[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


     THE PERSPECTIVE OF RURAL SMALL BUSINESSES IN NORTH MISSISSIPPI

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

                                 HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             JUNE 18, 2018

                               __________

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            Small Business Committee Document Number 115-079     
                                   
             Available via the GPO Website: www.govinfo.gov
             
             
                              __________
                               

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                   HOUSE COMMITTEE ON SMALL BUSINESS

                      STEVE CHABOT, Ohio, Chairman
                            STEVE KING, Iowa
                      BLAINE LUETKEMEYER, Missouri
                          DAVE BRAT, Virginia
             AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                        STEVE KNIGHT, California
                        TRENT KELLY, Mississippi
                             ROD BLUM, Iowa
                         JAMES COMER, Kentucky
                 JENNIFFER GONZALEZ-COLON, Puerto Rico
                    BRIAN FITZPATRICK, Pennsylvania
                         ROGER MARSHALL, Kansas
                      RALPH NORMAN, South Carolina
                           JOHN CURTIS, Utah
               NYDIA VELAZQUEZ, New York, Ranking Member
                       DWIGHT EVANS, Pennsylvania
                       STEPHANIE MURPHY, Florida
                        AL LAWSON, JR., Florida
                        YVETTE CLARKE, New York
                          JUDY CHU, California
                         ALMA , North Carolina
                      ADRIANO ESPAILLAT, New York
                        BRAD SCHNEIDER, Illinois
                                 VACANT

               Kevin Fitzpatrick, Majority Staff Director
      Jan Oliver, Majority Deputy Staff Director and Chief Counsel
                     Adam Minehardt, Staff Director
                            
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Steve Chabot................................................     1
Hon. Trent Kelly.................................................     3

                               WITNESSES

Mr. Pat Woods, Owner, Woods Farm Supply, Inc., Byhalia, MS.......     6
Mr. Geoffrey Carter, Founder, President and CEO, Hyperion 
  Technology Group, Inc., Tupelo, MS.............................     8
Mr. Michael Hatcher, President, Michael Hatcher & Associates, 
  Inc., Olive Branch, MS.........................................     9
Mr. Jason Bailey, President and CEO, Summit Management Services, 
  LLC, Oxford, MS................................................    11

                                APPENDIX

Prepared Statements:
    Mr. Pat Woods, Owner, Woods Farm Supply, Inc., Byhalia, MS...    25
    Mr. Geoffrey Carter, Founder, President and CEO, Hyperion 
      Technology Group, Inc., Tupelo, MS.........................    27
    Mr. Michael Hatcher, President, Michael Hatcher & Associates, 
      Inc., Olive Branch, MS.....................................    29
    Mr. Jason Bailey, President and CEO, Summit Management 
      Services, LLC, Oxford, MS..................................    31
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    None.

 
     THE PERSPECTIVE OF RURAL SMALL BUSINESSES IN NORTH MISSISSIPPI

                              ----------                              


                         MONDAY, JUNE 18, 2018

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 2:02 p.m., at the 
ServPro Training Center, 1160 Stateline Road East, Southaven, 
MS, Hon. Steve Chabot presiding.
    Present: Representatives Chabot and Kelly.
    Chairman CHABOT. Good afternoon. This hearing will come to 
order, the hearing of the House of Representatives Small 
Business Committee.
    Before we get too far into this, I want to sincerely thank 
Mr. Kelly for inviting me down here to Southaven this 
afternoon. This is such a beautiful area of the country, and I 
am glad to be with you all here today.
    Now, in our Committee back in Washington, we have members 
that come from all over the country, including, of course, from 
the south like Florida and South Carolina, Kentucky, and they 
all bring their own unique voice to our collective work, but 
none so much as Trent Kelly, who I used to think had quite an 
accent, but now I am starting to find since I have gotten here 
that I am the one that has the accent.
    [Laughter.]
    He is certainly a very valued leader on our Committee. In 
just a short time, he serves as Chairman of the Subcommittee on 
Investigations, Oversight, and Regulations, and he works 
diligently to represent the important issues facing North 
Mississippi small businesses in that role.
    Another thing I really like about Trent Kelly is his 
willingness to reach out across the aisle and work together 
with Democrats in a bipartisan manner. As the Small Business 
Committee, we really strive to work together to tackle the 
issues facing small firms in a very bipartisan fashion. You 
could say our Committee is an outlier in what has become the 
hyper-partisan city known as Washington, D.C.
    But enough about Trent; let's talk about me.
    [Laughter.]
    I am Congressman Steve Chabot, and I represent my home 
town, Cincinnati, Ohio, and some of its surrounding areas. As 
you might have figured out already, I am also Chairman of the 
House Small Business Committee, which I have served on for the 
past 22 years. I also serve on the House Foreign Affairs 
Committee, as well as the House Judiciary Committee.
    During my tenure on the House Small Business Committee, two 
of the concerns that we have repeatedly heard from small 
businesses are the burdens of overregulation, and also taxes, 
the complexity of it and just the level of taxation in our 
country.
    Let's start by talking about regulations because that is 
where we have made some headway that some in the press have 
already forgotten about. President Trump has worked very 
effectively, I believe, with Congress to tackle overregulation. 
He signed 15 CRAs, which are Congressional Review Acts. These 
are resolutions essentially determining that certain 
regulations that President Obama enacted had to go. In fact, 17 
have already passed one chamber or the other.
    In addition to that, he signed a number of executive orders 
that directly address regulations. My favorite is the one that 
says for every two new regulations coming out of Washington, we 
have to get rid of two new regulations for every one coming out 
of Washington. I am sure that I don't have to tell our 
witnesses or any other small businesses in attendance that the 
cost of federal regulations can be a lot, up to about $11,000 
per employee per small business.
    So the progress that we have made is important, and it is 
something that a year ago we could have only dreamed about.
    There is also good news on the tax front, as I am sure that 
most of you are aware. Last year we passed the most 
comprehensive overhaul of the tax code that we have seen in a 
generation. Because of that, a recent survey done by the 
National Federation of Independent Businesses, NFIB, said that 
small businesses are more optimistic now than they have been in 
the last three decades, the last 30 years.
    Now small businesses can invest more in their people, in 
increasing their benefits, giving their employees bonuses, 
buying and updating new equipment and, most importantly, 
creating jobs. Because small businesses are now out from under 
the yoke of excessive regulation and taxation, they are 
creating jobs at an historic pace.
    Our unemployment level is now 3.8 percent. Imagine that, 
3.8 percent. That is a big deal. Even the New York Times, a 
publication that certainly avoids giving credit oftentimes to 
this president or to his allies in Congress, had a headline 
earlier this month that said ``we ran out of words to describe 
how good the jobs numbers are.'' But we can always do better, 
and that is what we are striving to do.
    Today especially we are examining how small businesses in 
America's rural areas are faring and what they need to continue 
expanding and creating economic prosperity for small towns that 
they serve. I certainly appreciate being out here with rural 
folks who are in the trenches and hearing what they feel about 
the federal government and what we should do to help them live 
their entrepreneurial dreams.
    I again want to thank Trent Kelly for his service to his 
country, of course, and particularly his service in Congress 
and inviting us to be here with you all today.
    I would now like to yield to General Kelly for the purpose 
of making an opening statement.
    Mr. KELLY. Thank you, Mr. Chairman.
    This is kind of funny, because in D.C. we have 5-minute 
clocks and, let me tell you, you get rapped down if you go over 
5. So we get a little leeway here, so I will talk a little more 
than I do in Washington today.
    I thank Chairman Chabot and welcome him to Mississippi's 
1st District. I appreciate very much, and I hope you guys do, 
that he took the time to come down here to my district to do 
things and to learn about our small businesses here in 
Mississippi, but that is the kind of guy he is.
    I guess we are kind of tied at the hip because in 2009 and 
2010 I took kids from Xenia and Lebanon, Ohio, to Iraq with me, 
about 340 of them, which if they are not in his district, they 
are within rock-throwing distance of his district. So that is 
very important.
    As Chairman Chabot mentioned in his opening statement, they 
do talk about and rib me a little bit about the way I talk. I 
don't say ``I'' right. I don't know all these words, but every 
now and then we will have a good southern witness who speaks 
right, and I will say it is good to have somebody up here 
without an accent.
    [Laughter.]
    But down here today in my neck of the woods, you are the 
one who talks funny.
    [Laughter.]
    Anyway, we really appreciate him being down here, and all 
kidding aside, I really appreciate Chairman Chabot's leadership 
on the Small Business Committee. As he mentioned, our Committee 
does work in a bipartisan fashion, and he set the tone three-
and-a-half years ago when he became the Chairman. He fostered a 
fantastic relationship with the Ranking Member, Ms. Velazquez 
from New York, even though they couldn't and I couldn't be more 
ideologically different from her area of the world and where we 
live and what we represent and what she does.
    But as he and she often say, when it comes to small 
business, there are no Republican issues and there are no 
Democratic issues. So thank you again for your leadership on 
the Committee and your willingness to work across the aisle to 
actually get things done in a place where that is so rare.
    It is definitely an exciting time for businesses. We are 
seeing record-breaking small business optimism, and the 
national unemployment rate is at an 18-year low of 3.8 percent. 
Write this number down, 6.7 million jobs in America, and only 
6.2 million workers who are looking for work right now, 6.7 
million jobs, 6.2 million people looking.
    This rate is down significantly from the most recent high 
of 10 percent in October of 2009, and the economy has created 
16 percent more jobs in the first five months of 2018 than in 
the first five months of 2017. Business is booming, and 
deregulation and tax reform action taken by the President and 
the Congress have certainly primed the pump for what is looking 
like an extended period of economic growth that we haven't seen 
in decades. I just saw recently where they had to re-up their 
estimate for the GDP growth this quarter, and that is the 
second time I think that they have done that this quarter.
    But as in everything in life, we can do better. There are 
still some nagging problems small businesses face, and these 
problems are especially acute in rural areas, like most of the 
area I represent. For example, despite good news in most 
segments of the economy, the financial lending environment 
continues to be challenging for small businesses. According to 
the recent report by the United States Small Business 
Administration Office of Advocacy, small business lending 
decreased significantly during the Great Recession and has 
remained depressed compared to pre-recession levels. Access to 
affordable capital can make or break a small business, and the 
continuing strain on the system caused by the Dodd-Frank 
reforms after the Great Recession continue to hamper capital 
markets and affect small firms, particularly in rural areas 
where fewer and fewer lenders are located.
    Another problem is reliable access to broadband Internet. 
As the economy continues to rely on a more global marketplace, 
access to broadband is crucial to keeping businesses 
competitive. Many of the industries central to rural 
communities such as agriculture, fishing, mining, energy 
production, and manufacturing depend on mobility and 
connectivity to run their daily operations. Unfortunately, 
small firms in rural areas continue to be at a disadvantage 
when it comes to access and broadband.
    For example, about 39 percent of the rural population, or 
23 million people, still lack access to broadband services that 
is defined as fast by the FCC. Increasing access to broadband 
in rural communities can also mean access to better education, 
health care, higher wages, which all lead to economic growth.
    Technology is changing at an amazing pace, and we have got 
to be vigilant to ensure rural communities are not left behind.
    Finally, the economy's success is also causing a problem 
that hits small firms harder than their larger brethren. For 
the first time since the Department of Labor began tracking job 
vacancies, the number of vacant jobs surpassed the number of 
unemployed Americans. So while employees who are looking for 
work are finding it easy to locate jobs in several industries 
and can even command higher wages and better benefits, the 
increase has unified jobs and inhibited business growth, and 
therefore economic growth. Small firms are finding it difficult 
to find qualified employees and are at a disadvantage to large 
firms who can often provide larger salaries and greater benefit 
packages. In a sense, small firms are victims of their own 
success.
    That said, all in all, things are looking up. But what we 
would like to do today is hear from small businesses in North 
Mississippi and how they are doing. We have asked them to talk 
about the good and the bad. We want them to be honest with us 
so we can take their testimonies back to Washington to share 
with our colleagues and develop policies to alleviate day to 
day problems they face. The best ideas don't flow from 
Washington to the people. The best ideas flow from the people 
back to Washington.
    Again, thank you, Chairman Chabot, for joining us here 
today, and I yield back.
    Chairman CHABOT. Thank you very much.
    The gentleman yields back.
    I will take just a moment to sort of explain our lighting 
system, which is going to be a little different than the 
lighting system we use in Washington. We have kind of a fancy 
system up there where there is a green light on there to let 
you know. It is on for 4 minutes. We operate by the 5-minute 
rule where each of the panel members gets to talk to us for 5 
minutes and talk to you all, and then we ask questions for 5 
minutes, and then we will go back and forth. And then a yellow 
light comes on and lets you know you have a minute to wrap up, 
and then the red light comes on, and then you stop. But we are 
in the south, so we are going to go by the honor system. We are 
going to ask you all to try to stay within the 5 minutes. If 
anybody goes too far, I will maybe tap like this to let you 
know that you have gone over, and then I can tap real hard if 
you don't stop. But we won't have to do that, I am sure. So we 
would ask you to just kind of stay within 5 minutes, and we 
will all get along just great.
    So I would now like to turn the floor back over to Mr. 
Kelly to introduce our very distinguished panel here this 
afternoon.
    Mr. KELLY. Thank you again, Mr. Chairman.
    Our first witness is Mr. Pat Woods, Owner of Woods Farm 
Supply in Byhalia, a family-owned and -run small business that 
started in 1953. It began when his grandfather, JP, bought the 
local gin. The family began selling feed at the gin in 1975 and 
has continued to expand to its multi-faceted operation today 
that includes a wholesale fertilizer bagging line, a retail 
farm supply store, a hardware store, and a 300-head cow/calf 
operation. He attended both Northwest Mississippi Community 
College and Mississippi State University.
    Mr. Woods, we appreciate you being with us today.
    Our second witness is Mr. Jeff Carter, Founder and 
President and CEO of Hyperion Technology Group in Tupelo. 
Hyperion is a multi-million-dollar defense contractor with over 
25 full- and part-time employees. The company has licensed 
technologies from a variety of research institutions and 
developed several new technologies, including one designed to 
protect the warfighter for the Army that is currently deployed 
in Afghanistan. He received a Bachelor of Science and his 
Master's in Electrical Engineering from Mississippi State 
University.
    Thank you for being here, Mr. Carter.
    He is also my neighbor.
    Our next witness is Mr. Michael Hatcher, President of 
Michael Hatcher & Associates in Olive Branch. His company is a 
full-service landscaping provider, has been providing a full 
range of professional landscaping services for over 30 years to 
homeowners and commercial properties in Memphis and surrounding 
areas, including parts of Mississippi and Arkansas. The company 
relocated its corporate headquarters to Olive Branch in 2016 
and currently employs over 110 full-time associates.
    It is a pleasure to have you testifying here today, Mr. 
Hatcher.
    Up next is Mr. Jason Bailey, Owner and CEO of Summit 
Management Services, LLC in Oxford. Summit is a full service 
property management firm that offers a variety of rental 
options to local residents and businesses. He oversees the day 
to day operations of 40 different condominium and homeowner 
associations and over 700 long-term rental properties. Since 
2012, he has also served as an alderman for the City of Oxford. 
He received his Bachelor of Business Administration from Ole 
Miss.
    Mr. Bailey, thank you for being with us today.
    Mr. Chairman, I do want to recognize Mr. Brian Rigby, who 
is the owner of the ServPro franchise here, and also in Tupelo, 
for making this venue available to us today, and I yield back.
    Chairman CHABOT. Thank you very much.
    The gentleman yields back.
    Mr. Woods, you are recognized for 5 minutes.

   STATEMENTS OF PAT WOODS, OWNER, WOODS FARM SUPPLY, INC., 
   BYHALIA, MS; GEOFFREY CARTER, FOUNDER, PRESIDENT AND CEO, 
 HYPERION TECHNOLOGY GROUP, INC., TUPELO, MS; MICHAEL HATCHER, 
 PRESIDENT, MICHAEL HATCHER & ASSOCIATES, INC., OLIVE BRANCH, 
    MS; JASON BAILEY, PRESIDENT AND CEO, SUMMIT MANAGEMENT 
                   SERVICES, LLC, OXFORD, MS

                     STATEMENT OF PAT WOODS

    Mr. WOODS. Thank you. Chairman Chabot, Congressman Kelly, 
and other members of this Committee, I appreciate the 
opportunity to come before you today representing a small 
agricultural business in North Mississippi. My name is Pat 
Woods. My family and I operate Woods Farm Supply in Byhalia, 
along with roughly 35 employees. We also farm cotton, corn, 
soybeans, cattle, and timber.
    In my allotted time, I would like to focus my brief 
comments in three primary areas of federal policy: tax reform, 
regulatory relief, and rural broadband deployment.
    The first of these is tax reform. First and foremost, I 
applaud the efforts of the Congress and the Committee on Small 
Business to bring true tax reform to the American public and 
our small businesses across the country. Passage of H.R. 1, the 
Tax Cuts and Jobs Act, was long overdue. Reductions in 
individual rates, reforms in the corporate rates, and changes 
in the estate tax rules was a monumental activity that will 
help put America back on the road to economic recovery.
    As a small business owner and member of the board of 
directors for my local bank, I see the benefits of this 
legislation firsthand on a daily basis. For our business sales 
are up, and new construction loans at our bank have also taken 
a recent increase.
    I also serve on our local rural electric power cooperative 
board of directors. Our management tells us that there has been 
a recent spike in new connections to new homes being built in 
our service area. At our operation, my employees are seeing 
more take-home pay in their payroll checks, and they are 
investing those extra funds back into our local community.
    Additionally, I am pleased with the changes in the estate 
tax rules that allow me to pass my farm on to my three 
children. The estate tax is one of the most unfair laws on the 
books, and I sincerely appreciate those changes made by H.R. 1.
    In summary, I can confidently stand before you today and 
say that the economy is growing in my area and residents are 
seeing a higher quality of life. All of these positive 
movements and the boost in consumer confidence I attribute to 
the efforts made in the area of tax reform passed by Congress, 
teamed with a new Administration that fosters a pro-business 
climate.
    Secondly is regulatory relief. Another major area of 
federal policy for us as small business owners and farms that I 
would like to discuss is regulatory relief. As a farm business 
and farm operation owner, we deal with a host of federal 
regulations. One of the largest and most positive movements for 
us was the repeal and replace of the Waters of the U.S. Rule, 
and it was replaced by the EPA. This massive federal overreach 
would have been detrimental to every aspect of my farm and my 
farm business, and my customers as well.
    The overall business community in rural America has 
benefitted from the new vision at EPA, back to the philosophy 
of cooperative federalism, where the federal government is more 
of a partner and co-regulator with state lead agencies. This 
new view and philosophy at EPA has brought comfort to small 
businesses and farms that the federal government plans to be 
there to help them stimulate growth in our economy, not to be 
an obstacle in the way.
    And lastly, rural broadband deployment. The last final 
policy area that I would like to highlight which is vital to 
small businesses and farm technology is the topic of rural 
broadband deployment. Rural Mississippi is lagging behind in 
the area of connectivity to the Internet. I hear stories on a 
daily basis of school children that have to come to town to 
download their homework, business growth hampered by a lack of 
adequate service, and precision agriculture technology that 
loses a signal due to a lack of connectivity in their area.
    As you know, it is a huge problem for rural America, small 
businesses, and farm operations. I commend the Committee for 
all the work that has been done to bring broadband to rural 
America, and I cannot stress how important this is to 
stimulating the growth of the economy and quality of life for 
rural Americans.
    Specifically, I want to thank Congressman Kelly for his 
efforts in sponsoring legislation last December. The Small 
Business Broadband and Emerging Information Technology Act, 
H.R. 4677, addresses the bipartisan push for nationwide 
broadband that specifically targets small businesses' needs and 
potential.
    One delivery model I would like to suggest and encourage 
the Committee to look at as a means to bring this 
infrastructure to rural communities is through the rural 
electric power cooperatives. Broadband is now the electricity 
of the 1930s. The only way that electricity was brought to 
rural America was through the rural electric power cooperative 
model under President Roosevelt's New Deal. Numerous rural 
electric power associations are effectively deploying broadband 
across the rural countryside in the country right now. I would 
ask the Committee to look at ways that Congress can further 
study this concept, and also pursue any and all measures of 
federal policy that fosters connectivity in rural portions of 
the country.
    Again, Mr. Chairman and members of the Committee, I 
appreciate all that you are doing to promote and protect small 
businesses across the country.
    Thank you for the opportunity to be a part of this 
distinguished group of witnesses. I will be happy to take any 
questions that you may have.
    Chairman CHABOT. Thank you very much, Mr. Woods.
    Mr. Carter, you are recognized for 5 minutes.

                  STATEMENT OF GEOFFREY CARTER

    Mr. CARTER. Chairman Chabot, Congressman Kelly, my name is 
Geoff Carter. I am President and CEO of Hyperion Technology 
Group in Tupelo. Hyperion is a small business founded in 2009 
which now employs 31 people. Hyperion is a custom engineering 
research and development company with a primary focus on 
federal government contracting. Hyperion supports all branches 
of the military, as well as the Departments of Energy, Homeland 
Security, and the United States Secret Service, developing and 
building sensor and sensor systems to protect both civilians 
and the warfighter.
    Hyperion also works with several major public universities, 
including Mississippi State University and the University of 
Mississippi, supporting their research and development efforts 
and commercializing university-developed technologies for the 
public benefit.
    In addition, Hyperion's commercial division serves 
industrial customers with custom engineered solutions that 
increase productivity, with an emphasis on workplace safety.
    Over the past 18 months Hyperion Technology Group has seen 
significant growth in both government and commercial sales. 
Since the 2016 election, our workforce has increased by 30 
percent, our revenue has doubled, and we have outgrown our 
facility with the recently announced construction of our new 
headquarters, with five new jobs created just this year.
    Some of the factors contributing to our recent growth 
include the fact that government contracts seem to be moving 
through the system more quickly; there is an increased emphasis 
from the government on military research and development and 
modernization; a more positive and contractor friendly dealing 
with government contracting officers and staff; industry's 
desire to spend capital for facility modernization and 
improvement; and increased revenues from larger businesses' 
expenditures resulting from H.R. 1, the Tax Cuts and Jobs Act.
    The tax cuts afforded to us by H.R. 1 will make it easier 
for Hyperion to continue to grow and expand its footprint in 
both the government and commercial sectors. We anticipate our 
growth to continue as long as the current business environment 
prevails. The lower corporate tax rates and the increased 
ability to expense capital improvements will promote 
reinvestment, growth, and expansion of small businesses, as is 
evident from our recent announced expansion.
    While I have this opportunity to speak as an advocate for 
small business, I would like to mention how some of the 
regulatory and compliance burdens disproportionately affect 
small business government contractors.
    We recognize the importance of security, safety, export, 
and employment regulations, but the compliance and reporting 
requirements of these regulations are essentially the same for 
small and large businesses alike. Certain areas of our business 
are regulated by multiple agencies and departments, adding 
complexity and increasing the compliance with the reporting 
burden to unnecessary duplication. Many of these requirements 
demand full-time support staff to ensure full compliance, which 
dramatically increases our overhead costs. These fixed overhead 
costs are less significant for a large business but hit us 
harder as a percentage of overall budget in the small business 
community.
    I would like to recommend that the Committee consider 
introducing legislation in the form of tax credits targeted 
specifically towards small business government contractors to 
offset some of the burden that is required in order to comply 
with these important regulations.
    I would like to thank the Committee for this opportunity, 
as well as for your time and consideration.
    Chairman CHABOT. Thank you very much, Mr. Carter.
    Mr. Hatcher, you are recognized for 5 minutes.

                  STATEMENT OF MICHAEL HATCHER

    Mr. HATCHER. Thank you, Chairman Chabot and Congressman 
Kelly. Again, welcome to North Mississippi. We are glad to have 
you here.
    I am Michael Hatcher. I am the Owner and President of 
Michael Hatcher and Associates. We are a full-service 
landscape/design/build company that will service customers in a 
three-state area in about a 120-mile radius where we are today. 
We have been in business for over 36 years. As a graduate of 
Mississippi State University, I can assuredly share with you 
that our industry has changed dramatically in the 30 years that 
I have been in this industry, of which we have seen a lot of 
technology, we have seen a lot of opportunities, but none the 
least of which I will share with you in greater detail as I 
conclude would be the shortage of labor.
    Now, as we continue to move forward, we are excited to tell 
you that the results of the Tax Cuts and Jobs Act that was 
recently passed has played a significant impact in our area. As 
a small businessman, it has given me the opportunity to invest 
and to expand our facility and continue to expand our assets. 
For our customers, it has driven growth by approximately 20 
percent this year. It has been tremendous.
    Gentlemen, we work on expendable income. The landscaping 
services that we provide are not life and death services. They 
are expendable income, and when that expendable income 
increases, so do our revenues, and we want to continue to take 
advantage of that.
    Some of the things specifically that have happened is that 
we were able to give a 7 percent raise across the board this 
year. When you start talking about the FTEs that we have that 
are in excess of 110, that is a substantial investment, and we 
continue to make sure that we hire the best people that we can 
hire, and to train them, and to retain them.
    We are a drug-free workplace. We have been participating in 
the E-Verify program--some of you may recognize that as the I-
9--since its inception. I was a contractor working in a 
government facility in 2006 when that was enacted in June, and 
we adapted to that immediately.
    Our workman's comp mod rating, as I talk to you, is at .78. 
That means that we represent 22 percent safer working 
environment than our industry standard, and I am proud to talk 
to you about those things, and they are a direct result of some 
of the savings that we have received from the TCJA that has 
allowed us to invest in safety programs.
    As we continue to have those opportunities to grow, we must 
continue to recruit, as we do, regional universities, colleges, 
vo-tech schools and local high schools, as well as our area 
residents. As you just referred to earlier, Congressman Kelly, 
there are more jobs available than there are people to fill 
them. We have chosen to participate in the H2B program for the 
last three years.
    Gentlemen, I need not tell you--you live it every day--the 
significance of the immigration reform policies that are before 
us. As a small businessman I can tell you that that is where 
the rubber meets the road. So we have adapted to the program. 
As you referred to earlier, Mr. Carter and Mr. Woods, there is 
an undue burden of rules and regulations to follow by the 
Department of Labor, the guidelines of the H2B program. If we 
continue to work with those requirements for eligibility, the 
DOL has set wage rates for the positions that we field at a 
minimum of $12.97 per hour.
    Gentlemen, that is your new minimum wage rate. There is no 
longer a need for you to debate this program. It is coming 
through the DOL, which you all may or may not be aware of, 
which sets a market rate for the rest of us in the area, the 
requirement that mandates that all of our full-time employees 
pay that. So if I am hiring a high school worker for the 
summer, just working alongside one of those H2B documented 
workers that we have, we are paying that rate. We don't mind 
paying that rate because as an E-Verify drug-free workplace, we 
are attracting the best workers.
    During the past three years we have incurred expenses of 
that program of over $100,000, and that $100,000 does not 
include the salaries of the workers. Those are the fees that we 
are required to pay to receive those people across the border 
through the consulate, through the legal fees that we have to 
provide them.
    As we continue, this is a very burdening process that we 
incur, and then there is no assurance most recently with the 
cap being met. Fortunately, we have been in the program long 
enough. We know how to facilitate our request and do it at an 
early start. So for the 2019 workforce, we have already started 
this process.
    We want to continue to celebrate the successes that the 
TCJA has had, and it has been a tremendous success. We 
compliment each of you and your constituents for all the hard 
work to get that accomplished. Now we are missing the last 
piece. We are missing that piece to be able to facilitate the 
growth of the small businesses in our area.
    With that, gentlemen, I would like to conclude and thank 
you for your time.
    Chairman CHABOT. Thank you very much, Mr. Hatcher.
    Mr. Bailey, you are recognized for 5 minutes.

                   STATEMENT OF JASON BAILEY

    Mr. BAILEY. Thank you. Good afternoon, Chairman Chabot and 
Congressman Kelly. I want to thank you for the opportunity to 
be able to be here today and speak to you about small business 
and things facing small businesses like mine in the Mississippi 
1st Congressional District.
    My name is Jason Bailey. I am the Owner-Operator of Summit 
Management Services, LLC. I started my business in 2007 under 
the name Bailey Management Company, and I literally started my 
business out of a broom closet in one of the buildings that I 
managed. In 2009, three management companies that were in 
Oxford came together and we formed Summit Management Services.
    Right now I have a business partner. He and I are the sole 
owners and the operators of our business, and we are now 
working with the City of Oxford to go through our final 
approval to get a building built for our office. So we have 
come a long way since that little broom closet, and we are kind 
of excited about that.
    When we began we had four employees, including owners. 
Through the efforts of many, we have grown our company five-
fold since that first day. Currently we average 18 employees, 
both full-time and part-time, and in 2007 I was named by the 
Mississippi Business Journal as one of the top business persons 
of the year for the top 15 under 40, and this honor was given 
to me but it was earned by many. It wasn't just earned by me. 
So, I have a lot of support and really do appreciate that.
    Today we are very excited about the future of our company. 
The past nine years have been filled with challenges, including 
the Affordable Care Act. The Affordable Care Act has certainly 
had an impact on our business and our employees. But under this 
law, we do not have to provide health insurance to our 
employees, but we value them greatly and feel that health 
insurance and health care is something that we would like to 
provide to our employees. We have done that. That was part of 
our goal as we started our business, to provide that 100 
percent from day 1.
    At the time when we first started our business, the expense 
of health care was the seventh largest expense on our ledger. 
Today it is the second largest expense. When we started we were 
able to provide 100 percent health care to our employees. But 
because of the rollback, we have had to roll back 20 percent, 
and now we pay 80 percent to our full-time employees and they 
have to come up with the 20 percent. This is less money that 
they take home, and it restricts our growth as a company.
    As a small business owner, we have not realized the new tax 
benefits yet. We look forward to those that will be coming into 
play. Our employees are able to take home more pay, and we are 
grateful for that. But I feel more can be done.
    One of the casualties of the new tax reform change was 
removing the tax credit for entertaining clients. This is 
something that we really value in our business. This is how we 
grow our business. This is how we meet and form those 
relationships with potential clients. And due to our clients' 
busy work schedules, we find entertainment and lunch meetings, 
and unfortunately these things are now out-of-pocket expenses, 
whether it is us or whether it is our company or whether it is 
our employees. We feel like that is something we could probably 
work on and change that. I think that was one of the things 
that came out that we could definitely change.
    As we continue to grow, one of the many challenges is when 
to invest in another full-time employee. As you can imagine in 
the service business, as we are, people are critical. But due 
to some of the government issues, we have held back from hiring 
and searching for our people further. As you know, there is a 
breaking point with personnel, and we don't want to reach that. 
But oftentimes we make plans to grow to other markets and 
purchase other companies, but without any benefit from growth 
it makes it harder to do so, and the ROI is just too far down 
the road.
    One of the positive things that we have seen in the past 
six months is the new Opportunity Zone. This is something that 
will have a positive impact on rural Mississippi as we will see 
investors flock to the area to realize the tax benefits and 
invest in our communities.
    One wish I have is the opportunity to benefit from this 
program across all small businesses. For example, we are going 
to be the new owner-operator of our building, and because we 
are outside the Opportunity Zone, literally one block outside 
this Opportunity Zone, we are not going to realize that 
benefit.
    For example, our depreciation schedule when we build our 
building will now be 39 years, versus just down the street 
where an investor, maybe from out of state, will be able to 
realize the benefit in 10 years and can sell and reinvest. We 
invest in our market each and every day. I would like to see 
something like this for entrepreneurs like us that are owner 
operated and not geographically challenged.
    Think about it this way: We are investing in a market and 
not just here to build, rent, sell, and cash out. We do not 
want to cash out. This is our home, and we want to be in 
business for a long time. Think of a landscaping company that 
wants to invest in a new shop to help operate their business, a 
doctor that chooses to invest in an office in a rural area, a 
property management company that will own-occupy a building in 
the community that they are a key part of. I believe this is 
something we can work on and that can be done.
    I was excited to see the rollback of regulations of Dodd-
Frank. When a banker could not invest in someone they knew from 
church, kids school, sports programs, and just being a part of 
the community because of regulations placed on the banks, it 
became a weighted anchor on the growth of the economy in rural 
America. When I was starting out I was lucky enough to have a 
banker that knew my potential and invested in my future. If I 
started five years later during the Dodd-Frank regulations, I 
would not have been able to realize some of the opportunities I 
have. I look forward to seeing these regulations rolled back 
and appreciate you all's effort on that.
    In closing, I want to thank you for the opportunity to 
speak with you today, and I will be happy to answer any 
questions you have. Thank you.
    Chairman CHABOT. Thank you very much. I think it was 
excellent testimony from all four of the witnesses, so we 
appreciate it.
    We now go into our side asking for 5 minutes. Usually the 
Chairman starts with himself, so I guess I will do that, and 
then I will turn it over to Mr. Kelly, and then we will go back 
and forth a couple of times. So we may take two rounds, maybe 
three, but we will see how it is going.
    I will begin with you, Mr. Woods. I recognize myself for 5 
minutes.
    You had mentioned that the Tax Cuts and Jobs Act, which was 
the tax cut bill that went into effect at the end of this past 
year that the President signed into law and that I would say 
both Mr. Kelly and I both voted for, you had mentioned that one 
of the parts of it that had to do with the estate tax was 
particularly helpful to family farmers in that area.
    Mr. WOODS. Yes.
    Chairman CHABOT. Could you sort of explain to folks who may 
not be terribly familiar with it how that did benefit you and 
could benefit others?
    Mr. WOODS. Well, what it benefits is the sweat and blood it 
takes to build a farm for generations that was passed down from 
my grandfather to my father to me. I am a 7th generation farmer 
in Marshall County. My first grandfather came in around 1817, 
so I have been there that long farming. And as we work and we 
are able to buy a piece of land and we are able to work that 
land, and our kids grow up on the land, we want to be able to 
pass it on to them because it is part of their life. So many 
people work so hard, and then when it comes to the point that, 
all of a sudden they are gone and their family realizes that 
they may have to sell the farm just to pay the taxes when the 
taxes have been paid by the owner or the person for all their 
lifetime, it is just a very unfair burden. We just want to be 
able to have a legacy.
    So we want that to be carried on. That is one thing that 
makes us get up in the morning to do this, to hopefully have my 
grandkids, who just came to see me yesterday--I have eight and 
one on the way, will be nine--I want them to have a place, and 
hopefully one day they will have a place to raise their kids on 
the farm of granddaddy or great-granddaddy, for their own 
provided for them.
    Chairman CHABOT. Very good. Thank you very much.
    Mr. Carter, I will go to you next. You are involved in the 
SBIR program on occasion; is that right?
    Mr. CARTER. Yes, quite a bit actually.
    Chairman CHABOT. Could you tell us how that works and how 
you are able to take advantage of it?
    Mr. CARTER. We have several active Phase I and several 
active Phase II SBIRs now, all with DOD. That is a great 
program for somebody like Hyperion that is in the technology 
development and R&D type of world. It allows us to take a lot 
of the things that we develop and push them out, specifically 
towards the military.
    We do find, though, that the proposal process for DOD is 
through one common website, one common portal, but each branch 
of the military actually has their own requirements. So once 
you are given an award for an SBIR, if you are lucky enough to 
win, depending on the branch that you are getting the award 
from, the requirements can be vastly different.
    So, for example, the Air Force has a much higher reporting 
requirement than does the Army for an SBIR. But for us, we have 
been very, very successful. We have quite a few active 
programs, and we are right now actually in the middle of 
another proposal cycle and hope to win a few more this year.
    Chairman CHABOT. Very good. Thank you very much.
    Mr. Hatcher, I will turn to you now. You mentioned the H2B 
program, and there may be folks in the audience who aren't 
necessarily familiar with what that is. I am a proponent of it 
and have been trying to increase the numbers, and there are a 
lot of us trying to work on that right now.
    Sometimes you will get criticism, ``Oh, this is going to 
take jobs away from Americans.'' Would you explain your view on 
that and what the H2B program is and why if that is true, or if 
it is not true why it is not true?
    Mr. HATCHER. Yes, sir. Certainly. Thank you for this 
opportunity to expound on this. The Department of Labor is set 
up so that we must advertise through multiple avenues for 
positions that are open prior to the season.
    Chairman CHABOT. And these are generally seasonal 
employees. They are not going to work 12 months a year. They 
will work during the summer or----
    Mr. HATCHER. That is correct, the majority. So, of the 110 
people, we have 30 that are participating this year. So we have 
tried just all kinds of things, through radio ads, through 
print ads, through social media, to fill these positions for 
the local people.
    Chairman CHABOT. In fact, that is a requirement----
    Mr. HATCHER. Yes, sir, that is a requirement, and you have 
to do it multiple times to meet those obligations. You have to 
completely write the job description so they understand what it 
is. So there is an exhausting effort to make sure that you are 
looking for all the people locally.
    As I mentioned to you in my presentation about drug-free 
workplace, we often run into the real challenge in local 
employees of getting people to just be able to pass the drug 
test, and that is a real challenge for us. E-verification, as I 
mentioned also, the I-9 process, is there and it is in place. 
As I mentioned to you, I started participating in June of 2006. 
Early on, before we had E-Verify, when we were working 
documented workers, the Social Security Administration used to 
send us a No Match letter if we had people that didn't match, 
their numbers didn't match with the names. And following that 
was the I-9 or the E-Verify system which was starting to 
identify a lot of fraud that was outside of the employment. A 
lot of that fraud was then showing up in government subsidy 
programs.
    As your direct question relates back, there is an H2A 
program, which relates more to the farmers on the agricultural 
side, and the H2B program which, as you know and understand, is 
for the service business, whether it be a hotel maid or someone 
taking care of your hotel, the seafood industry that we have 
down on the coast. Any of those service-oriented industries 
work through the H2B program.
    We work under a cap system, as you know, that only allows a 
certain number of people to apply every year.
    Chairman CHABOT. It is about 65,000 nationally, I believe.
    Mr. HATCHER. That is correct. Yes, sir. So when you look at 
some of the things, and we listened to Congressman Kelly talk 
about the number of jobs that are available, and then we are 
only allowing that many documented workers in, it is a real 
regimented process for the individuals that are applying for us 
to get through the consulate in Mexico to become eligible. So 
they are vetting all of these people extensively. If there is 
any sort of warrants or issues, any problems, then they are not 
allowed to come work for us.
    Chairman CHABOT. Thank you very much.
    Mr. Kelly, I went over a little while, 8 minutes and 32 
seconds. I will get to the second round.
    The gentleman from Mississippi, Mr. Kelly, is recognized 
for 5 minutes, or 8 minutes and 14 seconds.
    Mr. KELLY. All right. I am going to start with you, then, 
Mr. Bailey. In your testimony you talked a little bit about 
Dodd-Frank. I am not a big fan of the CFPB and Dodd-Frank. I 
think it has been extremely detrimental to our small bankers, 
and I think if you don't have a bank, you don't have a town 
anymore, to replace the Post Office.
    In your testimony you talked about how Dodd-Frank put the 
brakes on commercial lending to small firms. You started five 
years before Dodd-Frank, so you have seen what it was like 
before, during, and now, after a little easing on the 
regulations.
    Can you walk us through what the credit markets were like 
in all three of those years, before, during, and what you are 
seeing now?
    Mr. BAILEY. I was a very young entrepreneur when I first 
went to the bank and asked for a loan. The banker that was 
there looked at me, knew who I was--I grew up in my community--
and said I am going to take a chance on you, and gave me 100 
percent financing on what I needed. I was very thankful, and it 
allowed somebody young who didn't have the cash or the cash 
position to realize his opportunity. I took that money, have 
invested that money, have paid that back, and I think I have 
five years left on that loan.
    Because of that, I have been able to acquire more and more 
loans and more property. But if I were to have started five 
years later, the regulations would have been through the roof. 
Since that time I have gone and got additional loans and have 
had to come up with cash capital, and somebody that is young 
like myself and is trying to put food on the table for two boys 
and trying to provide for my family, those opportunities are 
restricted because you have to come up with some capital.
    If the banker realizes your potential and sees your future 
and wants to invest in it, under these new regulations they are 
so handcuffed in what they can and can't do. Not only that, 
through our business as well, we do condo association 
management as well, and we have seen more and more paperwork 
come through our office, so we have to have somebody that hires 
to take care of this paperwork just to get a condominium owner 
financed. They do condo questionnaires, and when you receive 
one it takes about an hour to do, and when you receive 50 of 
those in a month, you could imagine what time that takes away 
from somebody else doing additional work.
    I am just now learning about the rollbacks. I am hoping 
that we will see some of those regulations go by the wayside. I 
don't know exactly just yet what that is going to look like. I 
think it is just in its infant stage, but I don't expect we 
will roll everything back, but I do expect if we can get rural 
lenders to be able to invest in their community and in their 
people like they had in the past, I think it will be a 
positive, positive thing.
    Mr. KELLY. Very good. And going to you, Mr. Carter, you 
mentioned that regulatory burden disproportionately affects 
small farmers. We have made some progress on that front since 
the president took office. What more can we do? And going back 
to Dodd-Frank, for small farmers, what that does is it adds a 
price to the end user. So your loans are more expensive, they 
can't function, so everything comes out because they don't have 
anything.
    What are some more things we can do to roll back 
regulations?
    Mr. CARTER. Well, what I would like to do is give you an 
example that has kind of been at the forefront of things at my 
office over the past several weeks. We have recently had 
several countries contact us asking if we can export some of 
the things that we build, both some of the military items and 
the non-military items. We have found that, at least in our 
business, there are six departments that have jurisdiction over 
exports in the United States. That includes the Department of 
Commerce, the Department of State, the Department of the 
Treasury, the Department of Commerce Bureau of the Census, the 
Department of Homeland Security, U.S. Customs and Border 
Protection, and, of course, the Department of Defense.
    There is no unified, integrated management system to 
address all of those departments at the same time, and before 
we can even consider releasing any technical information about 
anything we do, we have to go through an application process 
with all six of those departments, and that is just a burden 
that has had two of my employees tied up now for several weeks 
just going through that process.
    Mr. KELLY. Okay.
    Mr. Chairman, I yield back.
    Chairman CHABOT. I will go with Mr. Bailey, then, and go 
back. You had mentioned the Affordable Care Act, or Obamacare 
as a lot of people will refer to it, and I think you had said--
correct me if I am wrong, but I think you said before 
Obamacare, health care was the seventh costliest thing as a 
business person you had to pay for.
    Mr. BAILEY. That is correct.
    Chairman CHABOT. After Obamacare, it was the second most 
expensive thing.
    Mr. BAILEY. That is correct.
    Chairman CHABOT. Now, on top of that, you said you had 18 
employees?
    Mr. BAILEY. About eight full-time employees, and then 10 
part-time employees.
    Chairman CHABOT. Okay. And Obamacare isn't even supposed to 
affect those directly under 50 employees. So could you kind of 
explain so we can all understand how in the heck is that 
possible?
    Mr. BAILEY. How does it affect us as a small business?
    Chairman CHABOT. Yes.
    Mr. BAILEY. I believe it is under 50 employees you do not 
have to provide health care as a small business owner. We as a 
business choose to do that for our employees. That was one of 
our goals. When we started and we were meeting to form our 
company, we said one thing we want to do is provide health care 
for our employees. We value them. We value their health. We 
want them to be healthy because a healthy employee is a more 
productive employee. But we chose to provide that.
    Because of the cost of it, it wasn't that great at the 
time. I mean, it was I think for somebody like myself starting 
out, I think it was $139 for a monthly charge for health care. 
Now I think I am over $400 a month. But we want to provide that 
for them, and we want to be able to retain our employees 
because it is out there in the marketplace. In Mississippi, if 
you don't provide that, all of a sudden you have a great 
worker, and another office realizes it and offers them, and you 
have lost all that institutional knowledge. So we provide that 
for the employee to retain them mostly. When we did that we 
were able to provide 100 percent of health care cost as the 
seventh largest expense in our ledger, and today we are only 
providing 80 percent, they are providing 20. It is less take-
home pay for them, and it is the second largest on our ledger.
    Chairman CHABOT. Thank you very much.
    As you may be aware, Mr. Kelly and myself both believe that 
the American people deserve a whole lot better than what they 
are getting under Obamacare, or the Affordable Care Act, and we 
attempted and passed in the House doing just that, replacing it 
with something that we thought was better. We got it through 
the House, but unfortunately it missed by one vote over in the 
Senate for passing. So we are sort of stuck with it right now. 
We are not happy about that.
    I know in this job, as Chairman of this Committee, we get 
to talk to people all over the country, and I hear the same 
thing from people in my district as I do from people all over 
the country, that they wish we would change this to something 
that makes more sense. The American people really deserve 
better, and I totally agree with that sentiment.
    In the Tax Cuts and Jobs Act that we passed, there was one 
good thing in there about health care. It did do away with the 
individual mandate where you had to buy what the government 
told you to as an individual or you got penalized for that, a 
lot of money for a lot of folks. So that is an advantage, but 
the system still--people deserve a lot better.
    I think it was Bill Clinton, of all people, who said it is 
the craziest system in the world, talking about Obamacare. You 
are paying twice what you used to pay and getting half the 
coverage. I think he was right. I haven't agreed with him a lot 
over the years, but I definitely agreed with him on that one. 
So, thank you.
    I think I will at this point yield back and turn it over to 
Mr. Kelly for further questions.
    Mr. KELLY. Yes, sir. Thank you, Mr. Chairman.
    I am going to come to you, Mr. Woods. WOTUS, I am sure you 
know what that is, Waters of the U.S. Rule, that has been 
nixed. It would have been a major problem for family farms such 
as your own. Can you talk a little bit about if Congress had 
not acted in conjunction with the President to repeal and 
replace it how this rule would have affected your day to day 
operations?
    Mr. WOODS. Yes, sir. With the WOTUS Rule, it just covered 
every mud puddle in the country. It could be somebody's 
backyard. It could be in our pastures. If it rained a good rain 
and left standing water, that was Waters of the U.S. We could 
not work our fields under certain conditions. It was going to 
have to make us quit farming some of the areas. It allowed us 
not to be able to use proper drainage that we know how to do, 
drain our fields to make production better and more economical.
    I don't know where to begin, really. It was going to touch 
every--and it was so overreaching, and I don't even know all 
the areas it really touched because it was just huge. That is 
all I can say. I can't even describe it.
    Mr. KELLY. I remember when I had a chance with the past 
Administrator of the EPA and I got to talking to her, and I had 
a specific incident in Mississippi where there was a manmade 
irrigation ditch that had been dug many, many years ago, 
probably before I was born, was now grown over, but the cost to 
mitigate that property, because it was declared a Water of the 
U.S., was basically what it meant is a million-dollar business 
didn't come to Mississippi because of the mitigation cost. The 
property was worth more to mitigate, and so no one could afford 
to buy it.
    Mr. Hatcher, I am going to ask you--thank you for your 
answer.
    Mr. Hatcher, you stated you have had a 20 percent growth in 
your business receipts since this time last year based on the 
Tax Cuts and Jobs Act. You also say you gave your employees a 
minimum of a 7 percent raise to all of your employees. Just if 
you can articulate how impactful it has opened up capital, or 
how impactful it has been for your employees, and also for your 
business.
    Mr. HATCHER. Certainly. As the growth came, it came from 
the actions that I can say were strictly from the Tax Cuts and 
Jobs Act because it freed up corporations. So when I talk to 
you about 20 percent growth in revenue year over year, it is 
not in any one area. We are full service, so we do both 
government, commercial, industrial, and residential work. So an 
expendable-income, service-related business, it absolutely put 
more money into the budgets of all of those entities that 
directly reflected--a lot of it was deferred work that hadn't 
been done.
    How has it affected the employees? When that 7 percent 
raise came across the board, this is tied back into part of the 
DOL's mandate on the minimum wage rate that we pay. But as it 
went across from top to bottom, whether you are the CFO or 
whether you are the operator of a grass height reduction 
device, we gave 7 percent across the board. So in that, you 
start seeing new vehicles, you start seeing new cars, you start 
hearing them talking about what they are doing in upgrading 
their homes. So that is directly how that affected us.
    Mr. KELLY. Very good.
    This is kind of for the panel, so any one of you can jump 
in. I have about a minute-and-a-half left. But one of the 
things that I like to work on and one of the things that I am 
most passionate about is making sure people understand the 
great workforce we have here in Mississippi. And number two, in 
conjunction with our universities--I know, Geoff, you work with 
Mississippi State, and also Ole Miss--you get these bright 
engineers that they send to you, our community colleges, our 
high schools. What can we do in Congress that makes it easier 
for you all to get qualified workers who fit the needs that you 
have in your industry?
    Mr. BAILEY. I don't know if there is a mechanism to give a 
credit if somebody goes and gets further education, or if you 
hire a new employee and invest in that person, if there is a 
credit for a small amount of time, maybe a year or two, but I 
think that is something that would help.
    Mr. KELLY. You know, and I want to highlight real quick--I 
mean, Mr. Carter, they do some high-tech stuff. When people 
think of Mississippi, they don't think about the things that I 
got to use as a soldier in Iraq that I was the beneficiary of 
it saving my soldiers' lives. I visited other countries that 
also used the products and things that they develop. We are not 
in the right environment to talk about what those are, but for 
the most part these are Mississippi folks with Mississippi 
minds. So we may talk funny to other people, but I can tell 
you, our minds I will put up against anybody's in the world, 
whatever business that you are in.
    With that, I yield back to you, Mr. Chairman.
    Chairman CHABOT. Thank you.
    The gentleman yields back.
    One thing I probably should mention, my mom was born and 
raised in North Carolina, Charlotte, North Carolina, so I think 
you all talk just fine.
    But in any event, I am going to ask just a couple of 
questions, and then I am going to turn it over to Mr. Kelly 
again to wrap up with any questions that he might have. I again 
want to say that the panel has been, I think, very good in 
answering all of these questions and really helping us. What we 
learn here today and what we hear today we take back to our 
colleagues on the Committee, and they in turn take it back to 
the rest of the members of the House of Representatives. We 
also have Committee folks from Washington that are taking down 
all this information that they will take back to the staff, 
too.
    So everything that goes on here ultimately goes back there, 
and then we try to use that when we are looking at new 
regulations or getting rid of regulations, or new legislation 
that we might introduce and that sort of thing. So that is 
basically the type of thing that we are accomplishing here.
    Mr. Woods, I wanted to go back and ask you something. I 
have been hearing--now, this isn't the Agriculture Committee, 
but I know there has been a drop in net farm income in recent 
years.
    Mr. WOODS. Yes, sir.
    Chairman CHABOT. What impact--because as a farmer, 
obviously, you are the definition of a small business. What 
impact is that having? Is there anything that you think should 
be done either out of Washington or through the Small Business 
Committee, anything that you can come up with that we ought to 
be working on to assist the Agriculture Committee that is kind 
of struggling right now?
    Mr. WOODS. Well, we have a lot of associations that we are 
part of, you know, the Farm Bureau being one of them, who 
really advocate for farmers, and they do an excellent job.
    Chairman CHABOT. Yes, they come by our office a couple of 
times a year.
    Mr. WOODS. Well, we are glad. We hope they come by more. 
But as a member of that and other organizations, we are just 
pushing hard because all these commodities are traded, and that 
has an effect on investors getting in the market because they 
are not doing well in another sector, so they come in and they 
drive the prices up. So we get to benefit them, but we are at a 
five-year low at this time. We are looking at potential trade 
wars that certainly have a big effect on what our future may 
be. The average farmer is a little over 60 years old, and I am 
61, so I am right in the median of that. We are encouraging 
young farmers to come and try to get help, but all this with 
the creditors, they are all looking at the bottom line.
    But to help us with the markets, the reporting bureaus, 
sometimes they miss the mark on how many million bushels of 
corn are out there, or how much exports are, and sometimes they 
come back and say, oops, we made a mistake. Well, that was 30 
cents a bushel later, and we are in the hole. I am not sure how 
you correct that, and I am sure they are doing a good job, the 
best they can. I am not going to try to be a Monday night, 
armchair quarterback on that.
    But there are just so many things. Somebody can breathe 
wrong and the markets go out. I mean, I don't know. We can't 
control Mother Nature, so I know that is not the case. But I 
think keeping the safety net of the Farm Bill is a certain way 
to keep the farmers where they just don't fall on their face 
100 percent. With the Farm Bill that you ought to try to work 
on, I applaud your efforts, and as a cotton farmer I 
appreciate--we got left out in the rain in the last one, so we 
are hoping that we will be taken care of this time.
    But we are at the mercy of the markets. We buy everything 
at retail and sell everything at the lowest common denominator. 
I wish you could tell me that and I would figure out how to be 
very successful.
    Chairman CHABOT. Thank you very much.
    Joe Harts, who is our representative here from the Small 
Business Committee staff, reminded me that the Farm Bureau will 
be testifying before the Small Business Committee in Washington 
this week. So we will be hearing from them, and I know, as I 
mentioned before, they are very often letting us know what is 
happening out there in the farming community.
    Mr. WOODS. Well, we depend on them a lot.
    Chairman CHABOT. Yes.
    And then my last question would be for anybody on the 
panel, any or all that would like to answer.
    I would say there have been two major things that have 
really impacted small businesses positively in the last year, 
year-and-a-half. One is--and I think it has already been 
reflected here by the testimony here this afternoon. That is 
the Tax Cuts and Jobs Act that was passed that President Trump 
signed into law recently.
    The other thing is the President coming into office and 
saying that he wanted to get rid of two regulations, existing 
regulations for every new one that the bureaucracy and Congress 
comes up with in Washington. We have made some real progress in 
that.
    But what I am wondering is, is there anything that is still 
out there in red tape and regulation as a small business person 
that you think, boy, this is one that I sure wish they would 
either modify or get rid of it or it just doesn't make sense 
anymore, or whatever?
    So I will just go down the line for whoever wants to go 
first is welcome to. But is there anything out there that you 
think we ought to take a look at in the area of regulation that 
you would like to see changed? And then after I am done I am 
going to turn it over to Mr. Kelly and we are going to wrap up.
    Mr. CARTER. Well, I certainly agree with Mr. Bailey on his 
comments on the health care. For my business, we pay 100 
percent of our employees' health care costs, and that is the 
most expensive--that is the top line----
    Chairman CHABOT. That is rare these days, 100 percent. I 
commend you.
    Mr. CARTER. It is actually more than the next six items 
combined. In order to attract and retain the kind of talent 
that we require, and to keep them from escaping to Huntsville, 
those are the kind of benefits we have to offer.
    Chairman CHABOT. Thank you.
    Anybody else?
    Mr. HATCHER. If I may, Chairman Chabot, I would like to 
back up to you, Congressman Kelly, and your reference to the 
educational system. Let's not forget those that are not 
attending higher education and whatever help could be assisted 
through the high schools or vo-technical schools. There is a 
lot of opportunities there.
    Mr. KELLY. I agree. I mentioned high schools, and we have 
here at DeSoto County, we have a great vo-tech system here that 
does not just the ones that we went through as students, but 
they do high-tech jobs that are things that people like me 
couldn't get in. But they are high tech, and they are very, 
very good in DeSoto County. We have some model programs here 
that other people should look at.
    Chairman CHABOT. My time has expired. So, Mr. Kelly, if you 
have any additional questions?
    Mr. KELLY. Just very quick. We were talking about Farm 
Bureau, Mr. Chairman, and we had the President, Mr. Mike 
McCormick, and his congressional liaison I think is what he 
calls him, Justin Ferguson, who is here. They are in our 
office, but they are also here in this meeting. They are 
engaged in our small businesses across this state, and I thank 
Mike as the president for being here.
    I also want to once again thank my friend, Brian Rigby, for 
making this venue available.
    Now, I want to ask you guys just very quickly, about 30 
seconds each, what advice would you give entrepreneurs who are 
considering starting or relocating their businesses to North 
Mississippi? My experience has been workforce, infrastructure 
availability, and also the cost of doing business here in 
Mississippi. So you can talk about if those things apply to you 
or whatever else you think why people ought to move here from 
somewhere else and start businesses here in Mississippi.
    Mr. Bailey?
    Mr. BAILEY. My advice for somebody starting out would be--I 
don't know about regulations, but just to go for it and do it 
as hard as they can, with the love and passion they would do 
with anything else.
    As far as why Mississippi, our cost of doing business and 
starting a business is a lot lower than it is everywhere else 
in the nation just because of the price of rents, the price of 
utilities, the price of just everything is lower, which is 
great. Our state tax is not that burden on small businesses, 
which is a wonderful thing.
    The only thing I would say is if you are starting out and 
you are young, have a good accountant, because you don't want 
to all of a sudden get an oops of here is an additional $15,000 
that you have to pay to the government. So have a good 
accountant.
    Mr. KELLY. So it is basically those payroll taxes. I know, 
I was there. And then you have to write a check for a 25 
percent penalty and 15 percent. So you spend a lot of money you 
didn't have to start with.
    Mr. BAILEY. Exactly.
    Mr. KELLY. Mr. Hatcher?
    Mr. HATCHER. I would always recommend or suggest people to 
come to North Mississippi. It is the quality of life. The 
quality of life here is unparalleled to any other areas. The 
tenacity and the perseverance to be an entrepreneur is just 
strap on your boots.
    Mr. KELLY. Mr. Carter?
    Mr. CARTER. Well, considering my wife just started her own 
small business and has been working closely with the SBA and 
our local bank, I would definitely recommend anybody to take a 
long, hard look at Mississippi if they want to start a small 
business, not only the people and our education system but just 
the support in general that you just get from being in 
Mississippi.
    Mr. KELLY. And Mr. Woods?
    Mr. WOODS. Y'all come.
    [Laughter.]
    That is what we are. We are the hospitality state. We make 
people feel welcome. People can come here and start a business 
and get some good people that will work hard. If you have the 
heart to want to go through that first five years to kind of 
get over the hump, and I agree with the accountant statement, 
you just have to keep up with where you are, know where you 
are. As my banker told me one time when he made me a loan to 
start the company, he said don't walk in here and just tell me 
without having something prepared. I already know what you 
need. Explain it and believe it, and then we will try to help 
you. You just have to have that heart of wanting to succeed 
before you ever start.
    Mississippi, especially North Mississippi, is a wonderful 
place. I wouldn't want to be anywhere else. I have had people 
come here to start businesses that I know, and they said it was 
the best thing that ever happened to them.
    So, thank you all for letting me make some remarks.
    Mr. KELLY. And I am going to take a privilege of playing on 
my home field. But the other thing is our work ethic here is 
second to none. We have great community colleges and 
universities, all of which do great training and workforce. And 
I think something that is often overlooked in Mississippi that 
maybe other parts of the world don't have, we got river, rail, 
and major highway systems to everywhere in my district, right 
here in DeSoto County. We are not that far from the Mississippi 
River. Over on the other side of my district we got the Tenn 
Tom Waterway, which is the least expensive way to move major 
products. We have rail and highways that connect those, major 
interstates, and I think that is really good.
    Our governor and our state really works hard to bring 
industry into Mississippi.
    And with that, Mr. Chairman, I yield back.
    Chairman CHABOT. Thank you very much. The gentleman yields 
back.
    In wrapping up this hearing of the House Small Business 
Committee, I would just make a couple of comments.
    First of all, if I didn't live in Cincinnati, I think I 
would want to live in Mississippi after what I have heard here 
this afternoon, some real fine people and excellent testimony 
from really an excellent panel of witnesses here. Your 
testimony was very good, very helpful, and the answers to the 
questions were also very helpful.
    Just in saying a couple of things about your 
Representative, Trent Kelly, you all know Trent Kelly, but what 
you don't necessarily know is how others of his colleagues in 
Washington think about him. He is very, very respected among 
other Members of Congress on both sides of the aisle, both 
Republicans and Democrats. It is not often that a member, in as 
short a time as Trent Kelly has been in Congress, to be a 
subcommittee Chairman already. He, of course, as I mentioned 
early on, he is the Chairman of the Investigations, Oversight, 
and Regulations Subcommittee, which is a very important area, 
and it is small businesses all across the whole country. 
Seventy percent of the new jobs in America are created by small 
businesses. So it is very important.
    Of course, you also don't become a general without having a 
lot of leadership abilities and being a leader of men and 
women, and having served our country I believe two terms in 
Iraq. He literally saved a bunch of lives, as you may know, 
about a year ago on a ball field outside Washington, D.C. when 
he was literally in the line of fire of a shooter there, and 
not thinking of himself but thinking of the others. He was the 
closest person to that gunman, and he wasn't thinking about 
himself, he was thinking about others.
    Now, I wasn't there. My contribution to the Republican 
baseball team was not being on the team.
    [Laughter.]
    But Trent warned all the other persons. He said, ``Shooter, 
active shooter.'' There is no question he saved lives that 
morning.
    But beyond that, he is really an excellent member of 
Congress, and I would say just on a personal level I think you 
are lucky to have him representing you, and it is an honor to 
serve with him.
    At this time, that concludes my remarks. I would now like 
to turn it over to Trent for any closing remarks he might have.
    Mr. KELLY. I am just going to be very brief.
    Thank you, Mr. Chairman. Again, I am grateful that you were 
able to travel here to Southaven this afternoon and listen to 
my constituents and see where I live and see what is important 
to us.
    As I said in my opening statement, and I know you agree, 
the best ideas come to Washington, not from Washington. And 
while the economy is currently thriving, we need to pay close 
attention to how our small businesses are evolving. Of 
particular concern to me as I represent a large amount of rural 
areas here in Mississippi is how businesses and our small towns 
are faring because they face a unique set of challenges than 
their more urban counterparts do.
    I appreciate each of our witnesses taking time away from 
your businesses and busy schedules to provide the Committee 
testimony.
    I also want to thank each of you in the audience for coming 
and listening today.
    And finally, once again, thank you to Chairman Chabot for 
spending the day with us here in Mississippi, and I yield back, 
Mr. Chairman.
    Chairman CHABOT. Thank you very much.
    The gentleman yields back.
    In conclusion, I would ask unanimous consent that members 
have 5 legislative days to submit statements and supporting 
materials for the record.
    Mr. KELLY. Without objection.
    Chairman CHABOT. Without objection, so ordered.
    If there is no further business to come before the 
Committee, we are adjourned.
    Thank you very much.
    [Whereupon, at 3:20 p.m., the Committee was adjourned.]
                           
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