[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

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

52-890 PDF                       WASHINGTON : 2009 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, 
Washington, DC 20402-0001 















                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          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.]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                                
    
                                 
