[House Report 112-554]
[From the U.S. Government Publishing Office]


112th Congress  }                                             {  Report
  2d Session    }        HOUSE OF REPRESENTATIVES             { 112-554
_______________________________________________________________________
                                                 Union Calendar No. 397
 
                   SEMIANNUAL REPORT ON THE ACTIVITY 

                                 of the

                      COMMITTEE ON SMALL BUSINESS

                  SECOND SESSION OF THE 112TH CONGRESS

                 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


 June 28, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

19-006 PDF                       WASHINGTON : 2012 





                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                               Committee on Small Business,
                                     Washington, DC, June 28, 2012.
Hon. Karen L. Haas,
Clerk, House of Representatives,
Washington, DC.
    Dear Ms. Haas: Pursuant to clause 1(d) of rule XI of the 
Rules of the House of Representatives for the 112th Congress, I 
present herewith the third semi-annual report of the activities 
of the Committee covering the first half of the second session 
of the 112th Congress, including the Committee's review of 
legislation within its jurisdiction and the oversight 
activities taken in accordance with the oversight plan adopted 
on January 26, 2011.
            Sincerely,
                                                Sam Graves,
                                                          Chairman.
    Enclosure.



                            C O N T E N T S

                              ----------                              
                                                                   Page
Committee Jurisdiction...........................................     1
Rules of the Committee...........................................     1
Membership and Organization......................................    13
Legislative Activities...........................................    17
Oversight Summary................................................    27
  Part A--Full Committee Hearings................................    27
  Part B--Subcommittee Hearings..................................    47
  Part C--Waste, Fraud, Abuse, and Mismanagement.................    77
Oversight Plan...................................................    81
  Part A--Committee Oversight Plan...............................    81
  Part B--Implementation of Oversight Plan.......................    89
Regulatory Review................................................   103
                                 REPORT

    Clause 1(d) of rule XI of the Rules of the House of 
Representatives for the 112th Congress requires that each 
standing Committee, not later than the 30th day after June 1, 
submit to the House a semiannual report on the activities of 
that Committee, including separate sections summarizing the 
legislative and oversight activities of that Committee.

              JURISDICTION AND SPECIAL OVERSIGHT FUNCTION

    Clause 1(q) of rule X of the Rules of the House of 
Representatives of the 112th Congress sets forth the 
jurisdiction of the Committee on Small Business as follows--
    (1) Assistance to and protection of small business, 
including financial aid, regulatory flexibility, and paperwork 
reduction.
    (2) Participation of small-business enterprises in Federal 
procurement and Government contracts.
    Clause 3(l) of rule X of the Rules of the House of 
Representatives for the 112th Congress sets forth the Special 
Oversight Function of the Committee on Small Business as 
follows--
    The Committee on Small Business shall study and investigate 
on a continuing basis the problems of all types of small 
business.

    RULES OF THE COMMITTEE ON SMALL BUSINESS FOR THE 112TH CONGRESS

                         1. GENERAL PROVISIONS

    The Rules of the House of Representatives, in total (but 
especially with the operations of Committees rule X, cl. 1(q), 
cl. 2, cl. 3(l), and rule XI) are the rules of the Committee on 
Small Business to the extent applicable and are incorporated by 
reference. Each Subcommittee of the Committee on Small Business 
(``the Committee'') is a part of the Committee and is subject 
to the authority and direction of the Committee, and to the 
rules of the House and the rules adopted herein to the extent 
applicable.

                   2. REFERRAL OF BILLS BY THE CHAIR

    The Chair will retain consideration of all legislation 
referred to the Committee by the Speaker. No action will be 
required of a Subcommittee before legislation is considered for 
report by the Committee. Subcommittee chairs, pursuant to the 
rules set out herein, may hold hearings on any bill referred to 
the Committee.

                           3. DATE OF MEETING

    The regular meeting date of the Committee shall be the 
second Wednesday of every month when the House is in session. 
The Chair may dispense with the meeting of the Committee, if in 
the sole discretion of the Chair, there is no need for such 
meeting. Additional meetings may be called as deemed necessary 
by the Chair or at the request of the majority Members of the 
Committee pursuant to rule XI, cl. 2(c) of the rules of the 
House.
    At least 3 days notice of such an additional meeting shall 
be given unless the Chair, with the concurrence of the Ranking 
Minority Member, determines that there is good cause to call 
the meeting on less notice or upon a vote by a majority of the 
Committee (a quorum being present). To the extent possible, the 
three days shall be counted from the 72 hours before the time 
of the meeting. Announcements of the meeting shall be published 
promptly in the Daily Digest and made publicly available in 
electronic form.
    The determination of the business to be considered at each 
meeting shall be made by the Chair subject to limitations set 
forth in House Rule XI, cl. 2(c).
    The Chair shall provide to each Member of the Committee, to 
the extent practicable, at least 48 hours in advance of a 
meeting, a copy of the bill, resolution, report or other item 
to be considered at the meeting, but no later than 24 hours 
before the meeting. Such material also shall be made available 
to the public at least 24 hours in advance in electronic form.
    The rules for notice and meetings as set forth in rule 3 of 
these Rules shall not apply to special and emergency meetings. 
Clause 2(c)(2) of rule XI and clause 2(g)(3)(A) of rule XI of 
the Rules of the House, as applicable, shall apply to such 
meetings.
    A record vote of the Committee shall be provided on any 
question before the Committee upon the request of any Member of 
the Committee. A record of the vote of each Member of the 
Committee on a matter before the Committee shall be available 
in electronic form within 48 hours of such record vote, and, 
with respect to any roll call vote on any motion to amend or 
report, shall be included in the report of the Committee 
showing the total number of votes cast for and against and the 
names of those Members voting for and against.
    The Chair of the Committee shall, not later than 24 hours 
after consideration of a bill, resolution, report or other item 
cause the text of the reported item and any amendment adopted 
thereto to be made publicly available in electronic form.

                      4. ANNOUNCEMENT OF HEARINGS

    Public announcement of the date, place, and subject matter 
of any hearing to be conducted by the Committee shall be made 
no later than 7 calendar days before the commencement of the 
hearing. To the extent possible, the seven days shall be 
counted from 168 hours before the time of the Committee's 
hearing.
    The Chair, with the concurrence of the Ranking Minority 
Member, or upon a vote by the majority of the Committee (a 
quorum being present), may authorize a hearing to commence on 
less than 7 calendar days notice.

A. Witness Lists

    Unless the Chair determines it is impracticable to do so, 
the Committee shall make a tentative witness list available at 
the time it makes the public announcement of the hearing. If a 
tentative witness list is not made available at the time of the 
announcement of the hearing, such witness list shall be made 
available as soon as practicable after such announcement is 
made. A final witness list shall be issued by the Committee no 
later than 48 hours prior to the commencement of the hearing.

B. Material for the Hearing

    The Chair shall provide to all Members of the Committee, as 
soon as practicable after the announcement of the hearing, a 
memorandum explaining the subject matter of the hearing and any 
official reports from departments and agencies on the subject 
matter of the hearing. Such material shall be made available to 
all Members of the Committee no later than 48 hours before the 
commencement of the hearing unless the Chair, after 
consultation with the Ranking Minority Member, determines that 
certain reports from departments or agencies should not be made 
available prior to the commencement of the hearing. Material 
provided by the Chair to all Members, whether provided prior to 
or at the hearing, shall be placed on the Committee website no 
later than 48 hours after the commencement of the hearing 
unless such material contains sensitive or classified 
information in which case such material shall be handled 
pursuant to rule 15 of the Committee's Rules.

              5. MEETINGS AND HEARINGS OPEN TO THE PUBLIC

A. Meetings

    Each meeting of the Committee or its Subcommittees for the 
transaction of business, including the markup of legislation, 
shall be open to the public, including to radio, television, 
and still photography coverage, except as provided by House 
rule XI, cl. 4. If the majority of Members of the Committee or 
Subcommittee present at the meeting, determine by a recorded 
vote in open session that all or part of the remainder of the 
meeting on that day shall be closed to the public because the 
disclosure of matters to be considered would endanger national 
security, would compromise sensitive law enforcement 
information, or would tend to defame, degrade, or incriminate 
any person or otherwise would violate any law or rule of the 
House; provided however, that no person other than Members of 
the Committee, and such congressional staff and such executive 
branch representatives they may authorize, shall be present in 
any meeting which has been closed to the public.
    The Chair and Ranking Minority Member are ex officio 
Members of all Subcommittees for the purpose of any meeting or 
hearing conducted by a Subcommittee.

B. Hearings

    Each hearing conducted by the Committee or its 
Subcommittees shall be open to the public, including radio, 
television and still photography coverage. If the majority of 
Members of the Committee or Subcommittee present at the 
hearing, determine by a recorded vote in open session that all 
or part of the remainder of the hearing on that day shall be 
closed to the public because the disclosure of matters to be 
considered would endanger national security, would compromise 
sensitive law enforcement information, or would tend to defame, 
degrade, or incriminate any person or otherwise would violate 
any law or rule of the House; provided however, that the 
Committee or Subcommittee may by the same procedure also vote 
to close one subsequent day of hearings. Notwithstanding the 
requirements of the preceding sentence, a majority of those 
present (if the requisite number of Members are present under 
Committee rules for the purpose of taking testimony) may vote: 
(i) to close the hearing for the sole purpose of discussing 
whether the testimony or evidence to be received would endanger 
the national security, would compromise sensitive law 
enforcement information, or violate rule XI, cl. 2(k)(5) of the 
House or (ii) to close the hearing, as provided clause 2(k)(5) 
of rule XI of the House.
    The Chair and Ranking Minority Member are ex officio 
Members of all Subcommittees any hearing conducted by a 
Subcommittee. Members of the Committee who wish to participate 
in a hearing of the Subcommittee to which they are not Members 
shall make such request to the Chair and the Ranking Minority 
Member of the Subcommittee at the commencement of the hearing. 
The Chair, after consultation with the Ranking Minority Member 
of the Subcommittee, shall grant such request.
    No Member of the House may be excluded from non-
participatory attendance at any hearing of the Committee or any 
Subcommittee, unless the House of Representatives shall by 
majority vote authorize the Committee or Subcommittees, for 
purposes of a particular subject of investigation, to close its 
hearing to Members by the same procedures designated to close 
hearings to the public.
    Members of Congress who are not Members of the Committee 
but would like to participate in a hearing shall notify the 
Chair and the Ranking Minority Member and submit a formal 
request no later than 24 hours before the commencement of the 
meeting or hearing.
    To the maximum extent practicable, the Committee shall 
provide audio and video coverage of each hearing or meeting for 
the transaction of business in a manner that allows the public 
to easily listen and view the proceedings and shall maintain 
the recordings of such coverage in a manner easily accessible 
to the public.

                              5. WITNESSES

A. Statement of witnesses

    Each witness who is to appear before the Committee or 
Subcommittee shall file an electronic copy of the testimony 
with the Committee and the Ranking Minority Member no later 
than 48 hours before the commencement of the hearing. In 
addition, the witness shall provide 75 copies of the testimony 
by the commencement of the hearing. The Chair may waive the 
requirement of the witness providing 75 copies in which case 
the Committee or Subcommittee shall provide the 75 copies.
    Each non-governmental witness shall provide to the 
Committee and the Ranking Minority Member, no later than 48 
hours before the commencement of the hearing, a curriculum 
vitae or other statement describing their education, 
employment, professional affiliation or other background 
information pertinent to their testimony.
    As required by rule XI, cl. 2(g) of the Rules of the House, 
each non-governmental witness before the commencement of the 
hearing shall file with the Chair a disclosure form detailing 
any contracts or grants that the witness has with the federal 
government.
    The failure to provide the materials set forth by the 
deadlines set forth in these rules may be grounds for excluding 
both the oral and written testimony of the witness unless 
waived by the Chair of the Committee or Subcommittee.
    The Committee will provide public access to printed 
materials, including the testimony of witnesses in electronic 
form on the Committee's website no later than 24 hours after 
the hearing is adjourned. Supplemental material provided after 
the hearing adjourns, shall be placed on the Committee website 
no later than 24 hours after receipt of such material.

B. Number of witnesses and witnesses selected by the minority

    For any hearing conducted by the Committee or Subcommittee 
there shall be no more than four non-governmental witnesses of 
which the Ranking Minority Member of the Committee or 
Subcommittee (as appropriate) is entitled to select one witness 
for the hearing. Witnesses selected by the Ranking Minority 
Member of the Committee or Subcommittee shall be invited to 
testify by the Chair of the Committee or Subcommittee (as 
appropriate). Rule 6(A) shall apply with equal force to 
witnesses selected by the Ranking Minority Member of the 
Committee or Subcommittee.
    The limitations set forth in the preceding paragraph shall 
not apply if the Committee holds a hearing to honor the work of 
the small business community in conjunction with the annual 
celebration of Small Business Week. Witness limitations for 
such a hearing shall be determined by the Chair in consultation 
with the Ranking Minority Member.

C. Interrogation of Witnesses

    Except when the Committee adopts a motion pursuant to 
subdivisions (B) and (C) of clause 2(i)(2) of rule XI of the 
Rules of the House, Committee Members may question witnesses 
only when they have been recognized by the Chair for that 
purpose.
    The Chair and Ranking Minority Member of the Committee or 
Subcommittee shall face no limitation on the length of the time 
that they may question a witness. After recognition by the 
Chair, other Members shall have the opportunity, as set forth 
in rule XI, cl. 2 (j) of the Rules of the House, to question 
each witness on the panel for a period not to exceed five 
minutes.
    For any hearing, the Chair of the Committee or Subcommittee 
may offer a motion to extend the questioning of a witness or 
witnesses by Members other than the Chair or Ranking Minority 
Member identified in the motion for more than five minutes as 
set forth in rule XI, cl. 2(j)(B).
    The Chair of the Committee or Subcommittee shall commence 
questioning followed by the Ranking Minority Member. 
Thereafter, questioning shall alternate between the majority 
and minority Members by the time in which the Member arrived at 
the hearing after the gavel has been struck to commence the 
hearing, with the first arriving having priority over Members 
of his or her party. If Members arrive simultaneously or are 
there prior to the gavel being struck to commence the hearing, 
order of questioning shall be based on seniority.
    In recognizing Members to question witnesses, the Chair may 
take into consideration the ratio of majority and minority 
Members present in such a manner as to not disadvantage the 
Members of either party.

                              6. SUBPOENAS

    A subpoena may be authorized and issued by the Committee in 
the conduct of any investigation or series of investigations or 
activities to require the attendance and testimony of such 
witness and the production of such books, records, 
correspondence, memoranda, papers and document, as deemed 
necessary. Such subpoena shall be authorized by a majority of 
the full Committee. The requirement that the authorization of a 
subpoena require a majority vote may be waived by the Ranking 
Member of the Committee. The Chair may issue a subpoena, in 
consultation with the Ranking Minority Member, when the House 
is out for session for more than three legislative days.

                               7. QUORUM

    A quorum, for purposes of reporting a measure or 
recommendation, shall be a majority of the Committee Members. 
For purposes of taking testimony or receiving evidence, a 
quorum shall be one Member from the Majority and one Member 
from the Minority. The Chair of the Committee or Subcommittee 
shall exercise reasonable comity by waiting for the Ranking 
Minority Member even if a quorum is present before striking the 
gavel to commence the hearing. For hearings held by the 
Committee or a Subcommittee in a location other than the 
Committee's hearing Room in Washington, DC, a quorum shall be 
deemed to present if the Chair of the Committee or Subcommittee 
is present.

                      8. AMENDMENTS DURING MARK-UP

    Any amendment offered to any pending legislation before the 
Committee must be made available in written form by any Member 
of the Committee. If such amendment is not available in written 
form when requested, the Chair shall allow an appropriate 
period for the provision thereof. Such period shall not 
prejudice the offering of such amendment.
    For amendments to be accepted during mark-up, there is no 
requirement that the amendments be filed prior to commencement 
of the mark-up or prepared with the assistance of the Office of 
Legislative Counsel. Even though it is not necessary, Members 
seeking to amend legislation during mark-up should draft 
amendments with the assistance of the Office of Legislative 
Counsel and consult with the Chair or Ranking Member's staff 
(as appropriate) in the preparation of such amendments.

                     9. POSTPONEMENT OF PROCEEDINGS

    The Chair in consultation with the Ranking Minority Member 
may postpone further proceedings when a record vote is ordered 
on the question of approving any measure or matter or adopting 
an amendment. The Chair may resume postponed proceedings, but 
no later than 24 hours after such postponement, unless the 
House is not in session or there are conflicts with Member 
schedules that make it unlikely a quorum will be present to 
conduct business on the postponed proceeding. In such cases, 
the Chair will consult with Members to set a time as early as 
possible to resume proceedings but in no event later than the 
next meeting date as set forth in rule 3 of these Rules. When 
proceedings resume on a postponed question, notwithstanding any 
intervening order for the previous question, an underlying 
proposition shall remain subject to further debate or amendment 
to the same extent as when the question was postponed.

              10. NUMBER AND JURISDICTION OF SUBCOMMITTEES

    There will be five Subcommittees as follows:

The Subcommittee on Agriculture, Energy and Trade

    This Subcommittee (which will consist of seven (7) 
Republican Members and five (5) Democratic Members) will 
address policies that enhance rural economic growth, increasing 
America's energy independence and ensuring that America's small 
businesses can compete effectively in a global marketplace.
     Oversight of agricultural policies.
     Oversight of environmental issues and regulations 
(including agencies such as the Environmental Protection Agency 
and the Army Corps of Engineers).
     Oversight of energy issues, including expansion of 
domestic resources whether they are renewable or non-renewable.
     Oversight of international trade policy with 
particular emphasis on agencies that provide direct assistance 
to small businesses, such as: the Small Business 
Administration's (SBA) Office of International Trade, the 
Department of Commerce's United States Export Assistance 
Centers, the Department of Agriculture's Foreign Agricultural 
Service, and the Export-Import Bank.
     Oversight of infringement of intellectual property 
rights by foreign competition.

The Subcommittee on Healthcare and Technology

    This Subcommittee (which will consist of eight (8) 
Republican Members and five (5) Democratic Members) will 
address how healthcare policies may inhibit or promote economic 
growth and job creation by small businesses. In addition, the 
Subcommittee will examine small business job growth through the 
creation and adoption of advanced technologies.
     Oversight of the implementation of the Patient 
Protection and Affordable Care Act.
     Oversight of availability and affordability of 
healthcare coverage for small businesses.
     Oversight of general technology issues, including 
intellectual property policy in the United States.
     Oversight of United States telecommunications 
policies including, but not limited to, the National Broadband 
Plan and allocation of electromagnetic spectrum.
     The Small Business Innovation Research Program.
     Small Business Technology Transfer Program.

The Subcommittee on Economic Growth, Tax and Capital Access

    This Subcommittee (which will consist of seven (7) 
Republican Members and five (5) Democratic Members) will 
evaluate the operation of the financial markets in the United 
States and their ability to provide needed capital to small 
businesses. In addition, the Subcommittee will review federal 
programs, especially those overseen by the SBA, aimed at 
assisting entrepreneurs in obtaining needed capital. Since the 
tax policy plays an integral role in access to capital, this 
Committee also will examine the impact of federal tax policies 
on small businesses.
     Oversight of capital access and financial markets.
     Implementation of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act.
     SBA financial assistance programs, including 
guaranteed loans, microloans, certified development company 
loans, and small business investment companies.
     Oversight of the Department of Agriculture 
Business and Industry Guaranteed Loan program.
     Oversight of general tax policy affecting small 
businesses.
     The management of the SBA disaster loan program.

The Subcommittee on Investigations, Oversight and Regulations

    This Subcommittee (which will consist of seven (7) 
Republican Members and five (5) Democratic Members) will probe 
the efficient operation of government programs that affect 
small businesses, including the SBA, and develop proposals to 
make them operate in a more cost-effective manner. This 
Subcommittee also will review the regulatory burdens imposed on 
small businesses and how those burdens may be alleviated.
     Oversight of general issues affecting small 
businesses and federal agencies.
     Oversight of the management of the SBA.
     Oversight of the SBA Inspector General.
     Implementation of the Regulatory Flexibility Act.
     Oversight of the Office of Information and 
Regulatory Affairs at the Office of Management and Budget.
     Use of the Congressional Review Act.
     Transparency of the federal rulemaking process as 
required by the Administrative Procedure and Data Quality Acts.
     Implementation of the Paperwork Reduction Act.

The Subcommittee on Contracting and Workforce

    This Subcommittee (which will consist of seven (7) 
Republican Members and five (5) Democratic Members) will assess 
the federal procurement system, including those programs 
designed specifically to enhance participation by small 
businesses in providing goods and services to the federal 
government. The Subcommittee will examine various programs 
designed to provide technical assistance to small businesses, 
whether specifically aimed at federal contractors or small 
businesses in general. Finally, the Subcommittee will review 
the broad scope of workforce issues that affect the ability of 
small businesses to obtain and maintain qualified employees.
     Oversight of government-wide procurement practices 
and programs affecting small businesses.
     Oversight of federal procurement policies that 
inhibit or expand participation by small businesses in the 
federal contracting marketplace.
     All contracting programs established by the Small 
Business Act, including HUBZone, 8(a), Women-, and Service 
Disabled Veteran-Owned Small Business Programs.
     Technical assistance provided to federal 
contractors and perspective contractors through SBA personnel, 
Offices of Small and Disadvantaged Business Utilization, and 
Procurement Technical Assistance Centers.
     The SBA Surety Bond guarantee program.
     Oversight of all federal policies that affect the 
workforce including, but not limited to, the roles of the 
Department of Labor and the National Labor Relations Board.
     SBA entrepreneurial development and technical 
assistance programs unrelated to participation in the federal 
government contracting.

                 11. POWERS AND DUTIES OF SUBCOMMITTEES

    Each Subcommittee is authorized to meet, hold hearings, 
receive evidence, and report to the Committee on any matters 
referred to it. Prior to the scheduling of any meeting or 
hearing of a Subcommittee, the Chair of the Subcommittee shall 
obtain the approval of the Chair of the Committee.
    No hearing or meeting of a Subcommittee shall take place at 
the same time as the meeting or hearing of the full Committee 
or another Subcommittee, provided however, that the 
Subcommittee Chairs may hold field hearings that conflict with 
those held by other Subcommittees of the Committee.

                          13. COMMITTEE STAFF

A. Majority Staff

    The employees of the Committee, except those assigned to 
the Minority as provided below, shall be appointed and 
assigned, and may be removed by, the Chair of the Committee. 
The Chair shall fix their remuneration and they shall be under 
the general supervision and direction of the Chair.

B. Minority Staff

    The employees of the Committee assigned to the Minority 
shall be appointed and assigned, and their remuneration 
determined, as the Ranking Minority Member of the Committee 
shall determine.

C. Subcommittee Staff

    There shall be no separate staff assigned to Subcommittees. 
The Chair and Ranking Member shall endeavor to ensure that 
sufficient Committee staff is made available in order that each 
Subcommittee may carry out the responsibilities set forth in 
Rule 11, supra.

                              14. RECORDS

    The Committee shall keep a complete record of all actions, 
which shall include a record of the votes on any question on 
which a recorded vote is demanded. The result of any vote by 
the Committee, or if applicable by a Subcommittee, included a 
voice vote shall be posted on the Committee's website within 24 
hours after the vote has been taken. Such record shall include 
a description of the amendment, motion, order, or other 
proposition, the name of the Member voting for and against such 
amendment, motion, order, or other proposition, and the names 
of Members present but not voting. For any amendment, motion, 
order, or other proposition decided by voice vote, the record 
shall include a description and whether the voice vote was in 
favor or against.
    The Committee shall keep a complete record of all Committee 
and Subcommittee activity which, in the case of a meeting or 
hearing transcript shall include a substantially verbatim 
account of the remarks actually made during the proceedings 
subject only to technical, grammatical, and typographical 
corrections authorized by the person making the remarks.
    The records of the Committee at the National Archives and 
Records Administration shall be made available in accordance 
with rule VII of the Rules of the House. The Chair of the 
Committee shall notify the Ranking Member of the Committee of 
any decision, pursuant to rule VII, cl. 3(b)(3) or cl. 4 (b), 
to withhold a record otherwise available, and the matter shall 
be presented to the Committee for a determination of the 
written request of any Member of the Committee.
    The Committee Rules shall be made publicly available in 
electronic form and published in the Congressional Record not 
later than 30 days after the Chair of the Committee is elected 
in each odd-numbered year.

           15. ACCESS TO CLASSIFIED OR SENSITIVE INFORMATION

    Access to classified or sensitive information supplied to 
the Committee or Subcommittees and attendance at closed 
sessions of the Committee or a Subcommittee shall be limited to 
Members and necessary Committee staff and stenographic 
reporters who have appropriate security clearance when the 
Chair determines that such access or attendance is essential to 
the functioning of the Committee or one of its Subcommittees.
    The procedures to be followed in granting access to those 
hearings, records, data, charts, and files of the Committee 
which involve classified information or information deemed to 
be sensitive shall be as follows:
    (A) Only Members of the House of Representatives and 
specifically designated Committee staff of the Committee on 
Small Business may have access to such information.
    (B) Members who desire to read materials that are in 
possession of the Committee shall notify the Clerk of the 
Committee in writing.
    (C) The Clerk of the Committee will maintain an accurate 
access log, which identifies the circumstances surrounding 
access to the information, without revealing the material 
examined.
    (D) If the material desired to be reviewed is material 
which the Committee or Subcommittee deems to be sensitive 
enough to require special handling, before receiving access to 
such information, individuals will be required to sign an 
access information sheet acknowledging such access and that the 
individual has read and understands the procedures under which 
access is being granted.
    (E) Material provided for review under this rule shall not 
be removed from a specified Room within the Committee offices.
    (F) Individuals reviewing materials under this rule shall 
make certain that the materials are returned to the proper 
custodian.
    (G) No reproductions or recordings may be made of any 
portion of such materials.
    (H) The contents of such information shall not be divulged 
to any person in any way, form, shape, or manner and shall not 
be discussed with any person who has not received the 
information in the manner authorized by the rules of the 
Committee.
    (I) When not being examined in the manner described herein, 
such information will be kept in secure safes or locked file 
cabinets within the Committee offices.
    (J) These procedures only address access to information the 
Committee or Subcommittee deems to be sensitive enough to 
require special treatment.
    (K) If a Member of the House of Representatives believes 
that certain sensitive information should not be restricted as 
to dissemination or use, the Member may petition the Committee 
or Subcommittee to so rule. With respect to information and 
materials provided to the Committee by the Executive Branch or 
an independent agency as that term is defined in 44 U.S.C. 
Sec. 3502, the classification of information and materials as 
determined by the Executive Branch or independent agency shall 
prevail unless affirmatively changed by the Committee or 
Subcommittee involved, after consultation with the Executive 
Branch or independent agency.
    (L) Other materials in the possession of the Committee are 
to be handled in the accordance with normal practices and 
traditions of the Committee.

                          16. OTHER PROCEDURES

    The Chair of the Committee may establish such other 
procedures and take such actions as may be necessary to carry 
out the foregoing rules or to facilitate the effective 
operation of the Committee.

                   17. AMENDMENTS TO COMMITTEE RULES

    The rules of the Committee may be modified, amended or 
repealed by a majority vote of the Members, at a meeting 
specifically called for such purpose, but only if written 
notice of the proposed change or changes has been provided to 
each Member of the Committee at least 72 hours prior to the 
time of the meeting of the Committee to consider such change or 
changes.

                         18. BUDGET AND TRAVEL

    From the amount provided to the Committee in the primary 
expense resolution adopted by the House of Representatives in 
the 112th Congress, the Chair, after consultation with the 
Ranking Minority Member, shall designate one-third of the 
budget under the direction of the Ranking Minority Member for 
the purposes of minority staff, travel expenses of minority 
staff and Members, and minority office expenses.
    The Chair may authorize travel in connection with 
activities or subject matters under the legislative or 
oversight jurisdiction of the Committee as set forth in rule X 
of the Rules of the House.
    The Ranking Minority Member may authorize travel for any 
Minority Member or staff of the minority in connection with 
activities or subject matters under the Committee's 
jurisdiction as set forth in rule X of the Rules of the House. 
Before such travel, there shall be submitted to the Chair of 
the Committee in writing the following at least seven (7) 
calendar days prior specifying: a) the purpose of the travel; 
b) the dates during which the travel is to occur; c) the names 
of the states or countries to be visited and the length of time 
spent in each; and d) the names of Members and staff of the 
Committee participating in such travel. Prior approval shall 
not be required of Minority Staff traveling to participate in a 
deposition, authorized by the Chair in rule 16 of these Rules 
of an individual located outside of Washington, DC metropolitan 
area.

                         19. COMMITTEE WEBSITE

    The Chair shall maintain an official Committee website for 
the purpose of furthering the Committee's legislative and 
oversight responsibilities, including communicating information 
about Committee's activities to Committee Members and other 
Members of the House. The Ranking Minority Member may maintain 
a similar website for the same purpose, including communicating 
information about the activities of the Minority to Committee 
Members and other Members of the House.

                             20. VICE CHAIR

    Pursuant to the Rules of the House, the Chair shall 
designate a Member of the Majority to serve as Vice Chair of 
the Committee. The Vice Chair shall preside at any meeting or 
hearing during the temporary absence of the Chair. The Chair 
also reserves the right to designate a Member of the Committee 
Majority to serve as the Chair at a hearing or meeting.
                      MEMBERSHIP AND ORGANIZATION

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS

                    ONE HUNDRED AND TWELFTH CONGRESS

                                Revised

                             FULL COMMITTEE
Rep. NYDIA M. VELAZQUEZ (NY-12),     Rep. SAM GRAVES (MO-6),
Ranking Member                       Chairman
Rep. KURT SCHRADER (OR-5)            Rep. ROSCOE G. BARTLETT (MD-6)
Rep. MARK S. CRITZ (PA-12)           Rep. STEVE CHABOT (OH-1)
Rep. YVETTE D. CLARKE (NY-11)        Rep. STEVE KING (IA-5)
Rep. JUDY CHU (CA-32)                Rep. MIKE COFFMAN (CO-6)
Rep. DAVID N. CICILLINE (RI-1)       Rep. MICK MULVANEY (SC-5)
Rep. CEDRIC RICHMOND (LA-2)          Rep. SCOTT R. TIPTON (CO-3)
Rep. JANICE HAHN (CA-36)             Rep. JEFFREY M. LANDRY (LA-3)
Rep. GARY C. PETERS (MI-9)           Rep. JAIME HERRERA BEUTLER (WA-3)
Rep. WILLIAM L. OWENS (NY-23)        Rep. ALLEN B. WEST (FL-22)
Rep. WILLIAM R. KEATING (MA-10)      Rep. RENEE ELLMERS (NC-2)
                                     Rep. JOE WALSH (IL-8)
                                     Rep. LOU BARLETTA (PA-11)
                                     Rep. RICHARD HANNA (NY-24)
                                     Rep. BOBBY SCHILLING (IL-17)

             Subcommittee on Agriculture, Energy and Trade

Rep. MARK S. CRITZ (PA-12),          Rep. SCOTT R. TIPTON (CO-3),
Ranking Member                       Chairman
Rep. DAVID CICILLINE (RI-1)          Rep. ROSCOE G. BARTLETT (MD-6)
Rep. WILLIAM R. KEATING (MA-10)      Rep. STEVE KING (IA-5)
Rep. JUDY CHU (CA-32)                Rep. JEFFREY M. LANDRY (LA-3)
VACANT                               Rep. RENEE L. ELLMERS (NC-2)
                                     Rep. LOU BARLETTA (PA-11)
                                     Rep. BOBBY SCHILLING (IL-17)

               Subcommittee on Healthcare and Technology

Rep. CEDRIC RICHMOND (LA-2),         Rep. RENEE L. ELLMERS (NC-2),
Ranking Member                       Chairman
Rep. GARY C. PETERS (MI-9)           Rep. STEVE KING (IA-5)
VACANT                               Rep. MICK MULVANEY (SC-5)
VACANT                               Rep. SCOTT R. TIPTON (CO-3)
VACANT                               Rep. JAIME HERRERA BEUTLER (WA-3)
                                     Rep. JOE WALSH (IL-8)
                                     Rep. RICHARD HANNA (NY-24)
                                     Rep. BOBBY SCHILLING (IL-17)

        Subcommittee on Economic Growth, Tax and Capital Access

Rep. KURT SCHRADER (OR-5),           Rep. JOE WALSH (IL-8),
Ranking Member                       Chairman
Rep. YVETTE D. CLARKE (NY-11)        Rep. STEVE CHABOT (OH-1)
Rep. DAVID CICILLINE (RI-1)          Rep. STEVE KING (IA-5)
Rep. JUDY CHU (CA-32)                Rep. MIKE COFFMAN (CO-6)
Rep. GARY C. PETERS (MI-9)           Rep. MICK MULVANEY (SC-5)
                                     Rep. RICHARD HANNA (NY-24)
                                     Rep. BOBBY SCHILLING (IL-17)

       Subcommittee on Investigations, Oversight and Regulations

RANKING MEMBER,                      Rep. MIKE COFFMAN (CO-6),
Vacant                               Chairman
Rep. KURT SCHRADER (OR-5)            Rep. SCOTT TIPTON (CO-3)
Rep. JANICE HAHN (CA-36)             Rep. JEFFREY M. LANDRY (LA-3)
VACANT                               Rep. JAIME HERRERA BEUTLER (WA-3)
VACANT                               Rep. ALLEN B. WEST (FL-22)
                                     Rep. JOE WALSH (IL-8)
                                     Rep. RICHARD HANNA (NY-24)

               Subcommittee on Contracting and Workforce

Rep. JUDY CHU (CA-32),               Rep. MICK MULVANEY (SC-5),
Ranking Member                       Chairman
Rep. KURT SCHRADER (OR-5)            Rep. STEVE KING (IA-5)
Rep. MARK S. CRITZ (PA-12)           Rep. MIKE COFFMAN (CO-6)
Rep. YVETTE D. CLARKE (NY-11)        Rep. JEFFREY M. LANDRY (LA-3)
Rep. CEDRIC RICHMOND (LA-2)          Rep. ALLEN B. WEST (FL-22)
                                     Rep. RENEE L. ELLMERS (NC-2)
                                     Rep. LOU BARLETTA (PA-11)
                         LEGISLATIVE ACTIVITIES

    Clause 1(d) of rule XI of the Rules of the House of 
Representatives requires that not later than the 30th day after 
June 1, a Committee shall submit to the House a semiannual 
report on the activities of that Committee, including a 
separate section summarizing the legislative activities of that 
Committee.

  AN ACT TO PROVIDE FOR AN ADDITIONAL TEMPORARY EXTENSION OF PROGRAMS 
 UNDER THE SMALL BUSINESS ACT AND THE SMALL BUSINESS INVESTMENT ACT OF 
           1958 THROUGH MAY 31, 2011, AND FOR OTHER PURPOSES

                               (H.R. 366)

Summary
    H.R. 366 extended the programs authorized under the Small 
Business Act and the Small Business Investment Act of 1958 
through May 31, 2011.
Legislative history
    Chairman Sam Graves introduced H.R. 366 on January 20, 
2011. The bill was referred to the Committee on Small Business.
    On January 25, 2011, the House considered H.R. 336 under 
suspension of the rules. At the conclusion of debate, the 
measure passed by voice vote. On the same day, H.R. 366 was 
received in the Senate. On January 26, 2011, the Senate passed 
H.R. 366 by unanimous consent. On January 31, 2011, the 
President signed the bill, and it became Public Law 112-1.

  AN ACT TO PROVIDE FOR AN ADDITIONAL TEMPORARY EXTENSION OF PROGRAMS 
 UNDER THE SMALL BUSINESS ACT AND THE SMALL BUSINESS INVESTMENT ACT OF 
           1958 THROUGH MAY 31, 2012, AND FOR OTHER PURPOSES

                                (S. 990)

Summary
    S. 990 extended the programs authorized under the Small 
Business Act and the Small Business Investment Act of 1958 
through May 31, 2012.
Legislative history
    Senator Mary Landrieu introduced S. 990 on May 12, 2011, 
and the bill was placed on Senate Legislative Calendar and read 
the first time. On May 16, 2011, the legislation was read the 
second time and placed on Senate Legislative Calendar under 
General Orders, Calendar No. 51. On May 19, 2011, Senator 
Durbin offered an amendment in the nature of a substitute for 
Senator Landrieu. This amendment extended the Small Business 
Innovation Research (SBIR) and Small Business Technology 
Transfer (STTR) Programs through May 31, 2012. Additionally, it 
extended all other programs under the Small Business Act and 
the Small Business Investment Act of 1958 that necessitated an 
extension until June 30, 2011. The Senate passed S. 990 via 
unanimous consent on May 19, 2011.
    On May 24, 2011, Chairman Graves moved to suspend the rules 
and pass S. 990, as amended. Chairman Graves amended the 
legislation to provide for an additional temporary extension of 
the programs under the Small Business Act and the Small 
Business Investment Act of 1958 through September 30, 2011. The 
House passed S. 990, as amended, on May 24, 2011, via voice 
vote.
    On the same day, Senator Reid offered a perfecting 
amendment to S. 990 in the Senate. The perfecting amendment 
stripped all of the text of S. 990 and inserted certain 
extensions relating to the Patriot Act. The Senate passed S.990 
by a recorded vote of 72-23, on May 26, 2011. The House also 
passed S. 990 on May 26, 2011 by a recorded vote of 250-153. On 
May 26, 2011, the President signed the legislation and it 
became Public Law 112-14.

  AN ACT TO PROVIDE FOR AN ADDITIONAL TEMPORARY EXTENSION OF PROGRAMS 
 UNDER THE SMALL BUSINESS ACT AND THE SMALL BUSINESS INVESTMENT ACT OF 
           1958 THROUGH MAY 31, 2012, AND FOR OTHER PURPOSES

                               (S. 1082)

Summary
    S. 1082 extends the Small Business Innovation Research 
(SBIR) and Small Business Technology Transfer (STTR) Programs 
through September 30, 2011. Additionally, it extends all other 
programs under the Small Business Act and the Small Business 
Investment Act of 1958 that necessitated an extension until 
July 31, 2011.
Legislative history
    Senator Landrieu introduced and the Senate passed S. 1082 
via unanimous consent on May 26, 2011. The House passed the 
legislation, under suspension of the rules, by a recorded vote 
of 387-33, on May 31, 2011. On June 1, 2011, the President 
signed the legislation, and it became Public Law 112-17.

    THE CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011

                              (H.R. 1425)

Summary

    H.R. 1425, the ``Creating Jobs Through Small Business 
Innovation Act of 2011,'' modernizes and reauthorizes the Small 
Business Innovation Research (SBIR) and the Small Business 
Technology Transfer (STTR) programs through September 30, 2014. 
The legislative goal of the bill is to strengthen these 
programs, ensure efficient use of taxpayer dollars, utilize the 
best science offered by small firms, use existing federal funds 
to help small firms commercialize technology, and create jobs.
    The bill, among other things, would encourage greater 
commercialization success, a primary objective of the programs, 
by instituting commercialization initiatives at federal 
agencies that administer SBIR programs. The legislation also 
increases Phase I and Phase II award sizes for both programs, 
shortens the time frame between application and notice of 
award, and reduces the time between award and dispersal of 
funds. H.R. 1425 also allows for greater participation of small 
companies regardless of their financial structure. It codifies 
in statute the programmatic flexibility that federal agencies 
need in order to administer SBIR awards in a manner that is 
most consistent with the agency's specific mission. The bill 
reduces the programs' risk of waste, fraud, and abuse by 
requiring the Small Business Administration to develop 
preventive measures and requiring the Inspector General of each 
participating agency to establish fraud detection measures and 
share best practices. The bill permits agencies to use three 
percent of their SBIR and STTR budget for administrative, 
oversight, and contract processing costs. Finally, the bill 
continues the current 2.5 percent set aside of existing federal 
extramural research dollars for the SBIR and STTR programs.

Legislative history

    Representative Renee Ellmers introduced H.R. 1425 on April 
7, 2011. Original cosponsors include Representative Sam Graves, 
Chairman of the Committee on Small Business; Representative 
Ralph Hall, Chairman of the House Committee on Science, Space 
and Technology; Representative Eddie Bernice Johnson, Ranking 
Member of the Committee on Science, Space and Technology; 
Representative Ben Quayle, Chairman of the Subcommittee on 
Technology and Innovation of the Committee on Science, Space 
and Technology; Representative David Wu, Ranking Member of the 
Subcommittee on Technology and Innovation of the Committee on 
Science, Space, and Technology; Representative Cedric Richmond, 
Ranking Member of the Subcommittee on Healthcare and Technology 
of the Committee on Small Business; and Representative Jason 
Altmire.
    The Subcommittee on Healthcare and Technology held a 
hearing on H.R. 1425 on April 7, 2011, and heard various small 
businesses' views on the legislation.
    The Committee on Small Business met in open session on May 
11, 2011 and ordered H.R. 1425, as amended, reported favorably 
to the House by a voice vote.

          THE REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2011

                               (H.R. 527)

Summary

    H.R. 527 amends the Regulatory Flexibility Act (RFA) of 
1980, as amended by the Small Business Regulatory Enforcement 
Fairness Act, a law that requires federal agencies to consider 
the economic impact of the rules they propose on small 
entities. This legislation would strengthen the RFA by: 
expanding its requirements to agencies not currently covered; 
requiring more detailed analyses of regulatory impact; 
providing new authorities to the Chief Counsel for Advocacy; 
enhancing the participation of small businesses in the 
rulemaking process; strengthening the requirement for periodic 
review of regulations; and improving the ability of small 
businesses to challenge compliance with the RFA.

Legislative history

    Representative Lamar Smith, Chairman of the Committee on 
the Judiciary, introduced H.R. 527, on February 8, 2011. 
Original cosponsors include Representative Sam Graves, Chairman 
of the Committee on Small Business, and Representative Howard 
Coble, Chairman of the Subcommittee on Courts, Commercial and 
Administrative Law of the Committee on the Judiciary. The bill 
was referred to the Committee on the Judiciary and the 
Committee on Small Business, for a period to be determined by 
the Speaker.
    On March 30, 2011, the Committee on Small Business held a 
hearing entitled ``Reducing Federal Agency Overreach: 
Modernizing the Regulatory Flexibility Act'' to provide an 
overview of the RFA to Committee members. Subsequently, the 
Committee held a hearing on H.R. 527 and H.R. 585, to discuss 
the merits of those bills on June 15, 2011.
    The Committee on Small Business met in open session on July 
13, 2011 and ordered H.R. 527, as amended, reported favorably 
to the House by a voice vote. The House passed the bill by a 
recorded vote of 263-159 on December 1, 2011.

        THE SMALL BUSINESS SIZE STANDARD FLEXIBILITY ACT OF 2011

                               (H.R. 585)

Summary

    H.R. 585 amends the Small Business Act to authorize the 
Chief Counsel for Advocacy of the Small Business Administration 
to determine size standards for purposes of statutes other than 
the Small Business Act and Small Business Investment Act of 
1958. This ensures that decisions made by the Chief Counsel 
under the RFA are consistent with an agency's determination of 
any exemptions or other special treatment of small business.

Legislative history

    Representative Sam Graves, Chairman of the Committee on 
Small Business introduced H.R. 585, on February 9, 2011. 
Representative Lamar Smith, Chairman of the Committee on the 
Judiciary is an original cosponsor. The bill was referred to 
the Committee on Small Business.
    On June 15, 2011, the Committee on Small Business held a 
hearing on H.R. 585.
    On July 13, 2011, the Committee on Small Business met in 
open session on July 13, 2011 and ordered H.R. 585 favorably 
reported to the House by a recorded vote of 13-8.

  THE GOVERNMENT EFFICIENCY THROUGH SMALL BUSINESS CONTRACTING ACT OF 
                                  2012

                              (H.R. 3850)

Summary

    H.R. 3850 amends the Small Business Act by: increasing the 
goals for prime and subcontracts to be awarded to small 
business concerns; improving the reports of agency compliance 
with the goals; and imposing penalties on senior executives for 
failing to meet those goals. The changes are designed to ensure 
that the goal of the Small Business Act--to ensure that small 
businesses are awarded a fair share of federal procurement 
opportunities--is met.

Legislative history

    The issues in H.R. 3850 were addressed in the following 
hearings: full Committee hearing entitled ``Beyond the Size 
Standards: The Sustainability of Small Businesses Graduates'' 
on September 14, 2011; a Subcommittee on Contracting and 
Workforce hearing entitled ``Examining the Barriers for Small 
Business Contractors at the DoD on November 8, 2011; and a 
Subcommittee on Contracting and Workforce hearing entitled 
``Construction Contracting: Barriers to Small Business 
Participation on February 9, 2012.
    On March 7, 2012, the Committee on Small Business met in 
open session and ordered H.R. 3850, as amended, be favorably 
reported to the House by voice vote.

                THE SMALL BUSINESS ADVOCATE ACT OF 2012

                              (H.R. 3851)

Summary

    Each federal agency is required to have an official that 
reports to the head or deputy head of an agency to run an 
Office of Small and Disadvantaged Business Utilization. H.R. 
3851 would strengthen and clarify the responsibilities of the 
officials designated to run these offices with the expectation 
that they would improve the ability of small business concerns 
to obtain federal government contracts.

Legislative history

    The Subcommittee on Contracting and Workforce held two 
hearings to address the issues surrounding the Offices of Small 
and Disadvantaged Business Utilization. The first was held on 
June 23, 2011 and entitled ``Insourcing Gone Awry: Outsourcing 
Small Business Jobs'' and the second was entitled ``Helping 
Small Businesses Compete: Challenges within Programs Designed 
to Assist Small Contractors which took place on September 15, 
2011.
    On March 7, 2012, the Committee on Small Business met in 
open session and ordered H.R. 3851, as amended, be favorably 
reported to the House by a recorded vote of 11-7.

      THE SUBCONTRACTING TRANSPARENCY AND RELIABILITY ACT OF 2012

                              (H.R. 3893)

Summary

    H.R. 3893 imposes additional limitations on the ability of 
small businesses that obtain contracts through preferences 
established in the Small Business Act to subcontract the 
performance of that work to large businesses. The bill also 
imposes additional penalties for this type of improper 
subcontracting. To improve the subcontracting plans that large 
business prime contractors must submit with their bids, H.R. 
3893 amends the reporting of subcontracting actions taken by 
the large prime contractors by requiring more accurate 
information. Finally, the legislation imposes additional 
restraints on the ability of the federal government to transfer 
work performed under contract by small businesses and transfer 
it to federal employees.

Legislative history

    Three hearings were held to address subcontracting and 
insourcing. One was conducted by the Subcommittee on 
Contracting and Workforce at a hearing entitled ``Insourcing 
Gone Awry: Outsourcing Small Business Jobs'' on June 23, 2011. 
The second, also conducted by the Subcommittee on Contracting 
and Workforce was entitled ``Subpar Subcontracting: Challenges 
for Small Business Contractors'' held on October 6, 2011. The 
third was held by the Subcommittee on Investigations, Oversight 
and Regulation on October 27, 2011 and entitled 
``Misrepresentation and Fraud: Bad Actors in the Small Business 
Procurement Programs.''
    On March 7, 2012, the Committee on Small Business met in 
open session and ordered H.R. 3893, as amended, be favorably 
reported to the House by a voice vote.

               THE SMALL BUSINESS OPPORTUNITY ACT OF 2012

                              (H.R. 3980)

Summary

    The bill would improve the ability of procurement center 
representatives (PCRs) (personnel of the Small Business 
Administration assigned to major federal contracting 
activities) to provide input into the acquisition strategy; the 
premise being that such earlier input by PCRs will lead to 
greater contracting opportunities for small businesses. The 
bill also requires improved training on small business 
contracting for federal procurement officials.

Legislative history

    Two hearings of the Subcommittee on Contracting and 
Workforce considered matters raised in H.R. 3980: ``Insourcing 
Gone Awry: Outsourcing Small Business Jobs on June 23, 2011; 
and ``Helping Small Businesses Compete: Challenges within 
Programs Designed to Assist Small Contractors'' on September 
15, 2011.
    On March 7, 2012, the Committee on Small Business met in 
open session and ordered H.R. 3980, as amended, be favorably 
reported to the House by a voice vote.

         THE BUILDING BETTER BUSINESS PARTNERSHIPS ACT OF 2012

                              (H.R. 3985)

Summary

    The bill would revamp the requirements for establishing 
mentor-protege agreements under the Small Business Act. The 
modifications will provide better guidance to large business 
mentors and small business protege's on how to prepare such 
agreements, the standards by which the Small Business 
Administration will approve such agreements, and limitations on 
the ability of other federal agencies to establish mentor-
protege programs absent approval by the Administrator of the 
Small Business Administration.

Legislative history

    At a hearing conducted by the Subcommittee on Contracting 
and Workforce on September 15, 2011 entitled `` Helping Small 
Businesses Compete: Challenges within Programs Designed to 
Assist Small Contractors,'' issues related to the inadequacy of 
current mentor-protege programs was addressed.
    On March 22, 2012, the Committee on Small Business met in 
open session and ordered H.R. 3985, as amended, be favorably 
reported to the House by a voice vote.

               THE SMALL BUSINESS PROTECTION ACT OF 2012

                              (H.R. 3987)

Summary

    H.R. 3987 imposes additional constraints on the ability of 
the Administrator of the Small Business Administration to 
create size standards for small business concerns. 
Specifically, the legislation requires the Administrator to 
justify the rationale for adopting a common size standard for a 
group of industries, requires such size standard to be adopted 
after notice and comment rulemaking, and prohibits the 
Administrator from artificially limiting the number of size 
standards needed to define a small business concern for each of 
the industries enumerated in the North American Industrial 
Classification System.

Legislative history

    The procedures used by the Administrator to create size 
standards was fully ventilated in a hearing conducted by the 
Subcommittee on Economic Growth, Capital Access and Tax 
entitled ``Professional Services: Proposed Changes to the Small 
Business Size Standards'' on May 5, 2011.
    On March 22, 2012, the Committee on Small Business met in 
open session and ordered H.R. 3987, as amended, be favorably 
reported to the House by a voice vote.

           THE CONTRACTOR OPPORTUNITY PROTECTION ACT OF 2012

                              (H.R. 4081)

Summary

    The bill collects all of the provisions concerning contract 
bundling currently in the Small Business Act and transfers them 
to a revised 44. In addition to making this significant 
clarifying change, the bill strengthens the requirements that 
agencies must demonstrate before they are entitled to bundle or 
consolidate contracts that would have, absent such bundling or 
consolidation, been able to be performed by small businesses.

Legislative history

    Issues related to contract bundling were addressed at 
multiple hearings held to address federal government 
contracting at both the full and Subcommittee levels. One 
hearing, conducted by the Subcommittee on Contracting and 
Workforce entitled ``Construction Contracting: Barriers to 
Small Business Participation'' on February 9, 2012, focused 
specifically on contract bundling and consolidation in federal 
procurement for construction services.
    On March 22, 2012, the Committee on Small Business met in 
open session and ordered H.R. 4081, as amended, be favorably 
reported to the House by a voice vote.

         THE SMALL BUSINESS PROCUREMENT IMPROVEMENT ACT OF 2012

                              (H.R. 4118)

Summary

    H.R. 4118 addresses a miscellany of important small 
business procurement policy matters. First, the legislation 
seeks to improve participation by small businesses in multiple 
contracts by encouraging outreach and mandating that the 
President establish government-wide goals for small business 
participation in such contracting vehicles. Second, the bill 
raises the small business reserve to $200,000 and makes it 
applicable to multiple award contracts. Finally, the 
legislation expands the Federal Acquisition Regulatory Council 
to include the Administrator of the Small Business 
Administration.

Legislative history

    The issues raised in H.R. 4118 were examined in multiple 
hearings held by the Committee and Subcommittees.
    On March 7, 2012, the Committee on Small Business met in 
open session and ordered H.R. 4118 be favorably reported to the 
House by a voice vote.

         THE EARLY STAGE SMALL BUSINESS CONTRACTING ACT OF 2012

                              (H.R. 4121)

Summary

    The bill reestablishes in a slightly different format a 
successful program to help very small businesses win federal 
government contracts. The original program's authorization had 
lapsed, and H.R. 4121 rectifies that situation.

Legislative history

    Since H.R. 4121 is reauthorizing a program with a lapsed 
authorization, the findings of previous Congresses with respect 
to the matter raised in the legislation were determined still 
to be valid. As a result, no hearings were held on H.R. 4121.
    On March 7, 2012, the Committee on Small Business met in 
open session and ordered H.R. 4121, as amended, be favorably 
reported to the House by a voice vote.

        THE WOMEN'S PROCUREMENT PROGRAM IMPROVEMENT ACT OF 2012

                              (H.R. 4203)

Summary

    The bill makes technical changes to the Women's Procurement 
Program enacted by Congress in 2000. The specific changes 
relate to the size of contracts that could be awarded in the 
program to maintain consistency with similar specialized 
contracting programs in the Small Business Act.

Legislative history

    Since changes made in the bill were of a technical nature, 
no hearings were necessary to address the legislation.
    On March 22, 2012, the Committee on Small Business met in 
open session and ordered H.R. 4203 be favorably reported to the 
House by a voice vote.

     THE CONTRACTING OVERSIGHT FOR SMALL BUSINESS JOBS ACT OF 2012

                              (H.R. 4206)

Summary

    H.R. 4206 increases the adverse consequences for 
misrepresenting the status of small businesses by raising the 
criminal penalties and raising the probability that such 
concerns will be suspended or debarred. It creates a safe 
harbor for good faith efforts to properly certify the status of 
small business concerns. The bill makes necessary changes to 
the Office of Hearings and Appeals at the Small Business 
Administration. Finally, the bill requires increased reporting 
by the Administrator of the Small Business Administration to 
report on suspensions and debarments.

Legislative history

    Two hearings covered the matters raised in H.R. 4206. One 
was held by the Subcommittee on Contracting and Workforce 
entitled ``Subpar Subcontracting: Challenges for Small 
Businesses Contractors'' on October 6, 2011. The other was 
conducted by the Subcommittee on Investigations, Oversight and 
Regulation entitled ``Misrepresentation and Fraud: Bad Actors 
in the Small Business Procurement Programs'' on October 27, 
2011.
    On March 22, 2012, the Committee on Small Business met in 
open session and ordered H.R. 4206, as amended, be favorably 
reported to the House by a voice vote.
                           OVERSIGHT SUMMARY

    Clause 1(d) of rule XI of the Rules of the House of 
Representatives requires that not later than the 30th day after 
June 1, a Committee shall submit to the House a semiannual 
report on the activities of that Committee, including a 
separate section summarizing the oversight activities of that 
Committee. The report shall also include a delineation of any 
hearings held pursuant to clauses 2(n), (o), or (p) of rule XI, 
related to waste, fraud, and abuse in government programs.
    Part A of this section describes the hearings held in full 
Committee. Part B of this section describes the hearings held 
in the Subcommittees. Part C of this section describes the 
hearings that relate to the requirements of clauses 2(n), (o), 
or (p) of rule XI.

                                 PART A

                        Full Committee Hearings

                TAX PROVISIONS UNDER HEALTH CARE REFORM

    On February 9, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on ``Buried in Paperwork--A 1099 
Update.'' The hearing focused on the health care law's expanded 
1099 reporting mandate, which will require businesses to file a 
1099 form for virtually every business-to-business transaction 
of $600 or more in property and services.
    The witness for the first panel was The Hon. Daniel E. 
Lungren (R-CA). The witnesses for the second panel were: R. 
Jerol Kivett, President, Kivett's Inc., Clinton, NC, testifying 
on behalf of the National Federation of Independent Business; 
John ``Mark'' Eagleton, Managing Member, Eagleton Ventures, 
LLC, Golden, CO, testifying on behalf of the National 
Restaurant Association; Seth Shipley, Owner, Shipley's Fine 
Jewelry, Hampstead, MD, testifying on behalf of the National 
Retail Federation; and Mike Kegley, President, B.O.L.D. Homes, 
Inc., Union KY, testifying on behalf of the National 
Association of Home Builders.
    At the hearing, House Administration Committee Chairman Dan 
Lungren testified about H.R. 4, his bipartisan legislation to 
repeal Section 9006 of the health care law. Chairman Lungren 
said the expanded reporting requirement ``conveys the worst 
possible message to the small business community [and] reflects 
a disconnect with the day to day reality faced by men and women 
involved with companies in each and every one of our 
districts.'' All of the small business owners testified that 
the 1099 mandate will impose a substantial and costly paperwork 
burden.
    At the hearing's close, Chairman Graves said he would send 
a letter to the Chairman and Ranking Member of the House 
Committee on Ways and Means urging the Committee to consider 
the burdens on small businesses as they move H.R. 4 and other 
legislation to relieve job destroying tax and regulatory 
burdens through the Committee.

            THE STATE OF THE U.S. ECONOMY FOR SMALL BUSINESS

    On February 16, 2011, the Committee on Small Business met 
in Room 2360 of the Rayburn House Office Building for the 
purpose of receiving testimony on the state of the small 
business economy. The hearing, entitled ``Putting Americans 
Back to Work: The State of the Small Business Economy,'' 
focused on examining obstacles to small business job creation 
and economic growth and identifying specific tax, regulatory 
and health care policies that inhibit job creation and economic 
growth.
    The witnesses for the hearing were: William Phelan, 
President and Co-Founder, PayNet, Inc., Skokie, IL; Terry 
Frank, Owner, Nature's Marketplace, Oak Ridge, TN; Dixie 
Kolditz, Owner, Open-Box Creations, Cathlament, WA; and Bill 
Feinberg, President of Allied Kitchen and Bath, Ft. Lauderdale, 
FL, testifying on behalf of the U.S. Chamber of Commerce.
    Mr. Phelan began the testimony stating that while there has 
been a thaw in the extension of credit to small businesses, 
there are several negative factors that are continuing to 
inhibit access to credit. Ms. Frank stated that the federal tax 
burden has become too difficult to navigate by herself and 
suggested the best way to raise tax revenue is to make the 
process easier to comply with and lower the burden so that 
small business owners could reinvest that money back onto their 
businesses. Ms. Kolditz focused her testimony on importing and 
exporting regulations citing specific examples of new 
regulations that are costing her significant amounts of money 
and preventing her from expanding her business. Finally, while 
Mr. Feinberg stated that offering health care was imperative to 
recruiting and retaining the best employees, he expressed 
concern that the new Patient Protection and Affordable Care Act 
could impose significant regulatory and penalty burdens on his 
business. These additional burdens make him doubt he will be 
able to expand his business to as large as he feels it could 
be.

            THE SMALL BUSINESS ADMINISTRATION FY 2012 BUDGET

    On March 2, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony from the Hon. Karen Mills, 
Administrator, United States Small Business Administration, 
Washington, DC on the President's proposed budget for the Small 
Business Administration (SBA) and the programs authorized by 
the Small Business Act and Small Business Investment Act. The 
hearing, logically enough, was entitled ``The Small Business 
Administration FY 2012 Budget.''
    The Administrator commenced her testimony by noting that 
the agency focuses its mission on providing small businesses 
with capital, contracts, and counseling. The Administrator 
noted the number of small businesses assisted by the agency. 
However, she recognized the current fiscal situation will 
require a reduction in the budget. The Administrator 
recommended a number of minor programs for elimination.
    The Committee used her testimony in preparing its views and 
estimates on the President's Budget for the SBA. Those views 
and estimates were adopted by the Committee on March 15, 2011.

FEDERAL RESEARCH AND DEVELOPMENT GRANTS FOR SMALL BUSINESSES: THE SBIR 
                                PROGRAM

    On March 16, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on the Small Business Innovation 
Research (SBIR) and Small Business Technology Transfer (STTR) 
Programs. The hearing, entitled ``Spurring Innovation and Job 
Creation: The SBIR Program,'' focused on the benefits of the 
SBIR and STTR programs.
    The witnesses for the hearing were: Tom Tullie, Chief 
Executive Officer, President and Chairman of EcoATM San Diego, 
CA; Dr. David Audretsch, Indiana University Bloomington, IN; 
Dr. Mike Squillante, Vice President of Radiation Monitoring 
Devices, Inc. Watertown, MA, testifying on behalf of the Small 
Business Technology Council; and Amy Comstock Rick, Chief 
Executive Officer, Parkinson's Action Network, Washington, DC.
    Mr. Tullie began the testimony stating that in EcoATM's 
critical second year, they received an SBIR Phase I award that 
directly funded the development of the beginning technology 
they would later deploy in their handheld electronic automated 
recycling devices. Dr. Audretsch commented on his role in the 
National Research Council's An Assessment of the Small Business 
Innovation Research Program study that is widely recognized as 
one of the most comprehensive examinations of the SBIR program 
since its inception. Dr. Squillante provided an extensive 
overview of the SBIR program and offered suggestions as to how 
to improve it. Finally, Ms. Comstock Rick noted the large role 
the SBIR program plays in research for diseases such as 
Parkinson's Disease--especially because of the relatively few 
sufferers--leads to less private funding due to a smaller 
potential market.

    FEDERAL REGULATORY OVERREACH AND COMPLIANCE WITH THE REGULATORY 
                            FLEXIBILITY ACT

    On March 30, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on the Regulatory Flexibility Act (RFA). 
The hearing, titled ``Reducing Federal Agency Overreach: 
Modernizing the Regulatory Flexibility'' focused on introducing 
the concepts of the RFA to members of the Committee, showing 
them how the Act helps reduce regulatory burdens on small 
business, and explaining its weaknesses.
    The witnesses for the hearing were: Bill Squires, Esq., 
Senior Vice President and General Counsel, Blackfoot 
Telecommunications Group, Missoula, MT, testifying on behalf of 
the National Telephone Cooperative Association; David Frulla, 
Esq., Partner, KelleyDrye, Washington, DC; Craig Fabian, Vice 
President of Regulatory Affairs and Assistant General Counsel, 
Aeronautical Repair Station Association, Alexandria, VA; and 
Rich Draper, Chief Executive Officer, The Ice Cream Club, Inc., 
Boynton Beach, FL, testifying on behalf of the International 
Dairy Foods Association.
    Mr. Squires testified that the Federal Communications 
Commission frequently fails to comply with the RFA by treating 
small firms, such as Blackfoot, no differently than the largest 
telecommunications providers in the United States. Mr. Frulla 
noted that the RFA and the Office of Advocacy have proven 
valuable in reducing regulatory burdens on small businesses but 
needs to be overhauled. Mr. Fabian discussed litigation by the 
Aeronautical Repair Station Association challenging agency 
compliance with the RFA and the length of time it took the 
agency to comply with the court order mandating such 
compliance. Mr. Draper testified that small businesses, like 
his own, had significant difficulty dealing with regulatory 
creep and the cumulative effect of disparate agency 
regulations.
    Mr. Graves noted that the hearing would be part of the 
Committee's record as it considers modifications that 
strengthen the RFA.

            FREE TRADE AGREEMENTS AND SMALL BUSINESS EXPORTS

    On April 6, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on ``Help Wanted: How Passing Free Trade 
Agreements Will Help Small Businesses Create New Jobs.'' The 
hearing focused on the benefits and importance of passing the 
pending free trade agreements to small businesses. Lowering 
trade barriers will spur small business exports, which will 
then lead to job creation and long-term economic growth.
    The witnesses included: Bill Patterson, Founder and Chief 
Engineer, TEI Rock Drills, Montrose, CO; Phillip Wise, Owner 
and Operator, Wise Family Farm, Harris, MO, testifying on 
behalf of the National Pork Producers Council; Trevor Myers, 
CEO, Cloyes Gear & Products, Inc., Fort Smith, AR, testifying 
on behalf of the Motor & Equipment Manufacturers Association; 
and Jason Speer, Vice President, Quality Float Works, Inc., 
Schaumburg, IL, testifying on behalf of the U.S. Chamber of 
Commerce.
    At the hearing, four small businesses testified on the 
importance of passing the pending free trade agreements with 
Panama, Colombia, and Korea and their ability to compete 
globally, export more products and create more U.S. jobs. Jason 
Speer from Quality Float Works stated, ``With the passage of 
the three pending trade agreements, our company and more than 
250,000 small and medium-sized companies like ours will have 
the opportunity to gain market share and provide more jobs.'' 
All small business owners testified that failing to pass the 
three pending free trade agreements would put their small 
business at a competitive disadvantage with nations who have 
trade agreements in place.
    At the hearing's close, Chairman Graves said he would 
continue to spotlight the importance of passing the free trade 
agreements to small businesses, and he encouraged the 
Administration and Congress to pass all three agreements by 
July 1, 2011.

              REFORMING AND SIMPLIFYING THE U.S. TAX CODE

    On April 13, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on ``How Tax Complexity Hinders Small 
Business Job Creation and Economic Growth.'' The hearing 
focused on the complexity of the current tax code, the 
difficulty entrepreneurs have complying with it, and the 
resulting effect on hiring and expansion.
    The witnesses were Nina E. Olson, the National Taxpayer 
Advocate, Washington, DC; Steven J. Strobel, Executive Vice 
President and Chief Financial Officer, BlueStar Energy 
Solutions, Chicago, IL, testifying on behalf of the National 
Small Business Association; Robert Kulp, Founder, Kulp's of 
Stratford, Stratford, WI, testifying on behalf of the National 
Roofing Contractors Association; and Monty W. Walker, CPA, 
Principal, Walker Business Advisory Services, Wichita Falls, 
TX.
    The witnesses agreed that tax complexity has a direct 
impact on small business viability and job growth. In her 
testimony, Nina Olson testified that ``it is essential that the 
tax system does not present an unnecessary hurdle to the 
success of these already fragile operations. In addition, 
because a substantial portion of businesses are pass-through 
entities, a real reduction in complexity will not occur unless 
individual and corporate tax reform occurs at the same time.'' 
Mr. Walker testified that understanding tax matters is 
confusing and tax compliance comes at a cost. This results in 
lost resources that could have been used for business 
operations and business development. Mr. Walker also said that 
because of tax complexity, some business owners decide to stay 
small and not expand. Mr. Strobel encouraged Congress to 
simplify the tax code, broaden the base and lower all 
individual and corporate tax rates. He said these reforms will 
create a surge in economic growth.
    At the hearing's close, Chairman Graves said he plans to 
send a letter to the Chairman and Ranking Member of the House 
Committee on Ways and Means urging them to enact common sense 
tax reform that will enable our nation's small businesses to 
create jobs and spur growth in our economy.

              POLITICAL DISCLOSURE IN FEDERAL CONTRACTING

    On May 12, 2011, the Committee on Small Business and 
Committee on Oversight and Government Reform met in Room 2154 
of the Rayburn House Office Building to receive testimony on 
the April 13, 2011 draft Executive Order (EO) entitled, 
``Disclosure of Political Spending by Government Contractors.'' 
The EO directs agencies to require contractors to disclose 
political expenditures and contributions, including those to 
third parties, made within two years of all proposal 
submissions in an official contracting certifications, and to 
certify their acknowledgement that full disclosure of this 
information is a precondition to contract award.
    The first panel witness was the Hon. Daniel Gordon, 
Administrator, Office of Federal Procurement Policy. The second 
panel consisted of Alan Chvotkin, Executive Vice President and 
Counsel, Professional Services Council, Arlington, VA; D. Mark 
Renaud, Partner, Wiley Rein LLP, Washington, DC; ML Mackey, 
CEO, Beacon Interactive Systems of Cambridge, MA, testifying on 
behalf of the National Defense Industrial Association; the Hon. 
Marion Blakey, CEO, Aerospace Industries Association, 
Arlington, VA; and the Hon. Bradley A. Smith, Josiah H. 
Blackmore II/Shirley M. Nault Designated Professor of Law, 
Capital University Law School, Columbus, Ohio, testifying on 
behalf of the Center for Competitive Politics; and Lawrie 
Hollingsworth, President, Asset Recovery Technologies, Inc., 
Annapolis, MD, testifying on behalf of the U.S. Women's Chamber 
of Commerce.
    Administrator Gordon declined to answer questions about the 
proposed EO, but testified that the Administration remains 
fully committed to a merit-based contracting process rooted in 
the highest levels of integrity and transparency, and 
simultaneously asserted that, ``[t]here is no place for 
politics in federal acquisition.''
    Mr. Chvotkin opposed the EO, stating that political 
contributions do not currently impact federal contract awards, 
that contributions would not help contracting officers make 
awards, and that much of the information required by the EO is 
currently publicly available. As an expert on pay to play laws, 
Mr. Renaud explained that the ``President's proposal actually 
create several new problems where none existed before'' by 
injecting disclosure into the procurement process and creating 
an expensive recordkeeping requirement for small firms. Ms. 
Mackey stated that, as a small business owner, she had no 
problem with disclosure per se, but that it should be separate 
from contract consideration and should not be injected into the 
workplace. Ms. Blakey agreed that ``Political contributions 
should never be considered by any procurement officer when 
making a decision to either award or deny a contract to any 
entity.'' Mr. Smith, as a former Commissioner of the Federal 
Elections Commission, summarized that the propose EO, ``imposes 
junk disclosure requirements that serve no good purpose; 
[c]hills protected political activity; [and] seems motivated by 
simple partisan politics.'' Ms. Hollingsworth, while concerned 
by the administrative burdens the EO would place on small 
businesses, disagreed with the rest of the panel and testified 
that disclosure would level the playing field for small 
business.

            GOVERNMENT WASTE AND DUPLICATION IN SBA PROGRAMS

    On May 25, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
providing oversight on duplication in the U.S. Small Business 
Administration's (SBA's) entrepreneurial development programs. 
The hearing, entitled ``Promoting Entrepreneurship and Job 
Creation by Decreasing Duplication at SBA,'' focused on four 
programs at SBA dealing with entrepreneurial development. Those 
programs are the Small Business Development Companies (SBDC), 
the Service Corps for Retired Employees (SCORE), Women's 
Business Centers (WBCs) and Veterans' Business Outreach Centers 
(VBOCs).
    The witnesses were William Shear, Director, Financial 
Markets and Community Investment, U.S. Government 
Accountability Office (GAO), Washington DC; Arnold Baker, 
President and Founder, Baker Ready Mix and Building Materials, 
New Orleans, LA, testifying on behalf of the National Black 
Chamber of Commerce; Jody Keenan, Director, Virginia Small 
Business Development Center Network, Fairfax, VA, testifying on 
behalf of the Association of Small Business Development 
Centers; and Denise Pickett, Executive Vice President, American 
Express OPEN, New York, NY.
    Mr. Shear discussed the GAO's efforts to uncover waste and 
duplication in the federal government, including a recent GAO 
report pointing to 80 economic development programs that exist 
in four federal agencies costing taxpayers $6.2 billion in 
fiscal year 2010. Mr. Shear testified that the four agencies 
identified in their report appear to have taken some actions to 
implement collaborative practices, but they have offered little 
evidence that they have developed compatible policies or 
procedures. Mr. Shear testified that when you have separate 
infrastructures to deliver similar services it could lead to 
inefficiencies and confusion for small businesses. Mr. Baker 
testified that SBA has sustained too many cuts to its programs 
over the last several years and that the agency cannot afford 
further cuts. He argued that a better funded and better staffed 
field infrastructure at SBA is critical for continued 
improvement of this nation's economy. Ms. Keenan testified that 
the SBDC network is on the front line of providing services to 
entrepreneurs. She indicated that SBDC's serve all types of 
businesses and would very easily be able to deliver services to 
the small business community currently being served by other 
entrepreneurial development programs funded by SBA. Ms. Pickett 
testified about the programs that American Express offers to 
small business owners and stated that the public sector needs 
to work together with both the private sector and non-profits 
to meet to meet the needs of business owners.

                  ACCESS TO CAPITAL FOR SMALL BUSINESS

    On June 1, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on small business access to capital. The 
hearing entitled ``Access to Capital: Can Small Businesses 
Access The Credit Necessary To Grow and Create Jobs?'' provided 
a forum for lenders and business owners to discuss the current 
economic environment and how they are working together to 
support private sector job growth.
    The witnesses included William Hall, a Dairy Queen 
Franchisee, Ft. Worth, Texas, testifying on behalf of the 
National Franchise Association; Lynn Ozer, Executive Vice 
President, Susquehanna Bank, Pottstown, PA, testifying on 
behalf of the National Association of Government Guaranteed 
Lenders (NAGGL); Robert Kottler, Executive Vice President, 
Director of Retail and Small Business Banking, Iberia Bank, 
Lafayette, LA, testifying on behalf of the Consumer Bankers of 
American; and Dennis Jacobe, Chief Economist, Gallup, 
Washington, DC.
    Mr. Hall testified about his struggle to obtain capital in 
recent years and the needs of small businesses to obtain 
capital to maintain operations as well as grow. He cited a $2 
billion shortfall in available loans, which if filled could 
create more than 332,000 new jobs in the franchise industry. 
Ms. Ozer testified that the economic circumstances of the last 
several years, combined with increased federal banking 
regulations, have created the ``perfect storm of circumstances 
that together serve to stifle banks' abilities to make credit 
available to small businesses.'' Loan underwriting standards 
are significantly tighter today than they were just a few years 
ago. Many banks are taking advantage of the SBA 7(a) program 
since it takes less capital to support an SBA loan then it does 
a conventional loan. Mr. Kottler testified that over the last 
few years, his bank has seen weaker demand for small business 
loans, but they are starting to see an increase. Factors 
affecting credit demand are lower sales and collateral value, 
mainly in the housing sector. To increase demand, lenders are 
working closer with borrowers, and many banks have instituted 
``second look'' programs for those borrowers who are initially 
denied credit. Mr. Jacobe testified that the downfall in the 
housing industry and the recent financial crisis have caused 
huge disruptions in the financial services sector that have 
resulted in the continued economic ``soft patch.'' Citing 
research performed by the Gallup Organization, Mr. Jacobe 
reported that business owner optimism is down from early 2011, 
getting credit is slightly less difficult and small business 
owners are hiring fewer employees than they need.

REDUCING REGULATORY BURDENS BY AMENDING THE REGULATORY FLEXIBILITY AND 
                          SMALL BUSINESS ACTS

    On June 15, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony to review H.R. 527, the Regulatory 
Flexibility Improvements Act of 2011 and H.R. 585, the Small 
Business Size Standard Flexibility Act of 2011. The hearing 
titled ``Lifting the Weight of Regulations: Growing Jobs by 
Reducing Regulatory Burdens'' asked experts on the regulatory 
process for input on improvements to both bills.
    The witnesses for the hearing were: Frank Swain, Esq., 
Partner, Baker & Daniels, Washington, DC; Jane C. Luxton, Esq., 
Partner, PepperHamilton, Washington, DC; Harry J. Katrichis, 
Esq., Partner, The Advocacy Group, Washington, DC; and Adam 
Finkel, Ph.D., Fellow and Executive Director, Penn Program on 
Regulation, University of Pennsylvania Law School, 
Philadelphia, PA.
    Mr. Swain testified about the history of agency compliance 
with the Regulatory Flexibility Act (RFA). He noted that, even 
since the 1996 strengthening of the RFA, agencies continued to 
avoid compliance. Mr. Swain concluded by noting support for the 
changes made by H.R. 527 and H.R. 585. Ms. Luxton focused on 
the failure of agencies to consider indirect effects when they 
assess impacts on small businesses. She noted how significant 
the change would be to have agencies consider such indirect 
effects. Mr. Katrichis testified about the value of the RFA and 
the history of how the Committee passed the RFA initially and 
amended it in 1996. Dr. Finkel noted that the concepts behind 
H.R. 527 and H.R. 585 were interesting but he thought them 
unnecessary.
    Mr. Graves noted that the hearing would lay the foundation 
for the Committee's consideration of the legislation at a full 
Committee markup.

     SMALL BUSINESS ACCESS TO CAPITAL: TREASURY DEPARTMENT PROGRAMS

    On June 22, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony from the Hon. Timothy Geithner, 
Secretary of the Treasury, on the implementation of the Small 
Business Lending Fund and the State Small Business Credit 
Initiative--two programs established in the Small Business Jobs 
Act of 2010.
    The only witness at the hearing was Secretary Geithner. The 
Secretary began his testimony with a brief recap of the events 
that led to the financial crisis, the resulting difficulties in 
the American economy, and the responses by President Bush and, 
primarily, President Obama. Secretary Geithner then noted that 
small businesses faced stiffer obstacles because they were 
overrepresented in businesses affected by the downturn in the 
residential and commercial real estate markets. That in turn 
limited the ability of small businesses to obtain capital and 
credit. Secretary Geithner then explained how the Small 
Business Lending Fund and State Small Business Credit 
Initiative would increase capital access for small businesses.
    Chairman Graves noted that the Committee would continue to 
monitor the impacts of the two programs on small businesses.

           INCREASING INTERNATIONAL TRADE BY SMALL BUSINESSES

    On Wednesday, July 27, 2011, the House Committee on Small 
Business held a hearing titled, ``Bureaucratic Obstacles for 
Small Exporters: Is our National Export Strategy Working?'' The 
hearing examined the National Export Strategy and the effect 
that bureaucratic obstacles are having on small exporters. With 
over 20 federal agencies involved in the exporting process, 
many small firms have voiced the difficulty of maneuvering 
through the bureaucracy and regulations.
    Witnesses on Panel I were: Hon. Marie Johns, Deputy 
Administrator, United States Small Business Administration, 
Washington, DC; Hon. Suresh Kumar, Assistant Secretary of 
Commerce and Director General of the United States Commercial 
Service, Department of Commerce, Washington, DC; and Christian 
Foster, Deputy Administrator, Foreign Agriculture Service, 
United States Department of Agriculture, Washington, DC. The 
witnesses on Panel II were: Mark Rice, Founder and CEO of 
Maritime Applied Physics Corporation, Baltimore, MD; Mitchell 
Goetze, President and COO of Goetze Candy Inc., Baltimore, MD, 
testifying on behalf of the National Confectioners Association 
(NCA); and Maurice Kogon, Director, California Institute for 
International Trade and Development, El Camino Community 
College, Hawthorne, CA.
    At the hearing, the government officials testified on the 
status of the National Export Initiative and the 
Administration's strategy to improve agency coordination to 
make the export process easier for small businesses. The 
private sector witnesses offered direct examples of the 
barriers that limit their ability to export, including higher 
tariffs. Mr. Goetze stated ``We support the President's NEI to 
double U.S. exports, and the most efficient way to do this is 
through Congressional approval and the timely implementation of 
the pending free trade agreements with Korea, Colombia and 
Panama.''
    In closing, Chairman Graves said he would continue to work 
on reducing the bureaucratic obstacles faced by small business 
exporters. He will also focus on improving the coordination and 
efficiency within the federal trade agencies. He is planning on 
sending a letter to the United States Government Accountability 
Office requesting an updated report on the efficiency and 
duplication of the Trade Promotion Coordinating Committee.

                 PRIVATE WORKFORCE TRAINING INITIATIVES

    On September 8, 2011, the Committee on Small Business met 
in Room 2360 of the Rayburn House Office Building for the 
purpose of receiving testimony on ``Innovative Approaches to 
Meeting the Workforce Needs of Small Businesses.'' The hearing 
focused on how private, industry-led skills certification 
programs are helping meet the workforce needs of small business 
while improving career and educational prospects for students 
and workers. The Committee heard testimony from representatives 
of small businesses and skills certification programs.
    The witnesses were: Jennifer McNelly, Senior Vice 
President, The Manufacturing Institute, Washington, DC; Roger 
Tadajewski, Executive Director, National Coalition of 
Certification Centers, Kenosha, WI; Scott Watkins, CEO, Modern 
Tech Squad, Bonifay, FL, testifying on behalf of the Computing 
Technology Industry Association (CompTIA); and Robert Scott 
Ralls, Ph.D., President, North Carolina Community College 
System, Raleigh, NC testifying on behalf of the American 
Association of Community Colleges.
    Ms. McNelly testified about the National Association of 
Manufacturers' skills certification system, which teaches 
skills that may be used in any manufacturing business with a 
particular emphasis on knowledge needed to work at small 
manufacturers. Mr. Tadejewski discussed the cooperation between 
private businesses and the development of innovative training 
programs at community and technical colleges. Mr. Watkins 
testified that the CompTIA skills certification program 
enhanced his own skills and provided his small business with 
new opportunities that would have been unavailable without the 
CompTIA certification. Dr. Ralls testified that industry-led 
skills credentialing programs are important to local and state-
wide economic development efforts in North Carolina and serve 
as a means to attract employers to the state.
    All the witnesses expressed their desire that the 
government do more to promote industry-led skills certification 
programs through higher and secondary education programs as 
well as the Workforce Investment Act.

          SMALL BUSINESSES AND FEDERAL GOVERNMENT CONTRACTING

    On September 14, 2011, the Committee on Small Business met 
in Room 2360 of the Rayburn House Office Building to hold a 
hearing titled ``Beyond Size Standards: Sustainability of Small 
Business Graduates'' to consider two legislative proposals for 
creating a medium-sized business contracting program. The first 
proposal was introduced by Representative Michael Rogers (R-AL) 
as an amendment to the National Defense Authorization Act, H.R. 
1540, and would have created a pilot set-aside contracting 
program at the Department of Defense for firms with fewer than 
2,500 employees. The Committee on Rules found the amendment to 
be non-germane, so it was not made in order for consideration 
when H.R. 1540 went to the floor. The second proposal was the 
Small Business Growth Act, H.R. 1812, introduced by 
Representative Gerald Connolly (D-VA) introduced to create a 
pilot set-aside contracting program at the General Services 
Administration for firms with fewer than 1,500 employees that 
were participants in the agency's Mentor-Protege program.
    The witnesses were the Hon. Gerald Connolly (D-VA), United 
States House of Representatives, Washington, DC; Tonya Speed, 
Founder, Washington Premier Consulting, Washington, DC, 
testifying on behalf of the Mid-Tier Advocacy; Christopher 
Yukins, Esq., Professor of Law, George Washington University, 
Washington DC; Michael D. Frisbey, President, Government 
Suppliers & Associates, Knoxville, TN, testifying on behalf of 
the National Small Business Association; and Margot Dorfman, 
CEO, U.S. Women's Chamber of Commerce, Washington, DC.
    The witnesses disagreed about the wisdom of a medium-size 
business program, with Ms. Speed supporting the proposal as a 
method to increase competition, create jobs and sustain the 
industrial base. Professor Yukins testified that any proposal 
needed to account for current trade agreements and urged 
members to be mindful of the affiliation rules generally found 
in small business contracting. Mr. Frisbey began his testimony 
opposed to a mid-sized business pilot, but retracted his 
objection if the pilot would not encroach on the 23 percent 
small business prime contracting goal. Ms. Dorfman opposed any 
pilot since the federal government is not currently meeting the 
statutory small business prime contracting goals.
    Chairman Graves stated that for any legislative proposal to 
be considered favorably by the Committee, it must meet two 
mandates. First, it must provide benefits to the taxpayers and 
the government. Second, it must protect the ability of current 
small businesses to compete for federal contracts.

   REDUCING REGULATORY BURDENS THROUGH PRESIDENTIAL EXECUTIVE ORDERS

    On September 21, 2011, the Committee on Small Business met 
in Room 2360 of the Rayburn House Office Building for the 
purpose of receiving testimony on Executive Order 13563. The 
hearing titled, ``Eliminating Job-Sapping Federal Rules through 
Retrospective Reviews--Oversight of the President's Efforts,'' 
examined President Obama's order that executive branch agencies 
establish a process for reviewing their federal regulations and 
eliminating those that are unnecessary, duplicative or 
burdensome.
    The only witness for the hearing was the Hon. Cass 
Sunstein, Administrator, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC.
    Administrator Sunstein commenced his testimony by noting 
that he is responsible for overseeing agency compliance with 
the retrospective review process. The Administrator then noted 
that the there already were savings associated with the removal 
of certain regulations associated with telemedicine, paperwork 
burdens imposed by the Department of Labor, and spill 
prevention rules from the Environmental Protection Agency. The 
Administrator closed by stating his interest in working with 
all members of the Committee to ensure that agencies do not 
skip review of regulations important to small businesses.
    At the close of the hearing, the Chairman noted that he 
would continue to monitor the compliance and alert the 
Administrator if agencies were not complying with the 
requirements to assess the impact of rules on small businesses, 
especially those small businesses involved in the regulation of 
the general aviation industry.

  REGULATORY BURDENS OF LABOR LAWS AND REGULATIONS ON SMALL BUSINESSES

    On October 5, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on labor law rules affecting small 
businesses. The hearing titled ``Adding to Uncertainty: The 
Impact of DOL/NLRB Decisions and Proposed Rules on Small 
Businesses'' examined the following issues: eliminating secret 
ballots for union decertification; narrowing the scope of the 
bargaining unit; truncating time periods for union 
representation elections; and requiring disclosure of attorney 
communications to employers during unionization campaigns.
    The witnesses on the only panel were: Elizabeth Milito, 
Senior Executive Counsel, NFIB Small Business Legal Center, 
Washington, DC; Michael Mittler, President, Miller Brothers 
Machine and Tool, Wright City, MO, testifying on behalf of the 
National Tooling and Machining Association and the Precision 
Metalforming Association; Beverly McCauley, President, Hunt 
Country Masonry Inc., Leesburg, VA, testifying on behalf of the 
Mason Contractors Association of America; and Allen William 
West, Jr., President, West Sheet Metal Co., Sterling, VA.
    Ms. Milito testified that most small businesses are 
unfamiliar with the complexities of labor law. As a result, the 
rules proposed by the Department of Labor (DOL) and the 
National Labor Relations Board (NLRB) will make it more 
difficult for small businesses to understand their rights 
during a unionizing campaign. Mr. Mittler reiterated the point 
made by Ms. Millito concerning the complexity of labor law, and 
stated that the new proposals are likely to lead to greater 
antagonism between workers and management hindering 
productivity. Ms. McCauley opined that the new rules are one-
sided in favor of union certifications even though workers may 
not (if given sufficient time and information) support efforts 
at unionization. Mr. West summed up his review of the recent 
proposals from the DOL and NLRB as not imposing any 
disadvantages on small businesses.

      SPECTRUM ALLOCATION AND IMPACT ON AVIATION SMALL BUSINESSES

    On Wednesday, October 12, 2011, the House Committee on 
Small Business held a hearing titled, ``LightSquared: The 
Impact to Small Business GPS Users.'' The hearing examined the 
impact on small businesses that may result from LightSquared's 
plan to provide broadband service using its spectrum that is 
adjacent to the spectrum utilized by the Global Positioning 
System (GPS). Thousands of small businesses rely on an accurate 
GPS signal for their day-to-day operations, and potential 
interference could severely handicap or impair their business.
    Witnesses were: Dennis Boykin IV, Principal, DB4 
Consulting, Leesburg, VA, testifying on behalf of the Leesburg 
Executive Airport Commission; Rick Greene, Precision Agronomy 
Manager, MFA, Inc., Columbia, MO, testifying on behalf of the 
Agriculture Retailers Association; Tim Taylor, President and 
CEO, Free Flight Systems, Irving, TX, testifying on behalf of 
the Aircraft Electronics Association; and Jeffrey Carlisle, 
Executive Vice President of Public Policy, LightSquared, 
Reston, VA.
    At the hearing, small businesses explained how the 
LightSquared proposal would impact their business, including 
the costs of repairing and retrofitting their GPS devices. Mr. 
Greene, discussed the economic impact LightSquared would have 
on the agriculture industry, ``It will take 10-15 years to 
complete a normal replacement cycle and affects up to $10 
billion in equipment. Even if the Javad filter ($300-$800) 
works, implanting it to the 1 million receivers will cost $300 
to $800 million, which doesn't include the additional 
personnel, installation and down-time. It's like saying that 
because Chevy has an all-electric car on the market we can shut 
down every gas station in the U.S. next year or all analog TVs 
need to be replaced the day the digital switch was turned on.''
    In closing, Chairman Graves said he will continue to 
closely follow the action of the FCC and the LightSquared 
proposal. He plans to send a letter to the FCC reinforcing the 
need for comprehensive tests of all types of devices to ensure 
there is no interference and added costs for small business GPS 
users.

  OVERSIGHT OF THE SMALL BUSINESS ADMINISTRATION'S FINANCING PROGRAMS

    On October 26, 2011, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of conducting an oversight hearing titled ``Oversight of the 
Small Business Administration's Financing Programs.'' The 
hearing focused on the Small Business Administration's (SBA) 
Fiscal Year 2011 performance and whether the SBA programs met 
its goal of filling a void in the private lending market.
    The witness on first panel witness was the Hon. Karen 
Mills, Administrator, United States Small Business 
Administration, Washington, DC. Witnesses on the second panel 
were: Lynetta Tipton Steed, Executive Vice President, Business 
and Community Banking Division, Regions Financial Corp., 
Birmingham, AL, testifying on behalf of the Consumer Bankers 
Association; Sally Robertson, President, Business Finance 
Group, Fairfax, VA, testifying on behalf of the National 
Association of Development Companies; Gary Grinnell, President 
and CEO, Corning Federal Credit Union, Corning, NY, testifying 
on behalf of the National Association of Federal Credit Unions; 
and Rodger Davis, Managing Partner, Northcreek Mezzanine, 
Cincinnati, OH, testifying on behalf of the Small Business 
Investor Alliance.
    Administrator Mills testified that SBA financing programs 
supported over $30 billion in lending to 60,000 small 
businesses in Fiscal Year 2011. The SBA also is taking steps to 
streamline paperwork in its loan programs and encourage more 
lenders to make SBA backed loans.
    The second panel testified that while SBA has improved in 
several areas, problems remain. Ms. Steed testified that small 
businesses are facing a number of challenges that have 
diminished overall demand for loans including weak economic 
conditions and high levels of unemployment resulting in lower 
sales and a poor general economic outlook. Ms. Robertson 
testified that the ``grease'' that gets the small business jobs 
engine going is capital--both short-term and long-term funding 
to pay for business plant and store expansions and for 
inventory, raw materials, and labor costs. Mr. Davis testified 
that raising leverage limits in the Small Business Investment 
Company (SBIC) Program will help SBICs provide more patient 
capital to small businesses. Mr. Grinnell testified that 
participating in SBA financing programs requires meeting 
stringent government regulations.

           OVERSIGHT OF THE SBA'S DISASTER ASSISTANCE PROGRAM

    On November 30, 2011, the Committee on Small Business met 
in Room 2360 of the Rayburn House Office Building for the 
purpose of conducting an oversight hearing titled ``Disaster 
Assistance: Is SBA Meeting the Needs of Disaster Victims?'' The 
hearing focused on the Small Business Administration (SBA) 
implementation of the Small Business Disaster Response and Loan 
Improvements Act of 2008 and how those programmatic changes 
have affected the delivery of recovery loans. The Committee 
also learned about SBA's response plans and their capacity to 
respond to a disaster the size and scope of Hurricane Katrina.
    The witnesses were: Mr. James Rivera, Associate 
Administrator, Office of Disaster Assistance, United States 
Small Business Administration, Washington, DC; and Mr. William 
Shear, Director, Financial Markets and Community Investment, 
U.S. Government Accountability Office (GAO), Washington, DC.
    Mr. Rivera testified that the SBA is making progress 
towards fulfilling all of the requirements of the Small 
Business Disaster Response and Loan Improvements Act of 2008. 
Since hurricanes Katrina, Rita and Wilma, Mr. Rivera claimed 
that the SBA has greatly improved its capacity to process 
disaster loan applications in a timely manner. Mr. Shear 
testified that SBA continues to make progress towards 
implementing the statutory changes to the disaster program and 
other GAO recommendations on how to improve the disaster 
program. However, GAO reported that SBA needed to take 
additional steps to fully address several shortcomings, 
including improvements in the application process, increasing 
the celerity of loan disbursements, and improved coordination 
with state and local officials.

     THE PATH TO JOB CREATION: THE STATE OF AMERICAN SMALL BUSINESS

    On February 1, 2012, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on obstacles to small business job 
creation and economic growth. The hearing, titled ``The Path to 
Job Creation: The State of American Small Business,'' focused 
on informing Committee members of the most pressing obstacles 
facing small businesses in an effort to narrow the Committee's 
focus to the most pertinent impediments and to tackle the most 
egregious obstructions to job creation and economic growth.
    The witnesses for the hearing were: Dennis Jacobe, Ph.D., 
Chief Economist, Gallup, Washington, DC; Mr. Peter Ferrara, 
Senior Fellow, Entitlement and Budget Policy, Heartland 
Institute, Chicago, IL; Martin Neil Baily, Ph.D., Senior 
Fellow, Economic Studies, The Brookings Institution, 
Washington, DC; and Mr. Michael Fredrich, President, Manitowoc 
Custom Molding, Manitowoc, WI testifying on behalf of the Small 
Business and Entrepreneurship Council.
    Dr. Jacobe began the hearing with testimony outlining the 
results of an October 24, 2011 Gallup poll that showed that 
excessive government regulation, lack of available capital, and 
low consumer confidence as the biggest hurdles small business 
must overcome. He also stated that a one-year moratorium on all 
new federal regulations would be an immediate stimulus to the 
economy. Mr. Ferrara argued against further stimulus packages. 
Dr. Baily explained that the housing crisis is the mitigating 
factor in the current slow recovery of the economy following 
the 2007-2009 recession. He went on to state that while recent 
economic indicators have been somewhat positive, much more 
progress needs to be made to get the economy back to what is 
was before the recession. Mr. Fredrich stated that the ever-
changing and confusing actions of the Federal Reserve and what 
appears to be the insouciance of Washington regarding the 
federal debt creates a level of uncertainty in the private 
sector which will only result in stagnation and decline.

      PLACING FEDERAL TAX DOLLARS AT RISK: HOW THE SMALL BUSINESS 
    ADMINISTRATION MISMANAGES THE MODERNIZATION OF ITS INFORMATION 
                               TECHNOLOGY

    On February 8, 2012, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on the Small Business Administration's 
(SBA) efforts to modernize its computer systems used to manage 
its loan portfolio. The hearing, titled ``Placing Federal Tax 
Dollars at Risk: How the Small Business Administration 
Mismanages the Modernization of its Information Technology'' 
focused on a Government Accountability Office review of the 
SBA's prolonged modernization efforts.
    The hearing consisted of one panel: The Honorable Marie 
Johns, Deputy Administrator, United States Small Business 
Administration, Washington, DC; and Mr. David Powner, Director, 
Information Technology Management Issues, United States 
Government Accountability Office, Washington, DC.
    Deputy Administrator Johns noted that the modernization 
process of the Loan Management Accounting System (LMAS) 
commenced in 2005. The update efforts were reengineered in 
2009. Ultimately, the SBA determined to reduce the scope of the 
LMAS project thereby reducing the cost of the modernization 
effort. Nevertheless, Deputy Administrator Johns stated that 
certain legacy issues, such as the use of the COBOL computer 
language, will continue even after the updates are fully 
implemented.
    Mr. Powner noted that the reengineering stemmed from the 
SBA's inability to properly manage the original scope of the 
LMAS modernization. Even with the significant smaller scale 
project, the SBA remains behind schedule on milestones 
established for the modernization effort. Mr. Powner noted that 
the SBA did not have proper management practices needed to 
ensure successful completion of the modernization effort.

   A JOB CREATION ROADMAP: HOW AMERICA'S ENTREPRENEURS CAN LEAD OUR 
                           ECONOMIC RECOVERY

    On March 21, 2012, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on ``A Job Creation Roadmap: How 
America's Entrepreneurs Can Lead Our Economic Recovery.''
    The witnesses were Andrew Razeghi, Adjunct Assistant 
Professor, Kellogg School of Management, Northwestern 
University, Evanston, IL; Mr. Seth Goldman, President and CEO, 
Honest Tea, Bethesda, MD, testifying on behalf of the American 
Beverage Association; Mr. Heath Hall, President, Pork Barrel 
BBQ, Washington, DC; and Mr. Clinton Tymes, State Director, 
Delaware Small Business Technology Development Center, Newark, 
DE, testifying on behalf of the Association of Small Business 
Development Centers.
    Professor Razeghi noted that entrepreneurial ecosystems are 
instrumental in helping to support high potential investors. He 
also said that innovation reduces barriers to entry for 
entrepreneurs, but also reduces the need for employees, thereby 
reducing job growth. Mr. Goldman mentioned that running a lean 
small company had advantages, because the company made less 
expensive mistakes as a result. He also said that a 
differentiated product (the first organic tea beverage) was key 
to the company's survival. The best thing the government did to 
support the company, he noted, was to not get in the company's 
way. Mr. Hall said every regulation, requirement or delay that 
the government imposes is a burden that new small businesses 
have to overcome. These burdens cost entrepreneurs time and 
money, and often lead to many small firms prematurely calling 
it quits, opting to create fewer jobs and slowing innovation, 
he said. Mr. Tymes testified that Small Business Development 
Centers (SBDCs) educate entrepreneurs to access capital, 
improve sales, and manage the day-to-day complexities of a 
business.
    At the hearing's close, Chairman Graves said the Committee 
would continue to follow the research on, and needs of, 
America's entrepreneurs--our best job creators.

  LARGE AND SMALL BUSINESSES: HOW PARTNERSHIPS CAN PROMOTE JOB GROWTH

    On March 28, 2012, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on large and small businesses partnering 
to create added value, jobs and economic growth. The hearing 
titled ``Large and Small Businesses: How Partnerships Can 
Promote Job Growth'' focused on the strategic affiliations 
created between large and small businesses and how these can 
help us to create more jobs and grow the economy.
    The witnesses for the hearing were: Matthew Slaughter, 
Ph.D., Signal Companies Professor of Management, Tuck School of 
Business, Dartmouth College, Hanover, NH; William C. McDowell, 
Ph.D., Assistant Professor of Management, East Carolina 
University, Greenville, NC; Mr. Robert E. Bruck, Corporate Vice 
President & General Manager, Technology Manufacturing 
Engineering, Intel Corporation, Santa Clara, CA; and Mr. Paul 
Blackborow, Chief Executive Officer, Energetiq Technology, 
Inc., Woburn, MA.
    Dr. Slaughter began the testimony by stating that neither 
small business nor large business operates in a vacuum. Rather, 
each is deeply embedded in the overall U.S. economy--with 
extensive connections to each other in product markets, capital 
markets, and labor markets.
    He added that one important link between small business and 
big business is time: small businesses of today can grow to 
become the big businesses of tomorrow. Many of America's 
largest and most successful companies started small--indeed, as 
the quintessential person pursuing a dream from a garage or 
dorm Room. Dr. McDowell testified that traditionally, small 
businesses are at a disadvantage to large businesses in the 
access to capital and tax realms and that these issues must be 
addressed to have small businesses drive the United States 
economy. Both Mr. Bruck and Mr. Blackborow testified about the 
significant benefits their respective companies have realized 
by their partnership by stating that as a result of the 
technical and investment relationship with a small company, two 
technologies critical to the manufacture of Intel's present 
generation and future generation semiconductor chips have been 
developed and commercialized. They continued that Energetiq had 
benefitted not only from the revenue generated by sales to 
Intel's suppliers, but its relationship with Intel provides 
significant credibility with its customers, suppliers and other 
investors enabling it to enlarge its business.

      THE TAX OUTLOOK FOR SMALL BUSINESSES: WHAT'S ON THE HORIZON?

    On April 18, 2012, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on ``The Tax Outlook for Small 
Businesses: What's on the Horizon?'' The witnesses were: Aparna 
Mathur, Ph.D., Resident Scholar, American Enterprise Institute, 
Washington, DC; Mr. Leonard Steinberg, Principal, Steinberg 
Enterprises, LLC, West Windsor, NJ, testifying on behalf of the 
Small Business and Entrepreneurship Council; Mr. Martin J, 
Mitchell, Vice CEO, Mitchell & Best Homes, Rockville, MD, 
testifying on behalf of the National Association of Home 
Builders; and Ms. Margot Dorfman, CEO, U.S. Women's Chamber of 
Commerce.
    Dr. Mathur cited the study by Department of the Treasury's 
Office of Tax Analysis, which said in 2007, about 4% of small 
businesses faced the high marginal tax rates of 33% and 35%. 
However, nearly 32% of small business income was subject to 
this tax. For employer small businesses, 10% of small 
businesses and 38% of small business income was subject to 
these rates. The effect of high tax rates is reduced business 
entrepreneurship.
    Mr. Steinberg, whose tax practice is a small business, 
serves small business clients. He testified that whatever money 
is taken out of the economy from the small business community, 
the consequences have multiple effects. Business owners cannot 
afford to give their employees timely raises, and fringe 
benefits are cut or withdrawn, business owners defer capital 
expenditures affecting their suppliers and the supplier's 
workers.
    Ms. Dorfman discussed the frustration of small business 
owners with tax complexity. She expressed support for 
simplifying the tax code, particularly because so many small 
businesses are structured as pass-through entities and pay 
business taxes on their individual tax returns. She testified 
that the difficulties of tax compliance are compounded by the 
challenges of the recession.
    Mr. Mitchell strongly urged Members to extend the 2001 and 
2003 tax cuts. He said tax policy can have a dramatic effect on 
an industry like home building that is dominated by small 
businesses. Because so many builders are organized as pass-
through entities that pay business taxes on their individual 
tax returns, individual income tax rates are business tax 
rates.
    All witnesses expressed support for ending the estate tax.
    At the hearing's close, Chairman Graves said the Committee 
would continue to stay active in the debate on taxes in the 
months ahead.

    RUNNING ON EMPTY: THE EFFECTS OF HIGH GASOLINE PRICES ON SMALL 
                               BUSINESSES

    On May 9, 2012, the Committee on Small Business met in Room 
2360 of the Rayburn House Office Building for the purpose of 
receiving testimony on ``Running on Empty: The Effects of High 
Gasoline Prices on Small Businesses.'' The purpose of the 
hearing was to examine the causes of high fuel prices and to 
learn of the direct and indirect economic effects of high 
gasoline prices on small businesses.
    The witnesses were: Mr. Robert McNally, President, The 
Rapidan Group, LLC, Bethesda, MD; Ms. Jamie Smith, Owner and 
General Manager, Mr. Rooter Plumbing of Greater Baltimore, 
Baltimore, MD; Ms. C. Cookie Driscoll, Owner, C. Cookie 
Driscoll, Inc., Fairfield, PA, testifying on behalf of the 
National Small Business Association; and Michael Greenberger, 
Esq., Professor and Director, Center for Health and Homeland 
Security, Francis King Carey School of Law, University of 
Maryland, Baltimore, MD.
    Robert McNally testified that gasoline prices are largely 
dependent on the price of crude oil, the price of which is 
determined in international markets. He testified that recent 
increases in the cost of crude oil are largely the result of a 
lack of excess supply capacity relative to demand. Professor 
Greenberger testified that his research indicates that recent 
high crude oil prices, and the concomitant increase in gasoline 
prices, are not the result of market supply and demand 
fundamentals, but are a consequence of increased financial 
speculation in oil futures markets.
    Jaime Smith testified that small businesses such as his 
have less opportunity to hedge or mitigate the effects of high 
gasoline prices on their bottom line. He mentioned that his 
business has recently imposed a fuel surcharge in order to 
recoup a portion of the increase in his gasoline costs. 
However, he believes the fuel surcharge may have helped with 
one problem by creating another, as some customers strenuously 
object to the surcharge.
    C. Cookie Driscoll testified that the cost of all of the 
inputs she utilizes on her horse farm are directly linked to 
the price of fuel and that when oil prices go up, so does the 
cost of these inputs. As a result of high gasoline prices, Ms. 
Driscoll has stopped paying herself a salary and has been 
forced to increase the price she charges customers for boarding 
horses on her farm. Ms. Driscoll and Mr. Smith both testified 
that demand for their services declines when fuel prices 
increase.
    Professor Driscoll noted that the fundamental supply and 
demand for oil should not result in price spikes and attributed 
it to speculation. He went on to note that more concerted 
efforts by the Commodity Futures Trading Commission to 
implement provisions of Dodd-Frank and take other steps against 
index trading used by speculators would reduce price spikes for 
crude oil.

     U.S. TRADE STRATEGY: WHAT'S NEXT FOR SMALL BUSINESS EXPORTERS?

    On May 16, 2012, the Committee on Small Business held a 
hearing titled, ``U.S. Trade Strategy: What's Next for Small 
Business Exporters?'' The hearing examined the trade policy 
initiatives of the Administration and their effect on small 
business exporters. Specifically, the Committee heard from the 
Office of the United States Trade Representative (USTR) on the 
status of current trade negotiations and the overall strategy 
to open new markets for United States goods and services. In 
addition, the Committee received recommendations directly from 
small businesses on how to best increase exports and create new 
local jobs.
    The only witness on the first panel was: Ambassador Miriam 
Sapiro, Deputy United States Trade Representative, Office of 
the United States Trade Representative, Washington, DC. The 
second panel consisted of the following witnesses: Mr. Mark 
Luden, CEO of Guithammer Company, Westerville, OH, on behalf of 
the Consumer Electronics Association; Mr. Robert Sinner, 
President and Partner, SB&B Foods Inc, Casselton, ND, on behalf 
of the American Soybean Association; Mr. Thomas Crafton, 
President, Thermcraft Inc, Winston Salem, NC, on behalf of the 
National Association of Manufacturers; and Joshua Meltzer, 
Esq., LL.M., S.J.D., Fellow, Brookings Institute, Washington, 
DC.
    At the hearing, Ambassador Sapiro first testified on the 
Administration's efforts to help small businesses increase 
their exports. She explained the implementation status of the 
free trade agreements (FTAs) passed last year with Colombia, 
Panama and Korea. She stated the Colombia FTA, which just went 
into force on May 15, 2012, will help the already 13,000 small 
firms that currently export to Colombia increase their sales. 
The Ambassador also updated the Committee on the current Trans-
Pacific Partnership (TPP) negotiations with nine nations in the 
Asia-Pacific Region.
    The second panel of private witnesses discussed key policy 
issues affecting their ability to compete globally and provided 
recommendations on future trade policy. Mr. Luden praised the 
free trade agreements and their ability to open new markets. He 
also advocated expanding the Information Technology Agreement 
(ITA) within the World Trade Organization (WTO), as this would 
lower the export tariff on his electronic products. Mr. Crafton 
explained how vital exports are to his business, as they 
account for approximately 35 percent of total sales. Mr. Sinner 
explained some of the key barriers for soybean exporters, 
including the complex international standards promulgated by 
foreign nations. The final witness, Dr. Joshua Meltzer 
highlighted the potential gain for small business exporters 
through the TPP agreement, including a $14 billion trade 
surplus.
    In closing, Chairman Graves said he will continue to work 
on opening new markets, reducing barriers, and making the trade 
process easier for small business exporters. He also stated the 
Committee will continue to focus on improving the coordination 
and efficiency of the federal trade agencies to ensure small 
firms have the resources available to export.

            SBA'S MANAGEMENT OF ITS CAPITAL ACCESS PROGRAMS

    On June 6, 2012, the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of conducting an oversight hearing on the Small Business 
Administration's (SBA's) financial assistance programs. The 
hearing addressed SBA's oversight of the capital access 
programs with a special focus on the ad hoc procedures used to 
manage those programs.
    The only witness at the hearing was The Honorable Karen 
Mills, Administrator, United States Small Business 
Administration, Washington, DC.
    Administrator Mills testified that federal financial 
regulators have been sharing their best practices with SBA 
including the importance of establishing a comprehensive risk 
plan for the agency. The Administrator stated that the agency 
expects to complete its first comprehensive risk plan for its 
loan portfolios (which exceed $90 billion) before the beginning 
of the next fiscal year. Administrator Mills also remarked that 
lending partners have asked SBA for greater ``clarity, 
consistency, and transparency'' in lender oversight and that 
the agency would incorporate those concepts into upcoming 
revisions to its regulations.
                                 PART B

                         Subcommittee Hearings

          SMALL BUSINESS PROGRAMS CREATING INNOVATION AND JOBS

    On April 7, 2011, the Subcommittee on Healthcare and 
Technology of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for the purpose of 
receiving testimony on draft legislation reauthorizing the 
Small Business Innovation Research (SBIR) and Small Business 
Technology Transfer (STTR) Programs. The hearing, titled ``The 
Creating Jobs Through Small Business Innovation Act of 2011,'' 
focused on improving the SBIR and STTR programs via the 
legislation.
    The witnesses for the hearing were: Glenn Norem, Executive 
Chairman Totus Lighting Solutions, Inc. Lakeway TX; Terry 
Brewer, Ph.D., President, Brewer Science, Inc., Rolla, MO; 
Albert Link, Ph.D., Professor, Department of Economics, 
University of North Carolina at Greensboro, Greensboro, NC; and 
Scott Koenig, Ph.D., Chairman of the Board, Applied Genetics 
Technology Corporation (AGTC) and CEO of MacroGenics, Inc. 
Rockville, MD, testifying on behalf of the Biotechnology 
Industry Organization.
    Dr. Norem began the testimony by stating that the current 
Small Business Administration (SBA) rules regarding the 
participation of majority owned venture-backed small businesses 
has handicapped his business' access to capital. He stated that 
because of the rule, his company has had to make the choice 
between participation in the SBIR program or accepting venture 
capital investment. Dr. Brewer stressed the importance of the 
SBIR program on emerging as well as established companies and 
suggested that the SBIR program be a catalyst for American 
manufacturing. Dr. Link detailed the findings of the National 
Research Council's An Assessment of the Small Business 
Innovation Research Program of which he was a part. Dr. Koenig 
focused his testimony on the SBA's venture capital rule, 
contrasting two unique therapies two different companies have 
developed; one that succeeded (the company MedImmune and the 
treatment called Synagis) prior to the SBA's 2003 decision to 
limit the participation of venture-backed companies in the SBIR 
program and one that has been shelved (the company AGTC and the 
treatment for Pompe's disease) because the company had too much 
venture capital support under the current rules.

            THE EFFECT OF HIGH GAS PRICES ON SMALL BUSINESS

    On April 14, 2011, the Subcommittee on Agriculture, Energy 
and Trade of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for the purpose of 
receiving testimony on ``Drilling for a Solution: Finding Ways 
to Curtail the Crushing Effect of High Gas Prices on Small 
Business.'' The hearing focused on the negative impacts of 
rising fuel costs on small business and policies that should be 
implemented to decrease the United States' dependence on 
foreign oil and ease the cost burden on small businesses.
    The witnesses were Jim Ehrlich, Executive Director, 
Colorado Potato Administrative Committee, Monte Vista, CO; Rick 
Richter, owner of Richter Aviation, Maxwell, CA, testifying on 
behalf of the Agricultural Aviation Association; Dick Pingel, 
owner of Finally Trucking, Inc., Plover, WI, testifying on 
behalf of the Owner-Operator Independent Drivers Association, 
Inc.; and Robert Weiner, Professor of International Business, 
Public Policy, Public Administration and International Affairs, 
George Washington University, Washington, DC.
    The witnesses spoke about the impacts of increasing fuel 
costs within their industries and other small businesses, and 
agreed that the United States government should encourage 
increases in domestic energy development to reduce dependency 
on foreign sources and decrease fuel costs. Mr. Weiner stated, 
``[t]o foster investment and future production [of oil] it is 
important to establish and implement clear, stable policy in 
the areas that affect petroleum the most taxes and 
regulation.'' Mr. Ehrlich noted that ``for every $0.10 increase 
in gas prices there is a net loss of $5 billion dollars to the 
United States economy,'' and pointed to the fact that the 
``total energy cost of an irrigated potato crop in the San Luis 
valley can be as great as fifty percent of total production.'' 
Mr. Pingel testified that despite the fact that most owner-
operators earn less than $40,000 a year in income, ``each time 
the price of a gallon of diesel fuel increases by a nickel, a 
trucker's annual costs increase by $1,000.'' He also advocated 
fuel-efficiency driver training in lieu of costly government 
regulations. Finally, Mr. Richter encouraged Congress to 
prevent the EPA from promulgating new regulations on avgas. If 
these standards are put into place, it would effectively ground 
over 50 percent of agricultural aircraft, as there are no 
acceptable substitutes for piston-powered engines.

                SMALL BUSINESS SIZE STANDARDS REGULATION

    On May 5, 2011, the Subcommittee on Economic Growth, Tax 
and Capital Access of the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building to receive 
testimony on the U.S. Small Business Administration's (SBA) 
proposed rule, ``Small Business Size Standards: Professional, 
Scientific and Technical Services,'' 74 Fed. Reg. 14323 (March 
16, 2011). The proposed rule addresses industries within North 
American Industry Classification System (NAICS) Sector 54, 
Professional, Scientific and Technical Services, and one 
industry in NAICS Sector 81, Other Services. It would increase 
the small business size standards for 35 industries and one 
sub-industry, reduce the number of available size standards 
from 41 receipt and employee based standards to 16 standards, 
and bundle NAICS codes together to form common industry group 
size standards.
    The witnesses were Walter J. Hainsfurther, FAIA, President, 
Kurtz Associates Architects of Des Plaines, IL, testifying on 
behalf of the American Institute of Architects (AIA); John 
Woods, Partner, Wood Peacock Engineering Consultants of 
Alexandria, VA, testifying on behalf of the American Council of 
Engineering Companies (ACEC); Roger Jordan, Vice President, 
Professional Services Council (PSC) of Arlington, VA; and 
Odysseus Lanier, Partner, McConnell Jones Lanier & Murphy LLP 
of Houston, TX, testifying on behalf of the American Institute 
of Certified Public Accountants (AICPA).
    The witnesses agreed growth in the size standards is 
necessary to reflect economic conditions, but each disagreed 
with changes proposed by SBA. Mr. Hainsfurther testified that 
raising the standard for architectural firms from $4.5 million 
from $19 million, due to the use of common group size 
standards, would result in over 97% of architectural firms 
qualifying as small businesses, and stated that an employee 
based standard would better represent his industry. Mr. Woods 
testified that ACEC needed more time to respond to the SBA 
proposal, since the proposed rule would result in ``more than 
90% of the nation's engineering industry . .  . [being] 
classified as small business[es].'' Mr. Jordan protested the 
use of common size standards when those standards 
``eliminate[d] legitimate small businesses from being able to 
qualify.'' Mr. Lanier testified that SBA was not using the best 
industry data, and that the methodology did not address whether 
a firm was dominant in its field.
    At the hearing's close, Chairman Walsh said he plans to 
submit the hearing record to SBA for inclusion in the 
administrative record, and to request that SBA extend the 
comment period on the rulemaking.

              ENVIRONMENTAL PROTECTION AGENCY REGULATIONS

    On May 12, 2011, the Subcommittee on Oversight, 
Investigations and Regulations of the Committee on Small 
Business met in Room 2360 of the Rayburn House Office Building 
for the purpose of receiving testimony on ``Green Isn't Always 
Gold: Are EPA Regulations Stifling Small Business?'' The 
hearing focused on the negative impacts of the United States 
Environmental Protection Agency (EPA) regulations on small 
businesses.
    The witnesses were Glenn Johnston, Vice President of 
Regulatory Affairs, Gevo, Inc., Englewood, CO; John Ward, 
Chairman, Citizens for Recycling First, Broomfield, CO; and 
Bradford Muller, Vice President of Marketing & Corporate 
Communications, Charlotte Pipe and Foundry Company, Charlotte, 
NC, testifying on behalf of the American Foundry Society.
    The witnesses spoke about the impacts of various EPA 
proposed and final rules and how they negatively impact their 
industries, most specifically as they relate to the Clean Air 
Act and the Resources Conservation and Recovery Act. Witnesses 
also spoke about how EPA has neglected to take into account the 
Regulatory Flexibility Act when promulgating regulations, 
despite significant direct and indirect burdens experienced by 
small businesses. In his remarks, Mr. Muller stated, ``on the 
question of whether the EPA Regulations are harming small 
businesses . . . [t]he answer is unequivocally yes.''
    Mr. Ward, a former member of the National Coal Council and 
American Coal Council, testified that between 1999 and 2009, 
138 million tons of greenhouse gas emissions were decreased 
through the use of coal fly ash in concrete products, and that 
designating these byproducts as hazardous waste would only 
serve to increase waste and pollutant emissions.
    Mr. Johnston indicated that biofuels with broad market 
applications as a solvent and a gasoline blendstock cannot 
compete with ethanol due to EPA policies. ``Gevo and the 
Advanced Biofuels industry in general believe that the EPA 
should review its regulatory regime and to the extent possible 
should assure that biofuels other than ethanol have equal and 
unfettered access to the market,'' he said.

                 GOVERNMENT CONTRACTORS' TAX COMPLIANCE

    On May 26, 2011, the Subcommittee on Contracting and 
Workforce of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building to receive testimony on 
the effects of implementing Section 511 of the Tax Increase 
Prevention and Reconciliation Act of 2005, Pub.L. No. 109-222. 
As revised and implemented, the provision requires that 
payments by federal, state and local governmental entities for 
goods and services made after December 31, 2013 be subject to 
3% income tax withholding in order to address the tax gap.
    The first panel witness was the Hon. Wally Herger (R-CA). 
The second panel consisted of Brian George, Deputy Director, 
Office of Cost, Pricing & Finance, U.S. Department of Defense 
(DoD), accompanied by Dave McDermott, Director, Standards and 
Compliance, Defense Finance and Accounting Service, DoD, and 
the Hon. Curtis M. Loftis Jr., Treasurer of the State of South 
Carolina. The third panel witnesses were Mike Murphy, 
President, Turner Murphy Construction of Rock Hill, SC, 
testifying on behalf of the Associated General Contractors; Ian 
Frost, Principal, EEE Consulting, Inc. of Mechanicsville, VA, 
testifying on behalf of the American Council of Engineering 
Companies; and James M. Gaffney, Vice President, Goshen 
Mechanical Inc. of Malvern, PA, testifying on behalf of the 
Quality Construction Alliance; and Kara M. Sacilotto, Partner, 
Wiley Rein LLP, Washington DC. Over thirty additional groups 
submitted testimony for the record.
    Congressman Herger expressed his support for repeal of 
Section 511, and encouraged passage of H.R. 674, which would 
eliminate the 3% withholding provision.
    Messrs. George and McDermott provided information regarding 
the 2008 DoD study which found that implementation of Section 
511 would cost DoD $17 billion and deny the Department full 
small business participation, competition, and innovation. Mr. 
Loftis denounced the provision as an unfunded mandate that 
would create unnecessary budget stress on state and local 
governments while simultaneously harming small businesses.
    Each of the small business witnesses testified that the 3% 
withholding provisions exceed their profit margins and thereby 
prevent them from expanding or creating jobs. Ms. Sacilotto, a 
government contracts attorney, explained that the unintended 
consequences costs of the Section 511 on the procurement system 
outweighed any recaptured revenue.
    Chairman Mulvaney concluded the hearing by promising to 
work with the Committee on Ways and Means to repeal Section 
511. A copy of the hearing transcript will be sent to the 
Committee on Ways and Means once it is available.

      HEALTH INFORMATION TECHNOLOGY IMPLEMENTATION AND REGULATION

    On June 2, 2011, the Subcommittee on Healthcare and 
Technology of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for the purpose of a 
hearing entitled, ``Not What the Doctor Ordered: Health IT 
Barriers for Small Medical Practices.'' The hearing focused on 
the implementation of health IT by small physician practices, 
barriers that small practices have encountered and possible 
solutions to those barriers.
    The witnesses were: Farzad Mostashari, M.D., M.Sc., 
National Coordinator for Health Information Technology (ONC), 
Department of Health and Human Services, Washington DC; Karen 
Trudel, Acting Director, Office of E-Health Standards and 
Services, Centers for Medicare and Medicaid Services (CMS), 
Baltimore, MD; Sasha Kramer, M.D., Olympia, WA, testifying on 
behalf of the American Dermatological Society; Denise Elliott, 
D.P.M., Marrero, LA, testifying on behalf of the American 
Podiatric Medical Association; Andrew Slavitt, Chief Executive 
Officer, OptimumInsight, Eden Prairie, MN; and David L. Baumer, 
Ph.D., Professor of Law and Technology, North Carolina State 
University, Raleigh, NC.
    Dr. Mostashari testified that the Regional Extension 
Centers offer training and technical assistance to small 
practices that are working toward meaningful use of Electronic 
Health Records (EHR). Ms. Trudel said CMS and the states have 
made incentive payments to 1139 eligible professionals who have 
successfully adopted EHRs.
    The second panel's witnesses agreed that health information 
technology can help to boost a medical practice's quality of 
care, but that barriers can prevent smaller practices from 
adopting it. Dr. Elliott noted that more than 65% of 
podiatrists practice in one or two person groups, and requiring 
them to implement electronic health records for Medicare is an 
undue financial burden. Dr. Kramer purchased a system by a 
company that was acquired by another company whose software is 
not compatible. Now she is facing the purchase of a new system. 
Mr. Slavitt said the purchase and design of technology have 
taken a back burner to all of the compliance reporting 
requirements needed to qualify for federal incentive payments. 
Dr. Baumer testified that the efficiency gains are offset by 
the possible increased risks to the privacy of medical records 
and recommended legal safe harbors for small firms to protect 
them from lawsuits.

          DEPARTMENT OF TRANSPORTATION REGULATION OF TRUCKING

    On June 14, 2011, the House Committee on Small Business' 
Subcommittee on Oversight, Investigations and Regulations met 
in Room 2360 of the Rayburn House Office Building for the 
purpose of receiving testimony on ``Do Not Enter: How Proposed 
Hours of Service Trucking Rules are a Dead End for Small 
Businesses.'' The hearing focused on the Federal Motor Carrier 
Safety Administration's proposed rule on Hours of Service for 
property-carrying truckers.
    The witnesses were: Paul James, President, Rex Oil Company, 
Denver, CO, testifying on behalf of the Petroleum Marketers 
Association of America; James Burg, Owner, James Burg Trucking, 
Warren, MI, testifying on behalf of the American Trucking 
Association; J.D. Morrissette, President, Interstate Van Line 
Operations, Inc., Springfield, VA, testifying on behalf of the 
American Moving and Storage Association; and Rusty Rader, Co-
Owner, J.J. Kennedy, Inc., Fombell, PA, testifying on behalf of 
the National Ready-Mixed Concrete Association.
    The witnesses discussed how this proposed regulation would 
harm their industries by reducing allowed duty times for 
property-carrying trucks, hindering the ability for owner-
operators and other small businesses to transport goods 
nationwide. In his remarks, Mr. Burg stated, ``[t]hese changes, 
if finalized, would have a profoundly negative impact on small 
businesses, would restrict productivity, and would result in 
greater congestion and increased emissions. These impacts are 
significant since there are some 500,000 trucking companies in 
the United States and 99 percent of these companies are small 
businesses.'' Mr. Morrissette spoke to the complexities of the 
proposed rule: ``[t]he proposed hours of service changes are 
complicated, difficult to understand and difficult for the 
customer to appreciate . . . the current rules should continue 
to apply.'' Mr. Rader testified to the challenges that would be 
created as a result of changed restart provisions: ``[b]y 
mandating a driver's off duty time to include at least two 
consecutive periods of midnight to 6 a.m. reduces the number of 
hours available to meet construction and delivery schedules to 
an unacceptable level. Not every work day takes place during 
daylight hours, making this proposed change overly 
restrictive.'' Mr. James said, ``[w]ith fewer hours to drive 
each day, any companies would be forced to hire additional 
drivers or delay deliveries to the following day . . . [t]he 
daily reduction in driving hours would thus decrease overall 
safety by putting less experienced drivers on the road.''

     NEW FINANCIAL SERVICE REGULATION AND IMPACT ON SMALL BUSINESS

    On June 16, 2011, the Subcommittee on Economic Growth, Tax 
and Capital Access of the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of a hearing titled ``The Dodd-Frank Act: Impact on Small 
Business Lending.'' The hearing examined the regulatory 
structure of financial institutions including the new 
requirements placed on them by the Dodd-Frank Act.
    The witnesses were: Thomas Boyle, Vice Chairman, State Bank 
of Countryside, LaGrange, IL, testifying on behalf of the 
American Bankers Association; Mark Sekula, Executive Vice 
President, Randolph-Brooks Federal Credit Union, San Antonio, 
TX, testifying on behalf of the National Association of Federal 
Credit Unions; William Daley, Legislation and Policy Director, 
Main Street Alliance, Washington, DC; and Mr. Greg Ohlendorf, 
President and CEO, First Community Bank and Trust, Beecher, IL, 
testifying on behalf of the Independent Community Bankers of 
America.
    Witnesses spoke about the impact of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act and offered solutions 
to minimize its burdens. Mr. Boyle stated that community banks 
understand the financial needs of local community and is 
concerned that the community banking model will collapse under 
the massive weight of new rules and regulations. Mr. Sekula, 
testified that``[w]ith a slew of new regulation emerging from 
the Dodd-Frank Act, such relief from unnecessary or outdated 
regulation is needed now more than ever by credit unions.'' Mr. 
Daley testified that the members of his organization were 
concerned more about the over health of the economy and the 
impact on their community, then they were about over 
regulations. Mr. Ohlendorf, testified that ``[t]he stakes were 
raised sharply after the financial crisis, but I believe many 
examiners have overreacted and now the pendulum has swung too 
far in the direction of over-regulation.''

 INSOURCING OF FEDERAL PROCUREMENTS AND ITS EFFECTS ON SMALL BUSINESSES

    On June 23, 2011, the Subcommittee on Contracting and 
Workforce of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building to receive testimony on 
the implementation of the Administration's insourcing policies, 
and the effect of these policies on small businesses. 
Specifically, five issues were discussed: the lack of 
transparency in the insourcing process; inconsistencies in the 
cost studies used to justify insourcing; the prohibition on 
public-private competitions when insourcing; the lack of 
standing for small businesses that wish to challenge agency 
insourcing decision; and the role of the Small Business 
Administration in insourcing.
    The witnesses were Dawn L. Hamilton, President and Chief 
Executive Officer, Security Assistance Corporation, Arlington, 
VA; Bryant S. Banes, Managing Shareholder, Neel, Hooper & 
Banes, P.C., Houston, TX; Bonnie C. Carroll, President, 
Information International Associates, Oak Ridge, TN; and Jacque 
Simon, Public Policy Director, American Federation of 
Government Employees, Washington, DC.
    Ms. Hamilton, who had a contract insourced by the United 
States Coast Guard, provided testimony explaining the analysis 
used to insource her company's contract was irrevocably flawed, 
as it began with the assertion that ``that the cost of a 
contractor is automatically higher than a government employee 
and that the insourcing would have no adverse impacts to other 
organizations.'' Ms. Carroll, who had contracts insourced by 
the United States Air Force and the Department of Labor, 
testified that ``decisions to insource are driven more by 
arbitrary budget and manpower boogies than by the objectives of 
enhancing the government's workforce capabilities or by true 
cost savings.'' Mr. Banes provided testimony in his capacity as 
a government contracts expert. Specifically, he addressed the 
findings of the United States Court of Federal Claim in the 
decision of Hallmark-Phoenix 3, LLC v. United States, 99 Fed. 
Cl. 65 (2011) where the court determined that it lacked 
jurisdiction to consider insourcing decisions under statutes 
that give the Court of Federal Claims the authority to hear 
disputes over the award of federal government contracts. Ms. 
Simon focused on ``the importance of insourcing and reducing 
the Federal government's expensive and risky overreliance on 
service contractors.''
    Chairman Mulvaney stated that the Committee would consider 
legislative actions in response to the testimony received.

REGULATORY BURDENS ON LIVESTOCK PRODUCERS--NEW RULES FOR COMPLYING WITH 
                     THE PACKERS AND STOCKYARDS ACT

    On July 7, 2011, the Subcommittee on Agriculture, Energy 
and Trade of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for the purpose of 
receiving testimony on ``Regulation Gone Awry: How USDA's 
Proposed GIPSA Rule Hurts America's Small Businesses.'' The 
hearing focused on USDA's Proposed Grain Inspection, Packers 
and Stockyard Administration (GIPSA) rule and the changes on 
livestock marketing practices.
    The witness for the first panel was the Hon. Edward Avalos, 
Under Secretary for Marketing and Regulatory Programs, United 
States Department of Agriculture, Washington, DC. The witnesses 
on the second panel were: Robbie LeValley, Hotchkiss, CO, 
testifying on behalf of the Colorado Cattlemen's Association 
and the National Cattlemen's Beef Association; Gary Malenke, 
CEO, Natural Food Holdings, Sioux City, IA, testifying on 
behalf of the National Meat Association; Joel Bradenberger, 
President, National Turkey Federation, Washington, DC; and Bob 
Junk, Local Economy Manager, Fay Penn Economic Development 
Council, Uniontown, PA.
    At the hearing, Undersecretary Avalos explained that the 
USDA was still reviewing the 60,000+ comments they received in 
response to the rule. He assured the Committee that the Agency 
was taking all of the comments seriously and with a heavy 
heart. The Undersecretary refused to answer any specific 
questions about where USDA was in the rule making process but 
did tell the Committee that they expected a final rule 
``soon''. All of the small business owners on the second panel, 
minus Mr. Junk, testified that the proposed GIPSA rule was bad 
for their business and that some of the provisions in the rule 
would set back the livestock industry 30 years. Mr. Junk 
testified that the rule was necessary and it stemmed from 
language in the 2008 Farm Bill.
    At the hearing's close, Chairman Tipton encouraged USDA to 
take into consideration all of the testimony and questioning 
that they heard during the Committee as they work through the 
economic analysis. Mr. Tipton also urged the USDA to revise 
their analysis on small businesses as part of a more detailed 
economic analysis and then publish the new Regulatory 
Flexibility Analysis for comment to ensure small businesses can 
inform the Agency on its effect to their business. After the 
hearing, Chairman Tipton sent a letter to Undersecretary Avalos 
on July 21, 2011 with five follow up questions.

  ADVERSE IMPACT OF HEALTHCARE LAW ON SMALL BUSINESSES THAT CURRENTLY 
                         OFFER HEALTH INSURANCE

    On July 28, 2011, the Subcommittee on Healthcare and 
Technology of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for the purpose of holding 
a hearing titled, ``Small Businesses and PPACA: If They Like 
Their Coverage, Can They Keep It?'' The hearing focused on 
whether small firms can keep their current health insurance 
under the Patient Protection and Affordable Care Act.
    The witnesses were: Steven Larsen, Deputy Administrator and 
Director, Center for Consumer Information and Insurance 
Oversight, Centers for Medicare and Medicaid Services, 
Department of Health and Human Services, Washington, DC; 
Douglas Holtz-Eakin, Ph.D., President, American Action Forum, 
Washington, DC; William Dennis, Research Fellow, National 
Federation of Independent Business, Washington, DC; Brian 
Vaughn, President, Nearly Famous, Inc., Douglas, GA, testifying 
on behalf of the U.S. Chamber of Commerce; and Timothy 
Stoltzfus Jost, Esq., Robert Willett Family Professor of Law, 
Washington and Lee University School of Law, Lexington, VA.
    Mr. Larsen testified that the Patient Protection and 
Affordable Care Act (PPACA) contains a number of provisions 
that will help close the gap between small and large business' 
ability to offer health insurance to their employees. Dr. 
Holtz-Eakin said PPACA raises the overall cost of operating a 
small business and undermines job growth. Mr. Dennis reported 
that NFIB's recent survey found by overwhelming margins, small 
employers with some knowledge of PPACA think it will not reduce 
the rate of health insurance cost increases, will not reduce 
the administrative burden, will increase taxes and will add to 
the federal deficit. Mr. Vaughn testified that his plan has 
been to expand and open a new store by reinvesting profits back 
into his business, but he is instead worried that everything he 
has worked for will be wiped out by the new law. Professor Jost 
said that it is not possible to predict exactly how employers 
will react to all of the cross-cutting incentives, and that the 
effect of PPACA on employer-sponsored insurance is only one of 
many considerations that must be weighted in evaluating health 
care reform.

   REGULATORY BURDENS OF THE NEW CONSUMER FINANCIAL PROTECTION BUREAU

    On July 28, 2011, the Subcommittee on Investigations, 
Oversight and Regulations of the Committee on Small Business 
met in Room 2360 of the Rayburn House Office Building for the 
purpose of a hearing titled ``Open for Business: The Impact of 
the CFPB on Small Business.'' The hearing focused on the new 
Consumer Financial Protection Bureau (CFPB) created by the Wall 
Street Reform and Consumer Protection Act and its impact on 
small business.
    The only witness on Panel I was Dan Sokolov, Deputy 
Associate Director for Research, Markets and Regulations, 
Consumer Financial Protection Bureau, Washington, DC. The 
witnesses on panel II were: Jess Sharp, Executive Director, 
Center for Capital Markets Competitiveness, U.S. Chamber of 
Commerce, Washington, DC; Terry Jones, Chairman, Legislative 
and Regulatory Affairs Committee, Colorado Mortgage Lenders 
Association, Denver, CO; Mr. Daniel Fleming, President, Fleming 
NationaLease, Springfield, VA, testifying on behalf of the 
Truck Renting and Leasing Association; and Adam Levitin, Esq., 
Professor of Law, Georgetown University Law Center, Washington, 
DC.
    Mr. Sokolov testified that the CFPB is working to minimize 
the regulatory burden on small business by following procedural 
safeguards in the rulemaking process including compliance with 
the Small Business Regulatory Enforcement Fairness Act. The 
CFPB is focused on consumer transactions and does not have 
authority to regulate small business credit. Mr. Sharp 
testified that large numbers of small businesses turn to 
consumer financial products to fund their business because they 
are very affordable and that any restriction on use of those 
products could have a detrimental impact on small business. Mr. 
Jones testified that CFPB is already working on several 
regulations that focus on the mortgage lending industry and he 
hopes the CFPB does not turn into a ``super regulator'' for the 
mortgage industry. Mr. Fleming testified that the new small 
business data collection requirements will force him to spend 
money on regulatory compliance, rather than on growing his 
business. Professor Levitin testified that the CFPB is good for 
consumers and will have only tangential impact on small 
business lending.

                    SMALL BUSINESS ACCESS TO CAPITAL

    On August 25, 2011, the Subcommittee on Oversight, 
Investigations and Regulations of the Committee on Small 
Business met in Greenwood Village, Colorado for the purpose of 
conducting a hearing titled ``Small Business Committee Field 
Hearing in Colorado: Local Perspectives on the State of Small 
Business Lending.'' This hearing focused on the regulatory 
burdens to small business lending and provided attendees the 
opportunity to hear from the Small Business Administration 
(SBA) about the government backed lending programs available to 
help small businesses access capital.
    The witnesses were: Steve Smits, Associate Administrator, 
Office of Capital Access, United States Small Business 
Administration, Washington, DC; Jay Davidson, Chairman & CEO, 
First American State Bank, Greenwood, CO; David Brown, 
President Southeast Denver Centennialbank, Centennial, CO; and 
Mr. Jeff Wasden, Owner, PROFormance Apparel, Littleton, CO.
    Associate Administrator Smits testified that SBA lending 
programs are providing access to capital to small businesses 
and that could not otherwise obtain a loan without assistance. 
Mr. Davidson testified that the economic recovery is slower 
than it should be because regulators are requiring banks to 
raise additional capital. Mr. Brown testified that all of the 
new laws will lead to new regulation and this has been 
happening at a much quicker pace than at any time in the past. 
Further, each new regulation will be very expensive for banks 
to understand and implement. Mr. Wasden testified that business 
owners need to be focused on the day-to-day operations of their 
business and not on government policies. He believes that ten 
percent of businesses are thriving, twenty percent are seeing a 
slight increase, thirty percent are holding even, and the 
balance are struggling to stay in business.

   INCREASING PROCUREMENT OPPORTUNITIES THROUGH IMPROVEMENTS TO SBA 
                    PROCUREMENT ASSISTANCE PROGRAMS

    On September 15, 2011, the Subcommittee on Contracting and 
Workforce of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for a hearing titled 
``Helping Small Businesses Compete: Challenges within Programs 
Designed to Assist Small Contractors.'' The hearing addressed 
recent Government Accountability Office (GAO) reports on small 
business contracting assistance programs. The reports were: (1) 
GAO-11-548R, Mentor-Protege Programs Have Policies That Aim to 
Benefit Participants but Do Not Require Postagreement Tracking; 
(2) GAO-11-549R, Improvements Needed to Help Ensure Reliability 
of SBA's Performance Data on Procurement Center 
Representatives; and (3) GAO-11-418, Small Business 
Contracting: Action Needed by Those Agencies Whose Advocates Do 
Not Report to Agency Heads as Required.
    The witnesses were: Joseph G. Jordan, Associate 
Administrator of Government Contracting and Business 
Development, United States Small Business Administration (SBA), 
Washington, DC; Jiyoung Park, Associate Administrator, Office 
of Small Business Utilization, United States General Services 
Administration, Washington, DC; and William B. Shear, Director, 
Financial Markets and Community Investment, GAO, Washington, 
DC.
    The witnesses provided testimony on challenges facing the 
SBA's Procurement Center Representative (PCR) program, the 
individual agency Offices of Small and Disadvantaged Business 
Utilization (OSDBU), and the thirteen Mentor-Protege programs 
currently available. Mr. Shear discussed GAO's finding that the 
Departments of Agriculture, Commerce, Justice, Interior, State, 
and the Treasury, and at the Social Security Administration 
were not complying with Section 15(k)(3) of the Small Business 
Act, which requires that the OSDBU Director ``report directly 
to the head of such agency or to the deputy.'' Furthermore, he 
explained that most Mentor-Protege programs do not adequately 
measure outcomes, and provided insight into the challenges 
facing the SBA's PCRs. Mr. Jordan testified that SBA recently 
reviewed the PCR program and metrics, and is ``currently 
reviewing the results of this analysis and working to develop 
and implement an improved system, along with revised standard 
operating procedures and tools.'' Ms. Park explained GSA's 
Mentor-Protege, and that it had produced results by increasing 
both prime and subcontract awards to participants as well as 
creating ``132 new jobs as a direct result of participation in 
the program.''
    At the conclusion of the hearing, Chairman Mulvaney stated 
the Subcommittee would continue to work towards holding those 
government agencies accountable that refuse to comply with the 
requirements of the Small Business Act, and towards improving 
the small business contracting assistance programs.

                REGULATORY BARRIERS TO ENERGY PRODUCTION

    On September 19, 2011, the Subcommittee on Agriculture, 
Energy and Trade met in the City Hall Auditorium, Grand 
Junction, CO for a hearing titled ``Are Excessive Energy 
Regulations and Policies Limiting Energy Independence, Killing 
Jobs and Increasing Prices for Consumers?'' The hearing 
examined burdensome federal regulations and policies on the 
energy industry and their impact on small businesses, jobs, and 
consumer prices. Specifically, the issues addressed at the 
hearing included: the proposed regulation of coal combustion 
residuals under the Resource Conservation and Recovery Act as a 
hazardous waste; proposed rule to limit air certain toxics 
emitted from coal-fired powerplants; potential rules proffered 
by EPA to limit emission of greenhouse gases; and regulations 
to address hydraulic fracking in the natural gas extraction 
industry.
    Witnesses on Panel I were: James Martin, Regional 
Administrator, Environmental Protection Agency, Denver, CO; and 
Helen Hankins, Colorado State Director, Bureau of Land 
Management (BLM), United States Department of Interior, 
Lakewood, CO. The second panel consisted of the following 
witnesses: David White, Commissioner, Montrose County, 
Montrose, CO; David Ludlam, Executive Director, West Slope Oil 
& Gas Association, Grand Junction, CO; Jennifer Bredt, 
Development Manager, Renewable Energy Systems Americas, 
Broomfield, CO; James Kiger, Environmental Manager, Oxbow 
Mining, LLC, Somerset, CO, testifying on behalf of the Colorado 
Mining Association; Richard Welle, General Manager, White River 
Electric Association, Inc., Meeker, CO.
    Mr. Martin testified that EPA was still evaluating various 
regulations but did not believe that any final rules would 
impose significant costs on small businesses involved in energy 
extraction or production. Ms. Hankins stated that BLM is, by 
statute, committed to multiple use of federal lands and manage 
such lands to permit responsible use of public lands for energy 
and mineral development. Mr. White testified about the 
regulatory barriers imposed by EPA and BLM to siting energy 
production (both extractive and renewable) facilities in 
Montrose County, Colorado. Mr. Ludlam stated that the 
Department of Interior blocked a number of oil and gas drilling 
operations in western Colorado while at the same fracking for 
extraction of natural gas may be subject to stricter EPA 
regulation. Ms. Bredt testified about the impediments imposed 
by the Department of Interior to the development of wind energy 
projects. Mr. Kiger stated that in thirty plus years of 
``working in the Colorado coal mining industry . . . I have 
never before seen such a concerted emphasis by numerous federal 
agencies to create additional head winds for the coal industry. 
. . .'' Mr. Welle testified that his customers (who also are 
the owners since White River is a rural electric cooperative) 
support the use of clean coal and renewable energy but cannot 
afford rate increases that harm industry and punish consumers.

            SUBCONTRACTING OPPORTUNITIES FOR SMALL BUSINESS

    On October 6, 2011, the Subcommittee on Contracting and 
Workforce of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for a hearing titled 
``Subpar Subcontracting: Challenges for Small Business 
Contractors.'' Specifically, the problems discussed were: 
problems with the limitation on subcontracting requirements; 
noncompliance with subcontracting plans; and duplicative 
government contracting systems which fail to support 
enforcement or compliance.
    The witnesses were: Joseph G. Jordan, Associate 
Administrator of Government Contracting and Business 
Development, United States Small Business Administration (SBA), 
Washington, DC; Mary L. Kendall, Acting Inspector General, 
United States Department of the Interior, Washington, DC; 
Jenifer Bisceglie, President, Interos, McLean, VA, testifying 
on behalf of Women Impacting Public Policy; and Jamie Borromeo, 
President, The E & J Commission, LLC, Washington, DC.
    Mr. Jordan testified that SBA is working to ensure 
compliance with the limitation on subcontracting requirements, 
and is developing and maintaining tools, systems, and resources 
needed to monitor and track subcontracting achievements. Acting 
Inspector General Kendall testified that confusion as to the 
division of responsibilities between SBA and contracting agency 
personnel contributes to enforcement and compliance issues.
    The private sector witnesses agreed that small businesses 
are harmed by failure to enforce the subcontracting rules. Ms. 
Bisceglie testified that large prime contractors do not honor 
their subcontracting plans and the government fails to 
evaluate, monitor, and document compliance. Ms. Bisceglie 
recommended that the Subcommittee consider revising the 
limitation on subcontracting provisions to make them price-
based rather than cost-based, and to encourage small business 
teaming. She further recommended increased enforcement and 
transparency of subcontracting plans. Ms. Borromeo concurred, 
and also recommended the following steps to prohibit fraudulent 
contracting practices: (1) ensure government contracting 
professionals are complying with rules and systems in place to 
ensure prime contractors are performing well on existing 
contracts and subcontracting the proper amount to small 
businesses; and (2) ensure diligent and proper market research 
performed by program offices.
    Chairman Mulvaney asked the witnesses to work with the 
Subcommittee on ideas to improve large business compliance with 
subcontracting plans, and to improve the limitation on 
subcontracting requirements.

          TECHNICAL ASSISTANCE PROGRAMS FOR NEW ENTREPRENEURS

    On October 17, 2011, the Subcommittee on Contracting and 
the Workforce of the Committee on Small Business met for a 
field hearing in Pasadena, CA titled ``Land of Opportunity: 
Pursuing the Entrepreneurial American Dream.'' The hearing 
examined the resources available to new legal immigrants 
interested in becoming entrepreneurs.
    Witnesses at the hearing were: Manuel Martinez, President, 
Greater Los Angeles SCORE, Los Angeles, CA; America Tang, 
President and CEO, Ace Fence Co., La Puente, CA; Mr. Jesse 
Torres, President & CEO, Pan American Bank, Los Angeles, CA; 
and Yusa Chang, COO, of Pacific Asian Consortium in Employment 
(PACE), Los Angeles, CA.
    Witnesses discussed the training and services new legal 
immigrants need to become successful entrepreneurs. The hearing 
also focused on the resources that are currently available to 
help prospective business owners and whether additional 
outreach methods should be considered. Mr. Martinez testified 
about his experience as a volunteer counselor for SCORE and 
stated that the business owner is the only one who can truly 
make a business successful. Ms. Tang testified that Small 
Business Administration (SBA) programs can help her business, 
but the SBA needs to do a better job of letting people know of 
new programs that assist small business. Mr. Torres testified 
that his bank does not use SBA loan products because the rules 
for participation are too stringent and it would require too 
much of an investment to train his lending officers on how to 
work within SBA strictures. Ms. Chang provided several 
anecdotes about businesses that PACE has counseled and what 
services they could have used to be successful.

             REDUCING FRAUD IN FEDERAL PROCUREMENT PROGRAMS

    On October 27, 2011, the Subcommittee on Investigations, 
Oversight and Regulations of the Committee on Small Business 
met in Room 2360 of the Rayburn House Office Building to hold a 
hearing titled ``Misrepresentation and Fraud: Bad Actor in the 
Small Business Procurement Programs.'' The hearing focused on 
problems in the Small Business Prime Contract Program, 
Historically Underutilized Business Zone (HUBZone) Small 
Business program, Women-Owned Small Business program, Service-
Disabled Veteran-Owned Small Business Program, and Small 
Disadvantaged Business program.
    The witnesses were: the Hon. Peggy E. Gustafson, Inspector 
General, United States Small Business Administration, 
Washington, DC; and the Hon. Brian D. Miller, Inspector 
General, General Services Administration, Washington, DC.
    The witnesses provided examples of the types of fraud they 
have encountered in the small business procurement programs, 
including misrepresentations of size, program specific 
misrepresentations, pass-through contracts, violations of the 
non-manufacturer rule, incorrect assignment of size standards 
to contracts, and recurring acts of bribery and kickbacks. 
Inspectors General Miller and Gustafson stated that these 
fraudulent activities harm legitimate small businesses by 
denying them opportunities; the government, because statutory 
procurement goals are skewed and program reputation suffers; 
and the American people, as small businesses are not able to 
create more jobs. Finally, the witnesses explained that the 
current remedies available through the procurement process, 
False Claims Act, Program Fraud Civil Remedies Act, and the 
Small Business Jobs Act, still leave gaps in enforcement. 
Specifically, Inspector General Miller indicated that since 
small business fraud cases usually cost more to prosecute than 
they collect in damages, the Department of Justice is reluctant 
to use scarce resources to prosecute these cases, which results 
in agency Inspectors General devoting investigative resources 
elsewhere, which in turn results in mediocre enforcement by 
agency contracting personnel, ultimately leaving legitimate 
small businesses and taxpayers unprotected.
    At the conclusion of the hearing, Chairman Coffman asked 
the Inspectors General to work with the Subcommittee on ways to 
deter and punish bad actors, examine the sufficiency of the 
current remedies and whether there are sufficient monitoring 
mechanisms in place, or how these should be strengthened to 
detect fraud and misrepresentation in the small business 
procurement programs.

                    TAX REFORM FOR SMALL BUSINESSES

    On November 3, 2011, the Subcommittee on Economic Growth, 
Tax and Capital Access of the Committee on Small Business met 
in Room 2360 of the Rayburn House Office Building for the 
purpose of receiving testimony on ``Pro-Growth Tax Policy: Why 
Small Businesses Need Individual Reform.'' The hearing focused 
on the importance of tax policies to our nation's small 
businesses, our best job creators.
    The witnesses were: Robert Carroll, Principal, Ernst & 
Young, Washington, DC; Gary Marowske, President & CEO, Flame 
Furnace, Heating, Cooling, Plumbing & Electrical, Warren, MI, 
testifying on behalf of the Air Conditioning Contractors of 
America; William R. Smith, President & CEO, Termax Corporation, 
Lake Zurich, IL, testifying on behalf of the Precision 
Metalforming Association; and Stephen Capp, President & CEO, 
Laserage Technology Corporation, Waukegan, IL, testifying on 
behalf of the National Federation of Independent Business.
    Mr. Carroll estimated that 95% of U.S. businesses are pass-
through entities--sole proprietorships, LLCs, partnerships or S 
corporations. He opined that if Congress enacts only corporate 
tax reform, and not individual tax reform, the income taxes 
paid by owners of pass-through businesses could increase, on 
average, by 8%, or $27 billion annually from 2010-2014. Mr. 
Smith testified that ``[d]ue to our current U.S. tax code, we 
are taxed on income we do not take out of the company, but 
leave in the business to reinvest. This means we have fewer 
resources to put toward hiring, training and buying new 
machines. We need a comprehensive approach that addresses 
corporate, pass-through businesses and individual tax rates, 
deductions and credits.'' Mr. Marowske said ``I wholeheartedly 
agree that tax reform must address individual rates because of 
their impact on small businesses. Not everyone understands that 
sole proprietors, partners and S corporation shareholders pay 
taxes on business income through the individual income tax rate 
schedules.'' Mr. Capp testified that ``[a]t the very least, the 
tax rate paid by pass-through small businesses should be the 
same rate that applies to C corps.''
    At the hearing's close, Chairman Walsh said he plans to 
send a letter to the Joint Select Committee on Deficit 
Reduction asking that the Committee consider the concerns of 
small business owners when they evaluate approaches to tax 
reform.

 SMALL BUSINESS CONTRACTING OPPORTUNITIES AT THE DEPARTMENT OF DEFENSE

    On November 8, 2011, the Subcommittee on Contracting and 
Workforce of the Committee on Small Business met in Sumter, 
South Carolina for the purpose of receiving testimony on small 
business contracting issues at the Department of Defense. The 
hearing, titled ``Examining the Barriers for Small Business 
Contracting at the DOD,'' focused on examining the specific 
process by which the Navy determined the contract for the 3rd 
Army headquarters building construction on Shaw Air Force base. 
Additionally, testimony was delivered on the difficulties small 
businesses face when entering the federal contracting arena 
along with their potential solutions.
    The witnesses for the hearing were: Robert Griffin, 
Assistant Commander for Acquisition, United States Navy 
Facilities Engineering Command, Washington, DC; Jackie 
Robinson-Burnette, Associate Director of Small Business 
Programs, United States Army Corps of Engineers, Washington, 
DC; John Caporal, Secretary, United States Air Force Small 
Business Programs Office, Washington, DC; Bill Lynam, Owner, 
Lynam Construction, Sumter, SC; William Aycock, President, 
Aycock Construction, LLC., Sumter, SC; and Scott H. Bellows, 
Program Manager, South Carolina Procurement Technical 
Assistance Center, The Moore School of Business Small Business 
Development Center, University of South Carolina, Columbia, SC.
    Mr. Griffin began the testimony by detailing the process by 
which the Navy awarded the contract for construction of the 3rd 
Army headquarters building. The contract was awarded under a 
full and open process and no small business set aside programs 
were used. Ms. Robinson-Burnette detailed the efforts taken by 
the U.S. Army Corps of Engineers to include small businesses in 
their contracting plans. Mr. Caporal provided testimony 
outlining the efforts of the Air Force to include small 
business in their contracting efforts and explained several 
areas in which small businesses can compete for contracts at 
Shaw Air Force base.
    The second panel began with Mr. Lynam explaining that he 
believes that 8(a) firms have a virtual monopoly on contracts 
at Shaw. He also explained that while he appreciated the recent 
Administration efforts to hasten payments to prime contractors, 
he feels that it ought to be extended to subcontractors as well 
as there is often a delay in payments from prime contractors to 
subcontractors. Mr. Aycock testified that he found it 
disheartening that prime contracts and some subcontracts go to 
out of state companies, and that it seemed counterintuitive to 
force local companies to partner with out of state companies to 
get work literally right down the street. Finally, Mr. Bellows 
explained the services and benefits available for small 
businesses looking to get into the federal contracting arena at 
the South Carolina Procurement Technical Assistance Center.

             REGULATORY BURDENS ON THE AGRICULTURAL SECTOR

    On November 17, 2011, the Subcommittee on Agriculture, 
Energy and Trade of the Committee on Small Business met in Room 
2360 of the Rayburn House Office Building for the purpose of 
receiving testimony on ``Adrift in Regulatory Burdens and 
Uncertainty: A Review of Proposed and Potential Regulations on 
Family Farms.'' The hearing focused on the National Pollutant 
Discharge Elimination System (NPDES) requirements under the 
Clean Water Act (CWA) for the application of pesticides and 
other chemicals that must be registered under the Federal 
Insecticide, Rodenticide and Fungicide Act (FIFRA). In 
addition, the Subcommittee addressed new National Ambient Air 
Quality Standards (NAAQS) for coarse particulate matter (PM) 
that may or not incorporate dust.
    The witnesses were: Philip Nelson, President, Illinois 
State Farm Bureau, Bloomington, IL; Mr. Leonard Felix, 
President, Olathe Spray Service, Inc., Olathe, CO, testifying 
on behalf of the National Agriculture Aviation Association; Mr. 
Ray Vester, Vester Farms, Stuttgart, AR, testifying on behalf 
of the USA Rice Federation; and Carl Shaffer, President, 
Pennsylvania State Farm Bureau, Mifflinville, PA.
    At the hearing, the witnesses discussed onerous, 
overreaching proposed and potential regulations that the 
current Administration is considering which leave family 
farmers and ranchers adrift in new regulatory burdens. Extra 
regulation is potentially concerning at this time with nearly 
one in ten Americans unemployed and our country still 
struggling to crawl out of this economic downturn. All of the 
witnesses testified that the EPA was overreaching with their 
new regulations, and that it was clear the EPA does not 
understand the improvements in agricultural practices over the 
years.
    At the hearing's close, Chairman Tipton vowed to continue 
to focus on burdensome regulations that affect our farmers, 
ranchers and small businesses.

                   CYBER SECURITY FOR SMALL BUSINESS

    On Thursday December 1, 2011, the Subcommittee on 
Healthcare and Technology of the Committee on Small Business 
held a hearing entitled: ``Cyber Security: Protecting Your 
Small Business.'' This hearing focused on the issues faced by 
small businesses in combating cyber security threats, including 
the role of the federal government and best practice solutions. 
According to a recent study, small businesses are the victims 
of nearly 40 percent of cyber attacks in the United States.
    The only witness on panel I was the Hon. William M. ``Mac'' 
Thornberry (R-TX). Witnesses on panel II were: David Beam, 
Senior Vice President, North Carolina Electric Membership 
Corporation, Raleigh, NC, testifying on behalf of the National 
Rural Electric Cooperative Association; Glenn Strebe, Chief 
Executive Officer, Air Academy Federal Credit Union, Colorado 
Springs, CO, testifying on behalf of the National Association 
of Federal Credit Unions; Phyllis Schneck, Vice President and 
Chief Technology Officer, McAfee, Inc., Reston, VA; and Michael 
Kaiser, Executive Director, National Cyber Security Alliance, 
Washington, DC.
    At the hearing, Congressman Thornberry provided testimony 
on House Republican Cybersecurity Task Force's policy 
recommendations. He stressed the importance of establishing a 
strong public-private partnership to voluntarily share 
information and raise awareness. Next, a panel of private 
sector witnesses provided chilling reports on the severity of 
cyber attacks on small businesses. Michael Kaiser, Executive 
Director of the National Cyber Security Alliance in Washington, 
DC, provided some daunting statistics. He stated the average 
annual cost of a cyber attack on a small business was $188,242, 
and more than 60 percent of victims will shut down within six 
months.
    In closing, the Chairwoman said she will continue to 
closely follow the action around cybersecurity legislation. She 
plans on working with the Committees of jurisdiction to make 
sure small businesses have the resources available to combat 
cyber attacks, while not adding any duplicative regulatory 
burdens.

  IS UNCERTAINTY CONTRIBUTING TO THE JOBS CRISIS: THE VIEWS OF LOCAL 
                       ILLINOIS SMALL BUSINESSES

    On December 12, 2011, the Subcommittee on Economic Growth, 
Tax and Capital Access of the Committee on Small Business met 
for a field hearing at the Woodstock City Hall, Woodstock, IL, 
for the purpose of receiving testimony on ``Is Uncertainty 
Contributing to the Jobs Crisis: The Views of Local Illinois 
Small Business.'' The hearing focused on how uncertainty over 
the direction of federal policies are effecting small business 
investment and hiring decisions.
    The witnesses were: Eric Treiber, President and CEO, 
Chicago White Metal Casting, Inc., Bensenville, IL, testifying 
on behalf of the North American Die Casting Association; Perry 
Moy, Owner of Plum Garden Restaurant, McHenry, Il., testifying 
on behalf of the National Restaurant Association; and Craig 
Larsen, Founder/President, AHC Advisors, Inc., St. Charles, Il.
    At the hearing, the witnesses testified that uncertainty 
over the direction of federal tax, spending and regulatory 
policy affected their decisions to undertake new investments 
and hire more workers. The most common sources of policy 
uncertainty were large federal budget deficits, the looming 
expiration of the 2001 and 2003 tax cuts, and federal 
regulations.
    Eric Treiber described how concerns over government 
regulations, particularly the EPA rules, have supplanted unfair 
foreign trade as a predominate concern of small business 
manufacturers. Perry Moy testified that the federal government 
policies that affect the economic welfare of businesses in 
other industries ultimately affect the economic welfare of 
businesses in the service industry. Craig Larsen testified that 
uncertainty over the outcome of the 2001 and 2003 tax cuts is a 
significant source of small business uncertainty and results in 
less hiring and investment by small businesses.
    All the witnesses agreed that policy uncertainty is 
resulting in less than potential economic growth and is 
hindering business investment and job creation.

     NEW MEDICAL LOSS RATIOS: INCREASING HEALTH CARE VALUE OR JUST 
                           ELIMINATING JOBS?

    On December 15, 2011, the Subcommittee on Investigations, 
Oversight and Regulations of the Committee on Small Business 
met in Room 2360 of the Rayburn House Office Building for the 
purpose of receiving testimony on ``Medical Loss Ratios: 
Increasing Health Care Value or Just Eliminating Jobs?'' The 
hearing focused on the Patient Protection and Affordable Care 
Act (PPACA) and its regulations, which require health insurers 
to spend 80% of every premium dollar on health care claims or 
activities to improve health care quality (the Medical Loss 
Ratio) and cap administrative expenses at 20%. Under the law, 
insurance agent commissions are an administrative expense.
    The witnesses were Mitchell West, Insurance Broker, 
HealthChoiceOne, Greenwood Village, CO; Gary Livengood, 
Principal, What a Stitch, LLC, Mt. Airy, MD; Grace-Marie 
Turner, President, Galen Institute, Alexandria, VA; and Timothy 
Jost, Professor of Law, Washington and Lee School of Law, 
Lexington, VA.
    Mr. West stated that since the new MLRs became effective, 
all of the eight major insurance carriers in Colorado have 
reduced their commissions by an average of 47% for new business 
and 20% on existing business. He said his health insurance 
clients will not get the same high level of service because he 
must spend so much time selling and servicing other products to 
maintain his income. Mr. Livengood testified that he relies 
heavily on his agent for details about insurance products and 
claims assistance, and the agent's role will become 
increasingly important as more of the health care law's complex 
provisions become effective. Ms. Turner cited data showing that 
the MLR regulations have resulted in lower broker commissions, 
employee layoffs, reduced client service and higher premiums. 
Professor Jost said the National Association of Insurance 
Commissioners found that consumers in states with state-enacted 
MLRs continued to have access to brokers. He said he believes 
the new MLRs will make health insurance more affordable.
    At the hearing's close, Chairman Coffman pledged to 
continue to closely monitor how the implementation of health 
care reforms affects small businesses.

THE FUTURE OF THE FAMILY FARM: THE EFFECTS OF PROPOSED DOL REGULATIONS 
                      ON SMALL BUSINESS PRODUCERS

    On February 2, 2012, the Subcommittee on Agriculture, 
Energy and Trade of the Committee on Small Business met in Room 
2360 of the Rayburn House Office Building for the purpose of 
receiving testimony on ``The Future of the Family Farm: The 
Effects of Proposed DOL Regulations on Small Business 
Producers.'' The purpose of the hearing was to examine a notice 
of proposed rulemaking from the United States Department of 
Labor (DOL) that would have made significant changes to 
exemptions to Fair Labor Standards Act (FLSA) pertaining to 
youth employment on family-owned agriculture operations and 
those involving agriculture vocational education.
    The witness were: Nancy Leppink, Esq., Deputy 
Administrator, Wage and Hour Division, United States Department 
of Labor, Washington, DC; Mr. Chris Chinn, Owner, Chinn Hog 
Farm, Clarence, MO, testifying on behalf of the American Farm 
Bureau Federation; Mr. Kent Schescke, Director of Strategic 
Partnerships, National Future Farmers of America, Alexandria, 
VA; Mr. Robert Tabb, Deputy Commissioner, West Virginia State 
Department of Agriculture, Charleston, WV; and Mr. Richard 
Ebert, Vice President, Pennsylvania Farm Bureau, Blairsville, 
PA.
    At the beginning of her testimony, Deputy Administrator 
Leppink notified the Committee that DOL was going to withdraw 
and repropose the portion of the rule addressing the parental 
exemption. She then explained that the purpose of the proposed 
rule was to update and clarify existing FLSA regulations 
pertaining to the employment of youth in agriculture 
occupations.
    Ms. Chinn and Mr. Ebert testified that changes in the farm 
economy have resulted in changes to farm ownership patterns as 
families consolidate numerous individual farms and ranches into 
a single operation to take advantage of economies of scale. Mr. 
Schescke expressed concerns that the Department's attempts to 
narrow the Fair Labor Standards Act exemptions applicable to 
youth working with machinery could negatively affect their 
ability to provide comprehensive education and training to 
these youths. Mr. Tabb noted that current DOL FLSA regulations 
have resulted in a substantial decrease in the number and 
severity of on-farm accidents involving youth. All of the 
witnesses on the second panel agreed that DOL's proposed rule 
narrowing the parental exemption would negatively affect 
family-owned agriculture operations and vocational education 
programs.
    At the hearing's close, Chairman Tipton urged the 
Department of Labor to modify or rescind the parental exemption 
portion of the proposed rule.

   CONSTRUCTION CONTRACTING: BARRIERS TO SMALL BUSINESS PARTICIPATION

    On Thursday, February 9, 2012, the Subcommittee on 
Contracting and Workforce of the Committee on Small Business 
met in Room 2360 of the Rayburn House Office Building, to 
receive testimony on construction contracting and barriers 
related to small businesses. The hearing focused on contracting 
areas that can limit small businesses from competing on 
construction projects, such as: (1) contract bundling; (2) the 
sealed bid award process; (3) allowing prime contractors to 
take credit for low tier subcontracting; (4) prompt payment of 
prime contractors and subcontractor; (5) necessity of 
retainage; (6) effectiveness of the Small Business 
Administration (SBA) surety bond program; and (7) desirability 
of a locality preference.
    The witnesses on Panel I were: Mr. Mark McCallum, CEO, 
National Association of Surety Bond Producers, Washington, DC; 
Dirk D. Haire, Esq., Partner, Fox Rothschild, Washington, DC, 
on behalf of the Associated General Contractors of America; Ms. 
Rosie Privitera Biondo, President, Mark One Electric Co., 
Kansas City, MO, on behalf of the Women Construction Owners and 
Executives; and Mr. Miguel Galarza, President, Yerba Buena 
Engineering and Construction, San Francisco, CA. The witnesses 
on Panel II were: Mr. William Guerin, Assistant Commissioner, 
Public Building Service, General Services Administration (GSA), 
Washington, DC; James C. Dalton, P.E., Chief, Engineering and 
Construction Division, Directorate of Civil Works, United 
States Army Corps of Engineers (USACE), Washington, DC; and Ms. 
Jeanne Hulit, Acting Associate Administrator for Capital 
Access, Small Business Administration (SBA), Washington, DC.
    The private sector witnesses provided examples of why the 
contracting areas, highlighted in the hearing, prohibit small 
businesses from competing on construction projects. The 
witnesses supported expanding the statutory definition of 
contract bundling to specifically include procurements for new 
construction. Ms. Privitera Biondo and Mr. Galarza advocated 
for a bid listing provision to combat bid shopping on sealed 
bid awards, but Mr. Haire argued that industry should police 
itself in this area. The panel generally supported allowing 
prime contractors to count lower tier subcontracting work 
towards their small business subcontracting goals; accelerating 
prime contract payments on construction and architect and 
engineering contract to 14 days; and notifying subcontractors 
when the government pays prime contractors. Furthermore, the 
panel agreed that retainage should not be an arbitrary 
percentage automatically assessed the prime contractor and 
passed onto the subcontractor, and should not exceed the value 
of the remaining work. All agreed that improvements should be 
made to the SBA Surety Bond Guarantee program. The witnesses 
were not united behind the local geographic preference, and 
stated that it may be more detrimental than beneficial to the 
construction industry.
    The GSA and USACE witnesses highlighted their success 
including small businesses as prime contractors in their 
construction programs. Each denied that they bundle contracts, 
but both admitted that they consolidate contracts. SBA 
discussed its surety bond program and improvements underway to 
make the program more effective to small businesses, and 
recommended legislatively raising the cap on the guarantees to 
$5 million.
    At the conclusion of the hearing, Chairman Mulvaney thanked 
the witnesses for their testimonies, and asked them to work 
with the Subcommittee on ideas and ways to eliminate and 
minimize the impediments, mentioned in the hearing, that often 
limit or preclude a small business from effectively competing 
for construction contracts.

            BROADBAND: A CATALYST FOR SMALL BUSINESS GROWTH

    The Subcommittee on Healthcare and Technology of the 
Committee on Small Business met for a hearing on February 15, 
2012 titled, ``Broadband: A Catalyst for Small Business 
Growth.'' The purpose of the hearing was to examine the growth 
and importance of broadband to small businesses, including the 
role of the federal government in providing access to rural 
America.
    Witnesses included: Ms. Mitzie Branon, General Manager, 
Yadkin Valley Telecom, Yadkin, NC, on behalf of the following 
organizations: National Telecommunications Cooperative 
Association, Organization for the Promotion and Advancement of 
Small Telecommunication Companies, and Western 
Telecommunications Alliance; Mr. Roger Bundridge, General 
Manager, NorthwestCell, Maryville, MO, on behalf of the Rural 
Cellular Association; Ms. Rebecca Sanders, Indiana Telehealth 
Network Director, Indiana Rural Health Association, Plainfield, 
IN, on behalf of the National Rural Health Association; and Mr. 
Darrell West, Vice President and Director of Governance 
Studies, The Brookings Institution, Washington, DC.
    At the hearing, Ms. Branon and Mr. Bundridge explained 
their effort to expand both wireline and wireless broadband to 
more small businesses, especially in rural areas. They provided 
best practices and policy recommendations on certain federal 
programs, including the Universal Service Reform initiative and 
spectrum auctions. In addition, Mr. West and Ms. Sanders 
explained how access to those broadband services is essential 
for economic growth and success of small businesses. Ms. 
Sanders said, ``In many parts of Indiana, patients have no 
local access to specialists in critical fields, such as 
radiology, cardiology, and neurology and must travel great 
distances, often in very fragile health, to obtain those 
services. When adequate broadband is available in rural areas, 
patients are able to access specialists via telemedicine while 
staying in their local communities. This results in time 
savings to the patients through reduced travel, and higher 
laboratory and radiology revenues to the local healthcare 
providers who would have lost those revenues to the urban 
healthcare provider.''
    In closing, the Chairwoman said she will continue to 
closely follow the actions of the federal government in 
expanding broadband to small businesses. She will also work 
with House colleagues to ensure that federal policies do not 
obstruct the private sector investment in broadband 
infrastructure, as this will have an adverse impact on small 
businesses and their ability grow.

  EXAMINING THE ROLE OF GOVERNMENT ASSISTANCE FOR DISASTER VICTIMS: A 
                          REVIEW OF H.R. 3042

    On February 16, 2012, the Subcommittee on Economic Growth, 
Tax and Capital Access of the Committee on Small Business met 
in Room 2360 of the Rayburn House Office Building, for the 
purpose of examining legislation that would amend the Small 
Business Administration's (SBA) programs that provide long-term 
disaster recovery assistance and short-term business 
interruption assistance. The legislation, H.R. 3042, further 
lowers the interest loans for SBA loans to small businesses 
under section 7(b) of the Small Business Act.
    The witnesses were: Mr. H. Doug Hoell, Director, North 
Carolina Division of Emergency Management, Raleigh, NC, 
testifying on behalf of the National Emergency Management 
Association; Mr. Gene Tighe, Owner, GT Fabrication, Pittston, 
PA; Howard Kunreuther, Ph.D., James G. Dinan Professor of 
Decision Sciences and Public Policy, The Wharton School, 
University of Pennsylvania, Philadelphia, PA; and David B. 
Muhlhausen, Ph.D., Research Fellow in Empirical Policy 
Analysis, The Heritage Foundation, Washington, DC.
    Mr. Hoell testified that state emergency management 
officials work closely with the Federal Emergency Management 
Agency (FEMA) and the SBA to provide information to disaster 
victims about the recovery assistance available from the 
government. Mr. Tighe testified that after Tropical Storm Lee, 
he experienced multiple delays and misinformation while 
applying for an SBA disaster loan which would not be of 
significant help given the interest rate on such loans. 
Professor Kunreuther testified that natural disasters are 
becoming more costly because the government is providing 
incentives for rebuilding in disaster prone areas without 
providing any incentives to mitigate damage from such 
disasters. Mr. Muhlhausen testified that the federal government 
disaster response supplants the historical state role in such 
matters and such relief discourages individuals from obtaining 
private insurance to protect themselves.

    POWERING DOWN: ARE GOVERNMENT REGULATIONS IMPEDING SMALL ENERGY 
                 PRODUCERS AND HARMING ENERGY SECURITY?

    On March 8, 2012, the Subcommittee on Investigations, 
Oversight and Regulations of the Committee on Small Business 
met in Room 2360 of the Rayburn House Office Building for the 
purpose of receiving testimony on ``Powering Down: Are 
Government Regulations Impeding Small Energy producers and 
Harming Energy Security?'' The purpose of the hearing was to 
examine federal policies that were impeding small energy 
producer access to federal lands containing oil and gas 
deposits.
    The witnesses were: Mr. Tim Barber, Environmental/Federal 
Regulator Supervisor, Yates Petroleum, Gillette, WY; Mr. David 
Ewing, President, Ewing Exploration Company, Sugarland, TX; Ms. 
Kimberly Rodell, Regulatory Project Manager, Banko Petroleum 
Management, Inc., Englewood, CO; and Mark Squillace, Esq., 
Professor of Law and Director, Natural Resources Law Center, 
University of Colorado School of Law, Boulder, CO.
    Mr. Barber and Mr. Ewing testified that recent United 
States Department of Interior Bureau of Land Management (BLM) 
policies have greatly impeded the ability of small oil and gas 
production firms to obtain leases and permits to drill for oil 
and gas deposits on federal lands. They both claimed that BLM's 
decisions to delay putting new lands up for lease until the 
agency completes Master Resource Plans are arbitrary and not 
based on sound science or land management principles. The 
overall effect of these policies, Mr. Ewing testified, will be 
to drive small producers out of energy production on federal 
lands.
    Ms. Rodell testified about difficulties small producers are 
having obtaining permits to drill. Banko Petroleum Management, 
Inc. provides consulting services to small producers filing 
applications for permits to drill to BLM. She noted that the 
time it takes for BLM to approve an application for a permit to 
drill has increased significantly over the past few years. She 
also questioned BLM's increased use of stipulations on leases 
and drilling permits, such as a stipulation that prevents 
companies from disturbing Sage Grouse habitat.
    Professor Squillace testified that, in his opinion, oil and 
gas producers have ample access to lease opportunities on 
federal lands. He also stated that the federal land use 
planning and leasing processes are critical to sound decision-
making and should not be compromised for any perceived short 
term benefits to small oil and gas producers.

  THE HEALTH CARE REFORM LAW: ITS PRESENT AND FUTURE IMPACT ON SMALL 
                      BUSINESSES AND JOB CREATION

    On March 16, 2012, the Subcommittee on Investigations, 
Oversight, and Regulations of the Committee on Small Business 
met at Greenwood Village, Colorado for the purpose of 
conducting a hearing titled ``The Health Care Reform Law: Its 
Present and Future Impact on Small Businesses and Job 
Creation.'' The hearing examined the implementation of the 
Patient Protection and Affordable Care Act (PPACA) and its 
impact on small businesses. In particular, the Subcommittee 
considered the employer mandate and how that provision will 
affect small business job creation. The Subcommittee also 
discussed the confusion and uncertainty the PPACA is causing 
small businesses as the law is implemented.
    The witnesses for the hearing were: Keith Small, DMD, Cody 
Dental Group, Denver, CO; Mr. Matt Tynan, Secretary and 
Treasurer, Tynan's VW, Nissan, Kia, Aurora, CO, testifying on 
behalf of the National Automobile Dealers Association; Mr. John 
W. Leevers, President, Leevers Supermarkets, Inc., Franktown, 
CO, testifying on behalf of the National Grocers Association; 
and Mr. Mark Rogers, President and Chief Operating Officer, 
Roaring Fork Restaurants, Castle Rock, CO, testifying on behalf 
of the International Franchise Association.
    Dr. Small began the testimony by stating that the long 
standing cafeteria plan structure in existence since 1986 has 
been very beneficial to his employees. He went on to say that, 
unfortunately, due to the PPACA's abrupt change in the flexible 
spending account medical over the counter allowance in January 
of 2011 coupled with the 68.75% reduction in the maximum 
benefit on January 1, 2013 will be a major burden on the 
budgets of his employees. Mr. Tynan testified that instead of 
doing what is in the best interests of his employees and his 
business by offering health insurance coverage, the PPACA 
removes incentives to provide such coverage and makes it a 
simple math equation where businesses will look to their bottom 
lines and nothing else. Mr. Leevers expanded on the point made 
by Mr. Tynan by saying that he currently covers 80% of the 
health benefit costs for his full time employees with about 
$480,000. He stated that should the employer mandate come into 
effect unchanged in 2014, his health insurance costs would 
skyrocket to around $2 million. He finalized that point by 
saying that the penalties contained in the PPACA would only be 
around $440,000. Mr. Rogers stating that should the employer 
mandate be put into full effect, he envisions that he would 
have to raise prices three or four percent in each of his 
restaurants to cover the additional costs and believes that 
other industries would face similar, or perhaps higher, 
increases.

    IMPACT OF UNITED STATES TRADE POLICIES ON SMALL BUSINESSES AND 
                             MANUFACTURING

    On April 2, 2012, the Subcommittee on Agriculture, Energy 
and Trade of the Committee on Small Business held a hearing 
titled, ``Impact of United States Trade Policies on Small 
Businesses and Manufacturing'' at the Pittsburgh Technology 
Council in Pittsburgh, PA. The hearing provided an opportunity 
to examine the impact of international trade policies on small 
manufacturers.
    The witnesses on Panel I were: Mr. Thomas Cummings, 
Northeast Regional Director, Export-Import Bank of the United 
States, New York, NY; Mr. Joseph Hanley, Mid-Atlantic Director, 
United States Department of Commerce Export Assistance Centers, 
Philadelphia, PA; and Mr. Peter O'Neill, Executive Director, 
Center for Trade Development, Pennsylvania Department of 
Community and Economic Development, Harrisburg, PA. The 
witnesses on Panel II were: Mr. Walt Robertson, President, 
Johnstown Wire Technologies, Johnstown, PA, testifying on 
behalf of the American Wire Producers Association; Mr. Justin 
McElhattan, President and CEO, Industrial Scientific 
Corporation, Oakdale, PA; and Mr. David Groll, CEO, Circadiance 
LLC, Export, PA.
    At the hearing, the first panel of government witnesses 
explained the importance of and opportunities to increase 
exports from small businesses in the United States. Mr. Hanley 
stated the trade offices located in Pennsylvania helped counsel 
over 1,000 businesses in FY2011 and 2012, resulting in over 
$500 million in exports. Mr. O'Neill explained his role in 
promoting Pennsylvania exports and recommended stronger 
coordination between state and federal trade offices. Mr. 
Cummings stated the Export-Import Bank of the United States set 
a new record by financing over $6 billion to small business 
exporters.
    The second panel of private witnesses discussed key policy 
issues affecting their ability to compete globally. Mr. Groll 
said the possible enactment of the 2.3 excise tax on 
manufactured medical devices mandated by the Patient Protection 
and Affordable Care Act will force a 23 percent cut in his 
firm's research and development program thereby impinging on 
Circadiance's ability to stay competitive in the global market. 
Mr. McElhattan voiced his concerns around the export control 
process and encouraged policymakers to streamline the process. 
Finally, Mr. Robertson expressed his concerns over unfair trade 
practices with foreign competitors, especially in China. He 
stated actions must be taken to combat these practices and 
level the playing field.
    In closing, Chairman Tipton said he will continue to work 
on reducing barriers to better assist small business exporters, 
while making the overall trade process simpler and stronger. He 
will also work to ensure our foreign competitors are playing by 
the same rules as domestic manufacturers.

               EQUITY FINANCE: CATALYST FOR JOB CREATION

    On Thursday, April 19, 2012, the Subcommittee on Economic 
Growth, Tax and Capital Access met in Room 2360 of the Rayburn 
House Office Building, for the purpose of examining the current 
state of equity financing for small businesses. In particular, 
the hearing focused on barriers to new ideas for the provision 
of equity capital to startup ventures.
    Witnesses for the hearing were: Mary Dent, Esq., General 
Counsel, Silicon Valley Bank, Palo Alto, CA; Mr. Jason Best, 
Co-founder, Startup Exemption, San Francisco, CA; Mr. Tony 
Shipley, Founder & Chairman, Queen City Angels, Cincinnati, OH, 
testifying on behalf of the Angel Capital Association; and Ms. 
Angela Jackson, Managing Director, Portland Seed Fund, 
Portland, OR.
    Ms. Dent testified that the level of competition and the 
availability of credit varies depending on the maturity of the 
company in commerce, and younger companies (generally with 
lower cash flows) require greater access to equity capital. Mr. 
Best, discussed crowdfunding and how that would work given the 
recent enactment of the Jumpstart Our Business Startups Act 
(JOBS Act). Mr. Shipley testified that angel investors are 
passionate about helping start small businesses but may need 
certain tailored tax incentives to make angel investing a 
widespread option for early-stage small businesses and that 
angel investors enjoy being part of the entrepreneurial 
ecosystem. Ms. Jackson testified that even with the passage of 
the JOBS Act, other potential federal barriers exist to full 
participation by angel investors in providing equity capital to 
small businesses.

   HOW THE REPORT ON CARCINOGENS USES SCIENCE TO MEET ITS STATUTORY 
           OBLIGATIONS, AND ITS IMPACT ON SMALL BUSINESS JOBS

    On April 25, 2012, the Subcommittee on Healthcare and 
Technology of the Committee on Small Business and the 
Subcommittee on Investigations and Oversight of the Committee 
on Science, Space and Technology met in Room 2318 of the 
Rayburn House Office Building for the purpose of receiving 
testimony on the Report on Carcinogens (RoC) and its impact on 
small business. The hearing, titled ``How the Report on 
Carcinogens Uses Science to Meet its Statutory Obligations, and 
its Impact on Small Business Jobs,'' focused on examining the 
process used by the National Toxicology Program (NTP) to 
determine which substances should be listed in the 
congressionally mandated RoC and the impact of a substance 
listing on small business.
    The witnesses for the first panel were: Linda S. Birnbaum, 
Ph.D., Director, National Institute of Environmental Health 
Sciences and National Toxicology Program, United States 
Department of Health and Human Services, Research Triangle 
Park, NC; Charles A. Maresca, Esq., Director of Interagency 
Affairs, Office of the Chief Counsel for Advocacy, United 
States Small Business Administration, Washington, DC. The 
second panel witnesses were: James S. Bus, Ph.D., Director of 
External Technology, Toxicology and Environmental Research and 
Consulting, The Dow Chemical Company, Midland, MI; L. Faye 
Grimsley, Ph.D., Associate Professor, School of Public Health 
and Tropical Medicine, Tulane University, New Orleans, LA; Ms. 
Bonnie Webster, Vice President, Monroe Industries, Inc., Avon, 
NY; Ms. Ally LaTourelle, Vice President of Government Affairs, 
BioAmber, Inc., Plymouth, MN; Mr. John E. Barker, Corporate 
Manager, Environmental Affairs, Safety and Loss Prevention, 
Strongwell Corp., Bristol, VA; Richard B. Belzer, Ph.D., 
President, Regulatory Checkbook, Mount Vernon, VA.
    Dr. Birnbaum began the hearing by providing an overview of 
the process used to prepare the 12th RoC and the changes to the 
process for the 13th RoC. Mr. Maresca voiced the Office of 
Advocacy's concerns with the peer review and public comment 
process and discussed the potential regulatory and economic 
impact of a substance listing on small business. Dr. Bus said 
that the RoC process was largely ad hoc and lacked explicit 
criteria to ensure that NTP's reviews of scientific information 
are transparent and consistent. Ms. Grimsley noted the 
importance of the NTP to public health. Ms. Webster and Mr. 
Baker discussed the impact and uncertainty the listing of 
styrene in the 12th RoC was causing for their businesses. Ms. 
LaTourelle stated that regulations lead to innovation and that 
consumers are the ultimate regulators. Dr. Belzer stated that 
the RoC does not contain all the information mandated by 
Congress and recommended legislative changes to make the RoC a 
useful scientific compendium about human carcinogens.

   SMALL BUSINESS INNOVATORS: ON THE CUTTING EDGE OF ENERGY SOLUTIONS

    On April 26, 2012, the Subcommittee on Agriculture, Energy, 
and Trade of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building for the purpose of 
receiving testimony from witnesses regarding role of small 
business innovation in the energy industry. The hearing, titled 
``Small Business Innovators: On the Cutting Edge of Energy 
Solutions,'' focused on innovative ways small businesses 
contribute to energy production. Specifically, the Subcommittee 
focused on advanced biofuels, such as cellulosic ethanol, and 
new innovative technologies small companies have developed to 
produce energy from previously unused materials.
    The witnesses for the hearing were: Mr. Ralph Tommaso, CEO 
& Head of Business Development, Greenworks Holdings, Bethlehem, 
PA; Mr. Jerry Taylor, President & CEO, MFA Oil Company, 
Columbia, MO; Mr. Michael McAdams, President, Advanced Biofuels 
Association, Washington, DC; and Mr. Matthew Hughes, Director 
of Business Development--ETC (Environmental Tank & Container), 
JWF Industries, Johnstown, PA.
    Mr. Tommaso testified that biofuels represent a potentially 
cost effective way for the manufacturing industry to reduce 
harmful emissions, thus saving manufacturing jobs while 
simultaneously creating and preserving jobs in the biofuels 
industry. He added that small businesses need stable policies 
as the main challenge in his industry is regulatory uncertainty 
and the fluctuating and, more often than not, tightening 
policies under the Renewable Fuel Standard 2. While discussing 
MFA Biomass, LLC., Mr. Taylor stated that his MFA farmer-owners 
recognize the potential to offer America's rural communities 
permanent manufacturing jobs, a new cash crop for farmers, a 
local source for green heating, renewable liquid fuel sources, 
biobased chemicals, green building materials, water treatments 
systems, soil reclamation systems, and consumer packaging. Mr. 
McAdams testified that the advanced biofuels industry is 
extremely innovative and has evolved rapidly over the last five 
years and that the country is already starting to see advanced 
biofuels delivering on its promise of creating new jobs and 
helping to strengthen our nation's economic and energy 
security. Mr. Hughes testified that his company works in 
conjunction with their customers to develop new technologies to 
mitigate some of the fears and risks associated with fracking.

       PLANNING FOR THE DEATH TAX: CAN SMALL BUSINESSES SURVIVE?

    On May 31, 2012, the Subcommittee on Economic Growth, Tax 
and Capital Access of the Committee on Small Business met in 
Room 2360 of the Rayburn House Office Building for the purpose 
of receiving testimony on ``Planning for the Death Tax: Can 
Small Businesses Survive?'' The purpose of the hearing was to 
examine the ability of familial heirs to maintain the business 
in light of estate taxes.
    The witnesses were Neil D. Katz, Esq., Managing Partner, 
Katz, Bernstein & Katz, LLC, Syosset, NY; Karen Madonia, Chief 
Financial Officer, Illco, Inc., Aurora, IL, testifying on 
behalf of the Heating, Air-Conditioning & Refrigeration 
Distributors; Michael G. Flesher, Owner, Taylor Rental Center, 
Vestal, NY, testifying on behalf of the American Rental 
Association; and Thala Taperman Rolnick, Owner, Thala T. 
Rolnick, CPA, PLLC, Phoenix, AZ.
    Mr. Katz, who not only advises small business owners about 
tax matters, but is also managing partner of a small family 
business (law practice with his father), cited small businesses 
that are struggling in today's economy to meet their 
obligations and provide for their families. He said that adding 
the burden of an estate tax to be due, or one currently due as 
the result of the death of a former business owner, can make 
the operation of a small business a nearly impossible task.
    Ms. Madonia testified that she finds it fundamentally wrong 
to place a tax on death. If someone is able to accumulate 
wealth through hard work and pays taxes on income as it is 
earned, she believes the government cannot justify taking a 
significant portion of what is left simply because that person 
has saved and re-invested rather than consumed. Her small 
heating and air conditioning business carries capital intensive 
inventory valued at $10,000,000 and accounts receivable of 
$5,000,000, because they supply equipment to hospitals, 
schools, nursing homes and grocery stores.
    Mr. Flesher said that under current law, his heirs would be 
able to continue to operate the business, keeping sixteen full-
time employees working. The business would continue to invest 
in equipment and provide services to the community where it is 
located. If the estate tax reverts to the levels of 2000, it 
could mean sixteen people would no longer have a job, the 
businesses that have served his company may no longer have a 
customer, and the economic security of his heirs could be 
uncertain.
    Ms. Rolnick recommended that Congress pass a permanent 
estate tax exclusion. Such exclusion should include a 
reasonable valuation discount for operating small businesses 
where the death of the owner truly reduces the value of the 
business.
    At the hearing's close, Chairman Walsh said the Committee 
would continue to raise awareness of the impact of the estate 
tax on small businesses. He asked that numerous statements from 
trade associations representing small firms be admitted to the 
hearing's record.

 SCHEDULING SUCCESS? ISSUES AND OPPORTUNITIES FOR SMALL BUSINESSES ON 
                             THE SCHEDULES

    On June 7, 2012, the Subcommittee on Contracting and 
Workforce of the Committee on Small Business met in Room 2360 
of the Rayburn House Office Building to receive testimony on 
various contracting issues related to the General Services 
Administration's (GSA's) Multiple Award Schedules (MAS or 
Schedules) program. The hearing specifically addressed four 
areas: (1) voluntary set-asides on Schedules; (2) strategic 
sourcing and the Schedules; (3) GSA's proposed Demand Based 
Efficiency Models; and (4) Brooks Act contracting on the 
Schedules. The hearing also examined a United States Government 
Accountability Office (GAO) study on strategic sourcing.
    The witnesses on the first panel were: Mr. Thomas Jacobs, 
Principal, Krueck Sexton Architects of Chicago, IL, testifying 
on behalf of the American Institute of Architects; Mr. Larry 
Allen, President, Allen Federal Business Partners, McLean, VA; 
Mr. Charles Forman, Executive Vice President, Independent 
Stationers, Indianapolis, IN; and Mr. Mike Tucker, Owner, 
George W. Allen & Co., Beltsville, MD, testifying on behalf of 
the National Office Products Alliance. The witnesses on the 
second panel were: Mr. Steven J. Kempf, Commissioner, Federal 
Acquisition Service, GSA, Washington, DC; and Mr. William 
Woods, Director, Acquisition and Sourcing Management, GAO, 
Washington, DC.
    Mr. Jacobs expressed concerns that GSA Schedules are 
improperly including architects and engineers in violation of 
the Brooks Act, negatively affecting small architecture firms. 
Mr. Allen testified on recent changes to GSA's Demand Based 
Efficiency Model which could have negative consequences for 
small business owners. Mr. Forman discussed small business 
successes under GSA's federal strategic sourcing initiative 
(FSSI) particularly with the Office Supply II (OS II) awards. 
Mr. Tucker, in contradistinction, opined that FSSI and OS II 
awards limit small business contracting with the federal 
government.
    Mr. Kempf testified on the effects of GSA's recent changes 
on small businesses including: voluntary set-asides, FSSI, and 
the MAS demand efficiency model. Mr. Woods testified on GAO's 
December 2011 report (GAO-12-178) on GSA's strategic sourcing 
entitled, ``Office Supplies Pricing Study Had Limitations, but 
New Initiative Shows Potential for Savings,'' noting that small 
businesses appear to benefiting from the FSSI.
    At the conclusion of the hearing, Chairman Mulvaney stated 
the Subcommittee would continue to work towards ensuring 
equitable contracting opportunities with the GSA's Schedules 
program, and that GSA's proposed changes to the program did not 
unfairly harm small businesses currently holding a schedule or 
impede small businesses in receiving a schedule contract.

   CAUGHT UP IN RED TAPE: THE IMPACT OF FEDERAL REGULATIONS ON SMALL 
                       BUSINESSES AND CONTRACTORS

    On June 14, 2012, the Subcommittee on Contracting and 
Workforce of the Committee on Small Business met in Rock Hill, 
South Carolina for the purpose of receiving testimony from 
witnesses regarding regulatory impediments for small businesses 
and contractors. Specifically, the Subcommittee examined 
regulatory obstacles to small business job creation, economic 
growth, and participation in the federal contracting arena.
    The witnesses for the hearing were: Col. Charles O'Cain, 
USAF, Ret., Owner, Owl Business Consulting, LLC, Rock Hill, SC; 
Mr. Doug Meyer-Cuno, President, Carolina Ingredients, Rock 
Hill, SC; and Mr. Monty Felix, CEO, Alaglas Pools, Saint 
Matthews, SC, testifying on behalf of the American Composite 
Manufacturers Association.
    Col. O'Cain began the hearing by stating that while all of 
the information that small businesses need to successfully 
contract with the federal government is available online, there 
is no central location where small business owners can go to 
get that information. Col. O'Cain suggested that a central 
website designed with a checklist of processes and documents 
needed would better serve small businesses seeking to do 
business with the federal government.
    Mr. Meyer-Cuno focused his testimony on the regulations 
implementing the Patient Protection and Affordable Care Act, 
stating that with the complexity and sheer number of 
regulations coming out of this law, he is unable to predict his 
future costs when hiring new employees. He also testified that 
that if the law is fully implemented, his healthcare costs will 
rise by 100 to 150 percent.
    Mr. Felix ended the testimony by focusing his presentation 
on the lack of valid and transparent reviews of the scientific, 
economic, and other relevant facts. He cited the Department of 
Health and Human Services Report on Carcinogens as a prime 
example federal regulators disregarding scientific evidence 
contrary to the intended benefit of regulations.

      SMALL BUSINESS LENDING: PERSPECTIVES FROM THE PRIVATE SECTOR

    On June 21, 2012, the Subcommittee on Investigations, 
Oversight and Regulations of the Committee on Small Business 
met in Room 2360 of the Rayburn House Office Building for the 
purpose of conducting a hearing on small business lending. The 
hearing was a follow-up to the Committee on Small Business June 
6 hearing during which the Administrator of the Small Business 
Administration (SBA), the Hon. Karen Mills, testified.
    Witnesses for the hearing were: Mr. David Rader, Executive 
Vice President, SBA Lending, Business Executive, Wells Fargo 
Bank, N.A., Minneapolis, MN; Mr. Timothy Dixon, Senior Vice 
President & Head of Business-Owner Banking, Citizens Republic 
Bancorporation, Warrensville Heights, OH, testifying on behalf 
of the Consumer Bankers Association (CBA); Mr. Brett Martinez, 
President and CEO, Redwood Federal Credit Union, Santa Rosa, 
CA, testifying on behalf of the Credit Union National 
Association; and Mr. Robert Marquette, President and CEO, 
Members 1st Federal Credit Union, Mechanicsburg, PA, testifying 
on behalf of the National Association of Federal Credit Unions.
    Mr. Rader asserted that the SBA should focus its attention 
on extant programs rather than creating new pilot programs. Mr. 
Dixon suggested that the SBA provide results of audits to 
lenders in a more timely fashion. Mr. Martinez stated that the 
SBA should streamline its paperwork requirements since SBA 
loans require more information than a credit union's normal 
commercial loans. Mr. Marquette testified that about critical 
issues facing credit unions in their delivery of capital access 
to small businesses particularly focusing on the need for 
greater SBA outreach and removal of the commercial loan lending 
cap. Both credit union witnesses suggested that the commercial 
lending cap on credit unions be raised. Finally, all the 
witnesses were consistent in noting that the standard operating 
procedure development process needed to be overhauled.
                                 PART C

                 Waste, Fraud, Abuse and Mismanagement

    Of the hearings delineated above, the following were 
devoted specifically to an examination of programs within the 
Committee's jurisdiction with a focus on potential 
mismanagement, waste, fraud and/or abuse.

  HEARING ON THE FY 2012 BUDGET FOR THE SMALL BUSINESS ADMINISTRATION

    During the March 2, 2011 full Committee hearing on the 
President's FY 2012 budget request for the Small Business 
Administration (SBA), at which Administrator Karen Mills 
testified, the programs under her authority were discussed in 
detail. The members of the Committee expressed their concerns 
about several pilot programs that are not authorized, as well 
as the management of the agency related to the distribution of 
personnel and its reflection of agency priorities. Further, the 
Committee pointed to issues cited by the agency's Inspector 
General, namely the SBA's expedited loan processing initiatives 
and reliance on outside financial institutions, as well as 
contracts awarded to firms that do not meet program eligibility 
criteria. These concerns are laid out in greater detail in the 
Committee's FY 2012 budget views and estimates letter that was 
adopted by the Committee on March 15, 2011.

            HEARING ON ENTREPRENEURIAL DEVELOPMENT PROGRAMS

    The Committee hearing on May 25, 2011 examined duplication 
in the SBA's entrepreneurial development programs. The hearing 
focused on a report by the Government Accountability Office 
citing 80 economic development programs throughout the 
Department of Commerce, the Department of Housing and Urban 
Development, the Department of Agriculture and SBA. The 
Committee specifically focused on four programs at the SBA 
dealing with entrepreneurial development. Those programs are 
the Small Business Development Companies (SBDC), the Service 
Corps for Retired Employees (SCORE), Women's Business Centers 
(WBCs) and Veterans' Business Outreach Centers (VBOCs). In a 
March 15, 2011 letter to the Senate Committee on Small Business 
and Entrepreneurship, the SBA's Inspector General pointed to 
overlap in these SBA programs, reporting that 104 of the 109 
WBCs listed on SBA's website are located within 25 miles of 
either an SBDC or SCORE chapter. Additionally, of the 16 
Veterans Business Opportunity Centers, seven are located at the 
same college or university as an SBDC. Of the remaining 
veterans' centers, six have an SBDC within 10 miles, two are 
less than 20 miles from an SBDC and the remaining center is 33 
miles away. The Inspector General also noted that the 
Department of Commerce Minority Business Development agency has 
41 outreach centers providing similar services as SBDCs. All of 
these 41 centers have a SBDC or SCORE chapter within 25 miles. 
The Committee is examining these programs for consolidation or 
elimination, in line with the recommendations made in its FY 
2012 budget views and estimates letter.
    The Subcommittee on Agriculture, Energy and Trade held a 
filed hearing on April 2, 2012 in Pittsburgh, PA to address the 
impact of United States trade policies on small businesses and 
small manufacturers. One of the key recommendations in the 
hearing was to increase coordination between federal and state 
offices that provide small businesses with export assistance. 
The findings of this hearing comport with the Committee's 
efforts to reduce duplication in SBA's entrepreneurial 
assistance programs aimed at providing assistance to small 
businesses seeking to export their goods.

       HEARINGS ON THE SMALL BUSINESS INNOVATION RESEARCH PROGRAM

    The Committee held two hearings on the Small Business 
Innovation Research (SBIR) and Small Business Technology 
Transfer (STTR) Programs. The full Committee held a general 
hearing to provide an overview of the programs on March 16, 
2011. The Subcommittee on Healthcare and Technology held a 
hearing on April 7, 2011 to examine a draft legislative 
proposal to reauthorize and modernize the programs. Included in 
the draft proposal were provisions designed to eliminate waste 
and fraud in the programs. For example, the legislation 
establishes an interagency Committee to recommend greater 
efficiencies in the programs; requires the Comptroller General 
of the United States to conduct an audit of the SBIR and STTR 
programs; seeks to amend the SBIR and STTR Policy Directives to 
include measures to prevent fraud, waste, and abuse, including 
GAO studies on various measures of effectiveness; and requires 
the Offices of Inspector General for participating agencies to 
submit annual reports on fraud elimination in the programs. 
Ultimately, these provisions were included in legislation (H.R. 
1425) that the Committee marked up and reported favorably on 
May 11, 2011. These anti-fraud provisions then were 
incorporated into the National Defense Authorization Act for 
Fiscal Year 2012, Pub. L. No. 112-81, 125 Stat. 1298, 1823-62 
(2011).

             HEARINGS ON SBA FINANCIAL ASSISTANCE PROGRAMS

    The Committee held two hearings to consider the adequacy of 
programs designed to provide financial assistance to small 
businesses. On October 26, 2011, the Committee reviewed the 
capital access programs operated by the SBA in conjunction with 
private lenders. One of the major issues raised at the hearing 
related to the adequacy of the SBA's oversight of the lenders 
to ensure that federal taxpayers were not put at risk. In 
addition, the hearing also inquired into whether the SBA 
obtains sufficient returns when it is forced to foreclose on 
loans. The hearing on November 30, 2011 assessed the SBA's 
compliance with changes made to the disaster loan program in 
2008 and whether the agency was capable of responding to major 
disasters. GAO noted that SBA was improving its disaster 
preparedness but still had more to do to ensure adequate 
handling of disasters.
    On February 8, 2012, the Committee held a hearing to 
discuss a GAO investigation, initiated by Chairman Graves, 
concerning problems associated with the modernization of 
information technology resources used by the SBA to manage its 
loan portfolio. The investigation found numerous deficiencies 
in the project and the Committee continues to monitor the 
modernization project to ensure that it complies with sound 
information resource management practices.
    On June 6 and June 21, 2012, the Committee held two 
hearings to examine the lack of procedural regularity in how 
the SBA operates its capital access programs. The June 6 
hearing was with Administrator Mills and the June 21 hearing 
had testimony from SBA's private lending partners. The 
Committee will continue to review SBA operations to ensure that 
procedures used in the capital access programs are not based on 
ad hoc procedures allowing the agency to treat similarly 
situated entities differently.

                    HEARINGS ON FEDERAL PROCUREMENT

    The Subcommittee on Contracting and the Workforce conducted 
four hearings on federal procurement matters that addressed 
problems in efforts by the federal government to increase 
opportunities for small businesses to participate in federal 
procurements. Increased utilization of small businesses will 
increase competition, enhance innovation, and reduce reliance 
on certain sole source contracts thereby improving the value of 
goods and services purchased by the federal government.
    On June 23, 2011, the Subcommittee examined the impact of 
insourcing (converting work done by contractors to work done by 
federal employees) on small business federal government 
contractors. The hearing revealed that small businesses (who 
can do work in a more cost effective manner) were having their 
contracts brought in-house to be performed by federal employees 
even when those activities were not inherently governmental.
    On September 15, 2011, the Subcommittee investigated 
whether certain SBA programs were working sufficiently to 
ensure maximum participation by small businesses in the federal 
procurement arena. The hearing revealed that SBA programs 
needed further enhancement and revision to ensure maximum 
utilization from small businesses and the benefits that small 
businesses would provide to the federal government.
    A hearing on October 6, 2011 examined whether large 
contractors were complying with federal statutes and 
regulations to utilize small business subcontractors when 
providing goods and services to the federal government. The 
hearing found that large contractors did not comply with such 
requirements and that the computer data systems used by the 
federal government were inadequate to ensure compliance with 
the subcontracting requirements.
    The Subcommittee examined mechanisms to reduce fraud in 
special contracting programs overseen by the SBA in a hearing 
on October 27, 2011. The hearing identified a number of 
problems associated with these programs, including 
misrepresentation of status for participation in the programs, 
improper subcontracting (including violations of the so-called 
``non-manufacturing rule''), incorrect assignment of size 
standards by contracting officers, and recurring acts of 
bribery and kickbacks (which are currently under criminal 
investigation).
    On February 9, 2012, the Subcommittee on Contracting and 
Workforce held a hearing to investigate barriers that small 
businesses face in obtaining construction contracts. Although 
not focused solely on fraud, waste, and abuse, greater 
involvement by small businesses in construction contracts will 
lead to increased competition thereby providing the government 
with better service at lower overall cost.
    The Subcommittee on Contracting and Workforce held a 
hearing on June 7, 2012 to examine recent changes in operation 
of GSA's multiple award schedules (MAS). While some of the 
initiatives appear to be successful in providing increased 
value to the government, other actions taken by GSA, such as 
eliminating small sellers from the MAS, may hurt their ability 
to offer goods and services to states and municipalities that 
require their suppliers to have a MAS contract. The 
Subcommittee continues to monitor the impact that the policy 
changes will have on small government contractors.
                 OVERSIGHT PLAN FOR THE 112TH CONGRESS

    Clause 2(d) of rule X of the Rules of the House of 
Representatives for the 112th Congress requires that each 
standing Committee, in the first session of a Congress, adopt 
an oversight plan for the two-year period of the Congress and 
submit the plan to the Committee on Oversight and Government 
Reform and the Committee on House Administration.
    Clause 1(d) of rule XI of the Rules of the House of 
Representatives requires each Committee to submit to the House, 
not later than the 30th day after June 1, a semiannual report 
on the activities of that Committee. Moreover, that report 
shall include a summary of the oversight plan submitted under 
clause 2(d) of rule X and summary of the actions taken with 
respect to such plan; and a summary of any additional oversight 
activities undertaken by the Committee.
    Part A of this section contains the Oversight Plan of the 
Committee on Small Business for the One Hundred Twelfth 
Congress, which the Committee considered and adopted on January 
26, 2011.
    Part B of this section contains a summary of the actions 
taken to implement that plan.

                                 PART A


 Oversight Plan of the Committee on Small Business for the One Hundred 
                            Twelfth Congress

                              ----------                              


     January 26, 2011, Approved by the Committee on Small Business

                              ----------                              


  Mr. Graves, from the Committee on Small Business, submitted to the 
Committee on Oversight and Government Reform and the Committee on House 
                      Administration the following


                                 REPORT

    Rule X, cl. 2(d)(1) of the Rules of the House requires each 
standing Committee to adopt an oversight plan for the two-year 
period of the Congress and to submit the plan to the Committees 
on Government Reform and House Administration not later than 
February 15 of the first session of the Congress. Under rule X, 
the Committee has oversight authority to investigate and 
examine any matter affecting small business. This Report 
reflects that broad oversight jurisdiction.
    Pursuant to rule X, cl. 2(d)(1)(F), this oversight plan 
also includes proposals to cut or eliminate programs that are 
inefficient, duplicative, outdated, or more appropriately 
administered by State or local governments.

Oversight of federal capital access programs

    The Committee will conduct the hearings and investigations 
into Small Business Administration (SBA) and other federal 
agencies that provide capital to America's entrepreneurs that 
may include any or all of the following as well as matters 
brought to the attention of the Committee subsequent to the 
filing of this Report:
     Effectiveness of the capital access programs to 
generate jobs in the fastest growing small businesses.
     Whether lenders are meeting their goals to lend to 
small businesses and create jobs.
     Risk to the taxpayers of the capital access 
programs and if those risks are not reasonable, then 
elimination of those programs.
     Adequacy of SBA oversight of its lending partners 
to ensure that federal taxpayers are properly protected.
     Capabilities of the SBA information technology to 
manage the loan portfolio.
     Appropriateness of ad hoc guidance documents in 
regulating lenders and borrowers.
     The exercise of discretion by SBA to create pilot 
programs and the risk they pose to the taxpayer and whether 
such authority should be curtailed or eliminated.
     Whether SBA disaster loan program and its 
oversight ensures that small businesses are able to revive to 
rebuild communities without unduly placing the federal taxpayer 
at risk.
     Efficacy and duplication of federal capital access 
programs offered by the Department of Agriculture to small 
businesses in rural areas.
     Utilization by small businesses of export capital 
programs at the Export-Import Bank and the Overseas Private 
Investment Corporation.
     Effectiveness of the Small Business Lending Fund 
and State Small Business Credit Initiative created by Pub. L. 
No. 111-240, the Small Business Jobs Act of 2010.
     Impact of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, Pub. L. No. 111-203 on small business 
access to capital.
    In performing oversight, the Committee will focus on 
particularly risky aspects of financial assistance programs 
including, but not limited to, commercial real estate 
refinancing, premier certified lenders, participating security 
small business investment companies, small business lending 
companies, express lenders, loan programs utilizing simplified 
lending applications, and disaster loans offered by private 
lenders through interest rate subsidies.

Oversight of SBA and other federal entrepreneurial development programs

    The Committee will conduct the hearings and investigations 
into the SBA programs that provide training and advice to small 
businesses that may include any or all of the following as well 
as matters brought to the attention of the Committee subsequent 
to the filing of this Report:
     Examining effectiveness of SBA entrepreneurial 
development programs in creating jobs.
     Determining whether certain programs should be 
eliminated as a result of their ineffectiveness or duplication 
of programs provided by other agencies.
     Suggesting methods for enhancing coordination 
among federal agencies in providing assistance to 
entrepreneurs.
     Enhancing the efficacy and utilization of the 
Manufacturing Extension Partnership at the Department of 
Commerce.
     Recommending improvements in assistance to small 
businesses that participate in the production of value-added 
agricultural products.
     Increasing effectiveness of technical assistance 
provided to small businesses involved in the production of 
renewable and non-renewable energy sources.

Oversight of federal government contracting matters

    The Committee will conduct hearings and investigations into 
the federal procurement system that may include any or all of 
the following as well as matters brought to the attention of 
the Committee subsequent to the filing of this Report:
     Whether fraud or other problems exist in the 
federal government contracting programs overseen by the SBA 
including the 8(a), HUBZone, service-disabled veteran, women-
owned contracting program, and Small Business Innovation 
Research program.
     Effectiveness of SBA contracting programs to 
increase participation by small businesses in federal 
procurement.
     Effectiveness of federal agency protections 
against contract bundling and consolidation.
     The accuracy and utility of SBA size standards and 
federal procurement databases.
     Operation and effectiveness of federal agency 
assistance provided to small businesses interested in federal 
procurement, including that provided by the SBA, Offices of 
Small and Disadvantaged Business Utilization and Procurement 
Technical Assistance Centers.
     Development of federal acquisition policies and 
whether small businesses have sufficiently effective voice in 
development of such policies.
     Cost-effectiveness of outsourcing government work 
to private enterprise rather than expanding the government to 
do provide the good or service internally (i.e., government 
insourcing).
    In performing oversight, the Committee will focus its 
efforts on uncovering abuse and misuse of the small business 
designation to obtain federal government contracts.

Oversight of SBA management

    The Committee will conduct the hearings and investigations 
into the management of the SBA that may include any or all of 
the following, as well as matters brought to the attention of 
the Committee subsequent to the filing of this Report:
     The appropriate mission of the SBA.
     Whether agency employees in the field are 
empowered to assist small businesses.
     Duplication of offices and missions at SBA 
headquarters.
     Effectiveness of personnel management to ensure 
that employees are rewarded for assisting small businesses.
     Capabilities of SBA employees to provide proper 
assistance to small business owners.
    In carrying out this oversight, the Committee will focus 
particularly on streamlining and reorganizing of the agency's 
operations to provide maximum assistance to small business 
owners. Offices that primarily provide assistance or advice to 
headquarters staff that do not promote the interests of small 
businesses or protect the federal government as a guarantor of 
loans will be recommended for cuts or elimination. For some 
potential offices in which the Committee will examine, refer to 
the section title ``Reductions in Programs and Spending.''

Oversight of federal regulatory and paperwork burdens

    The Committee will conduct hearings and investigations into 
unnecessary, burdensome, and duplicative federal rules, 
reporting and recordkeeping requirements affecting small 
businesses that that may include any or all of the following, 
as well as matters brought to the attention of the Committee 
subsequent to the filing of this Report:
     Centers for Medicare and Medicaid Services.
     Consumer Financial Protection Bureau.
     Consumer Safety Products Commission.
     Department of Agriculture.
     Department of Energy, particularly the Office of 
Energy Efficiency and Renewable Energy.
     Department of the Interior, particularly the 
Bureau of Land Management and Minerals Management Service.
     Department of Labor, particularly the Occupation 
Safety and Health Administration.
     Department of Homeland Security, particularly the 
Transportation Security Administration.
     Department of Transportation, particularly the 
Federal Aviation Administration and Federal Motor Carrier 
Safety Administration.
     Environmental Protection Agency.
     Federal Communications Commission.
     Federal Financial Institutions Examination Council 
and its constituent agencies.
     Food and Drug Administration.
     Office of Federal Procurement Policy.
     Securities and Exchange Commission.
    The Committee will identify specific rules and regulations 
already issued or at the proposed rule stage to assess the 
impact on small businesses. The Committee will pay close 
attention to the effect that regulations have on the 
implementation of advanced technologies including, but not 
limited to, the deployment of broadband communications (either 
by wireline or wireless services) throughout the United States. 
Oversight of the regulatory process also will, to the extent 
relevant, examine the work of the Office of Information and 
Regulatory Affairs at the Office of Management and Budget. 
Special attention will be paid to the work performed by the 
Chief Counsel for Advocacy at the United States Small Business 
Administration to ensure that Office is fulfilling its mission 
to advocate vigorously on behalf of America's small business 
owners in regulatory matters at federal agencies. Finally, this 
oversight will entail an examination of compliance by federal 
agencies with amendments to Executive Order 12,866 and 
memoranda on regulatory flexibility and regulatory compliance 
issued by the President on January 18, 2011.

Oversight of federal tax policy

    The Committee will conduct hearings and investigations into 
the federal tax code, its impact on small business, and 
Internal Revenue Service's (IRS) collection of taxes that may 
include any or all of the following, as well as matters brought 
to the attention of the Committee subsequent to the filing of 
this Report:
     Identification of tax code provisions that hinder 
the ability of small businesses to create jobs and 
recommendations for modifying those provisions to boost small 
business job growth.
     Examination of the structure of the tax code in 
order to simplify compliance for small businesses.
     Assessment of the recordkeeping and reporting 
requirements associated with tax compliance and suggestions for 
reducing such burdens on small businesses.
     Evaluation of the estate tax provisions to 
determine whether they inhibit the ability of successive 
generations to maintain successful job creating enterprises.
     Efficiencies at that the IRS that improve the 
interaction between the government and small business owners.
     Inefficiencies at the IRS that force small 
businesses to divert capital from job growth to tax compliance.

Oversight of health care policy

    The Committee will conduct hearings and investigations into 
federal health care policy (such as Medicare and Medicaid) and 
the implementation of the Patient Protection and Affordable 
Care Act that may include any or all of the following, as well 
as matters brought to the attention of the Committee subsequent 
to the filing of this Report:
     The cost of Patient Protection and Affordable Care 
Act to small businesses, including the self-employed.
     The impact of the Patient Protection and 
Affordable Care Act, Medicare and Medicaid on the ability of 
physicians, pharmacists, and allied health care providers to 
offer the best care possible to patients.
     Alternatives to the Patient Protection and 
Affordable Care Act that reduce health insurance costs to small 
businesses without inhibiting their ability to create jobs.
     The impact of state tort and insurance laws on the 
cost of medical care.
     Examination of increases in efficiencies that will 
improve the provision of health care while reducing costs to 
small businesses that offer their workers health insurance.

Oversight of energy policy

    The Committee will conduct hearings and investigations into 
energy policy to reduce the cost of energy and increase energy 
independence that may include any or all of the following, as 
well as matters brought to the attention of the Committee 
subsequent to the filing of this Report:
     Innovations developed by small businesses that 
increase energy independence.
     Federal regulatory policies that increase 
dependence on foreign sources of energy.
     Policies needed to incentivize production of 
energy in the United States.
     Examination of commercialization of research in 
renewable energy.
     Federal regulations or policies that increase 
energy costs for small businesses.
    The primary thrust of the Committee's efforts will focus on 
efforts to use the innovation of America's entrepreneurs to 
fuel the drive for greater energy independence.

Oversight of trade and intellectual property policy

    The Committee will conduct hearings and investigations into 
international trade and intellectual property policies of 
America and its trading partners that may include any or all of 
the following, as well as matters brought to the attention of 
the Committee subsequent to the filing of this Report:
     Impact of free trade agreements to increase 
exports by American small businesses.
     Whether the federal government is doing enough to 
protect the intellectual property rights of small businesses by 
foreign competitors.
     The impact of federal intellectual property 
policies, particularly patents and copyrights, to protect the 
innovations of American entrepreneurs.
     Efforts to increase exports by small businesses.
    The focus of oversight will emphasize the best mechanisms 
to promote and protect advanced technology innovations of small 
businesses.

Reductions in programs and spending

    In addition to the programs and policies already cited, the 
Committee will examine and any all including, but not limited 
to, programs and offices listed below in order to find areas in 
which to reduce the federal deficit:
     Small Business Lending Fund operated by Department 
of Treasury.
     State Small Business Credit Initiative operated by 
Department of Treasury.
     Patriot Express Loan Program overseen by the SBA.
     Express Loan Program overseen by SBA.
     Emerging Leaders Initiative started by SBA.
     Drug-Free Workplace Program.
     SBA Office of Policy.
     SBA Regional Administrators.
     Office of Advocacy Regional Advocates.
     SBA Deputy District Directors.
     SBA Office of International Trade.
     SBA Office of Native American Affairs.
    In particular, the Committee will assess whether 
reorganization and reassignment of employees to more critical 
functions at the SBA, such as positions as procurement center 
representatives, will provide a more effective agency at 
assisting small businesses generate growth.
                                 PART B

Implementation of the Oversight Plan of the Committee on Small Business 
                  for the One Hundred Twelfth Congress

A. Oversight of federal capital access programs
    In its review of the Small Business Administration's (SBA) 
fiscal year (FY) 2012 budget request, the Committee analyzed 
the agency programs devoted to providing access to capital to 
small businesses. During a March 2, 2011 hearing on the SBA 
budget, at which the SBA Administrator testified, and as part 
of the Committee's views and estimates on the FY 2012 budget 
adopted on March 15, 2011, the Committee outlined its concerns 
with and proposals for improving the SBA programs devoted to 
small business financing, including the 7(a) Loan Program, the 
Certified Development Company Loan Program, the Microloan 
Program, the Small Business Lending Intermediary Pilot Program, 
the Small Business Investment Company Program, the Surety Bond 
Program and the Disaster Loan Program.
    On June 1, 2011, the Committee on Small Business met for a 
hearing titled, ``Access to Capital: Can Small Businesses 
Access the Credit Necessary To Grow and Create Jobs?'' The 
hearing provided a forum for lenders and business owners to 
discuss the current economic environment and how they are 
working together to support private sector job growth. 
Witnesses from the lending side discussed the demand for 
capital and current initiatives to encourage small business 
lending. Small business owners testified about the current 
economic environment and the capital that is required to expand 
and hire new workers. The value of the SBA lending programs, 
particularly the 7(a) guarantee program, was discussed in 
detail. The Committee, in a hearing with Secretary Geithner on 
June 22, 2011, examined programs operated by the Department of 
Treasury to increase capital access to small businesses. On 
October 26, 2011, the Committee examined in greater detail the 
SBA capital access programs (which use loan guarantees rather 
than direct loans to small businesses) and whether they were 
operating in a manner designed to enhance access to capital by 
small businesses while protecting the federal taxpayer from 
defaults on such loans. Finally, the Committee continued its 
oversight of the SBA Disaster Loan Program in a hearing on 
November 30, 2011 to ensure that it is prepared to assist small 
businesses in recovering from disasters.
    On June 2, 2011, the Committee secured a commitment from 
the Government Accountability Office (GAO) to review the SBA's 
Loan Management Accounting system. GAO has concluded its 
investigation and is awaiting the response from the SBA before 
finalizing its report to Congress.
    This system is designed to manage the SBA guaranteed loan 
portfolio, but is severely outdated. The Committee's views and 
estimates letter on the FY 2012 budget request, adopted by the 
Committee on March 15, 2011, outlines concerns with the Loan 
Management Accounting System used by the SBA and resources 
devoted to it. As already noted, elsewhere in this report, the 
Committee held a hearing to discuss the results of GAO's 
investigation on the inadequacies of the modernization process.
    In June 2012, the Committee held two hearings on the ad hoc 
procedures used by the SBA in operating its capital access 
programs. The Committee prepared a series of follow-up 
questions to Administrator Mills in an effort to further 
identify weaknesses in the SBA's regulation of its guaranteed 
lenders.
B. Oversight of SBA and other federal entrepreneurial development 
        programs
    On March 15, 2011 the Committee adopted its views and 
estimates on the FY 2012 budget that outlined several 
duplicative entrepreneurial development programs at the SBA. 
This letter will be used as a template for legislation to 
consolidate and/or eliminate said programs.
    On May 25, 2011, the Committee on Small Business held a 
full Committee hearing titled, ``Promoting Entrepreneurship and 
Job Creation by Decreasing Duplication at SBA.'' This hearing 
examined duplicative programs at the U.S. Small Business 
Administration (SBA), specifically focusing on the 
entrepreneurial development Programs. The panel discussed the 
overlap that occurs within SBA's entrepreneurial development 
programs and how private efforts meet the needs of businesses 
seeking professional educational opportunities.
    On July 28, 2011, Chairman Graves sent a letter to the 
Administrator of the SBA, the Hon. Karen Mills, requesting that 
the Administrator reconsider the disbursement of funds to 
grantees operating Small Business Development Centers (SBDC). 
The letter contended that the competitive grant program 
undermined the basic financing structure of the SBDC program.
    The following day, the Committee sent a request to the SBA 
for contracts issued by the agency on a sole source basis to a 
company that provided certain types of entrepreneurial 
education. The Committee continues to investigate this sole 
source contract and whether it duplicates efforts already 
provided by other entrepreneurial development programs at the 
SBA.
    At a hearing on October 17, 2011, the Subcommittee on 
Contracting and the Workforce examined whether changes were 
needed to the SBA's entrepreneurial outreach programs to 
maximize assistance to new entrepreneurs. The panel determined 
that improvements could be made with efforts to refocus some of 
the assistance provided by the SBA's entrepreneurial 
development partners.
    The Subcommittee on Agriculture, Energy and Trade held a 
field hearing in Pittsburgh, PA on April 2, 2012 to discuss 
trade policies and its impact on small manufacturers. Although 
the main thrust of the hearing was not oversight of SBA's 
entrepreneurial development programs, the issue of duplication 
and coordination among SBA international trade offices and 
those other federal and state agencies. Witnesses asseverated 
that there needs to be greater coordination among federal and 
state offices to promote the growth of small business 
exporters.
C. Oversight of federal government contracting matters
    On March 16, 2011, the Committee on Small Business met for 
a hearing titled, ``Spurring Innovation and Job Creation: The 
SBIR Program.'' This hearing marked the beginning of the 
Committee's work to reauthorize the Small Business Innovation 
Research (SBIR) and Small Business Technology Transfer (STTR) 
programs. Last fully reauthorized in 2000, the SBIR program 
sets aside federal research and development dollars to be 
provided in the form of grants to small businesses that offer 
innovations and needed products to the federal government. As 
such, the program offers an effective way to jump start 
entrepreneurs, grow the economy, and create jobs.
    On April 7, 2011, the Subcommittee on Healthcare and 
Technology met for a hearing titled, ``The Creating Jobs 
Through Small Business Innovation Act of 2011.'' The hearing 
was the second in a series of Committee events associated with 
the reauthorization SBIR and STTR programs. This hearing 
examined a draft of legislation reauthorizing the SBIR and STTR 
programs. Witnesses discussed the benefits of specific 
provisions in the draft legislation designed to improve and 
modernize the SBIR and STTR programs.
    On April 15, 2011, the Committee sent a letter to the SBA 
requesting access to the Electronic Subcontracting Reporting 
Systems to better carry out its oversight responsibilities.
    On May 5, 2011, the Subcommittee on Economic Growth, 
Capital Access and Tax met for a hearing titled, ``Professional 
Services: Proposed Changes to the Small Business Size 
Standard.'' The Subcommittee hearing examined the impact of 
size standard regulations proposed by the SBA to redefine who 
is a small business in the professional, scientific, and 
technical services industries. The transcript of the hearing 
and written testimony was provided to the SBA via a letter 
dated May 6, 2011, to be included in the administrative record.
    On May 12, 2011, the House Committee on Small Business and 
the House Committee on Oversight and Government Reform met for 
a joint hearing entitled, ``Politicizing Procurement: Will 
President Obama's Proposal Curb Free Speech and Hurt Small 
Business?'' This hearing examined the proposed Executive Order 
(``EO'') mandating the disclosure of political donations by 
government contractors as a prerequisite to receiving a 
government contract, and evaluated its impact and consequences 
upon the federal acquisition system. Specifically, the 
Committees expressed concerns that this proposed EO would 
inject politics into the procurement process, violate political 
free speech rights, and usurp the legislative power of 
Congress. This hearing followed a letter to President Obama, 
dated April 21, 2011, detailing Chairman Graves' concerns with 
the impact of the EO on small contractors.
    On May 26, 2011, the Small Business Subcommittee on 
Contracting and Workforce met for a hearing titled, ``Defer No 
More: The Need to Repeal the 3% Withholding Provision.'' The 
hearing examined the effect of Section 511 of the Tax 
Prevention and Reconciliation Act of 2005, which will require 
federal, state and local governments to withhold 3 percent from 
all payments for goods and services purchased from small 
businesses. The Subcommittee heard witness testimony that 
Section 511 will: cost more to implement than it would generate 
in revenue; restrict the already tight cash flow of small 
companies; and destroy jobs.
    Efforts to examine federal government contracting continued 
with four hearings by the Subcommittee on Contracting and the 
Workforce in late June, September and October of 2011. Those 
hearings were then followed with two more Subcommittee hearings 
in February and June of 2012. Those hearings have been 
described in greater detail in the sections on Subcommittee 
hearings and a description of the Committee's activities to 
combat waste, fraud and abuse. For the sake of brevity, their 
description will not be reiterated here.
    On June 9, 2011, the Committee on Small Business and the 
Committee on Oversight and Government Reform sent a letter to 
the Department of Health and Human Services to seek information 
about a contract awarded by the Biomedical Advanced Research 
and Development Authority (BARDA). The Committees expressed 
concern about the procurement process used to select the 
recipient, which started as a small business set-aside, but was 
then cancelled, and BARDA made a sole source award. The 
Committee continues to investigate this contract in conjunction 
with the Committee on Oversight and Government Reform.
    On June 29, 2011, as a follow-up to a hearing on insourcing 
policies, Subcommittee Chairman Mulvaney sent a letter to the 
Administrator of the Office of Federal Procurement Policy 
(OFPP), the Hon. Daniel I. Gordon (a copy of which was also 
sent to the Director of the Office of Management and Budget, 
the Hon. Jacob Lew). In the letter, Chairman Mulvaney disputed 
the findings of OFPP that insourcing would result in savings to 
the federal government. The Subcommittee Chairman then went on 
to request that insourcing stop until agencies developed 
transparent and sound cost estimation methodologies.
    On November 1, 2011, the Committee issued subpoenas to 
Deputy Attorney General James Cole, Deputy Secretary of State 
William Burns, Deputy Treasury Secretary Neal Wolin, and Deputy 
Secretary of Agriculture, Kathleen Merrigan to testify at a 
hearing on their agencies' lack of compliance with the 
requirements for ensuring that the Small and Disadvantaged 
Business Utilization Offices (SADBUs) reported to the head or 
deputy head of the agency. The hearing was intended to be the 
culmination of an investigation by GAO and the Committee on the 
failure of certain agencies to comply with federal statutes 
mandating that SADBUs report to either the head or deputy head 
of each federal agency. After the issuance of the subpoenas, 
the agencies negotiated changes to their internal reporting 
structures to the satisfaction of Chairman Graves and 
Subcommittee Chairman Mulvaney. In addition to these agencies, 
the Departments of Interior and Health and Human Services also 
agreed to modify the reporting structures for their Offices of 
Small and Disadvantaged Business Utilization.
    The Committee continues to monitor federal procurement 
matters as it relates to small businesses through informal 
contacts with the small business community and regular 
briefings with agency procurement personnel. For example, 
Chairman Graves, in conjunction with Chairman Issa, sent 
another letter to Secretary Sibelius on December 12, 2011 
concerning the award of a sole source contract awarded by BARDA 
already mentioned earlier in this section on government 
contract oversight. On April 17, 2012, the Committee requested 
information from the Inspector General of GSA concerning travel 
and conference planning abuses at that agency.

D. Oversight of SBA management

    The Committee continues to oversee the management of the 
SBA through hearings, meetings with agency personnel, and 
industry representatives.
    On March 2, 2011, the Committee held a hearing on the SBA's 
proposed budget for FY 2012. This hearing reviewed the 
administration's funding requests as well as agency management 
of key policy initiatives for the fiscal year. The Committee 
heard testimony from SBA Administrator Karen Mills. The 
information garnered at this hearing was utilized in the 
Committee's development of views and estimates on the FY 2012 
budget, subsequently adopted by the Committee and submitted to 
the House Budget Committee on March 17, 2011. The Committee's 
views and estimates letter recommends that 14 programs be 
zeroed out and three programs receive less money than the SBA 
requested for FY 12. The total dollar figure is difficult to 
quantify, but is approximately $100 million in cuts or 10 
percent less than the SBA's FY 12 budget request.
    In two hearings, one on October 26, 2011 and one on 
November 30, 2011, the Committee held hearings to assess the 
management of SBA's capital access and disaster loan programs. 
Those hearings were described in greater detail elsewhere in 
this document and a reiteration of their descriptions would be 
pleonastic.
    The examination of the Loan Management Accounting System by 
the GAO at the behest of the Committee, perforce, delves into 
SBA management of complex information technology. In addition, 
it examines whether the SBA has the tools needed to manage an 
$80 billion loan portfolio. A detailed description of the 
Committee's oversight hearing can be found elsewhere in this 
document and will not be repastinated here.
    Chairman Graves sent a letter to Administrator Mills on 
April 11, 2012 concerning the SBA's award of a grant in the 
State Trade Export Promotion (STEP) program created by the 
Small Business Jobs Act of 2010. Chairman Graves noted that a 
grant was made to an ineligible territory--the Northern 
Marianas Islands--and requested that the funds be returned to 
the United States Treasury rather than retained by the SBA. In 
addition, the Chairman requested information on protocols that 
will be followed to ensure that similar situations do not occur 
in the agency's oversight of the STEP program.

E. Oversight of federal regulatory and paperwork burdens

    On February 16, 2011, the Committee on Small Business met 
for a hearing titled, ``Putting Americans Back to Work: The 
State of the Small Business Economy.'' The Committee examined 
obstacles to small business job creation and economic growth 
and attempted to identify specific tax, regulatory and health 
care policies that are inhibiting job creation and economic 
growth. The hearing set the stage for future Committee 
deliberations related to the obstacles impeding entrepreneurs' 
and small firms' ability to strengthen our economy and put 
Americans back to work.
    On March 21, 2011, the Committee sent a letter to the 
Department of Labor (DOL) regarding a rule on wage methodology 
for temporary non-agricultural employment H2B program (76 Fed. 
Reg. 3,452). The letter questioned the methodology used to 
determine the prevailing wage under the rule and the impact on 
small businesses.
    On March 30, 2011 the Committee on Small Business met for a 
hearing entitled, ``Reducing Federal Agency Overreach: 
Modernizing the Regulatory Flexibility Act.'' The purpose of 
the hearing was to examine the Regulatory Flexibility Act (RFA) 
as amended by the Small Business Regulatory Enforcement 
Fairness Act (SBREFA). This hearing laid the foundation for 
Committee consideration of RFA reform and efforts to improve 
agency compliance with the Act.
    On April 12, 2011, the Committee sent a letter to the 
Commissioner of the Food and Drug Administration (FDA) 
regarding potential regulatory action related to the extra-
label use of cephalosporin antimicrobial drugs in food-
producing animals. Concerns were raised by agriculture 
producers, veterinarians, and consumers over the adverse impact 
the ban would have on food safety and animal health. A rule was 
proposed and revoked in 2008. The letter was sent in response 
to information suggesting the FDA is considering reissuing the 
rule.
    On April 14, 2011, the Committee sent a letter to the Chief 
Counsel for Advocacy at the SBA to encourage analysis of the 
Securities and Exchange Commission's proposed rule related to 
use of conflict minerals (75 Fed. Reg. 80,948). The letter 
focused on compliance with the Regulatory Flexibility Act and 
the rule's impact on small entities.
    On May 12, 2011 The House Committee on Small Business 
Subcommittee on Oversight, Investigations and Regulations met 
for a hearing entitled, ``Green Isn't Always Gold: Are EPA 
Regulations Harming Small Businesses?'' The hearing examined 
Environmental Protection Agency regulations that negatively 
affect small businesses, most specifically those related to the 
Clean Air Act and the Resources Conservation and Recovery Act. 
The Subcommittee heard testimony from small business owners 
about how EPA has neglected to take into account the Regulatory 
Flexibility Act when promulgating regulations despite 
significant direct and indirect burdens experienced by small 
businesses.
    On June 13, 2011, the Committee sent a letter to the 
Department of Agriculture (USDA) Grain Inspection, Packer and 
Stockyards Administration (GIPSA) regarding a proposed rule to 
amend the Packer and Stockyards Act of 1921 (75 Fed. Reg. 
35,338). The letter calls into question USDA's compliance with 
the Regulatory Flexibility Act in determining the impact of the 
regulation on small businesses involved in the beef, pork, and 
poultry industries' supply chain.
    On June 13, 2011, the Small Business Subcommittee on 
Investigations, Oversight and Regulations met for a hearing 
entitled, ``Do Not Enter: How Proposed Hours of Service 
Trucking Rules are a Dead End for Small Businesses.'' The 
hearing reviewed the Federal Motor Carrier Safety 
Administration's proposed rule on trucking Hours of Service and 
explored how this regulation would harm small businesses by 
reducing allowed duty times for motor carriers and thereby 
hindering the ability for owner-operators and other small 
businesses to deliver goods nationwide.
    On June 16, 2011, the Small Business Subcommittee on 
Economic Growth, Tax and Capital Access convened a hearing 
titled ``The Dodd-Frank Act Impact on Small Business Lending.'' 
The hearing examined the impact of Dodd-Frank regulations on 
the ability of banks to make loans to small businesses. This 
was followed by an examination of the potential adverse 
consequences on small business access to capital that may 
result from regulations issued by the Consumer Financial 
Protection Bureau. The hearing, titled ``Open for Business: The 
Impact of the CFPB on Small Business,'' was convened by the 
Subcommittee on Investigations, Oversight and Regulations.
    On June 23, 2011, the Committee sent the Commissioner of 
the Internal Revenue a letter concerning the requirement to 
report payment card and third party network transactions. The 
letter noted these requirements would be particularly 
burdensome on small businesses. As a result, the Committee 
requested that the Commissioner impose the minimal amount of 
reporting necessary to comply with the law and to the extent 
possible, reduce the complexity associated with this 
information collection.
    On July 7, 2011, the Subcommittee on Agriculture, Energy 
and Trade held a hearing titled ``Regulation Gone Awry: How 
USDA's Proposed GIPSA Rule Hurts America's Small Businesses.'' 
The hearing was a follow-up to the June 13, 2011 letter from 
Chairman Graves and Subcommittee Chairman Tipton concerning the 
Department's failure to examine the impact of proposed rules to 
implement the 2008 Farm Bill changes to the Packers and 
Stockyards Act. At the hearing, small livestock producers and 
meat processors testified about the increased uncertainty that 
would result from the adoption of the Department's proposed 
rule.
    Chairman Graves sent a letter to EPA Administrator Lisa 
Jackson on July 11, 2011 concerning the procedures used by the 
agency to convene a panel of small businesses, as set forth in 
Sec. 609 of the Regulatory Flexibility Act, 5 U.S.C. Sec. 609, 
in the development of a proposed rule to establish new source 
performance standards for utilities in order to control 
greenhouse gases. The Chairman noted that the small business 
representatives were not provided sufficient information to 
provide EPA with appropriate input on the impacts on small 
businesses.
    On September 21, 2011, the Committee on Small Business held 
a hearing titled ``Eliminating Job-Sapping Federal Rules 
through Retrospective Reviews--Oversight of the President's 
Effort'' to examine the results of Executive Order 13,563. That 
order required ongoing retrospective review of all federal 
regulations and the Committee was raised questions to the 
Administrator of the Office of Information and Regulatory 
Affairs, the Hon. Cass Sunstein, concerning whether the 
Executive Order would be any different than other presidential 
efforts to reduce regulatory burdens through retrospective 
reviews. As a follow-up to the Committee's September 21, 2011 
hearing, the Chairman, on November 4, 2011 sent Administrator 
Sunstein a letter raising multiple concerns about the cost 
impact of federal rules on general aviation.
    On October 5, 2011, the Committee convened to examine the 
impact of various decisions by the Department of Labor and 
National Labor Relations Board on small businesses. In 
particular, the hearing reviewed decisions that would place 
small businesses in a significantly disadvantageous position 
during union organizing campaigns.
    The Committee extended its examination of regulatory issues 
affecting general aviation when it convened a hearing titled 
``LightSquared: The Impact of Small Business GPS Users'' on 
October 12, 2011. The hearing focused on a proposal before the 
Federal Communications Commission to allocate spectrum for use 
of a terrestrial broadband service adjacent to spectrum used 
for GPS services. Witnesses testified about the potential 
interference with GPS devices, the potential serious 
consequences to aviation, and the costs that would result in 
needing to buy equipment that can filter out interference from 
an adjacent terrestrial broadband service.
    On November 17, 2011, the Subcommittee on Agriculture, 
Energy and Trade held a hearing titled ``Adrift in Regulatory 
Burdens and Uncertainty: A Review of Proposed and Potential 
Regulations of Family Farms.'' The primary focus of the hearing 
was the impact of requiring pesticide applicators to obtain a 
discharge permit under the Clean Water Act. In addition, the 
hearing considered the economic consequences of regulating dust 
on farms pursuant to the Clean Air Act.
    On November 17, 2011, Chairman Graves co-signed a letter to 
the Chair of the Securities and Exchange Commission, the Hon. 
Mary Schapiro. In the letter, the signatories raised concerns 
about the Commission's efforts to issue a final rule on 
conflict minerals as required by Sec. 1502 of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act. Specifically, 
the Commission's failure to assess adequately impacts on small 
business as mandated under the Regulatory Flexibility Act.
    The Subcommittee on Economic Growth, Tax and Capital Access 
held a field hearing in Woodstock, IL on December 12, 2011 to 
hear small businesses their concerns about regulatory overreach 
and uncertainty. The witnesses were consentient in their belief 
that increased government regulation and what direction it 
takes is deterring them from making new investments or hiring 
more workers.
    On February 2, 2012, the Subcommittee on Agriculture, 
Energy and Trade held a hearing to examine regulatory changes 
proposed by the United States Department of Labor concerning 
family-farm exemptions under the Fair Labor Standards Act 
(FLSA). The hearing resulted in the Department withdrawing part 
of the proposed rule and examining anew the family-farm 
exemptions under FLSA.
    Regulatory barriers and impediments to greater broadband 
deployment were examined in a Subcommittee on Healthcare and 
Technology hearing on February 15, 2012. The witnesses noted 
that reformation of the Universal Service regime and 
modification of spectrum management policies were needed to 
increase broadband deployment in rural areas.
    The Subcommittee on Economic Growth, Tax and Capital Access 
held a hearing on April 19, 2012 to examine the impact of 
regulatory changes wrought by the Dodd-Frank Wall Street Reform 
and Consumer Protection Act on the ability of small businesses 
to obtain equity capital. Witnesses testified that regulations, 
notwithstanding the JOBS Act, emanating from Dodd-Frank 
continue to impose barriers to small business access to equity 
capital.
    A joint hearing was held by the Subcommittee on Healthcare 
and Technology of the Committee on Small Business and the 
Subcommittee on Investigations and Oversight of the Committee 
on Science, Space and Technology to consider the impact on 
small business of the 12th Report on Carcinogens. Private 
sector witnesses, as well as a witness from the Office of the 
Chief Counsel for Advocacy of the United States Small Business 
Administration, contended that the Report did not go through a 
sufficient peer review process or obtain public input. Small 
businesses with chemicals newly listed in the Report raised 
concerns about economic impact of being listed as a potential 
carcinogen as well as legal liability associated with such 
listing.
    The Subcommittee on Contracting and the Workforce examined 
the impact of federal regulations on small businesses during a 
June 14, 2012 field hearing in Rock Hill, SC. The businesses 
noted that the government fails to provide sufficient 
information enabling them to comply with federal regulations, 
do not utilize sound science in developing regulatory 
standards, and future regulatory uncertainty interferes with 
the ability of businesses to undertake proper short- and long-
term planning.

F. Oversight of federal tax policy

    On February 9, 2011, the Committee on Small Business met 
for a hearing titled, ``Buried in Paperwork--A 1099 Update.'' 
The hearing focused on the health care reform law's expanded 
1099 reporting mandate, which would have required businesses to 
file a 1099 form for virtually every business-to-business 
transaction of $600 or more in property and services. In a 
letter dated February 10, 2011, the Committee shared the 
information garnered at the hearing with the Chairman and 
Ranking Member of the Committee on Ways and Means.
    On April 13, 2011, the Committee on Small Business met for 
a hearing entitled, ``How Tax Complexity Hinders Small 
Businesses: The Impact on Job Creation and Economic Growth.'' 
As Congress considers the issues related to fundamental tax 
reform, the concerns of America's small businesses about tax 
reform should be part of that debate. This hearing examined the 
complexity of the current tax code, the difficulty that 
entrepreneurs have in complying with it and the resulting 
effect on hiring and economic expansion. In a letter to the 
Chairman and Ranking Member of the Committee on Ways and Means 
dated April 13, 2011, the Committee shared the views of the 
witnesses who testified as relevant to the ongoing debate on 
tax reform.
    On November 3, 2011, the Subcommittee on Economic Growth, 
Tax and Capital Access held a hearing titled ``Pro-Growth Tax 
Policy: Why Small Businesses Need Individual Reform.'' The 
hearing focused on the importance of tax policies to our 
nation's small businesses. The primary issues addressed at the 
hearing included complexity of the tax code and the taxation of 
pass-through entities, such as sole proprietorships and S 
corporations.
    The full Committee and the Subcommittee on Economic Growth, 
Tax and Capital Access held hearings in April and May of 2012 
respectively to examine the impact of federal tax policy on 
small businesses. At the full Committee hearing a wide variety 
of issues, including high effective tax rates and complexity, 
were ventilated. During the Subcommittee hearing, witnesses 
asserted that the estate tax for small business owners should 
be permanently repealed.
    In addition to these hearings, the Committee continues to 
investigate the impact of Internal Revenue Code Sec. 6050W 
(dealing with among other things the tracking and reporting of 
debit and credit card purchases) on small businesses. On 
February 8, 2012, Chairman Graves sent a letter to IRS 
Commissioner Shulman requesting more information about the 
Service's implementation of Sec. 6050W.

G. Oversight of health care policy

    On March 22, 2011, the Committee sent a letter to the 
Department of Health and Human Services requesting information 
related to the treatment of small businesses in the Patient 
Protection and Affordable Care Act (PPACA) (P.L. 111-148) 
waiver process. The Committee is concerned that the process for 
receiving waivers may be unfair to small firms. The Committee 
also asked the GAO to examine the waiver process. On June 14, 
2011, the GAO issued a report regarding HHS waivers of 
restrictions on annual limits on health benefits.
    On June 2, 2011, the Small Business Subcommittee on 
Healthcare and Technology met for a hearing entitled, ``Not 
What the Doctor Ordered: Health IT Barriers for Small Medical 
Practices.'' The hearing examined the adoption of health 
information technology by small medical practices. The 
Subcommittee considered witness testimony regarding the 
barriers that small providers have encountered and possible 
solutions for addressing those barriers. As follow-ups to this 
hearing, Subcommittee Chairwoman Ellmers sent letters to the 
Department of Health and Human Services (dated July 5, 2011 and 
August 11, 2011) raising issues about the cost of implementing 
health information technology and regulatory modifications that 
could assist small health care providers in overcoming these 
cost barriers.
    The Subcommittee on Healthcare and Technology held a 
hearing on July 28, 2011 titled ``Small Businesses and PPACA: 
If They like Their Coverage can They Keep It?'' Small 
businesses testified that PPACA will not help them maintain 
health insurance coverage or reduce their costs of doing 
business.
    On August 30, 2011, Subcommittee Chairwoman Ellmers sent a 
letter to Secretary Sebelius on a proposed rule concerning the 
establishment of health insurance exchanges under the Patient 
Protection and Affordable Care Act. Subcommittee Chairwoman 
Ellmers contended that the proposed rule might force small 
health insurers out of the market. More significantly, 
Subcommittee Chairwoman Ellmers alleged that the requirements 
for eligibility as a small business under the insurance 
exchanges would impose significant additional recordkeeping and 
reporting requirements thereby increasing rather than 
decreasing costs for small businesses.
    On October 14, 2011, Chairman Graves sent a letter to GAO 
concerning the Internal Revenue Service's implementation of 
provisions in the Patient Protection and Affordable Care Act. 
Mr. Graves, in addition to being added as co-requestor on a 
study already underway by GAO, he asked GAO to prepare a study 
on the impact on small business of the Service's implementation 
of the Patient Protection and Affordable Care Act.
    The Subcommittee on Investigations, Oversight and 
Regulations held a hearing on December 15, 2011 to examine the 
impact of medical loss ratios (the requirement in the 
Affordable Care Act that insurers spend at least 80 percent of 
their premiums on coverage) on agents that sell health 
insurance. Agents noted that the medical loss ratio provisions 
will reduce services to small businesses a view seconded by 
small businesses at the hearing.
    Subcommittee Chairman Coffman convened a field hearing on 
March 16, 2012 in Greenwood Village, CO to assess the impact of 
the Affordable Care Act on small businesses that provide their 
employees with health insurance. The witnesses all concurred 
that the Act would reduce their ability to provide employees 
with health care coverage.
    Subcommittee Chairwoman Ellmers sent a letter to the Acting 
Administrator of the Centers for Medicare and Medicaid Services 
on May 1, 2012 concerning a proposed rule to implement the 
Electronic Health Record Incentive Program. The letter 
expressed significant concern about the Stage 2 goals in the 
proposed rule and its potential impact on small physician 
practices, particularly those with fewer than ten doctors. That 
was followed with another letter to Secretary Sibelius on June 
12, 2012 requesting that the Secretary provide Subcommittee 
Chairwoman Ellmers with a report outlining plans on how to 
ensure patient safety during the adoption of health information 
technology.

H. Oversight of energy policy

    On April 14, 2011, the Small Business Subcommittee on 
Agriculture, Energy and Trade met for a hearing titled, 
``Drilling for a Solution: Finding Ways to Curtail the Crushing 
Effect of High Gas Prices on Small Business.'' The purpose of 
this hearing was to bring to light the negative impacts of 
rising fuel costs on small business and to understand the 
effects of short- and long-term solutions such as increasing 
domestic oil production and further developing renewable energy 
sources.
    On September 19, 2011, the Subcommittee on Agriculture, 
Energy and Trade held a field hearing in Grand Junction, CO, 
titled ``Are Excessive Energy Regulations and Policies Limiting 
Energy Independence, Killing Jobs and Increasing Prices for 
Consumers?'' The hearing examined burdensome federal 
regulations and policies on the development of energy resources 
located in the United States and, in particular, Colorado.
    Chairman Graves convened a hearing on May 9, 2012 to 
examine the impact of gasoline prices on small businesses. 
Witnesses testified that small businesses had little control 
over the volatility in fuel prices, could not (unlike their 
larger counterparts) effectively hedge against such rapid price 
increases, and suffered diminution in net profits due to the 
increased costs of fuel.
    Two Subcommittee hearings were held in the first half of 
2012 that examined federal energy policy. The first, held on 
March 8, 2012 by the Subcommittee on Investigations, Oversight 
and Regulations addressed the barriers to increasing extraction 
on fossil fuels on federally-managed land, primarily that under 
the Bureau of Land Management. Witnesses suggested reduction in 
regulatory barriers to permit greater drilling on federal 
lands, especially for those lands already identified to be 
eligible for drilling. The second hearing, before the 
Subcommittee on Agriculture, Energy and Trade convened on April 
26 assayed the current state of small business innovation in 
developing alternative energy sources.

I. Oversight of trade and intellectual property policy

    On April 6, 2011, the Committee on Small Business met for a 
hearing entitled, ``Help Wanted: How Passing Free Trade 
Agreements Will Help Small Businesses Create New Jobs.'' The 
hearing focused on the benefits and importance of passing the 
pending free trade agreements to small businesses. Lowering 
trade barriers will spur small business exports, which will 
then lead to job creation and long-term economic growth.
    On July 27, 2011, the Committee on Small Business held a 
hearing titled ``Bureaucratic Obstacles for Small Exporters: Is 
our National Export Strategy Working?'' The hearing examined 
the efforts encapsulated in President Obama's National Export 
Strategy to reduce the regulatory barriers facing small 
businesses to expand their involvement in exports of goods and 
services.
    Ambassador Sapiro, the Deputy United States Trade 
Representative, testified at a full Committee hearing on May 
16, 2012 about trade policy initiative designed to increase 
exports. In addition to Ambassador Sapiro, small businesses 
testified at the hearing. Like Ambassador Sapiro, the small 
businesses supported increased export trade and recommended 
reducing the complexity of rules covering exports from the 
United States. The witnesses expressed the same sentiments that 
the Subcommittee on Agriculture, Energy and Trade heard at its 
Pittsburgh, PA field hearing on April 2, 2012.

J. Reductions in programs and spending

    On March 15, 2011 the Committee reported its views and 
estimates on the FY 2012 budget that outlined several programs 
at the SBA that should be considered for reduced spending or 
eliminated altogether. The letter suggested a reallocation of 
resources, both financial and personnel, to better meet the 
agency's mission. This letter will be used as a template for 
legislation to consolidate and eliminate unnecessary or 
duplicative programs. Overall, the Committee recommended the 
elimination of 14 programs, totaling approximately $100 
million. The Committee continues to examine programs and 
options for consolidating and eliminating unnecessary small 
business programs.
    On March 7, 2012, the Committee reported its views and 
estimates on the FY 2013 budget that identified programs at the 
SBA that should be considered for reduced spending or 
eliminated altogether. In addition, the letter recommended a 
reallocation of resources to enable the agency to better meet 
its mission of serving small businesses. The Committee 
continues to examine agency programs and procedures in order to 
draft legislation that will increase SBA effectiveness without 
undermining services provided to America's entrepreneurs.
                           REGULATORY REVIEW

  Legislative and Oversight Activity Related to Regulations, Orders, 
 Administrative Actions and Procedures by Federal Agencies Within the 
          Jurisdiction of the Committee on Small Business \1\
---------------------------------------------------------------------------

    \1\Under House rule X, the Committee on Small Business has 
jurisdiction over the protection of small business including 
``regulatory flexibility,'' as well as jurisdiction over the 
participation of small businesses in government contracts.

------------------------------------------------------------------------
                                              Oversight and legislative
 Regulation, order, administrative action             activity
------------------------------------------------------------------------
1099 Reporting Requirement in the Patient   The Committee held a hearing
 Protection and Affordable Care Act          regarding the burden on
 (PPACA) (P.L. 111-148).                     small businesses of the
                                             expanded 1099 reporting
                                             requirement in PPACA. The
                                             Committee shared the
                                             information gained in the
                                             hearing with the Committee
                                             on Ways and Means in a
                                             letter dated February 10,
                                             2011. Ultimately, the
                                             provision was repealed
                                             (P.L. 112-15)
SBA 504 Loan Refinancing Program (76 Fed.   On March 2, 2011, the
 Reg. 9,213).                                Committee held a hearing on
                                             the SBA budget request for
                                             FY 2012, and on March 15,
                                             2011, the Committee
                                             reported its views and
                                             estimates on the FY 2012
                                             SBA budget, including a
                                             recommendation that the 504
                                             Loan Refinancing Program be
                                             considered for elimination
                                             and that no funds be
                                             allocated for the SBA to
                                             oversee this program.
Department of Labor (DOL) rule on wage      The Committee sent a letter
 methodology for temporary non-              dated March 21, 2011 to DOL
 agricultural employment H2B program (76     questioning the methodology
 Fed.Reg. 3,452).                            used to determine the
                                             prevailing wage under the
                                             rule and the impact on
                                             small businesses.
Department of Health and Human Services     On March 22, 2011, the
 (HHS) waivers provided under the Patient    Committee sent a letter to
 Protection and Affordable Care Act          HHS requesting information
 (PPACA). (P.L. 111-148).                    related to the treatment of
                                             small businesses in the
                                             PPACA waiver process.
Securities and Exchange Commission's (SEC)  On April 14, 2011, the
 rule related to conflict minerals (75       Committee sent a letter to
 Fed. Reg. 80,948).                          the Chief Counsel for
                                             Advocacy to encourage
                                             analysis of the SEC's
                                             proposed rule, compliance
                                             with the Regulatory
                                             Flexibility Act, and the
                                             impact on small entities.
Proposed Executive Order on disclosure of   The Committee submitted a
 political contributions by Federal          letter to President Obama
 contractors.                                on April 21, 2011, to
                                             express concerns about the
                                             impact of the proposed
                                             Executive Order on small
                                             contractors. On May 12,
                                             2011, the Committee held a
                                             joint hearing with the
                                             Committee on Oversight and
                                             Government Reform to review
                                             the proposal.
SBA Proposed Size Standards for North       The Subcommittee on Economic
 American Industry Classification System     Growth, Tax, and Capital
 (NAICS) Sector 54 Industries related to     Access held a hearing on
 professional services (76 Fed. Reg.         May 5, 2011 to review the
 14,323).                                    size standard proposal. On
                                             May 6, 2011, via a letter
                                             to the SBA, the
                                             Subcommittee submitted the
                                             transcript of and written
                                             statements from the hearing
                                             for the administrative
                                             record.
Environmental Protection Agency (EPA)       The Subcommittee on
 regulations related to the Clean Air Act    Investigations, Oversight,
 (42 USC, Chapter 85) and the Resource       and Regulations held a
 Conservation and Recovery Act of 1976 (P.   hearing on various EPA
 L. 95-609).                                 regulations and their
                                             impact on small businesses
                                             on May 12, 2011.
Department of Agriculture (USDA) Grain      The Committee sent a letter
 Inspection, Packer and Stockyards           dated June 13, 2011, to the
 Administration (GIPSA) proposed rule to     USDA regarding compliance
 amend the Packer and Stockyards Act of      with the Regulatory
 1921 (75 Fed. Reg. 35,338).                 Flexibility Act in
                                             determining the impact of
                                             the regulation on small
                                             businesses involved in the
                                             beef, pork, and poultry
                                             industries' supply chain.
Tax credit for small businesses             The Committee requested a
 established by the Patient Protection and   GAO analysis of the small
 Affordable Care Act (PPACA) (P.L. 111-      business tax credit
 148).                                       established by PPACA.
Department of Transportation Federal Motor  The Subcommittee on
 Carrier Safety Administration's Hours of    Investigations, Oversight
 Service regulations (75 Fed. Reg. 82,170).  and Regulation held a
                                             hearing on the impact of
                                             trucking Hours of Service
                                             regulations on small
                                             businesses on June 14,
                                             2011.
Presidential Guidance on Government         The Subcommittee on
 Contracting, (74 Fed. Reg. 9755).           Contracting and Workforce
                                             held a hearing to examine
                                             the President's guidance on
                                             insourcing of work
                                             currently done by federal
                                             contractors on June 23,
                                             2011.
Reporting to IRS on credit card             Chairman Graves sent a
 transactions, (28 U.S.C. 6050W).            letter to the Commissioner
                                             of the Internal Revenue
                                             concerning the
                                             implementation of reporting
                                             requirements for payment
                                             card and third party
                                             network transactions on
                                             June 23, 2011. The
                                             Committee continues to work
                                             with the IRS on this issue.
Medicare Program; Proposed Changes to the   Subcommittee Chair Ellmers
 Electronic Prescribing Incentive Program,   sent a letter to the
 (76 Fed. Reg. 31,547).                      Administrator of the
                                             Centers for Medicare and
                                             Medicaid Services
                                             addressing the impact of
                                             changes in the electronic
                                             prescribing program on
                                             small businesses on July 5,
                                             2011.
Implementation of Regulations Required      The Subcommittee on
 Under Title XI of the Food, Conservation    Agriculture, Energy and
 and Energy Act of 2008; Conduct in          Trade held a hearing on
 Violation of the Act, (75 Fed. Reg.         July 7, 2011 which
 35,338).                                    addressed proposed
                                             regulations that modify
                                             requirements to comply with
                                             the Packers and Stockyards
                                             Act.
Draft Rule on Green House Gas New Source    Chairman Graves sent EPA
 Performance Standards for Electric          Administrator Jackson a
 Utility Steam Generating Units.             letter on July 11, 2011,
                                             about the inadequacy of the
                                             Small Business Regulatory
                                             Enforcement Fairness Act
                                             panel on green house gas
                                             emissions for new steam
                                             generating facilities
                                             constructed by electric
                                             utilities.
Patient Protection and Affordable Care      In a letter dated August 30,
 Act: Establishment of Exchanges and         2011, Subcommittee Chair
 Qualified Health Plans, (76 Fed. Reg.       Ellmers provided written
 41,866).                                    comments to the Department
                                             of Health and Human
                                             Services on the impact of
                                             proposed insurance
                                             exchanges on small
                                             businesses and the agency's
                                             lack of compliance with the
                                             Regulatory Flexibility Act.
Mentor-Protege Programs related to          The Subcommittee on
 government contracting (13 C.F.R.           Contracting and Workforce
 124.520).                                   held a hearing on September
                                             15, 2011 to address a
                                             number of government
                                             contracting issues
                                             including SBA improvements
                                             needed to maximize benefits
                                             of its Mentor-Protege
                                             Program for small
                                             government contractors.
Executive Order 13,563 regarding            The Committee held a hearing
 regulatory review, (76 Fed. Reg. 3821).     on September 21, 2011 with
                                             OIRA Administrator Sunstein
                                             to examine President
                                             Obama's executive order
                                             mandating retrospective
                                             review of federal
                                             regulations.
Representation--Case Procedures, Proposed   The Committee held a hearing
 Rule, (76 Fed. Reg. 36,812); Labor-         on October 5, 2011 to
 Management Reporting and Disclosure Act--   address the impact of
 Interpretation of the ``Advice''            proposed changes to union
 Exemption, Proposed Rule, (76 Fed. Reg.     representation elections
 36,178).                                    and the impact those
                                             changes would have on small
                                             businesses.
In the Matter of LightSquared Subsidiary    The Committee held a hearing
 LLC; Request for Modification of its        on October 12, 2011 to
 Authority for an Ancillary Terrestrial      consider the impact of
 Component, Order and Authorization, DA 11-  LightSquared's construction
 133, 26 FCC Rcd 566 (2011).                 of a terrestrial wireless
                                             broadband service and its
                                             impact on general
                                             aviation's use of GPS.
14 C.F.R. Part 91; 14 C.F.R. 39.13; Lead    Chairman Graves sent a
 Emissions from Piston Engine Aircraft       letter on November 4, 2011
 using Leaded Aviation Fuel, Advanced        to OIRA Administrator
 Notice of Proposed Rulemaking, (75 Fed.     Sunstein concerning
 Reg. 22,440).                               regulations affecting small
                                             businesses involved in
                                             general aviation.
Final National Pollutant Discharge          The Subcommittee on
 Elimination System Pesticide General        Agriculture, Energy and
 Permit for Point Source Discharges from     Trade held a hearing on
 the Application of Pesticides, (76 Fed.     November 17, 2011 to
 Reg. 68,750).                               consider the impact of EPA
                                             regulatory actions on small
                                             agribusinesses.
Conflict Minerals, Proposed Rule, (75 Fed.  Chairman Graves, in
 Reg. 80,948).                               conjunction with other
                                             members of the House and
                                             Senate, wrote to the SEC on
                                             November 17, 2011 reminding
                                             the agency of the need to
                                             comply with the Regulatory
                                             Flexibility Act in
                                             finalizing a rule on
                                             conflict minerals.
Regulations required by the                 Chairman Graves and
 reauthorization of the Small Business       Chairwoman Landrieu of the
 Innovation Research (SBIR) program in the   Senate Committee on Small
 National Defense Authorization Act of       Business and
 2012 (P.L. 112-81).                         Entrepreneurship wrote a
                                             letter to SBA Administrator
                                             Mills to encourage
                                             compliance with the
                                             deadline in the 2012 NDAA
                                             related to the issuance of
                                             regulations to implement
                                             new provisions of the SBIR
                                             program.
DOL proposed rule regarding agricultural    The Subcommittee on
 youth labor regulations (76 Fed. Reg.       Agriculture, Energy and
 54,836).                                    Trade held a hearing on
                                             February 2, 2012 to
                                             determine the impact of the
                                             proposed rule on family
                                             farms. Ultimately, DOL
                                             withdrew part of the
                                             proposed rule and is
                                             reviewing the family-farm
                                             exemptions under FLSA.
Reporting to IRS on credit card             Chairman Graves sent a
 transactions, (28 U.S.C. Sec. 6050W).       letter to Commissioner
                                             Shulman on February 8, 2012
                                             to determine the progress
                                             of implementation of
                                             requirements that
                                             businesses report credit
                                             card transactions and the
                                             Agency's consideration of
                                             small business concerns.
                                             Further, two staff
                                             briefings by the IRS
                                             occurred at the Committee's
                                             request.
Department of Health and Human Services     The Subcommittee on
 12th Report on Carcinogens (RoC) (76 Fed.   Healthcare and Technology
 Reg. 36,923).                               held a joint hearing on
                                             April 25, 2012, with the
                                             Science, Space and
                                             Technology Subcommittee on
                                             Investigations and
                                             Oversight, to determine the
                                             impact of the 12th RoC on
                                             small businesses.
Regulations to implement the electronic     On May 1, 2012, Chairwoman
 health record incentive program (77 Fed.    Ellmers wrote a letter to
 Reg. 13,698).                               the Acting Administrator of
                                             CMS, Mary Tavenner,
                                             regarding the effect of the
                                             regulations on small
                                             practices and their ability
                                             to comply and the
                                             associated cost burden.
------------------------------------------------------------------------

                                  
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