[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                    FULL COMMITTEE FIELD HEARING ON 
                 THE IMPACT OF NEW MARKET TAX CREDITS, 
                   THE SBIC PROGRAM, AND 504 PROGRAM 
                          ON URBAN COMMUNITIES 

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

                      COMMITTEE ON SMALL BUSINESS
                 UNITED STATES HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 11, 2007

                               __________

                          Serial Number 110-13

                               __________

         Printed for the use of the Committee on Small Business


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman


JUANITA MILLENDER-McDONALD,          STEVE CHABOT, Ohio, Ranking Member
California                           ROSCOE BARTLETT, Maryland
WILLIAM JEFFERSON, Louisiana         SAM GRAVES, Missouri
HEATH SHULER, North Carolina         TODD AKIN, Missouri
CHARLIE GONZALEZ, Texas              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              MARILYN MUSGRAVE, Colorado
RAUL GRIJALVA, Arizona               STEVE KING, Iowa
MICHAEL MICHAUD, Maine               JEFF FORTENBERRY, Nebraska
MELISSA BEAN, Illinois               LYNN WESTMORELAND, Georgia
HENRY CUELLAR, Texas                 LOUIE GOHMERT, Texas
DAN LIPINSKI, Illinois               DEAN HELLER, Nevada
GWEN MOORE, Wisconsin                DAVID DAVIS, Tennessee
JASON ALTMIRE, Pennsylvania          MARY FALLIN, Oklahoma
BRUCE BRALEY, Iowa                   VERN BUCHANAN, Florida
YVETTE CLARKE, New York              JIM JORDAN, Ohio
BRAD ELLSWORTH, Indiana
HANK JOHNSON, Georgia
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


JUANITA MILLENDER-McDONALD,          LOUIE GOHMERT, Texas, Ranking
California                           LYNN WESTMORELAND, Georgia
CHARLIE GONZALEZ, Texas
RAUL GRIJALVA, Arizona

                                 (iii)

  






















                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Chabot, Hon. Steve...............................................     2

                               WITNESSES

Muniz, Chad, 3CDC................................................     4
Main, David K., Hamilton County Development Co., Inc.............     7
Brown, Tony T., Uptown Consortium, Inc...........................     9
Oliver, Elizabeth, Shekinah Beauty Centers, Inc..................    13
Kirk, Guinette, DNK Architects...................................    14

                                APPENDIX


Prepared Statements:
Velazquez, Hon. Nydia M..........................................    28
Chabot, Hon. Steve...............................................    30
Main, David K., Hamilton County Development Co., Inc.............    32
Brown, Tony T., Uptown Consortium, Inc...........................    36
Oliver, Elizabeth, Shekinah Beauty Centers, Inc..................    39

                                  (v)

  


                    FULL COMMITTEE FIELD HEARING ON 
                 THE IMPACT OF NEW MARKET TAX CREDITS, 
                  THE SBIC PROGRAM, AND 504 PROGRAM ON 
                          URBAN COMMUNITIES 

                              ----------                              


                       WEDNESDAY, APRIL 11, 2007

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                     Cincinnati, OH
    The Committee met, pursuant to call, at 10:12 a.m., at the 
Avondale Pride Center, 3520 Burnet Avenue, Cincinnati, Ohio, 
Hon. Nydia M. Velazquez [Chairwoman of the Committee] 
presiding.
    Present: Representatives Velazquez and Chabot.

           OPENING STATEMENT OF CHAIRWOMAN VELAZQUEZ

    Chairwoman Velazquez. The House Small Business Committee is 
called to order. First, I'm Congresswoman Nydia Velazquez, 
Chair of the Small Business Committee.
    First, I want to thank each of you for being here today on 
a rainy day. For me, it has been quite a rewarding experience. 
This is the first time in four years that we do a Congressional 
field hearing. And I am very grateful to the ranking minority, 
Mr. Chabot, Congressman Steve Chabot, and his staff for putting 
this Congressional field hearing together.
    It is important for members of Congress to get out of the 
Beltway and come here and see how the legislation and the 
actions that we take in Washington have a direct impact in the 
lives of the community that we represent.
    And I am very impressed with what I have seen so far. 
There's no question that it provides a different perspective. 
And as I said, I want to thank Mr. Chabot for this opportunity.
    Being from New York, I can certainly understand the 
challenges facing entrepreneurs in urban areas, like 
Cincinnati. Such obstacles, like the high cost of labor and 
advertising, skyrocketing energy costs, and competition, can 
all make it difficult for entrepreneurs to be successful.
    That being said, urban areas need a system when it comes to 
the growth and prosperity of small businesses. Creating 
incentives for people to invest in urban communities and 
enabling entrepreneurs to thrive is critical.
    While many areas may flourish when the country is 
experiencing economic growth, the truth is, not all communities 
benefit. For those places, the New Markets Tax Credit can be 
very helpful.
    The New Markets Tax Credit was created to make loans and 
capital investment opportunities in under-served areas. Most 
importantly, it provides an incentive for people to invest in 
urban markets, like Cincinnati, where urban revitalization is a 
top priority. This is not only benefit to small firms, but the 
community as a whole.
    While creating incentives for people to do business in 
urban markets is important, it is equally essential to ensure 
small businesses are receiving the financing tools they need. 
Entrepreneurs are the country's economic drivers and job 
creators. However, accessing the capital they need to 
successfully grow a business is always challenging.
    This is where the Small Business Administration's loan 
programs, such as the SBIC and the 504, step in to help small 
businesses and, therefore, communities. The Small Business 
Investment Company program was created to give small businesses 
access to the long-term capital required for growth. SBICs 
provide equity capital, long-term loans, debt equity 
investment, and management assistance to small businesses, 
particularly during their growth stage.
    The SBIC 504 program was also intended to spur economic 
growth in under-served areas. It provides long-term fixed rate 
financing to small businesses for land, buildings and machinery 
equipment. It has been known to stimulate small businesses, 
create jobs, and encourage investment in the community.
    With small firms creating three out of every four new jobs, 
and comprising over half of the nation's gross domestic 
product, they can play a critical role in revitalizing urban 
communities. Clearly, the New Markets Tax Credit, SBIC, and the 
504 Program can work to help in urban revitalization by 
stimulating job growth, investing in the community and 
entrepreneurs.
    Today we will hear from small business owners who have 
utilized this program, as well as local stakeholders. Again, I 
want to thank each one of you for coming to share your 
experiences with all these federal programs, and to Mr. Chabot 
and his staff for all the work that you put in putting this 
event together. So, thank you. And I now recognize Mr. Chabot 
for his opening statement and the introduction of the 
witnesses.

                OPENING STATEMENT OF MR. CHABOT

    Mr. Chabot. Thank you, Madam Chairwoman. I want to, first 
of all, thank you--excuse me--for taking time out of your busy 
schedule in coming all the way from your district in New York 
to Cincinnati here to hold a field hearing of the Small 
Business Committee. I really do appreciate it.
    And I think we're going to learn a lot this morning from 
some of the local folks that have been involved in small 
business programs and the loan programs with the New Markets 
Tax Credit and the 504 Program. So, the fact that you came all 
the way from your district here is most appreciated, not only 
by myself, but I think all the people of the First 
Congressional District in Cincinnati.
    I appreciate the opportunity, I think we all do, to show 
you at least a small part of how our community and how the New 
Markets Tax Credits and the Certified Development Company, the 
504 loan program that I referred to before, are helping these 
communities like Avondale and Over the Rhine, where we were 
just at earlier, and many other communities in Cincinnati.
    I also want to thank all our witnesses, not only for their 
testimony that they will be giving shortly, but for the 
important work that they are doing in our community, 
particularly in the Uptown and Over The Rhine areas. The New 
Markets Tax Credit, enacted as part of the community renewal 
Tax Relief Act of 2000, takes an innovative approach to address 
poverty by using the tax code to enlist the support of both, 
the public and private sector, making the program unique among 
federal economic development initiatives.
    The New Markets Tax Credit, a 39 percent credit against 
federal taxes over a seven-year period, has helped spur 
investment and economic development in under-served communities 
all over the country, and Cincinnati, as well.
    For example, the New Markets Tax Credit program is 
attracting a significant amount of private capital to the 
Uptown and Over The Rhine neighborhoods.
    All told, the New Markets Tax Credit is responsible for 
more than $100 million in private investments within the First 
Congressional District, and is providing momentum to spur 
redevelopment and job creation in some of Cincinnati's most 
distressed neighbors.
    The New Markets program was extended for two more years 
last year, meaning the program will expire at the end of 2008, 
unless Congress takes action to renew it. And us being here is 
part of Congress seeing why we should renew that, because we're 
seeing it here firsthand, how it's helped Cincinnati.
    I happened to be a cosponsor of the legislation during the 
last Congress to renew the program for five more years. It's my 
understanding that Representatives Ron Lewis of Kentucky and 
Charles Rangel from your area in New York, the chairman of the 
Ways and Means Committee, plan to introduce similar legislation 
in the near future. And I look forward to, once again, lending 
my support, and I'm sure that the chairwoman does, as well, to 
a bill to continue the New Markets program. And I'm hopeful 
that such a bill will become law.
    The New Markets Tax Credits are an important part of the 
community redevelopment and reinvestment, as is the Small 
Business Administration's Certified Development Company 
program, also known as the 504 loan program. Certified 
Development Companies, or CDCs, such as David Main's Horizon 
CDC, are invaluable resources for America's small businesses. 
Every time a business owner receives a loan from a CDC, they 
are not only making a commitment to better their business, but 
also to improve their community by creating jobs and helping 
revitalize neighborhoods.
    This type of community investment is important, and it's 
one of the reasons that renewing the CDC program is critical. 
As many of you may know, a number of us also co-authored 
legislation, along with the chairwoman and myself and 
Representative Melissa Bean, called the Small Business Lending 
Improvement Act of 2007.
    This important bipartisan bill would reauthorize and 
strengthen the CDC program to ensure that small business owners 
and communities around the country will continue to benefit 
from the ability of small businesses to reinvest and grow their 
businesses. The Small Business Committee unanimously passed the 
Small Business Lending Improvement Act. I'm hopeful that the 
full House will consider it in the very near future.
    It's important that small businesses take root in 
communities such as Avondale and Over The Rhine, and that small 
businesses--after all, they've created 60 to 80 percent of 
American jobs over the last ten years. Think of that. 60 to 80 
percent of the jobs created over the last ten years have been 
created by small businesses. And that's something I think we 
should always recognize. They're the backbone of our economy.
    We need to provide small business owners the opportunity to 
thrive in Avondale and Over The Rhine and throughout the 
country as a means to create jobs and strengthen communities 
and improve the local economy.
    I, again, want to thank the witnesses for taking their time 
that we're going to be hearing from in the very near future 
here, and I want to thank you all for coming this morning. And, 
again, I want to thank the chairwoman for coming to Cincinnati 
and having this hearing this morning. I yield back my time. 
Thank you. With the chairwoman's permission, I will now 
introduce--will introduce the panel, just the witness. And then 
he or she will testify. And then we'll introduce the next one 
after they've testified. We'll do them individually.
    We'll start with Mr. Chad Munitz. Mr. Munitz joined the 
Cincinnati Center City Development Corporation, the 3CDC, in 
August 2006, as the executive vice president for development, 
and manages 3CDC's development activities. Chad had previously 
led the City of Cincinnati's Economic Development Department, 
serving as the primary point of contact with the city for 
developers and businesses promoting economic development 
projects.
    Prior to this role, Chad served as the assistant deputy 
director and the governor's regional economic development 
representative at the Ohio Department of Development in 
Columbus, where he facilitated private sector expansion, 
retention, and relocation projects within Ohio.
    And before coming to Avondale for this hearing, the 
chairwoman and I had an opportunity, and some of our staff 
people, to meet with Chad and some of his people down in Over 
The Rhine, where he showed us some of the work that's being 
done by 3CDC in the Over The Rhine area. And they are certainly 
doing some much-needed work down there. So, Mr. Munitz, you're 
recognized for five minutes, or approximately that.

    STATEMENT OF CHAD MUNITZ, EXECUTIVE VICE PRESIDENT FOR 
                       DEVELOPMENT, 3CDC

    Mr. Munitz. Thank you, Chairwoman and Congressman Chabot. 
Bear with us one second here.
    Mr. Brown. I'll blind you by the light.
    Mr. Munitz. While Tony is being gracious, thank you for 
helping me here get this focused a little bit, I'll just start 
real quick with this first, just real quick to show you the 
background of 3CDC.
    3CDC, as the Congressman said, is the Cincinnati Center 
City Development Corporation. We're a downtown development 
corporation in Cincinnati that focuses on the neighborhoods: 
Over The Rhine, our central business district, and then also 
our riverfront. And we are truly led by our chairman, who is 
the President and CEO of Procter & Gamble, A.G. Lafley, but 
also the rest of the corporate community in the City of 
Cincinnati.
    Today I really want to talk about the effects that the New 
Markets Tax Credits have had on our development that we've been 
doing. Over The Rhine has been a historically disinvested 
community in the City of Cincinnati. It is only six blocks from 
the heart of our city, which is Fountain Square, in our central 
business district, where we have over 80,000 employees that 
work downtown every day.
    Over the last decade, there's been disinvestment and the 
loss of over 40,000 residents in Over The Rhine. And over the 
last three years, since 3CDC has been formed, we've been 
acquiring parcels and property in Over The Rhine to look at 
doing reinvestment on a scale that actually has some momentum 
and starts to change the makeup of that community.
    We've only been able to do that thanks to the New Markets 
allocation that we received about four years ago.
    3CDC was the recipient of a $50 million New Markets 
allocation. We have taken that directly to invest in property 
in Over The Rhine, but also to invest in our development 
efforts.
    What we toured this morning, I'm going to go through this 
real quickly here, we have about 93, just less than a hundred 
commercial--or condominium units that we have created in Over 
The Rhine in a four-block area, right at 12th and Vine, 22,000 
square feet of commercial property.
    It's really transformed that corner of 12th and Vine, 
something it hasn't seen in decades.
    Just two years ago, before 3CDC started those efforts, 
there were over 270 police calls to that corner. And last year, 
since we have started construction, before the units had 
actually gone on-line, there's only been four police calls to 
that neighborhood. So we've really turned this around, and it's 
with the help of New Markets Tax Credits and small businesses.
    The four development teams that are developing this are all 
small business, and the actual contractors have all been small 
businesses who are doing these developments of the 93 units and 
the 22,000 square feet of retail. But then, also, all the 
businesses that we've brought so far, we've sold about 40 
percent of our commercial space, have also been young, small 
business entrepreneurs who are moving back into Over The Rhine.
    I really want to talk about, in a little bit more detail, 
the New Markets Tax Credit itself. We are one of the poorest 
rates of poverty--or highest rates of poverty anywhere in the 
country that has received the New Markets allocation. We have 
68 percent poverty level in the census tracks that make up our 
allocation district, in the central business district and Over 
The Rhine. The median family income in that district is only 12 
percent of the median family income of the entire City of 
Cincinnati, the metropolitan statistic area of Cincinnati.
    And Over The Rhine, for the last decade, has had less than 
a five percent home ownership rate, which is pretty hard to 
achieve. So we're slowly doing that, and that's why the bulk of 
our redevelopment has been focused on for-sale units.
    We really have, we feel, a unique New Markets program that 
we have set up here for the 3CDC. And what we've been able to 
do is, because of the investors in the program, we provide low-
interest loans, we provide interest-free and interest-only 
periods. We really take most of the risk through our fund by 
having nonrecourse debt to our lenders, to the developers who 
are doing this. We do not require them to have any recourse. 
The only collateral on these buildings are the value of the 
buildings themselves, which are actually much less than the 
money we have loaned into them.
    That which--again, getting into that, a lower loan-to-value 
ratio that we lend out, and then being subordinated debt behind 
other debt that has come into this is really the flexibility of 
the New Markets program, and has allowed us to get out there 
and reinvest these at a much greater rate. And it's also been 
an advantage for us to bring in the small businesses into the 
commercial section, but providing the tenant improvement 
allowance to them, and charging very low interest rates.
    3CDC is also taking advantage of the New Markets program by 
combining what we have of our staff of 3CDC and the Cincinnati 
Equity Fund to lower the administrative and overhead costs. So 
we pass very little cost on to the fund itself or to any of our 
borrowers. It also allows us to charge much lower than standard 
loan origination fees and consulting fees.
    And then, really quickly, which the Congress members saw 
this morning, but to show the rest of the audience here what 
we're doing right at 12th and Vine with these new developments 
that we're having, it's about a $27 million development that's 
had the $12.5 million in New Markets Tax Credits infused into 
that, the rest of the money coming from another loan fund that 
Cincinnati Center City Development Corporation has, and then 
also some grant funds from the City.
    As you can see, we've really taken some troubled properties 
and reformed them. This is right there on the corner where we 
have above it residential units for the art academy. There are 
dorm rooms above there. And below, which used to be the Bay 
Cafe, which was a very troubled carry-out, is now our sales 
center for the entire development. This is an actual unit that 
we walked through this morning.
    Most of these buildings that we have taken were vacant and 
really had squatters living in them. So we've taken these 
buildings, have had to clean them out and have had to remove 
all the lead and asbestos that was in those, and provide units 
for sale.
    Here, again, is just some more pictures of some of the 
dramatic changes from before and after that we've had in our 
units.
    That really concludes the bulk of our testimony. I just 
want to, once more, emphasize how important it is. People have 
been trying to redevelop Over The Rhine for decades in this 
city, and have really not been able to get the scale of 
development happening that changes communities and changes 
neighborhoods at a time.
    And if it was not for infusion of the New Markets Tax 
Credit, we would not be able to move forward with that, and, 
truly, the flexible terms of that, the generousness of the 
investors in the program, that really just take the federal tax 
credit as a return on that investment.
    And, then, since I have the honor of being here in front of 
the committee, I would like to let you know, also, that we have 
a new allocation request in and we're applying for another $75 
million in tax-free allocations for this next round. So, thank 
you very much for allowing me to be here.
    Mr. Chabot. Madam Chairwoman, I will introduce the next 
witness, if that's okay.
    Chairwoman Velazquez. Fine.
    Mr. Chabot. Thank you. Our next witness will be David Main, 
who is the President of Hamilton County Development Company, or 
Horizon Development. He actually started in 1983 at Hamilton 
County Development Company.
    While the SBA 504 loan program is HCDC's flagship economic 
development lending activity, HCDC also administers the Ohio 
Regional 166 loan program, the Community Reinvestment Fund, the 
U.S.A. Loan Program, the Hamilton County Economic Development 
Office, and the Hamilton County Business Center, a 70,000-
square-foot incubator.
    Prior to joining HCDC, David served as a loan officer, 
staff attorney for Citywide Development Corporation in Dayton, 
Ohio; legal adviser for the Department of Community Development 
in Rockford, Illinois; and commenced his economic small 
business development career as the first economic development 
coordinator for the City of Xenia, Ohio.
    Earlier this year, David Main testified before the Small 
Business Committee in Washington, D.C., as he's done, I 
believe, a few times prior to that. So, Mr. Main, you're 
recognized for five minutes, also.

  STATEMENT OF DAVID K. MAIN, PRESIDENT/CEO, HAMILTON COUNTY 
                     DEVELOPMENT CO., INC.

    Mr. Main. Thank you. I would like to thank Chairperson 
Velazquez and Ranking Member Chabot for providing me the 
opportunity to give remarks concerning the effects, role and 
positive benefits that the SBA 504 loan program plays in 
revitalizing urban communities.
    The 504 loan program is an economic development financing 
tool with the purpose of promoting small business capital 
investment as well as the creation of jobs and retention of 
jobs and employment opportunities. As such, it finances fixed 
assets, primarily real estate, though occasionally machinery 
and equipment, to facilitate the expansion of growing small 
businesses.
    One additional virtue of the 504 program is that it 
generates owner-occupied commercial real estate. Just as 
residential home ownership creates stakeholders who foster 
stability and commitment to local communities, business owner-
occupied real estate also promotes, and perhaps on a greater 
role, stakeholder commitment and stability in such communities.
    HCDC has funded numerous projects located in urban core 
areas and inner-ring communities where small business concerns 
have acquired real estate through the 504 program, sometimes 
using our private lending partners and including New Markets 
Tax Credits, and investing, not only in the acquisition of real 
property, but more importantly in constructing improvements and 
renovations to this real estate, as well. In addition, these 
companies have added jobs and typically employed local 
residents from the community. The end result is an improved 
property with new commerce and business activity.
    There are some noteworthy examples within the City of 
Cincinnati and Hamilton County urban communities where small 
businesses, some formerly renters, have acquired and improved 
real estate through the 504 program. As a result, not only have 
their businesses flourished, but the surrounding areas have 
benefited, as well.
    One such example is Baba Budan Coffee House, owned by Tony 
Hamburg. Due to an urban renewal project that acquired the 
building he rented for his shop near the University of 
Cincinnati, Mr. Hamburg needed to find a new location for his 
business. HCDC, through the SBA 504 loan program, together with 
a local community-based private lender, helped Mr. Hamburg 
acquire and renovate a vacant former bar near the UC campus. As 
a result, not only has his business flourished with increased 
revenues, but also his investment has helped spawn additional 
redevelopment of and new private investment in the city block 
where Baba Budan is now located.
    In addition, HCDC, through the 504 loan program, also 
assisted the redevelopment of two brownfield sites, financed 
through the Clean Ohio Fund, within the inner-ring community of 
Lockland. These sites have not only been environmentally 
remediated, but more importantly returned to active productive 
commercial use as two more HCDC-financed 504 projects. Premier 
Food Management and Frederick's Landscaping acquired these 
properties, constructed new buildings, and as a result, jobs 
and commerce have supplanted vacant brownfields.
    I would like to commend the committee leadership for 
getting HR 1332, the Small Business Lending Improvement Act, 
approved and unanimously voted out of the Small Business 
Committee, particularly since there has not been a full program 
reauthorization for several years. I also look forward to 
working closely with the Senate to complete passage of this 
important legislation.
    HR 1332 represents one of the most far-reaching 
improvements for the SBA 504 loan program. However, there are 
certain changes which could improve 504's impact on urban 
communities. One such change would be to reduce the required 
small business owner occupancy percentage requirement from 51 
percent for existing buildings to 35 percent, and from 65 
percent for new construction to 51 percent within urban core 
communities.
    Within these urban areas, real estate frequently involves 
multistory facilities that may be too large a structure for 
many small business borrowers to occupy the 51 percent. 
Nevertheless, with ownership requirements reduced to at least 
35 percent of the building, the balance could be rented out to 
other productive uses while the small business borrower would 
still serve as the owner-occupant anchor of the facility.
    From fiscal year 2001 through fiscal year 2006, HCDC 
increased its 504 loan approvals by 97 percent, going from 31 
loans in 2001 to 61 loans in 2006. Meanwhile, during the same 
period, the 504 program nationally increased its loan approvals 
by 91 percent, going from 5,195 loans approved in 2001 to 9,942 
loans approved during fiscal year 2006. Notwithstanding these 
increases, the SBA agency staff appears to have been cut to the 
point where its capacity to continue to effectively process 504 
loans in future years, as the program continues to expand, is 
in jeopardy.
    One solution, in addition to adding additional personnel, 
would be for the SBA to establish a second 504 processing 
center, preferably in the eastern half of the United States, to 
handle this growing 504 loan processing activity.
    In addition to the HCDC 504 loan clients who are appearing 
today and the other above-mentioned 504 urban successes, 
there's no doubt other examples of 504 loan activity throughout 
the country that provide tangible and lasting value regarding 
how the 504 loan program assists small businesses to expand, 
invest, create jobs, and improve the overall quality of life in 
urban communities.
    Thank you for your support, and I would be willing to 
answer any questions.
    [The prepared statement of Mr. Main may be found in the 
Appendix, on page 32.]

    Mr. Chabot. Thank you very much, David. Our third witness 
here this morning will be Tony Brown. Tony has served as 
President and CEO of the Uptown Consortium since March of 2004, 
so about three years now.
    The Uptown Consortium is a nonprofit organization made up 
of uptown's five largest employers: Cincinnati Children's 
Hospital Medical Center, Cincinnati Zoo and Botanical Gardens, 
the Health Alliance of Greater Cincinnati, TriHealth, Inc., and 
the University of Cincinnati.
    Mr. Brown began his career in banking in 1982. From 2001 to 
March 2004, Mr. Brown served as the director of the Community 
Development Financial Institutions Fund, a government-owned 
corporation at the United States Department of Treasury, to 
which he was nominated by President Bush.
    Under his direction, the CDFI Fund made a significant 
contribution to creating jobs and stimulating economic growth 
in the nation's low-income communities. Mr. Brown also 
successfully implemented the $15 billion New Markets Tax 
Credits program. And we welcome you here this morning, Mr. 
Brown.

 STATEMENT OF TONY T. BROWN, PRESIDENT/CEO, UPTOWN CONSORTIUM, 
                              INC.

    Mr. Brown. Excuse me. I'm also coordinator of the AV 
equipment, too.
    Chairwoman Velazquez, I would like to say welcome to Uptown 
Cincinnati. We are the premier cluster of neighborhoods in the 
First Congressional District of Ohio, and I'm sure Congressman 
Chabot would not challenge that. We'll let him debate that on 
the west side.
    Mr. Chabot. We love all the neighborhoods in our district.
    Mr. Brown. Congressman Chabot, welcome home, and thank you 
for conducting an official U.S. Housing Small Business 
Committee field hearing to review economic development 
programs. As the introduction stated, I am Tony Brown. I'm 
president of the Uptown Consortium, and we appreciate the 
opportunity to testify before you today.
    Our organization is founded by four of the region's top 
seven employers and the Cincinnati Zoo, which represents our 
region's number one tourist attraction. The members of the 
Uptown Consortium employ over 50,000 people and provide an 
annual economic impact of $3 billion.
    The House Small Business Committee has chosen the perfect 
city to explore local efforts to revitalize neighborhoods using 
small business investment programs. As you have witnessed, our 
city, in just the First District of Ohio, have received over 
$100 million in New Markets Tax Credits that have provided the 
incentive for us to attract private capital to help revitalize 
economically distressed neighborhoods, as seen in Avondale and 
Over The Rhine.
    Similar to Chad, I would like to focus my comments around 
the New Markets Tax Credit program, as it has been the primary 
tool that we're using to raise private capital. And, besides, 
it's an economic development program that I know a little 
something about.
    As the Congressman indicated, in 2001, I was appointed by 
the president to direct the CDFI fund, and I served as director 
through February of 2003. During my tenure at the Fund, I 
personally supervised the regulations for the first $6 billion 
in New Markets Tax Credits allocated.
    The New Markets Tax Credits program was designed to 
stimulate investment and economic growth in low-income urban 
neighborhoods and rural communities by offering, as the 
Congressman highlighted, a seven-year 39 percent federal tax 
credit into investment vehicles known as Community Development 
Entities. These CDEs use capital derived from the tax credit to 
make loans to, or investments in, businesses and projects in 
low-income areas. So, for instance, a $1 million investment 
into a CDE would yield for that investor a federal tax credit 
of $390,000 over a seven-year period.
    The New Markets Tax Credit program was enacted in December 
of 2000 as part of the Community Renewal Tax Relief Act. The 
original authorizing legislation provided $15 billion in New 
Markets Tax Credits authority. As you know, 2008 is the last 
year that Congress has authorized New Markets Tax Credit 
authority. And legislation to reauthorize the program through 
2013, I have been told, will actually be introduced next week 
in both, the House and the Senate. The House bill will be 
sponsored by Congressman Neal from Massachusetts, with 
additional support, as Congress Chabot said, from Ron Lewis 
from Kentucky.
    In Cincinnati alone, we know firsthand that this program 
works. We have been able to attract below-market sources of 
private capital as the patient source of funding we need to 
implement, in just the uptown area, a half a billion, $500 
million redevelopment pipeline. If you simply look at the list 
of investors in the Uptown Partners Fund, we can attest that 
New Markets have met the purpose that Congress has intended it 
to be. It has attracted private capital in low-income 
communities.
    As you can also see from your tour, we have--we are just 
getting started. And to end this program now would have a 
devastating impact on our ability to raise capital in order to 
continue our efforts.
    Madam Chairwoman, Congressman Chabot, your field visit to 
conduct a bipartisan review of this program is commendable, and 
your efforts are to be applauded. Your presence here today 
clearly signals the importance of this program for the areas 
you represent.
    In Ohio, for instance, on a per capita basis, Ohio has 
truly benefited from this program as 14 Community Development 
Entities have been awarded in excess of $647 million. And in 
New York, 17 Community Development Entities have been awarded 
well over $1.7 billion. The U.S. Department of Treasury reports 
that the New Markets Tax Credits program has accounted for an 
investment of nearly $8 billion in low-income communities to 
date.
    I'm going to take a moment here, again, similar to what 
Chad has done, to talk about how we're using the New Markets 
Tax Credits program to stimulate the type of economic 
revitalization of Burnet Avenue. Again, we thank you for the 
tour. Our focus has been on Burnet Avenue, as well as a number 
of other communities, but we're going to illustrate how we're 
using New Markets Tax Credits to stimulate the revitalization 
of what has been an historic African-American business 
district.
    We started two and a half years ago working with the 
Avondale Community Council to come up with a vision for the new 
Burnet Avenue north of Erkenbrecher. And from that plan, the 
vision resulted in stimulating 330 new workforce housing units 
and being a catalyst to invest in over 300,000 square feet of 
office retail space. Clearly, that is not how Burnet Avenue 
looked today, but we welcome you back in five years, and we're 
sure to show you that that's what it will look like in the next 
decade.
    The New Markets Tax Credits program and the investors in 
the Uptown Partners Fund have allowed us to take $25 million to 
become the single-largest property owner on Burnet Avenue north 
of Erkenbrecher between Forest and Harvey Avenue. But for New 
Markets Tax Credits, we could not have assembled this land, 
which makes us, if you combine the efforts of 3CDC, clearly, 
the largest privately-funded urban renewal effort focusing on 
neighborhood development in the country.
    We are investing in the transformation of Burnet Avenue. 
Our first project is allowing an African-American-owned 
business to build and construct a 45,000 square-foot office 
building. The Cincinnati Herald is our region's premier 
publication of African-American news and culture. Through the 
efforts of The Cincinnati Herald, several years ago, they went 
to Children's Hospital and said, we need to clean up Burnet 
Avenue. Will you help us do a 5,000-square-foot office 
building? Well, that 5,000-square-foot office building has 
turned into a 45,000-square-foot office building.
    Through the New Markets Tax Credits program, we are in 
partnership with the owners of Sesh Communications to construct 
and build the Cincinnati Herald building. The Uptown Cincinnati 
Development Fund is providing a mezzanine loan that has allowed 
the developer to get the senior loan in order to construct the 
$7 million facility.
    Cincinnati Children's Hospital is committed to expand and 
to bring more employees and pedestrians on the streets, and 
will build a parking garage to support the additional office 
space that's needed to make this activity happen. The 
leadership of the Avondale community was quite clear. The 
revitalization of Burnet Avenue has to be more than providing 
expansion for the hospitals. The residents must benefit.
    Along with this plan and this whole new design of urbanism 
is to wrap the parking garage with new workforce housing. We 
have assembled the entire site to start the first phase of 60 
units of new workforce housing, and equally proud, you will 
hear from another witness, from Guin, that the design team is 
an African-American-owned business.
    And then, as we jump the blocks, the second phase is where 
you are now. As the community has indicated, this has to be 
about transformation and empowerment, that we need to restore 
the vitality of a business district that benefits African-
American businesses.
    Steve Love, president of the African-American Chamber of 
Commerce, he and I just recently returned from a conference on 
small-business incubators to learn more about how we can 
utilize small-business incubators to be a catalyst to attract 
small businesses, minority businesses in this section of Burnet 
Avenue.
    If you look through those doors, you will see a red ribbon 
on the bus stop where a lady, innocently standing waiting for a 
bus, was shot by an errant bullet. The Cincinnati Police 
Department would consider this block to be one of its hot 
spots. We know that any revitalization must transform and 
create a vision for community accountability and wealth 
creation.
    As we look at the acquisition of the real estate, we know 
we have to come back with programs working in partnership with 
the Avondale Community Council, with the African-American 
Chamber of Commerce, with the Cincinnati Empowerment 
Corporation, to find ways to create small businesses, look at 
small-business incubators, increase the level of goods and 
services to the residents in this area, create an environment 
where the employees in our billion dollar institutions are 
welcome to stop and shop. And we're going to do that in 
partnership with the Avondale Community Council, and then we're 
going to do it in a way in working with our communities so that 
individuals who are now renters, can also be homeowners.
    Again, I would like to thank you for the opportunity to 
testify. The Uptown Consortium expresses our deepest 
appreciation for the leadership of the House Small Business 
Committee in making a bipartisan effort and exploring local 
efforts to revitalize neighborhoods using small-business 
investments.
    All indications are that the New Markets Tax Credits 
program is working. The program has been the catalyst to date 
of nearly $8 billion in low-income communities. And over 200 
CDEs across the country are using the credit to support a wide 
variety of community and economic development initiatives. We 
thank you for taking a firsthand look at this program and in 
aiding Cincinnati's redevelopment.
    We know that you both are champions in supporting the 
growth of small and minority-owned businesses and ensuring 
economic opportunity for the working class and poor. As leaders 
in Congress, we hope you will succeed in getting other members 
to join you in passing a five-year extension of the New Markets 
Tax Credits program. Thank you.
    [The prepared statement of Mr. Brown may be found in the 
Appendix, on page 36.]
    Mr. Chabot. Thank you very much, Mr. Brown.
    Chairwoman Velazquez. Thank you.
    Mr. Chabot. Thank you. Our next witness, our fourth 
witness, will be Elizabeth Oliver, who is the owner of the--is 
it pronounced Shekinah.
    Ms. Oliver. Shekinah.
    Mr. Chabot. Shekinah. Shekinah Beauty Center, Inc. She's a 
graduate of Moore University with a certificate in cosmetology 
in 1982. She spent 15 years cultivating her skill sets so that 
she could catapult into a career as a salon owner. She opened 
her own salon in 1997, leasing space in Sycamore Township.
    Understanding the importance of real estate ownership, 
Elizabeth Oliver purchased her existing property in 2002.
    She is the owner/operator of the Shekinah Beauty Center, a 
full-service salon and spa. She provides individualized 
consultation and spa services to individuals of all 
socioeconomic levels, and we're happy to have you testify on 
how this has influenced your business and made it possible for 
you to prosper. You're recognized.
    Ms. Oliver. Good morning.
    Mr. Chabot. Good morning. If you could speak up. I'm not 
sure if that mic is on. Yes, it is.

   STATEMENT OF ELIZABETH OLIVER, PRESIDENT, SHEKINAH BEAUTY 
                         CENTERS, INC.

    Ms. Oliver. Good morning. My name is Elizabeth Oliver. I am 
the President of Shekinah Beauty Centers, Inc. I am here today 
to speak on behalf of the SBA 504 program. Being a small-
business owner and being considered, at the time, as self-
employed, most traditional lenders did not extend the 
opportunity with ease for ownership. I am very grateful for the 
program because it has proven to be designed for small 
businesses that are trying to build wealth in real estate.
    With the beauty industry being a multibillion dollar 
industry, 90 percent of the business owners lease the space 
that their businesses are functioning out of. But I am pleased 
to be amongst the 10 percent that have ownership.
    The SBA program has been excellent for me from the start to 
the finish. The loan officer, Angela Howard, was very 
knowledgeable with the program and assisted me with the SBA 
process, as well as getting a local bank to collaborate with us 
for the main portion of the loan.
    With lower down payments and fixed interest rates, that I 
could not have found in traditional lending, the alternative 
funding of the SBA 504 program has enabled me to expand my 
business and create a vineyard for other small businesses to 
operate within our business while maintaining their own 
business identity. I don't think this would have been possible 
without the assistance of the SBA program.
    My husband and I have another business venture operating 
within the same building, and we hope to expand both 
businesses, and pray that we'll have the opportunity to use the 
SBA program once again. Thank you.
    [The prepared statement of Ms. Oliver may be found in the 
Appendix, on page 39.]
    Mr. Chabot. Thank you very much. I appreciate your 
testimony here this morning. And our fifth and final witness 
here this morning on the panel is Guinette Kirk, Vice President 
of Business Development, DNK Architects. Guinette Kirk received 
her undergraduate degree from Howard University in 1978, 
majoring in psychology. She received her M.B.A. in 1980 from 
Ohio State University. She has worked previously for 
Shillito's, Federated, as an assistant buyer from 1981 to '82; 
the Drackett Company, as assistant product manager, from '84 to 
'90; and Totes, as product manager, in 1994.
    Guinette assumed the position of vice president and 
business development officer with DNK Architects in 1994.
    DNK was formed by Ms. Kirk's husband, David, in 1986. The 
company provides architectural and building code consulting 
services to clients and design professionals, and we welcome 
you here this morning, Ms. Kirk, and thank you for your 
testimony.

    STATEMENT OF GUINETTE KIRK, VICE PRESIDENT OF BUSINESS 
                  DEVELOPMENT, DNK ARCHITECTS

    Ms. Kirk. Thank you. Good morning. As was stated 
previously, I'm Guinette Kirk, and I'm Vice President of 
Business Development for DNK Architects. As you already know, 
we are a Cincinnati-based firm specializing in architecture, 
interior urban and landscape design. We've been practicing 
since 1986, and we have 18 employees servicing the Tri-State 
area.
    We provide services to the public and private sectors, and 
our clients include such companies as the Health Alliance, 
Procter & Gamble, the Uptown Consortium, Children's Hospital--
Cincinnati Children's Hospital Medical Center, Cincinnati 
Public Schools, the Dayton Public Schools, and the General 
Services Administration.
    A few of our completed local projects include the Lincoln 
Court Senior Citizens building, which was part of the Hope 6 
project; the new Lindner YMCA in the West End; Gateway 
Condominiums in downtown. This was one of the projects that was 
previously shared with you through the PowerPoint with Mr. 
Munitz. Woodlawn Elementary School in the Princeton School 
District; the Hamilton County Community Action Agency 
headquarters; and we also provided all the modifications to the 
old Cinergy stadium that were required before the new Reds 
ballpark was built. In addition, we were the master architects 
in association with URS for the Cincinnati Public Schools $1 
billion rebuilding program.
    Currently, we are working with the Uptown Consortium here 
in the Avondale area, and you recently toured that site. We're 
working on revitalizing the Burnet Avenue area. Our work with 
the Consortium, Tony Brown and his staff includes improvements 
in the right-of-ways, site developments, housing, offices, and 
new retail.
    Approximately six years ago, we were introduced to the SBA 
504 loan program by Angela Howard, a loan officer of Horizon 
Certified Development Company, which was formerly the HCDC. She 
knew that we were looking to--for a new office space for our 
business. By using the 504 program, we were able to purchase a 
6,400-square-foot building, renovate it, and relocate our 
business to the Clifton Heights area in 2001.
    The 504 loan program afforded us a fixed rate of interest, 
lower capital outlay, and a longer loan term. All of these 
factors contributed to us being able to control both, our 
initial capital outlay and our ongoing expenses.
    We were also able to increase staff and thus add to the 
City of Cincinnati's tax base.
    In summary, we would highly recommend this loan program to 
other, not just minority, but other business owners here in 
Cincinnati. And I would like to thank you, Congressman Chabot 
and Congresswoman Velazquez, for this opportunity to provide 
our testimony.
    Mr. Chabot. Thank you very much.
    Chairwoman Velazquez. All right. Thank you very much. This 
has been quite--not only informative, but for me to come here 
and see, firsthand, the impact. And I wish that I was here many 
years ago, but I know that from this point on, I could come 
here, back here five years from now, and see the positive 
impact that these federal programs are having in our 
communities.
    The fact of the matter is that the ranking member and 
myself, and the Small Business Committee members, the Small 
Business Committee, will be working on revamping and retooling 
some of the programs on their SBA. And we're going to be 
working on the revitalization of the statute of the Small 
Business Administration. So, this provides a great wealth of 
information that we can use.
    Let me address my first question to Mr. Brown and Mr. 
Munitz. One of the obstacles to getting more investment as part 
of the New Markets Tax Credit program has been the complexity 
of the program. In a recent General Accounting Office report, 
it discussed how investors are concerned about the structure in 
which the tax credit is awarded. The investor also wants more 
flexibility in the ways they can make investments in these 
CDEs. Has this complexity discouraged you or other potential 
investors from using the New Markets Tax Credit program?
    Mr. Brown. As I look back at our banking community, 
clearly, this is a very complicated program. It's a tax credit 
program, and there are conflicting regulations. There is the 
community development impact that Congress intended for the 
program to have, and yet there are 45D rules under the IRS 
statute that governs tax shelter types of rules to make sure 
that the benefit of the program benefits the public, they have 
a public policy benefit, and that it just doesn't enrich the 
investors.
    We have found, in the way in which we've used our New 
Markets Tax Credit program, that we've had to get legal 
opinions and get our bank partners comfortable in utilizing New 
Markets Tax Credits to do land banking. And when you're doing 
land banking in a manner that doesn't provide an immediate 
source of repayment, then you can't just accrue that interest 
and repayment for year in/year out.
    And I could go into a lot more examples, but in summary, 
the New Markets Tax Credit Coalition, as well as other industry 
associations, are working with the IRS and members of Congress 
to try to simplify in instances where conflicting tax codes 
impact how the program is used and its appetite for the 
investment community.
    Chairwoman Velazquez. Thank you. Mr. Munitz.
    Mr. Munitz. Madam Chairwoman, I really echo a lot of what 
Tony has said. We were blessed a little bit differently than 
most, the majority of our investors in our fund, or for-profit 
corporations, but our banking investors are experiencing a lot 
of the similar problems with the complexity of the codes for 
the actual New Markets Tax Credits and then the IRS codes to 
claim the credits themselves. So, from that standpoint, it does 
get very complex.
    I think on the other side that you mentioned briefly, what 
kind of projects you can invest the funds in, I think those are 
doing very well for us. And from 3CDC's standpoint, we wouldn't 
want to see much change in that. It helps, we feel, keep us 
competitive, that we're truly investing these funds in the 
neighborhoods and the projects that need them the most in this 
country, and not some other things that could just benefit from 
additional return from the federal government.
    Chairwoman Velazquez. Thank you. Mr. Brown, some critics of 
the program point out that the New Markets Tax Credit doesn't 
do enough to attract new investment. They argue that it simply 
shifts investment. I was wondering if anyone could speak to the 
issue of how the program has encouraged investors to put money 
into these CDEs, that they may not have invested if the New 
Markets Tax Credit did not exist.
    Mr. Brown. And I think that's an excellent question.
    The Uptown Partners Fund is a tremendous example. I mean, 
you have five nonprofit employers who are investing in the New 
Markets Tax Credit program: The University of Cincinnati, 
Cincinnati Children's Hospital, Health Alliance, and the 
Cincinnati Zoo, I better not forget TriHealth. And it is 
uncommon for 3CDC, Procter & Gamble, Federated, it is sort of 
uncommon for these corporate entities to invest in community 
development programs.
    Because of the Community Reinvestment Act, it is not 
uncommon for our financial institutions to do it. I think that 
the program has attracted new investors. It has attracted 
investment bankers who do not have to comply with the New 
Markets Tax Credit program. It has attracted insurance 
companies who don't have to comply with the Community 
Reinvestment Act. I'm sorry. And so it has attracted other 
nontraditional community development investors.
    At the Fund, before I left, the administration allowed me 
to invest in what's called the Community Investment Impact 
System, CIIS. So now the CFI Fund has the ability to attract 
and to report to members of Congress: Who are the investors? 
Are they uncommon? And even heretofore, the inquiry I used to 
get when I testified before members of Congress, the Fund could 
not tell you in which census tracts investments were being 
made.
    Now with CIIS, and the GAO has reported they have the 
capability to slice and dice the information the way in which 
the members of Congress want to see it. So I think you will 
find, if you pose this question to the U.S. Department of 
Treasury, they have the capability to answer it.
    Chairwoman Velazquez. Thank you. Mr. Main, the 504 program 
is unique in its focus on local economic development and relies 
on CDCs to carry out this mission. How does the program focus 
on the local community, and in particular the CDC's role 
benefit business.
    Mr. Main. As economic development agencies, and I can speak 
primarily to HCDC, we do more than just package loans. We try 
to give back to the community. We took--we developed a business 
incubator. When we lost a General Motors assembly plant back in 
the mid-'80s, rather than--we felt that the rational response 
was through developing entrepreneurs, and we developed the 
business incubator.
    What the 504 program has provided us, though, is somewhat 
of a culture, where we have to get projects completed. We have 
to get loans approved, we have to get them funded, and they 
have to repay. So that's kind of developed a culture, as such.
    We've also been able to take that as economic development, 
financiers, and put it in other projects. We, in addition to 
the 504s, as I mentioned, we have the state Regional 166, but 
what's more importantly, we also have a program through what's 
called CRF USA, which has New Markets Tax Credits, and it goes 
beyond 504. We cannot do non-profits with CRF USA. We can 
finance non-profits. We have financed some condominiums in Over 
The Rhine with non-profits, primarily commercial. We are just 
one example. There's other CDCs, Certified Development 
Companies, throughout the country that provide other types of 
community benefits and support.
    Chairwoman Velazquez. The 504 loans are fixed rate and tend 
to be longer term than other financing alternatives. Is it 
these characteristics that have made the 504 program more 
attractive to local communities or local businesses.
    Mr. Main. I think it's a couple things. One is the fixed 
rate. Currently, we have rates at 6.29 percent, so it is below 
market. It's the fixed rate, it's the low down payment. As a 
rule, it can be as little as 10 percent down.
    I think the other thing, and it was mentioned by several of 
the witnesses, it's also the loan officers will work with 
entrepreneurs in, not only the 504 piece, but also putting them 
in touch with a bank and working them through the process. So I 
think, in addition to the fixed rate, the low down payment, I 
think it's also the--and not just here, but other CDCs, they 
work with the businesses in getting the financing through.
    Chairwoman Velazquez. Okay. Mr. Munitz, Mr. Brown, can you 
talk to me about how--or have you had any type of mechanisms 
that will prevent commercial gentrification or tenant 
gentrification? And so far, have you seen any of these trends 
happening.
    Mr. Munitz. Madam Chairwoman, it's something that we've 
taken very seriously at 3CDC as we're working in Over The 
Rhine. What we have been doing is partnering with some of the 
social service agencies, the community agencies in Over The 
Rhine, to ensure that that doesn't happen.
    One of the things that has been nice about what we've been 
doing is there have been such an enormous amount of vacant 
buildings and properties, that we are not actually pushing 
anybody out of buildings as we go in to redevelop them.
    The other thing, as we're moving along and trying to do 
this, is we showed our goal is to put 100 for-sale condominiums 
on the market each year for the next five years. We're also 
working with some of the low-income housing providers and the 
social service agencies to make sure that they keep pace with 
this, because this year we developed 93 for-sale condominiums. 
There's also been 80 affordable units that have come on-line 
that are new to the community.
    So, we want to try to bring both up together. And the only 
way that these investments are going to make it in the long run 
is to keep the heritage in Over The Rhine, which is a true 
mixed-use, mixed-income neighborhood.
    Mr. Brown. Madam Chair, you hit on what is a critical issue 
for us in our town. I think the issue of commercial 
gentrification--I'll address it from the standpoint, in the 
Uptown area, as you witnessed, you have four of the region's--
actually three of the region's top employers sharing the same 
headquarter blocks. The issues that we've had historically in 
the Uptown area has been how our institutions have expanded 
into the neighborhoods. And, historically, they have not done 
it very smart.
    And so the Uptown Consortium was formed by them to do land-
use planning in a better way. I think the Burnet Avenue 
revitalization plan is a way in which we can be transparent 
about the need to expand the campus for Children's Hospital, 
for instance, to provide parking and to provide offices, but to 
utilize new urbanism techniques that it can also be the 
catalyst for neighborhood revitalization.
    The University of Cincinnati, if we were doing this hearing 
in Clifton Heights, would be an example of how they were able 
to transform the campus and create Varsity Village and give 
their nonprofit partners air rights on top of their parking 
garage in order to stimulate the Clifton Heights business 
district.
    So, commercial gentrification, particularly in the Uptown 
area, and I probably shouldn't use the word "gentrification," 
but I would say land-use planning in the Uptown area, how this 
city balances its job base and the need to grow that job base 
without having an adverse impact in the neighborhoods, is 
something that we have to balance, it has to be comprehensive, 
and we have to plan for it.
    The issue of the residential impact is the same thing. I 
think our planning has to be done in a way that provides a 
balanced mix of housing. This city, second to Detroit, has lost 
more population than any other city in America. And so what we 
do together to provide the housing stock, the quality of life 
in our neighborhoods in a way that make it attractive for folks 
to want to live and play.
    I mentioned the consortium has 50,000 employees. Less than 
five percent live in the uptown neighborhood. So, though we 
have a captive audience, as we've surveyed those employees, we 
know what the negative attributes are as it deals with safety 
and the quality of public education. So, those are other 
factors that deal with, how do we create a quality of life that 
makes our neighborhoods communities of choice, and not areas 
where you avoid.
    Chairwoman Velazquez. Thank you. I will now recognize 
Ranking Member, Mr. Steve Chabot, for his questions.
    Mr. Chabot. Thank you, Madam Chair. Let me, again, thank 
you for holding this hearing here. And I want to thank all the 
witnesses for their excellent testimony.
    And because of time constraints, we obviously have to limit 
our number of witnesses in a hearing such as this, we would do 
the same thing if we were in Washington now, to a relatively 
small number of people.
    But we have quite a few people here who have an interest in 
small business or who have an expertise, a whole range of 
people. And I recognize an awful lot of people out there that 
really could very easily have been one of the people who would 
be testifying here, and might have things to contribute.
    So, what I would suggest is, if there are things which we 
didn't have an opportunity to cover this morning, or ideas that 
people might have, if you want to contact our office, if you 
can do it in writing, that would be the best thing, or e-mail 
us or something, I can make sure that I provide a copy to the 
chairwoman and to other members of the committee when we get 
back to Washington. We have staff, as well.
    So, if you have questions or comments or suggestions, 
please feel free to contact us. We can follow up with you and 
have a back-and-forth, and maybe--or perhaps we have some 
small-business folks here who are thinking about, you know, 
applying for a particular loan. If you get in touch with us, we 
can get in touch with the SBA local folks here, as well. They 
are also ably represented today. So, I just wanted to start off 
by saying that.
    My first question is: Back in February of 2007, there was a 
GAO, General--the Government Accounting Office report that came 
out, and it was released, and it said that substantial 
investments were made in low-income communities that would not 
have occurred without the New Markets Tax Credits. And, in 
fact, 88 percent of investors said that they would not have 
made their investment without the New Markets Tax Credit.
    I wanted to ask these three gentlemen, first of all, and 
especially with respect to Over The Rhine and Avondale, is that 
what you have found to be the case here? Is this, the 
improvements that we either have already seen, for example, in 
Over The Rhine, or the ones that we see on the horizon, 
especially here in Avondale, are these things that wouldn't 
have happened without the New Markets Tax Credits.
    And, obviously, the information that we take back are 
things that we're talking about reauthorizing this program for 
years to come, but it's something that we will take into 
consideration. So, what's been your experience here?
    Mr. Munitz. Madam Chairwoman, Congressman Chabot, I 
couldn't agree with you more. It's been, really, from 3CDC's 
standpoint, the single most important thing to allow us to move 
forward in redeveloping Over The Rhine. It's a neighborhood 
that people have had many starts and stops over the last 
several decades to try to get redevelopment to occur.
    And the way that the New Markets Tax Credit program is set 
up, and our investors, who would never invest that money were 
it not for the credit that the government is giving them, and 
allowing them to keep their equity invested for seven years 
during that term, until the product can perform on its own, to 
come out with a conventional lender to finance that, it's 
been--I can't even begin to state how valuable that has been.
    Also, allowing us to be flexible to create terms that bring 
those investments in, where we're really taking, as I said, low 
loan-to-value ratios of our loans, very low collateral that we 
take, allowing the developers to go in without any risk, no 
direct security from the developers.
    So, if it were not for this program, we would not be able 
to move forward in the scale that you need to to make true 
urban redevelopment in this day in these communities.
    Mr. Brown. And I just would echo what Chad has said. I 
think, simply put, what the New Markets Tax Credit Program has 
done is, it has allowed your corporate partner that would have 
looked at making a contribution for a community development 
activity, and to know that it's limited because it has an 
impact on the income statement, to take a look at its balance 
sheet.
    Because the tax credit, you know, 39 percent over five 
years sounds like it's a huge tax credit, but what it does for 
the investor, it's about a five percent return. So, it allows 
Chad to talk to Procter & Gamble or it allows us to talk to our 
investors to say, instead of putting that money into a U.S. 
Treasury or money market, invest in this tax credit program and 
then we can give you community impact.
    So, whether or not there is an economic return on the 
investment, the tax credit return itself, and the social impact 
provides a tremendous opportunity to bring private capital to 
work in low-income communities. So, if you look at it from that 
standpoint, that is what's been the stimulus of being able to 
attract this, these private dollars.
    Mr. Chabot. Thank you. Could you discuss briefly, when you 
have investments like we've been talking about here this 
morning, the types of jobs that can be available to folks that 
actually live in the communities.
    What types of jobs are we talking about? What impact on the 
community? That's my first question.
    And the second question, you mentioned, in the one slide, 
that there was a random shooting relatively close to here. And 
as we all know, Cincinnati had its highest homicide rate last 
year in the city's history. What type--you know, if we're 
successful in redeveloping some of Cincinnati's most 
disadvantaged communities over the next number of years, what 
impact should that have on crime, you know, connected with the 
job development? And to some degree, it's a chicken-and-egg 
thing because, you know, if you're able to have more 
development and more jobs for people, one would think it 
reasonable that crime would come down.
    Now, the other side of that is, if it's a high-crime area, 
people don't necessarily want to invest in that neighborhood, 
because they're afraid that they won't get a return on their 
dollar. It may not be safe for their customers or their 
employees or themselves. So, if you could address that 
relationship, as well.
    Mr. Brown. The allocatee for the Uptown Partners Fund is 
the Cincinnati Development Fund, and one of the nation's best 
community development financial institutions. And I can say 
that with authority, having managed them or invested in them 
all. And, quite frankly, but for the Cincinnati Development 
Fund, I don't think we would have been successful in the uptown 
area, because we wrote their track record.
    As a result, they have an obligation to report to the U.S. 
Department of Treasury the types of jobs that are created from 
their investments. And we know, through the allocation 
agreement, that we'll have to report the types of jobs created 
from the construction activity, and in this case, the types of 
real estate.
    In our case, we're investing in office and retail types of 
jobs. You have seen on Burnet Avenue, if you had been here just 
six months ago, a lot of vacant commercial space.
    If we're successful in constructing 300,000 square foot of 
office retail, we estimate that that should create and retain 
nearly 2,000 jobs.
    The issue of--now, how does tax credits get allocated in 
areas that need it most? In our allocation, we said we're only 
going to focus in low-income areas that, by federal definition, 
meets the criteria of being economically distressed. And so 
there are low-income communities, as you know, across the 
country that are in vibrant central business districts that 
qualify for the program.
    But, as you can see, in the uptown area and in Over The 
Rhine, low rates of home ownership, high rates of poverty, and 
we are trying very hard to make sure that our program has a 
neighborhood benefit, that it benefits our neighborhood 
business districts, and that our focus is that it increase the 
rate of home ownership. Cincinnati has a very low home 
ownership rate. In the uptown area alone, we only have a 20 
percent home ownership rate.
    So, as we use the programs to buy real estate--and as I 
said on the walking tour, it can't be a small plan. It has to 
be bold, and that we know that we have to deal with the 
perception of our market, whether crime is real or perceived in 
their mind. A lot of it is perceived. And we're doing 
everything we can in working with the Cincinnati Police 
Department, in the types of investments we make and the way 
that we deploy the New Markets Tax Credits, to create a new 
environment that then makes it attractive for folks who want to 
live and buy. And it's a challenge, but it's one in which we 
prioritize how we deploy our dollars.
    Mr. Chabot. Does that pretty much cover it, Chad.
    Mr. Munitz. It does. Just to add, it's a very important 
thing, and I think both of our organizations are committed to 
this. It starts from the beginning of using--it's not just at 
the end. Once the development happens, in having those new 
residents and the people working there be from low and moderate 
income, but also the work to create the development, we're both 
very committed to using small minority businesses to get that. 
So, from the very beginning, the investment occurs, we're 
helping out those areas.
    Mr. Chabot. Thank you. Madam Chair, do I have time for one 
more question.
    Chairwoman Velazquez. Oh, sure.
    Mr. Chabot. Okay. Thank you. If I could address the 
question to Ms. Oliver and Ms. Kirk and David, you, as well. 
Now, you all have benefited from the loan program in order to 
either start up or expand your business thus far. And, David, 
you kind of oversee that type of thing.
    Are there any things that you've seen in the program that 
would make it more user-friendly or easier for those that are 
starting up a small business or trying to grow it, any kind of 
roadblocks or things that you think should be a bit easier than 
it is, that makes it difficult, any changes that you would 
suggest in the program.
    Ms. Kirk. I'll go first. We started in 2001, as I said. 
And, honestly, our process went so smooth, and I credit a lot 
of that to Angela Howard.
    Mr. Chabot. Good job, Ms. Howard.
    Ms. Kirk. Because she--we developed a relationship with 
Angela from the previous banking relationship, and then she 
knew us, and knew that this was something that would help us. 
So, I would say just that relationship building, but honestly, 
we didn't have one hiccup, not one.
    Mr. Chabot. Ms. Oliver.
    Ms. Oliver. Yes, I'll echo that, because Angela, she was 
so--she was just excellent. She was very knowledgeable of the 
program. And anything that I had a question about, she was 
readily available. And she--the process was just complete. So, 
there's nothing that I can think of.
    Mr. Chabot. Excellent. Thank you. David, having dealt with 
probably many different--I'm very happy that these two are very 
satisfied. I'm glad it went well.
    Mr. Main. So am I.
    Mr. Chabot. Are there--you know, we've discussed this in 
the past. Are there any suggestions that you would make or that 
could improve or make it a little easier or more user-friendly.
    Mr. Main. I think I mentioned it in the testimony. One of 
the issues has been, the agency has been pretty much cut to the 
bone, to the point where I don't know how much more they can 
cut as far as staffing. They need to update the SOP.
    We were quite satisfied when we ran local processing 
through the Cincinnati office and Ron Carlson in Columbus. 
While I understand the need for improvement in that, there are 
times where we have found that Sacramento has not been as user-
friendly. There have been issues as far as appraisals, there's 
been--one of the biggest issues is land contracts.
    Now, it's not an issue out in the western part of the 
country. But for years in the Midwest, in Ohio, in Michigan, in 
Minnesota, if you have a land contract, someone comes in, 
they're not creditworthy for whatever reason, they cannot get 
conventional financing, they purchase property on a land 
contract. Equity title doesn't transfer. And we have taken out 
land contracts with 504 programs.
    Well, as it turns out, for some reason, Sacramento is 
telling us no. There is no real rationale behind it other than 
saying, well, we don't think it should apply. I think, with 
additional staffing, they could update the SOP. If we know the 
rules of the game, we can play them, but that's just one 
example.
    And as I mentioned, perhaps an eastern processing center 
for 504 loans. I'm concerned that the next great quake comes 
out in California, or they lose power, what happens to the 
process? Because this is one area. Whereas if we had a second 
one--Cincinnati would be a great place for an eastern 504 
processing center, I'm sure New York would be, just as well--
that we could balance things. But I--and I think, with updating 
the SOP and looking at some issues on appraisals and that, that 
could improve the program.
    Mr. Chabot. Thank you very much. I yield back my time.
    Chairwoman Velazquez. Thank you. Mr. Main, if the 504 
program did not serve the Cincinnati community, where would 
local businesses turn for long-term financing, low-cost 
financing?
    Mr. Main. It doesn't exist.
    Chairwoman Velazquez. And can you tell me if there are more 
and more businesses turning to the 504 program.
    Mr. Main. We've seen our volume increase over the last six 
years. We approved 31 loans back in 2001. We approved 61 last 
year. Hopefully, we're on track to do more this year. And it's 
a matter--the economy has somewhat slowed down in Ohio, and I 
noticed in Michigan, as well, but we seem to be pretty much 
holding our own.
    There is really no other alternative. The banks, typically, 
they may take a longer-term amortization, maybe about 20 or 25 
years, but they are going to have maybe a five-year balloon or 
they're going to have--they're going to want to adjust the 
interest rate after five years. The 504 program, as far as I'm 
aware of, is the only commercial loan program that will have a 
fixed rate which provides predictability for going out 20 years 
with a reasonable down payment.
    Chairwoman Velazquez. Mr. Brown, you mentioned in your 
testimony some changes and recommendations that you would make 
to the New Markets Tax Credit. Would you mind repeating them or 
adding to what you just said in your testimony.
    Mr. Brown. Yes. Madam Chairwoman, what I indicated is that 
there's an association, the New Markets Tax Credit Coalition, 
documented the issues and the complexity of the program and 
some of the other changes of where there needs to be regulatory 
fixes versus statutory fixes. As a board member on the New 
Markets Tax Credit Coalition, we were faced with the challenge 
of, do we focus on trying to keep the program simple without 
addressing meeting major reforms, and just ask members of 
Congress to go forward with the simple bill to extend the 
program?
    And those of us in the industry have concluded that we 
should go and ask members of Congress to do a very simple 
extension, because if you look at the time frame of when 
allocations have been awarded, it usually takes six months to a 
year to do the allocation agreement, and then another period of 
time before the dollars are actually deployed.
    As Congressman Chabot shared the GAO report, the 
allocations, those dollars are just now getting in the streets. 
So, out of the total amount allocated, about 59 percent is now 
deployed in low-income communities. And the issue is, it's not 
been deployed or percolated long enough so that we can report 
to you the quantitative impact that the program has had.
    So, we have documented the statutory issues, things that 
the IRS--because of the tax shelter regulations, dealing with 
true debt analysis and making sure that a loan is a loan and 
it's not a grant, because those are things that, because of 
supporters like you and Mr. Chabot, we felt that it was best to 
go forward with a simple extension of the program and work with 
the IRS, members of Congress, to then come back later with the 
statutory reforms that would deal with all the technical 
glitches.
    Chairwoman Velazquez. I'm seeing the incredible and 
positive impact that the New Markets Tax Credit is producing 
here in Cincinnati. We should be committed, not only to 
extending the date of 2008, but to fully fund the program, 
because as we can see, the impact that it is having here, we 
have so many other communities across the country that would 
benefit from such a program.
    So, I hope that when you talk to other members of Congress, 
that you share the positive experience and encourage them to 
not only extend the program, but to fully fund the program, to 
make it really workable. And, Mr. Chabot, if you have any other 
questions.
    Mr. Chabot. I have one question and one comment. A question 
for Ms. Oliver and Ms. Kirk. This is a little beyond the scope 
of this immediate hearing, but being small-business owners, 
when I talk to small-business people, they seem to bring up, 
when I ask them what their greatest challenge is--and we've 
heard this in hearings in Washington for years now. One of the 
greatest challenges that small-business owners have is 
providing health care for their employees. And I'm just 
wondering, is that something that you all, as small-business 
owners, are concerned about? And do you find that a challenging 
issue to deal with?
    Ms. Kirk. I'll go first. Insurance, insurance, insurance. 
That's all I will say. It's not only health care, but it's just 
insurance rates, period. Roughly 25 percent of our monthly 
overhead goes to insurance premiums, which is outrageous, 
totally outrageous.
    Fortunately, for health care, we are able to participate in 
a relatively good insurance program, but we look at increases 
annually, and more out-of-pocket expenses, as well, which makes 
it difficult to attract good employees. You know, it's 
requiring for the nation a new mind-set of what health care 
coverage is--should be for us, and that we, as individuals, 
have to participate.
    But it does make it extremely difficult because, you know, 
you're an employee, you want to look at your total compensation 
package. And the more out of pocket that you have to 
participate in your own coverage impacts what you have 
available to cover your expenses and your lifestyle.
    Mr. Chabot. Thank you.
    Ms. Kirk. One other thing that I would like to add, which 
you didn't ask me, but I would just like to state, that the 
fact that we purchased our building and were able to 
participate in a 504 program, I don't want it to go by that a 
true trickle-down effect is possible, because we're able, now 
that we own our building and we've--not only just the 
renovation, the types of businesses, African-American and 
minority businesses, that we used to help with that, but in 
terms of our ongoing maintenance, helps to provide, you know, a 
source of income for businesses that, say, a traditional large 
corporation would not ordinarily hire.
    And thus, those businesses, you know, are employing people 
that live in this targeted area. So, there is a true line item 
effect and a true trace that you can have as to the benefits of 
the tax credits and 504 program and minority businesses and on 
and on.
    Mr. Chabot. Thank you. Ms. Oliver.
    Ms. Oliver. Basically, because of the health insurance 
issues, I tend to get independent contractors that I do not 
have to provide health care for. And I just thank God that I 
have it through my husband, because when I was doing it myself, 
it was, like, very expensive, just per month, for one person, 
up to like $600. So, for that reason, I do have independent 
contractors in my business.
    Mr. Chabot. Your insurance, then, is provided through your 
husband's employment with another company, job.
    Ms. Oliver. Correct.
    Mr. Chabot. It's one of the--as the chairwoman knows, it's 
an issue that we, as a nation, are struggling with. And, 
certainly, we've been dealing with this in the Small Business 
Committee, and there are various proposals that have been put 
forward. And we are considering those things now.
    We had a bill that we proposed in the past couple of 
Congresses, called the Health Care Affordability Act, which 
would allow every individual and every small-business owner to 
fully deduct all the health care premiums from their taxes, 
which large companies can do now, but a lot of small companies 
can't. Individuals certainly can't.
    We're looking at the high cost of lawsuits and, you know, 
medical malpractice lawsuits, and things of that nature, 
looking at what's the best way to handle that, because that 
causes premiums to go up.
    And also allowing small-business owners to pool their 
resources, association health plans, where a number of barbers, 
for example, or a number of beauticians, or other businesses, 
could join together and have greater ability to negotiate with 
the insurance company for lower rates for their employees, 
various things that we're looking at. But I didn't want to get 
too far afield of the hearing.
    Chairwoman Velazquez. That would be a topic for another 
hearing, but let me add to that. First, that I was one of the 
lead sponsors of the association health plans with all the 
members. It was bipartisan legislation to allow for small 
businesses to band together and leverage to provide insurance.
    On the Democratic leadership, I have to tell you that I've 
been telling the democratic leadership that this is an 
important issue, and that we cannot address the issue of lack 
of health insurance in our nation without addressing the issue 
of lack of insurance for small businesses.
    Out of 44 million Americans who do not have any access to 
health insurance, 60 percent of them are either small business 
or their employees. It is an important issue for this 
committee, we've already held hearings.
    We, the Democrats, also--I took--I put together a round 
table. So, it is a priority for our work committee. And, 
hopefully, we will be able to come up with a bipartisan 
legislation that we can all afford to have. But this is a real 
challenge. And it is the right thing to do on behalf of small 
business. Mr. Brown, you wanted to add something.
    Mr. Brown. I was just going to clarify an answer to a 
question that you posed, and it was a very important one, about 
how we approach Congress in extending the program versus 
regulatory changes versus statutory. And I really wanted to 
just, because of our bank investors in the community, to really 
present the program from their risk.
    And the whole issue, and the clarity of the program, from 
our standpoint, is that the investors are trying to manage 
against recapture risk, and so they have to rely on the tax 
opinion from the counsel to note that the investment or the 
loan would meet the IRS definition and guidelines.
    And so what happens, the community development mission and 
our ability to use the tax credit to subsidize projects, which 
will allow us to forgive a loan or forgive an investment, we 
can't structure the deal that way, because it could not meet 
the--get the legal opinion and thus be a tax credit shelter 
definition and cause recapture to the investor.
    So, those are the issues for champions like you who know we 
need this private capital to be done in a flexible way to close 
the gap, that there are other public policy objectives. You 
have to make sure that investors aren't enriching their 
pockets. And that, in the most simple way I can put it, is the 
difficulty of the complexity of this program.
    Chairwoman Velazquez. Mr. Main.
    Mr. Main. I just wanted to mention briefly on the health 
insurance issue, HCDC is a small business. We have experienced 
between 12 and 20 percent increases in our health insurance we 
provide to our 20 employees. As far as the association, we have 
roughly 47 companies in our incubator. There's about 200 
employees, that if we could pool that into an association, we 
could--I understand we would see lower premiums because we 
would have that critical mass of the 180 to 200 employees as 
opposed to having right now a unit of 20.
    Mr. Chabot. Madam Chair, just one brief concluding comment, 
if I could. You know, oftentimes I think that the image or the 
view that people get from what goes on in Washington is 
Democrats and Republicans are always fighting with each other 
and trying to take political advantage and taking shots.
    Chairwoman Velazquez. We're friends.
    Mr. Chabot. And I think that's one thing that is--it's 
true, and that there are those that do work in a bipartisan 
fashion. And I think that's the way the committees ought to 
work, and some do. And the Small Business Committee, I think 
especially now--that did have problems in the past, there's no 
question about that, but the Chair--as the Chair and myself, as 
a ranking member, have worked very hard, and our staffs have, 
to work as much as possible in a bipartisan fashion. We're not 
going to agree on everything. There are philosophical 
disagreements that we have, but you can disagree and not 
necessarily be disagreeable. And when you work together, I 
think you can accomplish great things for communities, and you 
can also accomplish great things for our country.
    So, I want to thank you, again, for coming to our district, 
and thank you for continuing to work in a bipartisan fashion, 
even though your party is in the majority and mine in the 
minority. I would like to see that change someday. That's one 
of the things we disagree on, probably. But, let's continue to 
work together. Thank you for--
    Chairwoman Velazquez. Well, let me just say thank you, 
Steve. First, this is the first field hearing that we have 
conducted in four years. And as I said, there is no way that we 
can know if the things that we are doing in Washington really 
are working back in our communities if we don't come and listen 
to you here, and if we don't come into your district and see 
the positive developments that are taking place.
    But, when it comes to the Small Business Committee, and 
I've been serving on this committee for 15 years now, and given 
the political climate in Washington, my comment and my opinion 
have always been that this is the committee that should be run 
in a bipartisan way, because there should not be a Republican 
or Democratic approach when it comes to small businesses.
    And as Chair now, I will recognize the right of the 
minority to deliberate, to participate, to fully participate in 
the legislative process. If I deny that right, I will then call 
for a partisan reaction and response, and I would understand 
that. But, hopefully, we will continue to work in a bipartisan 
way so that small businesses in this country will benefit from 
the work that we do in the capitol and in DC, in the House of 
Representatives.
    It has been a great pleasure for me. Thank you very much 
for all the witnesses. And we will take all this wealth of 
information back to the capitol, to the House of 
Representatives, to our committee, and we will review and see 
how can we improve the 504, the New Markets Tax Credit, to make 
sure that they are, not only reauthorized, but fully funded.
    Thank you very much, And this committee is adjourned.
    [Whereupon, at 11:40 a.m., the committee was adjourned.]

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