[Senate Report 112-6]
[From the U.S. Government Publishing Office]


112th Congress 
 1st Session                     SENATE                          Report
                                                                  112-6
_______________________________________________________________________

                                     


                         SUMMARY OF LEGISLATIVE

                        AND OVERSIGHT ACTIVITIES

                       DURING THE 111TH CONGRESS

                               __________

                              R E P O R T

                                 of the

                              COMMITTEE ON

                   SMALL BUSINESS & ENTREPRENEURSHIP

                          UNITED STATES SENATE




                 March 28, 2011.--Ordered to be printed

                               -------
                    U.S. GOVERNMENT PRINTING OFFICE
99-010* (Star Print)        WASHINGTON : 2011





            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                      One Hundred Twelfth Congress

                 MARY L. LANDRIEU, Louisiana, Chairman
                OLYMPIA J. SNOWE, Maine, Ranking Member
JOHN KERRY, Massachusetts            CHRISTOPHER S. BOND, Missouri
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JOHN THUNE, South Dakota
JOSEPH I. LIEBERMAN, Connecticut     MICHAEL ENZI, Wyoming
MARIA CANTWELL, Washington           JOHNNY ISAKSON, Georgia
EVAN BAYH, Indiana                   ROGER WICKER, Mississippi
MARK PRYOR, Arkansas                 JAMES RISCH, Idaho
BENJAMIN L. CARDIN, Maryland
JEANNE SHAHEEN, New Hampshire
KAY HAGAN, North Carolina

               Donald Cravins, Democratic Staff Director
                Wallace Hsueh, Republican Staff Director


                            C O N T E N T S


                              ----------                              
                                                                   Page
   I. Overview........................................................1
  II. Job Creation and Economic Recovery..............................2
 III. Small Business Health Care Reform..............................10
  IV. Small Business Access to Capital and Credit....................16
   V. SBA Disaster Assistance and Disaster Recovery Issues...........17
  VI. Small Business Innovation Research and Small Business Technology 
      Transfer Programs..............................................28
 VII. Contracting and Procurement....................................35
VIII. Small Business International Trade.............................40
  IX. Education and Entrepreneurial Development......................46
   X. Small Business Broadband and Access to Technology..............51
  XI. Minority Small Business Development............................54
 XII. Small Business Tax Issues......................................56
XIII. The SBA Budget and Appropriations..............................60
 XIV. Presidential Nominations.......................................64
  XV. Other Committee Initiatives....................................65
 XVI. Additional Views...............................................67
XVII. Appendices.....................................................89



112th Congress                                                   Report
                                 SENATE
 1st Session                                                      112-6

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



 
   SUMMARY OF LEGISLATIVE AND OVERSIGHT ACTIVITIES DURING THE 111TH 
                                CONGRESS

                                _______
                                

                 March 28, 2011.--Ordered to be printed

                                _______
                                

        Ms. Landrieu, from the Committee on Small Business and 
               Entrepreneurship, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                              I. Overview

    Following the election of the nation's first African-
American President, on December 15, 2008, Senate Majority 
Leader Harry Reid announced the leadership of U.S. Senate 
Committees for the 111th Congress. Senator John F. Kerry, who 
had led the Committee on Small Business and Entrepreneurship 
either as Chair or Ranking Member since the 107th Congress, 
became Chair of the Senate Foreign Relations Committee, 
replacing Vice President Joseph P. Biden. Subsequently, Senator 
Mary L. Landrieu was appointed Chair of the Committee and 
officially assumed control of the Committee on January 21, 
2009. Alongside Ranking Member Olympia J. Snowe, the two 
Senators became the first pair of women in the country's 
history to lead a full Congressional Committee in either the 
House or the Senate.
    As the 111th Congress convened in January of 2009, the 
country was struggling in the midst of the worst economic 
crisis since the Great Depression. Following the collapse of 
the U.S. housing market, near-collapse of the financial 
markets, rising costs of health care, an ever-increasing 
national deficit, a simultaneous decrease in consumer 
confidence, and growing unemployment rates, small businesses 
were undoubtedly facing difficult times ahead. Meanwhile, the 
Small Business Administration (SBA), the primary agency 
responsible for aiding and assisting small businesses, was 
operating under limited capacity and lacking substantial 
ability to render assistance as a direct result of suffering 
more budget cuts than any other agency during the last eight 
years of the previous administration.
    Given the economic and budgetary difficulties facing the 
nation, the Committee faced the enormous challenge of 
increasing SBA's capacity to assist small business without 
substantially adding to the national debt. The Committee fought 
hard to increase the capacity of SBA's core programs, such as 
the 7(a), 504 and microloan programs, to make much-needed 
improvements to small business contracting programs, and to 
provide additional resources to SBA's entrepreneurial 
development programs. In the meantime, the Committee continued 
making contributions to top legislative priorities of the 111th 
Congress aimed at addressing these issues, including health 
care reform and financial regulatory reform. Beginning with the 
American Recovery and Reinvestment Act and ending with one of 
the most substantial pieces of small business legislation in 
the Committee's history, the Small Business Jobs Act of 2010, 
the Committee played and continues to play, a primary role in 
ensuring the future economic success of American small 
businesses.
    During the 111th Congress, the Committee conducted an 
extensive oversight and legislative program. The Committee met 
on 40 occasions, which included 33 hearings including, six 
field hearings, six nomination or confirmation hearings, as 
well as 11 roundtables, and five legislative markups. A total 
of 57 bills or resolutions and four nominations were referred 
to the Committee for consideration. Additionally, action was 
completed on numerous legislative, oversight and other related 
Committee matters. A total of six bills and resolutions were 
reported by the Committee, as well as several additional items 
included in legislation that was ultimately signed into law.
    This report of activities of the Committee on Small 
Business and Entrepreneurship during the 111th Congress is 
submitted in accordance to the requirements of Rule XXVI of the 
Standing Rules of the Senate, which stipulate that all standing 
committees report to the Senate, not later than March 31st of 
each odd-numbered year, on its legislative activities during 
the preceding Congress. This report summarizes the legislative 
and oversight activities of the Committee on critical issues of 
concern to small businesses.

                 II. Job Creation and Economic Recovery

    According to the Small Business Administration's (SBA) 
Office of Advocacy, in 2009, there were 27.5 million small 
businesses in the United States. Small businesses employ 
approximately half of the nation's workforce, employing 59.9 
million people, and according to the Office of Advocacy, small 
firms accounted for 65 percent of the 15 million net new jobs 
created between 1993 and 2009. Historically, small businesses 
have typically led job formation during economic recoveries. 
However, it is estimated that since the current economic 
downturn began in late 2007, 80 percent of the country's job 
losses have come from small businesses.
    As a result of tightening credit markets, there was 
significant concern heading into the 111th Congress that small 
businesses would not have sufficient access to capital to 
enable them to take on their previous job-creation role. 
Because of this, enabling small businesses to lead the country 
out of the current recession became a top priority during the 
111th Congress.

         A. AMERICAN RECOVERY AND REINVESTMENT ACT (P.L. 111-5)

    As the economic crisis that began in late 2007 continued, 
Congress, President Obama and congressional leaders made action 
on an economic recovery bill a top priority at the beginning of 
the 111th Congress. This action took form in H.R. 1, the 
American Recovery and Reinvestment Act of 2009 (``Recovery 
Act''), which is seen by many as one of the most significant 
legislative responses made thus far to the current economic 
turmoil. The bill was introduced in the House on January 26, 
2009, and consideration of the bill began on January 27th, with 
House passage occurring on January 28th. Senate consideration 
of the bill began on February 2, 2009 and concluded with the 
bill's final passage on February 10th. On February 17, 2009, 
President Barack Obama signed the Recovery Act into law as P.L. 
111-5.
    Generally, the Recovery Act provided almost $800 billion 
through extensive spending, for existing, and some new, 
programs across the 15 Cabinet-level departments and 11 
independent agencies, with some of the funds directed towards 
states, localities and other entities. In addition to new 
spending and tax provisions, the Recovery Act included new 
policies regarding unemployment compensation, health insurance, 
health information technology, broadband communications, 
energy, and requirements for oversight, accountability and 
transparency. The Recovery Act also provided critical funding 
for initiatives at the SBA to help small businesses access 
needed credit, counseling and contracting opportunities.

Small Business Provisions in the Recovery Act

    The Recovery Act provided a total of $730 million to the 
SBA. Specifically, the Act provided $375 million towards fee 
reductions and increased loan guarantees for the SBA's 7(a) and 
504 loan programs, and $255 million to guarantee loans of 
$35,000 or less through a new small business stabilization 
program known as the America's Recovery Capital (ARC) loan 
program.
    The bill included $30 million for SBA microloans and 
microloan technical assistance, $15 million for the SBA's 
surety bond program, and an increase in the size of the maximum 
bond. Additionally, the bill provided $20 million for 
improving, streamlining, and automating information technology 
systems related to lender processes and lender oversight, $10 
million for the Office of Inspector and $25 million for 
staffing to meet demands for the new Recovery Act programs.
    For the SBA's 7(a) loan program, which guarantees loans 
made by private-sector lenders to small businesses, the 
Recovery Act originally raised temporarily for one year, 
through February 17, 2010, the guarantee for participating 
lenders to 90 percent, up from the program's authorized 
guarantee of between 75 to 85 percent. The objective was to 
jumpstart lending to small businesses, and one way to do that 
was to decrease the risk to lenders. The higher guarantee also 
helped banks address concerns about a lack of liquidity and 
mounting pressure from regulators to reduce exposure. 
Additionally, under the Recovery Act, the SBA was authorized to 
temporarily eliminate or reduce as much as possible the fees 
for participants of the 7(a) program and to completely 
eliminate the fees for borrowers and the first-lien lenders in 
the 504 loan program through September 30, 2010. For the fees 
on the 7(a) loan program, the authority to reduce or eliminate 
fees was intended for borrowers and lenders, with priority 
going first to borrowers, then smallest lenders and then all 
other lenders. However, upon implementation, the fee for 7(a) 
lenders was not reduced or eliminated and the fees for 
borrowers were completely eliminated.
    Another aspect to jumpstarting lending to small businesses 
was to address cost; many small businesses, like the lenders, 
were risk-averse given the uncertainty of the economy and were 
hoarding cash. Eliminating the fees for the borrowers provided 
an incentive to go ahead with a loan because they could save 
thousands of dollars and maintain a better cash flow. 
Eliminating the fee for the first lien-lender in the 504 
package provided incentive for banks to make loans because it 
helped address some of their cost issues.
    SBA's 504 loan program guarantees loans to small businesses 
for real estate, machinery, or equipment through a combination 
of Certified Development Companies (CDCs), private lenders 
(first-lien lenders) and equity from the borrowers. To help 
small businesses survive the recession and beyond by reducing 
their costs, the Recovery Act gave the SBA permanent authority 
to refinance existing business loans as part of a new CDC/504 
loan for businesses looking to expand and current on payments. 
Prior law prohibited the use of CDC/504 loans to refinance 
existing debt, but the need was clear to make the change in 
order to reduce costs for businesses by refinancing that debt 
through 504 loans with low interest rates fixed for up to 20 
years. The Act also amended the 504 loan program to update its 
job creation requirements from one job to each $50,000 loaned 
to one job to each $65,000.
    To help address the frozen secondary markets for SBA loans, 
the Recovery Act created two new programs. One program 
authorized the SBA for two years to guarantee the non-
guaranteed loan portion of CDC/504 loan pools that are sold to 
third-party investors. The other program authorized the SBA to 
make loans for two years to broker-deals who were considered 
systemically important to the operation of the secondary market 
for SBA loans. The secondary market loans to the vital broker-
dealers could be used for financing the inventory of the 
government-guaranteed portion of the SBA loans in order to 
address the lack of equity broker-dealers had to buy the pools.
    To help increase access to venture capital, the Recovery 
Act updated the Small Business Investment Company (SBIC) 
debenture program by increasing the maximum of leverage allowed 
per SBIC, or multiple SBICs under common control. In both 
cases, the amounts allowed were more generous for SBICs 
investing 50 percent or more of their funds in businesses in 
low-income areas in order to encourage investments where it is 
hard to attract capital. This served to enhance small business 
access to venture capital by stimulating and supplementing the 
flow of private equity capital and long term loan funds which 
small business concerns need for the sound financing of their 
business operations and for their growth, expansion, and 
modernization, and which were not available in adequate supply.
    For non-lending programs, the Recovery Act included 
additional resources to expand the SBA's surety bond guarantees 
and small business contracting opportunities. Surety bonds 
provide insurance that contract work will be performed for the 
issuers of the contracts. Payment and performance bonds are 
required for general contractors on all Federal government 
construction projects of more than $100,000. The Recovery Act 
gave the SBA the opportunity to temporarily increase the 
contract ceiling in place for its Guaranteed Surety Bond 
program to help small businesses compete for contracts up to $5 
million and, in some cases, contracts of $10 million.
    In addition to SBA lending provisions, the Recovery Act 
included several important tax provisions to benefit small 
businesses as well. Normally, when a company converts from a C 
corporation to an S corporation, it must retain its assets for 
at least 10 years or pay a 35 percent tax on the built-in gains 
that occurred before the company made the conversion. The 
Recovery Act reduced the holding period to seven years for 
assets sold in 2009 and 2010. Additionally, the bill allowed 
small businesses to write off up to $250,000 of qualified 
investment for 2009, providing an immediate tax incentive to 
invest and create jobs.

Extensions of the Small Business Provisions of the Recovery Act

    The Recovery Act's 90-percent guarantee for lenders and the 
fee waiver for borrowers of 7(a) loans, as well as the fee 
waivers for borrowers and first-lien lenders of 504 loans, 
proved so effective at jumpstarting lending to small businesses 
that they were extended six (6) times. By the end of 2010, the 
authority and funding had leveraged more than $42 billion to 
about 90,000 businesses.
    The Department of Defense Appropriations Act, 2010 (P.L. 
111-118), enacted on December 19, 2009, appropriated an 
additional $125 million to extend the higher guarantee and fee 
waivers through February 28, 2010. The Temporary Extension Act 
of 2010 (P.L. 111-144), enacted on March 2, 2010, extended the 
provisions through March 28, 2010, and provided $60 million for 
the initiatives. P.L. 111-150, an Act to Extend the Small 
Business Loan Guarantee Program, enacted on March 26, 2010, 
extended the modifications through April 30, 2010, and provided 
authority to use $40 million of existing SBA loan funds to 
carry them out. Under the Continuing Extension Act of 2010 
(P.L. 111-157), enacted on April 15, 2010, the provisions were 
provided $80 million and extended through May 31, 2010. The 
Small Business Jobs Act (P.L. 111-240), enacted on September 
27, 2010, extended the guarantee modification and fee 
reductions through the end of 2010 and provided $505 million 
towards the extension of these programs, with an additional $5 
million provided towards administrative fees. The Continuing 
Appropriations and Surface Transportation Extensions Act of 
2011 (P.L. 111-322), enacted December 22, 2010, extended the 
provisions and authority to use unspent money from December 31, 
2010, through March 4, 2011, or until the exhaustion of funds.

Oversight Hearings

    On May 13, 2009, the Committee held a Hearing titled 
``Small Business Financing: Progress Report on Recovery Act 
Implementation and Alternative Sources of Financing.'' The 
purpose of the hearing was to provide focus on the 
Administration's progress in implementing the small business 
provisions of the Recovery Act, as well as the role and 
importance of alternative sources of small business financing 
during the credit crisis. Participants included the SBA 
Administrator, as well as representatives of organizations that 
provide small businesses with alternative sources of capital--
credit card companies, microlenders, and credit unions.
    On October 1, 2009, the Committee held a Roundtable titled 
``Reauthorization of SBA Finance Programs and the Impact of the 
Small Business Provisions in the Recovery Act.'' The purpose of 
the hearing was to provide a record for a reauthorization of 
the finance programs administered by the Small Business 
Administration and provide for oversight of the small business 
provisions in the Recovery Act. Participants included 
representatives from the Small Business Administration, the 
National Association of Government Guaranteed Lenders, and 
Community Development Centers.

Additional Oversight

    On June 25, 2009, Chair Landrieu and Ranking Member Snowe 
sent a letter to SBA Administrator Karen Mills requesting that 
the SBA do more to utilize the SBIC program. In the letter, 
Chair Landrieu and Ranking Member Snowe cited the importance of 
SBICs in helping small businesses obtain financing and 
expressed concern about the fact that only $650.3 million of 
SBIC debentures were utilized, out of an available $3 billion 
in program level for fiscal year 2008. Additionally, Chair 
Landrieu and Ranking Member Snowe urged Administrator Mills to 
fully implement the SBIC provisions enacted as part of the 
Recovery Act. On July 30, 2009, Administrator Mills issued an 
official response letter, expressing her shared concern about 
the under-utilization of the SBIC program. Additionally, 
Administrator Mills pointed to the recently published guidance 
for implementation of the SBIC provisions within the Recovery 
Act and assured Chair Landrieu and Ranking Member Snowe that 
the SBA intended to fully implement those provisions.
    On May 24, 2010, Chair Landrieu and Ranking Member Snowe 
sent a letter to SBA Administrator Karen Mills requesting that 
the SBA provide additional information regarding the SBA's 
Microloan Program, specifically funding that was provided 
through the Recovery Act. In the letter, Chair Landrieu and 
Ranking Member Snowe expressed concern that the $24 million in 
funding provided by the Recovery Act for Microloan marketing, 
management, and technical assistance grants had to be used by 
September 30, 2010. The letter also addressed Chair Landrieu's 
and Ranking Member Snowe's concern that President Obama's 
Fiscal Year (FY) 2011 budget reduced funding for the SBA 
Microloan program from its FY 2010 appropriated level of $25 
million to $13.8 million, while at the same time, the SBA 
planned to bring 30 new lending intermediaries into the 
program. On June 3, 2009, Administrator Mills issued an 
official response letter, expressing her belief that the SBA 
was on track to obligate all Microloan marketing, management, 
and technical assistance Recovery Act funds before the end of 
the fiscal year and that those funds would be accessed through 
September 30, 2012.

                       B. SMALL BUSINESS JOBS ACT

    On September 27, 2010, President Obama signed into law a 
comprehensive and important piece of small business 
legislation, the Small Business Jobs Act (P.L. 111-240) (SBJA). 
The bill contained provisions impacting a number of departments 
and agencies, all aimed at helping small businesses obtain the 
necessary capital and other resources they need to grow and 
expand, as well as providing billions in tax relief. Many of 
the provisions had been included in legislation previously 
introduced by Chair Landrieu, Ranking Member Snowe, and other 
members of the Committee throughout the course of the 111th 
Congress.

Access to Capital Provisions

    The Small Business Jobs Act included numerous provisions 
aimed at expanding SBA's capacity to assist small businesses 
with access to capital and credit. Specifically, the bill 
increased 7(a) loan limits, from $2 million to $5 million; 504 
loan limits, from $1.5 million to $5.5 million; and microloan 
limits, from $35,000 to $50,000. It also increased the 7(a) 
Express Loan limits, from $300,000 to $1 million, to increase 
working capital to small businesses. Additionally, the bill 
included an Intermediary Lending Pilot program, which allows 
the SBA to make direct loans to eligible intermediaries, in 
turn allowing them to make loans to new or growing small 
businesses. The bill also extended the increase in 7(a) loan 
guarantees and elimination of borrower fees that were 
originally included in the Recovery Act. Many of these 
provisions were included in the Small Business Jobs Creation 
and Access to Capital Act (S. 2869), introduced by Chair 
Landrieu and Ranking Member Snowe earlier in the Congress.
    While many of the access to capital provisions were focused 
on the SBA's lending programs, there were several provisions 
that also focused on efforts through the Department of the 
Treasury. Specifically, the bill created a State Small Business 
Credit Initiative (SSBCI), which provided $1.5 billion in 
grants to states to support small business lending programs. 
Additionally, the bill created a $30 billion fund to encourage 
small business lending by banks with less than $10 billion in 
assets. The Small Business Lending Fund (SBLF) allows the 
Department of the Treasury to purchase preferred stock from 
eligible financial institutions.
    The SBLF was designed to provide additional incentives to 
lenders to increase their lending to small businesses. 
Likewise, the SSBCI helps to support successful state programs 
that help to reduce the cost of borrowing for small businesses, 
which makes it easier for small businesses to obtain the credit 
they need to expand their businesses and create more jobs. 
Though not included in the original bill, these two programs 
were included in an amendment offered by Chair Landrieu and 
agreed upon, by vote, on the Senate floor.

Small Business Tax Provisions

    Recognizing the role that tax incentives play in promoting 
entrepreneurship, the SBJA increased, for 2010, the existing 
deduction for start-up expenditures to $5,000 to $10,000, and 
raised the cap on start-up expenditures that triggers the 
existing phase-out of the deduction from $50,000 to $60,000. 
The SBJA also temporarily increased the first-year write-off 
for qualifying business equipment, under Section 179 of the tax 
code, from $250,000 to $500,000 and raised the cap on eligible 
expenditures that triggers a phase-out of the incentive from 
$800,000 to $2 million. Additionally, the bill expanded the 
scope of Section 179 to include improvements to some real 
property--specifically, qualified leasehold improvement 
property, qualified restaurant property, and qualified retail 
improvement property.
    The SBJA also temporarily increased, from 75 percent to 100 
percent, the capital gains exclusion for stock issued by small 
business corporations with less than $50 million of gross 
assets from September 27, 2010 through December 31, 2010. 
Qualified small business stock must be held for five years and 
the gain is 10 times the original investment or $10 million, 
whichever is greater. Moreover, the Act provided the exclusion 
would not be subject to the alternative minimum tax.
    To help make healthcare more affordable for the self-
employed, for the first time, the bill allowed self-employed 
business owners to deduct their family's health insurance 
expenses for purposes of the Self-Employment Contributions Act 
(i.e., payroll tax purposes) for the 2010 taxable year. Many 
self-employed individuals must purchase health insurance in the 
individual market, at a much higher cost than the cost of the 
same coverage in the small- or large-group market, and those 
who cannot afford to purchase their own insurance must simply 
go without. Earlier in the Congress, Chair Landrieu filed an 
amendment to the Patient Protection and Affordable Care Act 
(H.R. 3590) that contained an expanded version of this 
provision.
    Other tax provisions of the SBJA expanded and extended 
certain small business tax provisions originally included in 
the Recovery Act including shortening the S-Corp holding period 
from seven years to five years, if the 5th taxable year in the 
holding period precedes the taxable year beginning in 2011, and 
extending, through 2010, the generous 50-percent first-year 
bonus depreciation for certain depreciable property. Also, the 
bill extended the 1-year carryback for general business credits 
to 5 years for certain small businesses including those sole 
proprietorships, partnerships and non-publicly traded 
corporations with $50 million or less in average annual gross 
receipts for the prior three years, and provided that for these 
small businesses, general business credits may be used against 
an alternative minimum tax liability.
    Finally, the SBJA made critical fixes to the Internal 
Revenue Code to limit the penalties small businesses face when 
they fail to disclose reportable transactions to the IRS and 
``delist'' cell phones so that employers can deduct or 
depreciate the cost of cell phones and blackberries provided to 
employees without having to comply with burdensome 
recordkeeping requirements.

Small Business Trade and Exporting Provisions

    Recognizing that less than one percent of small businesses 
currently export, and the potential for economic growth in 
small business trade and exporting, the Small Business Jobs Act 
contained a number of provisions to expand trade and export 
opportunities for small businesses. Specifically, the bill 
elevated and enlarges the SBA's Office of International Trade, 
which was greatly diminished during the previous 
administration, and added export finance specialists to the 
agency's small business counseling programs across the country. 
The bill permanently increased the maximum size of 
international trade finance loans to $4.5 million, and the 
guarantee to 90 percent, as well as broadened opportunities for 
financing under export loan programs. The bill also established 
a grant program to states to promote small-business exports and 
authorized $5 million to finance United States trade 
representative activities to open markets and enforce trade 
agreements. Additionally, it increased funding for the 
Department of Commerce's export activities, with an emphasis on 
small- and medium-sized businesses--including a provision that 
added the potential for exports to the list of considerations 
for manufacturing and technology grants.

Other SBA Provisions

    The bill included several provisions focused on making it 
easier for small businesses to win federal contracts and 
leveling the playing field with larger businesses in competing 
for government contracts. Specifically, the bill restricted the 
government's ability to bundle contracts and created a pilot 
program to help small businesses band together to bid jointly 
on contracts. To help prevent larger businesses from obtaining 
contracts designated for small businesses, the bill requires 
contractors to certify that they are small annually rather than 
every five years as presently required. Additionally, the bill 
required the SBA to review the size standards that determine 
whether a business is small, for federal contracting purposes, 
at least every five years, potentially increasing the pool of 
small businesses eligible to compete for government contracts. 
The bill also removed the priority that one contracting program 
has over another, making it clear that no single restricted 
competition program has priority over another.
    To help expand the SBA's capacity to help small businesses 
take advantage of the initiatives contained in the bill, it 
included additional funding for Small Business Development 
Centers (SBDCs), which provide free counseling and technical 
assistance services to small business owners and entrepreneurs 
nationwide. The bill also provided necessary relief to SBA 
resource partners having difficulty obtaining the share of non-
federal matching funds required in order to receive federal 
funds. Specifically, the bill provided the SBA Administrator 
authority to temporarily waive or reduce the match requirements 
for eligible Women's Business Centers and Microloan 
intermediaries in certain circumstances.
    Other provisions of the bill included allowing the SBA to 
make Economic Injury Disaster Loans (EIDL) to aquaculture 
businesses, which were previously excluded by the agency from 
obtaining these loans. Additionally, the bill strengthened the 
Regulatory Flexibility Act by requiring agencies to respond to 
the SBA Chief Counsel of Advocacy's comments received upon 
issuance of a final rule by another Department or Agency.

Hearings

    On January 29, 2009, the Committee held a Roundtable titled 
``Investing in Small Business: Jumpstarting Engines of Our 
Economy.'' The purpose of the roundtable was to take a broad 
look at small businesses in the economy, including ways the 
federal government can act as a supportive and effective 
partner in the growth and success of small businesses, helping 
them keep and create new jobs. Participants included 
representatives from the small-business community, including 
small business owners and representatives from relevant small 
business organizations and trade associations.
    On August 12, 2009, the Committee held a Field Hearing in 
Portsmouth, New Hampshire, titled ``Small Business Survival, 
Weathering the Economy, Creating Jobs, and What the SBA Can Do 
To Assist.'' The purpose of the field hearing was to take a 
look at how small businesses were weathering the economy, and 
what the Small Business Administration could do to assist. 
Participants included the SBA Administrator, as well as leaders 
in small business lending, small manufacturing, tourism, start-
up companies, and exporting.

Oversight

    On September 30, 2010, Senator Mark Warner and Chair 
Landrieu, along with Senators George LeMieux, Claire McCaskill, 
Evan Bayh, Blanche Lincoln, Michael Bennet, Debbie Stabenow, 
Kay Hagan, and Mark Begich, sent a letter to Federal Reserve 
Chairman Ben Bernanke, Federal Deposit Insurance Corporation 
Chairman Sheila Bair, Acting Comptroller of the Currency John 
Walsh, and National Credit Union Administration Chairman 
Deborah Matz advocating for a balanced approach to supporting 
small business lending as those agencies continued to provide 
necessary oversight of financial institutions. In the letter, 
the Senators cited concerns that excessive tightening and 
regulation of financial institutions could unduly curtail small 
business credit in the economic crisis and could impede or 
prevent recovery. The letter also referred to the importance of 
the newly passed Small Business Jobs Act, and asked that the 
examination staff in the appropriate agencies give ample 
consideration and help facilitate full utilization of the 
lending programs provided in the Act. Furthermore, the letter 
asked the agencies to continue to provide guidance to 
supervisory staff with regard to loan portfolios and, in 
particular, small business loans and loan workouts.
    On October 25, 2010, Acting Comptroller of the Currency 
Walsh issued an official response letter recognizing the vital 
role that small and medium-sized businesses play in the 
nation's economy and the need for those businesses to have 
access to credit. Acting Comptroller Walsh cited that the OCC 
and other federal banking regulators reiterated their 
expectations to bankers to make prudent loans to creditworthy 
borrowers. Additionally, Acting Comptroller Walsh cited the 
agencies' October 2009 policy statement which directs that 
financial institutions that implement prudent loan workout 
arrangements after performing a comprehensive review of a 
borrower's financial condition would not be subject to examiner 
criticism for engaging in those efforts, even if the 
restructured loans have weaknesses that result in adverse 
credit classification. Likewise, Acting Comptroller Walsh cited 
the agencies' February 2010 policy statement on meeting the 
needs of small business borrowers reinforced the need for 
examiners to take a balanced approach in assessing a bank's 
risk management and small business lending practices.

                 III. Small Business Health Care Reform

    One of the single biggest, most pressing issues facing the 
country heading into the 111th Congress was the rising costs of 
health care. According to the Kaiser Family Foundation, 
expenditures in the United States on health care surpassed $2.3 
trillion in 2008, more than three times the $714 billion spent 
in 1990, and over eight times the $253 billion spent in 1980. 
Additionally, in 2009, health care spending represented 17.3 
percent of the nation's Gross Domestic Product (GDP), an 
increase of 1.1 percent from 2008, representing the biggest 
yearly expansion of health care's share of the economy since 
1960, when the federal government began tracking costs. Without 
reform, some economists estimated that health care spending 
would nearly double by 2019.
    For small businesses, these costs are a tremendous obstacle 
to growth, as many small business owners simply cannot afford 
to provide coverage to their employees, and those that are able 
to provide coverage struggle under rising premium costs. 
According to the Kaiser Family Foundation, over the past 
decade, the percentage of smaller firms offering coverage fell 
from 65 percent to 59 percent, and the average annual family 
premiums for workers at small firms increased by 123 percent. 
Contributing to these costs are a lack of choice and a lack of 
competition in the health insurance market. According to the 
Government Accountability Office (GAO), private insurance 
companies are continuing to consolidate in the small group 
market, with the five largest insurers controlling a majority 
of the marketplace. Additionally, by some estimates, without 
reform, small businesses would go from spending $156 billion to 
$2.4 trillion over the next 10 years, and 178,000 small 
business jobs would be lost due to the high cost of health 
care.
    For these reasons, stemming the projected and ongoing 
accelerated rise of health care costs became a major policy 
priority in the 111th Congress, as the government, employers, 
and consumers increasingly struggled to keep coverage. On 
December 24, 2009, the Senate passed the Patient Protection and 
Affordable Care Act (H.R. 3590), the most expansive social 
legislation to be passed by the Senate in decades. The historic 
health care reform law, now referred to as the Affordable Care 
Act (ACA), was the result of months of intense congressional 
discussion, committee and floor action, and debate. The bill 
was signed by President Barack H. Obama on March 23, 2010, and 
enrolled as Public Law 111-148.

                              A. HEARINGS

Roundtable: ``Healthcare Reform: The Concerns and Priorities From the 
        Perspective of Small Businesses''

    On July 9, 2009, the Committee held a Roundtable titled 
``Healthcare Reform: The Concerns and Priorities from the 
Perspective of Small Businesses.'' The purpose of the 
roundtable was to discuss obstacles in accessing and providing 
affordable healthcare coverage and potential solutions in 
healthcare reform as it relates to small businesses. The 
roundtable served as an opportunity to hear from participants 
about their ideas of what successful healthcare reform 
legislation should include. Participants included various 
representatives of small business groups, small business owners 
and experts in healthcare policy, including Small Business 
Majority, the National Association for the Self-Employed 
(NASE), the National Federation of Independent Business (NFIB), 
the U.S. Hispanic Chamber of Commerce, the National Small 
Business Association (NSBA), the New America Foundation, the 
National Association of Realtors, Women Impacting Public Policy 
(WIPP), as well as U.S. Senator Ron Wyden.
    During the roundtable, Mr. John Arensmeyer, Founder and CEO 
of Small Business Majority, discussed the impact of reform in 
reducing costs of healthcare for small businesses, citing 
statistics from the organization's recent report stating that, 
without reform, 178,000 small business jobs would be lost by 
2018 as result of healthcare costs. Additionally, Mr. 
Arensmeyer stated that over the next ten years, without reform, 
$834 billion in small business wages would be lost due to high 
healthcare costs. Other participants endorsed the use of small 
business exchanges to purchase health care coverage as a way of 
lowering healthcare costs for small businesses. Many 
participants expressed concern of the inclusion of an employer 
mandate to provide coverage in healthcare reform legislation. 
Many of the recommendations made by the roundtable participants 
were included in provisions of the final legislation signed 
into law, and based on previous legislation introduced by 
Ranking Member Snowe in earlier Congresses.

Hearing: ``Reform Done Right: Sensible Healthcare Solutions for 
        America's Small Businesses''

    On October 20, 2009, the Committee held a hearing titled 
``Reform Done Right: Sensible Healthcare Solutions for 
America's Small Businesses.'' The purpose of the hearing was to 
gain a better understanding of the needs and concerns of small 
businesses in health care reform debate and to examine whether 
proposals under consideration met those needs. Witnesses on the 
first panel of the hearing included SBA Administrator Karen 
Mills and Mr. Gene Sperling, then Counselor to the Secretary at 
the U.S. Department of the Treasury, and witnesses in the 
second panel included representatives from Small Business 
Majority, NSBA, the NFIB, The Heritage Foundation and WIPP.
    Witnesses in both panels testified as to the need for 
Congress to address the spiraling costs of healthcare for small 
businesses, and for Congress to keep small business interests 
in mind when crafting healthcare reform legislation. In the 
first panel, Mr. Sperling provided important testimony 
outlining the ways in which the various healthcare reform bills 
before Congress addressed the obstacles facing small businesses 
in providing coverage. In the second panel, testimony provided 
by Mr. John Arensmeyer, Founder and CEO of Small Business 
Majority, supported Mr. Sperling's assertions as to the ways in 
which the healthcare reform bills before Congress addressed 
small business healthcare affordability issues. Additionally, 
in the second panel, Mr. Keith A. Ashmus, Chairman and Board 
Member of the NSBA, Ms. Amanda Austin, Director of Federal 
Public Policy-Senate at the NFIB, and Ms. Ann Sullivan, with 
WIPP, also gave additional recommendations as to ways Congress 
could improve the healthcare reform legislation before it, 
including allowing the self-employed to deduct the cost of 
their healthcare premiums as a business expense for payroll tax 
purposes.

                             B. LEGISLATION

    As the Senate debated the ACA, Chair Landrieu, along with 
other members of the Senate, offered critical improvements on 
behalf of small businesses to the bills Congress considered. 
The Committee, on behalf of Chair Landrieu, organized these 
improvements as a ``Small Business Package'' and provided these 
suggestions to Senate leadership and Senators responsible for 
managing the Affordable Care Act through the legislative 
process.

S. AMDT #3005 to the ACA (H.R. 3590)

    On December 8, 2009, Chair Landrieu filed an amendment to 
clarify that all of SBA resource partners, including Small 
Business Development Centers, Women's Business Centers, 
Veterans' Business Centers, SCORE and others, would be eligible 
to participate as Navigators, and receive Awareness grants, 
through the Exchanges. The bi-partisan amendment was co-
sponsored by Ranking Member Snowe and Small Business Committee 
members Jeanne Shaheen and Evan Bayh. The amendment was 
included in a manager's amendment, in the form of a substitute 
bill, voted out of the Senate on December 24, 2009, and 
ultimately included in the final legislation signed by the 
President on March 23, 2010.

S. AMDT #3006 to the ACA (H.R. 3590)

    On December 8, 2009, Chair Landrieu filed an amendment to 
expand small business representation on the national workforce 
commission, tasked by the ACA with gathering information on the 
health care workforce to better coordinate and implement 
workforce planning and analysis, and to ensure small healthcare 
businesses will have an adequate voice on the commission. The 
bi-partisan amendment was co-sponsored by Ranking Member Snowe 
and Small Business Committee members Jeanne Shaheen and Evan 
Bayh. The amendment was included in a manager's amendment, in 
the form of a substitute bill, voted out of the Senate on 
December 24, 2009, and ultimately included in the final 
legislation signed by the President on March 23, 2010.

S. AMDT #3007 to the ACA (H.R. 3590)

    On December 8, 2009, Chair Landrieu filed an amendment 
requiring the GAO to specifically review the impact of 
exchanges on the affordability and access of healthcare for 
small businesses. The bi-partisan amendment was co-sponsored by 
Ranking Member Snowe and Small Business Committee members 
Jeanne Shaheen and Evan Bayh. The amendment was included in a 
manager's amendment, in the form of a substitute bill, voted 
out of the Senate on December 24, 2009, and ultimately included 
in the final legislation signed by the President on March 23, 
2010.

S. AMDT #3008 to the ACA (H.R. 3590)

    On December 8, 2009, Chair Landrieu filed an amendment 
clearly stating that agencies cannot waive the Federal 
Acquisition Regulation, which requires them to report small 
business contracting awards and meet small business contracting 
goals of 23 percent, in implementing the ACA. The bi-partisan 
amendment was co-sponsored by Ranking Member Snowe and Small 
Business Committee member Jeanne Shaheen. The amendment was 
included in a manager's amendment, in the form of a substitute 
bill, voted out of the Senate on December 24, 2009, and 
ultimately included in the final legislation signed by the 
President on March 23, 2010.

S. AMDT #3010 to the ACA (H.R. 3590)

    The ACA, as it was introduced in the Senate, established an 
internet portal for individuals to easily access information 
regarding affordable healthcare coverage options. On December 
8, 2009, Chair Landrieu filed an amendment to expand the 
information provided through the portal to include information 
for small businesses on available healthcare options, including 
information regarding re-insurance for early retirees, small 
business tax credits, and other information specifically for 
small businesses regarding affordable healthcare options. The 
bi-partisan amendment was co-sponsored by Ranking Member Snowe, 
Assistant Majority Leader Richard Durbin, Small Business 
Committee members Jeanne Shaheen and Evan Bayh, and Senator 
Blanche Lincoln. The amendment was included in a manager's 
amendment, in the form of a substitute bill, voted out of the 
Senate on December 24, 2009, and ultimately included in the 
final legislation signed by the President on March 23, 2010.

S. AMDT #3011 to the ACA (H.R. 3590)

    Originally, the ACA, as introduced in the Senate, imposed a 
fee on businesses with more than 50 employees for waiting 
longer than 30 days before offering coverage to its employees 
into the business's healthcare plans. For waiting periods 
longer than 30 days, but less than 60 days, the bill imposed a 
fee of $400 per employee in the waiting period; and for waiting 
periods in excess of 60 days, but less than 90 days, the bill 
imposed a penalty of $600 per employee. On December 8, 2009, 
Chair Landrieu filed an amendment to eliminate any fee for 
waiting periods of less than 90 days, which would relieve some 
of the administrative burden and costs, particularly for 
businesses with high employee turnover, associated with 
enrolling employees into plans before there is sufficient time 
to determine whether the employee will stay employed with the 
business.
    The bi-partisan amendment was co-sponsored by Ranking 
Member Snowe, Small Business Committee members Jeanne Shaheen, 
Evan Bayh and Roger Wicker, and Senators Blanche Lincoln, Mark 
Warner, and Bill Nelson. A modified form of the amendment was 
included in a manager's amendment, in the form of a substitute 
bill, voted out of the Senate on December 24, 2009, and the 
original amendment was included, as filed, in the final 
legislation signed by the President on March 23, 2010.

S. AMDT #3013 to the ACA (H.R. 3590)

    On December 8, 2009, Chair Landrieu filed an amendment to 
allow the self-employed a 50 percent deduction of their health 
insurance costs as an ordinary business expense for payroll tax 
purposes. The amendment was a modified version of the proposal 
included in the Equity for Our Nation's Self Employed Act of 
2009 (S. 725), a bill introduced by Senator Jeff Bingaman and 
Sen. Orrin Hatch, and co-sponsored by Chair Landrieu. The 
amendment was co-sponsored by Small Business Committee members 
Jeanne Shaheen and Evan Bayh, as well as Senators Debbie 
Stabenow and Blanche Lincoln. Though the amendment was not 
included in the ACA, a modified version of the provisions 
included in the amendment was included in the Small Business 
Jobs Act (P.L. 111-240).

S. AMDT #3014 to the ACA (H.R. 3590)

    To help small businesses bridge the affordability gap they 
face in providing health insurance to their employees, the ACA 
provided, beginning in 2011, a sliding scale tax credit for 
small businesses with 25 employees or less with average annual 
wages of less than $40,000. In an effort to make healthcare 
coverage even more affordable for small businesses, on December 
8, 2009, Chair Landrieu filed an amendment to accelerate the 
availability of the credit for small businesses to 2010, rather 
than 2011. The amendment was co-sponsored by Small Business 
Committee members Jeanne Shaheen and Evan Bayh, as well as 
Senators Debbie Stabenow, Blanche Lincoln and Barbara Boxer. 
The amendment was included in a manager's amendment, in the 
form of a substitute bill, voted out of the Senate on December 
24, 2009, and ultimately included in the final legislation 
signed by the President on March 23, 2010.

S. AMDT #3085 to the ACA (H.R. 3590)

    The Affordable Care Act, as introduced, provided a sliding 
scale tax credit targeted to small businesses with fewer than 
25 employees with average annual wages of less than $40,000, to 
help small businesses in providing coverage to their employees, 
with the full credit available to small businesses with 10 
employees or less with average annual wages of $20,000 or less. 
On December 9, 2009, Senator Blanche Lincoln filed an amendment 
to expand the tax credit available under the ACA to make the 
full credit available to small businesses with 10 employees or 
less with average annual wages of less than $25,000, rather 
than the $20,000 ceiling included in the original bill. The 
amendment was co-sponsored by Assistant Majority Leader Richard 
Durbin, Small Business Committee member and former Chair John 
Kerry, Chair Landrieu, Senator Debbie Stabenow and Senator 
Barbara Boxer. The amendment was included as filed in a 
manager's amendment, in the form of a substitute bill, voted 
out of the Senate on December 24, 2009, and ultimately included 
in the final legislation signed by the President on March 23, 
2010.

S. AMDT #3112 to the ACA (H.R. 3590)

    On December 9, 2009, Small Business Committee member Maria 
Cantwell filed an amendment to modify the definition of a full-
time employee to be calculated over 390 hours per calendar 
quarter (13 weeks) rather than 30 hours per week as included in 
the ACA. The bi-partisan amendment was co-sponsored by Chair 
Landrieu, Ranking Member Snowe, and Senators Debbie Stabenow, 
Bill Nelson and Mark Warner. A modified form of the amendment, 
clarifying that a full-time employee is an employee that works 
on average at least 30 hours as calculated over a monthly 
basis, was included in a manager's amendment, in the form of a 
substitute bill, voted out of the Senate on December 24, 2009, 
and ultimately included in the final legislation signed by the 
President on March 23, 2010.

            IV. Small Business Access to Capital and Credit


                             A. LEGISLATION

Small Business Job Creation and Access to Capital Act of 2009 (S. 2869)

    On December 10, 2009, Chair Landrieu, along with Ranking 
Member Snowe, introduced the Small Business Job Creation and 
Access to Capital Act of 2009 (S. 2869), aimed at increasing 
small business access to capital. Specifically, the bill 
increases the maximum amount a borrower can borrow through the 
agency's 7(a), 504 and microloan programs. Additionally, the 
bill allows the 504 loan program to refinance short-term 
commercial real estate debt into long-term, fixed rate loans, 
and directs the SBA to create a website where small businesses 
can identify lenders in their communities. Finally, the bill 
extends the provisions of the Recovery Act which authorize the 
SBA to provide 90 percent guarantees on 7(a) loans and 
eliminate borrower fees on 7(a) and 504 loans through December 
31, 2010.
    In preparing to introduce this legislation, the Committee 
held a series of hearings, meetings and roundtables analyzing 
the SBA's loan programs and heard from small businesses and 
small business lenders on increasing the maximum loan sizes on 
7(a), 504 and microloans. The legislation builds upon the Small 
Business Lending Reauthorization and Improvement Act of 2007 
(S. 1256), which was introduced by Senator Kerry on May 1, 
2007, and addressed increasing 7(a) and 504 loan limits; and 
the Small Business Lending Market Stabilization Act of 2008 (S. 
3596), which was introduced by Senator Kerry on September 25, 
2008, and addressed lowering of SBA fees and refinancing debt 
through the 504 program. The bill also builds upon provisions 
included in the Small Business Access to Capital Act of 2009 
(S. 1832), introduced by Chair Landrieu on October 21, 2009, as 
well as the Next Step for Main Street Credit Availability Act 
of 2009 (S. 1615) and the 10 Steps for a Main Street Economic 
Recovery Act (S. 3705) introduced by Ranking Member Snowe on 
August 6, 2009 and November 19, 2008, respectively.
    On December 17, 2009, the Committee held a mark-up of S. 
2869, and the bill was reported out of Committee by a vote of 
17-1, with one member absent. During the markup of the bill, 
the Committee adopted a Manager's Amendment that included a 
modified amendment submitted by Senator Levin and a modified 
amendment submitted by Senator Thune. The vote on the Manager's 
amendment was adopted as part of the en bloc vote on the 
amendment and final passage of the bill.

                              B. HEARINGS

Hearing: ``Perspectives from Main Street on Small Business Lending''

    On March 19, 2009, the Committee held a Hearing titled 
``Perspectives from Main Street on Small Business Lending.'' 
The purpose of the hearing was to determine whether and to what 
extent small business owners were having trouble accessing 
credit, as well as whether and to what extent large banks and 
community banks were reducing small business lending. 
Participants included representatives from the small-business 
community as well as senior executives from large banks and 
community banks.

Roundtable: ``The State of Small Business Lending: Identifying 
        Obstacles and Exploring Solutions''

    On June 8, 2010, the Committee held a Roundtable titled 
``The State of Small Business Lending: Identifying Obstacles 
and Exploring Solutions.'' The purpose of the roundtable was to 
provide a record examining small business lending obstacles and 
the need for a small business jobs package in Congress. 
Participants included representatives from the Small Business 
Administration, the Federal Deposit Insurance Corporation, two 
community banks, as well as representatives from the small-
business community.

Roundtable: ``Small Business Access to Capital: Challenges Presented by 
        Commercial Real Estate''

    On November 17, 2010, the Committee held a Roundtable 
titled ``Small Business Access to Capital: Challenges Presented 
by Commercial Real Estate.'' The purpose of the roundtable was 
to take a broad look at the problem of commercial real estate 
hampering banks' ability to lend to small businesses. At issue 
was the approximately $1.4 trillion of commercial real estate 
debt that will need to be refinanced through 2014. Because of 
decreased property values, many borrowers will be unable to 
refinance their debt. Participants included Congressman Walt 
Minnick, representatives from the National Multi Family Housing 
Council, the Financial Services Roundtable, the Real Estate 
Roundtable, two community banks, a commercial real estate 
broker, and a senior executive from the commercial mortgage 
backed securities industry.

                              C. OVERSIGHT

    On October 8, 2010, Senator Bennet and Chair Landrieu sent 
a letter to SBA Administrator Karen Mills requesting that the 
SBA issue licenses to a limited group of mission-driven, small 
business lending companies (SBLCs) to participate in the SBA's 
7(a) program. In the letter, Senator Bennet and Chair Landrieu 
cited how over the last several years, non-traditional lenders, 
such as Community Development Financial Institutions (CDFIs), 
have increasingly become a critical source of capital for small 
businesses. The Letter also stated that in many cases, non-
traditional, mission driven lenders had stepped in to provide 
credit in communities where conventional lenders had pulled 
back. Senator Bennet and Chair Landrieu urged Administrator 
Mills that the SBA should award up to twelve new SBLC licenses 
on a competitive basis to mission-driven lenders, so those 
lenders could participate in the SBA's 7(a) guaranteed loan 
program. The Committee is currently awaiting a response from 
Administrator Mills.

        V. SBA Disaster Assistance and Disaster Recovery Issues

    While the U.S. Small Business Administration (SBA) is 
generally known for its financial support and counseling of 
small businesses, the SBA also plays a key role in assisting 
victims of natural and other declared disasters. In particular, 
the SBA provides disaster assistance through its Disaster Loan 
Program to help homeowners, renters, businesses of all sizes, 
and nonprofits recover from disasters such as hurricanes, 
earthquakes, tornadoes, and manmade attacks. During fiscal year 
2009, 21,780 disaster loans were approved for $1,129,515,400 to 
businesses, homeowners and others affected by disasters. During 
fiscal year 2010, 15,356 disaster loans were approved for 
$574,425,900.
    During the 111th Congress, the Committee held multiple 
hearings on the overall management of the SBA. Testimony at 
these hearings and research by Committee staff showed that the 
disaster loan program continues to provide prompt and effective 
aid to communities hit by disasters. The hearings on the SBA's 
budget revealed that 2008 reforms to SBA's disaster programs 
enacted as part of Public Law 110-246 have significantly 
improved SBA's disaster planning and loan processing abilities 
in recent years. During a March 25, 2009 hearing on the fiscal 
year 2010 Budget Request for the SBA, the Agency testified that 
substantial improvements to the technology, management 
structure, and staffing levels since 2005 have resulted in 
quicker loan processing times. Witnesses from southwest 
Louisiana also testified at a January 29, 2010 Committee 
roundtable that SBA was better prepared and more responsive 
following Hurricanes Gustav and Ike in 2008. Following 
Hurricane Ike, SBA took 5 days to process a home loan, compared 
to 90 days after Hurricanes Katrina and Rita in 2005. For this 
disaster, business loans averaged a little over a week to 
process, compared to the 70 days for the 2005 hurricanes.

             A. SBA DISASTER ASSISTANCE PROGRAMS OVERSIGHT

    On November 16, 2009, as required by Sections 12072 and 
12091 of Public Law 110-246, the SBA submitted three documents 
to the Committee. These documents included: an updated agency 
Disaster Response Plan, an Annual Report on SBA Disaster 
Assistance, and an Annual Report on Federal Disaster 
Contracting. When Hurricane Katrina struck the Gulf Coast in 
August 2005, the SBA's disaster response was guided by a 358-
page set of operating procedures that was overly bureaucratic 
and did not foster effective coordination between SBA 
leadership, field staff, and resource partners. In contrast, 
the Committee notes that the 2009 Disaster Response Plan 
submitted was 53 pages and incorporates many of the new 
programs and requirements from the Public Law 110-246. The 
Annual Report on Disaster Assistance indicated that SBA had up 
to 2,626 staff working on disaster operations for the 2008 
hurricanes (Gustav/Ike) and as of September 2009 the agency had 
1,108 employees. This report also detailed that during fiscal 
year 2009, SBA made 23 improvement projects to the Disaster 
Credit Management System, which is used by the Office of 
Disaster Assistance to process all home and business disaster 
loan applications. SBA also made five improvement projects to 
the Electronic Loan Application (ELA) System, which was 
launched in August 2008 on SBA's website. In FY09, 30 percent 
of all applications received were submitted via ELA. These 
improvements helped to improve the disaster loan process for 
applicants and improve the productivity of the Office of 
Disaster Assistance staff. Lastly, the Annual on Federal 
Disaster Contracting outlined Federal contracting data 
disaster-by-disaster and state-by-state from July 2008 to June 
2009. It included information on total prime contracts awarded 
to small businesses, minority-owned, women-owned, and local 
contractors. SBA indicated that the agency plans to submit this 
report bi-annually to Congress--each January and July for 
disasters within the previous six months.

Hearing: ``Oversight of the SBA Disaster Assistance Program''

    The Committee held an oversight hearing on SBA's Disaster 
Assistance Programs on May 19, 2010. This hearing, which was 
held less than two weeks ahead of the 2010 Atlantic Hurricane 
Season, assessed the SBA's preparedness to respond to 
disasters. During this hearing, the Committee also reviewed 
SBA's progress in implementing 2008 disaster reforms and how 
the agency responded to flooding during 2010 in Rhode Island 
and Tennessee. The Government Accountability Office (GAO) 
testified that out of 26 required disaster reforms from Public 
Law 110-246, SBA had met 15 and partially addressed six. Five 
provisions either required additional appropriations or were 
discretionary so required no action at the time. In general, 
the witness provided testimony that SBA has taken steps and 
continued to make progress in implementing remaining 
requirements. The agency testified that they were on track to 
implement the remaining requirements. For example, for the 
three Guaranteed Disaster Lending Programs (Sections 12083, 
12084, and 12085) included in 110-246, SBA testified it was in 
the process of finalizing timelines to refine subsidy models, 
conduct lender roundtable to inform operating requirements, and 
issue regulations for all three programs.

Small Business Administration Disaster Recovery and Reform Act of 2009 
        (S. 2731)

    Legislatively, Chair Landrieu and Senator Bill Nelson 
introduced S. 2731 on November 5, 2009. The bill would have 
increased SBA's disaster business and homeowner loan limits, 
modified Section 12085 from Public Law 110-246 to create a 
Pioneer Business Recovery Program, and improved SBA disaster 
coordination with the U.S. Department of Commerce (DOC) and 
U.S. Department of Agriculture (USDA) respectively. 
Unfortunately, many of these provisions were not included in 
legislation that was signed into law. However, Section 1501 of 
Public Law 111-240 authorized the SBA to provide Economic 
Injury Disaster Loans to small aquaculture businesses. This 
provision by Chair Landrieu is similar to Section 205 of S. 
2731. Section 1501 addresses a problem where aquaculture 
businesses were excluded from SBA Economic Injury Disaster 
Loans although there was no comparable Federal disaster 
assistance available at other agencies.

          B. GULF COAST RECOVERY FROM THE 2005/2008 HURRICANES

    Federal assistance to small businesses has been and 
continues to be imperative for the Gulf Coast region's economic 
recovery from the 2005 hurricanes. Ahead of the fifth 
anniversary of the 2005 hurricanes, Chair Landrieu and Ranking 
Member Snowe requested that GAO conduct a review of Federal 
disaster assistance provided to small businesses impacted by 
the 2005 hurricanes. This request, sent on June 12th, 2009 
requested a study of Federal assistance to help Gulf Coast 
small businesses recover in the Gulf Coast. On July 29, 2010, 
GAO submitted the final report to the Committee.
    The GAO review covered four states: Texas, Alabama, 
Mississippi, and Louisiana. It specifically targeted four 
Federal programs: U.S. Small Business Administration (SBA) 
disaster business loans; U.S. Department of Housing & Urban 
Development (HUD) Community Development Block Grants (CDBG); 
U.S. Department of Commerce Economic Development Administration 
(EDA) grants; and Federal contracting opportunities. This 
report also covered the current state of/improvement in the 
Gulf Coast economy, with a focus on the small business economy. 
The performance audit was conducted from September 2009 to July 
2010.
    In the report, GAO noted that SBA implemented the Gulf 
Opportunity (GO) Loan Pilot Program in November 2005 to provide 
moderate-sized small business loans for working capital and 
other general-purposes. As part of the program, SBA provided an 
85 percent guaranty to qualified lenders that agreed to make 
expedited loans (under 24 hours) under SBA's 7(a) Loan Program. 
Loans were up to $150,000 and SBA prescribed the maximum 
interest rate lenders can charge (6.5 percentage points over 
the prime rate for loans of $50,000 or less and a maximum of 
4.5 percentage points over the prime rate for loans over 
$50,000). The program was only supposed to last a year but SBA 
extended the program through September 30, 2010. As of March 
30, 2010 of the 1,573 GO Loans made to small businesses, 54 
percent were current and 17 percent were paid in full. The 
default rate for GO Loans to small businesses was 6 percent and 
about 13.4 percent were in delinquent status.
    HUD's Community Development Block Grant Program (CDBG) 
provides flexible grants to States or localities to carry out a 
variety of housing, infrastructure and economic development 
projects. CDBG has routinely been used following Federal 
disasters (floods, hurricanes and terrorist attacks). While the 
CDBG funds provided after Katrina/Rita were also used for 
housing, infrastructure, and other recovery projects, the GAO 
report focused on funds used for small business assistance. 
Following Katrina and Rita, Congress enacted three supplemental 
appropriations between December 2005 and November 2007. From 
these bills, a total of $19.5 billion was made available to 
Alabama, Louisiana, Mississippi, and Texas. Louisiana and 
Mississippi both implemented small business assistance programs 
using CDBG funds.
    Louisiana implemented the following three (3) programs: 
Bridge Loan Program; Business Recovery Grant and Loan Program; 
and Technical Assistance Program. In total, the state had used 
about $179 million in CDBG relief funds as of December 31, 2009 
for these programs. Louisiana used about $5.7 million in CDBG 
relief funds to help 800 businesses with temporary working 
capital bridge loans. The state used about $164 million in 
funds ($67.7 million in grants and $82 million in loans) to 
help over 4,500 small businesses under the Business Recovery 
Grant and Loan Program. Many of these businesses did not 
receive SBA disaster loans and/or needed additional assistance. 
Over 25 percent of small businesses participating in this 
program were in the fishing industry. The default rate for 
these grants/loans was 4.1 percent and about 8.5 percent were 
in delinquent status. Lastly, Louisiana used almost $8.9 
million in CDBG funds to assist about 3,800 small businesses 
with adjusting to post-hurricane conditions through the 
Technical Assistance Program. Over 2,200 of these businesses 
were entrepreneurs or start-up companies looking to open 
businesses in the impacted areas.
    Mississippi implemented one program specifically for small 
businesses, the Hancock County Job Generation Fund Program. The 
program, proposed by the Hancock County Chamber of Commerce, 
was intended to assist the small businesses in Hancock County 
that were hit hard by Katrina. The program offered loans at 2 
percent interest rate to small businesses located in the county 
5 months prior to the storm and which were committed to remain 
there for at least 5 years. Unlike SBA loans or Louisiana's 
loan programs, loans made through this program could be 
converted into forgivable loans if the loan recipient met 
certain requirements. This included purchasing/rehabilitating a 
county building and bringing it up to code and maintaining 
business operations in that building for a minimum of 5 years. 
As of April 2010, 42 small businesses in Hancock County were 
approved for loans under the Hancock County Job Generation Fund 
Program. The state targeted $3 million in CDBG funds for the 
program but at the time of the report no loans have been closed 
as the state was working with HUD on remaining program 
compliance issues.
    In the past, EDA has received supplemental appropriations 
to help areas recover from disasters (either to formulate 
economic recovery strategies or to fund projects that lead to a 
more disaster-resilient regional economy). For Katrina/Rita, 
EDA did not receive a supplemental appropriation but instead 
used existing programs, including the Revolving Loan Fund 
Program (RLF), to assist with small business recovery. Through 
RLF, EDA awards grants on a competitive basis to eligible 
applicants to establish revolving loan funds for small 
businesses or businesses that cannot otherwise borrow capital 
from private lenders. As borrowers repay loans, RLF grantees 
use a portion of interest earned to pay administrative expenses 
and add the remaining principal/interest repayments to make 
additional loans. According to GAO, EDA RLF grantees made 
approximately $36 million in below-market-rate loans to Gulf 
Coast small businesses. These investments generated over $196 
million in private investment. Following the hurricanes, EDA 
also recapitalized four of its RLF grantees in Louisiana for a 
total of $2 million to make loans to impacted businesses.
    Many Federal agencies also carry out emergency response 
activities through contracts with private businesses, including 
debris removal, reconstruction, and the provision of supplies. 
The Small Business Act requires that the President set a 
government wide goal (23 percent) for small business 
participation for a total value of all prime contracts awarded 
directly by an agency each fiscal year. There are also annual 
prime contract dollar goals for participation in five types of 
small businesses: small businesses, small disadvantaged 
businesses, women-owned businesses, businesses owned by 
service-disabled veterans, and businesses located in HUBZones. 
Furthermore, the Stafford Act also requires Federal agencies to 
give contracting preferences, to the extent practicable, to 
organizations/firms/individuals residing or doing business in 
the primary area affected by the disaster. According to GAO, as 
of January 15, 2010, Gulf Coast small businesses had directly 
received almost $2.9 billion (13.9 percent) of the total $20.5 
billion in total Federal contract funds awarded for Katrina/
Rita-related recovery projects between FY2005 and FY2009. Small 
businesses in the rest of the U.S. received about $2.7 billion. 
Small businesses in Louisiana directly received about $1.5 
billion in Federal contract funds; Mississippi small businesses 
$644 million; Texas over $401 million; and Alabama over $325 
million.
    In its report, GAO found that both the Corps of Engineers 
and the Department of Defense (DOD) were not consistently 
monitoring subcontracting reports of prime contractors for 
Katrina/Rita recovery projects. In the absence of this 
monitoring, both agencies could not demonstrate whether prime 
contractors were meeting their subcontracting goals/plans for 
11 of the 29 Corps construction projects (38 percent) and 2 of 
14 DOD construction projects (13 percent). The Committee was 
concerned with this finding as, without these reports, 
contracting officials lacked a key tool used to monitor 
contractors' performance under subcontracting plans.
    In reviewing the various Federal programs, GAO also found 
that the delinquent/default rate for GO Loans was higher than 
other Federal programs assisting Gulf Coast small businesses: 
19 percent for GO Loans; 15 percent EDA RLF loans; and 12 
percent for SBA disaster loans and Louisiana Small Business 
Loans. This information better informs the Committee's efforts 
to reduce waste, fraud and abuse in the Guaranteed Disaster 
Loan Programs SBA plans to enact following Public Law 110-246.

Field Hearing: ``A Year Later: Lessons Learned and Progress Made After 
        Hurricane Ike''

    The Committee further recognizes that since the 2005 
hurricanes, Gulf Coast small businesses experienced additional 
challenges as a result of Hurricanes Gustav and Ike which 
struck the region in 2008. A year after Hurricane Ike made 
landfall, Chair Landrieu held a field hearing on September 25, 
2009 in Galveston, Texas. This hearing reviewed lessons learned 
and progress made after the disaster. Before the hearing, Chair 
Landrieu toured the island with Senator Kay Bailey Hutchison 
and Galveston Mayor Lyda Ann Thomas to meet with small business 
owners. Both the tour and field hearing compared the 
coordinated Federal, State, and local government response to 
Hurricane Ike with the response four years earlier to 
Hurricanes Katrina and Rita.
    According to witness testimony at the hearing, the SBA was 
better prepared and deployed staff quickly following Ike--a 
marked difference than its sluggish and ineffective response 
following Hurricanes Katrina and Rita of 2005. Also, SBA took 
an average of five days to process home disaster loans and 12 
days to process business disaster loans following Ike. This is 
in contrast to up to 90 days for home loans and 70 days for 
business loans following Katrina. While witnesses testified to 
major improvements in SBA's disaster programs since the 2005 
hurricanes, the hearing also revealed key areas still in need 
of improvement. As of August 31, 2009, out of over 2,100 
applications SBA had only approved 536 business disaster loans 
for Galveston County--disbursing 280 of those for $21.8 
million. This may have been due to many outside factors but 
business owners at the field hearing complained of bureaucracy 
and paperwork related to SBA disaster loans as a limiting 
factor in continuing through the SBA loan process.

Small Business Administration Disaster Recovery and Reform Act of 2009 
        (S. 2731)

    Legislatively, Chair Landrieu and Senator Bill Nelson 
introduced S. 2731 on November 5, 2009. The bill, in addition 
to SBA disaster reforms, included two provisions related to 
Gulf Coast small business recovery. One provision would require 
SBA to report to Congress within 30 days of enactment with 
recommendations on assisting borrowers struggling with payments 
on 2005 Gulf Coast disaster loans. These recommendations could 
have included allowing SBA to refinance or re-amortize loans, 
term out loans, waive off a portion of interest payments, or 
additional options. Another provision would extend, for 2 
years, eligibility for Gulf Coast businesses impacted by 
Katrina or Rita to participate in the SBA 8(a) program. 
Unfortunately, this bill was not included in legislation that 
was signed into law.

Southeast Hurricanes Small Business Disaster Relief Act of 2010 (S. 
        2986)

    On February 4, 2010, Chair Landrieu, Senator Roger Wicker 
and Senator Thad Cochran introduced S. 2986. S. 2986 would have 
authorized the SBA to waive up to $15,000 of interest on 2005/
2008 business disaster loans from MS, LA, and TX. SBA would 
have been required to prioritize applications for businesses 
with 50 employees or less and businesses that re-opened between 
September 2005 and October 2006 (for 2005 disasters) or 
September 2008 and December 2008 (for 2008 disasters). 
According to SBA figures, this program would have helped up to 
16,000 businesses that employ approximately 60,000 employees. 
The GAO review of Gulf Coast recovery issued in July 2010 
further validated the potential benefits of this provision. In 
particular, during focus groups GAO noted that several small 
businesses stated that Federal disaster assistance loans 
increased their debt burden and created significant challenges 
for recovery. Additionally a local SBDC Director told GAO that 
accessing additional capital had proven even more difficult for 
small business owners with SBA disaster loans. With this in 
mind, Chair Landrieu filed a similar interest relief provision 
as Senate Amendment 4179 to H.R. 4899, the 2010 Supplemental 
Appropriations Act and later as Senate Amendment 4322 to H.R. 
4213, the Unemployment Compensation Extension Act of 2010. 
Senator Cochran, Chair Landrieu and Senator Wicker also filed 
this provision as Senate Amendment 4431 to H.R. 5297, the Small 
Business Jobs Act of 2010. Unfortunately, none of these 
provisions were included in legislation that was signed into 
law.

    C. DEEPWATER HORIZON DISASTER AND SIX-MONTH DEEPWATER DRILLING 
                               MORATORIUM

    On April 20, 2010, British Petroleum's drilling rig, 
Deepwater Horizon, exploded, severing the pipeline between the 
rig and the wellhead on the Gulf floor and setting in motion 
events that have lead to the greatest environmental disaster in 
our nation's history. As a result, many Gulf coast small 
businesses had to shut their doors and lay off employees. 
Charter fishing operations saw cancellations, Gulf tourism 
dropped substantially, and families of fishermen and 
shrimpers--who have fished Gulf Coast waters for generations--
worried that their way of life would be put on hold for years 
to come. The Committee recognizes that Gulf Coast small 
business recovery became even more difficult in 2010 following 
the Deepwater Horizon disaster and the subsequent six-month 
deepwater drilling moratorium instituted by the Obama 
Administration. After Hurricanes Katrina and Rita, Gulf Coast 
small businesses were ``up to their chins in water.'' After the 
Deepwater Horizon disaster, these same businesses were ``up to 
their knees in oil.'' Chair Landrieu and SBA Administrator 
Karen Mills went to Louisiana on May 10, 2010 to tour an SBA 
Business Recovery Center in St. Bernard Parish and meet with 
local lenders.
    In its review of Gulf Coast recovery from the 2005 
hurricanes, GAO noted that two industry sectors that were 
heavily impacted by the oil spill were: commercial/recreational 
fishing and travel/tourism. According to the National Oceanic 
and Atmospheric Administration, in 2008 commercial fishermen in 
AL, FL (West Coast), LA, and MS harvested approximately 1.2 
billion pounds of finfish and shellfish that generated about 
$523 million in total revenue (14.4 percent of the U.S. 
domestic landings and 11.9 percent of the domestic landings 
revenue generated). For every one of these direct jobs in the 
seafood industry, there are countless other related businesses 
dependent on them for commerce. Furthermore, according to the 
U.S. Travel Association, in 2008 domestic/international 
travelers spent more than $94 billion in travel expenditures in 
AL, FL, LA, and MS. These travel expenditures directly 
generated more than 1 million jobs in these four states. As of 
October 2009, the U.S. Travel Association reported that the 
economic impact of travel on Louisiana parishes showed that in 
2008 five parishes (Caddo, East Baton Rouge, Jefferson, 
Lafayette, and Orleans) accounted for about 67 percent (over $6 
billion) of the travel expenditures (domestic travelers only) 
in the state and 71 percent (more than 72,000 persons) of the 
travel-generated employment in the state. Orleans Parish alone 
generated about 37 percent ($3.5 billion) of the state total 
for travel expenditures in 2008 and 46 percent (roughly 47,000 
persons) of travel-generated employment.
    SBA responded to the disaster by announcing Economic Injury 
Disaster Loans (EIDLs) were available on May 6th, 2010 for the 
following twenty (20) Louisiana parishes: Jefferson, Lafourche, 
Orleans, Plaquemines, St. Bernard, St. Tammany, plus the 
neighboring parishes/counties--Assumption, St. Charles, St. 
James, St. John the Baptist, Tangipahoa, Terrebonne, 
Washington, Ascension, East Baton Rouge, East Feliciana, 
Evangeline, Livingston, Iberia, and St. Martin. On May 14th, 
SBA announced EIDLs were available in eleven (11) Mississippi 
counties, six (6) Alabama counties, and thirty-five (35) 
Florida counties. These declarations allowed businesses to 
access working capital loans of up to $2 million at an interest 
rate of 4 percent with 30-year terms. As of November 26, 2010, 
SBA had approved 382 loans for $34,087,000, disbursing 283 
loans for $21,585,000. However, only 31 percent of the loans 
received were approved for this disaster. According to the SBA, 
a majority of these loans were denied because of concerns over 
the credit and repayment ability of the companies. Committee 
testimony and research by staff revealed that that many Gulf 
Coast businesses took a ``wait and see'' approach in regards to 
SBA disaster loans offered for this disaster. This was because 
many local businesses instead chose to follow the BP claims 
process and were generally hesitant to take on additional debt 
with the difficult economic conditions in the area.

Hearing: ``Impact of the Deepwater Horizon Oil Spill on Small 
        Businesses''

    On May 27, 2010, Chair Landrieu and Ranking Member Snowe 
held a hearing to examine the effects of the Gulf Coast oil 
spill on small businesses. The hearing brought Coast Guard 
officials, technical assistance providers and BP America 
executives together to discuss the claims process for small 
businesses, and the ways businesses will be able to rebound 
from the problems this oil spill is causing.
    During the hearing, Chair Landrieu sought to clarify 
collateral and other conditions related to SBA disaster loans. 
Testimony from SBA officials and a Vice President for Resources 
at BP America confirmed that small businesses have the ability 
to use claims against BP as collateral for SBA disaster loans 
under existing authority at the SBA. However, BP expressed a 
preference for claimants to file directly with the company--as 
opposed to the SBA--and to seek additional SBA assistance if it 
is needed at a later date.

Hearing: ``Harnessing Small Business Innovation: Navigating the 
        Evaluation Process for Gulf Coast Cleanup Proposals''

    On June 17, 2010, Chair Landrieu held a hearing to discuss 
the evaluation process for proposals to clean up the leaking 
oil in the Gulf of Mexico from the Deepwater Horizon oil rig, 
as well as ways to improve the effectiveness and efficiency of 
the process. The hearing brought together Federal witnesses 
from the United States Coast Guard and Environmental Protection 
Agency to discuss how the review process worked, and how small 
businesses could play a pivotal role in the Gulf Coast clean 
up. During the hearing, the U.S. Coast Guard testified that 
over 1,900 proposals had been reviewed by the Federal 
Interagency Alternative Technology Assessment Program (IATAP) 
had received over 1,900 proposals, screened about 600 
proposals. To date, no proposals had yet been deployed in the 
Gulf of Mexico but IATAP had forwarded one proposal to the 
Federal On-Scene Coordinator for possible deployment in the 
Gulf of Mexico. BP had received over 35,000 proposals as of the 
hearing date, with only four in the testing phase and none 
deployed to the Gulf of Mexico. Chair Landrieu pressed the 
Coast Guard and EPA officials to improve communications with 
companies submitting proposals, particularly in getting timely 
responses on a status on proposals. She also encouraged the 
agencies to make the process more transparent and to 
communicate with local Gulf Coast officials on possible 
credible proposals.
    On May 27, 2010 the Obama Administration imposed a six-
month moratorium on deepwater drilling in the Gulf of Mexico, 
as an attempt to improve the safety of oil and gas production 
following the Deepwater Horizon accident. On June 23, 2010, 
U.S. District Judge Martin Feldman granted a preliminary 
injunction, halting the moratorium. The court's decision 
immediately prohibited the U.S. from enforcing the ban and the 
Administration appealed this decision. On July 12, Secretary of 
Interior Ken Salazar announced new deepwater drilling 
suspensions. The Administration's six-month deepwater drilling 
moratorium on deepwater drilling further exacerbated the 
recovery of Gulf Coast small businesses.

Hearing: ``The Deepwater Drilling Moratorium: A Second Economic 
        Disaster for Small Businesses?''

    On July 27, 2010, the Committee convened Congress' first 
hearing to evaluate the impact of the Obama Administration's 
deepwater drilling moratorium on Gulf Coast small businesses. 
The hearing brought together small business owners, experts and 
economists to discuss the negative impact this moratorium had 
on the Gulf Coast, as well as the entire country. At the time 
of the Deepwater Horizon explosion, 55 deepwater oil rigs were 
at work in the Gulf of Mexico. According to witness testimony 
received at the hearing, there were 13 drilling at that date. 
Furthermore, a witness from Louisiana State University 
testified that the moratorium could cause Gulf Coast region to 
lose more than 8,000 jobs, nearly $500 million in wages, and 
over $2.1 billion in economic activity, as well as nearly $100 
million in state and local tax revenue. The spillover effect, 
it was estimated, could mean 12,000 jobs and nearly $3 billion 
nationwide (including almost $200 million in Federal tax 
revenues) in just the first six months of the moratorium. If 
the moratorium lasted longer than six months, some 25,000 jobs 
could have been lost and under the worst case scenario--a 
permanent moratorium on all oil and natural gas production in 
the Gulf of Mexico--nationwide economic losses would exceed $95 
billion and more than 400,000 jobs.

Field Hearing: ``The Deepwater Drilling Moratorium: An Economic 
        Disaster for Louisiana's Small Businesses''

    On August 17, 2010 the Chair Landrieu and Senator Vitter 
held a field hearing on the deepwater drilling moratorium in 
Lafayette, Louisiana. This hearing discussed the economic 
impact of the oil spill and the impact of the drilling 
moratorium on local businesses. In particular, testifying 
before the Committee were Louisiana elected officials and 
business owners from a broad range of industries that were 
being impacted by the Administration's deepwater drilling 
moratorium. At this hearing, the Committee also heard testimony 
on the permitting issues that the shallow drilling industry 
faced, as there were numerous regulatory hurdles limiting the 
number of issued permits. With much of the focus placed on the 
idle rigs in the Gulf of Mexico and the thousands of workers 
forced out of work, this hearing received testimony from the 
many small businesses, in Louisiana and the rest of the 
country, that were struggling to stay afloat with drilling 
brought to a sudden halt. These industries that were being 
indirectly impacted range from bankers to restaurant owners, 
many of whom fought to keep their doors open under optimal 
circumstances.

Hearing: ``The Deepwater Drilling Moratorium: A Review of the Obama 
        Administration's Economic Impact Analysis on U.S. Small 
        Businesses''

    On July 26, 2010, Chair Landrieu sent a letter to the Obama 
Administration, requesting that the Administration conduct an 
economic analysis on the impact the moratorium had on small 
businesses along the Gulf Coast and throughout the rest of the 
United States. On September 16, 2010, Chair Landrieu held a 
hearing to receive a report from Administration witnesses about 
the economic impact of the moratorium. During the hearing, the 
U.S. Department of Commerce witnesses unveiled a report 
estimating that the moratorium caused the loss of 2,000 direct 
jobs, 8,000 to 10,000 indirect jobs, and a reduction in 
operator spending of $1.95 billion. Of the direct jobs lost, 
about 20 percent--or about 2,000--of the 9,700 rigs workers 
employed in April 2010 had been laid off or left the Gulf 
Coast.
    Chair Landrieu, however, took issue with witness testimony 
that that job loss from the moratorium was either minimal or 
temporary. For example, the International Association of 
Drilling Contractors had estimated that cost companies $3 
million per day to keep these employees who were not working. 
The reports also noted that while rig worker employment had not 
declined significantly, operators had reduced spending by 
lowering other costs, such as supplies, materials, and 
services, which were more discretionary. This reduction in 
spending is reflected in the $1.95 billion in reduced operator 
spending projected by the report. The report concluded: ``small 
firms with less financial capital will likely experience 
relatively larger employment losses. This was consistent with 
anecdotal evidence from small businesses in the Gulf Coast. 
Following the hearing, U.S. Department of the Interior 
Secretary Ken Salazar announced on October 12, 2010, that the 
Obama Administration was lifting the moratorium on deepwater 
drilling. As of December 1, 2010, 19 shallow water drilling 
permits had been issued and seven were pending in the Gulf of 
Mexico. However, there were no deepwater drilling permits 
issued or pending. To date in 2010, there are in total 63 
shallow water permits and 28 deepwater permits issued by the 
Department of Interior. In contrast, in 2009 a total of 91 
shallow water permits and 76 deepwater drilling permits issued 
by the agency.

S. AMDT 4179 to H.R. 4899 and S. AMDT 4322 to H.R. 4213

    Legislatively, Chair Landrieu, Senator Roger Wicker and 
Senator Thad Cochran filed Senate Amendment 4179 to H.R. 4899, 
the 2010 Supplemental Appropriations Act and later as Senate 
Amendment 4322 to H.R. 4213, the Unemployment Compensation 
Extension Act of 2010. This amendment would have allowed the 
SBA to utilize existing Disaster Loan funding to waive up to 
$15,000 of interest on 2005/2008 business disaster loans from 
MS, LA, and TX. SBA would have been required to prioritize 
applications for businesses with 50 employees or less, 
businesses that re-opened between September 2005 and October 
2006 (for 2005 disasters) or September 2008 and December 2008 
(for 2008 disasters), and businesses significantly impacted by 
the Deepwater Horizon disaster. Senator Cochran, Chair Landrieu 
and Senator Wicker also filed this provision as Senate 
Amendment 4431 to H.R. 5297, the Small Business Jobs Act of 
2010.

Gulf of Mexico Economic Recovery and Job Impact Analysis Act of 2010 
        (S. 3545)

    Lastly, Chair Landrieu filed S. 3545 which required the SBA 
Office of Advocacy to conduct a study evaluating the effect on 
small businesses of a six-month moratorium on new deepwater 
drilling in the Gulf of Mexico. Unfortunately, none of these 
provisions were included in legislation that was signed into 
law.

 VI. Small Business Innovation Research and Small Business Technology 
                           Transfer Programs

    The Committee has oversight of the two largest federal 
research and development programs for small businesses, the 
Small Business Innovation Research (SBIR) and Small Business 
Technology Transfer (STTR) programs. Through these programs, 
the government partners with small businesses, or small 
businesses and research universities or labs, to help solve its 
research and development problems by making small but 
sufficient awards to test as many ideas as possible. The focus 
is on discovering, funding, and evaluating the initial, 
highest-risk, most cutting-edge exploratory research that is 
necessary to achieve significant technological innovations and 
breakthroughs, and to increase private-sector commercialization 
of innovation derived from federal research and development. As 
a result, these programs stimulate the economy, and create 
businesses and jobs by making good use of its entrepreneurs, 
scientists and engineers.
    For the third Congress, the Committee worked to reauthorize 
the SBIR and STTR programs, which originally expired on 
September 30, 2008, and September 30, 2009, because the members 
believed they remain necessary to stimulate America's 
innovation economy, to remedy the continued underrepresentation 
of small businesses in federal research and development, and to 
use small businesses to help government agencies meet national 
needs. As the new chair of the Committee, Senator Landrieu 
worked closely with Ranking Member Snowe to build on 
legislation developed in previous congresses by Ranking Member 
Snowe when she was chair, and by Senator Kerry when he was 
chair.

            A. REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

    In the 111th Congress, there were two main bills through 
which the Committee worked to provide long-term reauthorization 
and stability to the SBIR and STTR programs. S. 1233, the SBIR/
STTR Reauthorization Act of 2009, and S. 4053, the SBIR/STTR 
Reauthorization Act of 2010.

The SBIR/STTR Reauthorization Act of 2009

    Chair Landrieu and Ranking Member Snowe introduced the 
SBIR/STTR Reauthorization Act of 2009 (S. 1233) on June 10, 
2009. As reported out of Committee unanimously on July 2, 2009, 
the bill would have reauthorized the SBIR and STTR programs for 
14 years each, through 2023. The 14-year reauthorization was a 
compromise down from the Committee's position in 2006 to make 
the programs permanent. The legislation would have gradually 
increased, over ten years, the allocation for the SBIR program 
at all participating agencies from 2.5 percent to 3.5 percent 
of an agency's extramural research and development budget, and, 
for the STTR program, it would have gradually increased, over 
six years, the allocation at all participating agencies from 
0.3 percent to 0.6 percent of this same budget. It would have 
increased the statutory award size guidelines for the both 
programs from $100,000 to $150,000 for Phase I and from 
$750,000 to $1 million for Phase II, with authority for the SBA 
to make adjustments every three years based on inflation, 
instead of every five years, as is currently the law. Also, in 
order to protect against abuses in issuing `jumbo' awards, the 
bill would have restricted agencies from making Phase I and 
Phase II awards that are more than 50 percent larger than the 
guidelines. Awards over the 50 percent cap would have still be 
allowed, but a Federal agency would not have been able to use 
funds from the SBIR and STTR allocations to provide the 
supplemental funding. To increase geographic participation in 
the SBIR and STTR programs, particularly in rural states, S. 
1233 would have enhanced and reauthorized through 2014 the 
Federal and State Technology Partnership (FAST) program and the 
Rural Outreach Program (ROP). To help move SBIR and STTR 
technologies across the `valley of death' (a phrase used to 
describe the funding gap between Phases II and III or 
transitioning projects to the commercialization stage), the 
legislation would have improved and made permanent what is 
currently known as the Commercialization Pilot Program at the 
Department of Defense (DoD) and would have provided authority 
to create commercialization pilot programs at the other SBIR 
agencies, authorizing all such pilots through 2014. The bill 
included a compromise on the issue of the participation of 
companies majority-owned by multiple venture capital companies 
in the SBIR program, allowing the National Institutes of Health 
(NIH) to award up to 18 percent of its SBIR dollars to 
companies majority-owned by multiple venture capital companies 
and the other SBIR qualifying agencies to apply to award up to 
8 percent of their SBIR dollars to this class of firms. The 
affiliation rule itself and the 500 employee standard remained 
unchanged in this bill. Last, the legislation sought to improve 
oversight by giving more autonomy and resources to the Small 
Business Administration's Office of Technology by building in 
regular assessments by the National Academy of Sciences, and by 
streamlining data collection and reporting requirements to help 
Congress better assess the programs' effectiveness, to guide 
future policy changes, and to address record-keeping problems 
identified by Government Accountability Office (GAO) and 
National Research Council (NRC) in their reports on the SBIR 
program. The bill passed the full Senate on July 13, 2009, as a 
substitute to H.R. 2965, the Enhancing Small Business Research 
and Innovation Act Of 2009, later stripped for other unrelated 
legislation and renamed the Don't Ask, Don't Tell Repeal Act Of 
2010. As passed out of the Senate, the length of authorization 
was reduced from 14 years to 8 years, additional oversight and 
anti-fraud provisions were added, and a clarification was 
included that SBIR and STTR awards must continue to be made on 
a competitive basis.

The SBIR/STTR Reauthorization Act of 2010

    Chair Landrieu and Ranking Member Snowe introduced and 
passed out of the Senate by unanimous consent on December 22, 
2010, S. 4053, the SBIR/STTR Reauthorization Act of 2010, a 
version of S. 1233 that blended provisions from H.R. 2965, the 
comprehensive SBIR and STTR reauthorization bill adopted by the 
House of Representatives. This bill, S. 4053, was significant 
because it included a break-through compromise between the 
Biotechnology Industry Organization (BIO) and the Small 
Business Technology Council (SBTC) on the issue of the 
participation of companies majority-owned by multiple venture 
capital companies in the SBIR program. Instead of allowing the 
National Institutes of Health (NIH) to award up to 18 percent 
of its SBIR dollars to companies majority-owned by multiple 
venture capital companies, the compromise would have allowed up 
to 25 percent at NIH, NSF and DoE to be used for these 
purposes. It also would have allowed the other SBIR qualifying 
agencies to apply to award up to 15 percent, instead of 8 
percent, of their SBIR dollars to this class of firms. Whereas 
the Committee had never before in any comprehensive bill 
changed the affiliation rules for the SBIR program, the 
compromise mandated the SBA to issue an interim final rule on 
the affiliation rules for firms majority-owned by multiple 
venture capital operating companies within one year or lose co-
sponsorship authority. The legislation also directed the SBA to 
promulgate rules that would have clarified that such firms 
would be eligible to compete for SBIR projects, as long as such 
firms were not a big business, a big entity, or a foreign 
business or foreign entity, or that that applicant was not 
majority owned by a big business, a big entity, a foreign 
business, foreign entity or persons who are not citizens of the 
United States. The goal of the rulemaking directive was to 
provide certainty and clarity to the firms majority owned by 
multiple venture capital operating companies while preserving 
the integrity of the SBIR program as a small business program. 
Another significant aspect of the compromise was a three-year 
pilot to allow the Administration to use up to 3 percent of its 
SBIR allocation for the administration, outreach and oversight 
of the programs. The compromise had broad support beyond BIO 
and SBTC, including the National Small Business Association, 
the National Federation of Independent Business, the U.S. 
Chamber of Commerce, the National Venture Capital Association, 
and various technology groups, from states such as Louisiana, 
California, Maryland and Massachusetts. Ultimately, despite 
brokering this break-through compromise and passing it 
unanimously through the Senate, S. 4053 was not considered in 
the House and, therefore, was not enacted in the 111th 
Congress.

The National Defense Authorization Act for FY2010

    Chair Landrieu, with the support of Ranking Member Snowe, 
worked with Senator Levin, Chair of the Senate Armed Services 
Committee, to include in the National Defense Authorization Act 
for FY2010, S. 1390, an amendment to authorize the Department 
of Defense's SBIR and STTR programs for 14 years, consistent 
with the Small Business Committee's passage of S. 1233, and to 
make permanent the DoD's Commercialization Pilot Program (CPP). 
The purpose of adding the SBIR/STTR reauthorization provisions 
to the FY2010 National Defense Authorization bill was to make 
sure there was an alternative legislative vehicle to enact the 
provisions instead of relying on a free-standing bill that had 
been blocked from passage in the previous two Congresses. The 
SBIR/STTR amendments were adopted by the Senate Armed Services 
Committee and passed out of the full Senate, as a substitute to 
H.R. 2647. Chair Landrieu then worked with Senators Levin and 
House Armed Services Chair Ike Skelton to preserve the 
provisions in conference. Ultimately, the provisions were 
enacted, but instead of 14 years of reauthorization for the 
SBIR and STTR programs and permanency for the CPP, they were 
each extended for one year, through September 30, 2010. This 
provided more stability to the largest SBIR and STTR programs 
over the many short-term extensions enacted for the other ten 
agency programs. P.L. 111-84, was signed into law October 28, 
2009.

S.A. 1703 to the National Defense Authorization Act for FY2010

    Chair Landrieu and Ranking Member Snowe offered the Senate-
passed version of S. 1233 as an amendment to annual Department 
of Defense authorization bill to modify and expand upon the 
SBIR and STTR amendments passed out of the Senate Armed 
Services Committee as part of S. 1390. Ultimately, as described 
above, all but the one-year authorization for SBIR, STTR and 
CPP were dropped in conference.

Temporary Extensions

    During the 111th Congress, the SBIR program was extended 
nine times, and the STTR program was extended six times, past 
their original sunsets of September 30, 2008, and September 30, 
2009. The purpose of the extensions was to prevent the SBIR and 
STTR participating agencies from slowing down or shutting down 
their programs, as happened around the time of the 2000 SBIR 
reauthorization, hurting many small businesses and delaying 
needed research. The extensions were as follows: (1) P.L. 110-
235; (2) P.L. 111-10; (3) P.L. 111-43; (4) P.L. 111-66; (5) 
P.L. 111-89; (6) P.L. 111-136; (7) 111-162; (8) P.L. 111-214; 
and (9) P.L. 111-251.

Oversight

    On June 2, 2009, John P. Holdren, Director of the Office of 
Science and Technology Policy, wrote Chair Landrieu to express 
the Obama Administration's strong support for the 
reauthorization of the SBIR and STTR programs and to provide 
its views on the core elements needed in any reauthorization 
legislation. Director Holdren stated that it was imperative to 
eliminate the short-term extensions of the programs, to 
increase the funding of Phase I and Phase II to $150,000 and 
$1,000,000, respectively, to allow agencies to spend up to 3.0 
percent of SBIR/STTR funds on program administration, and to 
avoid prescriptive mandates that could inhibit flexibility 
among agencies to pursue pilot programs or experiments, such as 
efforts to close the gap between Phase I and Phase II awards. 
The letter also noted the President's commitment to increase 
federal investment in research and development, but parted ways 
with the Committee in its efforts to increase the allocation 
for SBIR and STTR programs from 2.5 percent and .3 percent of 
the respective agencies' extramural research and development 
budgets. Finally, the letter expressed the Administration's 
support to allow appropriate participation by venture-backed 
firms in the SBIR program as long as funding was limited to 
truly small businesses that merit access to the program.

   B. RESTARTING THE SBIR AND STTR OUTREACH AND TECHNICAL ASSISTANCE

    Chair Landrieu, with Ranking Member Snowe's support, 
restored funding for the Federal and State Technology 
Partnership (FAST) program. Even though the initiative had 
proven effective at increasing the geographic distribution of 
SBIR activity across more states, FAST had not been funded 
since FY2004. For FY2010 and FY2011, the program received $2 
million in appropriations. The FAST program was created by 
Senator Bond in 2000 as part of SBIR reauthorization in an 
effort to strengthen the technological competitiveness of small 
business concerns in all 50 states in the SBIR program by 
providing competitive matching grants to the states. The grants 
have traditionally been used to raise awareness of the SBIR and 
STTR programs, assist businesses with applications to win SBIR 
and STTR awards, and then to help the firms commercialize the 
technology developed through the SBIR and STTR programs.

 C. EFFORTS TO REVERSE THE NIH'S SBIR/STTR EXEMPTION FROM THE RECOVERY 
                                  ACT

    Chair Landrieu and Ranking Member Snowe worked with 
Senators Cardin, Kennedy and Feingold to reverse language in 
the Recovery Act that exempted the NIH from allocating a 
portion (2.8 percent) of its $8.2 billion in Recovery Act 
funding to the SBIR and STTR programs. The exemption was added 
in conference, and the Senate Small Business Committee, which 
has jurisdiction for these programs, was not consulted. As a 
result of the exemption, the NIH was not required to award 
about $200 million in SBIR and STTR projects to small firms. 
The exemption ran counter to the purpose of the Recovery Act, 
which was designed to create high-quality jobs and spur 
innovation. The Committee, along with the offices of Senator 
Cardin and Feingold, and Senator Kennedy, chair of the 
oversight committee of the NIH, held meetings with the NIH and 
the SBA to understand who put the exemption in the Recovery Act 
and urge them to allocate the 2.8 percent anyway since it was 
not prohibited from doing so. In addition to the meetings, 
Senators Landrieu and Snowe sent a letter to the NIH requesting 
compliance with the SBIR and STTR statutes, the Committee held 
two hearings and one field hearing to restore the exemption and 
trace the origin of the exemption, and worked to include an 
amendment to the FY2010 HHS appropriations bill to restore any 
funding that should have been allocated for small businesses 
through the Recovery Act but were not. As a result of these 
efforts, the NIH created two new programs to use small 
businesses to spur innovation and create greater access to the 
Recovery Act awards: the Bridge Span awards, and the Small 
Business Catalyst awards.
    On March 10, 2009, Chair Landrieu and Ranking Member Snowe 
sent a letter to Mr. Charles E. Johnson, then the Acting 
Secretary of Health and Human Services regarding the exemption 
that the NIH requested from the SBIR and STTR requirements in 
relation to the $8.2 billion in Recovery Act funds the NIH 
received. The Senators argued that while the Recovery Act 
included an exemption for the NIH, it did not receive an 
exemption for the entire HHS and, therefore, wanted to know how 
the HHS would meet its obligation to stay in compliance. The 
Senators noted a similar attempt by DoD to exempt the Missile 
Defense Agency from the SBIR and STTR requirements in 2001 and 
that the DoD ultimately verified that it would meet its 
obligation.
    On April 1, 2009, Chair Landrieu received a reply to that 
letter from Dr. Raynard S. Kington, the Acting Director for the 
National Institutes of Health, announced that it would 
encourage SBIR and STTR firms to apply for ARRA funds through 
the ``Grand Opportunities'' or ``GO'' grants and fund recently 
peer-reviewed SBIR and STTR applications from FYs 2008 and 2009 
that were approved but not funded.
    On May 7, 2009, Chair Landrieu sent a letter to Dr. Robert 
Gates, Secretary of Defense, to inquire into Department of 
Defense's implementation of the American Recovery and 
Reinvestment Act funds and the SBIR program. Chair Landrieu 
stressed the importance and the need for such funds to be 
allocated to these programs as the programs allow small 
research and development firms to create high quality jobs and 
cutting edge products.
    On May 28, 2009, Chair Landrieu received another letter 
from Dr. Kington, this time in response to her May 7, 2009 
letter. In this letter Dr. Kington outlines more opportunities 
that the NIH is encouraging small businesses to apply for, such 
as the ``Challenge Grants'' and supplemental awards. He notes 
other steps the NIH has taken to address confusion and 
discouragement of small businesses to apply for Recovery Act 
initiatives caused by program managers. For example, the 
Director's office issued guidance and reminders for small 
businesses to apply for ARRA initiatives and held outreach 
events to the SBIR/STTR community to alert them to their 
eligibility for NIH funding opportunities supported by ARRA 
funds.

                              D. OVERSIGHT

    The National Academy of Sciences (NAS) and the Government 
Accountability Office (GAO) issued many reports on the SBIR 
program since the 2000 reauthorization of SBIR that informed 
the work of the Committee in drafting (S. 1233 and S. 4053) and 
validated the merits of reauthorizing these two important 
federal research and development programs for small, high-
technology firms. The studies and reviews are listed below.
           Small Business Innovation Research: 
        Observations on Agencies' Data Collection and 
        Eligibility Determination Efforts, GAO-09-956T, Aug 6, 
        2009
           Small Business Innovation Research: 
        Information on Awards Made by NIH and DoD in Fiscal 
        Years 2001 through 2004, GAO-06-565, Apr 14, 2006
    Agency or topic-specific studies published by the National 
Research Council in accordance with the mandate to evaluate the 
program originating in P.L. 106-554 include:
           Revisiting the Department of Defense SBIR 
        Fast Track Initiative (October 2009)
           Venture Funding and the NIH SBIR Program 
        (May 2009)
           An Assessment of the SBIR Program at the 
        National Aeronautics and Space Administration (December 
        2008)
           An Assessment of the SBIR Program at the 
        Department of Energy (June 2008)
           An Assessment of the SBIR Program at the 
        Department of Defense (November 2007)
           An Assessment of the SBIR Program at the 
        National Institutes of Health (November 2007)
           An Assessment of the SBIR Program at the 
        National Science Foundation (July 2007)
           An Assessment of the Small Business 
        Innovation Research Program (July 2007)
           SBIR and Phase III Challenge of 
        Commercialization (February 2007)
           SBIR: Program Diversity and Assessment 
        Challenges (September 2004)
           Capitalizing on Science, Technology, and 
        Innovation: An Assessment of the Small Business 
        Innovation Research Program--Project Methodology 
        (September 2004)

  E. COMMITTEE ROUNDTABLES AND MEETINGS ON THE SBIR AND STTR PROGRAMS

    On June 4, 2009, the Committee held a roundtable, ``SBIR 
and STTR Reauthorization: Ensuring a Strong Future for Small 
Business in Federal Research and Development.'' The purpose of 
the roundtable was to give participants the opportunity to 
discuss past proposals and offer justifications to either 
retain or change provisions previously adopted by the 
Committee, including length of re-authorization, the size of 
awards, preserving the basic program structures, outreach and 
technical and commercialization assistance initiatives, and 
eligibility for firms majority-owned by multiple venture 
capital firms. The discussion also included presentations by 
the Government Accountability Office (GAO) and the National 
Academy of Sciences' National Research Council (NRC) on studies 
regarding the participation of firms with venture capital in 
the SBIR and STTR programs. In addition to GAO and NRC, 
participants included small businesses, the SBA and several 
program agencies, as well as business and industry 
associations.
    On June 22, 2009, Senator Cardin held a field hearing in 
Rockville, Maryland, ``Missed Opportunities: The ARRA and the 
NIH/SBIR exclusion.'' The purpose of the hearing was to discuss 
the passage of the American Recovery and Reinvestment Act 
(``Recovery Act'') and the importance of the SBIR and STTR 
programs, as well as the impact that the funds available under 
the Recovery Act could have had on the economy if the NIH had 
not asked for an exemption from the Recovery Act. The field 
hearing built a strong record demonstrating that the NIH was 
not doing enough to include small businesses in their Recovery 
Act spending. Senator Cardin chaired the hearing, and was 
accompanied by panelists: Representative Chris Van Hollen, Ways 
and Means Committee; Representative Donna Edwards, Science 
Committee; Mr. Jere Glover, Executive Director, Small Business 
Council; Penny Pickett, Senior Advisor to the Administrator, 
Acting Associate Administrator for Entrepreneurial Development, 
Small Business Administration; Mr. Jonathan Cohen, President & 
CEO of 20/20 Gene Systems; Dr. Aprile Pilson, President & CEO 
Clarrasance, Inc., and APC Biotech Services, Inc.; Mr. Joe 
Hernandez, President & CEO, Innovative Biosensors, Inc.
    On October 6, 2009, Chairwoman Senator Mary Landrieu held a 
Recovery Act Oversight Hearing where the committee examined the 
progress of small business provisions within the Recovery Act. 
The hearing primarily focused on the finance and contracting 
changes under the Act. There were various witnesses from the 
Department of Defense (DoD), Department of Energy (DOE), as 
well as the Small Business Administration (SBA).

                    VII. Contracting and Procurement

    The Federal government is the world's largest purchaser of 
goods and services, with purchases totaling over $500 billion 
per year. The Federal government's long-standing policy has 
been to use its buying power to maximize procurement 
opportunities for various types of small businesses. Consistent 
with that policy, Congress has established a number of 
statutory goals designed to help small businesses compete for 
federal contracts.
    In addition to the goal of awarding at least 23 percent of 
all federal prime contracting dollars to small businesses, 
Congress also established Government-wide contracting goals for 
participation by small businesses that are located in 
Historically Underutilized Business Zones (3 percent), or owned 
by women (5 percent), socially and economically disadvantaged 
individuals (5 percent), or service-disabled veterans (3 
percent). These aspirational goals help ensure a level playing 
field for small businesses, and are essential tools in 
utilizing small businesses towards job creation and economic 
recovery.
    Yet, despite these goals and requirements, the Federal 
government has not consistently reached its small business 
contracting goals. Additionally, small businesses face a myriad 
of complicated laws and regulations that make it increasingly 
difficult for them in obtaining a federal contract award. 
Recognizing the obstacles that small business owners face in 
the federal contracting arena, the Committee on Small Business 
and Entrepreneurship, in its legislative and oversight 
capacity, is committed to providing new opportunities, 
strengthening existing opportunities and eliminating 
unnecessary obstacles for small businesses to compete for 
federal contracts.

         A. REAUTHORIZATION OF SBA GENERAL CONTRACTING PROGRAMS

Roundtable: ``Small Business Contracting: Ensuring Opportunities for 
        America's Small Business''

    On September 22, 2009, the Committee held a roundtable 
titled ``Small Business Contracting: Ensuring Opportunities for 
America's Small Business.'' The purpose of the roundtable was 
to examine ways the Federal government can increase contracts 
awarded to small businesses by improving government contracting 
programs, and to build the record in support of legislation 
reauthorizing those programs. Participants included small 
business owners and representatives from federal agencies and 
small business organizations, who discussed their perspectives 
of the state of the federal contracting arena.
    The roundtable focused on the challenges that small 
business owners face when attempting to contract with the 
federal government, including the challenges that small 
business owners face when attempting to work as subcontractors 
to large primes. The Committee took note that lack of privity 
is often cited as the primary reason why the government lacks 
the authority to protect subcontractors. The General Services 
Administration's (GSA) Deputy Chief Acquisition Officer, David 
Drabkin, testified during the roundtable that the Federal 
government avoids becoming involved in the relationship between 
prime and subcontractors. Additionally, the roundtable also 
heard testimony that more communication between subcontractors 
and prime contractors may help protect subcontractors.

The Small Business Contracting Revitalization Act of 2010 (S. 2829)

    On February 4, 2010, Chair Landrieu, along with Ranking 
Member Snowe, introduced the Small Business Contracting 
Revitalization Act of 2010 (S. 2829). Based on testimony from 
the September 22nd roundtable, as well as hearings and 
activities from the previous Congress, Chair Landrieu and 
Ranking Member Snowe introduced S. 2829 in an effort to 
revitalize and renew small business procurement law to better 
assist small businesses and to meet the changing needs of the 
21st century entrepreneur. The bipartisan bill updated 
contracting provisions pertaining to small business 
procurement, making significant improvements to the SBA's 
procurement programs, and authorized several new oversight and 
pilot program initiatives. Specifically, the bill included 
provisions that would require each federal agency to include in 
each solicitation, for any contract above the substantial 
bundling threshold of that agency, a provision soliciting bids 
by teams and joint ventures of small businesses and specify 
that compliance of federal prime contractors with small 
business subcontracting plans are to be evaluated as a 
percentage of obligated prime contract dollars, as well as a 
percentage of subcontracts awarded. Additionally, the bill 
included provisions to improve small business participation in 
the acquisition process and creates a presumption of loss to 
the United States whenever a contract, agreement, or grant 
intended for award to a small business is instead awarded to an 
entity that misrepresented itself as a small business.
    During the markup of S. 2989 on March 4, 2010, the 
Committee unanimously adopted, by voice vote, a bipartisan 
managers' substitute amendment offered by Chair Landrieu. The 
bill was subsequently adopted by the Committee, as amended, by 
a unanimous vote. The provisions in S. 2829 were ultimately 
included in the Small Business Jobs Act of 2010 (P.L. 111-240).

                   B. SMALL BUSINESS CONTRACT PARITY

    Under the SBA's parity policy, before setting aside a 
contract for small businesses, federal agency contracting 
officers may choose among the SBA's procurement and business 
development programs--HUBZone, Service Disabled Veteran-owned 
small businesses, Women-owned small businesses, and 8(a) 
programs--without giving one program preference over the 
others. Two Government Accountability Office (GAO) decisions 
released in September 2008 and May 2009 contradicted this long-
standing SBA policy that federal agency procurement programs 
should be treated equally when it comes to awarding contracts. 
In a protest decision arising out of an Air Force contract, the 
GAO made clear in its decision that HUBZone firms are entitled 
to absolute contracting priority over 8(a) firms in all cases 
where two or more HUBZone firms are available to perform the 
task. However, in an August 21, 2009 Memorandum Opinion, the 
Department of Justice directed executive agencies to follow the 
SBA's existing parity policy and place qualified HUBZone small 
businesses and 8(a) small businesses on an equal footing. 
Subsequently, in Mission Critical v. U.S. (09-864 C, Ct. of 
Fed. Claims, Feb. 26, 2010), the Court of Federal Claims held 
that the Small Business Act requires contract opportunities to 
be set aside for HUBZone firms whenever two HUBZone firms are 
available to perform the contract at a fair price.
    Through legislation and oversight efforts, Chair Landrieu 
and Ranking Member Snowe sought to clarify and reiterate 
Congress's original intent not to prioritize one small business 
program over another and reconcile the decisions made by the 
Federal Claims Court and the GAO with existing SBA parity 
policy.

Legislation

    On July 21, 2009, Ranking Member Snowe introduced the Small 
Business Contracting Programs Parity Act (S. 1489) to make 
clear that contracts to service-disabled veterans, 8(a), 
HUBZone, or women-owned firms may be awarded with equal 
deference to each program. The bill also provided HUBZones--the 
only small business contracting program without a 
subcontracting goal--such a target, as well as authorized 
mentor protege programs modeled after those used in the 8(a) 
program for service-disabled veteran, HUBZone, and women-owned 
firms.
    In May 2009, Ranking Member Snowe filed an amendment to 
establish parity as part of the Weapon Systems Acquisition 
Reform Act of 2009 (S. 454). However, the amendment was not 
adopted. Chair Landrieu and Ranking Member Snowe filed a 
similar amendment to the National Defense Authorization Act for 
Fiscal Year 2010 (S. 1390). The amendment was accepted and 
passed the full Senate on July 24, 2009, but was removed during 
conference negotiations.
    On March 26, 2010, Chair Landrieu, along with Senator 
Richard Durbin, introduced the Small Business Programs Parity 
Act of 2010 (S. 3190), to place small business programs on an 
equal playing field when competing for government work. 
Building on Chair Landrieu's and Ranking Member Snowe's 
previous legislative efforts, the bill clarified that the Small 
Business Act does not limit a contracting officer's discretion 
when deciding to award a federal contract to a small business 
participating in any restricted competition program. While no 
Committee action was taken on S. 3190, the bill was ultimately 
included as part of the Small Business Jobs Act of 2010 (P.L. 
111-240).

Oversight

    On October 13, 2010, Chair Landrieu sent a letter to all 
Federal agencies requesting them to begin implementing the 
contracting parity provisions included in S. 3190, which were 
later included in the Small Business Jobs Act of 2010 (P.L. 
111-240). In the letters, Chair Landrieu noted the importance 
of small business contracting programs in job creation and 
economic growth, and the detrimental effect of placing one 
program over another. Chair Landrieu urged the agencies to take 
swift action in implementing the law and to ensure that the 
agency is giving each program equal priority when issuing 
contract awards. As of January 3, 2010, twenty agencies have 
responded that they fully intend to implement the law without 
haste.

                  C. 8(A) BUSINESS DEVELOPMENT PROGRAM

    The ``8(a)'' business development contracting program, 
named for the Section of the Small Business Act that authorizes 
the program, is the main program by which economically and 
socially disadvantaged businesses compete for government 
contracts. The Committee has long recognized the 8(a) program 
as a critical tool in improving under-performing sectors of the 
economy and ensuring socially and economically disadvantaged 
small business owners are able to compete on a level playing 
field when pursuing federal contracts. In hearings, roundtables 
and official meetings held over the last several Congresses, 
the Committee has received and reviewed numerous reports, 
official testimony and statements detailing the systemic 
obstacles that socially and economically disadvantaged business 
owners, particularly minority-owned businesses, face in 
accessing and obtaining federal contracts. Chair Landrieu has 
sought to continue the Committee's effort in developing a 
significant record, both in breadth and depth, in support of 
the 8(a) program and corresponding legislative efforts to 
expand and improve the program.

Roundtable: ``Minority Entrepreneurship: Evaluating Small Business 
        Resources and Programs''

    On September 24, 2009, the Committee held a roundtable 
titled ``Minority Entrepreneurship: Evaluating Small Business 
Resources and Programs.'' The purpose of the roundtable was to 
examine existing minority entrepreneurship programs and 
opportunities for expansion, and focused on the difficulties 
minority-owned businesses have in obtaining contracting 
dollars. Participants in the roundtable discussion acknowledged 
that while many federal programs designed to serve minority 
entrepreneurs have been successful, many have not and that the 
SBA and other agencies could do more to make existing programs 
more effective. Participants included interested minority 
business leaders, successful business owners, representatives 
from academia, and organizational leaders, as well as an SBA 
representative.

Legislation

    On June 7, 2010, Chair Landrieu introduced the Section 8(a) 
Improvements Act of 2010 (S. 3458). The legislation sought to 
improve access to federal contracts for socially and 
economically disadvantaged small businesses by making key 
improvements to the SBA's Section 8(a) Business Development 
Program. Specifically, the bill directed the SBA Administrator 
to: (1) assign each North American Industry Classification 
System industry code to a category of either manufacturing, 
construction, professional services, or general services; and 
(2) for each category, establish a maximum net worth for the 
socially disadvantaged individuals who own or control small 
businesses in that category, for purposes of participation in a 
program for the award of federal procurement subcontracts to 
socially and economically disadvantaged small businesses. The 
bill also required an annual inflationary adjustment to the 
average income and maximum net worth limits of owners of such 
businesses, as well as a temporary adjustment within the first 
30 days after the enactment of the Act.
    S. 3458 established a transition period of three years 
after a small business has graduated from the 8(a) program, 
during which period such business may receive developmental 
assistance through the SBA; and included a provision to require 
the Comptroller General and the Administrator to each evaluate 
the program and report evaluation results to the congressional 
small business committees.
    Additionally, the bill directed the Administrator to 
establish a surety bond pilot program under which the 
Administrator may guarantee any surety against loss resulting 
from a breach of the terms of a bid bond, payment bond, 
performance bond, or bonds ancillary by a participating 
eligible small business. The bill allowed the Administrator, 
under the pilot program, to pay a surety up to 90 percent of 
the loss incurred; required the Administrator to provide, for 
up to three years, technical assistance and educational 
training to a small business participating in the pilot 
program; and established a pilot program advisory board and a 
Small Business Surety Bond Pilot Program Fund. Ultimately, no 
Committee or legislative action was taken on the bill.

         D. OVERSIGHT OF RECOVERY ACT CONTRACTING OPPORTUNITIES

Hearings

    On May 21, 2009, the Committee held a hearing titled ``The 
Role of Small Business in Stimulus Contracting.'' The purpose 
of the hearing was to examine contracting opportunities for 
small businesses as a result of the American Recovery and 
Reinvestment Act (``Recovery Act'') (P.L. 111-5). The hearing 
consisted of two panels. The first panel included witnesses 
from the SBA and the Department of Transportation, who 
testified as to their respective agency's efforts to track 
Recovery Act contracting opportunities for small businesses and 
discussed ways to improve inclusion of small businesses in 
Recovery Act-funded projects. The second panel included small 
business owners and interested organizational representatives, 
and focused on perspectives of small business owners and their 
experience in pursuing and obtaining Recovery Act contract 
awards.
    On October 6, 2009, the Committee held a hearing titled 
``The Recovery Act for Small Businesses: What is Working and 
What Comes Next?''. The purpose of the hearing was to evaluate 
small businesses' ability to access capital and contracts 
because of the small business provisions within the Recovery 
Act. The hearing consisted of five witnesses from various 
agencies, including representatives from the SBA, the 
Department of Defense, the Department of Energy and the 
National Institutes of Health.

Oversight

    On August 14, 2009, the SBA provided the Committee with the 
results of a study required under Section 508(d) of the 
Recovery Act pertaining to the SBA Surety Bond Guarantee 
Program fees and funding structure. Specifically, the Recovery 
Act required an assessment of (1) whether the program's current 
funding framework and program fee are inhibiting the program's 
growth; and (2) whether surety companies and small business 
concerns could benefit from an alternative funding structure. 
The study concluded that there was no evidence that the current 
fees and funding structure are inhibiting growth. However, the 
SBA continues to explore ways to enhance the program to help 
ensure that small businesses have robust access to surety bonds 
and can compete effectively for business contracts.
    On September 8, 2009, Chair Landrieu sent letters to 24 
executive agencies requesting information regarding Recovery 
Act contract awards to small businesses. In the letter, Chair 
Landrieu expressed the importance of small businesses in job 
creation and economic growth, and the need for greater access 
to Recovery Act contracting opportunities by small businesses. 
On September 15, 2009, Ms. Ana Ma, Chief of Staff in the SBA 
Office of the Administrator, issued a response letter to Chair 
Landrieu providing information about each agency's contracting 
awards.
    In her response, Ms. Ma outlined the Stakeholder Outreach 
Initiative (SOI), an effort launched in August of 2009 and co-
led by the SBA and the Department of Commerce. Ms. Ma stated 
that the SOI is designed to ensure that small businesses and 
disadvantaged businesses, including firms owned by minorities, 
women and veterans, have greater access to federal government 
contracting opportunities. Additionally, she indicated that the 
SOI would focus on training and outreach, and would host over 
200 events at which federal agencies would share information 
with small businesses about government contracting 
opportunities.

                VIII. Small Business International Trade

    Despite ongoing domestic economic difficulties, 
international trade and in particular exports of goods and 
services, has remained a leading source of U.S. economic growth 
in recent years. According to the most recent data from the 
Department of Commerce, exports have increased by nearly 61 
percent in the last ten years, growing from $989.3 billion in 
1999 to $1.9 trillion in 2009, and support approximately 10 
million American jobs. With 96 percent of the world's customers 
located outside of our borders, foreign markets remain a 
largely untapped resource for many U.S. businesses.
    Key to any future economic growth through international 
trade--and specifically, through exports--will be the increased 
engagement of U.S. small businesses. Presently, less than 1 
percent of our nation's nearly 29 million small businesses 
actively export their goods and services abroad. However, these 
260,000 small businesses account for nearly 97 percent of all 
indentified U.S. exporters, including 83 percent of those who 
employ fewer than 20 employees. This suggests that small 
businesses, particularly the smallest of our small businesses, 
are uniquely positioned to benefit from any increase in export 
opportunities.
    For these reasons, the Committee believes that it is 
critical for the Federal government to do more to both 
encourage and directly assist U.S. small businesses to expand 
into foreign markets. Small businesses seeking such 
opportunities routinely confront a number of barriers that the 
private sector has not been able to address, including 
insufficient access to working capital, lack of up-to-date 
market information, lack of in-market advocacy, high tariffs, 
and burdensome and confusing local regulatory laws. All of 
these factors present tremendous challenges for U.S. small 
businesses seeking to sell their products abroad and put them 
at a distinct disadvantage with their foreign counterparts.
    Recognizing these unique challenges, during the 111th 
Congress the Committee has sought to influence the development 
of U.S. trade and export policy by improving federal export 
promotion programs, particularly those programs operated and 
administered by the SBA, and by calling for stronger advocacy 
on behalf of small businesses at the highest levels of the U.S. 
government. The following is a summary of those activities.

  A. REAUTHORIZATION OF SBA INTERNATIONAL TRADE AND EXPORTING PROGRAMS

Legislation

    Chief among the Committee's efforts to increase export 
opportunities for small businesses during the 111th Congress 
was the reauthorization and improvement of the export 
assistance programs offered by the SBA's Office of 
International Trade (OIT). OIT was established by the Small 
Business Export Expansion Act of 1980 (P.L. 96-481) and later 
modified by provisions in the Small Business International 
Trade and Competitiveness Act of 1988 (P.L. 100-418). Although 
the SBA has made minor modifications and internal improvements 
to the office in recent years, the statutes authorizing and 
dictating the responsibilities of OIT have not been 
significantly updated since 1988, hindering the SBA's ability 
to serve small businesses seeking export opportunities.
    Building on legislation introduced in both the 109th and 
110th Congresses, on June 8, 2009, Chair Landrieu introduced 
the Small Business International Trade Enhancement Act of 2009 
(S. 1196), which sought to reform OIT. The legislation elevated 
OIT, moving it out of the SBA's Office of Capital Access and 
creating a new office, headed by an Associate Administrator for 
International Trade, directly accountable to the Administrator. 
The legislation also made a number of other critical 
improvements to the office by establishing internal and 
interagency goals for OIT, and requiring closer coordination 
with other core Trade Promotion Coordinating Committee (TPCC) 
member agencies. Most significantly, the legislation updated 
the SBA's export loan programs, increasing the maximum loan 
amounts, raising the loan guarantees, allowing working capital 
to be an eligible use for loan proceeds and, finally by 
extending the same terms for collateral and refinancing as with 
the SBA's 7(a) loan program. To carry out these changes, better 
serve small exporters and help the SBA effectively market their 
export assistance programs to the small business community, S. 
1196 also called on the SBA to increase and maintain the number 
of Export Finance Specialists posted in U.S. Export Assistance 
Centers throughout the country.
    On December 9, 2009, Ranking Member Snowe and Chair 
Landrieu introduced the Small Business Export Enhancement and 
International Trade Act of 2009 (S. 2862). The legislation was 
based largely upon the provisions in S. 1196 as well as 
provisions from other, similar bills introduced in past 
Congresses, and S. 1208, the Small Business Export Opportunity 
Development Act of 2009. Like S. 1196, the legislation elevated 
OIT, established an Associate Administrator position to head 
the office, made improvements to the SBA's export financing 
programs, and increased the number of SBA Export Finance 
Specialists. Additionally, the legislation created the State 
Trade and Export Promotion (STEP) Grant Pilot Program, to 
facilitate and supplement state and locally based export 
assistance programs serving small businesses. Finally, the 
legislation strengthened coordination between core TPCC 
agencies including the SBA, state and local trade agencies and 
SBA resource partners, and required a report to Congress on the 
Administration's efforts to promote exports by rural small 
businesses.
    On December 17, 2009, during markup of S. 2862, the 
Committee unanimously adopted by a voice vote, a bipartisan 
managers' substitute amendment offered by Chair Landrieu and 
Ranking Member Snowe. The bill was subsequently adopted by the 
Committee as amended by a roll call vote of 18-0.

Hearings

    To supplement the Committee's efforts to reauthorize the 
SBA's export assistance programs, Chair Landrieu held a 
roundtable as well as a field hearing to build a record of 
support for the reauthorization of SBA export assistance 
programs. On June 11, 2009, the Committee held a Roundtable 
titled ``Entrepreneurial Development: Investing in Small 
Businesses to Strengthen Our Economy.'' Though much of the 
focus was on the SBA's Entrepreneurial Development programs, a 
significant portion of the roundtable's discussion included 
exporting and the SBA's role in supporting small businesses in 
trade and exporting. Specific topics addressed included the 
staffing levels of SBA Export Finance Specialists, the creation 
of a grant program to supplement state and local small business 
programs, and adjustments to the SBA's export financing 
programs. Participants contributing to the exporting portion of 
the discussion included representatives from the U.S. Chamber 
of Commerce, the Small Business Exporters Association, as well 
as a representative from the small business export-financing 
community.
    Following the roundtable, on June 30, 2009, the Committee 
held a field hearing in New Orleans, Louisiana, titled 
``Keeping America Competitive: Federal Programs that Promote 
Small Business Exporting.'' The purpose of the field hearing 
was to highlight federal export assistance programs and the 
role of small businesses in international trade. The hearing 
consisted of two panels of witnesses, with the first panel 
comprising representatives from federal agencies who discussed 
their respective agency's role in developing and implementing 
small business export promotion programs. Witnesses on this 
panel included SBA Administrator Karen Mills; Ambassador Ronald 
Kirk, U.S. Trade Representative; Mr. Fred Hochberg, Chairman 
and President of the U.S. Export-Import Bank; and Ms. Patty 
Sefcik, then Acting Deputy Assistant Secretary for Domestic 
Operations of the U.S. and Foreign Commercial Service, within 
the Department of Commerce's International Trade 
Administration. Testimony covered topics including updates to 
the SBA's export financing and counseling programs, the U.S. 
Export-Import Bank's financing and insurance programs, USTR's 
efforts to promote small business interests during the 
negotiation, implementation and enforcement of trade agreements 
and finally, an overview of the services and programs offered 
by the U.S. Foreign and Commercial Service.
    The second panel featured a discussion of the obstacles and 
opportunities facing small businesses operating in foreign 
markets, as well as the domestic challenges associated with 
promoting small business exporting. Witnesses on the second 
panel included representatives from the World Trade Center of 
New Orleans, the Southern United States Trade Association, the 
Louisiana Business Incubation Association, and a representative 
from the Louisiana District Export Council. Specific issues 
discussed included the effectiveness of Federal export 
promotions in Louisiana, including those operated by the 
Department of Commerce and SBA, the effectiveness of these 
programs, ways to improve these programs and examples of best 
practices in small business exporting.

  B. CREATION OF AN ASSISTANT UNITED STATES TRADE REPRESENTATIVE FOR 
                             SMALL BUSINESS

Oversight

    In addition to efforts to improve the SBA's export 
assistance programs, the Committee strongly believes that the 
needs and concerns of small businesses should be fully 
incorporated into the development of federal trade policy and 
more specifically, during the negotiation of free trade 
agreements. Accordingly, on March 29, 2009, Chair Landrieu and 
Ranking Member Snowe, along with Senator Charles Schumer, sent 
a letter to United States Trade Representative Ronald Kirk 
asking him to consider creating an Assistant United States 
Trade Representative (AUSTR) for Small Business to ensure that 
small exporters have a stronger voice during the development of 
U.S. trade policy. The letter cited key statistics relating to 
the important role that small businesses play in international 
trade as well as the significant potential for economic growth 
and job creation that would result from encouraging and 
facilitating more participation by small businesses in 
exporting. The letter also highlighted the many barriers 
confronting small businesses attempting to access foreign 
markets and the importance of having a high-level advocate to 
help these businesses successfully enter and navigate foreign 
markets.
    In a response letter, dated May 21, 2009, Ambassador Kirk 
outlined efforts undertaken by his office in addressing the 
obstacles noted in Chair Landrieu's original letter, including 
addressing issues of customs facilitation and non-tariff 
barriers to trade, global intellectual property rights 
protection, expanded outreach by his office to small businesses 
and local chambers of commerce, and finally expansion of small 
business representation on USTR's trade advisory committee. 
Ambassador Kirk indicated his willingness to examine ways to 
more fully integrate small business interests into USTR's 
agenda, including through the creation of an Assistant USTR for 
Small Business. Additionally, during his testimony at the 
Committee's June 30, 2009 field hearing on exporting, 
Ambassador Kirk again re-iterated his commitment to improving 
USTR's small business advocacy and outreach efforts, but 
indicated that the creation of an AUSTR for Small Business was 
Congressional prerogative.

Legislation

    As a result of Ambassador Kirk's testimony, on December 9, 
2009, Ranking Member Snowe and Chair Landrieu introduced the 
Small Business Trade Representation Act of 2009 (S. 2861), 
establishing an AUSTR for Small Business. Prior to the 
introduction of S. 2861, on October 7, 2009 Chair Landrieu 
filed an amendment, to the Hiring Incentives to Restore 
Employment Act (HR 2847/P.L. 111-147), that allocated $500,000 
of USTR's FY2010 funding towards the creation of an Assistant 
U.S. Trade Representative for Small Business. Though the 
amendment was not ultimately voted upon by the Senate, it 
helped to bring additional attention to the joint efforts of 
Chair Landrieu and Ranking Member Snowe in establishing the 
position.

Creation of an Assistant United States Trade Representative for Small 
        Business

    As a result of Chair Landrieu and Ranking Member Snowe's 
joint efforts, on January 21, 2010, Ambassador Kirk announced 
that the current AUSTR for Market Access and Industrial 
Competitiveness would subsequently become the AUSTR for Small 
Business, Market Access and Industrial Competitiveness, thereby 
broadening the position's purview to include advocacy for and 
representation of small business interests in executing USTR's 
mission.

                     C. NATIONAL EXPORT INITIATIVE

Letter to the Administration Regarding the National Export Initiative

    During his 2010 State of the Union Address on January 27, 
2010, President Obama announced the creation of the National 
Export Initiative (NEI), a government-wide effort that seeks to 
double U.S. exports within five years and create 2 million new 
American jobs through the increased engagement of U.S. small 
businesses and farmers. To accomplish this ambitious goal, the 
President created an Export Promotion Cabinet consisting of key 
TPCC agencies and issued an Executive Order directing the 
Cabinet to conduct to conduct a comprehensive review of 
existing federal export assistance programs.
    In an effort to better understand the central goals of the 
NEI as they relate to the small business community as well as 
the Export Promotion Cabinet's role review process, on March 3, 
2010, Chair Landrieu and Ranking Member Snowe sent a letter to 
Secretary of Commerce Gary F. Locke requesting information on 
the TPCC's role in the NEI. The letter also urged Secretary 
Locke to fully integrate the SBA into the NEI, as well as into 
any new government-wide export strategy or programs resulting 
from the review process. In his response letter to Chair 
Landrieu and Ranking Member Snowe dated April 19, 2010, 
Secretary Locke indicated that the intent of the Export 
Promotion Cabinet was to supplement and better coordinate the 
work of the TPCC and its working groups, as well as to 
integrate any of resulting recommendations into the NEI. 
Secretary Locke also noted that the promotion of exports by 
small businesses would be a key feature of the NEI and 
indicated that SBA Administrator Karen Mills had been placed in 
charge of the small business working group.
    Following Secretary Locke's response, Chair Landrieu sent 
an additional letter to Secretary Locke on July 27, 2010, 
outlining her recommendations to assist the Export Promotion 
Cabinet and the Trade Promotion Coordinating Committee (TPCC) 
in the development and implementation of the small business 
elements of the National Export Initiative (NEI) plan. In the 
letter, Chair Landrieu called on the Administration to take 
five specific steps to improve the Federal export assistance 
and promotion process; (1) to increase marketing and outreach 
efforts to small business; (2) to update and improve existing 
federal export assistance programs used by small businesses; 
(3) to improve coordination amongst core TPCC agencies; (4) to 
improve small business advocacy mechanisms intended to help 
small businesses in foreign markets, and; (5) to increase 
resources in support of small business export assistance 
programs. On September, 16, 2010, the Export Promotion Cabinet 
released a report to the President outlining its 
recommendations for the implementation of the NEI, as well as 
improvement to federal export assistance programs. The report 
included a number of the recommendations previously outlined in 
Chair Landrieu's letter.

                        D. ADDITIONAL OVERSIGHT

Letter to the Administration Regarding Changes in U.S. 
        Telecommunications Policy Toward Cuba

    In April 2009, President Obama announced of a series of 
changes to limits on travel and gifts from the U.S. to Cuba, as 
well as the authorization of greater telecommunications links 
between the two countries. On May 11, 2009, Chair Landrieu, 
along with Senators Byron Dorgan, Jeanne Shaheen, Maria 
Cantwell and Ron Wyden, sent a letter to Treasury Secretary 
Timothy Geithner requesting that any changes in American 
telecommunications policy towards Cuba include access to new 
opportunities for U.S. small businesses. Specifically, Chair 
Landrieu urged Secretary Geithner to make small businesses a 
priority in any negotiations with the Cuban government 
regarding establishing fiber-optic cable by U.S. 
telecommunications providers and satellite telecommunications 
facilities linking the U.S. and Cuba. Additionally, Chair 
Landrieu requested information as to whether export loans 
program would include business activities in Cuba, the role of 
SBA in promoting U.S. small business opportunities in Cuba, and 
the role of the Cuban government in encouraging small business 
participation in joint ventures between the two countries. In 
his response letter, dated May 21, 2009, Secretary Geithner 
expressed agreement as to the need to include small business 
interests when negotiating policies between the U.S. and Cuba.

Letter to the GAO Regarding the Trade Promotion Coordinating Committee 
        and Inter-Agency Coordination

    On August 3, 2009, Chair Landrieu, along with Ranking 
Member Snowe and Small Business Committee members Benjamin L. 
Cardin and Jeanne Shaheen, issued a letter to Mr. Gene Dodaro, 
Acting Comptroller General of the U.S. Government 
Accountability Office (GAO), requesting that the GAO conduct an 
investigation of the Trade Promotion Coordinating Committee's 
(TPCC) progress in implementing an effective government-wide 
strategy to promote exporting opportunities for small 
businesses. In the letter, the Senators asked the GAO to 
examine the steps being taken to improve inter-agency 
coordination of export promotion programs, training, and 
outreach to small businesses. Additionally, GAO was asked to 
evaluate the allocation of SBA resources to export promotion 
efforts as compared to other TPCC member agencies, and the 
Department of Commerce's management and control of the TPCC's 
activities and whether its control impacts the effectiveness of 
trade promotion within other agencies. GAO has indicated that a 
report with the requested items is currently underway and will 
report back to the Committee on its findings in late 2011.

Letter to the President Regarding Small Business Representation on the 
        President's Export Council

    As part of the Administration's efforts to move the NEI 
forward, on July 7, 2010, President Obama reconvened the 
dormant President's Export Council and named 22 private sector 
representatives to the Council. As the principal national 
advisory committee on international trade, the Council advises 
the President of government policies and programs that affect 
U.S. trade performance and provides a forum for discussing and 
resolving trade-related problems among the business, 
industrial, agricultural, labor, and government sectors. 
However, of the 22 members named to the Council in July 2010, 
the overwhelming majority represent large U.S. corporations, 
including Boeing, Xerox, Pfizer and Ford Motor Company. As a 
result, on August 11, 2010, Chair Landrieu sent a letter to 
President Barack Obama asking him to consider filling the 8 
remaining private sector spots on the Council with successful 
small business exporters.

             IX. Education and Entrepreneurial Development

    The Committee's role in overseeing the numerous SBA 
programs has led to the development of several programs aimed 
at providing small businesses with the tools they need to 
compete and succeed. These programs are designed to protect the 
interests of small businesses and most importantly, improve the 
success rate of small businesses through counseling, training 
and technical assistance. According to the Aspen Institute, 
``training and technical assistance are arguably the most 
important components of microenterprsie development services in 
the United States, particularly when those services are aimed 
at low-income clients.'' Small business counseling and 
technical assistance programs have the potential to help 
millions of small businesses by teaching entrepreneurs and 
small business owners fundamental principles and practices 
regarding cash flow, cost management, strategies to access to 
capital and effective business planning.
    With the help of its resource partners such as Small 
Business Development Centers (SBDCs), Women's Business Centers 
(WBCs), Service Corps of Retired Executives (SCORE), Veteran 
Business Centers (VBCs), and the Program for Investment in 
Microentrepreneurs (PRIME), the SBA provides technical 
assistance and information to potential and current small 
business owners, but helping to focus the nation's 
entrepreneurial spirit into concrete economic growth. In 2007, 
with a modest federal investment of approximately $97 million 
in assistance, SBDC clients generated nearly $220 million in 
additional federal revenues. Nationally, this economic activity 
resulted in approximately $2.26 in revenue for every federal 
dollar expended. This level of return on investment is not 
unique to SBDCs. According to an SBA report to Congress, SCORE 
helped create more than 19,000 new small businesses in 2007 at 
a cost of $29 per business and helped create more than 25,000 
new jobs each year.
    During the 111th Congress, the Committee has worked to 
educate Members of Congress and other interested parties in the 
vital role that SBA's resource partners play in making SBA and 
other federal agencies' programs more effective. Additionally, 
Chair Landrieu and Ranking Member Snowe sought to improve and 
expand the capacity through which SBA and its resource partners 
assist small businesses. Through hearings and legislation, the 
Committee has worked to provide SBA resource partners with the 
tools they need to effectively serve small businesses.

  A. REAUTHORIZATION OF THE SBA'S ENTREPRENEURIAL DEVELOPMENT PROGRAMS

Entrepreneurial Development Act of 2009 (S. 1229)

    On June 10, 2009, Chair Landrieu and Ranking Member Snowe 
introduced the Entrepreneurial Development Act of 2009 (S. 
1229). Consistent with the Committee's commitment to improving 
and providing necessary support to SBA's resource partners, the 
legislation increases funding authorized by Congress for 
important counseling, training and technical assistance 
programs. Additionally, the legislation codifies several 
programs currently operated and supported by the SBA that are 
not authorized under the Small Business Act.
    S. 1229 is based on S. 1671, the Entrepreneurial 
Development Act of 2007, which was incorporated into S. 2920, 
the SBA Reauthorization Act of 2007. Both pieces of legislation 
were based on S. 3778, the Small Business Reauthorization and 
Improvements Act of 2006, developed in part by then Chair Snowe 
during the 109th Congress. S. 1229 builds on the Committee's 
work in the prior Congresses, making slight changes to the 
provisions, including clarification on the definitions and 
qualifications of eligible WBCs. S. 1229 also calls for 
extending privacy requirements to SCORE clients and increasing 
the number of members to the National Small Business 
Development Center Advisory Board. Additionally, S. 1229 
authorizes several programs in support of veterans' business 
development and Native American entrepreneurship, as well as a 
program to provide information on health insurance options to 
small business owners.
    On June 18, 2009, during markup of the legislation the 
Committee unanimously adopted, by voice vote, a bipartisan 
managers' substitute amendment offered by Chair Landrieu and 
Ranking Member Snowe. The legislation was subsequently adopted 
by the Committee as amended by a roll call vote of 18-0.

Small Business Community Partner Relief Act of 2010 (S. 3165)

    The SBA maintains a national network of WBCs and microloan 
intermediaries that provide technical assistance, training, 
counseling and other services to help underserved segments of 
the population start and grow successful small businesses. More 
than 110 WBCs across the country help more than 150,000 
clients, primarily women, annually on a vast array of topics--
from how to write a business plan to where to get financing. 
Additionally, microloan intermediaries provide small, short-
term loans to start-ups or small growing firms that cannot 
access credit through traditional loan programs. Much like 
WBCs, microloan intermediaries tend to serve disadvantaged 
businesses in populations and areas of the country that have 
been hit the hardest by the recession, with about 48 percent of 
microloans going to small businesses owned by women and 
approximately 53 percent to minority-owned small businesses.
    As a requirement to receive funding from the SBA, WBCs and 
microloan intermediaries must also find matching local funds to 
support their programs. However, in the face of the recent 
economic downturn, many WBCs and microloan intermediaries who 
typically receive matching funding from state and local 
governments, universities and private entities have experienced 
significant reductions in or the limitation of funding awards 
due to budget cuts and current economic conditions. As a 
result, some WBCs and microloan intermediaries have had to 
reduce or refuse federal money. At least nine WBCs closed or 
requested reduced funding in 2010 and many other WBCs are 
struggling to keep their doors open, even in the face of record 
demand for their services.
    To help alleviate the financial burdens causing small 
business counseling centers to close, on March 25, 2010, Chair 
Landrieu, Ranking Member Snowe and Senator Richard Durbin 
introduced the Small Business Community Partner Relief Act of 
2010 (S. 3165). The legislation enabled the SBA to temporarily 
waive or reduce the matching non-federal funding requirement 
for qualified WBCs and microloan intermediaries who meet 
certain economic hardship criteria. Under the legislation, the 
SBA may grant a waiver or reduction of a match requirement on a 
yearly basis, renewable upon application, through 2012. While 
no Committee action was taken on S. 3165, the legislation was 
ultimately included as part of the Small Business Jobs Act of 
2010 (P.L. 111-240).

Strengthening Entrepreneurship for America's Veterans Act of 2010 (S. 
        3394)

    According to the Department of Veterans Affairs, there are 
more than 23.8 million veterans in the country, with hundreds 
of new veterans returning home from service each day. 
Additionally, a recent small business study on veteran business 
ownership revealed that approximately 22 percent of veterans in 
the U.S. household population were either purchasing or 
starting a new business or considering purchasing or starting a 
business in 2004. Of those veteran entrepreneurs, 72 percent 
planned to hire at least one person in the start of their 
venture. The report indicates that many veterans and military 
personnel returning from recent tours become entrepreneurs and 
create new jobs in their communities, and help to strengthen 
the economy overall.
    Since the passage of the Veterans Entrepreneurship and 
Small Business Development Act of 1999 (P.L. 106-50), the SBA's 
Office of Veterans Business Development (OVBD) has been working 
to provide technical assistance and support to those veterans 
who have served our country and returned to start or grow a 
small business. The Committee has supported efforts to ensure 
successful transitions into civilian life and, more 
specifically, civilian employment. By encouraging all levels of 
veteran entrepreneurship and advocating for additional 
resources, the Committee has worked diligently to provide 
America's veterans with the information and tools they need to 
become success small business owners. The Committee continues 
to recognize the tremendous success and potential of the OVBD 
in providing critical information and services to veteran small 
business owners across the country.
    In continuing with the Committee's commitment to supporting 
America's veteran entrepreneurs, on May 20, 2010 Chair Landrieu 
and Ranking Member Snowe introduced the Strengthening 
Entrepreneurship for America's Veterans Act of 2010 (S. 3394). 
The legislation established a Veterans Business Center program 
within the OVBD, to provide entrepreneurial training and 
counseling to veterans, service-disabled veterans, reservists, 
their spouses and surviving spouses. It also authorized funding 
so that the OVBD may carry out the program. In addition, S. 
3394 authorized the OVBD to create an online mechanism through 
which the SBA may provide information to assist veteran 
business centers in providing resources to clients. 
Additionally, the legislation required two reports to be 
completed, one regarding veterans' access to credit and another 
on the effectiveness of the veterans business center program. 
The legislation included provisions similar to those contained 
in the Entrepreneurial Development Act of 2009 (S. 1229) 
introduced by Chair Landrieu and Ranking Member Snowe earlier 
in the Congress.

The Native American Small Business Assistance and Entrepreneurial 
        Growth Act of 2010 (S. 3534)

    According to the U.S. Census Bureau, the three-year average 
poverty rate for American Indians and Alaska Natives was 25.9 
percent higher than for any other race groups. Testimony 
provided during hearings held by the Senate Committee on Indian 
Affairs in the 111th Congress stated that the national average 
is 50 percent unemployment for Native Americans living on or 
near reservations. Additionally, in some places it reaches 
nearly 80 percent unemployment, and of the 10 poorest counties 
in America, eight of them are counties located on Indian 
reservations.
    Yet despite the dire statistics, research shows that 
entrepreneurial development plays a significant role in 
promoting healthy tribal economies and fostering economic 
growth across a variety of industries. Data from the U.S. 
Census shows that in 2007, American Indians and Alaska Natives 
owned 237,386 nonfarm U.S. businesses in 2007, an increase of 
17.9 percent from 2002, and of those, 24,064 had paid 
employees, employing approximately 191,472 people. In total, 
these firms generated $34.5 billion in gross receipts.
    To help further stimulate the economy and help foster 
opportunities for entrepreneurship in Indian country, Chair 
Landrieu, alongside Senator Byron Dorgan, Chairman of the 
Senate Committee on Indian Affairs, introduced the Native 
American Small Business Assistance and Entrepreneurial Growth 
Act of 2010 (S. 3534). The legislation, which was introduced on 
June 24, 2010, codified the Office of Native American Affairs 
within the SBA, which currently works to promote and support 
Native American entrepreneurs and to encourage important 
entrepreneurial activity in Native American communities. 
Additionally, legislation S. 3534 established a grant program 
to help provide culturally tailored business development 
training, technical assistance and counseling to Native 
American entrepreneurs. For communities that have not typically 
been geared towards private enterprise, the legislation 
intended to provide critical resources and help to address 
long-term sustainability issues in tribal communities. The 
legislation included provisions similar to those contained in 
the Entrepreneurial Development Act of 2009 (S. 1229) 
introduced by Chair Landrieu and Ranking Member Snowe earlier 
in the Congress and builds upon legislation introduced by 
Senator Tim Johnson in previous Congresses.

                              B. HEARINGS

Roundtable: ``Entrepreneurial Development: Investing in Small 
        Businesses to Strengthen Our Economy''

    On June 11, 2009, the Committee held a Roundtable titled 
``Entrepreneurial Development: Investing in Small Businesses to 
Strengthen Our Economy.'' The purpose of the roundtable was to 
build the record in support of the SBA's counseling and 
technical assistance programs, and to discuss the changes 
included in S. 1229. Participants included interested 
organizational leaders, SBA resource partner and a 
representative of the SBA, many of whom endorsed many of the 
changes S. 1229 as well as the increase in funding for these 
programs.

Roundtable: ``Entrepreneurship for the Next Generation: Harnessing the 
        Power of Young Entrepreneurs in a Changing Economic Landscape''

    On August 3, 2010, the Committee held a Roundtable titled 
``Entrepreneurship for the Next Generation: Harnessing the 
Power of Young Entrepreneurs in a Changing Economic 
Landscape.'' The purpose of the roundtable was to discuss the 
role of young entrepreneurs in strengthening the economy and 
the obstacles they face in starting or expanding small 
businesses under the current economic climate. Participants 
included young entrepreneurs and successful small business 
owners, leaders in entrepreneurial education, as well as 
representatives from the Small Business Administration, the 
Center for American Progress, SCORE, and SBDCs.

                              C. OVERSIGHT

Letter to the Administration Regarding Appointments to the National 
        Women's Business Council

    On July 29, 2010, Chair Landrieu and Ranking Member Snowe 
sent a letter to SBA Administrator Karen Mills regarding the 
status of appointments of members, and selection of a 
Chairperson, to the National Women's Business Council (``the 
Council''). Under the Women's Business Ownership Act of 1988 
(P.L. 100-533), the Council was created to serve as an 
independent source of advice, and to provide policy 
recommendations, to the President, Congress and the SBA, on 
behalf of women's small business issues.
    Under the Act, the Administrator of the SBA is responsible 
for eight of the fifteen appointments of members to the 
Council, and vacancies are required to be filled within 30 
days. In the letter, Chair Landrieu and Ranking Member Snowe 
expressed concern that the Council had been operating without a 
Chairperson or an adequate number of members for an extended 
period of time, and that the vacancies of the Council were 
undermining the ability of the organization to remain effective 
and active in representing the obstacles facing women business 
owners. Additionally, Chair Landrieu and Ranking Member Snowe 
requested an update as to the status of the Administrator's 
appointments as well as information regarding the selection of 
the Council's Board Chair.
    While the SBA did not issue a formal response letter, on 
August 8, 2010 the Council announced the appointment of Dana 
Lewis as its new Executive Director, to oversee the daily 
operations of the Council and to facilitate the appointment and 
transition of a new Board Chair. Additionally, on October 4, 
2010 President Obama announced his intent to appoint Ms. Donna 
A. James to be the Chair of the National Women's Business 
Council.

          X. Small Business Broadband and Access to Technology


                             A. LEGISLATION

Small Business Broadband and Emerging Information Technology 
        Enhancement Act of 2010 (S. 3506)

    On June 17, 2010, Chair Landrieu and former Chair John 
Kerry introduced legislation to better assist small business 
owners in accessing broadband Internet technology. The Small 
Business Broadband and Emerging Technology Enhancement Act of 
2010 (S. 3506) was designed to address many of the 
recommendations from the Federal Communications Commission's 
March 2010 report entitled ``Connecting America: The National 
Broadband Plan'' which calls for increased broadband access for 
rural small businesses, and includes many of the Committee's 
recommendations for increasing small business access to 
broadband. Specifically, the bill would have amended the Small 
Business Act to direct the Administrator of the Small Business 
Administration (SBA) to assign an SBA employee to coordinate 
SBA programs and activities relating to broadband and emerging 
information technology (BEIT). The bill was referred to the 
Committee, though no action was taking on the bill.

The Small Business Investment and Innovation Act of 2010 (S. 3967)

    On November 18, 2010, Chair Landrieu introduced the Small 
Business Investment and Innovation Act of 2010 (S. 3967). While 
the bill contained a number of provisions aimed at 
strengthening counseling and technical assistance programs, 
revising disaster assistance, addressing regulatory concerns, 
and building contracting and international trade initiatives 
for small businesses, the bill also contained several 
provisions targeted to improving small business broadband 
access. Specifically, S. 3967 would have amended the Small 
Business Act to assign within the Small Business Administration 
(SBA) a Broadband and Emerging Information Technology 
Coordinator to assist small businesses in using broadband and 
other emerging information technologies. This provision would 
have directed the SBA Administrator to establish a pilot 
program to provide up to 1,000 excess government-owned 
computers each year to rural small businesses at no cost or at 
a reduced cost. In addition, the legislation would have 
required a report from the SBA Administrator on ways the agency 
could assist with the development of broadband and wireless 
technology to the benefit of small businesses. The bill was 
referred to the Committee, and while a markup of the bill had 
originally been scheduled to take place in November, the markup 
was postponed.

                              B. HEARINGS

Hearing: ``Connecting Main Street to the World: Federal Efforts to 
        Expand Small Business Internet Access''

    On April 27, 2010, Chair Landrieu and Ranking Member Snowe 
convened a hearing titled ``Connecting Main Street to the 
World: Federal Efforts to Expand Small Business Internet 
Access.'' The hearing focused on implementing the Federal 
Communications Commission's (FCC) National Broadband Plan and 
ongoing broadband grant opportunities made available from the 
American Recovery and Reinvestment Act. Additionally, the 
hearing served as a foundation for understanding what federal 
efforts have been made to date to enhance small business access 
to broadband technology, and to hear industry's input on these 
efforts.. The hearing brought together the Chairman of the FCC, 
Julius Genachowski; the Administrator of the Rural Utilities 
Service, Jonathan Adelstein; the Acting Chief Counsel at the 
SBA's Office of Advocacy, Susan Walthall, and the Administrator 
of the National Telecommunications and Information 
Administration, Larry Strickling, to fully address the National 
Broadband Plan.

Roundtable: ``Connecting Main Street to the World: Small Business 
        Perspectives on Internet Access''

    On May 13, 2010 the Committee held a roundtable titled, 
``Connecting Main Street to the World: Small Business 
Perspectives on Internet Access.'' The purpose of the 
roundtable was to discuss, with small business owners, the 
specific needs that various small businesses have with regard 
to broadband access, affordability, and adoption. In the 
roundtable, participants discussed the implementation of the 
Federal Communications Commission's (FCC) National Broadband 
Plan, and whether the plan meets their needs as small business 
owners and customers of broadband Internet service.

                              C. OVERSIGHT

Letter to Federal Officials Regarding Recovery Act Funds for Small 
        Business Broadband

    On June 10, 2009, Chair Landrieu sent a letter to U.S. 
Department of Commerce Secretary Gary Locke, National 
Telecommunications and Information Administration Acting 
Administrator Anna Gomez, Department of Agriculture Secretary 
Tom Vilsack and Federal Communication Commission (FCC) Acting 
Chairman Michael Copps regarding resources to increase access 
to technology by small businesses in rural and traditionally 
underserved communities. In her letter, Chair Landrieu 
encouraged the respective Federal entities to ensure small 
business opportunities as they allocate the American Recovery 
and Reinvestment Act's more than $3.3 billion in broadband-
related funds toward expanding access to advanced 
telecommunications technology and services.
    On June 23, 2009, Acting FCC Chairman Michael Copps issued 
a response letter thanking Chair Landrieu for her 
recommendations, and informed the Chair of the FCC's role in 
developing a national broadband plan. In his letter, Acting 
Chairman Copps outlined the process for seeking input in 
developing the plan, and expressed a continuing commitment to 
ensure small businesses are a part of that process.

Letter to the FCC Regarding Broadband and Small Businesses Growth

    On November 12, 2009, the Federal Communications Commission 
(FCC) sought public comment on the relationship between 
broadband and economic opportunity. On December 4, 2009, Chair 
Landrieu sent a letter to FCC Chairman Julius Genachowski 
offering her comments on the impact of broadband technology on 
small business growth and economic development. In her letter, 
Chair Landrieu cited several Louisiana-based small businesses 
and rural cities that have benefitted from the use of advanced 
technologies. In addition to spurring growth among the nation's 
small businesses, Chair Landrieu noted that broadband expansion 
has the ability to boost tourism in rural parts of the country.

Letter to the FCC Regarding the National Broadband Plan

    On February 22, 2010, Chair Landrieu sent a letter to the 
Federal Communications Commission (FCC) regarding the National 
Broadband Plan and its impact on small businesses. In her 
letter, Chair Landrieu expressed her interest in broadband's 
capacity to create and grow small businesses, and her desire 
that the National Broadband Plan support small business 
suppliers of broadband as well as small businesses customers of 
broadband Internet service. Additionally, Chair Landrieu 
expressed the need for the Small Business Administration to 
play a role in assisting small businesses in gaining access to 
and benefitting from broadband technology.

Letter to HUD Regarding Permissible Use of Funding Towards Small 
        Business Broadband

    On April 15, 2010 Chair Landrieu sent a letter to the U.S. 
Department of Housing and Urban Development (HUD) requesting 
information regarding the eligible uses of various HUD programs 
to support funding for increasing small business access to 
technology. Specifically, Chair Landrieu requested information 
regarding whether Community Development Block Grant (CDBG) 
funds may be used by state and local governments towards the 
improvement of broadband technology and infrastructure to the 
benefit of small businesses. Chair Landrieu also requested 
information as to whether Section 108 Loan Guarantee program 
may be used by communities to construct or install broadband 
Internet infrastructure and computing facilities. Additionally, 
Chair Landrieu requested information as to whether Sustainable 
Communities Planning grants may be used by state, regional or 
local development groups to fund plans which include expanding 
or facilitating broadband internet access.
    On April 30, 2010, HUD issued a response letter to Chair 
Landrieu's request for information regarding permissible use of 
HUD programs towards increasing broadband infrastructure to the 
benefit of small businesses. In the response, Mr. Peter A. 
Kovar, Assistant Secretary for Congressional and 
Intergovernmental Relations, stated that CDBG funds may be used 
towards the improvement of broadband technology and 
infrastructure to the benefit of small businesses, in certain 
circumstances. Mr. Kovar also stated that the Section 108 Loan 
Guarantee Program may be utilized for broadband and other 
technology-based projects. Additionally, in his letter, Mr. 
Kovar informed Chair Landrieu that HUD was in the process of 
preparing a Notice of Funds Availability (NOFA) for the 
Sustainable Communities Regional Planning Grant Program, and 
that they expected that the NOFA would be drafted in such a way 
as to address Chair Landrieu's concerns.

                XI. Minority Small Business Development

    Minority-owned small businesses account for nearly 18 
percent of our nation's nearly 27.7 million small businesses, 
earning gross receipts of nearly $668 billion and employing 
approximately 4.7 million workers, or roughly 9 percent of the 
workforce. According to the SBA's Office of Advocacy, minority-
owned small businesses are among the fastest growing segments 
of the small business community and it is estimated that over 
the last decade, minority-owned enterprises have accounted for 
more than 50 percent of the two million new small businesses 
started.
    Despite this recent growth among minority-owned small 
businesses, many of these firms face significant barriers when 
attempting to start or expand their operations. A recent study 
by the SBA's Office of Advocacy found that race is a 
significant predictor of opening a business. For example, the 
odds of a minority opening a business are estimated to be 55 
percent lower than those for a non-minority owned firm. Wealth, 
experience and education have also been found to factor 
significantly into the ability of minority-owned firms to open, 
start and expand their business. Further compounding these 
problems, the recent economic recession has seen credit tighten 
drastically with many banks withdrawing or reducing their 
lending activity to small businesses. Minority-owned firms, who 
struggle to access capital under even the best of economic 
conditions, have also been significantly and negatively 
affected by the credit-crunch.
    The Committee recognizes the vital role minority-owned 
businesses play in strengthening our economy and increasing our 
global competitiveness. Lack of access to capital, contracting 
and other opportunities for any sector of the small business 
community results in loss of economic efficiency to the 
American economy as a whole. The Committee continues to push 
the SBA to expand its lending, contracting and technical 
assistance programs to reach underserved segments of the 
minority community, including minority-owned firms, as well as 
to provide additional resources in support programs designed to 
serve these communities. During the 111th Congress, through 
hearings and legislation, the Committee has sought to examine 
and address the obstacles that minority business owners face in 
starting and growing their small businesses.

                              A. HEARINGS

Roundtable: ``Minority Entrepreneurship: Evaluating Small Business 
        Resources and Programs''

    On September 24, 2009, the Committee held a Roundtable 
titled ``Minority Entrepreneurship: Evaluating Small Business 
Resources and Programs.'' The purpose of the roundtable was to 
examine existing minority entrepreneurial development programs 
as well as opportunities for expansion of these programs, with 
a specific focus on the difficulties minority-owned businesses 
have in obtaining federal contracts. Participants in the 
roundtable included interested minority business leaders and 
successful business owners, representatives from academia, 
organizational leaders, as well as a representative of the SBA. 
A number of the participants acknowledged that although many 
federal programs designed to serve minority entrepreneurs have 
been successful, other have not achieved their intended 
objectives. Additionally, the participants also expressed their 
views as to how the SBA and other agencies could do more to 
make existing programs more effective.

Hearing: ``Assessing Access: Obstacles and Opportunities for Minority 
        Small Business Owners in Today's Capital Markets''

    On April 15, 2010, the Committee held a hearing titled 
``Assessing Access: Obstacles and Opportunities for Minority 
Small Business Owners in Today's Capital Markets.'' The purpose 
of the hearing was to discuss the opportunities and obstacles 
for minority business owners in accessing capital and related 
technical assistance, in order to build a record for Congress 
to address those issues. Witnesses included minority business 
owners, as well as representatives from the financial sector, 
academia, the Department of Commerce's Minority Business 
Development Agency (MBDA) and the SBA.
    During the hearing, Dr. Robert Fairlie, a Professor of 
Economics at the University of California, testified that 
minority entrepreneurs face increased scrutiny in finding and 
receiving capital, and are less likely to receive loans than 
non-minority owned firms regardless of firm size. In addition, 
Dr. Fairlie testified that when minority-owned firms do receive 
financing, it is at lower levels and higher interest rates than 
non-minority business owners. This testimony was supported by 
Mr. David Hinson, National Director of the MBDA, who presented 
similar findings that were included in a recent report 
published the Agency. Additionally, several witnesses made 
legislative recommendations for Congress to address these 
issues.

                              B. OVERSIGHT

Letter to the SBA Regarding the Appointment of the Associate 
        Administrator for Minority Small Business and Capital Ownership 
        Development

    On December 4, 2009, Chair Landrieu sent a letter to SBA 
Administrator Karen Mills regarding the appointment of the 
Associate Administrator for Minority Small Business and Capital 
Ownership Development. According to Section 4(b)(1) of the 
Small Business Act, the Administrator has the authority to 
appoint an Associate Administrator for Minority Small Business 
and Capital Ownership Development, which is responsible ``for 
the formulation and execution of the policies and programs 
under sections 7(j) and 8(a) of [the Act] which provide 
assistance to minority small business concerns.'' At the time 
Chair Landrieu sent the letter, the position had not been 
filled. The Chair, in her letter to the Administrator, 
requested information regarding the SBA's status in filling the 
position.
    Having not received an official response from the SBA, 
Chair Landrieu sent a follow up letter, on April 7, 2010, to 
Administrator Mills thanking her for allowing Mr. Grady 
Hedgespeth, Director of the Office of Financial Assistance, to 
participate in the Committee's April 15, 2010 hearing titled, 
``Assessing Access: Obstacles and Opportunities for Minority 
Small Business Owners in Today's Capital Markets.'' In the 
letter, Chair Landrieu reiterated her request for information 
regarding the status of the appointment to the position and 
indicated her intent to ask Mr. Hedgespeth whether the SBA 
intended to fill the position.
    During the hearing, Chair Landrieu asked Mr. Hedgespeth 
about the SBA's intent to appoint an Associate Administrator 
for Minority Small Business and Capital Ownership Development. 
Mr. Hedgespeth acknowledged that Administrator Mills had 
received Chair Landrieu's request for information regarding the 
position. According to Mr. Hedgespeth, the SBA was moving 
``swiftly'' to fill the position and had identified a well-
qualified candidate to potentially assume the role. On August 
31, 2010, Darryl K. Hairston was appointed to the position of 
Associate Administrator for Minority Small Business and Capital 
Ownership Development. In his capacity, he serves as the 
Associate Administrator for Business Development (formerly, 
Associate Administrator for Minority Small Business and Capital 
Ownership Development). As such he is responsible for the 
formulation and execution of the policies and programs under 
sections 7(j) and 8(a) of the Small Business Act which provide 
assistance to minority small business concerns.

                     XII. Small Business Tax Issues


                             A. LEGISLATION

The Small Business Stimulus Act of 2009 (S. 156) and the Net Operating 
        Loss (NOL) Carryback Act (S. 823)

    As a means to help small businesses quickly recover the 
cost of certain capital expenses, small business taxpayers are 
allowed to elect to write-off the cost of these expenses in the 
year of acquisition as opposed to recovering these costs over 
time through depreciation. In 2008, Congress passed and the 
President signed into law the Economic Stimulus Act of 2008, 
which allowed American small businesses to expense up to 
$250,000 of certain investments, including the purchase of new 
equipment through 2009. On January 6, 2009, Ranking Member 
Snowe, Chair Landrieu and former Chair John Kerry introduced 
the Small Business Stimulus Act of 2009 (S. 156) to extend 
these enhanced expensing limits for small businesses. The bill 
extended, through 2010, the increased expensing allowance for 
depreciable business assets included in the Economic Stimulus 
Act of 2008, and extended, from two to five years, the 
carryback period for net operating losses incurred in 2008 or 
2009. Though no action was taken on the bill, the provisions 
were ultimately included in the Recovery Act (P.L. 111-5)
    On April 2, 2009, Ranking Member Snowe, along with Small 
Business Committee member Maria Cantwell and Senators Max 
Baucus, Orrin Hatch, Debbie Stabenow, John Ensign, Blanche 
Lincoln and Bill Nelson, introduced the Net Operating Loss 
(NOL) Carryback Act (S. 823). On July 20, 2009, Chair Landrieu 
cosponsored the bill, which limited the amount of a NOL carried 
back to the fifth taxable year to 50 percent of taxable income, 
except for small business taxpayers with gross receipts of $15 
million or less. Though no action was taken on the bill, the 
provisions were ultimately included in the Worker, 
Homeownership, and Business Assistance Act of 2009 (P.L. 111-
92), signed into law on November 6, 2009.

The Small Business and Military Family Assistance Act of 2009 (S. 2748)

    On November 6, 2009, former Chair John Kerry, Chair 
Landrieu and Senator Blanche Lincoln introduced the Small 
Business and Military Family Assistance Act of 2009 (S. 2748), 
which extended a tax credit that was designed to provide an 
incentive for small employers to eliminate any pay gap between 
civilian and military pay of their reservist employees when 
they are called to active duty. Specifically, the tax credit 
provided small businesses with less than 50 employees with a 
tax credit of 20 percent of the differential pay. The maximum 
credit is $4,000. The credit is for amounts paid through 
December 31, 2009. The bill extended this provision for an 
additional year to apply to amounts paid through December 31, 
2010. While no action was taken on the bill, the provisions 
were ultimately included in the Tax Relief, Unemployment 
Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 
111-312).

Small Business Tax Equalization and Compliance Act (S. 3430)

    On May 26, 2010, Ranking Member Snowe and Chair Landrieu 
introduced the Small Business Tax Equalization and Compliance 
Act (S. 3430) to provide the salon industry the same tax rules 
on tips paid to employees as permitted in the restaurant 
industry. Specifically, the bill provided a tax credit designed 
for salon employers to offset the matching Social Security and 
Medicare taxes that the salon employer is required to pay on 
the tips that employees receive from customers. Building upon 
similar legislation introduced in previous Congresses, the 
legislation would also help to make more even-handed IRS 
enforcement of laws on payroll and income taxes. Subsequent to 
introduction, S. 3430 was referred to the Finance Committee, 
which did not take action on the bill.

                              B. HEARINGS

Roundtable: ``What is Working: Tax Incentives to Aid Small Business 
        Recovery''

    Shadowing the economic recovery efforts, many tax benefits 
for small businesses effective for most of the last decade were 
set to expire during the course of the 111th Congress. In 
particular, the individual and capital gains tax cuts enacted 
as part of the Economic Growth and Tax Reconciliation Act of 
2001 (EGTRRA) and the Jobs and Growth Tax Reconciliation Act of 
2003 (JGTRRA) (together, the ``Bush Tax Cuts'') were set to 
expire on December 31, 2010. As a result of the impending 
expiration of these tax cuts, on December 3, 2009, the 
Committee held a roundtable entitled ``What is Working: Tax 
Incentives to Aid Small Business Recovery.''
    The purpose of the roundtable was to discuss relevant 
expiring tax provisions and their impact on small businesses 
and small business owners; and examine the need for extending, 
redesigning, or making permanent these provisions in the tax 
code. Participants included interested organizational leaders, 
tax policy experts, and small business owners. Specific 
provisions discussed in the roundtable included enhanced 
expensing provisions originally included in the American 
Recovery and Reinvestment Act (P.L. 111-5), as well as the New 
Markets Tax Credit Extension Act of 2009 (S. 1583), a bill co-
sponsored by Chair Landrieu and Ranking Member Snowe which 
would extend the New Market Tax Credit for five years and 
provide $5 billion in annual allocation authority.
    Additionally, many of the provisions discussed--including 
the need to extend the Bush Tax Cuts--were ultimately included 
in the Tax Relief, Unemployment Insurance Reauthorization, and 
Job Creation Act of 2010 (P.L. 111-312) signed into law on 
December 18, 2010.

                          C. FORM 1099 DEBATE

Legislation

    As part of healthcare reform, beginning in 2012, as an 
offset, Congress expanded the Form 1099 reporting requirement 
to require any business to file a Form 1099 for payments made 
for goods--in addition to services--that cost $600 or more. 
This created another category of income that required a Form 
1099 filing requirement. The Form 1099 filing requirement was 
also expanded to require businesses that made payments to 
corporations for services that cost $600 or more to file Form 
1099s to report those payments. Following the passage of 
healthcare reform, small businesses raised concerns regarding 
these new requirements set to take effect in 2012 (the ``2012 
Form 1099 Requirements'').
    On September 14, 2010, during the debate on the Small 
Business Jobs Act (P.L. 111-240), Senator Mike Johanns and 
Senator Bill Nelson introduced amendments to address the 2012 
Form 1099 Requirements, and neither amendment was agreed to by 
Senate vote. In addition, on September 14, 2010, Chair 
Landrieu, together with Senator Barbara Mikulski, introduced 
the Information Reporting Modernization Act of 2010 (S. 3783) 
(``IRMA''). The bill was designed to update and modernize the 
existing Form 1099 reporting requirements as well as the 2012 
Form 1099 Reporting Requirements. Specifically, the bill 
amended the Internal Revenue Code to increase the threshold 
reporting requirement from $600 to $5,000 for reporting to the 
Internal Revenue Service (IRS) payments made to corporations. 
Additionally, IRMA authorized the IRS to issue guidance to 
allow the $5,000 amount to be annually adjusted for inflation 
every year thereafter; exempted from the reporting requirements 
altogether, payments made by credit cards and debit cards; and 
required the IRS to (i) upgrade its scanning technology to 
allow for the submission of generic 1099-MISC forms downloaded 
from its site; and (ii) establish a free online entry and 
submission mechanism.
    Building upon S. 3783, on November 15, 2010, Senate Finance 
Committee Chairman Max Baucus, along with Chair Landrieu, 
introduced the Small Business Paperwork Relief Act (S. 3946). 
The bill would repeal the 2012 Form 1099 Requirements. Both S. 
3783 and S. 3946 were referred to the Finance Committee, though 
no action was taken in the Finance Committee on either bill.
    On Nov. 29, 2010, the Senate voted to repeal the expanded 
Form 1099 reporting requirements set to take effect in 2012. 
Senators Johanns and Baucus each introduced separate amendments 
to the FDA Food Safety Modernization Act (S. 510). Both the 
Johanns and Baucus amendments would have repealed the 2012 
reporting requirements. To pay for the full repeal, however, 
the Johanns amendment would have rescinded $39 billion of 
unobligated, appropriated discretionary funds, except funds 
appropriated to the Department of Defense and the Department of 
Veterans Affairs. Alternatively, the Baucus amendment would 
have been paid for by a reduction in the overall savings 
triggered by healthcare reform law. Ultimately, neither 
amendments were successfully voted out of the Senate.
    Finance Committee chairman Baucus and Senator Charles 
Schumer subsequently attempted to resolve the Form 1099 issue 
through separate amendments to the Tax Relief, Unemployment 
Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 
111-312). However, both attempts to resolve the issue in 
connection with P.L. 111-312 failed, and the respective 
relevant Form 1099 provisions were not included in the final 
legislation signed into law.

Hearings

    On November 18, 2010, the Committee held a roundtable 
entitled ``Assessing the Regulatory and Administrative Burdens 
on America's Small Businesses.'' The purpose of the roundtable 
was to examine overly burdensome Federal regulatory 
requirements on small businesses, including the 2012 Form 1099 
Requirements, and the burden that these requirements impost on 
small businesses. The hearing consisted of two panels. In the 
first panel, the Committee heard from Dr. Winslow Sargeant 
Ph.D., Chief Counsel for Advocacy at the U.S. Small Business 
Administration; and Mr. James R. White, Director of Tax Issues 
at the U.S. Government Accountability Office. During the second 
panel, the Committee heard testimony from small business 
owners, policy experts, and interested organizational 
representatives.

                XIII. The SBA Budget and Appropriations

    In the preceding eight years to the 111th Congress, under 
President Bush, the Small Business Administration (SBA) 
suffered more cuts to its budget than any other federal agency, 
experiencing a budgetary decrease of nearly 28 percent. In 
conjunction with the financial and economic crisis that began 
in late 2007, these budget reductions have significantly 
impeded the Agency's ability to achieve its core mission of 
providing credit, counseling and contracting assistance to 
America's nearly 28 million small businesses.
    By contrast, since taking office in 2009, President Obama 
has made small businesses a top priority. In the first two 
years of his administration, the President submitted higher 
annual budget requests for the SBA than those submitted in each 
of the preceding eight years. However, despite these needed 
increases, some of the SBA's programs and services still would 
have lacked sufficient resources to meet the demands of small 
businesses, such as the need for more Procurement Center 
Representatives to help small businesses contract with the 
federal government. To that end, Chair Landrieu worked closely 
with Ranking Member Snowe to provide additional resources to 
the SBA above the Administration's request.

       A. FISCAL YEAR 2010 BUDGET AND APPROPRIATIONS FOR THE SBA

    For Fiscal Year (FY) 2010, President Obama requested a 
budget of $779 million for the SBA. This request represented an 
overall increase of approximately 19 percent from the Bush 
Administration's FY 2009 request of $657 million. Excluding 
disaster loan funding and Congressional initiatives, the 
President's FY 2010 request was a 40 percent increase above the 
FY 2009 request and a 24 percent increase over the enacted 
amount for the same year. For SBA credit programs, the FY 2010 
request included $80 million in subsidy costs for the SBA's 
largest loan program, known as the 7(a) loan guarantee program, 
to support a program level of $17.5 billion. This program had 
been removed from the budget during the previous administration 
and had not received funding since 2005. The FY2010 request 
also included $7.5 billion in lending authority for the 504 
program and $3 billion in authority for the SBIC Debenture 
program. Additionally, the President requested $3 million in 
subsidy costs for the microloan program to support a level of 
$25 million, a significant increase from the FY 2009 budget 
request of $0.
    For SBA's non-credit and technical assistance programs the 
President requested $138 million, an increase of approximately 
38 percent from the Bush Administration's FY 2009 request. 
While this amount was approximately 15 percent less than the 
enacted amount for those programs in FY 2009, it is important 
to note that additional funding for these programs was 
appropriated to the SBA through the American Recovery and 
Reinvestment Act of 2009 (P.L. 111-5) and made available 
through the end of FY 2010. The President factored this 
additional funding into his FY 2010. As a result, the request 
included lower amounts for the Microloan technical assistance 
program, the Program for Investment in Micro-Entrepreneurs 
(PRIME), Small Business Development Centers, Women's Business 
Centers and the National Women's Business Council. Several 
other non-credit and technical assistance programs above both 
the requested and enacted FY 2009 levels, including the 
Agency's Native American outreach programs, the 7(j) technical 
assistance program, SCORE, and HUBZone technical assistance 
programs.
    On March 13, 2009, Chair Landrieu and Ranking Member Snowe 
sent a letter to Budget Committee Chairman Kent Conrad and 
Ranking Member Judd Gregg regarding the Committee's views on 
the FY 2010 budget request for the SBA. While the President had 
yet to release the specific details of his FY 2010 budget 
request for the Agency, the ongoing recession, worsening credit 
crisis and devastating job losses in the preceding months 
prompted the Committee to offer overall and specific funding 
recommendations to the Budget Committee. In the letter, Chair 
Landrieu and Ranking Member Snowe expressed their concern 
regarding the significant cuts to the SBA's budget that had 
taken place during the course of the previous administration 
and noted the significance of the Agency in helping 
entrepreneurs start or maintain their businesses. In light of 
these factors, as well as the important role played by the SBA 
in supporting and ensuring our country's overall economic 
growth, Chair Landrieu and Ranking Member Snowe requested a 
minimum overall funding level of $880 million for the Agency. 
Specifically, they called for funding increases to a number of 
specific agency programs, including the 7(a) loan program, 504 
loan program, Microloan program, SBA lender oversight efforts, 
the Office of Technology, Small Business Development Centers, 
the Office of Veterans Business Development, Women's Business 
Centers, SCORE, the Office of International Trade, Office of 
Advocacy, Office of Size Standards and HUBZone technical 
assistance programs.
    On March 25, 2009 the Committee held a hearing on President 
Obama's budget blueprint for the Small Business Administration 
(SBA) for FY 2010. The hearing gave the SBA an opportunity to 
present the preliminary details of the President's FY 2010 
budget request and allowed members to communicate to the 
Administration their priorities for the Agency. At the hearing, 
Mr. Darryl Hairston, then Acting Administrator for the SBA, 
testified on behalf of the Administration and emphasized the 
Administration's commitment to supporting small business 
community in light of the difficult economic circumstances 
confronting the country at the time. Both Chair Landrieu and 
Ranking Member Snowe urged the Administration to increase 
overall funding for the Agency, with a focus on core SBA 
programs, including the Microloan program and counseling 
programs such as Small Business Development Centers and the 
Women's Business Centers. Chair Landrieu also voiced her 
support for progress made by former Chairman Kerry and Ranking 
Member Snowe in reforming the SBA's disaster programs during 
the 110th Congress and asked the Administration to continue 
improving and properly funding those programs.
    On April 30, 2009, Chair Landrieu and Ranking Member Snowe 
sent a letter to Senators Durbin and Collins, Chairman and 
Ranking Member of the Senate Appropriations Committee's 
Subcommittee on Financial Services and General Government, 
outlining their funding recommendations for the FY 2010 
appropriations bill. In the letter, Chair Landrieu and Ranking 
Member Snowe reiterated their concerns regarding cuts to SBA's 
budget during the previous eight years and again called for the 
SBA's overall funding level be increased to at least $880 
million, with specific increases devoted to the programs and 
office previously outlined in their March 13th letter to the 
Budget Committee. Additionally, they noted that the Budget 
Committee had accepted an amendment during the Committee's 
markup of the FY 2010 Budget Resolution (S. Con. Res. 13) 
offered by Senator Benjamin L. Cardin, which increased the 
SBA's FY 2010 funding to a level consistent with Chair Landrieu 
and Ranking Member Snowe's request. The letter also reiterated 
Chair Landrieu and Ranking Member Snowe's concern regarding 
cuts to the SBA's budget during the previous Administration and 
cited the critical role that small businesses play in spurring 
economic growth.
    Ultimately, the Consolidated Appropriations Act, FY 2010 
(P.L. 111-117) signed into law on December 16, 2009, included 
an overall funding level of $824 million for the SBA. This 
included a $211.7 million increase in non-Recovery Act funding 
for the Agency in FY 2010. A number of core SBA programs 
benefited from the increase in funding, including: the 
Microloan program; Veterans Business Center program; Small 
Business Development Centers; the Program for the Investment in 
Micro Entrepreneurs (PRIME); the 7(j) technical assistance 
program; Service Corps of Retired Executives (SCORE); HUBZone 
oversight; and Native American outreach programs. Additionally, 
the Federal and State Technology (FAST) Partnership Program, 
which increases small businesses' participation in the Small 
Business Innovation Research (SBIR) and Small Business 
Technology Transfer (STTR) programs, received funding for the 
first time since FY 2004.

       B. FISCAL YEAR 2011 BUDGET AND APPROPRIATIONS FOR THE SBA

    Building on the progress made by funding increases for key 
SBA programs in the FY 2010 Consolidated Appropriations Act, 
Chair Landrieu sought to secure additional resources for the 
SBA during the FY 2011 budget and appropriations process. On 
February 1, 2010, President Obama submitted his budget proposal 
to Congress and requested an overall funding level of nearly 
$994 million for the SBA. This represented a $170 million or 21 
percent increase over the FY 2010 enacted level, and a 27 
percent increase from the Administration's FY 2010 request. For 
SBA credit programs, the FY 2011 request included $164.5 
million in subsidy costs for the 7(a) loan program, supporting 
a program level of $17.5 billion. According to the SBA, the 
increased funding level request for this program would support 
nearly $55.3 billion in total 7(a) credit activity, credit 
badly needed. Additionally, the President's FY 2011 budget 
request included $7.5 billion in lending authority for the 504 
loan program and $3.8 million in subsidy costs for the 
microloan program to support a program level of $25 million.
    For SBA's non-credit and technical assistance programs, the 
President requested $174 million, representing an increase of 
nearly $36 million or 26 percent over the FY 2010 request. 
However, this funding level was approximately 6 percent less 
than the amount enacted for those programs in the previous 
fiscal year. For the SBA's non-credit programs, the President's 
request included increased funding above the levels requested 
in FY 2010, with the exception of the Drug-Free Workplace and 
Microloan technical assistance programs, for which the request 
was the same as FY 2010. The National Women's Business Council 
was the only program in which the President's request was 
higher than both the FY 2010 request as well as the enacted 
level, while the microloan technical assistance program and 
PRIME experienced funding level requests that were less than 
the amounts enacted in FY 2010.
    On March 5, 2010, Chair Landrieu sent a letter to Budget 
Committee Chairman Kent Conrad and Ranking Member Judd Gregg to 
express the Committee's views and estimates on the President's 
FY 2010 budget request for the SBA. In the letter, Chair 
Landrieu requested an additional $100 million above the 
President's FY 2011 request for the SBA, for a total budget 
request of nearly $1.094 billion. Specifically, Chair Landrieu 
requested additional funding in support of a wide range of core 
SBA programs, including the Microloan program, 7(a) loans, 504 
loans, Small Business Development Centers, SCORE, Veteran's 
Business Centers, Women's Business Centers, Native American 
Outreach programs, International Trade programs, the SBA Office 
of Advocacy, and the Office of Technology, among others. 
Additionally, Chair Landrieu noted the importance of the SBA in 
ensuring that America's entrepreneurs and small business owners 
have the resources they need to start, grow or expand their 
business, as well as the overall importance of small businesses 
in job creation.
    On April 21, 2010 the Committee held a hearing on President 
Obama's budget blueprint for the Small Business Administration 
(SBA). The purpose of the hearing was to give the 
Administration an opportunity to present the FY 2011 budget 
request for the agency and for the Members of the Committee and 
the Administration to discuss the priorities of the agency. At 
the hearing, SBA Administrator Karen Mills testified on behalf 
of the Administration, and reiterated the Agency's commitment 
to supporting and assisting the small business community in 
light of the ongoing recession. Specifically, Administrator 
Mills outlined a number of SBA priorities incorporated in the 
SBA's FY 2011 request, including: the allocation of additional 
resources in support of the SBA's capital access programs as 
well as increases to maximum loan size of loans made through 
the 7(a), 504, and Microloan programs; stronger oversight of 
the Agency's small business contracting programs; improvement 
and expansion of the Agency's core counseling programs like 
Small Business Development Centers, Women's Business Centers, 
and SCORE; continued improvement to the Agency's disaster loan 
programs, and; several new Administration initiatives such as 
the development of regional innovation clusters. Chair Landrieu 
expressed her support for key components of the budget request, 
including increased funding in support of the SBA's loan 
programs, but also reiterated her belief that more funding was 
needed to support the programs outlined in her views and 
estimates letter submitted to the Budget committee.
    The Financial Services and General Government 
Appropriations bill for FY 2011 (S. 3677) passed the 
Appropriations Committee on July 11, 2011, and recommended an 
overall funding level of $1.1 billion for SBA, $13.9 million 
above the FY 2010 enacted level (including funds appropriated 
through the American Recovery and Reinvestment Act) and $108.7 
million above the President's FY 2011 request. The legislation 
did not receive consideration by the full Senate in the 111th 
Congress. However, on December 21, 2010, the Senate voted on 
and passed Continuing Appropriations and Surface Transportation 
Extensions Act, 2011 (HR 3082/P.L. 111-322) a continuing 
resolution to fund the government through March 4, 2011. While 
the majority of SBA programs continued to be funded at their FY 
2010 enacted levels, the resolution contained a provision 
extending successful SBA lending incentives established by the 
American Reinvestment and Recovery Act that had been set to 
expire on December 31, 2010.

                     XIV. Presidential Nominations

    During the 111th Congress, the Committee on Small Business 
and Entrepreneurship received four executive nominations from 
the President.

                         A. KAREN GORDON MILLS

    On April 1, 2009, the Committee held a hearing to consider 
the nomination of Karen Gordon Mills to serve as Administrator 
of the SBA. After careful review, the Committee voted 
unanimously in favor of Ms. Mills, and on April 3, 2009 she was 
confirmed by a unanimous vote of the Senate as the 23rd 
Administrator of the SBA. Prior to her confirmation, Ms. Mills 
served as the President of MMP Group, Inc., a private equity 
investment and advising firm. She is a founding partner and was 
the managing director of Solera Capital, a NY-based venture 
capital firm run largely by women.

                      B. WINSLOW LORENZO SARGEANT

    On August 6, 2009, the Committee held a hearing to consider 
the nomination of Dr. Winslow Lorenzo Sargeant, PhD to serve as 
Chief Counsel for Advocacy for the SBA's Office of Advocacy. 
After careful review, the Committee voted in favor of Dr. 
Sargeant by a vote of 13-6. While Chair Landrieu supported the 
President's nomination of Dr. Sargeant as Chief Counsel, 
Ranking Member Snowe expressed her opposition to the nomination 
by voting against Dr. Sargeant in Committee. After reporting 
out Dr. Sargeant's nomination to the full Senate, Republican 
Senators repeatedly blocked a unanimous consent agreement to 
confirm his nomination before the full Senate. On August 19, 
2010, nearly a year after receiving approval from the 
Committee, Dr. Sargeant was recess-appointed to the position of 
Chief Counsel of the Office of Advocacy by President Obama.
    Prior to his appointment, Dr. Sargeant served as Managing 
Director of Venture Investors, a Midwest venture capital 
company with a concentration on starting up healthcare and 
technology companies. Previously, he co-founded Aanetcom, a 
technology company now owned by PMC Sierra and served as a 
program manager for the Small Business Innovation Research 
(SBIR) program in electronics at the National Science 
Foundation.

                         C. PEGGY E. GUSTAFSON

    On August 6, 2009, the Committee held a hearing to consider 
the nomination of Peggy E. Gustafson to serve as Inspector 
General of the SBA. On September 16, 2009, the Committee voted 
unanimously in favor of Ms. Gustafson's nomination, and on 
September 24, 2009 she was confirmed by the full Senate.
    Ms. Gustafson previously served as General Counsel to 
Senator Claire McCaskill (D-MO), where she advised the Senator 
on government oversight issues and helped write two bills that 
have significantly strengthened the federal offices of 
Inspectors General: the Inspector General Reform Act of 2008 
and the legislation that strengthened the office of the Special 
Inspector General for the Troubled Asset Relief Program. 
Additionally, she served as General Counsel in the Missouri 
State Auditor's Office, where she worked closely with the 
auditors on issues of the scope of their duties, the auditors' 
need to access records, and all other legal issues arising in 
the course of the audits.

                     D. MARIE ANNETTE COLLINS JOHNS

    On May 19, 2010, the Committee held a hearing to consider 
the nomination of Marie Annette Collins Johns to serve as 
Deputy Administrator of the SBA. Ms. Johns' nomination was 
approved by the Committee and confirmed by the Senate on June 
22, 2010.
    Prior to her confirmation, Ms. Johns served as a managing 
member of L&L Consulting, LLC, an organizational effectiveness 
and public policy consulting practice. Previously, she served 
as President of Verizon Washington. In 2004, after 21 years of 
service in the telecommunications industry, retired from 
Verizon.

                    XV. Other Committee Initiatives


                    A. SMALL BUSINESS MANUFACTURING

Hearing: Manufacturing Closures in North Louisiana: Impact on Small 
        Businesses and Local Communities

    On April 14, 2009, the Committee held a field hearing in 
Shreveport, Louisiana, titled ``Manufacturing Closures in North 
Louisiana: Impact on Small Businesses and Local Communities.'' 
The purpose of the field hearing was to discuss the impact of 
manufacturing closures on small and main street businesses in 
north Louisiana. Witnesses testifying at the hearing included 
Congressman Rodney Alexander, Shreveport Mayor Cedric Glover, 
Bastrop Mayor Clarence Hawkins, Acting Louisiana State Director 
for Rural Development at the U.S. Department of Agriculture 
Karen Nardini, Director of the Manufacturing Extension 
Partnership of Louisiana Corinne Deputy, U.S. Small Business 
Administration Louisiana District Director Michael Ricks and 
Northeast Louisiana Economic Alliance President and Chief 
Executive Officer Tana Trichel.

Oversight

    On March 4, 2009, Chair Landrieu and Ranking Member Snowe 
issued a letter to Secretary of Labor Hilda L. Solis, Acting 
Secretary of Commerce Otto J. Wolff and Small Business 
Administration Acting Administrator Darryl K. Hairston 
regarding coordination between their agencies' programs 
designed to help manufacturers hit hard by the economic crisis. 
In the letter, Chair Landrieu and Ranking Member Snowe 
expressed the importance of the programs in providing 
assistance to small businesses and workers in the manufacturing 
industry that have been adversely affected by the economic 
downturn. Chair Landrieu and Ranking Member Snowe urged 
Secretary Solis, Acting Secretary Wolff and Acting 
Administrator Hairston to improve coordination among their 
agencies' programs in order to maximize the effectiveness of 
these programs.
    On March 18, 2009, Acting Administrator Hairston issued a 
response letter, in which he agreed with Chair Landrieu's and 
Ranking Member Snowe's assertions as to the importance of these 
programs and the need for increased coordination between 
agencies. Additionally, he informed Chair Landrieu and Ranking 
Member Snowe of the SBA's plans to convene a Small Business 
Inter-Agency Task Force to encourage further collaboration 
between small business programs.

                       B. YOUTH ENTREPRENEURSHIP

Roundtable: Entrepreneurship for the Next Generation: Harnessing the 
        Power of Young Entrepreneurs in a Changing Economic Landscape

    On August 3, 2010, the Committee held a roundtable entitled 
``Entrepreneurship for the Next Generation: Harnessing the 
Power of Young Entrepreneurs in a Changing Economic 
Landscape.'' The roundtable focused on young entrepreneurs and 
the obstacles they face starting or expanding their business in 
the current economic climate. Participants at the Roundtable 
included young entrepreneurs, representatives from SCORE, the 
Hillman Entrepreneurs Program at Prince George's Community 
College; the Center for American Progress; the U.S. Small 
Business Administration; Small Business Development Centers; 
Susquehanna Patriot Bank; the Idea Village; and the Kauffman 
Foundation.

                         XVI. Additional Views

                              ----------                              

        MS. SNOWE, FROM THE SENATE COMMITTEE ON SMALL BUSINESS AND 
            ENTREPRENEURSHIP, SUBMITTED THE FOLLOWING

                            A. INTRODUCTION

    In accordance with rule XXVI of the Standing Rules of the 
Senate, all standing committees are to report to the Senate, 
not later than March 31st of each odd-numbered year, on its 
legislative activities during the preceding Congress. The Chair 
of the Senate Committee on Small Business and Entrepreneurship 
(``Committee'') drafted and submitted Report 112-6, 111th 
Summary of Legislative and Oversight Activities During the 
111th Congress (``111th Summary''),\1\ on behalf of the 
Committee, without consultation with its Republican members, 
including Ranking Member Snowe. Moreover, the 111th Summary was 
not reported from the Committee. This star report reprints the 
111th Summary and adds an Additional Views section. As the 
Committee Republicans were not involved in the approval process 
for the 111th Summary, statements contained therein should not 
be assumed to be endorsed by the Republican Committee members. 
While not all inclusive, this Additional Views section 
supplements the 111th Summary, to provide a broader perspective 
of the activity of the Committee over the 111th Congress.
---------------------------------------------------------------------------
    \1\Sen. Rpt. 112-6, (Mar. 28, 2011).
---------------------------------------------------------------------------

                       B. SMALL BUSINESS JOBS ACT

    On September 16, 2010, the Senate passed the Small Business 
Jobs Act of 2010 (H.R. 5297) (``Jobs Act'') by a vote of 61 to 
38. Only two Republican Senators voted in favor of this 
legislation. Following its passage in the House of 
Representatives on September 23, 2010, the Jobs Act was signed 
into law (P.L. 111-240) by the President on September 27, 2010.
    The Jobs Act included several priorities originally 
introduced by Ranking Member Snowe, including provisions to 
increase Small Business Administration (``SBA'') loan limits in 
the 7(a), 504 and microloan programs; enhance small business 
exporting; and provide small businesses greater access to 
federal contracts. Unfortunately, it contained other 
initiatives that concerned Republicans, like the inclusion of a 
highly controversial $30 billion Department of Treasury 
(``Treasury'') Small Business Lending Fund (``Lending Fund'') 
and the expansion of an exceptionally onerous 1099 small 
business reporting requirement.
Small Business Lending Fund
    Chief among Republican concerns during consideration of the 
Jobs Act was the Lending Fund, and specifically, the likelihood 
that it would essentially be an extension of the Troubled Asset 
Relief Program (``TARP''), even though TARP did not appear to 
substantially increase small business lending. In a May 17, 
2010, letter to then House Financial Services Committee 
Chairman Barney Frank and Ranking Member Spencer Bachus, Neil 
Barofsky, the Special Inspector General for TARP, wrote that 
``in terms of its basic design, its participants, its 
application process, and, perhaps its funding source from an 
oversight perspective, the [Lending Fund] would essentially be 
an extension of TARP.''
    Additionally, the bipartisan Congressional Oversight Panel 
(COP) for TARP drew similar comparisons between TARP and the 
Lending Fund stating: ``[i]n many ways, however, the SBLF 
[Lending Fund] substantially resembles the CPP [TARP Capital 
Purchase Program]: it is a bank-focused capital infusion 
program that is being contemplated despite little, if any, 
evidence that such programs increase lending.''\2\
---------------------------------------------------------------------------
    \2\The COP May Oversight Report, The Small Business Credit Crunch 
and the Impact of the TARP, at 82, (May 13, 2010).
---------------------------------------------------------------------------
    Republicans were also concerned that instead of promoting 
quality loans, the Lending Fund might encourage unnecessarily 
risky behavior by banks. Under the program, Treasury will lend 
funds to banks at a 5 percent dividend rate, which can then be 
reduced to as low as 1 percent if the institutions increase 
small business lending. However, if recipient banks fail to 
increase small business lending, the dividend rate could rise 
to a more punitive 7 percent. This type of incentive has a 
potential to prompt banks to originate risky loans in order to 
retain lower dividend rates, resulting in a ``moral hazard.'' 
The COP had similar concerns, stating:

          Even if the SBLF's [Lending Fund's] incentive is 
        sufficiently strong, the program may produce one key 
        unintended consequence. A capital infusion program that 
        provides financial institutions with cheap capital and 
        a penalty for banks that do not increase lending runs 
        the risk of creating moral hazard by encouraging banks 
        to make loans to borrowers who are not creditworthy. 
        Although, in the legislation, the carrot--an up to four 
        percent decrease--is arguably stronger than the stick--
        a two percent increase--the stick nonetheless increases 
        the incentive. The stronger the incentive, the greater 
        the likelihood that the program will spur some amount 
        of imprudent lending activity. As evidenced by recent 
        events, imprudent lending activity may in turn inflate 
        a small lending and commercial loan bubble, a result of 
        using an increasing supply of money for transactions of 
        diminishing credit quality.\3\
---------------------------------------------------------------------------
    \3\Id. at 77-78.

    Another significant problem with the Lending Fund is that 
TARP recipients might use it to refinance their outstanding 
TARP loans, obtaining a better interest rate while having less 
restrictions and safeguards. Moreover, to lock in a low 
interest rate, a bank need only increase its small business 
lending, measured against a benchmark of the institution's 
average small business lending over the four full quarters 
immediately preceding the date of the Jobs Act's enactment. 
This would inevitably be a low benchmark as lending at that 
time had declined significantly from historical levels. The COP 
explained the danger of using a low benchmark (considering a 
---------------------------------------------------------------------------
2009 benchmark at the time of COP's analysis) as follows:

          An additional risk is that the SBLF [Lending Fund] 
        may reward banks that would have increased their 
        lending even in the absence of government support. The 
        SBLF's incentive structure is calculated in reference 
        to 2009 lending levels, which were low by historical 
        standards. If a bank increases its lending--not as a 
        result of receiving the SBLF funds but simply to return 
        to a more normal lending level commensurate with its 
        long-term business model--then it will receive a 
        reduced cost of funds. The low lending levels in 2009 
        also make it unlikely that the penalty provision will 
        have much teeth: because the program uses a low 
        baseline, and many banks may be able to increase their 
        lending levels within two years of receiving SBLF 
        funds. In effect, a bank may receive a government 
        reward and avoid a penalty simply for acting in its 
        normal course of business.\4\
---------------------------------------------------------------------------
    \4\Id. at 77.

    The score for the Lending Fund was another reason that 
opponents did not want this new, unproven government mechanism 
included into the Jobs Act. When the House Committee on 
Financial Services first considered the Lending Fund, reporting 
it out of Committee, the Congressional Budget Office (CBO) 
determined that it would cost taxpayers $1.4 billion.\5\ That 
score was derived using the Federal Credit Reform Act of 1990 
(FCRA) scoring methodology. FCRA methodology is used when there 
is a disbursement of funds by the government to a nonfederal 
borrower under a contract that requires the repayment of the 
funds. This is the methodology that is used when scoring loans.
---------------------------------------------------------------------------
    \5\See CBO, Budget Office Cost Estimate, H.R. 5297 Small Business 
Lending Fund Act of 2010, at 3 (May 25, 2010).
---------------------------------------------------------------------------
    After that score was released, the House modified the 
Lending Fund to eliminate a requirement that the funds be 
repaid. Of course, there is every intent that the funds will be 
repaid and, in an effort to make this certain, the dividend 
rate that banks pay rises to a punitive 9 percent after 4\1/2\ 
years. But, there is no absolute requirement to repay. This 
change had several effects. First, and foremost, eliminating 
the requirement to repay put taxpayer funds at greater risk. 
Second, it allowed banks to treat the money they receive as an 
investment instead of a loan, therefore counting the funds as 
Tier 1 capital, the core measure of a bank's financial 
strength. Finally, because of technical scoring requirements 
placed on CBO, the Office was forced to score the program under 
a cash-based estimate.
    Under a cash-based estimate, the CBO listed the official 
score for the Lending Fund as raising $1.1 billion over ten 
years.\6\ However, the very same CBO score highlighted that:
---------------------------------------------------------------------------
    \6\See CBO, Budget Office Cost Estimate, H.R. 5297 Small Business 
Lending Fund Act of 2010, at 3 (June 28, 2010).

          Estimates prepared on a ``fair-value'' basis include 
        the cost of the risk that the government has assumed; 
        as a result, they provide a more comprehensive measure 
        of the cost of the financial commitments than estimates 
        done on a FCRA basis or on a cash basis. CBO estimates 
        that the cost of the SBLF [Lending Fund] on such a 
        fair-value basis (that is, reflecting market risk) 
        would be $6.2 billion.\7\
---------------------------------------------------------------------------
    \7\Id. at 4 (emphasis added).

    While proponents of the Lending Fund repeatedly touted that 
it would raise $1.1 billion, they ignored that CBO projected 
the cost to taxpayers as: (a) $1.4 billion using FCRA 
methodology, and (b) $6.2 billion using the most comprehensive, 
fair-value, methodology.
    The Minority had little appetite for the government to 
become a long-term stockholder in small, private lending 
institutions across our nation; especially in light of the 
program's risks with little potential to substantially increase 
small business lending. As such, the inclusion of the Lending 
Fund into the Jobs Act forced nearly every Senate Republican to 
oppose the Act's passage.
1099 Reporting Requirements
    The Jobs Act contained a new exceptionally onerous 
reporting mandate requiring real estate owners to report to the 
Internal Revenue Service (IRS) expenditures in excess of $600 
for goods or services relating to rental property. This 
provision was in addition to Form 1099 reporting mandates 
instituted by the Patient Protection and Affordable Care Act 
(PPACA), signed into law on March 23, 2010, requiring similar 
reporting for business purchases that exceed a threshold of 
only $600 per vendor or supplier. Ranking Member Snowe opposed 
both of the expanded Form 1099 requirements.

                          C. ACCESS TO CREDIT

    Ensuring that small businesses have responsible access to 
affordable credit was a key priority for Members from both 
sides of the aisle throughout the 111th Congress. The Majority 
and Minority worked together on several initiatives in this 
regard, including those outlined in the 111th Summary such as 
the broad support of six extensions of temporary measures to 
raise the guarantees and reduce the fees on SBA loans. These 
measures were credited with increasing SBA lending by 90 
percent nationwide.
    After hearing from small business owners that the SBA's 
maximum loan levels were insufficient to meet the needs of 
today's small business borrowers, Ranking Member Snowe 
introduced S. 1615, the Next Step for Main Street Credit 
Availability Act on August 6, 2009. In October of 2009, 
President Obama endorsed the Ranking Member's proposed 
increases, which were ultimately enacted into law as part of 
the Jobs Act. Specifically, the SBA loan limits were increased 
from $2 million to $5 million for 7(a) loans, from $1.5 million 
to $5.5 million for 504 loans, and from $35,000 to $50,000 for 
microloans.
    While Committee members from both sides of the aisle 
collaborated on numerous measures to provide greater access to 
credit to small businesses, one significant area in which the 
members disagreed was the Lending Fund, discussed above.

                  D. SMALL BUSINESS HEALTH CARE REFORM

    Although Ranking Member Snowe, along with all Senate 
Republicans, opposed the final health care reform legislation, 
several of its small business provisions were modeled after 
earlier legislation she worked to develop. The Small Business 
Health Options Programs (SHOP) Act (S. 2795) was jointly 
introduced by Ranking Member Snowe, Durbin, Lincoln, and 
Coleman on April 2, 2008. The SHOP Act developed the framework 
for what would later be included in the larger Patient 
Protection and Affordable Care Act (PPACA) (H.R. 3590) as state 
exchange markets where small businesses could shop for health 
insurance. The SHOP Act was also the original model that the 
PPACA drafters used to develop their base proposal for a small 
business health insurance tax credit, although the credit 
included in the final legislation was far more complicated and 
less generous than the one envisioned by Ranking Member Snowe.
    The underlying, bipartisan objectives for the health reform 
legislation were to promote job growth, help more Americans 
obtain affordable health insurance, and lower the cost of 
health insurance while increasing the quality of care. 
Unfortunately, the PPACA failed to achieve these goals. Instead 
of promoting job growth, a mandate that businesses with 50 or 
more employees offer prescribed levels of health insurance to 
employees will incent businesses not to hire in order to stay 
below the threshold where the mandate will be imposed. Ranking 
Member Snowe will continue to collaborate with colleagues to 
repeal this provision in the 112th Congress.
    Ranking Member Snowe championed inclusion of the SIMPLE 
Cafeteria Plan Act of 2009 (S. 988) in the PPACA in order to 
help small businesses and the self-employed use pre-tax funds 
to purchase health insurance and retirement plans. This has 
been a longstanding goal for Ranking Member Snowe, who first 
introduced the SIMPLE Cafeteria Plan Act (S. 723) in April of 
2005. Unfortunately, the provisions were significantly weakened 
when included in the PPACA.
    The costs of health insurance are projected to increase 
more than 8 percent in 2011. Instead of implementing sensible 
reforms that could have lowered health insurance costs, the 
PPACA is creating a massive bureaucracy with approximately 159 
new boards, agencies, and programs, and a regulatory regime 
that has already surpassed 6,000 pages of new rules and 
official guidance.
    Ranking Member Snowe sought to include provisions that 
would allow health insurance plans to sell policies across 
state lines. Unfortunately, the final legislation substantially 
weakened these provisions by creating plans that will be 
overseen by the federal Office of Personnel Management and 
highly limited ``interstate compacts.'' The interstate compacts 
were intended to allow states to form agreements to allow 
interstate health insurance purchasing, but are so restrictive 
that consumers will experience little, if any, benefit.
    While Ranking Member Snowe has advocated for subsidies for 
low-income individuals to purchase health insurance, the PPACA 
developed a complicated and expensive new regime that will 
require all Americans to purchase health insurance. Rather than 
allowing everyone to purchase affordable catastrophic plans, 
the PPACA limits those plans to individuals under the age of 
25, and requires everyone else to purchase expensive bronze, 
silver, gold, or platinum plans. Further, Ranking Member Snowe 
has supported more flexibility in defining qualified plans. 
Under the PPACA, individuals who purchase high-deductible 
catastrophic plans will be further disadvantaged by changes 
that limit the usefulness of Health Savings Accounts and 
Flexible Spending Arrangements (FSAs)--although Ranking Member 
Snowe was successful in preventing an outright prohibition of 
over-the-counter purchases with FSAs.
    To pay for the PPACA, a number of revenue provisions were 
included that will be harmful to small businesses, including a 
tax on health insurers that applies to plans sold to small 
businesses, but exempts large employer plans, where insurance 
companies act as third-party administrators to self-insured 
plans. Another tax will target those who purchase health 
insurance plans with high premiums--which will be most harmful 
to small businesses that cannot produce economies of scale to 
spread risk the way large businesses can. In the Senate Finance 
Committee, Ranking Member Snowe worked to include protections 
for retirees and high-cost occupations, but was not able to 
completely prevent this new tax. Further, the PPACA also 
creates another new tax aimed at high-income individuals that 
will disproportionately affect small business owners who file 
as individuals. In addition, Ranking Member Snowe successfully 
exempted some small businesses from another new tax that will 
apply to medical device manufacturers, but could not persuade 
the Majority to remove it altogether.
    In the 112th Congress, Committee Republicans will work to 
implement health care policies that curb the rising costs of 
insurance, increase access for small businesses to affordable 
plan options, and reduce the new costs and burdens imposed on 
small businesses by the health care law. Moreover, they will 
pursue market-driven, consumer-centered solutions to the 
nation's health care challenges.

                 E. SMALL BUSINESS TRADE AND EXPORTING

Small Business Exporting Assistance

    Increasing small business exports is vital for economic 
growth and the Committee took several steps to improve and 
modernize the SBA's international trade and export assistance 
programs during the 111th Congress. These programs, 
administered through the SBA's Office of International Trade 
(OIT), provides small businesses seeking to export goods and 
services with critical international trade financing assistance 
and business counseling services. Programs such as the 
International Trade Loan (ITL) program, the Export Working 
Capital Loan Program (EWCP), and the Export Express Loan 
program are intended to bolster sales opportunities and sales 
volume by small business exporters.
    Republican Committee members are concerned that the SBA is 
not reaching enough small businesses through these programs, 
and is failing to provide small businesses with the resources 
and tools they need to become successful exporters. For 
example, in Fiscal Year (FY) 2008, the SBA funded approximately 
3,000 loan guarantees to small exporters and counseled 4,500 
small businesses on export related activities. While the SBA's 
programs enabled these small exporters to post over $2.4 
billion in export sales in FY 2008, these export sales 
accounted for less than one percent of the total export volume 
produced by all U.S. small businesses during that fiscal year. 
Furthermore, the limited number of small businesses assisted by 
the SBA in FY 2008 represented fewer than three percent of all 
identified U.S. small exporters.
    The vigorous promotion of small businesses that currently 
export would help them expand to additional foreign markets and 
increase the value of their exports. The Federal Government 
should be doing more to both encourage and directly assist U.S. 
small business expansion into foreign markets. Small businesses 
seeking such opportunities routinely confront a number of 
barriers that the private sector has not been able to address, 
including insufficient access to working capital, the absence 
of up-to-date market information, a lack of in-market advocacy, 
high tariffs, and burdensome and confusing local regulatory 
laws. All of these factors present tremendous challenges for 
U.S. small businesses seeking to sell their products abroad and 
put them at a distinct disadvantage with their foreign 
counterparts.
    Recognizing these unique challenges, during the 111th 
Congress the Committee has sought to influence the development 
of U.S. trade and export policy by improving federal export 
promotion programs, particularly those operated and 
administered by the SBA, and by calling for stronger advocacy 
on behalf of small businesses at the highest levels of 
government.

The Small Business Export Enhancement and International Trade Act of 
        2009

    The Jobs Act, signed into law on September 27, 2010, 
included numerous provisions from the Small Business Export 
Enhancement and International Trade Act of 2009 (S. 2862), 
which Ranking Member Snowe introduced on December 9, 2009. The 
legislation--cosponsored by Chair Landrieu, and Senators 
Shaheen, Bayh and Cardin--passed unanimously out of the 
Committee on December 17, 2009.
    S. 2862 was derived from two separate pieces of legislation 
introduced on June 8, 2009: (a) Ranking Member Snowe's Small 
Business Export Opportunity Development Act of 2009 (S. 1208); 
and (b) Chair Landrieu's Small Business International Trade 
Enhancements Act of 2009 (S. 1196).
    Critical provisions in S. 2862, now enacted into law 
originated in Ranking Member Snowe's export legislation, S. 
1208, such as increasing the loan limits for the International 
Trade Loan and the Export Working Capital Loan Program from $2 
million to $5 million; authorizing a permanent Export Express 
loan program; establishing a State Trade and Export Program to 
promote small business export opportunities on the state level; 
bolstering the number of the SBA's Export Assistance Finance 
Specialists assigned to regions throughout the country; 
expanding export assistance provided by existing SBA resource 
partners, particularly the Small Business Development Centers; 
and improving coordination between the SBA and other federal 
agencies with responsibility for U.S. trade and export policy. 
Ranking Member Snowe's efforts were endorsed by the U.S. 
Chamber of Commerce, the Small Business Exporters Association, 
Association of Small Business Development Centers, the State 
International Development Officers, and the Bankers Association 
for Finance and Trade. Additional information on the provisions 
is contained in the 111th Summary.

Creation of Assistant USTR for Small Business

    It has long been a priority of Ranking Member Snowe to 
create the position of Assistant United States Trade 
Representative (AUSTR) for Small Business. Ranking Member Snowe 
asserts that the United States Trade Representative (USTR) has 
often overlooked U.S. small businesses' concerns and that more 
should be done to promote small business exporting and remove 
unfair trade practices that disproportionately impact small 
firms.
    In January of 1999, Ranking Member Snowe introduced the 
Small Business Enhancement Act of 1999 (S. 80), legislation 
that called for the creation of the AUSTR position. 
Subsequently, on November 25, 2003, during the 108th Congress, 
then-Chair Snowe introduced the Small Manufacturers Assistance, 
Recovery, and Trade Act (S. 1977), cosponsored by Senators 
Voinovich, Collins, and Cochran, which also contained a 
provision to established an AUSTR for Small Business.
    In addition to the efforts outlined in the 111th Summary, 
on January 12, 2010, Ranking Member Snowe, in her dual capacity 
as Ranking Member of the Committee and a senior member of the 
Senate Finance Committee, sent a letter with Finance Committee 
Chair Max Baucus to USTR Ambassador Ron Kirk requesting the 
creation of an AUSTR for Small Business. As a result of the 
various efforts, Ambassador Kirk announced the establishment of 
the AUSTR for Small Business, Market Access and Industrial 
Competitiveness.
    Ranking Member Snowe appreciates the efforts of Ambassador 
Kirk and the Senators who collaborated with her over the years 
to create this position. Ranking Member Snowe encourages 
current and future AUSTRs for Small Business, Market Access and 
Industrial Competitiveness to work tirelessly to address small 
businesses' trade concerns in the international marketplace.

                             F. CONTRACTING

Small Business Contracting Programs

    The Committee has long promoted small business 
participation in the federal contracting arena. Small 
businesses, the nation's most dynamic job generators, create 
healthy competition--including lower prices and quality 
services and products--to the Federal Government, the largest 
purchaser of goods and services in the world. In fact, the U.S. 
government procures around $500 billion annually in products 
and services.
    In the 111th Congress, the Committee reviewed the SBA's 
government contracting and business development programs, which 
include the SBA's Prime Contracting and Subcontracting 
Programs, the Historically Underutilized Business Zone 
(HUBZone) Program, the Small Disadvantaged Business Program, 
the women-owned small business program, and the service-
disabled veteran-owned small business program. Stakeholders of 
these programs provided critical insight and recommendations to 
the Committee. In addition to advocating for small businesses 
to have increased opportunities to participate in the federal 
marketplace, the Committee also takes its oversight role very 
seriously in ensuring that the Federal Government meets its 
statutory goal of awarding 23 percent of contracts to small 
businesses.

Small Business Contracting Revitalization Act of 2010 (S 2989)

    On February 4, 2010, Chair Landrieu and Ranking Member 
Snowe introduced the Small Business Contracting Revitalization 
Act of 2010 (S. 2989), targeted toward revitalizing and 
renewing small business procurement law to better assist small 
businesses and the evolving needs of entrepreneurs. This 
bipartisan legislation updated contracting provisions to make 
significant improvements to the SBA's procurement programs, and 
authorized several new oversight and pilot program initiatives.
    Specifically, S. 2898 required federal agencies to include 
in each solicitation, for any contract above the substantial 
bundling threshold, a provision soliciting bids by teams and 
joint ventures of small businesses. Additionally, the 
legislation provided multiple protections to subcontractors, 
many of which are small businesses, by requiring federal prime 
contractors to: (a) comply with original subcontracting plans, 
and (b) present a written explanation to their contracting 
officer if they fail to utilize the subcontractor in the manner 
described in their bid or proposal.
    The legislation also included provisions to improve small 
business' participation in the acquisition process and created 
a presumption of loss to the United States whenever a contract, 
agreement, or grant intended for award to a small business is 
instead awarded to an entity that misrepresents itself as a 
small business.
    During the markup of S. 2989 on March 4, 2010, the 
Committee unanimously adopted, by voice vote, a bipartisan 
managers' substitute amendment offered by Chair Landrieu. The 
legislation was subsequently adopted by the Committee, as 
amended, by a unanimous vote. The provisions from S. 2989 were 
ultimately included in the Jobs Act, discussed above.

Small Business Contract Parity

    On May 6, 2009, Ranking Member Snowe filed an amendment to 
establish parity as part of the Weapon Systems Acquisition 
Reform Act of 2009 (S. 454) but the amendment was not adopted. 
Chair Landrieu and Ranking Member Snowe subsequently filed a 
similar amendment to the National Defense Authorization Act for 
Fiscal Year 2010 (S. 1390). The amendment was accepted and 
passed by the full Senate on July 24, 2009, only to be removed 
during conference negotiations.
    On July 21, 2009, Ranking Member Snowe introduced the Small 
Business Contracting Programs Parity Act (S. 1489) to ensure 
that federal contracts to service-disabled veteran-owned small 
businesses, 8(a), HUBZone, or women-owned small firms may be 
awarded with equal deference to each program. The legislation 
also provided HUBZones, the only small business contracting 
program without a subcontracting goal, such a target. 
Additionally, it authorized mentor protege programs, modeled 
after those used in the 8(a) program, for small businesses that 
are HUBZone-certified, or that are owned by service-disabled 
veterans or women. S. 1489 was ultimately enacted into law as 
part of the Jobs Act.

Oversight of Recovery Act Contracting Opportunities

    On December 16, 2010, Chair Landrieu and Ranking Member 
Snowe sent a letter to SBA Administrator Karen Mills requesting 
that the SBA provide a detailed plan for rectifying 
vulnerabilities plaguing its various contracting programs and 
inquiring into the SBA's plan for implementing recommendations 
from a series of Government Accountability Office reports 
demonstrating waste, fraud, and abuse in the SBA's small 
business contracting programs. The Committee did not receive a 
response to this letter during the 111th Congress.

                      G. SMALL BUSINESS TAX REFORM

    In her dual capacity as Ranking Member of this Committee 
and as a senior member of the Senate Finance Committee, Ranking 
Member Snowe consistently fought throughout the 111th Congress 
to minimize the tax burdens on small businesses. The Jobs Act 
reflects these efforts, building on her work from previous 
congressional sessions to provide small business tax relief.
    For instance, Ranking Member Snowe worked to include in the 
Jobs Act expanded Section 179 expensing provisions for small 
businesses. Specifically, the revisions allowed for increased 
expensing limitations for qualified leasehold improvement 
property, restaurant property, and retail improvement property. 
Ranking Member Snowe is a longtime proponent of tax incentives 
to encourage and facilitate small business capital purchases 
and property improvements, as evidenced by legislation she 
introduced or cosponsored in the 111th Congress, including: (a) 
the Small Business Stimulus Act of 2009 (S. 156) (cosponsored 
by former Committee Chairman John Kerry and current Chair Mary 
Landrieu); the Small Business Expensing Permanency Act (S. 
2822) (cosponsored by Chair Landrieu); and the Small Business 
Job Creation Act of 2010 (S. 3103).
    The Jobs Act also included provisions that emanated from 
the SHOP Act (S. 979), legislation that Senator Richard Durbin 
and Ranking Member Snowe jointly developed over a period of 
years. For instance, the Jobs Act incorporated the SHOP Act's 
call to allow self-employed business owners to deduct their 
health insurance expenses for payroll purposes. Further details 
on the SHOP Act are contained in the ``Small Business Health 
Reform'' section, above.
    Ranking Member Snowe fought for other Jobs Act small 
business tax provisions including a temporary elimination of 
tax on the net recognized built-in gain of an S corporation and 
an extension, through 2011, of the 50-percent first-year bonus 
depreciation for certain qualified property. Also, the 
legislation extended from 1 to 5 years the carryback period for 
eligible small business credits, and set forth special rules 
for eligible small business credits in 2010, including treating 
the tentative alternative minimum tax (AMT) as being zero.
    Additionally, the Jobs Act contains a provision from the 
Invest in Small Business Act of 2009 (S. 78), introduced by 
Senators Kerry and Ranking Member Snowe on January 6, 2009. 
This provision allows a temporary exclusion from gross income 
of the gain from the sale or exchange of qualified small 
business stock acquired after March 15, 2010, and before 
January 1, 2012.
    Regrettably, the Jobs Act also extended onerous Form 1099 
tax reporting requirements on small businesses, which 
Republicans broadly opposed. More information on this is 
contained in the ``Small Business Jobs Act'' section, above.
    Ranking Member Snowe had several other tax related 
initiatives that she introduced during the 111th in an effort 
to provide tax relief and assist small businesses. While there 
were many, the following are a few examples. On June 25, 2009, 
Ranking Member Snowe and Senator Kent Conrad introduced the 
Home Office Tax Deduction Simplification and Improvement Act of 
2009 (S. 1349). This measure would help simplify the home 
office tax deduction and make it more accessible for eligible 
taxpayers. The Act would direct the Secretary of the Treasury 
to draft regulations detailing a method to calculate an 
optional standard home office deduction in lieu of 
substantiating actual costs.
    On August 6, 2009, Ranking Member Snowe along with Senators 
Dianne Feinstein and Jeff Bingaman introduced bipartisan 
legislation, the Expanding Building Efficiency Incentives Act 
of 2009 (S. 1637), to encourage energy efficient technology and 
construction by providing tax incentives for the construction 
of energy efficient new homes, energy efficient manufactured 
homes, energy efficient commercial buildings, and major 
incentives for the residential energy efficiency industry.
    On May 26, 2010, Ranking Member Snowe and Chair Landrieu 
introduced the Small Business Tax Equalization and Compliance 
Act of 2010 (S. 3430), which would allow the salon and 
cosmetology industry to have the same tax rules on tips paid to 
employees as is permitted in the restaurant industry. The 
legislation would provide a tax credit equal to the amount of 
payroll tax paid by the employer on employees' tips. The 
legislation would increase compliance with payroll tax 
obligations and will make sure that the women who work in the 
salon industry earn all the Social Security retirement/
disability benefits they should be entitled to.

        H. ENTREPRENEURIAL DEVELOPMENT AND TECHNICAL ASSISTANCE

    The recession resulted in continued high unemployment and 
depressed demand for goods and services. This caused more small 
businesses to seek technical assistance to maintain business 
operations and enabled unemployed individuals to pursue 
business ventures as an alternative to the difficult job 
market.
    The SBA's technical assistance partners, including the 
Small Business Development Centers (SBDCs), Women's Business 
Centers (WBCs), Veterans Business Outreach Centers (VBOCs), and 
SCORE, have been critical in helping existing and potential 
entrepreneurs during this challenging economic environment. 
Additionally, the tight credit market has caused small business 
borrowers to require more hours of counseling and assistance as 
a result of enhanced lender requirements.
    Ranking Member Snowe and Republican Committee members have 
been supportive of the SBA's technical assistance programs, 
unanimously supporting the Entrepreneurial Development Act of 
2009 (S. 1229), which reauthorized and improved the SBDC, WBC, 
VBOC and SCORE programs. Ranking Member Snowe also proposed 
including in the Jobs Act an additional $50 million for the 
SBDCs to hire more counselors and expand services during the 
economic recovery. This proposal was ultimately included in the 
legislation signed into law by President Obama.
    In the 112th Congress, the Committee Republicans intend to 
examine areas in which the SBA's entrepreneurial development 
programs are duplicative, inefficient, or fragmented and ways 
to improve the effectiveness of programs that are determined to 
be vital to assisting small businesses.

                I. SMALL BUSINESS ADMINISTRATION BUDGET

    During Ranking Member Snowe's tenure as Chair or Ranking 
Member of the Committee since the 108th Congress, she has 
consistently called for a larger investment in the SBA, which 
had been historically underfunded. However, with the nation's 
debt projected to reach 100 percent of our gross domestic 
product and the Federal Government spending far in excess to 
tax revenues, the Ranking Member and other Committee 
Republicans recognize the need to reign in Federal spending, 
cut duplicative and overlapping government programs, and 
restrain the growth of programs as necessary.
    The Committee Republicans are particularly concerned about 
growth in the SBA's budget that is attributed to administrative 
expenses and overhead. Given that the SBA received an 
additional $240 million for its operations and core programs--
through the American Recovery and Reinvestment Act of 2009 
(ARRA) (H.R. 1), supplemental appropriations, and the Jobs 
Act--additional growth in the SBA's core budget and 
unauthorized programs, as requested in the President's budget 
is imprudent in view of the nation's staggering deficits.
    In the 112th Congress, the Committee Republicans will 
continue to press the SBA to reduce its operating costs and 
find savings in administrative expenses, while eliminating or 
reducing funding to programs that are inefficient, repetitive, 
and ineffective.

                         J. DISASTER ASSISTANCE

    The Committee has worked in a bipartisan fashion to address 
the failures of the Federal Government, and specifically the 
SBA, in responding to the devastating hurricanes of 2005 and 
2006. The Agency's response was slow, inefficient, and 
incompetent. Ranking Member Snowe was Chair of the Committee at 
the time of Hurricanes Katrina and Rita, and through the 
Committee's tireless efforts, including trips to the Gulf, 
aggressive oversight hearings, and numerous pieces of 
legislation, the Committee was able to include in the Food, 
Conservation, and Energy Act of 2008 (H.R. 2419) (``2008 Farm 
Bill'') key provisions to address many of the fundamental flaws 
in the SBA's disaster assistance programs.
    While the Committee's aggressive oversight and reforms led 
to a streamlined and improved agency that is better prepared 
today to help victims of natural disasters recover and rebuild, 
the Minority is concerned about reports from the GAO that the 
SBA has only fully met 15 of the 26 requirements of the 2008 
Farm Bill, and missed deadlines on five of the major components 
of the law.
    Further, the Committee Republicans are alarmed with reports 
issued by the SBA's Inspector General in the fall of 2009 
indicating that the SBA has failed to protect taxpayer dollars 
by not ensuring compliance with insurance requirements on 
collateral used to secure loans, and for not correctly applying 
insurance offsets to loan balances. As the Federal Government 
takes increasing responsibility from the states when it comes 
to disaster recovery and response, as has been the trend since 
Hurricane Katrina in 2005, we must ensure that taxpayer dollars 
are safeguarded with the utmost care and used efficiently.

    K. DEEPWATER HORIZON DISASTER AND SIX-MONTH DEEPWATER DRILLING 
                               MORATORIUM

    In her dual capacity as Ranking Member of the Committee and 
Ranking Member of the Senate Commerce Committee's Oceans, 
Atmosphere, Fisheries, and Coast Guard Subcommittee, Ranking 
Member Snowe sent a letter to President Obama on June 3, 2010, 
urging the coordination of economic relief efforts for 
individuals and small businesses impacted by the Deepwater 
Horizon.
    Ranking Member Snowe furthered that sentiment with Coast 
Guard Rear Admiral Ronald Rabago during a June 17, 2010, 
Committee hearing titled: Harnessing Small Business Innovation: 
Navigating the Evaluation Process for Gulf Coast Cleanup 
Proposals. Ranking Member Snowe called for a single point of 
federal accountability for approving new technologies to 
protect the Gulf Coast's ecology, as well as clarification in 
the chain of command for clean-up efforts overall. Ranking 
Member Snowe questioned the necessity of and reasons for two 
apparent approval processes (one for the Federal Government, 
and another for BP) in approving oil removal methods. Committee 
member Senator Vitter implored the Federal Government, as well 
as BP, to involve local Louisiana small businesses in clean-up 
efforts as a way of mitigating the economic impact on them. 
Senator Vitter also spoke against the moratorium--both in 
deepwater, in addition to what he described as a de facto 
moratorium in shallow water, following the Administration's 
halt on accepting new permit applications.
    On July 27, 2010, the Committee held another hearing on 
this matter titled: The Deepwater Drilling Moratorium: A Second 
Economic Disaster for Small Businesses? On July 22, 2010, 
Senator Vitter wrote to President Obama requesting that a 
senior member of the Administration participate on the 
Committee's witness panel for the July 27 hearing to explain 
the merits of the deepwater drilling moratorium in contrast to 
the obvious economic damage to the state of Louisiana as well 
as the Gulf Coast. The Obama Administration did not provide a 
witness for this hearing. Committee member Senator Wicker 
expressed concern in the Federal Government's overreaction to 
halting drilling on deepwater rigs, suggesting that the 
government's response to the spill could be more costly than 
the spill itself. Both Senators Vitter and Wicker contributed 
witnesses to the hearing's panels.
    On September 16, 2010, the Committee held a hearing titled: 
The Deepwater Drilling Moratorium: A Review of the Obama 
Administration's Economic Impact Analysis on U.S. Small 
Businesses. Following calls from both Chair Landrieu and 
Committee member Vitter for the Administration to provide a 
high level witness to discuss the financial impact of the 
moratorium to the affected states, Ms. Rebecca Blank, 
Department of Commerce Under Secretary for Economic Affairs, 
discussed the Administration's rationale for halting deepwater 
drilling. Under questioning from Committee member Vitter, Ms. 
Blank stated that, prior to the decision to shut down deepwater 
drilling, no economic analysis was performed by the Federal 
Government.

                              L. OVERSIGHT

    In the 111th Congress, Committee members collaborated, on a 
bipartisan basis, to conduct oversight of the SBA and the 
programs under the SBA's purview. The 111th Summary contains 
examples of those activities. Following is a sampling of 
additional measures taken by Ranking Member Snowe and the 
Committee Republicans in this regard:
    On March 10, 2009, Ranking Member Snowe wrote to Department 
of Energy Secretary Steven Chu regarding Title 17 of the ARRA; 
the Innovative Technology Loan Guarantee Program, to assert 
that the Loan Guarantee Program has presented insurmountable 
bureaucratic obstacles to small businesses participating in the 
programs.
    Secretary Chu responded on April 28, 2009, that in 
February, 2009 he approved a series of reforms to the Loan 
Guarantee Program including streamlining and simplifying loan 
application forms and other paperwork.
    On March 27, 2009, Ranking Member Snowe wrote to Secretary 
of Labor Hilda Solis, urging her and the Employment Training 
Administration to include mobile manufacturing skills training 
and rapid job placement programs when they compile the 
parameters for competitive grants under the American Recovery 
and Reinvestment Act. Ranking Member Snowe asserted that mobile 
manufacturing training can provide a valuable resource for 
expeditiously and effectively implementing the employment and 
training portions of the ARRA, placing thousands of 
disadvantaged workers into critical advanced manufacturing jobs 
in high growth, green, and emerging industries.
    Secretary Solis did not respond to Ranking Member Snowe's 
letter as of the end of the 111th Congress.
    On April 21, 2009, Ranking Member Snowe wrote to SBA 
Administrator Mills regarding the establishment of an 
Interagency Task Force to assist veterans in realizing their 
entrepreneurial goals. Ranking Member Snowe authored the 
initial legislation, the Veterans Small Business Opportunity 
Act of 2007 (S. 904) in March of 2007 to create the Task Force, 
whose mission included increasing capital access, contracting 
opportunities and integrity, and training and counseling for 
veteran-owned small businesses. This was subsequently included 
in the Military Reservist and Veteran Small Business 
Reauthorization and Opportunity Act of 2008 (H.R. 4253) and 
signed into law (P.L. 110-186) on February 14, 2008.
    Although the law required the Task Force to be established 
within 90 days, it had not yet occurred. In her letter, Ranking 
Member Snowe urged Administrator Mills to make implementation 
of the Task Force a priority as she began her new role at the 
helm of the SBA.
    Having not received a response to the April 21, 2009, 
letter, Ranking Member Snowe sent a follow-up letter on October 
15, 2009, inquiring about a delay in implementing the Task 
Force and reasserting that the Task Force should be formed 
without further delay.
    Administrator Mills responded on October 23, 2009, stating 
that the SBA was working with the White House to establish the 
Task Force vis-a-vis a Presidential Executive Order. President 
Obama finally issued an Executive Order establishing the 
Interagency Task Force on Veterans Small Business Development 
on April 26, 2010, and the Task Force held its first public 
meeting on October 15, 2010.
    On July 21, 2009, Ranking Member Snowe wrote to SBA 
Administrator Mills, requesting a status report on issues 
regarding: (a) the Government Accountability Office and SBA 
Inspector General's series of reports, testimonies, and studies 
identifying concerns with the SBA's HUBZone and Alaskan Native 
Corporation programs; and (b) the number of statutorily 
mandated reporting deadlines that the SBA had missed relative 
to the Small Business Innovation Research (SBIR), the Small 
Business Technology Transfer (STTR), and the 8(a) business 
development programs.
    Administrator Mills responded on July 31, 2009 in a letter 
outlining the status of various initiatives.
    On September 21, 2009, Ranking Member Snowe wrote to SBA 
Administrator Mills regarding the following three issues: (a) 
small business prime contracting goal achievement; (b) the data 
quality of procurement information; and (c) fraud in the SBIR 
program. Regarding the first concern, the Federal Government 
has consistently failed to satisfy its goal that 23 percent of 
contracts be awarded to small business and its goals for small 
businesses that are women-owned, service-disabled veteran-
owned, or HUBZone certified. For the second issue, data 
regarding procurement information has been perceived as 
incomplete and lacking in integrity. With respect to abuse, 
there was a consistent pattern of fraudulent and incomplete 
information contained on the SBA's public database.
    Administrator Mills responded on October 9, 2009 in a 
letter outlining the staffing reviews and changes that were 
initiated; the ways in which the SBA is developing a procedure 
to verify the size status of small business; and flagging 
inconsistencies and fraud in the SBIR program.
    On October 19, 2009, Ranking Member Snowe wrote to SBA 
Administrator Mills regarding the women-owned small business 
contracting program and the fact that the government 
consistently falls short of its goal that five percent of 
federal contracts be awarded to women-owned firms. Ranking 
Member Snowe asserted that women are still inhibited by the 
SBA's failure to pass meaningful and effective regulations.
    Administrator Mills responded on October 19, 2009 that the 
SBA was taking critical steps to promulgate the implementing 
regulations for the women-owned small business contracting 
program. Administrator Mills further stated that the regulatory 
process does not allow her to suggest a precise timetable, as 
it is under interagency review.
    On November 19, 2009, Ranking Member Snowe wrote to SBA 
Administrator Mills and Edward DeSeve, Special Advisor to the 
President for Implementation of the ARRA, regarding the 
accuracy of the Administration's reporting on job creation and 
retention. Ranking Member Snowe asked for: (a) a comprehensive 
outline of the methodology used by the Administration to 
calculate its figures; and (b) for the Administration to 
rectify any reporting inaccuracies on the recovery.gov website.
    Administrator Mills responded on November 25, 2009 
expressing that much of the data is self-reported by small 
businesses, microlenders, and contractors, and that the SBA 
tries to maintain as accurate information as possible.
    On November 19, 2009, Ranking Member Snowe wrote to Eric 
Shinseki, Secretary of the Department of Veterans Affairs (VA), 
and to SBA Administrator Mills, regarding Veterans' Assistance 
programs and the fact that the Federal Government has never met 
its statutory contracting goal for service-disabled veteran-
owned small businesses. Ranking Member Snowe urged that proven 
waste, fraud, and abuse in the contracting program be addressed 
immediately, and recommended: (a) expanding the use of the VA 
verified database, government-wide, for the purposes of 
validating all service-disabled veteran-owned small business 
eligible firms for contracting; (b) requiring that all 
contractors who knowingly misrepresent their status as one of 
these firms be debarred; and (c) having the SBA Administrator 
refer all service-disabled veteran-owned small business firms 
that submit misrepresentations of their status to the SBA's 
Office of Inspector General for review and further 
investigation.
    Administrator Mills responded on December 3, 2009, stating 
that the SBA and the VA are conducting a joint review of the 
GAO's report recommendations in order to provide Ranking Member 
Snowe with a comprehensive response. The letter stated that the 
SBA's efforts would primarily focus on eligibility 
surveillance, monitoring, and enforcement.
    On December 15, 2009, Ranking Member Snowe wrote to VA 
Secretary Shinseki and SBA Administrator Mills regarding 
interim rule 819.307 published in the Federal Register on 
December 8, 2009, regarding the VA's Executive Director of the 
Office of Small and Disadvantaged Business Utilization (OSDBU). 
This rule would have allowed the Executive Director of the 
OSDBU to solely decide service-disabled veteran-owned small 
business and veteran-owned small business status protests. 
Ranking Member Snowe urged the groups to complete negotiations 
and establish a feasible yet effective protest system within 
the next 60 days. These status protests allow veterans to self-
police the service-disabled veteran-owned small business and 
veteran-owned small business programs to prevent fraud and 
abuse.
    Secretary Shinseki responded on February 4, 2010, asserting 
that the VA's Acquisition Regulation was fully implemented on 
January 7, 2010, and that the VA and the SBA were working 
together to formalize an Interagency Agreement for the SBA to 
process veteran-owned small business status protests.
    On January 26, 2010, Ranking Member Snowe wrote to 
Administrator Cass Sunstein of the Office of Information and 
Regulatory Affairs (OIRA) regarding the review process of the 
women's contracting program regulations, and requested that 
OIRA conclude its review no later than February 12, 2010. 
Ranking Member Snowe reiterated her frustration with the 
Administration's lack of urgency in regard to the women's 
contracting rule, asserting that the Federal Government has 
consistently failed to meet its annual five percent women's 
contracting goal. Ranking Member Snowe urged OIRA to conclude 
its review in a timely manner to ensure swift and effective 
implementation of the women's procurement program.
    Administrator Sunstein responded on March 11, 2010, stating 
that, on October 21, 2009, the SBA submitted a draft of its 
proposed rule to OMB, which concluded its review on February 
12, 2010.
    On May 24, 2010, Ranking Member Snowe wrote to SBA 
Administrator Mills regarding certain SBA oversight practices, 
and the SBA's ability to find effective solutions to oversight 
problems. The letter referred to a House of Representatives' 
hearing on April 21, 2010, during which House Small Business 
Committee Chairwoman Velazquez referenced a September 29, 2009 
award made to McKinsey & Company in the amount of $580,000 to 
review the SBA's new loan management software. Apparently, 
Chairwoman Velazquez asked to see the McKinsey & Company file 
on April 6, 2010 and was informed on April 16, 2009 that the 
file was lost. Copies of select documents from this file were 
forwarded to Chairwoman Velazquez in order to recreate the 
SBA's record. Meanwhile, McKinsey & Company was in the process 
of obtaining an additional $5 million contract to consult with 
the SBA and the Administrator's Office. Ranking Member Snowe 
wrote to Administrator Mills to request copies of the items 
given to Chairwoman Velazquez, as well as all materials 
regarding the current contract with McKinsey & Company to 
ensure that the procurement process is independent, 
competitive, and impartial.
    Administrator Mills responded immediately by forwarding all 
available documentation to meet the demands of this request.
    On September 7, 2010, Ranking Member Snowe wrote to SBA 
Administrator Mills regarding SBA guaranteed, deferred interest 
debentures in order to make investments in small businesses 
engaged in researching, manufacturing, developing, or providing 
goods, products, or services that reduce the use or consumption 
of non-renewable energy sources, signed into law by the Energy 
Independence and Security Act of 2007. Nearly three years 
later, however, the SBA had yet to carry out these energy-
saving debentures. Ranking Member Snowe was concerned about a 
lack of progress in these crucial small business energy 
initiatives and requested that the SBA promulgate an interim 
final rule by September 30, 2010.
    Administrator Mills responded on October 8, 2010, 
indicating that the SBA had drafted a rule to implement the 
program, and that the draft rule was being reviewed by the 
Office of Management and Budget (OMB). Because OMB considered 
the rule to be ``significant'' under Executive Order 12866 
(Regulatory Planning and Review), Administrator Mills stated 
that OMB would submit the draft rule for interagency review.
    On September 8, 2010, Ranking Member Snowe wrote to the 
Chief Counsel for Advocacy at the SBA, Dr. Winslow Sargeant 
asking how the SBA's Office of Advocacy would handle the 
responsibilities from Senate Amendment 3883 to the Restoring 
American Financial Stability Act of 2010 (S. 3217), which 
created small business advocacy review panels within the newly 
created Consumer Financial Protection Bureau (CFPB).
    Dr. Sargeant responded on September 16, 2010 that the SBA's 
Office of Advocacy would work to ensure that the CFPB 
effectively utilized the small business review panel process 
and that his Office had already been in touch with the Federal 
Reserve and the Department of the Treasury regarding the 
process, in addition to offering training on the Regulatory 
Flexibility Act to new CFPB staff.
    On September 21, 2010, Senators Collins, Snowe, Enzi, 
Bennett, McCain, Voinovich, Graham, Coburn, Brown, and Ensign 
wrote to SBA Administrator Mills with concerns over a 
significant change in federal procurement policy under the 
consideration of the Administration, which would seriously 
undermine the ability of small businesses to compete 
effectively for contracts in the $500 billion federal 
marketplace. The issue at hand relates to ``High Road'' 
contracting that would effectively eliminate otherwise 
qualified businesses from consideration for a contracting award 
even though it offers the government the lowest price, provides 
the best technical solution, and is fully compliant with labor 
laws. The ``High Road'' contracting scheme would require 
``scores'' for potential contracting based on the agencies' 
perception of the labor practices of these businesses, leaving 
room for the introduction of inappropriate or political 
considerations into the federal procurement process.
    Senators requested a response and stance on ``High Road'' 
contracting policy by September 30, 2010.
    Administrator Mills responded on September 30, 2010, that 
the SBA has taken the recommendations made by the President's 
Interagency Task Force on Federal Contracting Opportunities for 
Small Businesses, and that the SBA is working across federal 
agencies to implement those recommendations promptly and fully. 
She noted that there had been no decision in regard to ``High 
Road'' contracting, but that she was confident that small 
business concerns would be taken into consideration in any 
procurement policy decision in the future.
    On October 5, 2010, Ranking Member Snowe wrote to SBA Chief 
Counsel for Advocacy Sargeant concerning his Office's failure 
to submit formal comments to a recent Request for Information 
solicited by the Treasury Department and the Internal Revenue 
Service (IRS) involving the new IRS form 1099. The Office did 
not provide ``specific comments . . . regarding the burdens 
associated with implementing the new reporting requirements for 
different types of taxpayers and businesses.''
    Ranking Member Snowe requested that Dr. Sargeant provide, 
within two weeks, a specific plan regarding how the Office of 
Advocacy will address the 1099 issue to mitigate small business 
impact.
    Dr. Sargeant responded on October 21, 2010 that the Office 
of Advocacy engaged in the issue through confidential 
interagency comments with the IRS rather than through the 
public comment process because ``the particular IRS notice in 
question did not address the full impact of the 1099 burden on 
small business.''
    On November 15, 2010, Ranking Member Snowe and Senator Enzi 
wrote to Department of Labor Secretary Solis expressing 
concerns with several actions taken by the Occupational Safety 
and Health Administration (OSHA) that could undermine the job 
creation ability of our nation's small businesses. Even with 
positive numbers highlighting the effectiveness of a 
collaborative approach, OSHA recently proposed several 
significant regulatory changes that will negatively affect 
small businesses, without the benefit of small business review 
panels or comprehensive outreach to small business.
    A response from Secretary Solis had not been received as of 
the end of the 111th Congress.
    On December 13, 2010, Ranking Member Snowe and former 
Committee Chair Kerry wrote to SBA Administrator Mills 
requesting an update on the SBA's activities regarding 
implementation of the SBA's provisions of the Energy 
Independence Act, specifically Sections 1201 through 1207 of 
the Energy Independence Act. The Senators requested information 
on the SBA's successes, performance metrics, benchmarks, and on 
what provisions remained to be implemented. Ranking Member 
Snowe and Senator Kerry requested a response to the letter by 
January 7, 2011, detailing what the SBA has done to implement 
each measure and what steps the SBA will take in the near 
future to further completion.
    Administrator Mills responded at the beginning of the 112th 
Congress with a comprehensive letter stating that the SBA was 
working to establish an energy debenture program by consulting 
with the Department of Energy and other experts concerning some 
crucial technical issues involved with the rulemaking. 
Administrator Mills further disclosed that many programs were 
never implemented.

                          M. REGULATORY REFORM

    Committee Republicans have long regarded regulatory reform 
as a top priority for assisting small businesses. Small 
businesses and their trade associations repeatedly express 
concerns that the greatest inhibitors to small business' 
success and ability to compete and create jobs are the onerous 
regulatory burdens imposed by the local, federal, and state 
government. These concerns include: (a) the lack of 
predictability in the rulemaking process and how laws are 
interpreted; (b) the failure of agencies to fully consider the 
effects of rulemaking on small businesses; (c) the need for 
agencies to examine certain indirect economic effects of 
regulations; and (d) the failure of agencies to regularly 
review existing rules for possible revisions or eliminations.
    Regulatory compliance costs fall even more heavily on small 
businesses because they lack the resources to deal with complex 
and ever-changing rules. According to a 2010 report 
commissioned by the SBA's Office of Advocacy, the total cost of 
federal regulations on businesses is $1.75 trillion.\8\ Small 
firms, with fewer than 20 employees, bear a disproportionate 
burden of compliance and pay $10,585 per employee annually to 
comply with federal regulations, which is 36 percent higher 
than the regulatory cost facing larger firms.\9\
---------------------------------------------------------------------------
    \8\See Crain & Crain, Sept. 2010.
    \9\See Crain & Crain, Sept. 2010.
---------------------------------------------------------------------------
    Since enactment of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA) (PL 104-121), more 
than 50,000 new rules have gone into effect, including 1,000 
``major'' rules, each of which with an estimated impact of more 
than $100 million annually.
    In the 111th Congress, Ranking Member Snowe proposed an 
amendment (S. Amdt. 3883) to the Restoring American Financial 
Stability Act of 2010 (S. 3217) that requires the new Consumer 
Financial Protection Bureau (CFPB) to hold a Small Business 
Regulatory Enforcement Fairness Act (SBREFA) panel whenever a 
CFPB planned rule is likely to have a significant economic 
impact on a substantial number of small entities. SBREFA panels 
are a critical first opportunity in the rulemaking process for 
small businesses to voice their concerns about the potential 
effects that a rulemaking might have on the economy. The panels 
prepare reports with constructive recommendations to the 
agency, and that report is published with the proposed rule. 
Ranking Member Snowe's provision was approved by voice vote on 
May 19, 2010, and became law on July 21, 2010 (Public Law No. 
111-203).
    Ranking Member Snowe also introduced the Small Business Job 
Creation Act of 2010 (S. 3103) on March 10, 2010. S. 3103 would 
amend the Regulatory Flexibility Act to require that each 
agency: (a) include in its Initial Regulatory Flexibility 
Analysis (IRFA) an estimate of the economic impact of a 
proposed rule on small businesses; (b) notify the SBA Chief 
Counsel for Advocacy of any draft rules that may have a 
significant economic impact on a substantial number of small 
businesses; (c) publish its final regulatory flexibility 
analysis on its website; and (d) consider specified factors, 
including the continued need for the rule, the nature of 
complaints received, and the rule's complexity and current 
impact.
    Ranking Member Snowe filed the Job Impact Analysis Act of 
2010 (S. 3024) on February 23, 2010. This legislation would 
help ensure that the Federal government--both Congress and 
Executive Branch agencies--fully consider small business job 
creation in the legislation Congress passes and in the rules 
and regulations that agencies promulgate. The Job Impact 
Analysis Act of 2010 included several targeted regulatory 
reforms to help ensure that Congress and Federal agencies fully 
consider small business implications when enacting laws and 
promulgating rules, including:
    (a) Jobs Impact Statement. The legislation would direct the 
Congressional Budget Office (CBO), to the extent practicable, 
to create a ``job impact statement'' estimating the potential 
job creation or job loss attributable to each bill or joint 
resolution reported by a congressional committee that exceeds 
$5 billion in costs.
    (b) Small Business Regulatory Reform. The legislation would 
strengthen the effectiveness of the Regulatory Flexibility Act 
that requires agencies to consider the impact of regulatory 
proposals on small businesses and analyze effective 
alternatives that minimize the negative impact. It would also 
require Federal agencies to take into account comments provided 
by the SBA's Office of Advocacy as an independent voice for 
small business within the Federal government.
    (c) Independent Office of Advocacy. The legislation would 
guarantee the statutory and budgetary independence of the SBA 
Office of Advocacy to enable its independence and ensure 
impartiality.
    The Jobs Act incorporated various provisions from the Job 
Impact Analysis Act of 2010. For example, it provides budgetary 
independence for the SBA Office of Advocacy. Additionally it 
requires that agencies include in their rulemaking responses to 
any comments filed by the Chief Counsel of the SBA Office of 
Advocacy regarding a proposed rule, and that the agency provide 
a detailed statement of any changes made to the proposed rule 
in the final rule as a result of the comments.
    In the 112th Congress, Minority members will continue to 
pursue meaningful regulatory reform and ease barriers placed on 
small businesses that are limiting their job creation 
potential.

                             N. NOMINATIONS

Dr. Winslow Sargeant

    On May 21, 2009, President Obama announced the nomination 
of Dr. Winslow Sargeant to be Chief Counsel for the SBA's 
Office of Advocacy. The Committee scheduled a hearing for this 
nominee on Thursday, August 6, 2009, where Dr. Sargeant, via 
testimony, described outreach to rural America, access to 
capital, intellectual property protections, and advocacy on 
behalf of minority or women-owned, disadvantaged businesses as 
``pressing issues that we must proactively address.''
    As the SBA's Chief Counsel for Advocacy is the one 
regulatory official within the Federal Government who 
represents small business' interests during the federal 
rulemaking process, Committee members were concerned that Dr. 
Sargeant did not adequately identify the regulatory burden on 
small business as Advocacy's primary purpose and concern. 
Further, Dr. Sargeant failed to discuss the Regulatory 
Flexibility Act in interviews with Committee staff or in his 
hearing testimony. Another concern was that, if selected, Dr. 
Sargeant would become the first Chief Counsel for Advocacy 
since the office's inception in 1978 to not hold a legal 
degree, nor did he have a significant background in regulatory 
issues. The Committee held a markup for Dr. Sargeant's 
nomination on September 16, 2009, where he passed out of the 
Committee by a vote of 13-6.
    On October 5, 2009, Senators Snowe, Vitter, Thune, Enzi, 
and Isakson sent a letter to President Obama appealing that he 
resubmit Dr. Sargeant's nomination for an alternate post at the 
SBA, such as the position of Deputy Administrator. The White 
House responded on January 11, 2010, contending that ``Dr. 
Sargeant is highly qualified to serve as the SBA's Chief 
Counsel for Advocacy.''
    Dr. Sargeant was recess appointed to serve as Chief Counsel 
for Advocacy on August 19, 2010.
                            XVII. Appendices


        A. HEARINGS, ROUNDTABLES, AND MARKUPS OF 111TH CONGRESS

First Session

     January 29, 2009: Hearing titled ``Investing in 
Small Business: Jumpstarting Engines of Our Economy,'' Senator 
Landrieu chaired.
     March 19, 2009: Hearing titled ``Perspectives from 
Main Street on Small Business Lending,'' Senator Landrieu 
chaired.
     March 25, 2009: Hearing titled ``The FY2010 Budget 
Request for the SBA,'' Senator Landrieu chaired.
     April 1, 2009: Hearing titled ``Nomination of 
Karen G. Mills as Administrator of the Small Business 
Administration,'' Senator Landrieu chaired.
     April 14, 2009: Field Hearing titled 
``Manufacturing Closures in North Louisiana: Impact on Small 
Businesses and Local Communities,'' Senator Landrieu chaired.
     May 13, 2009: Hearing titled ``Small Business 
Financing: Progress Report on Recovery Act Implementation and 
Alternative Sources of Financing,'' Senator Landrieu chaired.
     May 21, 2009: Hearing titled ``The Role of Small 
Business in Stimulus Contracting,'' Senator Landrieu chaired.
     June 4, 2009: Roundtable titled ``SBIR and STTR 
Reauthorization: Ensuring a Strong Future for Small Business in 
Federal Research and Development,'' Senator Landrieu chaired.
     June 11, 2009: Roundtable titled ``Entrepreneurial 
Development: Investing in Small Businesses to Strengthen Our 
Economy,'' Senator Landrieu chaired.
     June 18, 2009: Markup of S. 1233, ``A Bill to 
Reauthorize the Small Business Innovation Research and Small 
Business Technology Transfer Programs'' and Markup of S. 1229, 
``A Bill to Reauthorize the SBA's Entrepreneurial Development 
Programs,'' Senator Landrieu chaired.
     June 22, 2009: Field Hearing titled ``Missed 
Opportunities: The ARRA and the NIH/SBIR Exclusion,'' Senator 
Cardin chaired.
     June 30, 2009: Field Hearing titled ``Keeping 
America Competitive: Federal Programs that Promote Small 
Business Exporting,'' Senator Landrieu chaired.
     July 9, 2009: Roundtable titled ``Healthcare 
Reform: The Concerns and Priorities from the Perspective of 
Small Businesses,'' Senator Landrieu chaired.
     August 6, 2009: Hearing to consider the nomination 
of Mr. Winslow Lorenzo Sargeant to be Chief Counsel for 
Advocacy for the Small Business Administration and Ms. Peggy E. 
Gustafson to be Inspector General of the Small Business 
Administration, Senator Landrieu chaired.
     August 12, 2009: Field Hearing titled ``Small 
Business Survival, Weathering the Economy, Creating Jobs, and 
What the SBA Can Do to Assist,'' Senator Snowe and Senator 
Shaheen chaired.
     September 16, 2009: Hearing to confirm Dr. Winslow 
Lorenzo Sargeant to be Chief Counsel for Advocacy for the Small 
Business Administration and Ms. Peggy E. Gustafson to be 
Inspector General of the Small Business Administration, Senator 
Landrieu chaired.
     September 22, 2009: Roundtable titled ``Small 
Business Contracting: Ensuring Opportunities for America's 
Small Business,'' Senator Landrieu chaired.
     September 24, 2009: Roundtable titled ``Minority 
Entrepreneurship: Evaluating Small Business Resources and 
Programs,'' Senator Landrieu chaired.
     September 25, 2009: Field Hearing titled ``A Year 
Later: Lessons Learned and Progress Made After Hurricane Ike,'' 
Senator Landrieu chaired.
     October 1, 2009: Roundtable titled 
``Reauthorization of SBA Finance Programs and the Impact of the 
Small Business Provisions in the Recovery Act,'' Senator 
Landrieu chaired.
     October 6, 2009: Hearing focused on the 
implementation of the small business provisions in the Recovery 
Act, Senator Landrieu chaired.
     October 20, 2009: Hearing titled ``Reform Done 
Right: Sensible Health Care Solutions for America's Small 
Businesses,'' Senator Landrieu chaired.
     December 3, 2009: Roundtable titled ``What Is 
Working: Tax Incentives to Aid Small Business Recovery,'' 
Senator Landrieu chaired.
     December 17, 2009: Markup of S. 2862, ``Small 
Business Export Enhancement and International Trade Act of 
2009'' and S. 2869, ``Small Business Job Creation and Access to 
Capital Act of 2009,'' Senator Landrieu chaired.

Second Session

     March 4, 2010: Markup of S. 2989, ``Small Business 
Contracting Revitalization Act of 2010,'' Senator Landrieu 
chaired.
     April 15, 2010: Hearing titled ``Assessing Access: 
Obstacles and Opportunities for Minority Small Business Owners 
in Today's Capital Markets,'' Senator Landrieu chaired.
     April 21, 2010: Hearing titled ``The FY2011 Budget 
Request for the Small Business Administration,'' Senator 
Landrieu chaired.
     April 27, 2010: Hearing titled ``Connecting Main 
Street to the World: Federal Efforts to Expand Small Business 
Internet Access,'' Senator Landrieu chaired.
     May 13, 2010: Roundtable titled ``Connecting Main 
Street to the World: Small Business Perspectives on Internet 
Access,'' Senator Landrieu chaired.
     May 19, 2010: Hearing titled ``The SBA Disaster 
Assistance Program and the Impact of the Deepwater Horizon Oil 
Spill on Small Businesses,'' Senator Landrieu chaired.
     May 19, 2010: Confirmation Hearing of Marie 
Annette Collins Johns to be the Deputy Administrator of the 
Small Business Administration, Senator Landrieu chaired.
     May 27, 2010: Hearing titled ``Impact of the 
Deepwater Horizon Oil Spill on Small Businesses,'' Senator 
Landrieu chaired.
     June 8, 2010: Roundtable titled ``The State of 
Small Business Lending: Identifying Obstacles and Exploring 
Solutions,'' Senator Landrieu chaired.
     June 17, 2010: Hearing titled ``Harnessing Small 
Business Innovation: Navigating the Evaluation Process for Gulf 
Coast Cleanup Proposals,'' Senator Landrieu chaired.
     July 27, 2010: Hearing titled ``The Deepwater 
Drilling Moratorium: A Second Economic Disaster for Small 
Businesses?'' Senator Landrieu chaired.
     August 3, 2010: Roundtable titled 
``Entrepreneurship for the Next Generation: Harnessing the 
Power of Young Entrepreneurs in a Changing Economic 
Landscape,'' Senator Landrieu chaired.
     August 17, 2010: Field Hearing titled ``The 
Deepwater Drilling Moratorium: An Economic Disaster for 
Louisiana's Small Businesses?'' Senator Landrieu chaired.
     September 16, 2010: Hearing titled ``The Deepwater 
Drilling Moratorium: A Review of the Obama Administration's 
Economic Impact Analysis on U.S. Small Businesses,'' Senator 
Landrieu chaired.
     November 17, 2010: Roundtable titled ``Small 
Business Access to Capital: Challenges Presented by Commercial 
Real Estate,'' Senator Landrieu chaired.
     November 18, 2010: Hearing titled ``Assessing the 
Regulatory and Administrative Burdens on America's Small 
Businesses,'' Senator Landrieu chaired.

                   B. BILLS REFERRED TO THE COMMITTEE

First Session

     S. 177 (Mr. Feingold) January 8, 2009. A bill to 
amend the Small Business Act to extend the Small Business 
Innovation Research and Small Business Technology Transfer 
programs, to increase the allocation of Federal agency grants 
for those programs, to add water, energy, transportation, and 
domestic security related research to the list of topics 
deserving special consideration, and for other purposes.
     S. 1070 (Ms. Snowe) May 19, 2009. A bill to 
establish the Small Business Information Security Task Force to 
address information security concerns relating to credit card 
data and other proprietary information.
     S. 1196 (Ms. Landrieu) June 8, 2009. A bill to 
amend the Small Business Act to improve the Office of 
International Trade, and for other purposes.
     S. 1208 (Ms. Snowe) June 8, 2009. A bill to amend 
the Small Business Act to improve export growth opportunities 
for small businesses, and for other purposes.
     S. 1229 (Ms. Landrieu) June 10, 2009. A bill to 
reauthorize and improve the entrepreneurial development 
programs of the Small Business Administration, and for other 
purposes.
     S. 1233 (Ms. Landrieu) June 10, 2009. A bill to 
reauthorize and improve the SBIR and STTR programs and for 
other purposes.
     S. 1489 (Ms. Snowe) July 21, 2009. A bill to amend 
the Small Business Act to create parity among small business 
contracting programs, and for other purposes.
     S. 1615 (Ms. Snowe) August 6, 2009. A bill to 
amend the Small Business Act and the Small Business Investment 
Act of 1958 to stop the small business credit crunch, and for 
other purposes.
     S. 1817 (Mr. Brown) October 20, 2009. A bill to 
temporarily raise the limits on certain loans under the Small 
Business Act and the Small Business Investment Act of 1958, and 
for other purposes.
     S. 1831 (Mr. Kerry) October 21, 2009. A bill to 
amend the Small Business Investment Act of 1958 to reauthorize 
the venture capital program, and for other purposes.
     S. 1832 (Ms. Landrieu) October 21, 2009. A bill to 
increase loan limits for small business concerns, provide for 
low interest refinancing for small business concerns, and for 
other purposes.
     S. 2661 (Mr. Kerry) November 2, 2009. A bill to 
create a 3-year pilot program that makes small, nonprofit child 
care businesses eligible for loans under title V of the Small 
Business Investment Act of 1958.
     S. 2731 (Ms. Landrieu) November 5, 2009. A bill to 
improve disaster assistance provided by the Small Business 
Administration, and for other purposes.
     S. 2765 (Mr. Kerry) November 10, 2009. A bill to 
amend the Small Business Act to authorize loan guarantees for 
health information technology.
     S. 2770 (Ms. Gillibrand) November 10, 2009. A bill 
to amend the Small Business Act to establish a Veterans 
Business Center program, and for other purposes.
     S. 2777 (Ms. Snowe) November 16, 2009. A bill to 
repeal the American Recovery Capital loan program of the Small 
Business Administration.
     S. 2780 (Mr. Levin) November 17, 2009. A bill to 
amend the Small Business Act to establish a small business 
intermediary lending pilot program.
     S. 2808 (Ms. Shaheen) November 20, 2009. A bill to 
improve the Express Loan Program of the Small Business Act.
     S. 2862 (Ms. Snowe) December 9, 2009. A bill to 
amend the Small Business Act to improve the Office of 
International Trade, and for other purposes.
     S. 2869 (Ms. Landrieu) December 10, 2009. A bill 
to increase loan limits for small business concerns, to provide 
for low interest refinancing for small business concerns, and 
for other purposes.
     S. Res. 50 (Ms. Landrieu) February 13, 2009. An 
original resolution authorizing expenditures by the Committee 
on Small Business and Entrepreneurship.
     H.R. 1803 (Mr. Nye) March 31, 2009. To amend the 
Small Business Act to establish a Veterans Business Center 
program, and for other purposes.
     H.R. 1807 (Mr. Thompson) March 31, 2009. To 
provide distance learning to potential and existing 
entrepreneurs, and for other purposes.
     H.R. 1834 (Ms. Kirkpatrick) April 1, 2009. To 
amend the Small Business Act to expand and improve the 
assistance provided to Indian tribe members, Alaska Natives, 
and Native Hawaiians, and for other purposes.
     H.R. 1838 (Ms. Fallin) April 1, 2009. To amend the 
Small Business Act to modify certain provisions relating to 
women's business centers, and for other purposes.
     H.R. 1839 (Mr. Buchanan) April 1, 2009. To amend 
the Small Business Act to improve SCORE, and for other 
purposes.
     H.R. 1842 (Mr. Luetkemeyer) April 1, 2009. To 
amend the Small Business Act to improve the Small Business 
Administration's entrepreneurial development programs, and for 
other purposes.
     H.R. 1845 (Mr. Schock) April 1, 2009. To amend the 
Small Business Act to modernize Small Business Development 
Centers, and for other purposes.
     H.R. 2352 (Mr. Shuler) May 12, 2009. To amend the 
Small Business Act, and for other purposes.
     H.R. 3014 (Ms. Dahlkemper) June 24, 2009. To amend 
the Small Business Act to provide loan guarantees for the 
acquisition of health information technology by eligible 
professionals in solo and small group practices, and for other 
purposes.
     H.R. 3737 (Mr. Ellsworth) October 7, 2009. To 
amend the Small Business Act to improve the Microloan Program, 
and for other purposes.
     H.R. 3738 (Mr. Nye) October 7, 2009. To amend the 
Small Business Investment Act of 1958 to establish a program 
for the Small Business Administration to provide financing to 
support early-stage small businesses in targeted industries, 
and for other purposes.
     H.R. 3743 (Mr. Griffith) October 7, 2009. To amend 
the Small Business Act to improve the disaster relief programs 
of the Small Business Administration, and for other purposes.
     H.R. 3854 (Mr. Schrader) October 20, 2009. To 
amend the Small Business Act and the Small Business Investment 
Act of 1958 to improve programs providing access to capital 
under such Acts, and for other purposes.

Second Session

     S. 2986 (Ms. Landrieu) February 4, 2010. A bill to 
authorize the Administrator of the Small Business 
Administration to waive interest for certain loans relating to 
damage caused by Hurricane Katrina, Hurricane Rita, Hurricane 
Gustav, or Hurricane Ike.
     S. 2989 (Ms. Landrieu) February 4, 2010. A bill to 
improve the Small Business Act, and for other purposes.
     S. 3020 (Ms. Snowe) February 23, 2010. A bill to 
direct the Administrator of the Small Business Administration 
to reform and improve the HUBZone program for small business 
concerns, and for other purposes.
     S. 3089 (Ms. Landrieu) March 9, 2010. A bill to 
require a study and report by the Office of Advocacy of the 
Small Business Administration regarding the effects of proposed 
changes in patent law.
     S. 3165 (Ms. Landrieu) March 25, 2010. A bill to 
authorize the Administrator of the Small Business 
Administration to waive the non-Federal share requirement under 
certain programs.
     S. 3190 (Ms. Landrieu) March 26, 2010. A bill to 
reaffirm that the Small Business Reauthorization Act of 1997 
does not limit a contracting officer's discretion regarding 
whether to make a contract available for award pursuant to any 
of the restricted competition programs authorized by the Small 
Business Act.
     S. 3228 (Mr. Schumer) April 20, 2010. A bill to 
authorize the Administrator of the Small Business 
Administration to make grants to small business concerns to 
assist the commercialization of research developed with funds 
received under the second phase of the Small Business 
Innovation Research Program.
     S. 3279 (Mr. Wyden) April 29, 2010. A bill to 
reauthorize the national small business tree planting program, 
and for other purposes.
     S. 3394 (Ms. Landrieu) May 20, 2010. A bill to 
establish the veterans' business center program, to improve the 
programs for veterans of the Small Business Administration, and 
for other purposes.
     S. 3399 (Ms. Snowe) May 24, 2010. A bill to remove 
the limit on the anticipated award price for contracts awarded 
under the procurement program for women-owned small business 
concerns, and for other purposes.
     S. 3432 (Ms. Boxer) May 27, 2010. A bill to 
establish a temporary Working Capital Express loan guarantee 
program for small business concerns, and for other purposes.
     S. 3444 (Ms. Snowe) May 27, 2010. A bill to 
require small business training for contracting officers.
     S. 3458 (Ms. Landrieu) June 7, 2010. A bill to 
improve the program under section 8(a) of the Small Business 
Act and to establish a surety bond pilot program.
     S. 3506 (Ms. Landrieu) June 17, 2010. A bill to 
improve certain programs of the Small Business Administration 
to better assist small business customers in accessing 
broadband technology and for other purposes.
     S. 3534 (Ms. Landrieu) June 24, 2010. A bill to 
establish a Native American entrepreneurial development program 
in the Small Business Administration.
     S. 3545 (Ms. Landrieu) June 29, 2010. A bill to 
require a study of the effect of a 6-month moratorium on new 
deepwater drilling in the Gulf of Mexico on small businesses.
     S. 3563 (Mr. Merkley) June 30, 2010. A bill to 
amend the Small Business Act to temporarily designate as a 
HUBZone, counties that are most affected by a recession.
     S. 3604 (Ms. Snowe) July 15, 2010. A bill to 
extend the small business loan enhancements.
     S. 3835 (Mr. Cardin) September 23, 2010. A bill to 
reinstate the increase in the surety bond guarantee limits for 
the Small Business Administration.
     S. 3836 (Mr. Cardin) September 23, 2010. A bill to 
make permanent the increase in the surety bond guarantee limits 
for the Small Business Administration.
     S. 3959 (Ms. McCaskill) November 17, 2010. A bill 
to eliminate the preferences and special rules for Alaska 
Native Corporations under the program under section 8(a) of the 
Small Business Act.
     S. 3967 (Ms. Landrieu) November 18, 2010. A bill 
to encourage investment in and innovation by small business 
concerns, and for other purposes.
     S. 4053 (Ms. Landrieu) December 22, 2010. A bill 
to reauthorize and improve the SBIR and STTR programs, and for 
other purposes.
     H.R. 6191 (Mr. Miller) September 23, 2010. To 
amend the Small Business Jobs Act of 2010 to include certain 
construction and land development loans in the definition of 
small business lending.

                             C. PUBLIC LAWS

    Public Law 111-5 (H.R. 1) American Recovery and 
Reinvestment Act of 2009. Signed into Law: February 17, 2009.
    Public Law 111-10 (H.R. 1541) To provide for an additional 
temporary extension of programs under the Small Business Act 
and the Small Business Investment Act of 1958, and for other 
purposes. Signed into Law: March 20, 2009.
    Public Law 111-24 (H.R. 627/Related Bill S. 1070) Credit 
Card Accountability Responsibility and Disclosure Act of 2009. 
Signed into Law: May 22, 2009.
    Public Law 111-43 (S. 1513) A bill to provide for an 
additional temporary extension of programs under the Small 
Business Act and the Small Business Investment Act of 1958, and 
for other purposes. Signed into Law: July 31, 2009.
    Public Law 111-66 (H.R. 627) To provide for an additional 
temporary extension of programs under the Small Business Act 
and the Small Business Investment Act of 1958, and for other 
purposes. Signed into Law: September 30, 2009.
    Public Law 111-89 (S. 1929) A bill to provide for an 
additional temporary extension of programs under the Small 
Business Act and the Small Business Investment Act of 1958, and 
for other purposes. Signed into Law: October 30, 2009.
    Public Law 111-118 (H.R. 3326) Department of Defense 
Appropriations Act, 2010. Signed into Law: December 19, 2009.
    Public Law 111-136 (H.R. 4508) To provide for an additional 
temporary extension of programs under the Small Business Act 
and the Small Business Investment Act of 1958, and for other 
purposes. Signed into Law: January 29, 2010.
    Public Law 111-144 (H.R. 4691) Temporary Extension Act of 
2010. Signed into Law: March 2, 2010.
    Public Law 111-150 (H.R. 4938) To permit the use of 
previously appropriated funds to extend the Small Business Loan 
Guarantee Program, and for other purposes. Signed into Law: 
March 26, 2010.
    Public Law 111-157 (H.R. 4851) Continuing Extension Act of 
2010. Signed into Law: April 15, 2010.
    Public Law 111-162 (S. 3253) A bill to provide for an 
additional temporary extension of programs under the Small 
Business Act and the Small Business Investment Act of 1958, and 
for other purposes. Signed into Law: April 30, 2010.
    Public Law 111-214 (H.R. 5849) To provide for an additional 
temporary extension of programs under the Small Business Act 
and the Small Business Investment Act of 1958, and for other 
purposes. Signed into Law: July 30, 2010.
    Public Law 111-240 (H.R. 5297/Related Bill S. 1196) Small 
Business Jobs and Credit Act of 2010. Signed into Law: 
September 27, 2010.
    Public Law 111-251 (S. 3839) A bill to provide for an 
additional temporary extension of programs under the Small 
Business Act and the Small Business Investment Act of 1958, and 
for other purposes. Signed into Law: September 30, 2010.

                                  
