[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.]
    
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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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