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

                    COMMUNITIES THAT THINK SMALL AND WIN BIG

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

                                    HEARING

                                   before the

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  HEARING HELD
                                 JUNE 20, 2018

                                   __________

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                Small Business Committee Document Number 115-080
                 Available via the GPO Website: www.govinfo.gov

                                 _________

                    U.S. GOVERNMENT PUBLISHING OFFICE
     30-505                 WASHINGTON : 2018

                       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 ADAMS, 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. Yvette Clarke...............................................     2
    Hon. Nydia Velazquez.............................................    14

                                   WITNESSES

    Mr. Greg Prestemon, President & CEO, EDC Business & Community
      Partners, St. Charles, MO......................................     5
    Mr. Derek Miller, President & CEO, Salt Lake Chamber and Downtown
      Alliance, Salt Lake City, UT...................................     6
    Ms. Vanessa Wagner, Small Business and Entrepreneurship Manager,
      Loudoun County Department of Economic Development, Ashburn, VA.     8
    Mr. Gregg Bishop, Commissioner, NYC Department of Small Business
      Services, New York, NY.........................................    10

                                    APPENDIX

    Prepared Statements:
        Mr. Greg Prestemon, President & CEO, EDC Business & Community
          Partners, St. Charles, MO..................................    25
        Mr. Derek Miller, President & CEO, Salt Lake Chamber and
          Downtown Alliance, Salt Lake City, UT......................    32
        Ms. Vanessa Wagner, Small Business and Entrepreneurship
          Manager, Loudoun County Department of Economic Development,
          Ashburn, VA................................................    36
        Mr. Gregg Bishop, Commissioner, NYC Department of Small
          Business Services, New York, NY............................    43
    Question and Answer for the Record:
        Question from Hon. Adams to Mr. Greg Prestemon and Answer
          from Mr. Greg Prestemon....................................    53
        Question from Hon. Adams to Mr. Derek Miller and Answer from
          Mr. Derek Miller...........................................    55
        Question from Hon. Adams to Ms. Vanessa Wagner and Answer
          from Ms. Vanessa Wagner....................................    56
        Questions from Hon. Adams to Mr. Gregg Bishop and Answer from
          Mr. Gregg Bishop...........................................    57
    Additional Material for the Record:
        National Main Street Center (NMSC)...........................    60
        Thumbtack....................................................    62

                    COMMUNITIES THAT THINK SMALL AND WIN BIG

                                  ----------

                            WEDNESDAY, JUNE 20, 2018

                      House of Representatives,
                   Committee on Small Business,
                                                        Washington, DC.
        The Committee met, pursuant to call, at 11:03 a.m., in Room
    2360, Rayburn House Office Building, Hon. Steve Chabot
    [chairman of the Committee] presiding.
        Present: Representatives Chabot, King, Luetkemeyer,
    Marshall, Curtis, Velazquez, Lawson, Clarke, and Schneider.
        Chairman CHABOT. Good morning.
        The Committee will come to order. And we are supposed to
    have votes in just a little while. So we are going to try to
    get off as quickly as possible and on time and then move pretty
    rapidly so we can get through as many of the testimonies as
    possible here.
        So, before I begin my opening statement, I would like to
    thank Mr. Kelly, who is not with us right yet, but he is
    Chairman of the Subcommittee on Investigations, Oversight, and
    Regulations, for inviting me to participate in Monday's field
    hearings in Southaven, Mississippi. I enjoyed the southern
    hospitality and appreciated the opportunity to talk shop with
    rural small business owners. And I am happy to report that our
    Mississippi witnesses reflected the surging optimism measured
    in the latest National Federation of Independent Business
    survey.
        Here at the Small Business Committee, we like to think that
    small business owners' optimism is, at least in part, a result
    of the hard work that we do here in this room on both sides of
    the aisle, because this, as I always like to say, is a
    Committee that really does work in a bipartisan fashion as much
    as possible.
        Of course, the Committee cannot take all the credit. The
    historic progress made to reduce tax and regulatory burdens on
    America's small businesses is a result of congressional action
    and support from the White House as well and, obviously,
    particularly for the hard work of small businesses all across
    America. That is where the real effort is, and we are seeing
    the result of that now.
        We rely on local policymakers and community organizations
    to implement reforms, develop innovative support systems, and
    advocate for our Nation's 30.2 million small businesses. From
    Southaven to Simi Valley, small businesses are creating more
    jobs, reinvesting in their employees, updating new equipment,
    and setting higher goals for growth. That doesn't mean we can
    take our foot off the gas pedal. There is a lot more work to be
    done.
        This Committee, we are here today to highlight communities
    that have developed thriving small business ecosystems. In your
    community, you may see shops run by local artisans and farmers
    and restauranteurs, but you probably won't see what is
    happening behind the scenes. Every small business ecosystem
    relies on a delicate balance of support and resources to
    survive.
        The creation of a healthy ecosystem requires significant
    investment by all participants, small business owners, support
    organizations, and policymakers. To be successful, each
    ecosystem develops according to the unique needs of its
    location. No two Main Streets are identical. Each community
    capitalizes on its own unique offering.
        Policymakers and support organizations, like the ones we
    have on this panel, have developed innovative strategies,
    resources, and measurements to ensure local small businesses
    are thriving. Our witnesses will detail the investments
    required for a business-friendly community. They will also
    discuss the economic, social, and cultural impact of small
    business investment.
        I have observed this phenomenon in my district,
    specifically on the revitalized Over-the-Rhine neighborhood.
    And I would look forward to hearing more success stories from
    our witnesses today, and I am grateful for their participation
    here and their efforts back in their communities.
        And I would now like to yield to the gentlelady, Ms.
    Clarke, for a purpose of making an opening statement. The
    Ranking Member, Ms. Velazquez, is not able to be with us right
    now, but I think will be here later.
        Ms. CLARKE. That is my understanding, Mr. Chairman.
        And I thank you for yielding to our panelists. We want to
    welcome you and your expert testimony here today.
        Thank you, Mr. Chairman.
        Our nation's 30 million small businesses play a critical
    role in their local communities. However, starting a small
    business isn't easy. Nine out of 10 startups fail because of a
    multitude of obstacles that stand between an entrepreneur and a
    successful business.
        For startups to succeed, they need access to capital, a
    solid business plan, and a strong workforce. Although SBA
    offers some of these services nationally, local entrepreneurial
    and small business development programs can provide tailor-made
    solutions to fit the community.
        Today, we have representatives from several municipalities
    that are filling this gap and helping Main Street America grow.
    These programs are set up around the country and offer a
    variety of incentives and services that make starting and
    growing a business easier. From finding a business location to
    developing the skills of young workers, such services provide
    the catalyst for small businesses to thrive.
        Some provide financial incentives like specialized grants
    and loans so businesses can hire more workers or expand work
    space. In fact, our witness today, the New York City Department
    of Small Business Services, is offering a loan program for
    women and minority business owners to help traditionally
    underserved portions of the community.
        But they offer much more than just financial incentives.
    Local organizations provide site selection services to help
    firms maximize exposure to their target markets and identify
    new customers. Through professional counseling, which can range
    from pro bono legal assistance to business planning, innovators
    can learn how to optimally run their operations for success.
        Finally, we all know a business is only as strong as its
    workforce. To that end, some localities have begun offering
    grants and tax incentives for apprenticeships and on-the-job
    training. This allows workers to gain valuable new skills so
    businesses are better able to compete in the marketplace.
        This hearing gives us the opportunity to analyze the
    innovative ideas deployed by our witnesses and explore what
    makes a town, city, or county a great place for small business.
    It is my hope that we can establish a set of best practices for
    these programs, which can be used by other municipalities and
    future federal programs to stimulate small business growth.
        Thank you all for being here today. I appreciate our
    witnesses taking time from their busy schedules to join us.
        And I yield back, Mr. Chairman.
        Chairman CHABOT. Thank you very much. The gentlelady yields
    back.
        And if Committee members have opening statements, I would
    ask they be submitted for the record.
        And we will take just a moment to explain our rules
    relative to timing. They are pretty simple. You get 5 minutes,
    and then we get 5 minutes to ask questions. And there are some
    lights to assist you there. The green light will be on for 4
    minutes; the yellow light will come on and will be on for 1
    minute; and then the red light will come on to let you know the
    5 minutes is up. And if you could kind of stay within those
    parameters, we would greatly appreciate it.
        And I will--now we will go ahead and introduce our
    distinguished panel here this morning. And I would like to
    yield to the gentleman from Missouri, Mr. Luetkemeyer, who is
    the Vice Chairman of this Committee, to introduce our first
    witness.
        Mr. LUETKEMEYER. Thank you, Mr. Chairman.
        I am pleased to introduce today one of my constituents,
    Greg Prestemon, who serves as the President and CEO of the
    Economic Development Council of St. Charles, Missouri, where he
    has worked to provide startup assistance, small business
    financing, and business attraction and retention programs for
    St. Charles County there in my Third Congressional District.
        Mr. Prestemon has dedicated his career to making St.
    Charles County the most attractive destination for
    entrepreneurs and small businesses alike. Prior to coming to
    St. Charles EDC, Mr. Prestemon was the Executive Director for
    the Grinnell 2000 Foundation, where he directed a
    multicommunity development program.
        Previously, Mr. Prestemon worked as a professional economic
    developer in New York. We won't hold that against him because
    he has become Missourianized now. He is one of us. Mr.
    Prestemon attended the University of Iowa, where he earned a
    Bachelor of Arts in political science and government and a
    subsequent master of arts degree in economic development with a
    concentration in development finance.
        Mr. Prestemon, thank you for being here. Always a pleasure
    to see you. Welcome, Greg, and look forward to your testimony.
        Chairman CHABOT. Thank you very much.
        And our next witness will be Derek Miller, the newly
    appointed President and CEO of the Salt Lake Chamber and
    Downtown Alliance. Mr. Miller previously served as Chief of
    Staff to Governor Gary Herbert and as Managing Director of the
    Governor's Office of Economic Development under Governor John
    Huntsman, Jr. He began his career in Washington, D.C., and
    spent 3 years as a Legal Counsel to House Transportation and
    Infrastructure Committee, and we thank you for your
    participation.
        Our third witness will be Ms. Vanessa Wagner, who serves as
    Loudoun County's Small Business and Entrepreneurship Manager.
    In this capacity, she is dedicated to supporting small
    businesses and growing the entrepreneur ecosystem in the
    county. She has more than 10 years of marketing and program
    development experience with small business and international
    organizations.
        And we welcome you here as well, Ms. Wagner.
        And I would now like to yield to the acting Ranking Member,
    Ms. Clarke, for the purpose of introducing our fourth and final
    witness.
        Ms. CLARKE. Thank you, Mr. Chairman.
        As Commissioner of the New York City Department of Small
    Business Services, Mr. Greg Bishop is charged with running a
    dynamic city agency focused on equity of opportunity, economic
    self-sufficiency and mobility for New York City's diverse
    communities. SBS actively connects New Yorkers to good jobs,
    creates stronger businesses, and builds a thriving economy in
    neighborhoods across the five boroughs.
        A New York City native, Mr. Bishop began his career at the
    agency in 2008 designing programs to make it easier for
    businesses to start and grow and to recover from emergencies.
    After a number of successful promotions, he was appointed
    commissioner by Mayor Bill de Blasio in November of 2015.
        Mr. Bishop holds a master's degree from Florida State
    University, a BS from Florida A&M University, and he is also a
    graduate of Harvard Kennedy School's Senior Executives in State
    and Local Government Program. Thank you for being here today.
        And on a side note, Mr. Prestemon, once a New Yorker,
    always a New Yorker.
        I yield back.
        Chairman CHABOT. The gentlelady's comment will be stricken
    from the record. No, just kidding. Just kidding. I am not a
    judge here.
        Mr. LUETKEMEYER. Thank you, Mr. Chairman.
        Chairman CHABOT. And I am from Ohio. Yeah. But we
    appreciate the sentiments.
        And before we get to Mr. Prestemon, I would just remind
    folks that we are going to have votes here shortly. If you hear
    the buzzers go off, just ignore them, and we will try to get
    through a number of these. We have 15 minutes to get over
    there. So we will probably--even after that--and then it will
    go off again 5 minutes later, and we may still go on, but
    members will have time to get over and vote.
        So, Mr. Prestemon, you are recognized for 5 minutes.

     STATEMENTS OF GREG PRESTEMON, PRESIDENT & CEO, EDC BUSINESS &
    COMMUNITY PARTNERS, ST. CHARLES, MO; DEREK MILLER, PRESIDENT &
     CEO, SALT LAKE CHAMBER AND DOWNTOWN ALLIANCE, SALT LAKE CITY,
        UT; VANESSA WAGNER, SMALL BUSINESS AND ENTREPRENEURSHIP
      MANAGER, LOUDOUN COUNTY DEPARTMENT OF ECONOMIC DEVELOPMENT,
    ASHBURN, VA; AND GREGG BISHOP, COMMISSIONER, NYC DEPARTMENT OF
                 SMALL BUSINESS SERVICES, NEW YORK, NY

                      STATEMENT OF GREG PRESTEMON

        Mr. PRESTEMON. Thank you. Well, I very much appreciate this
    opportunity. I am really honored to be here.
        Chairman CHABOT. Could you pull the mike up a little bit?
    It will----
        Mr. PRESTEMON. And I am proud of having spent a little time
    in New York, so especially in August, which is much nicer.
        I represent a 30-member board of directors that is a true
    public/private partnership. We have 10 local government
    representatives and 20 private sector folks. So--and I am
    representing a county that has about 400,000 people, somewhere
    north of 9,000 small businesses.
        So we have a really simple mission as far as I am
    concerned: It is to help businesses and the communities in our
    county to succeed and grow, you know. And ever since the EDC's
    inception in 1992, we have concentrated the lion's share of our
    resources on small business development, for sure.
        We do this through two main flagship programs. We are what
    is called a Certified Development Company, or CDC, so we
    operate the 504 Loan Program, which is ultimately under your
    jurisdiction here, and we are a pretty big player in that. We
    have a portfolio today of about 120 million and, you know,
    almost 300 loans from all across the State of Missouri.
        But we are also an important participant in the Missouri--
    University of Missouri Small Business Technology Development
    Center Program, which is a mouthful. While our local impacts
    have been large, I think the statewide impacts are even more
    important, I think are stunning. From 2015 to 2017, the
    statewide network of SBTDCs, which are very thinly staffed, by
    the way, have helped generate over $1 billion in annual sales
    for those companies that they served and north of $1 billion in
    procurement awards, which I know is something that is close to
    the heart of this Committee; that is the PTAC program, which is
    part of that SBDC network.
        But enough about the numbers. I want to talk about the
    principles that we use at the EDC, and I think you will find
    some commonality between what we do and what the other speakers
    were talking about. I think that we have been successful in
    part because we believe that all small businesses are
    important. We think the mom-and-pop retailers or the auto
    repair shop is just as important as the IT technology startup.
    We want those too, but we have had to kind of serve the
    companies that come in front of us so we are market-oriented.
        So our approach is not to target a particular type of
    business but instead to help what the market provides. So all
    small business is important, is our main principle. The second
    one is that we strive to have all of our programs--and there
    are many--kind of be in alignment with each other. Even in a
    small organization, it is easier for silos to develop.
        So, for example, whenever we have a 504 borrower, we try
    very hard to make sure that they are SBDC clients as well and
    vice versa. You know, that only makes sense because 504
    borrowers need to repay federally guaranteed loans, and so we
    want them to be healthy for that reason, if no other. And then
    all SBDC clients, you hope, will get to a critical mass where
    they are in need of long-term fixed-rate financing that a 504
    program provides. So that alignment, I think, is important. And
    I think that we are somewhat unique in doing that in terms of
    the other CDCs around the United States.
        Second thing, we are trying to strive for our programs to
    be community sensitive. And I will tell you a story. About 2
    years ago, a company called the Good News Brewing came to--an
    entrepreneur came to us with an idea to set up a microbrewery
    in an area in St. Charles County that would not be considered
    to be trendy or chic and maybe out of favor.
        And through that process, we found that there was indeed a
    market. And fast forward, they now have a thriving microbrewery
    business. Now they have come back to us for a second idea,
    again in an area that is not particularly in favor, to open a
    really kind of high-end coffee shop. You know, it is something
    that--and this one will work too.
        That kind of synergy between the best of the SBDC and the
    best of the financing programs will be--you know, has really
    borne fruit, and I think it potentially could be a game changer
    for this kind of older area of St. Charles County. And I think
    that story you could find all across the United States, and I
    know I could tell you dozens of them, but that would be an
    example.
        And, finally, we are able to do this because of strong
    partnerships. I mean, the--certainly the EDC made a difference
    in this particular company. But, you know, between the
    University of Missouri, obviously the SBA, the city of
    O'Fallon, St. Charles County government, all of them had to
    coalesce around the goal of helping this individual small
    business and other businesses just like them.
        No one participant had all the ingredients to get this job
    done, but together they did. And this is a success story, and
    it is not a bad day's work for all of the people involved in
    this kind of thing. So, on behalf of businesses and communities
    in St. Charles County, I want to give you thanks. Zero, phew.
        Chairman CHABOT. Right on the dot. Thank you very much. We
    appreciate it.
        Mr. PRESTEMON. Sure.
        Chairman CHABOT. Mr. Miller, you are recognized for 5
    minutes.

                       STATEMENT OF DEREK MILLER

        Mr. MILLER. Chairman Chabot, Ms. Clarke, and members of the
    Committee, thank you for the invitation to speak to you today
    about Utah's thriving small business ecosystem.
        Utah's economy is one of the best in the nation. Utah ranks
    number one in the U.S. for job growth and enjoys consistently
    low unemployment. I am proud to say that small business is at
    the heart of this success, with over 277,000 small businesses
    that make up 99 percent of Utah companies and 57 percent of
    total employees.
        Now, you may be asking yourself, as a visiting Chinese
    diplomat asked me recently, how did a state I have never heard
    of become the fasting growing economy in the United States of
    America? I want to share with you what I shared with this
    diplomat, four areas that I believe are fundamental to Utah's
    economic success.
        The first is a growing and educated workforce. Any business
    will tell you, if they can't find good people, then nothing
    else matters. Utah's public education system has a strong
    partnership with our business community to identify and fill
    gaps in our workforce. One way this collaboration is evident is
    through the Talent-Ready Utah Initiative, which includes
    technical training for students throughout high school so they
    graduate not only with a degree but with a high-wage, high-
    demand job.
        The second factor is taxes and regulation. Utah benefits
    economically from our flat 5 percent personal and corporate tax
    rate. Low taxes are important to small businesses, but equally
    important is a stable tax rate. Utah's tax rate has not risen
    in nearly 20 years. In 2011, the state conducted one of the
    most thorough regulatory reviews in the nation. The experience
    that gave rise to this reform was a small business owner who
    wondered aloud, why can I not fax or email my license renewal
    instead of having to mail it? The question spurred a regulation
    review, caused us to look at the regulation, and sure enough,
    the rule only allowed for mail--no email, no fax, and certainly
    no online renewal. A closer inspection showed that the rule was
    written in 1973. Based on this experience, Governor Herbert
    asked each member of his cabinet to review every state
    regulation and asked two simple questions: Does the rule impact
    business, and what is the public purpose? In nearly 400
    instances, there was no good answer to that second question,
    and so those rules were either modified or eliminated.
        The third factor is incentives. Incentivizing business
    creation and sustainable growth is key to Utah's thriving small
    business ecosystem. There are several State programs that
    assist new and existing businesses. One example is the Utah
    Science, Technology, and Research, or USTAR, Initiative that
    specifically assists startup and early stage tech companies,
    like ENVE Composites, a small business that designs and
    manufactures carbon fiber bicycle wheels and components.
        The final area is international trade. It may surprise you
    to find out how important trade is to an inland state like
    Utah. Trade is not killing Utah; in fact, in Utah, Utah is
    killing it when it comes to trade. Let me share with you a
    story that illustrates the point. Butcher's Bunches makes all-
    natural fruit preserves. The Butcher family began selling their
    product at a farmers' market in Park City to tourists from
    around the world. They began asking Liz Butcher how they could
    buy her jam at their home. Liz had never considered selling
    outside of the United States, but the encouragement from her
    customers gave her the confidence to try, and today she sells
    to Japan, the U.K., France, Australia, Canada, and Dubai.
        These are all ways, I believe, Utah is doing it right when
    it comes to supporting small businesses, but that does not mean
    that those companies don't face challenges. In fact, in some
    rural areas of our state, the economic story is very different
    from what I have just described.
        To address this, Governor Herbert set a goal to create
    25,000 jobs in 25 rural counties. I was grateful to lead the
    25K jobs tour that kicked off this goal. Over 20 business
    service providers visited the 25 rural counties to connect
    local businesses and job seekers with available tools and
    resources.
        Based on my experience on the 25K jobs tour, may I just
    mention what I think is the most important element of Utah's
    economic success: That is our people. Utah's small business
    owners, whether in urban Salt Lake City or rural Salina,
    epitomize our state's motto of industry. They are good,
    hardworking people with a strong entrepreneurial spirit. Utah's
    pioneering heritage is alive and well across the state from
    Grouse Creek to Montezuma Creek. Thank you again for the
    opportunity.
        Chairman CHABOT. Thank you very much.
        And the buzzer just went off. We have 15 minutes so we
    should be able to get through the final two, if they keep on
    their 5 minutes as these two did.
        So, Ms. Wagner, you are recognized for 5 minutes.

                      STATEMENT OF VANESSA WAGNER

        Ms. WAGNER. Great. Thank you.
        I would like to begin by thanking the Congressional Small
    Business Committee for inviting me to testify today on behalf
    of Loudoun County Economic Development and our small business
    partners.
        As a Small Business Entrepreneurship Manager, I am charged
    with building an entrepreneurial ecosystem to ensure we have
    the programs, people, and places so that our small businesses
    can thrive. While my focus is on technology startups, the
    programs we support help our Main Street businesses as well.
        So one of the things I would like to urge today is building
    an ecosystem around your community's unique advantages will
    prove more sustainable and impactful than placing a trend in
    the middle of your city.
        What I learned in my experience--and I will admit, when I
    started as a stakeholder, I wanted to hit all the buzzwords. I
    wanted to find out all of the new coworking spaces, the venture
    capitalists. I chased around all of the pitch events. What I
    quickly learned in my role is that we already had the resources
    we need in Loudoun County to be successful.
        And one of those biggest resources I encourage people to
    look at and identify is the existing businesses within their
    community. By utilizing a mix of your legacy businesses, your
    large giants, in addition to your small, growing companies,
    that is where you are going to find the talent and the
    experience as well as the inspiration for your next generation
    of businesses.
        I want to start by talking about some of the giants in your
    community or the legacy businesses that could help support an
    entrepreneurial ecosystem. In Loudoun County and the D.C.
    region, one of the most impactful organizations in our history
    remains America Online, or AOL. From 1994 through its growth
    into the 21st century, AOL had a giant impact on our region.
    Not only did they develop the region's technology workforce but
    also the spirit of innovation.
        When AOL moved its headquarters from Dulles to New York in
    2007, it continued to have an impact on our region. It left
    behind a wake of tech talent but also executives that later
    became future founders as well as angel and institutional
    investors for our next generation.
        Even after the presence of AOL began to slow down, the
    company continued to have an impact. They worked to create an
    incubator within their walls, allowing new startups to come
    inside, utilize the existing infrastructure, the talent that
    they had, the human resources, and today, our region is
    benefiting from the results of these efforts. In Loudoun County
    in particular, that has inspired a new wave of startups,
    companies like MilAdvisor, ThreatQuotient, ParkMyCloud, X-Mode
    Social, and many others in the area.
        As the Entrepreneurship Manager in Loudoun, I didn't seek
    to change what was working with this legacy business or their
    impact; rather, it was my role to promote this opportunity to
    the right startups. This could be as simple as an email
    introduction or sponsoring events to be hosted at the facility
    so that new entrepreneurs could be inspired by the potential.
        These relationships--as Fishbowl Labs did end up leaving
    Loudoun County, the relationships forged still continued to
    help our community because when those companies were suddenly
    finding themselves without a home or an incubator, we were able
    to work with another entrepreneur in the community to place
    them in a new building, Terminal 68. At that time, one of the
    companies, X-Mode Social, only had 10 employees, but through
    the investment of time made from the entrepreneurs and the
    talent already in our community, that company had 10 employees
    back in August and is now pushing 40. And that is utilizing our
    legacy resources.
        But relying on the largest employers is providing a
    disservice to your entrepreneurs. Facilitating introductions
    and relationships to your growing companies and early stage
    entrepreneurs should be included in any community strategy.
    Loudoun small business partners leverage growing firms such as
    Omnilert, Cofense, Telos, K2M, amongst others. The advantage of
    working with this new cohort of technology firms is that they
    can provide recent examples of challenges and solutions faced
    in building their business.
        Our growth firms are invested in the region because, as
    they say, all ships rise with the tide. A community has to seek
    unique ways to make these interactions. For us in Loudoun,
    leveraging our chamber in the Loudoun Technology Coalition is a
    natural way.
        For example, our cybersecurity firm Telos, one of the
    fastest growing cyber firms in the country, they sponsor the
    tech coalition and work to enhance the programming there. Just
    last week, we had three executive members from Telos sit with
    our small startups, our entrepreneurs, our solopreneurs to talk
    about trends in cyber. And when I left, conversations were
    still going. So the results of these interactions is still yet
    to be known.
        So, when entrepreneurship catalysts are seeking to build
    onto their entrepreneurial ecosystems or their resources, they
    don't need to look much further than their existing businesses.
    This is where you are going to find strong assets for
    mentorship, experience, and support in building your next
    generation of entrepreneurs.
        My testimony focuses on examples related to technology
    enabled firms, but if I had more time, I could easily sit here
    and give you examples of how this helped our rural community,
    our craft beverage industry, and many more. One size does not
    fit all for entrepreneurship, and I encourage you to look at
    your existing resources first. Thank you.
        Chairman CHABOT. Thank you very much.
        Mr. Bishop, you are recognized for 5 minutes.

                       STATEMENT OF GREGG BISHOP

        Mr. BISHOP. Thank you. Good morning, Chairman Chabot, and
    sitting in for Ranking Member Velazquez Representative Clarke,
    and other members of the House Small Business Committee. My
    name is Greg Bishop, and I am the Commissioner of the New York
    City Department of Small Business Services. I thank you for
    this opportunity to testify before the Committee and share some
    of the great work and best practices that we are seeing in New
    York City.
        At SBS, we aim to unlock economic potential and create
    economic security for all New Yorkers by connecting them to
    quality jobs, building stronger businesses, and fostering
    thriving neighborhoods. Unlike other city agencies that work
    with businesses, we do not enforce regulations but rather
    provide the necessary services to help them start, operate, and
    grow.
        We provide services to New York City's 230,000 small
    businesses through our network of seven Business Solution
    Centers and eight industrial business service providers. At
    SBS, we know that small businesses are essential to the local
    economy and character of our neighborhoods. Despite the fact
    that small businesses face challenges due to unprecedented
    growth New York City has seen in recent years, our small
    businesses continue to grow.
        Over the last 10 years, the number of businesses in New
    York City have increased by 10 percent according to the U.S.
    Census County Business Patterns report. That is why I believe
    it is critical for municipalities to incorporate small
    businesses into their economic development strategy because it
    not only helps small businesses grow but also provides their
    city with good jobs, vibrant neighborhoods, and a better
    quality of life.
        Many small businesses struggle to access credit so SBS
    provides free financing services through our business centers.
    We work regularly with more than 40 different lenders, the
    majority of which are community development financial
    institutions and other financial institutions. CDFIs play a
    critical role in our efforts to providing financing to
    businesses that are not able to access traditional bank
    financing.
        Since the start of this administration, SBS has connected
    approximately 1,800 businesses to over $155 million in
    financing. As we see businesses grow in New York City, the city
    has also implemented necessary regulations to worker
    protections. Regulations are important to ensure health and
    public safety, but they should be fair and not overly
    burdensome to small business owners.
        In 2015, the mayor launched Small Business First, a major
    multiagency effort to reduce the regulatory burden and help
    businesses understand and comply with city regulations. To make
    it easier, we built a state-of-the-art NYC business portal to
    serve as a central repository of key business information and a
    single place for business interactions with the city.
        On the NYC Business Portal, a business owner can create an
    account, link their licenses, permits, inspections, and
    violations from city agencies onto one dashboard. In 2017,
    there were more than 1 million visits to the NYC Business
    Portal.
        A key focus of our work is ensuring our program is
    accessible to all New Yorkers, including women entrepreneurs.
    Through extensive research and outreach, we developed WE NYC, a
    series of programs to address the most common challenges women
    entrepreneurs face.
        Most recently, we launched WE Fund Crowd, a city-led
    crowdfunding program that helps women entrepreneurs access
    affordable capital and start businesses. WE NYC has been a
    great success and other cities have taken notice, with Boston
    recently launching their own women entrepreneurs Boston program
    modeled on WE NYC.
        Growing up with my grandmother in Grenada, who supported
    our household as a women entrepreneur, I came to understand
    firsthand that business ownerships can empower family and
    support greater economic opportunity for future generations.
        With approximately 6 out of 10 New Yorkers being either
    immigrants or children of immigrants and nearly half of small
    businesses owned by immigrant entrepreneurs, New York City has
    always been and will continue to be a city of immigrants.
        To that end, SBS created Building Your Business in New York
    City, a guide for immigrant entrepreneurs which is available in
    seven languages. Through the use of the city's purchasing
    power, the New York City Minority and Women-owned Business
    Enterprise Program aims to support the growth of minority and
    women-owned businesses and ensure our vendors reflect the
    diversity of our city.
        At SBS, we provide essential capacity-building services and
    technical assistance so businesses can compete for and execute
    government contracts. The Procurement Technical Assistance
    Center, funded in part by the Department of Defense and
    administered by the Defense Logistics Agency, offers critical
    support to small businesses.
        We believe that in order for small businesses to gain and
    sustain growth, they must be prepared to take advantage of
    multiple revenue streams, particularly minority, women,
    veteran, and service-disabled veteran-owned businesses that
    have historically not had access to government contracting
    opportunities.
        As you can see, New York City has made small businesses a
    priority, and as a result, we have seen them flourish. We hope
    municipalities from across the country use New York City as a
    model and replicate our successes by recognizing the strength
    and diversity in our city and helping immigrant women, black
    entrepreneurs, and other entrepreneurs of color to grow
    thriving businesses and careers. We are ensuring every New
    Yorker has access to economic security while growing our city's
    economy.
        Thank you for the opportunity to share the importance of
    small businesses in New York City and cities across the nation.
    I look forward to your questions.
        Chairman CHABOT. Thank you very much. We appreciate all the
    witnesses for staying right on time. We appreciate it.
        We are going to be in recess for a little while. We have
    votes. And then we will be back here to follow up with
    questions. So I would encourage all members to come back as
    quickly as they can after votes, and we are in recess.
        [Recess.]
        Chairman CHABOT. The Committee will come back to order, and
    we will hopefully be joined by some of our colleagues here
    shortly.
        And we have been joined by our Ranking Member, the real
    Ranking Member, Ms. Velazquez, although Ms. Clarke did a fine
    job filling in for her.
        So I recognize myself for 5 minutes. My first question, Mr.
    Prestemon, you had mentioned that one of the loan programs that
    you deal with in your capacity is the 504 Loan Program. And,
    you know, we hear a lot about the 7(a) Loan Programs; the 504,
    not quite as known by the public.
        And I know that--we have Hamilton County Development
    Corporation back in my area in Cincinnati, Ohio, and they do
    use that program a lot. Could you kind of tell folks who may
    not be familiar with it how it works and how businesses can
    take advantage of it.
        Mr. PRESTEMON. Sure. The 504 Program is a long-term, fixed-
    rate, fixed-asset program, so, you know, typically, 20-year
    amortization, and it is always done in partnership with a bank.
    So, basically, the bank lends at the end of the process 50
    percent of the proceeds, and we come in as the agents for the
    SBA to underwrite the other 40 percent and then the borrower
    would typically have a 10-percent equity.
        Chairman CHABOT. Okay. And in general, how would a small
    business qualify for that program or try to take advantage of
    it?
        Mr. PRESTEMON. Yeah. Well, they need to be--first of all,
    they need to have a reasonable cash flow, so they need--it is
    underwritten to standards very similar to what any bank would
    underwrite it to, so they have to be able to show they can
    cover debt service. And they have to be financing a fixed
    asset, so land, building, machinery, and equipment. But there
    is--virtually any kind of business can be financed through it
    as long as it has a fixed asset that would be financed.
        Chairman CHABOT. Okay. Thank you very much.
        Mr. Miller, I will turn to you next. You had mentioned in
    your testimony--I thought it was interesting; you mentioned in
    particular a program. I think your Governor in your state, you
    had gotten rid of a bunch of regulations which, you know, no
    longer really made any sense. How important is it for us at the
    federal level and also for local communities to get rid of
    regulations that really don't have any real purpose anymore?
        Mr. MILLER. Thank you, Mr. Chairman.
        I recognize that sometimes when we talk about regulatory
    reform, that can be viewed as a political issue or even a
    partisan issue, but I don't believe it needs to be. And the
    reason I shared the story that I did about the not being able
    to email or fax, I think, is a good illustration of the many
    regulations, at least in Utah, that we found were on the books.
    No one had ever gone back and looked at it again, you know. Of
    course, a law that was written in 1973 wouldn't talk about
    email, wouldn't even talk about fax, and certainly wouldn't
    talk about online.
        But we like to say in Utah that regulations are like weeds
    in the ditch. They just build up, and they impede the flow of
    commerce, unless you go back on a regular basis and look at
    what has been outdated, look at what doesn't make sense
    anymore, and look at what needs to be updated, and certainly,
    when we talk to small businesses in Utah, what they tell us--
    they were grateful for the regulatory reform on the State
    level, by the way--but what they tell us would not surprise
    you, which is that regulatory review needs to happen on a
    Federal level as well.
        Chairman CHABOT. Thank you very much.
        Ms. Wagner, I will turn to you next. How do you market your
    community, like Loudoun County and the area, to prospective
    businesses in the areas--well, when it comes to such criteria
    as anticipated operating costs, operating conditions, quality
    of life, those types of things, how do you--you know, how do
    you go about marketing those when you are trying to get folks--
    attract people to your community?
        Ms. WAGNER. Sure. Thank you, Mr. Chairman, for the
    question.
        In Loudoun County, we have a team of over 20 members that
    represent different industry sectors, those from agriculture,
    aviation, transportation, cybersecurity, health information,
    and those individuals go out and identify opportunities in
    conjunction with our marketing team and strategic initiatives
    team, companies from across the globe really to identify
    companies that might be looking at new office space, expansion,
    and making sure that we have solutions to their problems or
    identify opportunities that fit that particular industry
    cluster.
        Chairman CHABOT. Okay. Thank you very much.
        And, Mr. Bishop, I will turn to you with the remaining time
    that I have. You are from New York City, and I represent the
    city of Cincinnati, most of it, as well as the surrounding
    area. Are there advantages and disadvantages that urban areas
    like your community in New York has, say, compared to the State
    of Utah or the State of Mississippi when it comes to marketing
    and arguing, you know, the good things you have versus the
    challenges? What are kind of the advantages or disadvantages
    that you like to key in on when you are talking about an urban
    area like New York?
        Mr. BISHOP. Yeah. So thank you for the question, Mr. Chair.
    So I think New York has--one of the advantages, of course, we
    are a global city. And certainly there is a diversity of a
    consumer base for a small business. There is certainly a number
    of resources that small businesses can tap into, not only in a
    local level but on the federal level in terms of actually
    helping grow their business.
        I think that also leads to the disadvantage in the fact
    that there is a lot of price pressures, and we may not be as
    forgiven in terms of, if you do not have a solid plan or you
    are not sure of how to actually grow your business, you know,
    in an urban area, where you may be able to--you may not be able
    to recover as quickly if you are in a rural area, for example.
    There is a lot more competition.
        So what we do is we really try to make sure that small
    business owners are equipped with the necessary tools, not only
    to help them plan out their business but grow their business,
    but also we provide a lot more resources for some of the things
    that business owners may not know what they need to know.
        Chairman CHABOT. Thank you very much. My time has expired.
        The Ranking Member, Ms. Velazquez, is recognized for 5
    minutes.
        Ms. VELAZQUEZ. Thank you, Mr. Chairman.
        And, Mr. Bishop, thank you for sharing--being able to come
    here today and share your insights as to----
        Mr. BISHOP. Thank you.
        Ms. VELAZQUEZ.--how can we improve small businesses
    opportunities.
        I would like for you to talk to us about your agency's
    initiatives that is undertaken to help immigrants succeed, and
    what are the economic benefits in doing so?
        Mr. BISHOP. So, as I mentioned in my testimony, New York
    City is an immigrant-rich city, and certainly, when you look at
    our 230,000 small businesses the assumption is that the larger
    businesses are actually the economic drivers of the city in
    terms of the workforce, but it is actually our small
    businesses.
        Our small businesses employ over 3.9 million New Yorkers,
    and over 52 percent of those small businesses are owned by a
    foreign-born New Yorker. So it is essential for us to connect
    with immigrant communities. It is essential for us to provide
    resources to immigrant communities.
        So we actually have worked not only in developing programs;
    we have worked with the private sector as well in terms of
    funding some of these programs. So we work with local
    organizations to tap into some of those communities, to connect
    to our resources because, most likely, entrepreneurship is
    something that immigrants would veer to, and certainly, if they
    are creating businesses, then they are creating jobs within the
    community. So that is important to New York City.
        Ms. VELAZQUEZ. Thank you.
        One of my top priorities in this Committee as the Ranking
    Member is helping the traditionally underserved communities
    access capital. What can you share with us in the federal
    government that you are doing in New York to help women and
    minority communities access capital.
        Mr. BISHOP. Right. So thank you again for that question.
    One of the things that we are doing--particularly when we did
    our outreach to women entrepreneurs, we found out that women
    entrepreneurs face other barriers than their male
    counterparts--so we built out a program called WE NYC
    specifically for women entrepreneurs that not only covers
    access to capital. We have teamed up with an organization
    called Kiva where the city is now putting in the first 10
    percent of their loan request. That is up to $10,000. We also
    are putting together resources for women entrepreneurs to
    connect with other successful women entrepreneurs. Mentorship
    is one of the biggest things that we found that women
    entrepreneurs were looking for. Access to capital was the
    other. And then some of my colleagues have talked about in
    terms of recruiting and finding the right workers.
        In terms of helping minority business owners, the city of
    New York is using its purchasing power. We spend anywhere
    between $12 billion and $13 billion a year to run the city, and
    we want to make sure that a percentage of that actually
    connects to small business, especially minority and women-owned
    businesses.
        But access to capital is an issue for minority
    entrepreneurs. So we actually created a $10 million fund where
    we--business owners can borrow up to $.5 million if they have a
    city contract. So that helps that business not only mobilize on
    the contract but build their credit to then become a bank-
    worthy customer.
        Ms. VELAZQUEZ. Thank you.
        Mr. Prestemon, the gender wage gap is an issue across the
    country. It is my understanding that, in St. Charles County,
    men earn an average of 1.4 times more than women. Are there
    ways your organization can incentivize businesses to close that
    gap?
        Mr. PRESTEMON. Oh, boy. I am not familiar with that
    statistic specifically. I can tell you that I am not--I would
    say that about 40 percent of the entrepreneurs that we work
    with are women-owned businesses. So women are certainly active
    participants in the ecosystem, the entrepreneurship ecosystem
    of St. Charles County as well as in the St. Louis area.
        But I think, you know, the wage gap, it is kind of above my
    pay grade in terms of----
        Ms. VELAZQUEZ. Sure.
        Mr. PRESTEMON.--our ability. We don't have a policy-setting
    role.
        Ms. VELAZQUEZ. Okay. So I am going to give you an easy one.
        Mr. PRESTEMON. Thank you.
        Ms. VELAZQUEZ. So the United States is losing manufacturing
    jobs to outsourcing every day. However, St. Charles County's
    top employer is the manufacturing sector----
        Mr. PRESTEMON. Right.
        Ms. VELAZQUEZ.--accounting for 26,000 jobs. What can the
    federal government and other municipalities learn from your
    ability to attract manufacturing jobs?
        Mr. PRESTEMON. Well, although I was--I can't take credit
    for it from the EDC standpoint, I think that we have a vibrant
    workforce and a workforce development system that is working
    well. So our community college has been actively engaged with
    training and retraining workers.
        We were very fortunate that General Motors, even in the
    aftermath of the downturn in 2007 and 2008, ended up expanding
    in St. Charles County, and that has driven a good portion of
    those jobs based in St. Charles County. Manufacturing is a big
    targeted sector for sure, and we are seeing successes all
    around us.
        Ms. VELAZQUEZ. Thank you.
        I yield back.
        Chairman CHABOT. The gentlelady yields back.
        The gentleman from Utah, Mr. Curtis, is recognized for 5
    minutes.
        Mr. CURTIS. Thank you, Mr. Chairman and the Ranking Member.
    It is a delight for me to be here.
        I am grateful for all four witnesses, but I will give you
    some bias that, Mr. Derek Miller from Utah, particularly
    pleased to be here with you. Thanks to all of you for making
    this trip, and, Derek, thanks for coming.
        I don't think it would be--hopefully, Mr. Chairman, it
    wouldn't be out of line if I gave a shout-out to Mr. Miller's
    family who has accompanied him on this trip and is here with us
    today. Thank you for joining us.
        Mr. Miller, you have served as a CEO for the Salt Lake
    Chamber. You are serving now in that role. You have served as a
    CEO for the World Trade Center. You were the Chief of Staff to
    the Governor of our State. You have spent some time back here.
    Thank you for bringing all those qualifications with you today
    to answer some of these questions.
        It makes me really proud to come from Utah where we are
    doing so many things right, but we need to continue to improve,
    especially for our small businesses. We are really proud of the
    work we have done with deregulation. Could you speak to how
    important it is that we don't overregulate particularly our
    small businesses, and, in addition, what else can we be doing
    here in Washington for our small businesses?
        Mr. MILLER. Thank you, Mr. Curtis. It is great to be here
    with you and the other members of the Committee. And I shared
    the story about the email already, and I think there may be
    some who would think, you know, come on, that is a small thing,
    you know, being able to email a business license instead of
    having to send it by U.S. Postal Service. And it is true. It is
    a small thing.
        But I guess the point that I want to make is that small
    things matter a lot to small businesses. Small businesses bear
    a disproportionate share of the burden when it comes to
    regulations because often they are either a family-owned
    business or a sole proprietor. They don't have resources. They
    don't have time to hire an army of lawyers to go out and study
    this stuff. They don't have the resources or the time to have
    compliance officers in their business. They are just working
    hard every single day to try to be a successful business, live
    the American Dream for themselves and their family.
        And so you asked the question, what could the federal
    government do? I think it would be a great place to start by
    doing what we did in Utah, which is to look at those
    regulations. It doesn't have to be political. It doesn't have
    to be partisan. But those that are just simply outdated, those
    small things add up to be a very large burden to our small
    businesses.
        Mr. CURTIS. I appreciate you pointing that out. Sometimes
    we think, well, they can just send that off to another
    department to have it done, right, and that is usually----
        Mr. MILLER. And they are the other department.
        Mr. CURTIS. They are the other department.
        We are experiencing an unusual economy in Utah and have for
    a number of years. Your unemployment in the Salt Lake Valley is
    3 percent or maybe slightly less than 3 percent and in Utah
    County. A lot of my district is rural, and in some places, we
    are in double-digit unemployment.
        Can you address your thoughts on what can we do and how can
    we team with you and local leaders to help the rural economy
    and the rural small business owners.
        Mr. MILLER. Sure. Thank you for that question.
        So, when we went out on our 25K Jobs Tour, we discovered a
    couple of things. The first one is we have some parts of our
    state where the greatest challenge for the business is finding
    qualified workforce. That is their number one top challenge.
        Yet we go out to some of the rural counties in our state,
    and their greatest challenge is finding jobs. Okay, well, you
    know, I don't claim to be a genius, but I can at least add two
    and two. And when you do put two and two together what you
    realize is that there are opportunities, especially in today's
    economy with so many of the tech businesses that you represent
    in your district, Congressman, who they have jobs that don't
    need to be located at headquarters, whatever headquarters
    means.
        There is an opportunity to take those jobs, either by
    telecommuting or other technology, so that we are leading an
    effort right now that is part of Governor Herbert's 25,000 jobs
    goal to challenge our businesses that are part of the Salt Lake
    Chamber, challenge them to do a thorough review of the jobs
    that they currently have unfilled to identify which of those
    jobs don't need to be located along the Wasatch Front or our
    urban core, and then we will help them connect with the local
    Chambers of Commerce and work with them to match the unfilled
    job with the person in those rural communities who is looking
    for a job.
        Mr. CURTIS. I hope you will consider me and my colleagues
    partners in this, whether it is nothing more than the bully
    pulpit or facilitating or work that we can actually do here,
    but I definitely want to be a partner in that goal. It is a
    great goal.
        Lastly, you described in your testimony that trade is not
    hurting Utah but actually helping. Could you elaborate on that
    and talk about why and how that is so important in the State of
    Utah?
        Mr. MILLER. Sure. Utah, as I mentioned, is a trade State.
    If we were only selling to our 3 million citizens, we would not
    be seeing the economic success that we are. Nevertheless, we
    recognize that free trade is good, but it has to be fair trade.
    So we believe that, and we believe that Congress also ought to
    assert its role in making sure that, for example, NAFTA is
    modernized. If we are going to pull out of other trade
    agreements, like the TPP or the TTIP, then let's put something
    in its place.
        Our small businesses need rules-based trading. Again, they
    don't have the opportunity to go out and make those deals on
    their own. They look to the U.S. Government. They look to you,
    Members of Congress, to go establish their rules for them that
    will give them the predictability and the stability they will
    need to continue to be successful.
        Mr. CURTIS. Thank you.
        I am out of time, Mr. Chairman, but I would love just to
    underline that predictability that they are looking for that we
    need to give them. Thank you very much.
        Chairman CHABOT. Thank you very much. The gentleman's time
    has expired.
        And we are going to go briefly into a second round. We had
    votes, as you know, that interrupted this, and unfortunately,
    many of our members had other things they then had to go to. We
    usually don't have votes in the morning that interrupt us, but
    we had a lot of business this week that we had to take care
    of--still do--so I apologize for that.
        So I just have one question that I will throw out, and
    anyone who would like to take it can, or if you want to go down
    the line, we can do that too. The question is this: Many
    communities use geographic targeted economic development
    programs to create jobs and attract investment.
        What role do small businesses play in neighborhood
    revitalization plans, and have you ever--are there any
    socioeconomic returns that you have observed over the years in
    this area? So whoever wants to tackle that is--you are welcome.
        Ms. Wagner.
        Ms. WAGNER. Sure. When we talk about geographic targeted
    plans, one of the opportunities we take advantage of in Loudoun
    County is we do have a designated HUBZone program. And we work
    very hard to foster our government contractors that are in that
    sector that are small businesses by providing resources through
    our Small Business Development Center, partnered with George
    Mason University's Procurement Technical Assistance Program, as
    well as with our Loudoun Chamber's Government Contracting
    Initiative because helping those HUBZone companies, they are
    hiring within the HUBZone, which is historically an
    underutilized business district, for those not familiar with
    that, and we are creating jobs in that community by supporting
    the entrepreneurs in our HUBZone in Leesburg, Virginia.
        Chairman CHABOT. Very good. Thank you very much.
        Any of the other panel members like to address that? Mr.
    Miller.
        Mr. MILLER. Thank you, Mr. Chairman.
        You are probably thinking I haven't bragged on Utah enough.
    So I will just take another moment. We have great geographic
    assets from our Rocky Mountains in the northern part of the
    state to our Red Rock in the south, and we use that to our
    advantage in a couple of ways: The first one, of course, is the
    quality of life that it presents there.
        And when I talked earlier about the need that we have for
    talented workforce, you can believe that we use that quality of
    life to market the heck out of Utah and attract talent from all
    around the world to come and work in our businesses.
        We are the fastest growing state in the nation, and most
    people think that comes from a high birthrate, but that is only
    half the story. That is something we do in Utah very well, by
    the way, is have families. But half of our population growth
    comes from net in-migration, people moving into Utah.
        And the second way that we use that is in the economic
    clusters that we have identified where we believe we have a
    competitive advantage, and one of those is our outdoor
    recreation industry. So we have not just the talented workforce
    to build all of the equipment that can be used to recreate
    outdoors, but we also have the playground to go out and test
    the equipment.
        Chairman CHABOT. Very good. Thank you very much.
        Any of the others? Yes, Mr. Bishop.
        Mr. BISHOP. So one of the things--I can't let the gentleman
    from Utah show up New York State, New York City. But one of the
    things you will hear consistently is that, you know, small
    businesses are essential to the success of all our communities.
        Certainly, in New York, we focus--because, you know, in
    Brooklyn alone, we have 3.2 million people--the city as a whole
    has 8.9--we have to make sure that small businesses understand
    some of the neighborhoods that they are operating in because
    they are just unique and distinct.
        We do have industrial business zones because we want to
    focus on maintaining the manufacturing businesses that are in
    New York City. So the businesses within those areas also have
    special services and incentives to remain in those areas to
    provide the much-needed jobs.
        And we really work to integrate the work that is happening
    in those manufacturing, because manufacturing is changing--the
    type of manufacturing is changing to make sure that we--our
    educational system actually keeps up with that. So there is a
    lot of connectivity between not only small businesses and the
    different neighborhoods of New York City but also our academic
    institutions to make sure, as you have heard all of us say,
    that our workforce is prepared for the future of tomorrow.
        Chairman CHABOT. Thank you very much.
        Mr. Prestemon, anything you want to add?
        Mr. PRESTEMON. I would just add the--I think even in a
    place like St. Charles County that is, you know, very, very
    prosperous, there are areas of the county that are not doing as
    well. And, you know, I think that the illustration that I made
    with this Good News Brewing company was that, first of all,
    there was indeed a market but that it had to be discovered. It
    wouldn't have been obvious. So I think, you know, increasing
    the sophistication of the entrepreneur in and of itself is a
    good thing.
        And then--and there is a synergy that takes place once
    investments start. You know, disinvestment cycles are tough to
    reverse, and that is--but they, you know, require, I would say,
    coordinated public investment in roads and that kind of thing.
    But also you have to find that entrepreneur that has that fire
    in his or her belly and just won't be denied, and that is what
    we found in this case, so----
        Chairman CHABOT. Thank you very much. I have got 10 seconds
    left. So I would just mention that you had mentioned
    microbreweries and how successful.
        Mr. PRESTEMON. Yeah.
        Chairman CHABOT. We have had a slew of them in Cincinnati
    that are doing very well----
        Mr. PRESTEMON. Oh, yeah.
        Chairman CHABOT.--and so it is a phenomenon this happened
    all over the country. America like its beer apparently.
        Mr. PRESTEMON. Apparently, yeah. And coffee.
        Chairman CHABOT. Yeah. Coffee as well. That is right.
        And the gentleman from Utah is recognized for 5 minutes,
    and it will be our last questioner here today.
        Mr. CURTIS. Thank you. Not that we are tag teaming on how
    great Utah is, but we don't do a lot of beer and coffee, but we
    have got great ice cream. You know, I was a small business
    owner before, and I can't tell you how many times I said to
    myself and my partners, why don't they get this in Washington,
    right?
        So I would like to give all four of you a moment to say
    what is it that you would like to express that you talk about
    around the coffee and saying, ``I wish in Washington they got
    this one thing,'' in New York, in Virginia, in Missouri, in
    Utah. Is there something that you would like me and my
    colleagues to hear? And let's start with Mr. Miller from Utah.
        Mr. MILLER. Thank you, Mr. Curtis.
        So we have talked about regulatory reform, and we have
    talked about trade deals. Let me hit what I think is the
    other--the big three, and that is immigration reform. That is a
    hot topic in Washington, D.C., right now. It is important to
    Utah. As you know, as someone who owned a business in Utah, we
    need those qualified workers. We need them to be part of not
    just our agricultural businesses, but we need them to be part
    of our tech businesses, our manufacturing businesses, all up
    and down the line.
        Utah was a state, as you know, that was founded by
    refugees, religious refugees, who at the time they got there
    were outside of the United States, had been driven out. And so
    we are a state that is very sensitive to that topic, not just
    from a business issue but from a cultural and a moral issue as
    well. And so immigration reform would be so critical to keeping
    the good thing that we have going in Utah going.
        Mr. CURTIS. That is also very timely.
        Mr. Prestemon.
        Mr. PRESTEMON. My observation would be, one-size-fits-all
    regulation that applies equally to a company of 5,000 employees
    to a company with 5 is a recipe for big problems. I hear far
    more about navigating regulatory burdens than I do about high
    taxes. Not that there is not a need for, you know, continued
    attention to tax--tax burden, but I think regulatory burden is
    the main thing.
        And I can only imagine the difficulty of crafting rules
    that work in that environment, but that is a persistent
    complaint that you will hear about. You know, it is pretty much
    to your point, if you are a really small business, you can't
    just hand this over to the regulatory division either. You
    know, you are that too.
        Mr. CURTIS. I am often out among businesses, and I say:
    Well, how did you like tax reform? And they say: Well, it was
    nice, but what has really helped is deregulation.
        Mr. PRESTEMON. Yeah. That would be what I have heard too.
        Mr. CURTIS. Ms. Wagner.
        Ms. WAGNER. For the clients I serve, which are a lot of
    technology startups, the biggest challenge they have overcoming
    is the attraction of tech talent and the availability of that.
    So investment in our technology workforce, both in uptraining
    and upscaling the current workforce as well as investing in our
    next generation of technology employment is probably the
    biggest concern facing many of my clients today.
        Mr. CURTIS. Thank you.
        Mr. Bishop.
        Mr. BISHOP. So I am going to cheat a little bit and say
    that I have two things.
        Mr. CURTIS. I would love to hear both.
        Mr. BISHOP. Certainly, you have heard it from Mr. Miller,
    the importance of immigrant and immigration. And, you know, New
    York City, as I said, is powered by immigrant entrepreneurs,
    and certainly, we want to make sure that we create
    opportunities for immigrants to create businesses because those
    businesses will hire within their communities. And I want to
    stress that. It is so important. It is important to New York
    City's economy.
        The other part, the other thing that I said that I wanted
    to make sure that you understand is that the success of
    American businesses is dependent on our workforce. And we have
    to make sure that our workforce is prepared for the
    technologies of tomorrow. And in certain areas, they are not.
        And certainly, we have to make sure we have made
    investments in New York City to ensure either through
    apprenticeship programs or working with industry to identify
    and project in the next 3 to 5 years what are the skill sets
    that those companies need in order to grow, because if they are
    not going to--if we as a country can't provide the workforce,
    then they are going to go to other countries that can, and
    certainly, we need to make sure that our education system
    provides the pipeline of the next engineers, the next computer
    programmers, et cetera. So that is very important for the
    success of our small businesses.
        Mr. CURTIS. Those were four great messages. We need to make
    sure our colleagues hear all four of those. Thank you very much
    for your time today, and I yield my time.
        Chairman CHABOT. Thank you very much. The gentleman yields
    back.
        And I spoke too soon because the gentleman from Florida,
    Mr. Lawson, who is the Ranking Member of the Subcommittee on
    Health and Technology is recognized for 5 minutes.
        Mr. LAWSON. Thank you, Mr. Chairman, and welcome to the
    Committee. I am sorry I am late, but I was addressing a small
    business group from Florida who is up on Capitol Hill. And one
    of the things that I wanted to say is that there are more small
    businesses in this country than any other type of businesses.
        Yet a lot of the incentives that states and counties,
    countries offer are for larger companies to move into the
    cities and the towns to create jobs, and we hear that all the
    time. And we have the Chambers of Commerce that are going out
    and recruiting, and most of the time, they are not recruiting
    small businesses. They are always recruiting large firms.
        What incentives are available--and specifically, if you
    have already discussed them, I would hate to go back over--for
    small businesses to create jobs that States should consider?
    And that is extremely important.
        Even from the standpoint of having served in the
    legislature in Florida for a long time, 28 years, 18 years in
    the House, 10 years in the Senate, before coming here, the
    Governors and everybody come. When they come in the state, the
    first thing they do, their focus is on recruiting those
    businesses from Canada, every place else and say we are going
    to bring more jobs, but still the largest employers are small
    business.
        So what should we focus on to make sure that small
    businesses get the same kind of consideration? And that is a
    question for everyone on the Committee, wherever you want to
    start.
        Ms. WAGNER. Thank you for that question.
        I am going to start with a line we use a lot in Loudoun,
    that no amount of incentives make a bad location a good
    location. I am proud that Virginia does offer various programs
    to support our small businesses through Virginia Jobs
    Investment Program, which provides credits and opportunities
    for small businesses that are hiring employees and making small
    investments into their infrastructure.
        We also have the CIT GAP Funds Program, which is a state
    program that is a seed venture to help our technology-based
    businesses scale up quickly. It also helps them connect with
    future investors for subsequent fundraising rounds. And we do
    put a lot of effort in Virginia into helping technology firms
    better understand the grants available through the federal
    government, like SBIR and STTR funds that really is America's
    seed fund.
        What I will say is I do feel that communities, when they
    are looking at investments or incentives for their small
    businesses, should really look at how they can maximize their
    current programs. If you can help your small business
    development centers, your chambers, those can have a greater
    reach and reach a greater amount of small businesses versus one
    or two companies that you can pour an incentive into.
        So, in Loudoun County, we support our Mason Enterprise
    Center Incubator and the Small Business Development Center so
    that they can reach--you know, this past year alone, they
    reached over 300 businesses in their programs. And that is--we
    are seeing that trickle-down effect as those companies are
    remaining in the community, adding jobs, and growing, and then
    can hopefully qualify for some of those larger incentive
    programs down the line. Thank you.
        Mr. LAWSON. Okay. Mr. Miller.
        Mr. MILLER. Thank you, Mr. Lawson, for the question. And
    you are absolutely right when you talk about the importance of
    small businesses. I can tell you, in Utah, they represent over
    99 percent of all of our businesses and the majority of the
    employees work for small businesses.
        In Utah--I happened to in a previous career run the
    incentive program for the state, and so I am very sensitive to
    the question and the issue that you have raised. In Utah, we
    created what we call the BEAR Program, the Business Expansion
    and Retention Program, specifically designed for and targeted
    to small businesses.
        However, at the time I was working for the state, our
    largest incentive program, we refer to it as the EDTIF, for
    Economic Development Tax Increment Financing Program--with that
    long name you can understand why it goes by its acronym--that
    program was only to recruit new business in the State of Utah.
        When our current Governor was elected, he asked the very
    important question: Why? Why is that program not available
    either for existing businesses or for businesses of any size?
    And so that program was modified, and I am pleased to be able
    to tell you that today more than half of all of the companies
    that receive incentives do fit in those existing small business
    categories.
        Mr. LAWSON. Okay. Mr. Prestemon.
        Mr. PRESTEMON. Oh. Well, I--actually, I do agree with you
    about the focus being on really, really big projects typically
    on economic development programs. We have not gone that
    direction in St. Charles County. But I have four Cs that we
    work off of. You know, this is my little slogan here: Counsel,
    so at a council meeting, you know, technical assistance, that
    is important to the companies; capital, which is, you know,
    through both publicly sponsored as well as other programs; I
    would say connection, which refers back to things like the
    procurement technical assistance centers and programs that
    help, again, upgrade the connection today that small companies
    have to compete for large contracts; and then my final one is
    community. That is probably the softest one of the four, but I
    think it is not to be dismissed, in that entrepreneurs tend to
    make mistakes because they are in isolation. And so anything
    you can do to bring entrepreneurs together on a regular basis
    to guide and advise each other and support, I think that
    enhances the chances of their success.
        Mr. LAWSON. Mr. Chairman, could I be granted 30 more
    seconds?
        Chairman CHABOT. Yes, indeed.
        Mr. LAWSON. Mr. Bishop, I understand you are a Rattler?
        Mr. BISHOP. I sure am.
        Mr. LAWSON. Would you care to comment on that?
        Mr. BISHOP. Of being the Rattler or--the best experience
    ever.
        Mr. LAWSON. Yeah.
        Mr. BISHOP. But I think it is important, and we are in
    line, as you probably heard from the rest of the panel. At--in
    New York, we actually have--our agency, Department of Small
    Business Services, was created to focus on small business
    services. We are actually not--we have another agency called
    Economic Development Corporation, so we actually have the two
    separate, because we know that we need to provide additional
    resources of small businesses.
        So, when a small business, when we are interacting with a
    small business, we connect them to a host of services, not only
    from education but the incentives that we have for small
    businesses. So, for example, energy cost savings, we have
    customized training grants to help those small businesses train
    their employees. So we actually created a separate and distinct
    agency focused on retaining and helping small businesses, so--
    --
        Mr. LAWSON. Okay. Thank you, Mr. Chairman. I yield back.
        Chairman CHABOT. Thank you very much. The gentleman yields
    back.
        And we want to thank our distinguished panel here both this
    morning and this afternoon. Sorry about the votes falling in
    between here and any inconvenience there, but for your
    excellent testimony. We rely on local experts like yourselves
    and your innovative strategies that you have put in place to
    better understand the needs of small businesses.
        And we are seeing success stories, I think, all over the
    country. And it is improving not only local economies but
    people's lives, and we want to thank you for being an important
    part of that and explaining to us how what we do here can help
    you to help people all over the country.
        So I want to thank folks on both sides of the aisle for
    being here.
        I would ask unanimous consent that Members may have 5
    legislative days to submit statements and supporting materials
    for the record.
        Without objection, so ordered.
        And if there is no further business to come before this
    Committee, we are adjourned. Thank you very much.
        [Whereupon, at 12:45 a.m., the Committee was adjourned.]

                                A P P E N D I X

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                            Question for the Record

                          Committee on Small Business

               Hearing: Communities That Think Small and Win Big

                                 June 20, 2018

        Congresswoman Adams Question to Mr. Greg Prestemon:

        1. Unfortunately, we know that minority-owned businesses
    are more likely to face obstacles, like difficulty accessing
    capital. According to a 2016 study, white owners were three
    times more likely to say their loans were always approved than
    were African-American owners.

        What policies could Congress implement to provide greater
    access to capital for these types of small businesses?

        Answer:

        Capital availability for small business is a daunting
    challenge in any environment, but it is particularly
    challenging for entrepreneurs from minority backgrounds.
    Uniform or ``one size fits all'' underwriting standards will
    often have the presumably unintended effect of excluding any
    borrowers operating in minority neighborhoods or for minority
    borrowers operating in predominantly white neighborhoods.
    Because my organization lacks experience in providing services
    in minority neighborhoods, I am at a disadvantage to provide
    guidance. On a general level, preserving and expanding the
    incentives for lending under the Community Reinvestment Act
    would likely be beneficial. Since much lending in distressed
    neighborhoods often is done through non-bank sources, this
    argues for strong regulatory approaches to fend off predatory
    lenders.

        Direct capital investment from micro-loan funds holds
    promise, although the administrative costs for operating such
    programs are high. Covering minimal staff and other expenses
    from program income is usually not possible. Perhaps an
    increase in grants for operating support for microlending
    organizations would be impactful. The organization that I lead
    has not engaged in microlending, primarily because we did not
    see a path to breaking even.

        In terms of programs like the 504, we would recommend
    consideration of relaxed approval standards for the 504 loan
    for minority borrowers. For example, in most instances the 504
    program will require a 20% down payment/equity injection for
    startup businesses. Lowering that requirement for minority
    borrowers is worthy of consideration.

        Finally, the Small Business Development Center program is
    extremely beneficial to small businesses, irrespective of the
    ethnic background of the owner. This program is woefully
    underfunded on a national basis. Increased appropriations for
    the SBDC program should be considered, and there could easily
    be provisions within such appropriations legislation to target
    the increased support to SBDC's with a track record of
    supporting minority entrepreneurs as well as other segments of
    the population that are at a market disadvantage. Rural
    locations have high needs and relatively low resources, for
    example.

        Gregory D Prestemon
        Chief Executive Officer
        EDC of St. Charles County
                            Question for the Record

                          Committee on Small Business

               Hearing: Communities That Think Small and Win Big

                                 June 20, 2018

        Congresswoman Adams Question to Mr. Derek Miller:

        1. Unfortunately, we know that minority-owned businesses
    are more likely to face obstacles, life difficulty accessing
    capital. According to a 2016 study, white owners were three
    times more likely to say their loans were always approved than
    were African-American owners.

        What policies could Congress implement to provide greater
    access to capital for these types of small businesses?

        Answer:

        In Utah, we recognize that access to capital is the
    lifeblood of all small businesses. At the Salt Lake Chamber, we
    run a program called the Women's Business Center of Utah that
    supports women and minority owned businesses. The Center
    provides entrepreneurial training, networking opportunities and
    business consulting including assistance in accessing capital.
    These services are provided at no cost to the women and
    minority small business owners, which is possible because of
    federal grants available for this purpose. I encourage Congress
    to continue its support of these grants.
                            Question for the Record

                          Committee on Small Business

               Hearing: Communities That Think Small and Win Big

                                 June 20, 2018

        Congresswoman Adams Question to Ms. Vanessa Wagner:

        1. Unfortunately, we know that minority-owned businesses
    are more likely to face obstacles, like difficulty accessing
    capital. According to a 2016 study, white owners were three
    times more likely to say their loans were always approved than
    were African-American owners.

        What policies could Congress implement to provide greater
    access to capital for these types of small businesses?

        Answer:

        This crucial question has been the subject of important
    research and reporting by a number of federal and nonprofit
    organizations. They all confirm that minority businesses are
    denied loans at a much higher rate than non-minority
    businesses. When minorities are able to secure loans, it's at a
    much higher interest rate than rates secured by non-minorities.
    The Congressional Black Caucus Foundation has made these
    recommendations: ``While there are laws prohibiting loan
    discrimination on the basis of face, regulatory agencies need
    to improve upon enforcing regulations at a national level ...
    the U.S. Department of Justice must ensure that these laws are
    enforced by streamlining oversight of banks and their lending
    practices ... The Government Accountability Office could also
    perform an investigation of whether or not the DOJ is
    effectively enforcing these regulations and how funds are being
    appropriated.'' Improving access to capital for minority
    entrepreneurs will ultimately result in the creation of more
    jobs and prosperity for the nation as a whole.

        (FYI: This response is based on info on pages 3 and 4 of
    the attached document. This article gives related info: https:/
    /newsonecom/3428232/barriers-to-financing-undermines-black-
    entrepreneurship/)
                            Questions for the Record

                          Committee on Small Business

               Hearing: Communities That Think Small and Win Big

                                 June 20, 2018

        Congresswoman Adams Questions to Mr. Gregg Bishop:

        1. Minority-owned businesses are an integral part of my
    District's economy. And a large source of these minority small
    business owners is Johnson C. Smith, a Historically Black
    University in Charlotte. In my state there are 10 Historically
    Black Colleges and Universities--the most in the nation--but
    there are more than 100 Historically Black Colleges and
    Universities nationwide.

        In your view, how can local officials, Chambers of
    Commerce, and other local stakeholders work more closely with
    our nation's Historically Black Colleges and Universities to
    create more small business owners?

        Answer:

        1. Importance of Historically Black Colleges and
    Universities

        Historically Black Colleges and Universities (HBCUs) are
    vital institutions that produce highly skilled and ambitious
    graduates. As an alumnus of an HBCU, I understand the
    importance of connecting with these institutions to ensure
    young black men and women know the power of entrepreneurship to
    uplift themselves, their families, and their communities. In my
    time as Commissioner of New York City Department of Small
    Business Services, I have made it a priority to meet with
    alumni associations, fraternities and sororities to raise
    awareness about our free services and resources. I would
    encourage elected officials, chambers of commerce and other
    stakeholders to build relationships with their local HBCUs and
    do the same. Some examples of how these stakeholders may work
    with HBCUs to support burgeoning entrepreneurs and jobseekers
    include:

               Hosting entrepreneurship workshops to
            provide guidance to enterprising students and alumni
            networks

               Host innovation competitions in partnership
            with HBCUs to encourage potential entrepreneurs to
            pitch their business ideas

               Work with employers to provide necessary
            workforce development training resources to students in
            growing industries. One model program could be New York
            City's Tech Talent Pipeline Residency, run by the New
            York City Department of Small Business Services, which
            works directly with employers to train undergraduate
            students, helping them develop the necessary skills to
            have a successful career in tech.

        2. Last week this Committee held a hearing on the
    difficulties small businesses, and particularly minority- and
    women-owned small businesses, face in competing for federal
    contracts. In your testimony, you talked about New York City's
    Procurement Technical Assistance Center (PTAC), which offers
    support to small businesses, including minority, women, and
    veteran-owned businesses that have historically not had access
    to government contracting opportunities.

        Can you tell us more about that Center, and how it works to
    enable these small businesses to compete in the federal
    marketplace?

        2. Procurement Technical Assistance Center

        The New York City Department of Small Business Services'
    Procurement Technical Assistance Center (PTAC) provides support
    for businesses interested in government procurement. The
    Procurement Technical Assistance Center is funded in part with
    the help of the U.S. Department of Defense and the Defense
    Logistics Agency. The services provided by the center help
    small businesses navigate the entire government procurement
    process, from bidding to completion. By empowering NYC
    government contractor's with education, mentorship programs and
    targeted workshops and training resources, we are providing
    businesses with the capacity to grow their businesses into the
    federal and state contracting arenas. Our services help
    businesses to:

               Become certified as Minority and Women-owned
            Business Entities (M/WBEs), SBD, 8(a), Small
            Disadvantaged Business (SDB), HUB Zone, Woman Owned,
            Service Disabled and Veteran Owned Business programs

               Understand how to do business with the
            government

               Learn how to respond to RFPs effectively

               Access a range of one-on-one assistance and
            training to help ease into government contracting with
            New York City, New York State and Federal agencies

        More specifically, topics covered by PTAC include:

               Introduction to Government Contracting

               Small Business Certifications

               Doing Business with General Services
            Administration

               Navigating System for Award Management

               Contract Accounting, Response to RFPs/
            Proposal Writing

                        With technical assistance to help
                    businesses understand requirements for
                    government contracts

               Teaming Arrangements and Subcontracting

               Finding the Right Contracting Opportunities

                        Includes notifications of government
                    contracting opportunities and how to locate
                    these opportunities

               Successfully performing a contract

               Managing and completing contracts,
            submitting payment requests and resolving issues with
            government agencies

        3. Unfortunately, we know that minority-owned businesses
    are more likely to face obstacles, like difficulty accessing
    capital. According to a 2016 study, white owners were three
    times more likely to say their loans were always approved than
    were African-American owners.

        What policies could Congress implement to provide greater
    access to capital for these types of small businesses?

        3. Barriers for Black Americans to Access Capital

        Due to generational inequalities in wealth distribution
    created by discriminatory local, state and federal policies,
    many black Americans face barriers to accessing capital.
    Traditional measures of credit-worthiness continue to be an
    especially difficult barrier for black entrepreneurs.
    Alternative criteria for evaluating credit-worthiness (e.g.
    strength of a business plans, testimonials from trustees,
    history of rent payments, etc.) would help address the
    persistent disparity between black and white business owners'
    credit scores.

        To make it easier for small businesses to access capital,
    SBS provides free financing services. Through NYC Business
    Solutions, one-stop business centers located in every borough,
    we match businesses with the right lender for their needs and
    business profiles and walk them step-by-step through the loan
    process. Since 2014, SBS has connected approximately 1,800
    businesses to $155,000,000 in financing. For Minority and
    Women-Owned Business Enterprises (M/WBEs) contracting with New
    York City, SBS offers the Contract Financing Loan Fund. This
    revolving fund offers loans of up to $500,000 capped at 3% APR,
    one of the lowest interest rates available in the market. Since
    the program's launch in 2017, we have lent more than $7 million
    to small businesses.

        Sincerely,

        Gregg Bishop
        Commissioner

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