Springfield, women speak over 150 different languages.
With the SBA's total investment to us in northern Virginia
of approximately $900,000 over the past 6 years, we have only
spent around 125 federal dollars per woman assisted. We also
know that based on a survey of responses from about one-fifth
of our clients, that we have had at a minimum a $44 million
economic impact on northern Virginia and its surrounding areas.
When you consider that the median gross receipts of the
businesses we assist were only $25,000, we have helped a lot of
small businesses.
Despite flat and reduced funding, the SBA insists that all
of our major milestones increase annually by ten percent. In
the past two years, while the WBC NOVA has suffered a 32
percent budget cut, the number of individuals we have assisted
has grown 60 percent. I am projecting that this year we will
help 2,500 women on an annual cash budget of $225,000.
Let me tell you about one particularly interesting client.
And then I will conclude. Pauline Lewis was born in Malaysia
and came to the United States when she was 18 to attend a small
college in New York. Three years ago she showed up at our WBC
as a low-income new American with a Bachelor's degree in
international relations, a desire to start her own importing
business, and a keen commitment to helping women.
Pauline traveled alone to Ho Chi Minh City in Vietnam and
discovered a woman-owned factory there where 100 women were
making beautiful handbags. The piece parts for those bags had
come from 500 women doing hand embroidery work in co-ops
outside of Hanoi.
Pauline struck a deal with the factory owner to export her
handbags and to support her women employees. She named her
company Oovoo, the root of the word from Latin for female egg.
Less than three years later, Oovoo Design Handbags are now
sold in 600 retail stores in the United States, Canada, and
Europe. The factory in Vietnam has hired 20 more women to keep
up with demand. All of the women are being paid 15 percent
above market rate as well as being taken annually by the
company on a fully paid weekend vacation.
Pauline's business, Oovoo Deign, made almost $500,000 last
year and was featured in a Time Magazine article about women
helping women through trade. And last month, Pauline was
honored to receive Count Me In's prestigious Make Mine a
Million award. Her goal is to have a million dollars in
revenues by the end of the year. She is still a home-based
business, and we are so proud of her. She says she could not
have done it without us.
We thank the members of the House Committee on Small
Business for your longstanding support of the women's business
center program and for other efforts to support women's
enterprise development in general, such as your support for the
National Women's Business Council and for increasing access to
federal procurement opportunities to women-owned firms.
In closing, I would like to reiterate on behalf of the AWBC
our strong support for the SBA Women's Business Programs Act of
2007. We look forward to continuing to work with you to
increase the economic and social contributions of this nation's
estimated 10.4 million women-owned enterprises and to the
countless others whose ideas are on the drawing board awaiting
support and assistance from our nation's women's business
centers.
Thank you, Madam Chair.
[The prepared statement of Barbara Wrigley may be found in
the Appendix on page 52.]
ChairwomanVelazquez. Thank you, Ms. Wrigley, especially for
that great story.
Our next witness is Mr. Scott Sklar. Mr. Sklar is the
President of The Stella Group, a strategic marketing and policy
firm for clean distributed energy users and companies. He also
serves as Steering Committee Chair of the Sustainable Energy
Coalition, composed of the renewable energy and energy
efficiency trade associations and analytical groups. Thank you.
Mr.Sklar. Thank you, Madam Chairman. I wish to thank the
House Committee on Small Business for holding this hearing and
focusing on energy as critical to small business and how small
business can provide critical answers to our country's energy,
environmental, and security challenges.
STATEMENT OF SCOTT SKLAR, CHAIR, STEERING COMMITTEE OF THE
SUSTAINABLE ENERGY COALITION AND PRESIDENT, THE STELLA GROUP,
LTD.
Mr.Sklar. I would like to point out that I am a small
business. And my testimony I submitted was featured this past
month in Fortune Small Business on how my own company has used
these technologies. My company focuses on other companies and
how to make them more efficient.
Energy prices are going up. And I included in my testimony
that I have submitted an April 11th submission in the
Washington Post, an article where the local Virginia utility is
asking a price increase of 90 percent for natural gas, 143
percent for its crude oil for its peak power plants, 25 percent
increase for coal, and 8 percent for nuclear fuel. And that is
happening all over the country. We are having rate increases.
That is going to continue.
We have also experienced, as you know, longer-term energy
outages from everything from a tree branch in Ohio that shut
down electric power in 11 states for 3 weeks in many cases to
Katrina. And I am consulting with the State of Mississippi and
also, through the Clinton Foundation, the City of New Orleans
on how they rebuild their energy infrastructure. The impact on
business in both cases an accident and an act of God have been
profound. It has pushed many businesses from being in the black
into the red.
I want to remind the Committee that most of our retail
industry in this country makes its profit in the last few weeks
of the year. So if you have an outage due to a mistake, an act
of God, or a tree branch or a squirrel, it puts you in the red.
It is not acceptable.
The good news is--and I included that in my testimony that
I hope will be included in the record--that we have $17 billion
coming from institutional investors and the joint venture
community into these businesses to create new kinds of
technology. And that's the whole portfolio of energy efficiency
renewable technology.
That is the good news. And it is going into intellectual
property. And these companies have been growing 30 percent a
year for the last 7 years. The bad news is this kind of money
does not go to the kinds of companies that take this new
technology and bring it into the marketplace. So there has
been, in fact, a bottleneck that we can manufacture and we can
start automating. And we can't get it to the public.
And, unfortunately, I have to disagree with our SBA
representative here that DOE and EPA are really not set up to
do this kind of job. And the fact of the matter is that the
proposals in the draft bill of the Committee are very good.
The sustainability initiative and the way to open up
certain programs at SBA are able to bring professionals geared
to help small businesses that need the capital to orchestrate
that capital and for those who want to use these technologies
to figure out ways to access private capital and in some cases
public capital to be able to do that so that they can expand
and be more cost-effective.
I have been appointed this past month by the administrator
of EPA on the NACEPT advisory committee, the over-arching
committee for EPA. And I work closely with DOE. DOE is great on
technology assistance. And EPA is a great regulatory agency and
to give people some ideas. But they are not SBA.
SBA the President has said all agencies through executive
order are to work in making this country more energy efficient
and to reduce energy imports, all agencies. The Committee's
bill I believe, the proposed bill, is to really start getting
into the meat of that and creating some tools to do that. So I
urge you to raise the bar and create the capacity within SBA.
I am getting called by lots of small businesses. And when I
refer them to the SBA, they go, ``There is no one there that
knows these energy issues.'' And so they just refer them to the
banks. And the banks have no idea what to do. And it rolls off
the back. So we need to be a little more focused on how we do
this.
There is no question that we have more cities out of Clean
Air Act containment than ever before. Obviously you are reading
the news articles about emissions causing change in our global
climate. We are fighting a few wars in the Middle East now,
where we are importing a good portion of our energy. But,
frankly, we are importing our energy from other countries
around the world that are as shaky or are not democracies.
We have some problems in this country that small business
can help tackle. We have the private investment coming in. We
need the public tools to help to facilitate that investment.
Thank you very much.
[The prepared statement of Scott Sklar may be found in the
Appendix on page 55.]
ChairwomanVelazquez. Thank you, Mr. Sklar.
Mr. Rowe, the Energy Policy Act of 2005 required the
administrator to take an active role in getting small
businesses to be more energy-efficient. And he was supposed to
establish a strategy and plan for its implementation. He was
supposed to meet with EPA and Department of Energy and
coordinate an effort to gather information on energy
efficiency, information that is useful to small businesses.
We have looked over your congressional submissions, your
GPRA reports, and your Web site. And I don't see any of that. I
just would like to know what is it that SBA is doing to carry
out the goals established by the Energy Policy Act of 2005?
Mr.Rowe. Yes, ma'am. The Office of Policy and Planning at
SBA is working with EPA and the Department of Energy to collect
the information and establish links through our Web site to
information from EPA and the Department of Energy.
ChairwomanVelazquez. How long do you think it will take?
Mr.Rowe. I can't give you an exact time, but it's my
understanding from our Director of Policy and Planning that the
implementation of the links should be established within the
time frame of this summer.
ChairwomanVelazquez. Since the SBIC program was
implemented, basically it tended to focus more on financing
small businesses in the manufacturing industry. In the past
year, only four SBIC financings went to small businesses
involved in energy and utilities. This represents less than
one-quarter of one percent of the total finance in the SBIC
program.
Has the SBA done anything to increase the number of small
businesses receiving SBIC investment in the area of alternative
energy?
Mr.Rowe. Ma'am, I spoke with your staff. And you are
correct. We did four financings to utilities. I think we may
have done about 30 financings in--
ChairwomanVelazquez. Okay. Alternative energy, not
petroleum.
Mr.Rowe. Right. And the problem is, as you point out, most
of those investments are probably extraction and services-
based. We don't have any information as to whether they are
efficiency or conservation-based.
ChairwomanVelazquez. So does the SBA support efforts to
adapt the SBIC program to encourage investment in the area of
energy independence if it could be done with zero additional
cost to the government?
Mr.Rowe. Yes, ma'am. I was discussing this with some other
folks in the administration, ma'am. And I believe we would be
very interested in the fact that if it can be done through a
zero subsidy debenture, that might actually be more efficacious
than some of these subsidized and supported provisions that
exist at other agencies. Unfortunately, we just haven't had
time to go through all of the other options that are out there,
the other agencies.
ChairwomanVelazquez. Thank you.
Ms. Goldstein, one of your legislative proposals that you
sent to us, you are requesting from Congress to give to the SBA
one percent of the SBDC appropriation for administrative costs.
If we look at the last seven years' budget submission from SBA,
basically it has been flat funded, has been flat. You haven't
requested any additional money.
On top of that, you are also proposing to eliminate the
microloan technical assistance program and have the SBDCs fill
this gap. With an overstretched and flat funding SBDC program,
explain to me how can the agency now take already scarce
program funds from the SBDC and use it to pay for
administrative costs?
Ms.Goldstein. Well, we have made a great effort with
Administrator Preston in finding ways to not get involved in
too many platitudes but in doing more with less. And we have
had a concerted effort on that.
You always wish you were in the position to be able to meet
all the requests and all the goals. We continue to do that and
look at ways that we can stretch the dollars as far as we can.
And we will have continued to do the same. Some of it is
starting to take effect. We're devoting a lot of energy into
how we manage and how we use our time and how we use our money.
ChairwomanVelazquez. But do you think it is responsible on
behalf of small businesses in this country for the
administrator to submit a budget without asking for an increase
for those programs and then robbing Peter to pay Paul while we
know that in the last six years, the budget has been cut by 40
percent?
I will ask Mr. Higgins. What is your position regarding SBA
taking one percent of the SBDCs to pay for the administrative
costs?
Mr.Higgins. Well, if the assumption is that the funds are
being appropriated to serve small businesses, I don't think
they would be served by moving those funds into the
administrative costs of the agency.
ChairwomanVelazquez. Let me go to Mr. Chabot because I know
that there is going to be a series of votes. But I have more
questions. And then on my second round, I will come back to
them.
Mr.Chabot. Thank you, Madam Chair. I would just like to
compliment the panel on their testimony this morning. I thought
it was very good and very interesting.
Ms. Wrigley, if I could start with you first? Just a
comment that your story was very interesting about the
Malaysian lady who started the purse thing. And I have to say
last weekend was Mother's Day, as we all know. And I was trying
to figure out what to get my wife and was very creative and got
her I think candy and flowers.
She always compliments me on my creativity. But if I had
known that, that sounds like that Oovoo purse would have been a
very interesting --
Ms.Wrigley. oovoodesign.com.
Mr.Chabot. You said there are 600 outlets around the
country that now carry that sort of thing?
Ms.Wrigley. There are 600 retail stores that carry her
purses, yes. And you can also find them online at
oovoodesign.com.
Mr.Chabot. Staff should take that down.
[Laughter.]
Ms.Wrigley. There you go.
Mr.Chabot. Next Mother's Day. Thank you. Don't tell my
wife, though, beforehand.
Ms.Wrigley. Okay.
Mr.Chabot. Let it be a surprise.
Could you tell me what the rationale for having separate
outreach programs is, just in general, you know, for specific
groups?
Ms.Wrigley. Sure.
Mr.Chabot. And are the rationales as valid today as they
were when Congress created them quite a few years ago?
Ms.Wrigley. I think that there is tremendous rationale for
having different programs, sir. The women's business center
programs really target a very different kind of population than
the SBDCs.
And I speak from a great deal of experience because we
happen to have both under one roof at our location in
Springfield. The women's business center office is literally
three feet away from the SBDC office.
We serve very different clientele because we do so in a
very different way. Women learn differently from men. And I
know that when I had my own business in Virginia a number of
years ago, it was very intimidating to me to consider the idea
of going to a university to, frankly, sit down next to a bunch
of white guys with M.B.A.'s and a lot of daddy's money in their
pocket. I felt like, you know, I would be really intimidated to
ask my questions.
We create a very different culture at the women's business
center. We really have made it a welcoming place where new
Americans, where women of color are supported, and they feel
comfortable.
We explain all of our terms. We don't presume a level of
knowledge that perhaps is presumed by the SBDC. Let me give you
a real specific example. At the center where I work, the
women's business center takes an entire day to teach how to
write a business plan. We explain every term.
As I mentioned, we spend some time with networking. We
really don't want to use terms even like cash flow without
really going into depth as to what that means.
At the SBDC, you can get the exact same information in a
two-hour class versus an eight-hour class. So there is a huge
difference in how we do what we do. And it's very important to
me that the woman have a place where they feel comfortable,
where no question is considered stupid, and where they see
other women like themselves who are aspiring to reach their
dreams.
Mr.Chabot. Thank you.
Ms. Goldstein, if I could go to you next? You mentioned
that, I believe, online the SBA has 23, I think you said,
training programs that one can go on to get assistance at. How
does the SBA get the word out there that those are available to
make the public and maybe people that are thinking about
getting into starting a small business or expanding? How do
they find out about it to begin with?
Ms.Goldstein. Well, we don't have a separate marketing
program for it, but we let our resource partners know. And we
get about 12 million people annually looking at our Web site.
And they find it there. It's been fairly well-promoted on the
Web site. That's how they learn.
Mr.Chabot. Thank you.
Ms.Goldstein. And, of course, we talk about it wherever we
go.
Mr.Chabot. Mr. Sklar, if I could move to you next? Could
you talk again briefly--and you went into this in your
testimony again--how small businesses, in particular, are
affected by the energy prices that have been going up so
dramatically in recent years?
Mr.Sklar. You know, there are easy things that small
businesses can do that we all do, even in our homes, you know,
from compact fluorescence and energy thermostats and things
like that which are common knowledge and you can do. But once
you get to a certain level--and a lot of these small businesses
are really constrained by the energy costs.
I have a client company that is going to close down one of
their plants just because their energy costs are too high, but
they're committed not to go overseas and outsource. But,
instead, they're just shutting down plants.
And, frankly, that was the company I said, ``Well, go to
the Small Business Administration.''
And they said, ``We got no answers.''
And then I called SBA and said, ``Who do you know on
energy?''
``We have nobody on energy.'' And so they're getting
squeezed. And the problem is if you want to keep business in
the United States,--and I think we all want to do as much as
rationally possible--one of the places we have to deal with is
how to confront these rising energy costs.
And, you know, you have in some cases no options if you
don't do it. Refrigeration costs are high if you are in food
processing. Running motors is high and so on. Obviously natural
gas for heating is getting higher. And these businesses are
also getting higher costs in basic commodities, a lot of it
attributable to growth in China and India driving those
commodities up worldwide, understandably.
Well, if your energy prices are going up and your commodity
prices are going up, I think you are really starting to get
crunched. And that is what I hear all over the country. And I
am working with these companies all over the country.
Mr.Chabot. Thank you.
Mr. Rowe, on behalf of the SBA, how do you respond to that,
the comment that the SBA doesn't know energy or we don't have
anybody there that knows this area and maybe concentrating on
the future as much as in the past, really?
Mr.Rowe. Yes, sir. Well, as I told the Chairwoman, we are
working to implement the provisions of the Energy Policy Act,
which should be able to provide some assistance to small
businesses looking for that kind of information.
I will be frank. I am not certain what information exists
in the world, whether it's EPA or the Department of Energy, to
help small businesses with these energy efficiency issues
Mr.Chabot. Thank you.
Do I still have any time, Madam Chair? Mr. Higgins, and
then I will go very quickly. Mr. Higgins, you were fairly
complimentary of the initiatives and the direction that the
Committee is going on the proposed legislation. Are there any
things when you reviewed this that seemed to be either missing
or that you think we should add to make it even better,
anything that comes to mind? And if there's not--
Mr.Higgins. Well, with respect to the mature businesses,
the legislation focused exclusively on what I mentioned, which
is those businesses, those people that are likely to retire,
leave the business, and may not succeed.
Another point that was made here earlier is there is a huge
slug of folks reaching retirement age or who are going to be
looking at either part or full-time business ownership as a way
to either stay business or to supplement their retirement.
I think it's important to look to the future three or four
years and figure out how we're going to handle that group of
folks. Many of them are going to retire with significant assets
that may be put at risk if they don't understand the mechanics
of appropriately starting and managing businesses. I mean, the
sharks will be out there to take their monies to sell them
franchises or whatever. So I think that it would be well for us
to get ahead of that curve.
Mr.Chabot. Thank you.
Mr. John, unfortunately, I have run out of time. We are
going to maybe go to a second round. So maybe we'll get you
next time. We are going to have a vote at 11:30. I think the
Chairwoman wants to give the other members who are here a
chance.
ChairwomanVelazquez. And I will come back to you.
Mr. Sestak?
Mr.Sestak. Thanks, Madam Chair.
See, I am kind of struck. From the background I come from
in the military, I have watched. When people tend to lose
funding or things start to decline, there is always this
greater effort to fight for control over a smaller piece of
pie. And to some degree, I have watched the SBA budget decline
40 percent and saw what you have done zeroing out the
microloans and zero subsidies for 7(a) and significant cuts
that had been mentioned in the WBCs' percent of program
budgets. And there's prime and all that.
So I am intrigued at the same time why there seems to be
this movement by SBA when it's got less to do, so to speak, or
less funding to give, why there's this movement by you for
greater control. It just seems like an organizational thing
I've watched in the military. As the Services lost their power
and their funding, went to Joint Staff, they seemed to fight
more for it.
So with that as background and as I watch as you want to
know more about the clients that are coming to the SBDCs and
their information, how money is used from the SBA for the SBDCs
to do the examination process but, in particular, how you all
want to now have a veto authority, so to speak, on the
grantees' selection of the SBDC state director. Why is that so
important?
Ms.Goldstein. So that they can participate in the selection
of the people that will be running the program. I mean, I don't
think I find that a terribly unusual practice.
And you are talking about some prohibitions that we have,
but in the meantime, the programs are flourishing. We are
training and counseling more people. We want to participate in
the interaction in the States and with our programs and have
that option to--
Mr.Sestak. But is it true that the hours that are
actually--the number of people is going up. Aren't the hours of
client services going down? Mr. Higgins, is that so?
Mr.Higgins. Necessarily when SBA was pressing for more
touches of people, many states saw the number of hours per
consulting case drop to less than two.
Mr.Sestak. So the number of hours that we're able to do
things is dropping. Would it be beneficial to have a position
of state director, help to have a chop on it, so to speak, by
the SBA?
Mr.Higgins. Well, you know, there are two SBDCs here. One
is from New Mexico. Both of us have partners that put far more
money into the activity than does the SBA. I said there are two
SBDCs represented here. And both of us have funding partners
that put far more money into the SBDC than does the SBA. I
don't know why the SBA is the only partner that insists upon a
veto on the selection of the--
Mr.Sestak. Again, as you mentioned, the number of people
has gone up, but, actually, the number of hours are going down.
And, yet, this is more assertion for control.
A question I have is health care. I am most intrigued by
it. There has been an increase according to the last 6 years of
78 percent in the health premiums across the nation for small
businesses. I mean, there is really a challenge for small
businesses in addition to the energy. It's got to be health
care. I mean, its time has come.
My take on it is, does granting additional resources--
because a lot of this is just about sometimes information,
knowing where to go to find something. Would that be of help in
this health care area if we were able to provide additional
resources?
Mr.Higgins. Absolutely. And you're right. It's a matter of
understanding where the information is and being able to
analyze alternatives in many cases, which with everything else
the small business owner has to do, that's often very
difficult.
Mr.Sestak. One other thing. I really like that we're
reauthorizing this bill and all because, as everyone has
mentioned, times are changing. You know, we see more groups,
women, et cetera, coming. To some degree, I am also struck by
formulas that are older and potentially need to be changed.
This one may come across a bit parochial. I don't mean it
that way, but I watched populations, like in Pennsylvania or
New York City, where they are actually declining. We have a
formula that is based upon population or distribution.
You know, I find places like Pennsylvania or my own
district that one out of five manufacturing establishments has
disappeared in the last three years. And a real challenge is
here.
But is the formula we are using the correct one as we go
into the future?
Mr.Higgins. I think the formula establishes a base. And I
think that's important to establish a base. But then I think
that the separately funded initiatives allow individual SBDCs
to identify opportunities or issues within their own area and
then additional funds that would be more flexible, not
allocated by formula, would allow SBDCs to address what they
perceive as the special needs in their area.
Mr.Sestak. Thank you, Madam Chair.
ChairwomanVelazquez. Mr. Shuler?
Mr.Shuler. Madam Chair, thank you.
I continue here. We have heard about the SBA not being a
part of the future, it seems like. I mean, we continue to talk
about sustainable renewable energies, the ways that we can
benefit. I mean, this hasn't happened overnight. It's not
something that this Congress, this Committee decided to do
yesterday. This has been going on for quite some time.
So give me your plans. I mean, this is very discouraging to
me that there has been no plan. It should have already been
implemented. I mean, we have other businesses and organizations
throughout our communities and our district and our state that
have already gone forth and put the effort as working with the
different organizations to ensure that we have better energy
efficiency. We know it's a problem. We can't ignore it. And our
small businesses continue to hurt every single day because of
that.
Give me your plan. I mean, we talk about implementing a Web
site to be able to direct the information. But what are we
doing actually on the ground with the people? What education
are you giving to the employees that will actually benefit our
small businesses?
Mr.Rowe. Well, as far as an employee-based outreach
program, Mr. Shuler, we don't have one in place at this time.
I'm certainly willing to bring that back to the administrator.
I know that's one of the things he would be happy to take up.
He's very interested in getting our district offices more
involved in outreach. And obviously this is an area of interest
to the Congress but to the nation as a whole.
ChairwomanVelazquez. Would the gentleman yield?
Mr.Shuler. Yes.
ChairwomanVelazquez. Mr. Rowe, I think that basically our
frustration is because this Energy Policy Act of 2005 required
for the administrator to establish a strategy and a plan. So I
will request, formally request, from this Committee that you
send to us information as to when the strategy and plan will be
ready.
Mr.Rowe. Yes, ma'am. I will be glad to do that.
Mr.Shuler. Thank you, Madam Chair.
Mr. Higgins, can you tell me some of the things that you
are doing, certainly in Pennsylvania, to be able to get the
message out. I mean, maybe this is some of the things that we
can give SBA that how you have indicated in being able to
educate the small business community.
Mr.Higgins. Right. Well, we have in Pennsylvania an
environmental management assistance program that includes also
our energy conservation program. It's not funded with SBA
funds. We funded it elsewhere.
What we do is when we begin a consulting engagement with a
company, we try to make them aware that it is quite likely that
there are opportunities for energy conservation in those
companies. We can follow that up with an on-site assessment
where we make specific recommendations as to what you can do. I
mean, it may be as simple as lighting, heating, and air
conditioning and may be fairly complex depending on the size of
the company, business they are in.
But, as I said, we have found that with those on-site
visits, those companies can realize savings of between 20 and
30 percent in energy bills. This becomes critical in
Pennsylvania because we're one of those states where the caps
are coming off, electrical costs, and the bills are likely to
rise anywhere from 50 to 70 percent. So these small businesses
have got to confront this.
You know, we market that. We have 18 centers in
Pennsylvania. That assistance is available through all of them.
But you know what? Again, it is one of the many things, like
health care, that a small business owner has got to confront.
So our job we feel when we get hold of them is to say, ``Okay.
Have you thought about this? Do you want us to help you do
this?''
When we first started, about 30 percent of the businesses
took us up on it. Now we are up to 60 percent of them want us
to help with the energy conservation. It is huge for them.
Mr.Shuler. Real quickly, Mr. Sklar, I appreciate your
testimony today. And I commend you for your work and what you
have been able to do and accomplish.
Talk to me briefly what we can do in association with the
banking industry, particularly maybe our more community,
smaller community banks that we can actually educate them and
allow them to get the background necessary for them to make a
loan.
For an example, our small businesses may have more up-front
costs, but the energy impact, it may be a great investment, a
larger investment, up front but over the life of a particular
business to be able to benefit from better energy-efficient
products.
Mr.Sklar. I think that is an absolutely important question.
We are finding that credit unions and more community-based
banks are very concerned about the economic stability of the
small business community.
And the issue that you just addressed that yes, the up-
front cost is higher, I use the example that solar water heater
costs four times what a regular water costs, but if you
incorporate in a longer-term financing package, the monthly
loan is less than the utility bill that you would be saving. So
you would pay for itself the day you financed the system. And
that is true in lots of different technologies in energy
efficiency and renewables.
Frankly, what I was hoping for SBA, what my aspiration is
was really to do just that, is to provide some guidance to
lenders that work with small businesses on these kinds of
issues and yes, of course, bring in DOE or EPA on technology or
regulatory issues and then work with the states.
Pennsylvania has a fabulous program for environmental
businesses and clean energy, but they don't have the expertise
in the government to deal with this, the lending side of it.
And that is, frankly, what we need. We need it to be done on a
regional basis because most lenders are sort of regional. And
they will learn from each other.
And we are finding, by the way, in some states that have
these programs once the lenders have a couple of years'
experience, you know, it is sustainable. It goes on its own. So
it is a very important issue.
Mr.Shuler. Thank you, Madam Chair.
ChairwomanVelazquez. Mr. Jefferson?
Mr.Jefferson. Thank you, Madam Chair.
Not to stay on the same subject for the entire hearing, but
I suppose the area of energy efficiency is very intriguing for
all of us. I think we all agree that the expertise does reside
in the SBA now based on all of the discussions to provide real
assistance in this area.
My question is, is it important? Is it important for us to
work on developing that sort of expertise or we look at this
being provided in some other way? Is it realistic to propose
this sort of expertise there or should we have partnership
arrangements that provide it in some other way? Mr. Sklar, I
might ask that.
Mr.Sklar. You know, that is a good question. And I
obviously believe--I am not thinking that the Committee ought
to say, ``We ought to bring ten people into the SBA and create
a new program,'' but I do believe the administrator ought to
anoint someone to say, ``You look at energy and environmental
lending.'' And then you start developing teams with the other
agencies but really have it more edgy so that you can do
something. It's building up knowledge.
Again, the President has said to do this. EPACT has said to
do this. The other agencies are willing to cooperate, but there
needs to be a vision thing at SBA to do it. And then it needs
to dialogue with these other programs that are also providing
personalized assistance so they become more educated and
implement. That is all I am asking, but you still have to have
somebody who is responsible at the top of the agency for this
kind of program area.
I do agree with the congressman that it doesn't make sense
to build a whole department around it.
Mr.Jefferson. That is very helpful. With respect to
disaster recovery, the approach that is taken in the bill is I
think to provide some way to deal with the caps and to permit
these to get up and running in a hurry.
I don't know if even that is fast enough. Might it be that
we might just insist on some automatic waivers in case of
certain disasters when they are bad enough or extend long
enough?
Somehow or the other, there just needs to be a quicker way
to get at it. Have you given any thought to how we might even
do this more quickly than the bill provides us an opportunity
to do it?
Mr.Rowe. Mr. Jefferson, in the SBA's legislative package,
one of the items that we addressed specifically regarding this
was expanding the utility of the portability grants for that
purpose. One of the other things we would support is some
legislative changes so that we don't have the restriction,
unfortunately, we ran into in Katrina regarding operations of
SBDCs beyond, I guess, what you would call their borders so
that an SBDC in New York could assist in Texas and vice versa
without worrying about any restraints from the agency.
And the portability grants go along with helping the SBDCs
defray those costs because obviously if you're sending folks
across the country to assist in counseling, you've got to pay
their travel and other expenses.
Mr.Jefferson. Mr. Higgins?
Mr.Higgins. I am all for as much flexibility as you can get
in a disaster situation. And I think the less paper and process
involved, the better off you are. I think that one of the real
advantages of this legislation is that it allows us to build
some capability to get it in place.
Now, the reality is that SBDCs or people from SBDCs in
other states did go to the Gulf Coast. We sent folks out of
Pennsylvania because they had training. But, you know, it was
tied up in some complex negotiations, and there were silly
limitations on it.
You know, I think if this legislation passes, you know, you
could put in place a framework that takes care of all of that
bureaucratic nonsense on the front end so that when it is time
to go, your people just go.
ChairwomanVelazquez. The Committee will stand in recess.
And we will resume after these two votes that will take around
20 minutes.
[Brief recess.]
ChairwomanVelazquez. The Committee is called to order. As
you can imagine, we're going to have a series of votes in the
next maybe 15 more minutes or 20 minutes. So we're going to try
to wrap this up as soon as we can.
I would like to make some questions. Mr. Chabot is right
here and having a meeting. And as soon as he finishes, he will
join us.
My question is addressed to Mr. Higgins. The proposed
legislation, the draft legislation, that we're considering
takes the SBDC program in a new direction by creating
initiatives tailored to specific entrepreneurial needs. This
differs from the baseline program, which provides a funding
base on a population-based formula.
Conceptually do you believe that this is the right
direction to take the SBDC program in?
Mr.Higgins. Let me begin by saying I think it is absolutely
critical that the funding for the basic SBDC activities, those
things that we do, all do, every day over and over again in
working with the small business community be maintained and be
protected. And I would not want to see anything happen to
reduce the base funding for the SBDC.
But moving to the next step, we all go through in each SBDC
a strategic planning process on a regular basis, where we are
looking at the needs of the small business community and trying
to develop strategies and programs to meet those needs.
And I think that this set of initiatives if funded in
addition to the base funding would provide us the wherewithal
to really move the SBDCs to the next level, where you not only
were providing the basic meat and potatoes of small business
development center assistance but were able to tailor your
program to meet critical issues and meet some critical needs of
small businesses in each of the states of the SBDC.
ChairwomanVelazquez. Thank you, Mr. Higgins.
Mr. John, the need for entrepreneurial development
assistance in Native American communities is critical given the
large number of individuals who are interested in starting
their businesses and also given the fact of the high
unemployment rate that you have in those communities. How will
the Native American Business Development Act of 2007 introduced
by Representative Udall support job growth in these
communities?
Mr.John. Thank you for that question, Madam Chair.
I think right now, as we speak, we don't have a small
business development center on the Navajo reservation right
now. We do have it in border towns, like Farmington, Gallup
areas, just adjacent to the reservation. And with this bill, we
would like to expand onto the reservation to help assist some
of these Native American entrepreneurs. And I think that is a
need.
And, of course, the tribal government is doing what they
can to cut down some of these lengthy processes to make it
easier to start a business on the Navajo reservation because
some of these laws have already been mandated by Congress under
the Code of Federal Regulations that we have to abide by
through the Bureau of Indian Affairs.
ChairwomanVelazquez. Thank you.
Ms. Goldstein, the SBA's mismanagement of the disaster loan
program has created unnecessary difficulties for small business
owners in disaster-affected areas. The counselors at SBDC have
experience with SBA loans and know what is required to help
these business owners to complete their disaster loan
applications. Would the SBA support giving these counselors a
greater role as first responders to a disaster like this?
Ms.Goldstein. Well, I think you know, Madam Chair, that we
are in the process of producing a handbook for how to handle
future disasters. It's due here in Congress June 1st, I believe
it is. And we have gone to great attempts, and we have carried
the message. And the SBDC has been part of the planning of that
process. And they expressed that they certainly are capable of
coming on the scene of a disaster sooner than they were
previously.
So I think when you see that document, which is being
finished as we speak, and it comes up here, you will see a much
different approach. You know, we learned a lesson, obviously.
ChairwomanVelazquez. Well, we are discussing today
legislation regarding the SBDC and the structure of problems
that we saw regarding the disaster or lack of response,
appropriate response, effective response, to the Katrina
victims. And one of the issues that we saw was the fact that
you didn't have on the ground the amount of people that were
needed based on the magnitude of the disaster.
Since I don't have that package in front of me that
disaster plan that the administration has been working on and
that was supposed to have even before Katrina hit the Gulf
Coast, my question to you is, do you support the counselors
from the SBDC to be part of the first responders?
Ms.Goldstein. I don't know that I can answer the question
not having seen the final product.
ChairwomanVelazquez. Okay.
Ms.Goldstein. I was definitely part of letting the deputy
who is responsible for writing it--we met with the SBDC, with
SCORE, women's business centers and talked about how their role
could be enhanced in the future. And that's the best I know
today.
ChairwomanVelazquez. Who met with them, the SBDC?
Ms.Goldstein. We did a conference call. Some people came to
us.
ChairwomanVelazquez. You were a part of that call?
Ms.Goldstein. Yes, that call, one of many calls and
meetings that took place as she was writing the handbook. There
is a total team of people.
ChairwomanVelazquez. But you don't recall what specific
role a person from SBDC will play?
Ms.Goldstein. It was certainly told to her that they would
like an earlier role. She heard that. What the final product
looks like I don't know.
ChairwomanVelazquez. Okay. I want to note for the record
that I will be submitting written questions to SBA. In
particular, I will be submitting a question on the SBDC
proposal and how SBA will administer it. Given our interest in
this issue, I would like an answer by the end of the week.
Ms.Goldstein. Okay. I will take that back.
ChairwomanVelazquez. As part of the legislative package
that SBA submitted to Congress, you proposed that Congress give
SBA full access to SBDC client information. However, I just
want to make it clear that current law already allows SBA to
access SBDC client information for the purpose of conducting
client surveys.
So how can we be sure this information will be kept
confidential? And, for example, what protects a client seeking
assistance on tax questions from having the information
conveyed to the IRS, Ms. Goldstein?
Ms.Goldstein. Well, the information I know most about is
that which goes for the impact survey. It goes directly to a
company. And mostly we use it by numbers and addresses to send
mail.
They keep the records. They are not made public. They are
just used by the vendor that we choose to conduct the survey.
And none of the results are stated by name.
We don't use personal information for that. It's aggregated
data. And so I think, you know, we make every move to conduct
privacy. I spent 12 years of my life in survey research. And
that's part of it, the privacy thing. And we would not. We
would not do it. You can ask for their permission if they want
to be quoted on it, but we wouldn't do that.
ChairwomanVelazquez. Mr. Higgins, what do you see as the
benefit of client confidentiality protections? And do you
believe they should be weakened or strengthened?
Mr.Higgins. Well, I think the basic benefit is if we can't
offer confidentiality, absolute confidentiality, to the
clients, many are not going to come to us for assistance at
all.
And many who do are not going to be willing to share things
like financial statements and sensitive business information.
And that would make us fairly ineffective as business
consultants if we don't have access to all of the information
we need. I mean, it won't work. They won't come. And it won't
work if they come and don't share.
I think anything you can do to strengthen the
confidentiality provision is something that you certainly
should do.
ChairwomanVelazquez. Thank you.
Mr.Higgins. Thank you.
ChairwomanVelazquez. Mr. Chabot?
Mr.Chabot. Thank you, Madam Chair. I will be very brief
because we have, again, votes on the floor.
Mr. John, I hadn't gotten around to you. And I understand
the Chair already asked you a question about it, but if I could
just very briefly? You had mentioned in your testimony the
challenges, the difficulty it is to start a business on Indian
land, and the 60 steps that you have to go through and
sometimes taken up to 2 to 3 years to go through the process.
I just wanted to make sure that you are satisfied that the
legislation that we are considering here will at least help to
improve that situation. Is that correct?
Mr.John. Yes, that is correct because a lot of these steps
that I mentioned in my testimony are where the businessmen need
technical assistance and also putting their business package
together and financial and whatever that they need for the
banking institution and then also help them.
Counseling is a big issue after they get frustrated for
being in the system for so long. Then they just quit. And then
I think this legislation will be part of the area that will at
least motivate them that the SBDC is also doing something on
the Navajo reservation, which we don't right now.
And, however, we do have 21 SBD offices statewide in New
Mexico. So a lot of the Native Americans are already coming to
SBDC for assistance. And we're helping them as much as we can.
And I think that this legislation will be one of the red tape
that will be cut a little bit at a time. Hopefully in the
future we won't have to go through 60 steps or sometimes more.
Mr.Chabot. Okay. Well, thank you very much.
Mr.John. At one time it was 121 steps, just for your
knowledge.
[Laughter.]
Mr.Chabot. Thank you. So we are at least heading in the
right direction. All right. Well, thank you very much, Mr.
John.
ChairwomanVelazquez. Okay. Well, with this, it concludes
this hearing. I want to thank all of the witnesses. And I ask
unanimous consent that the members will be given five
legislative days to enter into the record any statement or
extraneous material that they might consider important.
This Committee adjourns. The hearing adjourns.
[Whereupon, at 12:19 p.m., the foregoing matter was
concluded.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]