[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
SBA's ROLE IN CLIMATE SOLUTIONS
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HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND REGULATIONS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
JULY 21, 2021
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[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-027
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
45-123 WASHINGTON : 2021
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Dean Phillips............................................... 1
Hon. Beth Van Duyne.............................................. 3
WITNESSES
Ms. Laurel Walk, Chief Lending Officer, Colorado Lending Source,
Ltd., Denver, CO, testifying on behalf of the National
Association of Development Companies (NADCO)................... 5
Mr. Rick Chapman, General Manager and Certified Marina Manager
(CMM), The Port of Sunnyside Club, Inc., Stillwater, MN,
testifying on behalf of the Midwest Marina Association in his
role as President.............................................. 7
Dr. Lynn Abramson, President, Clean Energy Business Network,
Washington, DC................................................. 8
Mr. Mark Glenn, Owner and Chief Executive Officer, FASTSIGNS,
Carrollton, TX, testifying on behalf of the International
Franchise Association (IFA).................................... 10
APPENDIX
Prepared Statements:
Ms. Laurel Walk, Chief Lending Officer, Colorado Lending
Source, Ltd., Denver, CO, testifying on behalf of the
National Association of Development Companies (NADCO)...... 27
Mr. Rick Chapman, General Manager and Certified Marina
Manager (CMM), The Port of Sunnyside Club, Inc.,
Stillwater, MN, testifying on behalf of the Midwest Marina
Association in his role as President....................... 34
Dr. Lynn Abramson, President, Clean Energy Business Network,
Washington, DC............................................. 38
Mr. Mark Glenn, Owner and Chief Executive Officer, FASTSIGNS,
Carrollton, TX, testifying on behalf of the International
Franchise Association (IFA)................................ 46
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Clearly Clean Products, LCC.................................. 53
SBA's ROLE IN CLIMATE SOLUTIONS
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WEDNESDAY, JULY 21, 2021
House of Representatives,
Committee on Small Business,
Subcommittee on Oversight,
Investigations, and Regulations,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:01 a.m., in
Room 2360, Rayburn House Office Building, Hon. Dean Phillips
[chairman of the Subcommittee] presiding.
Present: Representatives Phillips, Newman, Craig, Chu,
Evans, Van Duyne, Hagedorn, Meuser, and Donalds.
Chairman PHILLIPS. Good morning, everybody. I am going to
call the meeting to order.
And without objection, the Chair is authorized to declare a
recess at any time.
Let me begin by saying that standing House and Committee
rules and practice will continue to apply during hybrid
proceedings. All members are reminded that they are expected to
adhere to these standing rules including decorum.
House regulations require members to be visible through a
video connection throughout the proceeding, so please keep your
cameras on. And please remember to remain muted until you are
recognized to minimize background noise. If you have to
participate in another proceeding, please exit this one and log
in later.
In the event a member encounters technical issues that
prevent them from being recognized for their questioning, I
will move to the next available member of the same party and I
will recognize that member at the next appropriate time slot
provided they have returned to the proceeding.
For those members and staff physically present in the
Committee room today, we will continue to follow the most
recent OAP guidance. Masks are no longer required in our
meeting space for members and staff who have been fully
vaccinated. All members and staff who have not been fully
vaccinated are still required to wear masks and socially
distance. I sincerely hope we do our part to protect each other
and our staff.
I will move to my opening statement.
The coronavirus pandemic may have been the most severe and
widespread shock to the global economy in recent memory. It was
a harsh reminder of the economic and social injury that come
with being unprepared. And America's small businesses have been
particularly hard hit, which is why Congress quickly
established emergency relief programs like the Paycheck
Protection Program, which has provided more than $798 billion
in economic aid to 8.5 million small businesses and nonprofits
across our country.
But throughout the pandemic, we have witnessed the
heartbreaking human cost of a slow and oftentimes uncoordinated
response and our businesses are still battling the economic
consequences.
I look forward to this Subcommittee hearing and I look
forward to future hearings on the challenges that inflation and
labor shortages are also posing to small businesses. But today,
I want to focus our attention on how the lessons of the COVID-
19 pandemic can help inform our response to another looming
crisis, and that is our rapidly changing climate.
Scientists and experts have long warned of the devastation
of a pandemic scale climate crisis, but recently, those
predictions have transformed into devastating realities. Today,
historic droughts, rising sea levels, and other extreme weather
events pose a significant risk to life as we know it and to our
businesses. In the same way that we could not have imagined how
the pandemic would alter our lives and livelihoods, we can
hardly anticipate the challenges that await us if our
conservation and sustainability efforts remain unrealized. With
small firms accounting for 99 percent of all businesses and
much of our economic growth, they will be important
participants in the fight against climate change. Businesses,
governments, and individuals have a vital role to play as we
work to manage disruption risk, invest in more resilient
infrastructure, reduce our carbon footprint, and build a green
economy.
While short-term economic challenges, such as unemployment,
supply chain management issues, labor shortages, inflation, and
shipping delays are important outstanding matters, global
environmental threats only stand to worsen if these issues in
the long term and the fact of the matter is we must be solving
for each and every one of them.
This will present monumental challenges but also immense
opportunities. By innovating to go green, small businesses can
help create new industries and great paying jobs as part of the
clean energy economy. The clean energy economy already covers
many industries that are dominated by small businesses. For
example, the construction, manufacturing, and renewable energy
sectors all have a very high percentage of small firms. In
2020, renewable energy provided 21 percent of energy
consumption in the United States and fossil fuel consumption
hit its lowest level since 1991.
As the federal government prioritizes combatting climate
change, the renewable sector will continue to grow. As the
adoption of wind and solar and other renewable energy systems
increase, small business owners stand to benefit.
Going green also presents many benefits for small
businesses on a micro level. Green energy is often the cheapest
way to power a business and switching to renewables can often
boost an entrepreneur's bottom line. Small business owners who
save money through energy efficiency improvements can
reallocate it to capital expenditures to make their enterprises
more competitive and profitable. Renewable investment can also
uplift the American economy as a whole. Seizing on the
opportunities the green economy creates can help revitalize
America's energy production, manufacturing, and position
America as a clean energy leader in the world.
These benefits make it plain that the federal government
must offer adequate incentives for businesses to go green. The
SBA has a clear role in supporting the small businesses that
want to make the transition to renewables. The agency already
has several programs that supply small firms with capital to
undergo business improvements, purchase assets, and rebuild
after disasters. It is vital that we take a close look at these
programs and find ways to optimize them to serve businesses
that wish to switch to renewables or make other climate related
decisions.
Investing in energy infrastructure improvements or
preparing a business for future weather events can be costly
endeavors as we all know. That is why the SBA's programs must
ensure that they are set up to help small businesses
confronting the realities of the climate crisis. By crafting
programs that understand the level of vulnerability small firms
face, we can better prepare for future environmental threats to
our nation, its economy, and the health of our fellow citizens.
I hope this hearing will enable us to increase the resilience
of small businesses that were very affected by the pandemic and
continue to need our support in their endeavors.
Now I would like to yield to the Ranking Member, Ms. Van
Duyne, for her opening statement.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
Small businesses are the lifeblood of the American economy.
They spur innovation, provide the majority of jobs, and keep
America's uniquely entrepreneurial spirit thriving. At the
beginning of 2020, we saw small business success at record
levels, and as everyone on this Committee is brutally aware,
the COVID-19 pandemic brought the economy to a standstill.
These shutdowns forced small businesses to temporarily close
their doors, lay off their employees, and for some shattered
their dreams entirely.
But even while enduring such a difficult moment in our
nation's history, the resilience of America's entrepreneurs
shine through. Small businesses quickly adapted to this new
environment and the SBA's COVID relief programs including the
successful Paycheck Protection Program helped many of America's
smallest employers keep the bills paid as they waited to
reopen.
Yet even after getting past seemingly never-ending state
and local restrictions, small businesses are now facing
unexpected competition from the federal government. The Biden
administration seems relentless in its attempt to destroy small
businesses. Today, the businesses fueling growth in our
communities are experiencing massive labor force shortages,
rapidly increasing inflation, and an unreliable supply chain.
And unfortunately, all of these individually disastrous issues
have something in common--tone-deaf Federal policies.
To top it all off, the small businesses I have spoken with
are already preparing for the next disaster. This
administration is hurling their way which is tax hikes. After
meeting with countless small businesses back at home in North
Texas, there was not one that I talked to who has not already
increased wages and benefits to attract workers and yet they
are still struggling to find good help.
So last week, with the help of local elected officials, I
hosted a job fair to connect these hurting businesses with
workers looking for their next opportunity. If there is one
takeaway that I can share today it is that America is ready to
reopen. We need to give small business the room to succeed and
allow American workers to earn their way forward.
While I left that job fair with a great sense of optimism
in the people of this country and their never-ending
resiliency, the work here in Congress is far from over. Prices
today are notably higher than at this time last year and the
solution given by this administration is to spend trillions
more. And who will fit the bill? The exact same small
businesses and employees we are allegedly trying to help.
Small businesses can lead this recovery but they must be
given the opportunity to do so in their own way. The American
entrepreneur, not this administration's checkbook, is our
country's greatest asset. I look forward to promoting an
environment in which small businesses can once again drive our
country forward.
I want to thank all of our witnesses for joining us here
today, Mr. Chairman, and I yield back.
Chairman PHILLIPS. Thank you, Ms. Van Duyne. The gentlelady
yields back.
Now I will take a moment to explain how this hearing will
proceed. Each witness will have 5 minutes to provide a
statement and each Committee member will have 5 minutes for
questions. Please ensure that your microphone is on when you
begin speaking and that you return to mute when you are
finished.
With that, I will begin to introduce our witnesses.
Our first is Ms. Laura Walk. Ms. Walk is the chief lending
officer with Colorado Lending Source, a certified development
company with a mission to foster the economic growth of diverse
small businesses. Colorado Lending Source utilizes the SBA 504
and 7(a) loan programs to offer access to capital for
entrepreneurs as well as the SBA Community Advantage and
Colorado main street programs. Ms. Walk has assisted in the
approval of over 1,400 SBA 504 loans which have created more
than 10,000 jobs and injected over $2 billion into the economy.
We appreciate you being with us today, Ms. Walk.
Our second witness is Mr. Rick Chapman, the general manager
of Sunnyside Marina on the St. Croix River in Minnesota and the
president of the Midwest Marina Association representing 25
marinas on the St. Croix River, the Mississippi River, Lake
Minnetonka, and Lake Superior, with over 6,000 boaters. Mr.
Chapman is also a resident of Bloomington located in my
district, Minnesota's 3rd. We appreciate you being with us
today, Mr. Chapman.
Our third witness is Dr. Lynn Abramson, the president of
the Clean Energy Business Network, the small business voice for
the clean energy economy, representing over 3,000 businesses in
all 50 states. Dr. Abramson has a Ph.D. in marine and
atmospheric sciences from Stoney Brook University where her
research on carbon cycle processes spurred her interest in
advancing low carbon energy solutions. We appreciate you being
with us, Doctor.
Now, Ms. Van Duyne, will introduce her witness.
Ms. VAN DUYNE. Our fourth witness is Mark Glenn. Mr. Glenn
is the owner and chief executive officer of four different
FASTSIGNS locations in the Dallas area and one in Carrollton,
Texas, which is actually in my district. FASTSIGNS is a banner
and graphics sign company with franchise locations across the
globe. Prior to being a franchisee owner with his wife Shawn
and employing approximately 30 workers, Mr. Glenn worked in the
corporate headquarters office of FASTSIGNS in Carrollton,
Texas. With a business management degree from Southeastern
Oklahoma State University, Mr. Glenn brings an entrepreneurial
spirit to his company daily. Mr. Glenn, we appreciate you
taking time away from your busy schedule running four different
small businesses, and I know your expertise as a business owner
will be important as we continue to examine the small business
ecosystem.
I thank you for joining us this morning. I would like to
welcome all of the other witnesses as well. I look forward to
this morning's conversation and I yield back.
Chairman PHILLIPS. Thank you, Ms. Van Duyne. And I join you
in welcoming all of our witnesses.
And we will start with Ms. Walk. You are recognized for 5
minutes for your opening statement.
STATEMENTS OF LAUREL WALK, CHIEF LENDING OFFICER, COLORADO
LENDING SOURCE, LTD.; RICK CHAPMAN, GENERAL MANAGER AND
CERTIFIED MARINA MANAGER (CMM), THE PORT OF SUNNYSIDE CLUB,
INC.; LYNN ABRAMSON, PRESIDENT, CLEAN ENERGY BUSINESS NETWORK;
MARK GLENN, OWNER AND CHIEF EXECUTIVE OFFICER, FASTSIGNS
STATEMENT OF LAUREL WALK
Ms. WALK. Good morning, Chairman Phillips, Ranking Member
Van Duyne, and distinguished members of the Subcommittee. Thank
you so much for having me today.
My name is Laurel Walk and I am the chief lending officer
at Colorado Lending Source, a certified development company, or
known as a CDC, based here in Denver, Colorado.
Colorado Lending Source is also a member of the National
Association of Development Companies (NADCO), the trade
association representing more than 200 private, nonprofit CDCs.
I am also pleased today to testify on behalf of NADCO and my
CDC colleagues.
I am honored to discuss the role of the Small Business
Administration lending programs, particularly the 504 program
in supporting a resilient 21st century economy, including
lending in the energy space.
First, the 504 program is SBA's premier economic
development tool and CDCs who deliver the program are dedicated
to building strong communities across the country. The program
is primarily used to finance real estate, including new
construction, remodeling, retrofitting existing real estate and
equipment. The program also has specific energy reduction goals
that allows borrowers to access more capital.
Like other public policy and job creation goals, the
energy-related goals of the program have made a real impact.
Colorado Lending Source was able to see this impact firsthand
when we partnered with the Garden of the Gods resort in
Colorado Springs on two different projects. Their second
project was made possible by using the renewable energy
program. The business is women-owned and our borrowers, Brenda
Smith and Judy Mackey have stated that thanks to the renewable
energy program, the property has been able to improve their
energy efficiency. All of this equipment not only saved money
in the first year that they were installed but continues to
save and provide energy efficiency.
There are many small businesses that must make hard choices
regarding what they can afford to do at any time. We see the
renewable energy program as a way for businesses to focus on
energy efficiency at the same time they are improving their
property.
The scope and reach of the 504 program could be broadened.
First, Congress should consider reducing the required equity
injection for green energy projects from 10 percent to 5
percent. This is something the Small Business Committee has
already considered and included for manufacturing loans in the
bipartisan 504 Modernization and Small Manufacturing
Enhancement Act of 2021. In particular, a smaller equity
injection from the borrower would increase access to smaller
projects under $500,000. This is a category often overlooked by
traditional lending.
As small businesses compete for commercial real estate in
today's market, a smaller equity requirement would truly expand
access to capital for those businesses and allow them to
conserve precious capital while filling a gap in conventional
financing which 504 was created for.
Secondly, Congress should consider increasing the loan size
for renewable energy projects which is another enhancement
provided for manufacturers in H.R. 1490.
As small businesses recover and look to scale, the current
loan size, coupled with real estate and construction costs will
likely impact the ability of the program to help small
businesses achieve their scaling goals in the future.
SBA's local district offices could also partner more
actively with at least one resource partner such as their local
small business development center to promote the benefits of
implementing the alternative energy sources.
There are also administrative changes the SBA could make.
For example, there is an instituted cap of $16.5 million as the
maximum amount of 504 loans for a borrower under the existing
energy goals for the program. SBA could reassess and consider
eliminating this. One of the benefits that we have heard over
and over from our borrowers is the ability to come back and
utilize the program as they grow which happens with the energy
program.
Finally, but very importantly, the 504 program is available
to borrowers across the country thanks to an annual
authorization by Congress. The authorization level for the
amount of 504 loans that can be approved has been at $7.5
billion for years. The combination of recovering from the
pandemic and the higher profile the SBA has created has
resulted in high demand. As an industry, we are thrilled to be
helping so many small businesses. However, we have real
concerns about the possibility of reaching the $7.5 billion cap
before the end of the fiscal year. If the program reaches the
authorization cap, the program will shut down and we will be
unable to make any 504 loans. It is critically important the
program be available to small businesses during this integral
recovery period. The CDC industry supports efforts to provide
flexibility for the administrator to increase the 504
authorization cap up to 15 percent which is consistent with the
7(a) program.
Thank you again for having me here today and I look forward
to answering any questions.
Chairman PHILLIPS. Thank you, Ms. Walk.
Now, Mr. Chapman, you are recognized for 5 minutes for your
opening statement.
STATEMENT OF RICK CHAPMAN
Mr. CHAPMAN. Chairman Phillips and Ranking Member Van
Duyne, and members of the Subcommittee, thank you for the
opportunity to appear before you today to discuss the Small
Business Administration's role in climate solutions.
My name is Rick Chapman. I live in Bloomington and work in
Stillwater, Minnesota, the land of 10,000 lakes. And like 70
percent of my fellow Minnesotans, I am an outdoor enthusiast. I
am fortunate that I am also able to further foster the
enjoyment and protection of our great outdoors through my role
as general manager and certified marina manager at Sunnyside
Marina, a private marina on the St. Croix River. I also serve
as the president of the Midwest Marina Association,
representing 25 marinas on the St. Croix River, Mississippi
River, Lake Minnetonka, and Lake Superior with over 6,000
boaters.
MMA works collaboratively with the National Marine
Manufacturers Association, the Association of Marina
Industries, and the Marine Retailers Association of the
Americas. Sunnyside Marina, along with other marinas on the St.
Croix River, have been leaders in the state's Clean Marina
program as part of a national program that encourages marina
operators and recreational boaters to protect water quality by
engaging in environmentally sound operating and maintenance
procedures.
I am proud to report we were the first marina in Minnesota
to install a water recycling system to capture, filter, and
reuse the water we use to wash boats at the end of the season,
helping to keep acids and metals out of the water. Lead by the
recreational boating industry, the outdoor recreation economy
is a major contributor to the U.S. economy accounting for 2.1
percent of GDP, $788 billion in economic output, and most
importantly, 5.2 million American jobs. New powerboat sales in
the U.S. increased last year by an estimated 13 percent
compared to 2019, reaching a 13-year high. Four hundred fifteen
first-time boat buyers entered the market in 2020.
This rise in outdoor recreation has both showcased the
popularity of such activities as a safe and fun way to spend
time with loved ones and illuminated one of the most pressing
issues facing our industry. We need resilient infrastructure to
protect access to recreation and marine businesses and can
adapt to our rapidly changing climate.
Small businesses in the outdoor sector depend on robust
infrastructure to be able to make their living and they often
face the brunt of natural disasters like flooding, wildfires,
hurricanes, earthquakes, tornadoes, and mega droughts, leaving
them damaged and unable to operate. When they are unable to
operate, the jobs and families they support are at risk. Local
economies depend on small businesses like these.
According to FEMA, natural disasters have cost the U.S.
$800 billion in the past decade and have been the direct cause
of thousands of businesses shutting down. Small businesses are
particularly susceptible to these dire economic effects with 40
to 60 percent never reopening after a natural disaster.
I thank the Committee for holding today's hearing to
discuss how the SBA can better support small businesses in
providing climate solutions and for allowing me to shine a
light on the significant role small businesses play in driving
the outdoor economy. Small businesses in our industry are in
jeopardy without investments in climate resilient recreation
infrastructure. The time to fortify recreation infrastructure
from the impacts of climate change is now. Fortunately, a
bipartisan infrastructure deal is in negotiation and
infrastructure resiliency is a primary for both the
administration and the bipartisan group of senators leading
this process.
The infrastructure package presents an opportunity to
utilize the SBA as a resource to help small businesses protect
themselves from the costly damages of climate change. To
accomplish this, Congress should include language from the
PREPARE Act and the resiliency title of any infrastructure
package that moves forward. To allow small businesses to access
much needed capital, to invest in disaster resilient
infrastructure, this landmark legislation will allow the SBA to
make low interest, fixed rate loans of up to $500,000 to small
businesses to invest in their properties to protect against
natural disasters.
We applaud the Committee on small business in spearheading
this proposal that would create an integral tool for building
more resilient recreation access, protecting vulnerable
communities, and rebuilding local economies. The recreational
boating industry looks forward to continue to work with the
members of this Subcommittee and other Committees of
jurisdiction to protect and expand opportunities for recreation
going forward. And we thank you very much for the opportunity
to appear today and I look forward to taking your questions.
Chairman PHILLIPS. Thank you, Mr. Chapman.
And now I recognize Dr. Abramson for 5 minutes for your
opening statement.
STATEMENT OF LYNN ABRAMSON
Ms. ABRAMSON. Thank you, Chairman Phillips, Ranking Member
Van Duyne, and members of the Subcommittee. Thank you for the
opportunity to testify today on the SBA's role in climate
solutions.
I also want to take a moment to thank the Committee on
Small Business for providing critical lifelines of support for
small businesses throughout the COVID-19 pandemic.
I am Lynn Abramson, president of the Clean Energy Business
Network, which serves as a small business voice for the clean
energy economy. Our nonpartisan, nonprofit organization works
with more than 5,000 small and mid-size clean energy business
leaders across all 50 U.S. states and a very broad spectrum of
energy technologies.
These businesses include innovators like Exergy Predictive
in St. Paul, Minnesota, which is developing cloud computing to
support electric vehicle fleet deployment. And they include UHV
technologies in Fort Worth, Texas, which has developed an X-ray
technology to enable faster and more efficient recycling of
scrap metals.
I would like to share with you my perspective of clean
energy as an economic engine, the role of small businesses, and
what policies can best support our nation's clean tech
entrepreneurs.
First, clean energy drives a competitive economy. The past
decade has seen significant growth in energy efficiency,
natural gas, and renewable energy. Today, more than 3 million
Americans earn a living in the clean energy economy with
roughly 70 percent of those workers employed by small
businesses.
As we rebuild our economy investing in new clean energy
technologies is one of the best things that we can do to create
good jobs for regular people right now while reaping long-term
benefits for decades to come.
First, we must continue to invest in energy innovation
programs such as the American Made challenges, the advanced
research projects, agency energy, and the small business
innovation research and small business technology transfer
programs.
There are also a number of ways we can make these crucial
programs even more accessible and impactful for entrepreneurs.
I have outlined these recommendations in my written testimony
and I am happy to speak on them further.
We must also continue to build an ecosystem of
entrepreneurial support throughout the nation through regional
centers such as the national laboratories, incubators and
accelerators, and small manufacturers. And we must improve
financing opportunities for demonstration projects to overcome
the final valley of death to commercialization and help turn
energy innovations into successful companies.
Finally, we must strengthen Federal coordination to help
entrepreneurs access the breadth of available programs to
support their work. The Small Business Administration can play
an important role in coordinating with other Federal agencies
to curate and promote such information.
My written testimony includes a link to a letter signed by
more than 200 business leaders urging Congress to act swiftly
on an infrastructure package that addresses such
recommendations. We hope that the Senate's bipartisan Energy
Infrastructure Act and the House's LIFT Act will provide a
basis for bicameral, bipartisan negotiation and enactment of an
infrastructure deal.
Investing in American technology has a history of paying
off. From landing a man on the moon to putting computers in our
pockets, to developing COVID vaccines, government investment
has been key to America's success. It is time to empower
America's small clean energy businesses to unlock their most
brilliant ideas for tackling climate change while building the
economy of the future.
Thank you, and I look forward to your questions.
Chairman PHILLIPS. Thank you, Doctor.
And now I recognize Mr. Glenn for 5 minutes for your
opening statement.
STATEMENT OF MARK GLENN
Mr. GLENN. Good morning, Chairman Phillips, and Ranking
Member Van Duyne.
Thank you for your strong bipartisan support efforts to
save businesses like mine through the pandemic. I was a
recipient of PPP loans and I am grateful for your support. It
really made a difference in our business.
My name is Mark Glenn, and I am the CEO and multiunit owner
of four FASTSIGNS locations in the Dallas area. My wife Shawn
and I became business owners in 2011 after spending 15 years in
the corporate headquarters of FASTSIGNS. FASTSIGNS is a sign
and visual graphics company and is the sign industry's leading
franchise system. The system is 100 percent owned by
franchisees just like me. I do believe that all stakeholders,
including small businesses, have a role to play in the
responsible, sustainable stewardship of our planet. But, as a
small business owner still recovering from the pandemic, my
main focus right now is on rebuilding our employee team and
navigating policy uncertainties that may have real world bottom
line impacts on our balance sheet.
I would like to share my experience with the critical labor
shortage issue. It is real and it is crippling to the business.
My four locations generally have 28 to 30 staff. I currently
have four open positions that cannot be filled right now due to
a lack of quality applicants. That is roughly 10 percent of my
workforce is unfilled. I strive to be an employer of choice
through competitive wages and career building opportunities.
These are good paying jobs in a strong industry with a career
that can be built upon. We have made extraordinary efforts to
recruit and hire talented candidates. Not only have we posted
job openings on traditional online job platforms and on social
media, but we are offering referral incentives and joining
local job fairs like the one recently hosted by Ranking Member
Van Duyne.
My on-the-ground experience is that the expanded
unemployment insurance is keeping people home right now. I
fully understand and I appreciate that there are continued
childcare challenges as we come out of the pandemic, but my
firsthand real-world experience is that candidates are sharing
during these hiring processes.
The staffing shortage is without a doubt my biggest hurdle
to meet customer service and market needs. I am worried about
potential tax increases and threats to the franchise business
model. Policy uncertainties have real-world impacts because our
everyday business decisions rely on certainty. For those of us
outside of Washington, D.C., we often hear about potential tax
increases associated with infrastructure, spending, or budget
debates. I want to emphasize that increasing taxes on small
businesses can take the lifeblood needed to help with this
recovery. This forces us to take cash and allocate to taxes
rather than increasing pay for staff or creating promotional
opportunities for our employees.
As you know, small businesses' incomes appear on their
personal tax return. There is a real difference between a hedge
fund manager's tax return showing over $1 million in income
where zero jobs are created and a small business owner that
shows a profit that is essential to take risk and create jobs.
I am concerned about the House's support for the PRO Act
and how close this bill is to becoming law. I am concerned
about how franchise brands will react to the increased
liability.
As franchise contracts come up for renewal, franchise
brands will be encouraged to convert locations into corporate
locations. These policies hurt small business owners the most.
I welcome the opportunity to work with you to find a better
solution for workers and business owners. The franchising
sector needs certainty and should be supported, especially
because it provides wealth-building opportunities that are
important for underserved communities. Franchising is also good
paying jobs.
In my written testimony, I included a new study by IFA and
Oxford Economics that shows a wage and benefit premium
associated with franchise jobs in certain industries. Thirty-
two percent of respondents also said they would not be business
owners without franchising which translates to about 60,000
small businesses across the economy. That percentage was even
higher for women-owned and first-time business owners.
Franchisees also have material higher sales on average than
independent small businesses including among women and people
of color. Together, I truly believe we can build a stronger
economy if the right policy environment is provided.
Thank you again for allowing me to testify today. I look
forward to your questions.
Chairman PHILLIPS. Thank you, Mr. Glenn. And gratitude to
all of our witnesses for being with us today and for your work
and engagement on this issue.
I will begin by recognizing myself for 5 minutes. My first
question is to you, Ms. Walk.
You spoke of the 504 program which, of course has
accelerated in the post-pandemic economy as businesses and
optimism have improved, but you reference that we may be
hitting the $7.5 billion cap sooner than expected which would
cause the program to shut down before the end of the fiscal
year. So could you elaborate for our Committee how a 504
program shutdown would impact the ability of small businesses
to access affordable growth capital?
Ms. WALK. Yeah, absolutely. Thank you for your question.
Yes.
Since the recovery 504 volume has been higher than we have
seen in a long time and we have seen more and more businesses
taking advantage of the program with its low interest rates and
long-term fixed rate for the borrower, it is very attractive
for businesses that are looking to purchase real estate.
Overall, nationwide, we are up 37 percent in volume which just
shows the appetite of businesses that are looking to make that
commitment and purchase a building and really recovery from the
pandemic robustly.
If the program were to shut down, all of those businesses
would be in a waiting pattern until the program reopened in
October, and that would be very detrimental for our businesses.
Businesses that are out trying to purchase real estate are
competing with investors and other entities that have more
cash. They are constantly being told if they do not meet their
closing deadlines they will not get the property. If there is a
delay in how they get their financing, or worse, if they are
not able to get the financing they were planning on with a
lower equity requirement, they will lose the property and that
could seriously impact their business.
One of the wonderful pieces of the 504 program is that it
allows borrowers to bring 10 percent equity injection to the
project. Typically, on a conventional commercial real estate
loan you are seeing that at 20-25 percent. So that savings of
capital is so critical for our businesses. And if there was
anything that would hinder that from the program, if there was
a pause, if businesses had to wait, it would be very
detrimental.
Chairman PHILLIPS. So fair to say that time is of the
essence?
Ms. WALK. Yes. Very much so.
Chairman PHILLIPS. All right. Thank you.
Mr. Chapman, you spoke of natural disasters, of course,
impacting small businesses throughout the country from powerful
storms to fires to drought to low water levels. And of course,
in our home state of Minnesota, oftentimes even a lack of snow
during the winter season are affecting small businesses. What
can you tell us about how your business has adapted throughout
the pandemic and what lessons have you learned that might
support our response to climate events in the future?
Mr. CHAPMAN. Well, so currently in Minnesota right now we
are experiencing low water. And the thing about the climate
change is we do not know whether it is going to be low water or
high water or what the issue is going to be. But that is why we
spend so much time talking about infrastructure because all of
that infrastructure, from locks and dams to just simple things
that we have to do to prepare for high water, for instance,
making sure that power sources are above the highest waterline
and making sure that fuel tanks are secure if they are above
ground. Those are the kind of things that unfortunately we
often react to after the disaster has occurred instead of being
proactive and having those things in place before the disaster
occurs. So I think that the Small Business Administration could
really help in this situation especially with small marinas,
small individual owners to help them prepare before the
disaster strikes if you will. I do not know if I did a great
job of answering that question.
In regards to the pandemic, I should just say the pandemic
had the opposite effect on the recreational boating industry. I
am sure all of you know that anything to do with outdoor
activity is seeing an enormous boom. We were not expecting
this. I was last March applying for payroll protection and then
all of a sudden we had the busiest season we have ever had and
now we are doing it again this year with even a busier season.
So the pandemic for us has been incredibly good for business. I
feel sorry for small businesses that cannot say that but for
the recreational boating industry, we are really seeing a boom
because of the pandemic.
Chairman PHILLIPS. And fair to say that you would like to
see Congress and the SBA prioritize resiliency, investments,
and support?
Mr. CHAPMAN. Absolutely. That is the whole point is trying
to make sure that we are building better before the disaster
strikes would be really beneficial to these small operators. I
represent a number of privately, family-owned marinas from the
Midwest Marina Association and that is what they are telling me
is that it would be really, you know, it is not just the locks
and dams which, you know, falls on the Army Corps. It is the
stuff that we can do at our individual marinas to help prepare
ourselves for the disaster that might be coming next.
Chairman PHILLIPS. And I think you just coined a new
phrase: build back better before. You just added another B to
that one.
Thank you. I appreciate your answer.
Last month, the International Trade Center at the United
Nations issued a report on the pandemic entitled ``Empowering a
Green Recovery.'' The report states that while the range of
likely impacts varies depending on the model used, the economic
damage of climate change could be as bad as having a pandemic
the size of COVID-19 every 10 years.
Ms. Abramson, the pandemic revealed just how vulnerable
small businesses are to unanticipated economic events. So why
is it important that we have a conversation about aligning our
resources to mitigate climate events now as businesses are
still struggling to recover from COVID-19 impacts?
Ms. ABRAMSON. Thank you.
I think some of the points that both Ms. Walk and Mr.
Chapman raised resonate with the clean energy businesses that I
work with, as well as their customers, the small businesses
around the nation in terms of preparation. And so you raised
earlier the concern about how COVID-19 caught us all unprepared
and unaware. And I think it has really highlighted how much we
need to anticipate and plan for risk. And certainly, climate
change related natural disasters, you know, extreme weather, as
well as sort of the changing impacts on our economy are things
that we need to prepare for. So investing in resilient
infrastructure up front to better accommodate these changes is
absolutely critical for all of our small businesses.
And I think in addition to the general impact that it will
have on our economy and in helping businesses of all sizes
prepare for these extreme weather events, it also helps to
generate new industries and jobs. And so we actually saw that
prior to the COVID-19 pandemic the clean industries were the
growth sectors of the U.S. energy economy and were adding all
sorts of new diversified technologies to our portfolio. And
generating some very high-paying jobs in the process. So I
think that we can really achieve a double benefit by investing
in clean and resilient technology that not only helps us better
withstand some of the stressors on our economy but also helps
to generate new industries.
Chairman PHILLIPS. Thank you.
And forgive me, my time is long expired. Forgive me.
I am going to turn it over to Ms. Van Duyne for 5 minutes.
Ms. VAN DUYNE. Great. Thank you.
Chairman PHILLIPS. For 3 minutes.
Ms. VAN DUYNE. Thank you very much.
Mr. Glenn, in your testimony--first of all, thank you very
much. I appreciate your testimony. You state that the primary
challenge we, as small business owners face with staffing has
come from the expanded unemployment benefits which has become a
small business owner's biggest hurdle to recruiting and hiring
candidates. Why do you believe this is such a hurdle and what
should Congress do moving forward?
Mr. GLENN. Thank you for the question. I am happy to
address that.
Not only me, but just in talking with other small business
owners, the issue has been the same. We have gone, just as a
side note, we as a sign company have gone and offered signage,
now hiring signage to business neighbors of ours in the
community. And we are trying to do everything we can. But the
real issue is the competition is the federal government with
the added unemployment subsidies that many have been receiving.
A plus for us here in the state of Texas as Governor Greg
Abbott has declined as of late last month, declined the Federal
benefit for recipients receiving these. That has helped some
with that. But just to give you an example, we have ads out on
job lines. And these are good positions. These are graphic
designer positions. These are equipment operators. And these
are sales positions with a very competitive earning range. And
we have received resumes with no qualification at all that just
were not legitimate candidates for us. And so that is the type
of challenges we are facing as small business owners. And
again, it is just not isolated with me. I stay very close to
the business community and through the chambers, the local
chambers and business associations, and we are all facing the
same here. And fortunately for me and the ones, the others that
I speak with, the majority of us are in Texas and it is not as
bad. It would really be a tough time if we were not in the
state of Texas and were still up against these challenges. And
people are not leaving their homes to seek jobs because
financially, in my opinion, they do not have to at this point.
Ms. VAN DUYNE. All right. Thank you.
As you know, this administration is proposing a number of
changes to the Tax Code to pay for their spending plans. While
details continue to be debated, how could tax increases impact
small businesses? And do you believe that it could impact
investment decisions?
Mr. GLENN. It would absolutely impact decisions that a
small business owner would be forced to take. It would be
critical for us that that cash would be at the expense of the
operation of the business. The investment to our employees. The
additional training. With the taxes we currently pay, I look at
the taxes that I pay each year, and if I knew that money did
not have to go to those areas, I think of all the other things
that I could do to improve the business, to add more jobs. So
it is very concerning with the uncertainty of any new taxes
coming to us that we, as small businessowners, would shoulder
the burden of those payments. It is very concerning.
Ms. VAN DUYNE. Can you talk about the impact of rising
costs and inflationary pressures on small businesses that
operate on the margins as yours does? And do you think Congress
should avoid policies that would increase inflation?
Mr. GLENN. Congress should avoid that by all means. Let
capitalism work at its best and free flowing without any
interference. We have seen with our materials, specifically our
plastic materials used to create signs are petroleum-based in
many cases. We have seen increases along those around 30
percent so far. And it is still coming up. Not only the
increases but shortages. Additionally, aluminum products have
gone up drastically for us. About 30 percent of our revenue is
aluminum products and those have not only with shortages but
increasing costs for us, we are very reluctant to stay
competitive in the market to pass along those increases. We are
absorbing some of that in our pricing but it comes to a point
where you can no longer do that and sustain the business and
make a profit. It is very challenging and the last thing we
want is the government to become a factor with that.
Ms. VAN DUYNE. We have discussed a number of challenges
facing small businesses today from labor shortages to inflation
to taxes. The topic of today's hearing is the SBA's role in
climate solutions. When you think back on the last year, where
did the climate issue rank in your list of concerns and do you
think the SBA should be focusing on it over items like access
to capital and labor issues?
Mr. GLENN. If I look back at the past 16 months or
basically all of 2020, the environmental issues would rank
relatively low considering the other issues that were much more
urgent as a result of the pandemic. And these were things that
as a small business owner we, in many cases, had to totally
reshape our business model. I was very fortunate that we were
buffered by some of that with COVID-related signage. We did
have some nice projects that kept people employed. But at the
height of the uncertainty, we were making those adjustments as
well. So any climate issues, they were not top of mind with not
only just me but other small businesses outside my industry as
well. It is not something that we were forced to deal with at
the time. It was more how do we react and adjust our business
to the uncertain economy of the past 12 months?
Chairman PHILLIPS. Thank you, sir. The gentlelady's time is
expired.
Now I recognize the gentlelady from California, Ms. Chu,
for 5 minutes.
Ms. CHU. Dr. Abramson, as the clean economy rebounds from
COVID and resumes its enormous growth across the country, it
will be especially important to ensure that we have a trained
workforce that can quickly step into skilled high-paying union
jobs in the green economy. And we have an incredible
opportunity to do that through President Biden's American Jobs
Plan, especially through a new civilian climate corps. That is
why I introduced H.R. 4220, the National Climate Service Corps
and Careers Network Act of 2021 which would create a new
program under AmeriCorps to complete climate-related projects.
But most importantly, this bill will also create a new climate
careers network to connect participants with high-paying, long-
term careers using the skills they acquired in the corps.
So could you talk about the job placement needs of small
businesses in the clean energy industry today and how you see
that demand increasing as we make major investments into
decarbonization? How can both a climate service corps and a
dedicated climate careers network help clean energy small
businesses find qualified and trained marine energy workers?
Ms. ABRAMSON. Thank you, Congresswoman. I think that is a
very important issue and I just want to acknowledge, I think
some of the labor shortages that Mr. Glenn spoke about are
challenges we have seen across small businesses. But unlike I
think more typical small businesses, the clean energy economy
has faced those labor shortages prior to the pandemic and I
think the major factor influencing those shortages has been the
lack of appropriately trained and skilled workers to support
our industry.
The U.S. Energy Employment Report, which is an annual
report tracking trends in the clean energy economy and
workforce has consistently reported that small businesses and
large corporations in the clean energy sector face a shortage
of appropriately skilled workers. And so I think getting more
of these kinds of economic opportunities in front of
communities training workers, whether it is through
apprenticeship type programs such as what you are envisioning,
working with our community colleges as well as our higher
institutions of learning to make sure we are training people
for the jobs of the future is very important.
I also want to note that I believe that workforce
development is critical to ensuring that the clean energy
industry is more representative of the United States population
as a whole. And we have seen that, for example, across energy
sectors, and this is broadly speaking, women represent about 23
to 32 percent of the workforce in the energy economy compared
to roughly half of the workforce nationwide. And specifically,
when it comes to small business leadership and ownership, we
see that only about 7 to 8 percent of the Department of
Energy's small business innovation research awards are going to
women-owned or minority-led businesses. So this is a
significant concern. I think that we see that the clean energy
sectors are the growth sectors of the energy economy, and if we
do not make sure that these are inclusive sectors then we will
definitely be leaving whole segments of our population out of
that potential for economic growth.
Ms. CHU. Thank you for that.
Mr. Chapman, I am so glad that you are here to talk about
the importance of community resiliency for the small business
economy. We know that climate cost disasters are increasing and
having a terrible disproportionate impact on small businesses.
In California, my state, wildfires in 2018 caused $150 billion
in economic damage. And now that the state faces a historic
drought, we have to prepare for a fire season that could be
even more damaging. So that is why the National Climate Service
Corps that I talked about could improve community resilience
and complete projects that would address sustainability.
Could you talk about what it would mean for your industry
to mobilize thousands of young people across the country to
complete these projects?
Mr. CHAPMAN. Yeah. So we are also experiencing in the
recreational boating industry I think the same thing that
happens to a lot of industries in regards to finding the right
or the qualified employees. And part of it is just because
right now for us it is specifically technicians. It is
specifically the technicians that work on the boats. I know
that the automobile industry is having the same issue but
trying to find those kind of skilled people just to come into
the industry is very, very difficult. So a program like what
you are talking about which would potentially bring young
people into an industry that we are having a hard time getting
young people to come into would be extremely beneficial.
Ms. CHU. Thank you.
I yield back.
Chairman PHILLIPS. The gentlelady yields back.
And now I recognize the Ranking Member on the Subcommittee
on Underserved, Agricultural, and Rural Business Development,
Mr. Hagedorn, the gentleman from Minnesota.
Mr. HAGEDORN. Thanks, Mr. Chairman. I appreciate that.
I agree with Ranking Member Van Duyne. I think this hearing
is a little bit offtrack. We should probably be focusing more
on the supply chain issues, labor shortages, and things that
are really affecting our small businesses now. And frankly, I
do not think there is any discernible positive outcome that
anybody can point to as to these changes that people are
talking about making. I would just add this though: you know,
technology is great and we want better products, higher quality
products, but they need to be at the same price. They need to
be as reliable. And we do not always get that in this whole
green energy sector. As a matter of fact, to put this in
perspective, look, China, Communist China alone emits more
carbon than all the developed countries in the world. Three
times more than the United States. So I think we can talk about
changes here of small businesses but it is going to mean
nothing compared to what has to happen. If you think this is
the big problem, you have got to go after China. You are going
to have to go after India. And I do not think we should be
taxing and burdening our own sectors more than that. If you
really want to help the world get rid of carbon emissions, we
should be producing way more natural gas in the United States,
like in Congressman Meuser's district and exporting that to
China so they can produce electricity cleaner, have more
nuclear power. These are the things that make the big
difference. And so those are great jobs in the United States.
That means it creates wealth in the United States. It puts
China in a position where they are dependent on us. But
instead, this administration under Biden attacking U.S. energy,
going after the lifeblood of our economy, it is absolutely I
think disgusting what they are doing. And they are going to
destroy our economy and our way of life if we are not careful
and we cannot let that happen.
So, you know, we do not want to exchange U.S. energy
independence for dependence on China. And that is what we would
have with a ``clean energy economy.'' China has cornered the
market for the most part on rare materials and the minerals
that we need for solar panels, wind generators, batteries for
lithium. Why do we want to be dependent on China? Why would we
not be dependent on the United States, independent like we are
now, and we are going to lose that very quickly. It makes
absolutely no sense. Our country became a great economic power
because of homegrown U.S. energy, reliable, abundant,
affordable, and we do not want to get away from that.
So Dr. Abramson, I will ask you this. I have never met a
small businessperson that said increase my energy costs. Not
one. As a matter of fact, lower energy cost is really good for
business. So I do not know if you represent any manufacturers
or people like that but some of these manufacturers spend 15,
20, 30 percent of everything they do and they produce on
energy. So we are going to swap out energy sources that are low
cost with energy sources that are not as low cost and certainly
not as reliable. How does that help small businesses in that
sector, manufacturing especially?
Ms. ABRAMSON. Thank you, Congressman. And I agree with you.
I think that reducing energy cost is critical for small
businesses and manufacturers. And we actually, frankly, have a
lot of manufacturers of clean energy technologies within our
network. And they are consumers of energy as well.
Mr. HAGEDORN. That is a piecemeal thing. The policies that
the Democrat party is talking about are top-down Washington,
D.C. policies that are going to pick winners and losers in the
energy sectors and they are going to swap out all sorts of
traditional technology for new technology. The new technology
is not as reliable. The new technology is much more expensive
and you cannot even do it on a grand scale today. It is not
even feasible. If you went and did it today, we could not
produce the electricity that we needed. So I mean, I understand
you can have a business that puts up solar panels or something
and you can say that is cheaper, but we are talking about the
whole economy and we are talking about our whole energy sector.
How is that going to be good to increase energy prices for our
small businesses?
Ms. ABRAMSON. Well, I want to actually start by clarifying
some of the businesses within our network do work in the
industries you mentioned such as natural gas and nuclear
energy. And one of the things that we advocate for is a
portfolio-based approach to diversifying our energy economy.
And investing across the board in energy innovation. And some
of the things you highlighted in terms of America's leadership
in the energy economy I fully agree. I mean, we need to look at
our critical minerals. We need to look at technologies across
the board including looking at our fossil energy industry and
ways to help it decarbonize and keep up with some of the
technology innovations that we are seeing across the globe.
Mr. HAGEDORN. Everybody is crossways here. I mean, in
Minnesota, we have a mine up in Northern Minnesota that could
produce all the copper we need but the people on the left do
not want us to go get that copper. Instead, we have to rely on,
for instance, China and others. And I think that, I agree,
nuclear power is good. All these other things. But if we cannot
swap out the technology and keep it as low cost, reliable, and
abundant, we should not do it. And like I said, if you are
really concerned about this issue, I would focus on China.
I yield back.
Chairman PHILLIPS. The gentleman's time is expired.
I just remind my colleagues, this is not a hearing about
China. It is not a hearing about mining. It is not a hearing
about the price----
Mr. HAGEDORN. Why is not a hearing on whatever I want to
talk about, sir?
Chairman PHILLIPS. I am just reminding colleagues that
today's hearing is about how we support small businesses in our
country, in Pennsylvania and Minnesota and California and
Indiana and Texas, those who are suffering from the
consequences of climate change, which is real. Plain and
simple. Fires, low water tables, lack of snow. That is what
today's----
Mr. HAGEDORN. So what are you talking about doing today
that is going to change anything tomorrow?
Chairman PHILLIPS. So that is what today's topic is and I
ask that my colleagues focus on that.
Now I recognize the gentleman from Pennsylvania, Mr. Evans,
for 5 minutes.
Mr. EVANS. Thank you, Mr. Chair.
My question is to Ms. Walk. There are a number of job
opportunities in both construction and installation of energy
efficient upgrades. How does the increase of energy efficiency
and the decreased cost of electric renewable energies help to
keep the energy intense American business competitive in a
global economy and how can the 504 program help small
businesses achieve this growth and competitiveness?
Ms. WALK. Thank you for the question.
You know, we have seen when our businesses are installing
and looking to the green energy pieces to add renewable energy,
you know, working closely with those providing installation. We
have seen an increase in that really statewide here in doing
that. And I think, the more that small businesses have access
to renewable energy, the more that it makes sense for them from
a business perspective, like some of the businesses I
highlighted in my testimony. You know, the first business I
talked about within there, the Comedy Club, their decision to
include solar really ended up being a huge cost savings. You
can see that in the comments that we heard from our other
businesses as well. Something that they really were not
considering but came about because of the 504 program ended up
really having a great impact for the business, for the bottom
line, and for the overall energy consumption of the business.
So I think the 504, by taking what is in place, the 504 has a
great system in place. It is a program that has been well-
established. And increasing those enhancements and making it
more attractive to small businesses helps the entire energy
consumption deplete and it helps our businesses save capital.
Mr. EVANS. Do you have any kinds of suggestions of how we
can augment the program in any way?
Ms. WALK. Yeah. As I outlined, I think, one of the things
that we could do especially with the equity injection, I think
if we could open the program for businesses that are utilizing
renewable energies and reduce the equity requirement from 10 to
5 percent would be phenomenal. I think that would be a savings
that would be welcomed by all of our borrowers as capital has
become so critical. It is something you have heard over and
over here today. I think you could look to increase the cap for
energy projects as well. Right now it is at the 5.5. I think as
costs increase, construction real estate, increasing that makes
the program more dynamic for the years to come.
Mr. EVANS. I thank you and I yield back the balance of my
time, Mr. Chairman.
Chairman PHILLIPS. The gentleman yields back.
And now I recognize the Ranking Member on the Subcommittee
on Economic Growth, Tax, and Capital Access, Mr. Meuser, for 5
minutes.
Mr. MEUSER. Thank you, Chairman Phillips. I appreciate
that. Thank you, Dr. Abramson and all the other witnesses with
us today. I appreciate you being here very much. It is an
interesting topic.
You know, I think it is okay, and I take the Chairman's
words and my colleagues into consideration but I think it is
fine to look at the big picture here. Small businesses, what we
can do for them, the effects of climate change and how we can
truly, what we can do to create an environment to help them be
more competitive yet drive the idea of a cleaner climate;
right? I mean, I think we all want the cleanest environment
possible in the shortest time possible that is economically
feasible. It must be economically feasible. And you know what
is interesting about this debate, I tend to think that it has
been polluted by politics; right? I mean, you are either in
this debate, you are either a knuckle-dragging, climate-denying
neanderthal or you are an environmental wacko; right? There are
a lot of us in between. I certainly see myself as very much in
between.
So natural gas, we went through that. It has lower costs
for businesses, so particularly in Pennsylvania. We have some
of the lowest energy costs in the country, which absolutely
should make us more competitive. It has also made the United
States 2 years in the row having the least level of carbon
emissions. We have to admit that. We can call it a transitory
energy source and all, and that is fine. Let's get to something
that is better. But it has proven to be important in both ways,
costs and the environment.
And do you know what is interesting? All of us as members
and, you know, you visit small businesses, mid-size businesses,
large businesses. They are finding it to be kind of cool to
become green; right? I mean, there are all kinds of new energy
efficiency measures taking place. You know, the lights are
going off when you leave a room. They are investing in solar
panels. Employees like it. You know, it is a trend. It is a
private sector trend and it is happening in rural Pennsylvania
and in urban Pennsylvania. So it must be throughout the country
as well. So those are very important things.
So what we need to do is we need to help businesses do
that. We can remind them. Groups like yours I think are good to
make sure they know what is available, what the resources are,
what sort of tax credits. But at the same time that we are
talking about low interest loans, we cannot be talking about
tax increases because China does fall into the big picture
here; right? Because when our small businesses become less
competitive, that makes frankly the Amazons more attractive.
And, you know, unfortunately, most of what people buy from
Amazon comes from China where China, by the way, is making
something like one coal plant, building one coal plant a week
or something insane like that. So it does come into play here
and it is sort of a big picture situation.
As well, what we have done with gasoline. Look at the cost
of gasoline. That is because of the rattling of the oil
industry; right? And at the same time, I do not know how many
people know this, Russia's imports to the United States for oil
is at an all-time high. So what sense does that make; right? We
do it in a cleaner way. We should pursue that with, again,
economically feasible regulations.
So, and we do have many tax credits, Dr. Abramson and
others; right? I mean, it is 26 percent Federal reduction for
solar panels. Okay. That is fine. States have additional. Many
states do. We have a $7,500 tax credit for EVs. Right? So wind
turbines have very extended programs and they are very
controversial in Pennsylvania because they are not so
environmentally friendly when you put them in. They are really
troublesome, particularly if they are near any residential
areas.
Anyway, I have said a lot. I am going to ask you, since you
are sitting here, Dr. Abramson, to react to some of the things
that I have said.
Ms. ABRAMSON. Thank you. And there is a lot to unpack
there. But first, I want to thank you for your comments that
this does not have to be such a political issue. And I want to
point out that a lot of our members are all across the
political spectrum and are in this because they see this as an
economic opportunity. And you talked about some of that. And I
want to highlight that, yes, natural gas has played a huge role
in the decarbonization of our economy as well as the growth of
affordable clean energy. And we really believe that setting
goal-based approaches for what directions we want to see in
terms of decarbonization as well as affordability and
reliability and resilience and then allowing different
technologies to compete in that market is really the way to get
there rather than necessarily picking winners and losers. That
does not mean we do not necessarily want to invest in
technology hurdles to overcome particular challenges that the
hydrogen economy might face or storage or solar, et cetera. But
we think that market-based approaches are the way to go.
On the Tax Code issues, I mean, we have focused more on the
incentive side of things and I do believe that the clean energy
tax incentives have been critical for fostering market pathways
to help reduce the costs of these technologies and really get
them to the point where now increasingly the cleanest sources
of energy are becoming the cheapest and I am really interested
to see the conversations going on in both the House and Senate.
And in fact, in the House, in quite a bipartisan manner,
looking at potential pathways down the road where we can
encourage sort of technology-neutral, goal-based approaches to
the Tax Code. I think the certainty that has been provided with
technology-specific tax credits has been incredibly valuable
but we recognize that ultimately at some point, you know, we
have to think about these goal-based approaches. And so----
Mr. MEUSER. Thank you. I am sorry.
Ms. ABRAMSON. Yeah.
Mr. MEUSER. I am way past my time.
Ms. ABRAMSON. No worries, but thank you very much,
Congressman.
Chairman PHILLIPS. The gentleman's time is expired but we
are going to move to a brief second round. And frankly, Mr.
Meuser, I really appreciate this exchange and your comments,
and if you are willing, we can come back to it in a moment.
With that, we will move to a second round. I will recognize
myself for 5 minutes.
Mr. Chapman, I think you would agree, as probably most
Committee members would agree and most small business owners,
the labor shortage is an issue. Inflation is an issue. Energy
costs are an issue. Tax burdens are a challenge. But because
today's topic is about the effects of climate change on
business and how we can support small businesses, describe for
us what you think would happen if we addressed all those other
issues but we did nothing to support resiliency amongst small
businesses in the United States.
Mr. CHAPMAN. Yeah. It is a tough topic, right, because I
was just thinking as I was listening to this last response that
I just wanted to use an example of something so simple that
Sunnyside Marina just took advantage of. We just changed out
our lighting. We went to all LED lighting in our warehouse, in
our shop, in our ship store. We spent about $8,000 to do it.
Excel Energy was nice enough to give us a rebate of about
$2,000. So we put $6,000 into this project. But guess what else
happened? We lowered our electric bill by $200 a month, which
obviously is going to pay off quickly; right? So, you know,
these are simple things that can be accomplished without, you
know, really changing the world.
But in regards to how we look at climate change and how we
look at what kind of things can happen to us, again, we are in
a low water situation right now. We literally have boats in St.
Paul, Minnesota, that are in their slips, sitting on the
ground. They do not have enough water to float. That is
obviously a dredging issue. But all of these things are related
to climate change; right? So what happens if we do not do
anything? If we do not try to give these small businesses the
opportunity again to be prepared to spend the money that they
need to spend and with the help of the Small Business
Administration maybe lending them money to help get some of
this dredging done or get some of this other stuff done that
needs to be accomplished in order for them to stay in business.
You know, we need to see these small businesses not be able to
succeed simply because we do not want to address the issue just
because it might be related to climate change.
Chairman PHILLIPS. I appreciate it, Mr. Chapman.
Mr. Glenn, I know you are in Texas, a small business owner,
and you referenced a lot of the challenges small businesses
face, and I concur. They are all issues that we should consider
and address. But maybe share with us for a few moments if you
would about what impact on your business you are seeing in
Texas relative to changing climate, weather events, droughts,
the like. And equally importantly, on your customers. The ones
that come to you for signs.
Mr. GLENN. Sure. Thank you for the question.
You know, one of the things we have seen and observed is we
have directly been impacted with some of the things, and one of
the most recent impacts climate-wise was the winter storm that
Texas faced in February. We were closed, along with most other
businesses. We were closed for over a week so that definitely
hurt things. We had to be innovative on how we reacted to that.
We set people up remotely for work environments and tried to
make do as best we could with the business. But in terms of
some of the things that we do environmentally and how we can
contribute to that, I would like to share a little bit about
what we do in our business and some of the characteristics of
the things that we have and where we can kind of shrink our
carbon footprint.
So 30 percent of my revenue of selling signs is aluminum
signage. That is various types of signs made from aluminum
products is 30 percent. So in an ideal world we would use a 4-
by-8 sheet of aluminum, cut the sizes we need from that. In an
ideal world we would have zero scrap. But that is not reality.
We have remnants. We have scraps. And at 30 percent of a $5
million business, that is a fair amount of scraps and aluminum
that otherwise we could just discard. But we make a point, 100
percent of that is recycled. And, you know, aluminum has a lot
of different uses other than just the sign industry, of course.
But to put that in perspective, in our volume and in our
operation and within my production areas, that equates to three
or four trailer loads of scrap aluminum that we are recycling
every year. And so those are things like that. You know, Mr.
Chapman mentioned LED lights. We have done that. You know,
these are the small things that will make a difference with us.
Another thing I would bring up, too, and this is really
something that is probably not on the surface that anyone would
thing about but we have wide-format sign printers in our
business. And the ink cartridges, and how many ink cartridges
we go through in a year, and just in my operation, extrapolate
that out within the industry, but we make a point to recycle
the ink cartridges. And keep in mind, these cartridges are
approximately the size of a small shoebox. So they are not
something that you would just want to toss anywhere. So there
is a recycling program for that as well.
So these are some things that in our business that we do to
try to impact or lessen the impact that we have on the
environment. And so I just wanted to share those with you and
just kind of let you know kind of what we are doing out here,
you know, on those fronts.
Chairman PHILLIPS. Thank you, sir. And we salute and
celebrate those efforts with gratitude.
With that I will recognize my friend from Pennsylvania, Mr.
Meuser, for another 5 minutes.
Mr. MEUSER. Well, thanks again, Mr. Chairman.
So, Dr. Abramson, you went through a list earlier of some
of the things and resources and advocacies and assets you have
available for small business. Could you give me a summary of
how you could help and advocate some businesses in my district
or any of our districts for that matter?
Ms. ABRAMSON. Thank you, Congressman.
So I think one of the important things we have talked about
is trying to help make energy affordable for all small
businesses. And I think some of the programs that we discussed
today, 504, other sorts of financing assistance for modernizing
energy infrastructure and ensuring that our small businesses
are getting the most out of their money is really critical. And
we see those kinds of assistance programs provided at the
Federal, state, and utility level.
On the flipside, too, we have the providers of energy
technologies, and I have spoken a lot about energy innovation
in this hearing. And I would say about a quarter to a third of
the members that I work with are earlier stage companies. And
they really excite me because they represent the promise of the
energy future and the economy.
And so I mentioned some of the critical Federal investments
that are very important to helping to get their ideas off of
the table and turn them into real businesses. And those include
things like RPE, SBIR, America's Seed Fund, America Made
Challenges program. And these have enjoyed bipartisan support
because these types of programs really have helped with energy
innovation and addressing our competitiveness son a global
scale.
We have outlined some proposed improvements to make some of
these programs even more impactful and accessible. And so
actually, in my written testimony, I have included a link to a
letter where we have 115 business signatures recommending some
improvements to SBIR. These are all pretty much low or zero
cost types of proposals that can be administered, some of them
accomplished through administrative action and some through
legislation. And they include things like trying to make the
various SBIR programs across the Federal agencies more uniform,
learn what is working best at particular agencies and apply
those best practices across the board. They include things such
as making permanent certain pilot programs that have helped
these agencies improve their administration of the programs or
commercialization, providing more flexibility to small
businesses in how they can use their technical and business
assistance funds, encouraging the use of short form
applications for the first round of review so that companies do
not waste their time on 60-page applications if it turns out
their technology is not a good fit.
And then one thing I wish that we could sort of get a
message across to the Department of Energy in particular to
learn from some of the other agencies is they have sort of in
recent years adopted a practice of allocating their SBIR funds,
which is a 3.65 percent set-aside of their extra grant funds
according to the specific subaccounts of the agency. And we do
not think that that is the best way to do it. Just sort of
allocating it across the broader accounts such as Office of
Science, Energy Efficiency, Renewable Energy, and Fossil Energy
would be better because right now the way they are doing it,
for some of the smaller accounts they can maybe cobble together
one SBIR award a year. And it also kind of hinders their
flexibility to call for more open solicitations for novel
technology ideas that might not be envisioned.
So those are just a handful of the recommendations. Our
letter details these in further depth but I think, in sort,
basically, on both the customer side and the provider side we
really need to think about what small businesses need and make
sure that the federal government is supporting them.
Mr. MEUSER. That is great.
I have limited time. I just want to ask Mr. Glenn, is there
something you are hearing today or do you have any further
comments where we can advocate for you or perhaps resources
discussed during this hearing would be of use to a business
like yours?
Mr. GLENN. Sure. Thank you for inquiring and checking with
me on that. As a small business owner, the fear for us is
uncertainty. And we look for certainty practically in every
step of the way where we can make the best decisions for our
business. And you know, as an entrepreneur you have to be a
certain amount of a risk taker. So with uncertainty, that just
increases risk. You know, but the largest thing and some of the
largest concerns which I have touched on in my testimony is
what is the chances of additional tax burdens? Those are things
that quite frankly will keep me up at night. It is, how does
that impact my cashflow? How does that impact my balance sheet?
If it does, how do I make the adjustments? All of these series
of events are what goes through a small business owner's mind
as far as how do I adjust? You have to constantly be aware of
what are your challenges of the day, so to speak? What are the
long-term challenges? What are the immediate challenges? And
those are the things that we look for to thrive with our
business and to create more jobs and to become profitable and
create wealth is, you know, taking out some of the uncertainty
that could originate from the government. And you know, quite
frankly, let capitalism work to its fullest extent and without
interference. And there is a long history of that and a long
history of success with that. And so those are the things that
a small business owner, that is some of their greatest concerns
is what I would add.
Mr. MEUSER. Thank you very much. I appreciate your
testimony.
I yield back, Mr. Chairman.
Chairman PHILLIPS. The gentleman yields back.
And with that, we will conclude our questioning.
And I want to thank all of our witnesses. Heartfelt
gratitude for joining us today. Your testimony has shed light
on the economic challenges that you are all facing, that the
country is. But also the opportunities that lie ahead for us.
You know, climate change is real. We are seeing it right in
front of our eyes, whether it is Mr. Glenn having to close his
business for a week because of winter storms in Texas; whether
it is boats sitting on lakebeds in Minnesota or a lack of snow
in Northern Minnesota for snowmobilers, not to mention the
horrors we are seeing in the West right now as fires rage. It
is real. The question is, are we going to do something about
it? Are we just going to hope that businesses survive? I would
argue, and I believe my colleagues agree, and the point of
today's hearing was to elevate the need to provide investment
resources to small business to become more resilient. That is
what this hearing is all about, how to protect small
businesses.
COVID-19 has only highlighted that even the most
sophisticated, well-staffed, well-resourced and profitable
companies are still terribly vulnerable to unanticipated
shocks. We have learned that there has to be greater government
capacity to anticipate and then deal with major public crises.
And for members of this Committee, I believe that means working
to ensure that small businesses have support from the SBA and
other programs as they experience the consequences of climate
change. The crisis poses challenges, of course, for American
small businesses and the SBA programs have to anticipate those
and reflect that reality.
On this Committee, many of us like to say there is no
partisanship when it comes to small businesses, and I think the
same should go for the protection of our planet. Not just the
planet, mind you. This is about our children and our
grandchildren. Earth will survive. Earth will survive. The
question is, will our children survive? Will humanity survive
these consequences. The question is not whether they are
manmade or not. The question is how are we going to accommodate
it, anticipate it, and address it, and that should be our
concern. And small businesses as the backbone of our entire
economy, have to be prepared for these realities.
So I look forward to working with my colleagues on both
sides of the aisle as we seek to ensure that small firms
benefit from the creation of a more sustainable and resilient
economy and ultimately, a more livable planet for our
descendants.
I would ask for unanimous consent that members have 5
legislative days to submit statements and supporting materials
for the record.
And without objection, so ordered.
And if there is no further business to come before the
Committee, we are now adjourned. And I thank you all.
[Whereupon, at 11:20 p.m., the Subcommittee was adjourned.]
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