[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


            MEMBER DAY HEARING: COMMITTEE ON SMALL BUSINESS

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                              MAY 15, 2019

                               __________

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            Small Business Committee Document Number 116-020
             Available via the GPO Website: www.govinfo.gov
             
             
             
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                          JUDY CHU, California
                           MARC VEASEY, Texas
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                        TRENT KELLY, Mississippi
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania

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

                           OPENING STATEMENTS

                                                                   Page
Hon. Nydia Velazquez.............................................     1
Hon. Steve Chabot................................................     2

                               WITNESSES

Hon. Ed Case, Member of Congress, U.S. House of Representatives, 
  Washington, DC.................................................     3
Hon. Tony Cardenas, Member of Congress, U.S. House of 
  Representatives, Washington, DC................................     5

                                APPENDIX

Prepared Statements:
    Hon. Ed Case, Member of Congress, U.S. House of 
      Representatives, Washington, DC............................     8
    Hon. Tony Cardenas, Member of Congress, U.S. House of 
      Representatives, Washington, DC............................    10
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Hon. Gil Cisneros, Member of Congress, U.S. House of 
      Representatives, Washington, DC............................    12
    Hon. Andy Levin, Member of Congress, U.S. House of 
      Representatives, Washington, DC............................    14
    Hon. Gregorio Kilili Camacho Sablan, U.S. House of 
      Representatives, Washington, DC............................    18

 
            MEMBER DAY HEARING: COMMITTEE ON SMALL BUSINESS

                              ----------                              


                        WEDNESDAY, MAY 15, 2019

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The committee met, pursuant to call, at 11:40 a.m., in Room 
2360, Rayburn House Office Building. Hon. Nydia Velazquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Kim, Veasey, Delgado, 
Chabot, Kelly, Hagedorn, and Burchett.
    Chairwoman VELAZQUEZ. Good morning. The committee will come 
to order.
    I thank everyone for joining us this morning, and I want 
to, especially, thank my colleagues for joining us today for 
the House Committee on Small Business Members Day hearing. 
Today is a chance for the committee to hear directly from our 
fellow members of Congress about their priorities for 
supporting programs and policies that promote small business 
creation and growth.
    Our nation's nearly 30 million small businesses support 56 
million jobs and can be found in every sector of the economy 
and in every congressional district in the country. On this 
committee, we probably represent parts of America from our 
northeastern coastal cities to our rural heartland and 
communities out west. And I know that when we travel back to 
our districts, we are eager to hear from our local businesses 
to understand what policies are working for them and what can 
we improve.
    For the members testifying here today, I know that you are 
also gathering feedback from Main Street businesses in your 
districts, and I look forward to hearing more throughout this 
hearing.
    On this committee, we oversee a wide range of policies and 
programs dedicated to supporting American entrepreneurs and 
small companies. We strive to support the budding entrepreneur 
by making it easier to access affordable loans and advocate for 
fair and true tax relief for small business. It is also the 
mission of this committee to open the lucrative federal 
marketplace to entrepreneurs, reduce onerous paperwork, and 
give small companies the tools they need to take care of their 
employees and build their companies. And we do so while working 
with our Republican colleagues.
    Our committee has a long history of working in a bipartisan 
manner because at the end of the day we all agree that small 
businesses truly are the backbone of our economy. They are what 
unify us in our work and hold together our local communities.
    Today, we have the chance to engage in an open dialogue on 
how we can collaborate to support small firms. Thank you again 
to all members for being with us today. I look forward to our 
discussion and to working on your ideas to foster an 
environment that promotes small business entrepreneurship and 
job creation in communities across this country.
    I now would like to yield to the Ranking Member, Mr. 
Chabot, for his opening statement.
    Mr. CHABOT. Thank you, Madam Chair. And as we begin, I 
would just point out that both the current Chair, Ms. Velazquez 
and I have served on this Committee for over 2 decades now, and 
we have both served as Chair and we have both served as Ranking 
Member, but one thing that we do do is work together in a 
bipartisan manner and that is one of the reasons this is one of 
the most productive Committees I believe in the House, and we 
are going to continue to do that. So I thank her for that.
    It has been quite some time since we have had a Small 
Business Committee Day where we have hosted Member Day like 
this, allowing other Members of Congress to come in and tell us 
what is working, maybe what is not working in some cases in 
their communities. It kind of broadens our perspective on what 
is happening around the country. It gives us a broader, I 
think, world view of things and what issues they are facing. We 
kind of have, those of us on the Committee, we sort of have 
small business on the brain. We think about this all the time 
and not to the exclusion of everything else because most of us 
are on other Committees. I happen to be on Judiciary, where we 
just discussed executive privilege and a whole range of things. 
Last week, we were finding the Attorney General in contempt, 
and so we all are on other Committees that do interesting 
things. And I am also on Foreign Affairs and there is always 
something happening around the world, but none of that is as 
important, as far as I am concerned, as the backbone of the 
American economy. And that is America's small business, about 
30 million of those.
    So we are here to listen today and to learn, and so I want 
to thank Representative Case who had the opportunity to serve 
some years ago, and he had a sabbatical there for a while and 
now he is back and better than ever. And refreshed. And I kind 
of had that experience as well, except I lost when I left here. 
You went out voluntarily and ran somewhere else and then came 
back. So it is better to do it the way you did it than the way 
I did it. So, but we welcome you back, and I will yield back, 
Madam Chair.
    Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. And the 
gentleman yields back.
    And if committee members have an opening statement, we will 
ask that they be submitted for the record.
    I also ask unanimous consent that Representative Sablan's 
statement in support of his bill, H.R. 2603, be submitted for 
the record.
    Without objection, so ordered.
    I will begin by introducing Mr. Case, Congressman Case, 
proudly represents Hawaii's 1st Congressional District. Mr. 
Case was born and raised in Hilo. His great grandparents on his 
father's side immigrated to Hawaii in 1896 from Kansas, and his 
family has lived in many of the state's islands over the 
generations since. Before joining Congress, Mr. Case spent 2 
decades at the Honolulu law firm of Carlsmith Ball, where he 
rose to managing partner. Congressman Case serves on the 
Appropriations Committee, and I am also proud to serve with him 
on the Natural Resources Committee. Welcome, sir. You are 
recognized for 5 minutes.

 THE HONORABLE ED CASE, A REPRESENTATIVE IN CONGRESS FROM THE 
                        STATE OF HAWAII

    Mr. CASE. Thank you for that very kind introduction from 
both of you. It is great to be back in Congress, and it is 
great to be back with this Committee where I spent my own time. 
I served on this Committee, and it is good to share some 
thoughts with you again.
    I want to share those thoughts on issues of importance to 
our small business community, both nationally and in my home 
state of Hawaii. As you may remember from my prior service on 
the Committee, my focus is not only on keeping small business 
strong throughout our country but on protecting and expanding 
on Small Business Administration programs that support some of 
Nation's underrepresented populations and on insuring a level 
playing field between small business and large government 
contractors operating especially in Hawaii, issues that are not 
uncommon throughout the country.
    I want to begin by stressing that small business truly is 
the key to the success of our economy in Hawaii. According to 
the SBA, 99 percent of businesses in Hawaii are small business, 
and a clear majority of employees in Hawaii are employed by 
small business. These small businesses are the engine of the 
economy in my home state and thus, as national small business 
goes, so also does Hawaii business.
    Given the rich, ethnic diversity in Hawaii, minority-based 
programs are particularly important in my home state. Almost 93 
percent of small businesses in Hawaii are minority-owned. They 
depend on and have received great benefit from programs such as 
the 8(a) Business Development Program and the HUBZone program, 
which help provide a level playing field for small businesses 
owned by socially and economically disadvantaged peoples in 
historically underutilized business zones.
    Additionally, the Microloan Technical Assistance Program 
has been a great help in the development of native Hawaiian 
businesses, and the Women-owned Small Business Federal 
Contracting Program provides Federal opportunities to 
industries where women-owned small businesses are 
underrepresented. The continuation of these programs is needed 
to empower some of our Nation's underrepresented populations 
that are the true drivers of Hawaii's small businesses.
    Furthermore, there are many great trade opportunities for 
Hawaii's small business given its place in the Indo-Pacific 
region. Hawaii exported $647 million in goods to 100 countries 
in 2018 with small businesses generating 64 percent of those 
total exports. The state's large market in 2018 was South Korea 
at $222 million, followed by Singapore, Japan, China, and 
Taiwan. With the world's fastest growing global markets in the 
Indo-Pacific, keeping trade open within this region is crucial 
to Hawaii's economy and our Nation's standing in the region.
    The State Trade and Export Promotion Grant Initiative and 
international trade loans have been vital components in 
developing Hawaii's small business for trade with these foreign 
markets, and I urge you to continue this Committee's 
longstanding support for these programs.
    Additionally, the Federal Government, primarily through the 
Department of Defense, is the largest source of Federal dollars 
in Hawaii, and it is important to make sure that small local 
businesses have a fair chance to compete for defense dollars. 
This is why I introduced legislation in my prior service in 
Congress which would help to guarantee small business's place 
in Federal contracting through such means as combatting 
contracting bundling.
    I would appreciate working with your Committee to continue 
this fight to help ensure that huge corporations do not just 
vacuum up and win all of the defense contracts, even though 
small business throughout our country, and Hawaii's small 
business particularly, are equally, if not better qualified to 
do the work.
    Finally, I want to briefly highlight the importance of the 
SBA's Contracting Assistance Programs in Hawaii. With 1 in 10 
residents of Hawaii being a veteran, the Service-disabled, 
Veteran-owned Small Business Program has assisted numerous 
veterans in the state transition from military service to 
successful business owners. It is critical for this Congress to 
continue our Government's commitment to our veterans.
    In closing, thank you to all of you for your leadership in 
helping our Nation's small businesses, which I believe is a 
truly nonpartisan, bipartisan effort, and has been on this 
Committee, and specially for your consideration of the needs of 
Hawaii's small businesses. Mahalo.
    Mr. KIM. Well, thank you so much, Congressman, for coming 
on in here, and I am just taking the place of the Chairwoman 
temporarily here, but I appreciate you taking the time. And I 
just want to echo what the Ranking Member said, just how 
important it is for us to be able to hear about the different 
challenges and opportunities that small businesses are facing 
in every single corner of our country. So I appreciate you 
taking the time to come on out.
    I want to be mindful of your time as well. I know we are 
all very busy as well, so I just wanted to open it up and see 
if there were any particular questions for the Congressman 
while he is here; otherwise, we will take a brief recess until 
our other witness arrives.
    But I just wanted to open it up.
    Ranking member, anybody else, if you have any questions for 
the Congressman?
    Mr. CHABOT. We informed our folks we would not ask any 
questions. We usually do not do that with the members.
    Mr. KIM. Sure.
    Mr. CHABOT. And I was just thinking, I do not know when Mr. 
Cardenas is going to get here but I would have no objection to 
entering his statement into the record in full and that way we 
could accommodate him and everybody else here, too.
    Mr. KIM. Okay. Well, thank you so much.
    We are just going to take a very brief recess, see if our 
next witness arrives, and then we will proceed.
    [Recess]
    Mr. KIM. I would like to call the Committee back to order 
as we have the Congressman here who was first elected to the 
United States House of Representatives in 2013 for the 113th 
Congress and has represented California's 29th District ever 
since. Has been a leading voice representing the San Fernando 
Valley with a passion and commitment, and serves on the Energy 
and Commerce Committee. He is also a member of the 
Congressional Hispanic Caucus.
    Welcome to our Committee.
    Why do we not just jump right in as we just want to make 
sure we are mindful of everyone's time? So Congressman, over to 
you. You are recognized for 5 minutes.

THE HONORABLE TONY CARDENAS, A REPRESENTATIVE IN CONGRESS FROM 
                    THE STATE OF CALIFORNIA

    Mr. CARDENAS. Thank you, Mr. Chairman. I appreciate this 
opportunity.
    When I came to Congress, I was not familiar with the fact 
that when members in that legislative body, it is not the 
custom and practice up here for members to actually present to 
the Committee, so I really appreciate this opportunity that 
this Small Business Committee is allowing and affording us to 
share because it is really important that we constantly have an 
opportunity to remind the people that we represent that we 
represent our districts, we represent our states, but we 
represent all of America. And one of the things that I would 
like to point out about small businesses is that I think 
Americans do not realize how prolific and how important small 
businesses are to everyday lives across this great Nation. 
Whether you are in the smallest town in America or you are in 
the biggest city, I think the numbers bear out that a large 
percentage of the folks who feed their family are actually 
working in a small business. And being a representative in the 
northeast San Fernando Valley where the vast majority of the 
individuals who live in my district are Hispanic, it is 
important for me to also point out that one of the fastest 
growing groups of small businesses in American for the last few 
years and going forward appear to be the Hispanic small 
businesses, both women and men-owned businesses.
    Myself, over 22 years ago, I fed my family, completely on 
commission of owning my own business, and it was something that 
I was very, very proud of. And I take that with me in every 
office that I have actually represented over the last 22 years. 
My ability to realize that I was responsible for the front end 
of a paystub. That I was responsible for making sure that when 
people walk through those doors of my business, I had to try 
very hard that I made good decisions for everybody, not just 
for my family but for the dozens of families that depended on 
my business staying open every time they got up and went to 
work and made sure that door was unlocked and available for 
them to feed their family. And that is what is going on across 
America.
    A few things that I would like to point out that are 
important not only to me and my community but I think important 
to all Americans, especially small businesses, is that the 
Federal Government has a tremendous role to play when it comes 
to access to capital. I remember owning my business that when I 
had access to capital and I had a great idea and I was able to 
expand my business, it was having access to capital that 
allowed me to move forward at the rate and speed that I knew I 
could and should in order to grow my business responsibility. 
And I remember those times when I had to wait for the capital 
or keep going from one bank to another to another to another to 
get that small business loan to expand my business. What 
happened, ladies and gentlemen, is that that did not afford me 
to hire more people because every time I expanded my business, 
along with that meant that more families got to feed themselves 
because I hired one of their family members to work for me. And 
it is really important that we realize that the Federal 
Government in the greatest Nation on earth has a tremendous 
responsibility to responsibly allow small businesses access to 
capital. And that might mean a small business loan of maybe 
$5,000 or $10,000 or what have you, that I can guarantee you 
will eventually mean that that same business that got a small 
business loan for less than $25,000, some day is going to end 
up looking to get a loan to maybe buy the building that they 
have been occupying for many years. Or to maybe even expand and 
buy the building next door so they could actually double their 
ability to produce. And those are the kinds of things that I 
think that are important not only to us as legislators but it 
is important to every single community that needs to make sure 
that businesses are not thwarted, businesses do not slow down, 
that that progress that people work very hard to make continues 
at a pace that is organic and natural to that business and to 
that community.
    So in a nutshell, to me, when I think of small businesses, 
I think of jobs. When I think of small businesses, I think of 
that business owner who knows the name not only of their 
workers but actually knows the name of the children of those 
workers. Actually knows and comes in and says, hey, how is your 
mom, how was her surgery last week, et cetera. Those are the 
kinds of relationships that small businesses create that maybe 
some larger businesses are lucky and fortunate to have that 
kind of relationship with the people that they depend on every 
single day. But I think that is at the core of what makes small 
businesses wonderful, great, and such an organic, important 
part of every corner of America.
    So what I am here to remind all of us is we are fortunate 
to be in the United States Congress. We are fortunate to have 
the responsibility of making policy. But let us not ever forget 
that every single day there are men and women in small 
businesses that are working 50, 60, 70, 100 hours a week to 
make sure that they keep those doors open, and that means that 
the families that work there and the community they serve are 
actually benefitting from that.
    So thank you very much for this opportunity.
    Mr. KIM. Thank you very much, Congressman, for your 
passionate words there. I can really hear in your voice just 
the commitment that you have to your constituents and the small 
businesses there, and it really hits on that connection of just 
community, you know, the community that many small business 
owners, employees, and others are forming. And that is why they 
have become the backbone and continue to be the backbone of our 
society and our communities as well.
    I just want to pause here before we conclude.
    Would any other member of the Committee like to be 
recognized at this moment?
    If there are no other comments, I would like to conclude 
this hearing by once again thanking my colleagues for being 
here today. I can hear the passion and the enthusiasm in your 
voice when you talk about the ways to strengthen our Nation's 
small businesses. Many of the issues that you have raised and 
others have raised about affordable capital and providing these 
opportunities, they are the work that we here in this Committee 
in the 116th Congress are dedicated to be able to do, working 
together across the aisle to give voice to small businesses and 
make sure they are not being left behind in any policy 
initiatives or in infrastructure or tax policies.
    I encourage you to work with our staff here, our 
colleagues, on the legislation that we are talking about and we 
are trying to figure out how to address to move forward to 
address the issues that you are doing and we are going to do 
everything we can to work in a nonpartisan way to be able to 
achieve those.
    I ask unanimous consent that members have 5 legislative 
days to submit statements and supporting materials for the 
record.
    Without objection, so ordered.
    If there is no further business to come before the 
Committee, we are adjourned. Thank you.
    [Whereupon, at 12:03 p.m., the committee was adjourned.]
                            
                            
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