[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
SUBCOMMITTEE MARKUP OF LEGISLATION
AFFECTING THE SBA CAPITAL ACCESS PROGRAMS
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
OCTOBER 8, 2009
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 111-050
Available via the GPO Website: http://www.access.gpo.gov/congress/house
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
DENNIS MOORE, Kansas
HEATH SHULER, North Carolina
KATHY DAHLKEMPER, Pennsylvania
KURT SCHRADER, Oregon
ANN KIRKPATRICK, Arizona
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
MELISSA BEAN, Illinois
DAN LIPINSKI, Illinois
JASON ALTMIRE, Pennsylvania
YVETTE CLARKE, New York
BRAD ELLSWORTH, Indiana
JOE SESTAK, Pennsylvania
BOBBY BRIGHT, Alabama
PARKER GRIFFITH, Alabama
DEBORAH HALVORSON, Illinois
SAM GRAVES, Missouri, Ranking Member
ROSCOE G. BARTLETT, Maryland
W. TODD AKIN, Missouri
STEVE KING, Iowa
LYNN A. WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
MARY FALLIN, Oklahoma
VERN BUCHANAN, Florida
BLAINE LUETKEMEYER, Missouri
AARON SCHOCK, Illinois
GLENN THOMPSON, Pennsylvania
MIKE COFFMAN, Colorado
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Karen Haas, Minority Staff Director
.........................................................
(ii)
STANDING SUBCOMMITTEE
______
Subcommittee on Finance and Tax
KURT SCHRADER, Oregon, Chairman
DENNIS MOORE, Kansas VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona STEVE KING, Iowa
MELISSA BEAN, Illinois W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
(iii)
C O N T E N T S
__________
OPENING STATEMENTS
Page
Schrader, Hon. Kurt.............................................. 1
Buchanan, Hon. Vern.............................................. 2
APPENDIX
Reviewed Bills:
H.R. 3723: "The Small Business Credit Expansion and Loan Markets
Stabilization Act of 2009"..................................... 13
H.R. 3739: "The Job Creation and Economic Develpment Through CDC
Modenization Act of 2009"...................................... 41
H.R. 3737: "Small Business Microlending Act of 2009"............. 139
H.R. 3740: "The Small Business Investment Company Modernization
and Improvement Act of 2009"................................... 148
H.R. 3722: "The Enhanced New Markets and Expanded Investment in
Renewable Energy for Small Manufacturers Act of 2009".......... 164
H.R. 3014: "The Small Business Health Information Technology
Financing Act"................................................. 178
H.R. 3738: "The Small Business Early Stage Investment Act of
2009".......................................................... 184
H.R. 3743: "The Small Business Disaster Readiness and Reform Act
of 2009"....................................................... 195
Statements for the Record:
Larsen, Hon. Rick................................................ 204
(v)
SUBCOMMITTEE ON FINANCE AND TAX
MARKUP OF LEGISLATION AFFECTING
THE SBA CAPITAL ACCESS PROGRAMS
----------
Thursday, October 8, 2009
U.S. House of Representatives,
Committee on Small Business,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:03 a.m., in
Room 2360, Rayburn House Office Building, Hon. Kurt Schrader
[chairman of the Subcommittee] presiding.
Present: Representatives Schrader, Moore, Kirkpatrick,
Bean, Halvorson, Buchanan, Luetkemeyer and Coffman.
Chairman Schrader. I am pleased to call this morning's
markup to order for the Subcommittee on Finance and Tax. Today
the Subcommittee will consider legislation reauthorizing SBA's
access to capital programs. These resources, which are critical
to small firms in all stages of growth, have not been fully
modernized in at least 8 years. Needless to say, entrepreneurs'
financing needs have since changed dramatically. In this
morning's markup we have an opportunity to update these
resources to reflect those changes and help small firms grow
and enhance their ventures once again.
The SBA offers a diverse catalog of lending and investment
programs. When the private sector is unable to meet small
business needs, these initiatives bridge the gap. But while
SBA's lending options are of enormous value, they are also in
need of strengthening and expanding.
The continued success of SBA's lending programs hinge on
three primary issues: First, they must evolve to reflect the
financing needs of today's businesses; second, SBA must devote
more management resources to program maintenance; and, thirdly,
the agency should take this opportunity to break the mold and
reach out to new and more sophisticated lenders and upgrade
their own practices.
The eight bills before us today address these issues head
on, and could not have come together without the hard work of
their sponsors: Representative Halvorson, Ranking Member
Buchanan, Representative Ellsworth, Representative Luetkemeyer,
Representative Kirkpatrick, Representative Dahlkemper,
Representative Nye, and Representative Griffith.
Modernizing SBA's access to capital programs is one of the
most important policy steps we can take in this particular
Congress. Doing so will strengthen the small business
community, allow entrepreneurs to create jobs, and begin to
grow our economy once again.
[The information is included in the appendix.]
Chairman Schrader. I will now yield to Ranking Member
Buchanan for his opening remarks.
Mr. Buchanan. I want to thank the Chairman for holding this
important markup legislation affecting the SBA capital access
programs.
Today, clearly banks are not lending to small businesses.
They can't secure the capital or the credit they need. The
reality in southwest Florida and all over Florida: If you want
to borrow $1 million, you have got to put up a $1 million CD. A
lot of real estate has been secured in the past or loans have
been secured in the past by real estate, but banks don't even
want the real estate today, for obvious reasons. So there is
little or no credit, and that is killing jobs in America.
Currently we have 15.1 million Americans that are
officially out of work. Now, more than ever, we must rely on
small business to creates 70 percent of the jobs not only in
Florida, but across the country. Ninety-nine percent of all
businesses that are registered in Tallahassee, our capital in
Florida, 99 percent of them are small, medium-sized firms, and
they create the jobs.
I held a small business conference in our area; had 130
small, medium-sized businesses at that conference. When I
started the meeting, I asked everybody in the room, I said,
what is your relationship? What has it been? What is it today?
Are you having struggles with the banks renewing lines of
credit, this, and whatever? And the bottom line was clearly 99
percent of the people in the room had raised their hand that
they are concerned about even their business going forward
without the lines of credit.
Today we are going to take significant steps, I believe, in
alleviating some of the problems facing our Nation's small
business. Today I introduce a job creation and economic
development concept, or a bill that is the CDC Modernization
Act of 2009. It is H.R. 3739. The CDC program was created to
provide long-term financing for development and construction of
plants, facilities, and other hard assets. My bill will
modernize title V of the Small Business Investment Act and
significantly increase lending limits by CDCs. This will ensure
that small businesses will get the capital they need to expand
their business and, ideally, create more jobs.
While I plan on voting for all the bills today, I do have
some concerns in particular on the loan limits on the 7(a)
program, which I believe will restrict the ability of some
small and, ideally, medium-sized business to get the capital
they need. But I look forward to working with the Chairman. I
plan on being supportive, but I am hoping we can do more in
that area.
I yield back, Mr. Chairman.
Chairman Schrader. Thank you very much. Good remarks.
[The information is included in the appendix.]
Chairman Schrader. Are there other Members who wish to be
recognized for the purpose of opening remarks?
Representative Luetkemeyer from Missouri.
Mr. Luetkemeyer. Good morning, and thank you, Mr. Chairman,
for the opportunity to mark up critical legislation aimed at
making the Small Business Administration's capital access
programs more effective and responsive to the needs of small
businesses.
At a time when small businesses are still struggling to
keep their doors open, we must continue to work to improve the
usefulness of these initiatives to ensure that our small
businesses are able to fully utilize all available resources.
Most small business owners remain cautious in their economic
outlook, with more than two-thirds saying the recession is not
over for them, according to a September 2009 Discover Small
Business Watch Index. Many people are eager for a definitive
signal that the economy is on the mend, but America's small
business owners aren't able to send that message yet. This is
at a time when access to credit is being denied at an
accelerating pace.
Small businesses have never had a harder time to get a
loan. Since the onset of the credit crisis over 2 years ago,
available credit to small businesses and consumers has
contracted by trillions of dollars, and that occurrence is
reflected in dismal consumer spending trends. Without access to
credit, small businesses can't grow, can't hire, and too often
end up going out of business.
As a small businessman, I am pleased to introduce a bill
that will assist many small business owners and employees
throughout my district in Missouri and all throughout the
country. Small businesses employee 50 percent of the country's
workforce and contribute 38 percent of the GDP. Like every
recession before, small business will lead the way to an
economic recovery.
H.R. 3740, the Small Business Investment Company
Modernization Improvement Act of 2009, updates and streamlines
the SBA's largest investment program, the Small Business
Investment Company Program. The legislation aims to increase
the number and size of investments made to small firms under
the program. Perhaps equally important, the bill endeavors to
halt the continued flight of SBICs that participate in the
program by establishing an expedited licensing program. This
will keep successful SBICs that are in good standing involved
in the program.
The bill will also revise the SBIC leverage limitations to
create an incentive for well-managed SBICs to remain in the
program. This will be possible by allowing SBICs that are
managed by the same management team to access the increased
leverage limits available for a family of SBIC funds.
Businesses will have access to greater investment under the
provisions of the bill that expand the Energy Saving Debenture
Program and increase the amounts of leverage available to
invest in veteran-owned businesses. Burdensome SBA regulations
that limit businesses' ability to prepay SBIC leverage will
also be eliminated, enabling businesses to prepay a safe amount
of their SBIC investment without prior approval from the SBA.
This change will provide businesses with greater flexibility in
managing investment funds they receive under the program.
Finally, the bill makes a number of technical revisions to
the SBIC program that will increase the overall efficacy of the
program.
I know that the Small Business Committee here in this House
and this Subcommittee recognize how critical small business is
to the economic health of this country. That is why I want to
thank my colleagues for their commitment to sponsoring
legislation to improve programs that assist our country's small
business owners. I am pleased to see my bill and my colleagues'
legislation working their way through the legislative process,
and look forward to seeing these bills become law.
With that, I yield back, Mr. Chairman. Thank you.
Chairman Schrader. Thank you.
[The information is included in the appendix.]
Chairman Schrader. Any other Member wish to speak?
Seeing none, the first order of business is to consider
House Resolution 3723, the Small Business Credit Expansion and
Loan Markets Stabilization Act of 2009, introduced by
Representative Halvorson. This bill makes important steps to
broaden the reach of the 7(a) SBA, SBA's largest lending
program.
In the past, 7(a) has been a tremendously important
initiative, but despite its historic value, the program is no
longer living up to its full potential. As a result, many small
firms have struggled to access the capital they need to weather
the recession.
House Resolution 3723 is a comprehensive answer to this
concern. Importantly, it extends the loan guarantees and fee
exemptions established by the Recovery Act. It also makes 7(a)
more adaptable, revising it to expand when markets contract. On
their own, these two changes will make the program more
affordable and more accessible. When coupled with larger loan
sizes, they will go a long way in delivering the capital to the
small firms when they need it most. In increasing the size of
the 7(a) loans, we are giving entrepreneurs the financing they
need to enhance their ventures, and we are doing it in a way
that actually minimizes the risk to taxpayers.
Finally, H.R. 3723 expands efforts to bring affordable
capital to rural regions and veteran entrepreneurs, both of
which have historically been underrepresented in the small
business community.
This bill is supported by the National Restaurant
Association, the International Franchise Association, National
Association of Federal Credit Unions, and National Cooperative
Business Association, Independent Community Bankers of America,
and the Credit Union National Association. I support this
legislation and urge its adoption.
Are there any other Members that wish to be recognized on
House Resolution 3723?
Representative Halvorson from Illinois.
Mrs. Halvorson. Thank you, Chairman Schrader and
Representative Buchanan, for holding this morning's markup.
This is a great opportunity for us to consider legislation that
will update the SBA's capital access programs.
I have held many small business roundtables throughout my
district and have found that at every single one of them, the
number one thing that comes up is the biggest challenges facing
our small business owners is access to capital.
We all know that small businesses need capital to expand
and to grow, but the tight credit market has been increasingly
difficult for them to do so. The SBA's capital access programs
are supposed to be a resource for small business owners when
they have difficulty accessing credit from traditional sources.
Unfortunately, we have seen a recent decrease in the SBA's loan
volume.
In fiscal year 2009, SBA made 36 percent fewer loans than
it did in 2008. This is something that must be addressed, and
that is why I have introduced H.R. 3723, the Small Business
Credit Expansion and Loan Markets Stabilization Act. My bill
will improve and enhance SBA's flagship 7(a) loan program. It
increases the maximum loan level and expands provisions in the
American Recovery and Reinvestment Act that increases the SBA
loan guarantee to 90 percent. H.R. 3723 also increases SBA's
outreach to rural and small lenders to encourage them to
participate in 7(a).
My bill will extend a few of the SBA's other capital access
programs. H.R. 3723 extends the ARC loan program created by the
Recovery Act and increases the maximum award from 35,000 to
50,000 interest free.
Finally, my bill will make the SBA's Community Express
pilot program permanent. Community Express helps provide loans
to businesses owned by women, minorities, and veterans.
H.R. 3723 will take major steps to improve the SBA's
capital access programs so that we can provide our Nation's
small business owners with the tools they will need to put us
on the road to economic recovery. I ask for the Subcommittee's
support, and I yield back the balance of my time.
Chairman Schrader. Does anyone else wish to speak on behalf
of House Resolution 3723?
Seeing none, the Committee now moves to consideration of
House Resolution 3723. The clerk will report the title of the
bill, please.
The Clerk. To amend the Small Business Act to improve the
activities carried out under section 7(a) of such act, and for
other purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time. Does any
Member seek recognition?
Seeing none, the question is on reporting House Resolution
3723 to the full Committee. All those in favor, say aye.
Those opposed, say no.
The bill is adopted and reported to the full Committee.
Chairman Schrader. We will now consider House Resolution
3739, the Job Creation Economic Development Through CDC
Modernization Act of 2009, introduced by our Ranking Member
Buchanan.
The Certified Development Company program helps businesses
secure capital for fixed-asset purchases. This initiative
relies on a unique financing process, one that allows both CDCs
and private-sector lenders to invest in small firms. This
arrangement helps businesses secure loans of up to $10 million
at a fixed rate. That particular provision is critical as it
provides an element of stability in these otherwise very
uncertain times.
House Resolution 3739 will go a long way in modernizing the
CDC program. Among its most important changes is an increase in
loan size. By raising levels to 12.5 million, it will give
middle-market firms a chance to participate in the SBA program.
Meanwhile, CDCs stand to gain greater flexibility for
liquidating defaulted loans, and that alteration will ease
costs to taxpayers. Finally, small firms will have an
opportunity to make larger equity injections, thereby reducing
their debt levels. Through these changes, the CDC program will
remain a powerful tool for economic development.
The National Association of Development Companies supports
this legislation, and I urge Members to support it as well.
Are there any Members who wish to be recognized?
Ranking Member Buchanan.
Mr. Buchanan. Thank you, Mr. Chairman.
I think I mentioned obviously where I am at on this, but I
do want to add one thing in terms of the SBA. In talking with a
lot of banks and participants in the program, we really
challenge the SBA. We need to figure out a way to get more
banks to participate. A rot of them say it takes too long, it
is not profitable. They have, it seems, very little or no
interest in many of these programs, and many of the
participants in the program get discouraged because it takes so
long.
So I just want to add, as we are looking at these new
proposals today, which I think will be enacted as a part of
law, we have got to find a way for our participants, because
the banks are carrying most of this out, because we have got
people that want them, but for one reason or another they are
not getting out to the public. People are saying it just takes
too long, costs too much, and nobody is excited about them. So
we have got to find a way to deal with that.
I yield back. Thank you.
Chairman Schrader. Thank you.
Does anyone else wish to be recognized?
Seeing none, the committee now moves to consideration of
House Resolution 3739. The clerk will report the title of the
bill.
The Clerk. To amend title V of the Small Business
Investment Act of 1958 to provide for improved long-term
financing to small business concerns, and for other purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time.
Does any Member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on reporting House
Resolution 3739 to the full Committee. All those in favor, say
aye.
Opposed.
Passage is unanimous. The bill is adopted and reported to
the full Committee.
Chairman Schrader. The next order of business, consider
House Resolution 3737, the Small Business Microlending
Expansion Act of 2009, introduced by Representative Ellsworth.
The bill enhances SBA's Microloan Program, an initiative
that supplements traditional loans with technical assistance.
That combination allows borrowers to access the capital they
need to start a business and the guidance they need to make
that business a success.
Oftentimes it is the smallest firms that produce the
largest returns in our economy in the future. They create jobs
where there were none before and deliver economic empowerment
to historically underserved communities. House Resolution 3737
takes steps to bolster these small businesses by reducing their
interest rates on loans. This is a key element, because lower
interest rates give entrepreneurs more room for growth and
greater flexibility for investment.
The Corporation for Enterprise Development supports this
legislation. I urge Members to back it as well.
Are there any other Members that wish to be recognized on
House Resolution 3737?
Seeing none, the Committee now moves to consideration of
House Resolution 3737. The clerk will report the title of the
bill.
The Clerk. To amend the Small Business Act to improve the
Microloan Program, and for other purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time.
Does any Member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on reporting House
Resolution 3737 to the full Committee. All those in favor, say
aye.
Opposed, say no.
The ayes have it. The bill is adopted and reported to the
full Committee.
Chairman Schrader. We will now consider House Resolution
3740, the Small Business Investment Company Modernization and
Improvement Act of 2009, introduced by Representative
Luetkemeyer.
House Resolution 3740 will update and streamline SBA's
largest investment option, the Small Business Investment
Company Program. After the participating securities program was
cut in 2004, SBIC became best known for the debentures program,
which provides debt-oriented capital to later-stage businesses.
Despite changes to its original format, SBIC remains a critical
initiative. House Resolution 3740 seeks to build on its success
by increasing the number of and size of investments made in
small firms. It also creates incentives to encourage
participation amongst successful, well-managed SBICs.
To spur innovation this bill gives SBA the freedom to
create a new pilot program within SBIC. While this authority
would be subject to certain limitations, successful trial
initiatives could inspire new investment models we need to see
down the road.
The SBIC program remains an important part of SBA's
investment portfolio, and House Resolution 3740 will ensure it
continues to be a valuable asset. This legislation is supported
by the National Association of Small Business Investment
Companies, and I urge Members to support it.
Are there any Members that wish to be recognized?
Seeing none, the Committee now moves to consideration of
House Resolution 3740. The clerk will report the title of the
bill.
The Clerk. To amend the Small Business Investment Act of
1958 with respect to small business investment companies, and
for other purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time.
Does any Member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on reporting House
Resolution 3740 to the full Committee. All those in favor,
signify by saying aye.
Those opposed, say no.
The ayes have it. The bill is adopted, reported to the full
Committee.
Chairman Schrader. We will now consider House Resolution
3722, the Enhanced New Markets and Expanded Investment in
Renewable Energy for Small Manufacturers Act of 2009,
introduced by Representative Kirkpatrick.
The New Markets program operates as a public-private
partnership between the SBA and licensed new markets venture
capital companies. It is a vital source of investment for our
underserved communities.
Since its enactment in 2001, the program has made available
a total of $149 million. That includes $62.4 million in non-
Federal funding for low-income areas across 15 States. House
Resolution 3722 will expand that reach even further. It will do
this by requiring that SBA ensure nationwide distribution for
the new markets program, thereby growing its network of
investment firms. Additionally, the legislation places an
increased emphasis on small manufacturers in low-income areas.
Doing so will bolster struggling sectors of our economy and the
communities that have been hit hardest by this recession.
In the same vein, House Resolution 3722 addresses the needs
of small suppliers in our beleaguered auto industry. It does
this by increasing assistance for manufacturers looking to
retool and update their operations.
For struggling communities across this country, the
benefits of House Resolution 3722 will be twofold. Not only
will it bring new investment, but it will also create much-
needed jobs, and I urge Members to support this legislation.
Are there any Members who wish to be recognized on House
Resolution 3722?
Representative Kirkpatrick from Arizona.
Mrs. Kirkpatrick. Thank you, Mr. Chairman.
Today I am pleased to offer House Resolution 3722, the
Enhanced New Markets and Expanded Investment in Renewable
Energy for Small Manufacturers Act. This legislation will
reform two critical programs at the Small Business
Administration. The New Markets Venture Capital Initiative
provides investment capital to businesses in some of our
Nation's most economically distraught communities. While this
program has made significant contributions, several obstacles
have prevented it from reaching its full potential.
In 2001, the Southwest Development Fund applied to be a new
market venture capital company. The fund, located in Arizona,
filled out the paperwork and received conditional approval from
the Small Business Administration. Unfortunately, the fund was
unable to obtain final approval from the SBA before the
expiration of the agency's deadline. As a result, promising
sources of new capital for Arizona businesses never got off the
ground. Investment dollars that could have sparked
entrepreneurship in some of Arizona's most economically
depressed communities, which I represent, went elsewhere. I
suspect this story is all too common.
My bill will speed up the application process and provide
operational assistance from SBA while applicants are awaiting
final approval. This will mean more companies make it through
the process and ultimately invest in small businesses.
Small manufacturers in low-income areas can benefit
tremendously from new market venture capital investments. House
Resolution 3722 spurs investments in small manufacturers in
economically struggling communities. By helping these
entrepreneurs, we can maintain a strong manufacturing base in
this country and support good-paying jobs.
We can also support job growth by expanding entrepreneurs'
role in clean energy fields like wind, solar, and biofuels.
Small businesses are pioneering these new fields in Arizona and
across the country. The Renewable Energy Capital Initiative was
designed to help small businesses obtain capital for renewable
fuels projects. Currently only smaller enterprises, those with
less than $2 million in income over the last 2 years, are
eligible to participate. By opening the program to all small
businesses as defined by the SBA, we will further promote clean
energy entrepreneurship.
Mr. Chairman, access to capital remains one of the toughest
challenges facing our small businesses. House Resolution 3722
will strengthen two programs at the SBA that help small
businesses raise investment capital. I urge passage of this
bill, and I yield back.
Chairman Schrader. Thank you.
Anyone else wishing to comment on House Resolution 3722?
Seeing none, the Committee now moves to consideration of
House Resolution 3722. The clerk will report the title of the
bill, please.
The Clerk. To amend the Small Business Investment Act of
1958 to improve the New Markets Venture Capital and Renewable
Fuel Capital Investment Programs, and for other purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time.
Does any Member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on reporting House
Resolution 3722 to the full Committee. All those in favor,
signify by saying aye.
Opposed, say nay.
The ayes have it. The bill is adopted and reported to the
full Committee.
Chairman Schrader. We will now consider House Resolution
3014, the Small Business Health Information Technology
Financing Act, introduced by Representative Dahlkemper.
Health information technology, or HIT, is the hardware and
software that makes electronic medical records a reality. With
widespread use, HIT has the potential to improve quality by
preventing errors, reducing costs, and increasing
administrative efficiency. But HIT is a very costly commodity.
As such, it is typically found only in large medical
institutions. This is problematic, because most Americans rely
on physicians in solo and small group practices. House
Resolution 3014 remedies this by providing reduced-cost capital
to small firms looking to purchase the technology. That way,
doctors and patients in every pocket of this country can enjoy
the benefits and rewards of HIT.
This legislation provides small firms with more than just
the capital to purchase HIT. It is carefully tailored to meet
the unique challenges small firms face in its adoption and
implementation.
I believe that House Resolution 3014 can assist in
improving health care in the United States, and I urge Members
to join the American Dental Association and the American
Osteopathic Association in supporting this legislation.
Are there any other Members that wish to be recognized at
this time?
Seeing none, the Committee now moves to consideration of
House Resolution 3014. The clerk will report the title of the
bill.
The Clerk. To amend the Small Business Act to provide loan
guarantees for the acquisition of health information technology
by eligible professionals in solo and small group practices,
and for other purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time.
Does any Member seek recognition to offer an amendment?
Seeing no amendments, the question is on reporting House
Resolution 3014 to the full Committee. All those in favor, say
aye.
Opposed, say no.
The ayes have it. The bill is adopted and reported to the
full Committee.
Chairman Schrader. We will now consider House Resolution
3738, the Small Business Early-Stage Investment Act of 2009,
sponsored by Representative Nye.
Beginning in the last quarter of 2008, investments in
early-stage businesses plunged $5.4 billion. That drop marked a
decline of 26.5 percent from the previous quarter and a
dwindling of resources for small business startups. This is
especially troubling, considering that these businesses are
integral to creating new jobs and driving growth, particularly
as the economy exits this recession.
Historically the SBA has relied on the SBIC Participating
Securities Program to fill gaps in the capital markets. In the
last 5 years, however, the agency has not licensed any new
equity investment firms under this program. As a result, small
firms have struggled to secure much-needed capital. House
Resolution 3738 addresses that void, and it does so in a manner
that balances the demands of the free market with the need to
safeguard taxpayers' interests.
Under the legislation, SBA provides funds to highly
qualified investment companies. In turn, these firms will
direct investments to early-stage businesses in targeted
industries such as information technology and agriculture. With
those fields, investments will be geared towards research,
development, and manufacturing.
House Resolution 3738 incorporates several measures to
protect the taxpayers. These safeguards include a requirement
that investment companies match grant requests with capital
from non-Federal sources. SBA will also conduct audits of
participating companies; that way we can be sure that grants
are invested in a fashion that is consistent with our law.
Furthermore, investment funds must commit to repaying all
investors, including the SBA, with cash. Even more importantly,
SBA will always be reimbursed first.
The IAO, the National Venture Capital Association, and the
Association of Investment Companies all support this
legislation, and I urge Members to support its passage.
Are there any other Members that wish to be recognized on
House Resolution 3738?
Seeing none, the Committee now moves to consideration of
House Resolution 3738. The clerk will report the title of the
bill.
The Clerk. To amend the Small Business Investment Act of
1958 to establish a program for the Small Business
Administration to provide financing to support early-stage
small businesses in targeted industries, and for other
purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time.
Does any Member wish to be recognized for the purpose of
amendment?
Seeing no amendments, the question is on reporting House
Resolution 3738 to the full Committee. All those in favor, say
aye.
Those opposed, say no.
The ayes have it. The bill is adopted and reported to the
full Committee.
Chairman Schrader. Finally, we will consider House
Resolution 3743, the Small Business Disaster Readiness and
Reform Act of 2009, introduced by Representative Griffith.
For businesses and homeowners touched by catastrophe, SBA's
Disaster Loan Program is a financial lifeline. But if GAO's
July report on the program is any guide, SBA still has a long
ways to go in improving disaster loan funds.
House Resolution 3743 includes several provisions to ensure
SBA can respond to the next major catastrophe. This legislation
provides the agency with a variety of tools to improve its
response process. To begin, it streamlines the manner in which
disaster loans are processed, approved, disbursed, and repaid.
In addressing shortcomings and planning, the bill establishes
regional working groups. Doing so will enable SBA, hopefully,
to respond to the multitude of different disasters that could
impact our country. Finally, House Resolution 3743 tailors
assistance to fit the express needs of small firms following a
disaster.
In preparing for a national catastrophe, the agency's work
is never done. That is because when it comes to disaster loans,
SBA's primary task is to remain vigilant. House Resolution 3743
will ensure that it does, and will prevent complacency from
taking root. I urge the adoption of this legislation.
Are there any other Members that wish to be recognized on
House Resolution 3743?
Seeing none, the Committee now moves to consideration of
House Resolution 3743. The clerk will report the title of the
bill.
The Clerk. To amend the Small Business Act to improve the
disaster relief programs of the Small Business Administration,
and for other purposes.
[The information is included in the appendix.]
Chairman Schrader. I ask unanimous consent that the bill in
its entirety be open for amendments at this time.
Does any Member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on reporting House
Resolution 3743 to the full Committee. All those in favor, say
aye.
Those opposed, say no.
The ayes have it. The bill is adopted and reported to the
full Committee.
This concludes our Subcommittee business for today. I ask
unanimous consent that the Subcommittee is authorized to
correct section numbers, punctuation, cross references, and
make necessary technical and conforming corrections on the
bills considered today. Without objection, so ordered.
I appreciate everyone's hard work. The markup is adjourned.
[Whereupon, at 10:37 a.m., the Subcommittee was adjourned.]
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