[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
TO INVESTIGATE THE LEGISLATION THAT WOULD INCREASE THE EXTENT AND
SCOPE OF THE SERVICES PROVIDED BY SMALL BUSINESS DEVELOPMENT CENTERS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON WORKFORCE,
EMPOWERMENT, AND GOVERNMENT PROGRAMS
of the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC, JULY 19, 2001
__________
Serial No. 107-20
__________
Printed for the use of the Committee on Small Business
U.S. GOVERNMENT PRINTING OFFICE
75-226 WASHINGTON : 2001
----------------------------------------------------------------------------
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COMMITTEE ON SMALL BUSINESS
DONALD MANZULLO, Illinois, Chairman
LARRY COMBEST, Texas NYDIA M. VELAZQUEZ, New York
JOEL HEFLEY, Colorado JUANITA MILLENDER-McDONALD,
ROSCOE G. BARTLETT, Maryland California
FRANK A. LoBIONDO, New Jersey DANNY K. DAVIS, Illinois
SUE W. KELLY, New York WILLIAM PASCRELL, New Jersey
STEVEN J. CHABOT, Ohio DONNA M. CHRISTIAN-CHRISTENSEN,
PATRICK J. TOOMEY, Pennsylvania Virgin Islands
JIM DeMINT, South Carolina ROBERT A. BRADY, Pennsylvania
JOHN THUNE, South Dakota TOM UDALL, New Mexico
MIKE PENCE, Indiana STEPHANIE TUBBS JONES, Ohio
MIKE FERGUSON, New Jersey CHARLES A. GONZALEZ, Texas
DARRELL E. ISSA, California DAVID D. PHELPS, Illinois
SAM GRAVES, Missouri GRACE F. NAPOLITANO, California
EDWARD L. SCHROCK, Virginia BRIAN BAIRD, Washington
FELIX J. GRUCCI, Jr., New York MARK UDALL, Colorado
TODD W. AKIN, Missouri JAMES R. LANGEVIN, Rhode Island
SHELLEY MOORE CAPITO, West Virginia MIKE ROSS, Arkansas
BILL SHUSTER, Pennsylvania BRAD CARSON, Oklahoma
ANIBAL ACEVEDO-VILA, Puerto Rico
Phil Eskeland, Deputy Staff Director
Michael Day, Minority Staff Director
------
Subcommittee on Workforce, Empowerment, and Government Programs
JIM DeMINT, South Carolina, Chairman
FRANK LoBIONDO, New Jersey JUANITA MILLENDER-McDONALD,
MIKE FERGUSON, New Jersey California
FELIX GRUCCI, New York DANNY DAVIS, Illinois
DARRELL ISSA, California STEPHANIE TUBBS JONES, Ohio
ED SCHROCK, Virginia CHARLES GONZALEZ, Texas
SHELLY MOORE CAPITO, West Virginia MIKE ROSS, Arkansas
DONNA CHRISTIAN-CHRISTENSEN,
Virgin Islands
Nelson Crowther, Professional Staff
C O N T E N T S
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Page
Hearing held on July 19, 2001.................................... 1
Witnesses
Sweeney, Hon. John E., Member, U.S. House of Representatives..... 2
Udall, Hon. Tom, Member, U.S. House of Representatives........... 4
Brady, Hon. Robert A., Member, U.S. House of Representatives..... 5
Wilson, Donald T., Executive Director, Association of Small
Business Development Centers................................... 9
Grumbles, Thomas G., Vice President, American Industrial Hygiene
Association.................................................... 10
Cartier, Rudolph, Small Business Ombudsman, State of New
Hampshire...................................................... 12
Conroy, Christian, Associate State Director, Pennsylvania Small
Business Development Centers................................... 14
Lopez, Leonard, Sun Valley Express (Convenience Store)........... 16
Appendix
Opening statements:
DeMint, Hon. Jim............................................. 24
Prepared statements:
Sweeney, Hon. John E......................................... 27
Udall, Hon. Tom.............................................. 30
Brady, Hon. Robert A......................................... 36
Wilson, Donald T............................................. 37
Grumbles, Thomas G........................................... 45
Cartier, Rudolph............................................. 57
Conroy, Christian............................................ 61
Lopez, Leonard............................................... 67
TO INVESTIGATE THE LEGISLATION THAT WOULD INCREASE THE EXTENT AND SCOPE
OF THE SERVICES PROVIDED BY SMALL BUSINESS DEVELOPMENT CENTERS
----------
THURSDAY, JULY 19, 2001
Subcommittee on Workforce, Empowerment, and
Government Programs,
Committee on Small Business,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m. in
room 311, Cannon House Office Building, Hon. Jim DeMint
[chairman of the Subcommittee] presiding.
Mr. DeMint. We are officially convened. I appreciate
everyone being here. As you know, we will probably have a vote
very quickly and we will adjourn, but it would probably be a
good idea to go ahead and begin the hearing to see if we can
get in some of the testimony before the first vote.
I do want to welcome all of you and particularly you, Mr.
Sweeney. I appreciate the ideas behind your bill and your being
here to tell us a little bit about it, so I look forward to
that.
Today, the Subcommittee has three bills before us that
would expand the extent and the scope of the services provided
by the Small Business Development Centers that we usually refer
to as the SBDCs. There are three legislative proposals under
consideration that we will hear about.
The first is H.R. 203, the National Small Business
Regulatory Assistance Act of 2001, introduced by Congressman
Sweeney of New York. This would direct the Administrator of the
Small Business Administration to establish a pilot program to
provide regulatory compliance assistance to small business
concerns through participating SBDCs.
Under H.R. 203, small businesses would be able to receive
confidential counseling regarding compliance with federal
regulations, provided that such counseling does not constitute
the practice of law. In addition, SBDCs would provide to small
businesses training and educational activities, technical
assistance and referrals to experts and other providers of
compliance assistance. The bill is aimed at helping small
businesses cope with the maze of federal regulations, a good
example of the federal government creating the problem and then
coming in to solve it.
The next legislative proposal, sponsored by Congressman
Brady of Pennsylvania, who I assume will be here after the
vote, would permit the SBA to make grants to SBDCs to enable
them to provide technical assistance to secondary schools or to
post secondary vocational and technical schools for the
development and implementation of curricula designed to promote
vocational and technical entrepreneurship.
The third which has been dropped, H.R. 2538, is sponsored
by Congressman Udall of New Mexico. It would authorize the SBA
to make grants to SBDCs for the purpose of providing
entrepreneurial assistance to Native Americans, Native Alaskans
and Native Hawaiians in starting, operating and growing small
businesses. The legislation is aimed at stimulating the
economies of areas served and to promote job creation.
The Subcommittee would appreciate everyone's views. We will
be looking forward to hearing everyone. John, I think the best
idea, if you do not mind, is we will go vote and come back,
unless you would prefer to make your statement and then we will
go vote.
[Mr. DeMint's statement may be found in appendix.]
Mr. Sweeney. Well, Mr. Chairman, my statement is very
brief, so I think I could actually make the statement and get
us over there. How much time do we have?
Mr. DeMint. I would like the Ranking Member to have the
opportunity to make a statement. Let us see if we can fit in
these two statements before we vote.
Ms. Millender-McDonald.
Ms. Millender-McDonald. Thank you. Good morning, Mr.
Chairman.
Since I will be here for a little while after we return
back, I will defer to our colleague, Congressman Sweeney, if
you have a short one so that we can get to the Floor to vote
and then return back. At that time, I will make my statement if
it is okay with you.
Mr. DeMint. Thank you. Thank you very much.
Congressman Sweeney.
Mr. Sweeney. I thank the Chairman and the Ranking Member,
and I will shock you both by giving a very brief statement.
Mr. DeMint. I will be shocked.
Mr. Sweeney. I also want to compliment you on your choice
of hearing rooms. This is a great historic place, and I think
it showed some real contemplation.
I am going to submit for the record an extended statement.
STATEMENT OF CONGRESSMAN JOHN E. SWEENEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Sweeney. For nearly 25 years, Congress has recognized
that small businesses face substantial regulatory burdens. I,
like you, have a substantial number of constituents in jobs
created out of my district by small businesses, some 90 percent
in New York's 22nd Congressional District, and I think that
mirrors the vast majority of Members of Congress.
In the spirit of helping these entrepreneurs, I have
introduced H.R. 203, the National Small Business Regulatory
Assistance Act. This legislation would assist small businesses
in successfully finding their way through the maze of
regulations that have proliferated in recent years.
Last year, after a great deal of effort during the 106th
Congress, and I was proud to be a Member of this Committee, we
breathed new life into what began as an outstanding initiative,
but had little prospect for implementation. This improved
legislation has a proven record of support as witnessed on
September 26 of last year when the House passed the National
Small Business Regulatory Assistance Act by voice vote.
H.R. 203 would amend the Small Business Act to establish a
pilot program in 20 states. The Administrator, in consultation
with the National Association of Small Business Development
Centers, SBDCs, would select two states from each of the ten
federal regions for participation in the program. This is a
compromise that has been worked out over the last year.
Within the pilot program, SBDCs would develop partnerships
with federal agencies and be a point of contact for small
businesses to turn to free of charge for confidential advice
concerning regulatory compliance. This type of cooperation, Mr.
Chairman and Ranking Member, is not new. Some SBDCs have
already been thinking outside the box and providing that kind
of service. They have fostered relationships with different
federal agencies and independent compliance groups to build
upon each other's resources.
H.R. 203 is not meant to replace current regulatory
compliance programs, but supplement them when relevant
participating SBDCs may refer businesses to existing regulatory
compliance programs. This bill is intended to take these
successes and apply them nationwide to ensure safety in the
workplace, to ensure compliance with all sorts of different
regulatory requirements of the federal government.
There are a number of examples, including examples within
my own district, and I simply would say that as a former
regulator--I was New York's Labor Commissioner before coming to
Congress--I recognize both the importance that the government
plays, the important role the government plays in providing
regulatory oversight for the safety and health of both people
who work at businesses or people who are using those
businesses, and I also understand the need to try to link and
better link those in the business community to those regulatory
underpinnings so that we achieve the fundamental goal.
It simply is not a matter of having more regulation and
more rules, Mr. Chairman. It is really a matter of finding the
easy and the right way or, I should say, the correct way, not
the easy way, for businesses to be able to comply.
With that, I will thank you again, submit my statement for
the record and answer any questions you might have.
[Mr. Sweeney's statement may be found in appendix.]
Mr. DeMint. Thank you, Congressman. We do need to leave,
but if there is a quick question from the Ranking Member?
Ms. Millender-McDonald. Just one question, Mr. Chairman.
Thank you so much for your indulgence.
Mr. Sweeney, thank you so much for your presentation. We
will submit your statement for the record. I just wanted to ask
the funding source, given that there is no authorization levels
in this proposal.
Mr. Sweeney. And there is not a need to. This is without
cost because the SBDCs have already indicated the capacity to
be able to provide this service, and indeed they have in some
areas. This is an attempt on our part to nationalize what we
think is a program within the SBDCs that has worked.
Mr. DeMint. Thank you. We are adjourned until 10:30.
[Recess.]
Mr. DeMint. Let us continue with the testimony. I assume
some of our colleagues will join us later, but since we have a
bipartisan mix here in the room, Tom, we will continue.
We want to hear from two additional Congressmen on two
additional pieces of legislation. Tom, since you are to my
immediate left we will hear from Congressman Tom Udall from New
Mexico, and then we will go to Congressman Robert Brady.
Is that okay, that order?
Mr. Brady. Sure.
STATEMENT OF CONGRESSMAN TOM UDALL, A REPRESENTATIVE FROM THE
STATE OF NEW MEXICO
Mr. Udall. Thank you. Thank you very much, Chairman DeMint.
It is a pleasure to be here with you today.
Good morning, and I thank you for this opportunity to speak
to the Committee about my proposal, which would establish a
three year pilot project providing grants to SBDCs for
assisting Native American, Native Alaskan and Native Hawaiian
populations with their small business development needs.
Today we have demonstrated how important small business
enterprise is to the health of our economy, but there are still
places in this country where economic prosperity has often
failed to reach. These areas deserve our attention and
assistance.
Consider this. Nowhere in America has poverty persisted
longer than on or near Native American reservations, which
suffer an average unemployment rate of 45 percent. However, the
number of businesses owned by Indian tribe members and Native
Alaskans grew by 84 percent from 1992 to 1997, and their gross
receipts grew by 179 percent in that period. This is compared
to all businesses, which grew by seven percent, and their total
gross receipts grew by 40 percent in that period.
I would like to continue this growth and expansion of small
enterprise with the Native American Small Business Development
Act, H.R. 2538. My bill ensures that Native Americans, Native
Alaskans and Native Hawaiians seeking to create, develop and
expand small businesses have full access to the counseling and
technical assistance available through the SBA's SBDC program.
The business development tools offered by the SBDCs can
assist Native Americans with the information and opportunity to
build sustainable businesses in their communities. The Native
American Small Business Development Act would permit state
Small Business Development Centers to apply for federal grants
to establish one or more Native American Small Business
Development Centers.
In an effort to ensure the quality and success of the
program, the proposal requires grant applicants to provide SBA
with their goals and objectives, including their experience in
assisting entrepreneurs with the difficulties in operating a
small business.
In addition, the applicant must show their ability to
provide training and services to a representative number of
Native Americans, Native Alaskans and Native Hawaiians. Most
importantly, applicants must seek the advice of the local
native population on the specific needs and location of these
services they will provide.
It is clear we can do more to aid Native American
entrepreneurs. No doubt, not enough has been done to assist
Native Americans in building their businesses, which in turn
helps benefit their community. I hope to change that with my
proposal.
In closing, I would like to mention that we will be
receiving testimony from Mr. Leonard Lopez of Bloomfield, New
Mexico. Mr. Lopez is opening a convenience store called Sun
Valley Express on the Navajo Reservation in Shiprock, New
Mexico. I know that he will provide the Committee with
firsthand information on the strengths of the SBDC and how this
proposal will further assist the development of small
businesses for Native Americans, Alaskans and Hawaiians.
I would also like to acknowledge the presence of Mr. Roy
Miller, who is New Mexico's SBDC state director. He is here in
the crowd.
I thank the Chair for the opportunity to discuss these
issues today. Thank you very much, Mr. Chairman.
[Mr. Udall's statement may be found in appendix.]
Mr. DeMint. Thank you, Congressman Udall. Can you stay with
us a few minutes?
I will hold my questions until we hear from Congressman
Robert Brady. Thank you for being here.
STATEMENT OF CONGRESSMAN ROBERT A. BRADY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. Brady. Thank you, Mr. Chairman. I appreciate this
opportunity and look forward to discussing my proposal with you
and with this Committee.
I would like to introduce Christian Conroy, who is the
assistant director at our Philadelphia SBDC in Wharton. I asked
him to join me. I believe he is on the panel, but I asked him
to join me up here in case you do have questions that I know he
can answer that I cannot.
It is the American value of hard work and valuable skill
that makes our standard of living possible. From machinists and
carpenters to auto mechanics and computer technicians, skilled
work has made our life better for laborers and consumers.
In a more competitive and global economy, it is a bedrock
truth that to succeed you must be skilled, but there is another
step to be taken toward a better life, and it, too, is a part
of the American character. That is entrepreneurship, talented
individuals starting their own businesses. Small business forms
the backbone of our economy.
The businesses create half of all jobs and do it more than
60 percent faster than larger firms. Small businesses employ
our mechanics, technicians, builders, machinists and draftsmen.
My bill would for the first time create a training program to
help these skilled workers become entrepreneurs themselves.
It is important to realize that many of these very skilled
laborers do not have business experience or training that would
help them succeed. We want them to succeed, so we should help
them all we can. How do we propose to do this? I propose the
Vocational and Technical Entrepreneurship Development Act to
provide the resources necessary to help skilled workers learn
new skills; how to build their own business and make it thrive.
My bill would establish a program for vocational and
technical entrepreneurship development. Through SBA we would
provide grants to Small Business Development Centers to provide
assistance to high schools, universities or vo-techs to develop
and implement curriculum promoting entrepreneurship.
With over 20 years of experience helping hundreds of
thousands of people turn their dreams into profitable
businesses, the Small Business Development Centers have
developed excellent education programs to train people on what
is required to operate a successful business.
I thank you very much for the opportunity to speak to this
Committee.
[Mr. Brady's statement may be found in appendix.]
Mr. DeMint. Thank you both.
I just have a couple of brief questions, and then we can
hear from some of the witnesses that you have been a part of
inviting.
Congressman Udall, as we look at providing I guess focused
services or special services to particular groups, there are I
guess many individuals who are disadvantaged for socio-economic
reasons not necessarily related to their ethnic connections or
whatever.
Is there a reason we should focus these grants on Native
Americans instead of including them in I guess a grant package
that would go for disadvantaged areas, particularly areas that
might have socio-economic problems?
I just wanted to hear why the focus on just particular
groups rather than a focus on the nature of the problem as a
whole?
Mr. Udall. Thank you very much, Chairman DeMint, for that
question.
The issue of unemployment in Native American communities is
really a chronic and a longstanding one, and I do not think
there is any place else in the country that has the dismal
unemployment record of Native Americans. You heard me mention
in my testimony an average of 40 percent. Many of the
reservations in my state the unemployment is closer to 75 and
80 percent, and it has been like that for over 100 years.
What we are trying to do with this bill in setting up a
pilot is see that if we move some of these centers nearer to
the reservation we cannot stimulate the kind of activity that
could bring down those unemployment rates. Up until now, SBDC
centers, which I think are required under current law to serve
everyone in a state.
In my state, which is a very large, rural state with
hundreds of miles to travel, it may well be that an
entrepreneur that needs assistance cannot travel 300 miles in
order to get to that center, and so I think if we have this
pilot that tries to locate these centers closer to where the
problem is and to where the high unemployment is we may see
more assistance. That would be my answer.
I have also been joined up here, and I neglected to mention
it, by Don Wilson, who is the president of the Association of
Small Business Development Centers. He may assist me in some of
these questions, too.
Thank you for that question.
Mr. DeMint. Thank you very much.
Mr. Wilson. Mr. Chairman, if I could interrupt----
Mr. DeMint. Sure. Please.
Mr. Wilson [continuing]. And just add to that? I know, for
example, I believe the county in South Dakota, Congressman
Thune's district and state, the Pine Ridge Reservation, I think
that county has the highest level of poverty of any county in
the nation.
These patterns on Native American reservations are fairly
consistent. SBDCs have done outreach in a number of these
reservations and so forth, but when they go they may be out
there once a month or, you know, once every two weeks, this
sort of thing, because of the limited resources we have.
I believe if we could concentrate it on the reservation and
have a full-time operation that we could begin to break this
terrible cycle of poverty that Congressman Udall has so
eloquently referred to.
Mr. DeMint. Let me see if I have a question for Congressman
Brady here.
Congressman Brady, I know that particularly in the post
secondary vocational schools, community colleges, that
sometimes they do have funds available to contract for various
types of educational services. Do you envision that with the
additional funds for the SBDCs we will provide free services to
these colleges or look at doing it on some kind of partnership
basis where there is some funding on a contract basis?
To put the question in the context. Are there things like
this happening now where the SBDCs are actually working with
community colleges, vocational colleges? Is there payment for
this? Is it being done free now, or are we proposing something
that is actually different?
Mr. Brady. I do not know other than where I am from. In the
City of Philadelphia, that does not happen. Our vo-techs are
gone.
Mr. DeMint. Right.
Mr. Brady. I really do not know about the rest of the parts
of the country, but in the City ofPhiladelphia there is hardly
any more vo-techs out there.
It would be a partnership. The school would have to apply.
They would apply, and there would be a clearinghouse, one
clearinghouse throughout the country, that would supply maybe
up to 33 schools or universities that would get these grants.
It would be a partnership, but I do not know about the rest.
Maybe Christian can help. I know in the city we do not have
many more vo-techs that use your services. I do not know again
through the rest of the country. Do you know?
Mr. Conroy. Sure. Actually, part of the reason for the
development of this proposal is in, for instance, Lancaster,
Pennsylvania, we have worked with the Stevens College of
Technology, which is a vocational school, and we have an
outreach office that is located there.
The reason we are able to have an outreach office there is
that the college provides funding to the local Small Business
Development Center that serves that area, which is operated out
of the university.
What we envision would happen with this is that yes, it
would be a competitive process where vocational schools would
apply to offer this type of training to their students.
Mr. DeMint. Would the grant go to the school or to the
SBDC?
Mr. Conroy. It would go initially to the SBDC, and then we
would put it out for competitive bids to various vocational-
technical schools throughout the state.
What that would allow then is the flexibility for different
schools to tailor their programming to best reflect the
strengths of the programs that they have. For instance, if one
school is particularly strong in doing computer IT type of
training, we could tailor the program so that it focuses on
those areas that are relevant to that particular industry.
Mr. DeMint. If there are no additional comments, we will
dismiss this panel and move to Panel II. I want to thank both
of my colleagues for being here.
Let us just take a couple minutes and rotate the witnesses.
Mr. Udall. Thank you very much.
Thank you, Mr. Chairman.
Mr. Sweeney. Thank you, Mr. Chairman.
[Pause.]
Mr. DeMint. Let us convene our second panel. I want to
thank all of you gentlemen for taking the time to share your
thoughts with us today.
We have with us today Thomas Grumbles, who is vice-
president of the American Industrial Hygiene Association. We
have Don Wilson, president and CEO of the Association of Small
Business Development Centers. We have Mr. Rudy Cartier, small
business ombudsman for the State of New Hampshire; and
Christian Conroy, the associate state director for Pennsylvania
Small Business Development Centers; and Leonard Lopez, Sun
Valley Express, Navajo Reservation, Shiprock, New Mexico.
Congressman Udall would like to say a few words about our
guest, Mr. Lopez, before we get started.
Mr. Udall. Thank you, Chairman DeMint. Let me just say
about Mr. Lopez, who is one of my constituents, and give you a
little bit of an introduction and background.
He is presently the president of L&A Enterprise, Inc., in
Bloomfield, New Mexico. He is an enrolled and registered member
of the Navajo Nation. Mr. Lopez was born in Geezi, New Mexico,
and attended high school in Bloomfield, and he attended San
Juan College in Farmington, New Mexico. He received his B.S. in
Business Education from Brigham Young University.
Leonard has worked extensively in the field of natural gas
production in gas control analysis and training. He was the
lead plant operator and was responsible for managing his crew.
He has also worked in the field of education, teaching
accounting and computer applications at the high school level.
He is married and has five children. It is an honor to
introduce and have a member of my constituency of the 3rd
Congressional District here.
Thank you very much, and I look forward to hearing from all
of the panel members here today. Welcome to all of you.
Mr. DeMint. Thank you, Congressman Udall.
Gentlemen, will you try to keep your comments within about
five minutes. We will let you all have a chance to speak, and
then we will ask a few questions if that is okay.
We will run the clock, so you will have some idea of how
long you are taking. When you see it turning yellow, you will
know the red light is right after that.
We will begin with Donald Wilson. Donald?
STATEMENT OF DONALD T. WILSON, PRESIDENT AND CEO, ASSOCIATION
OF SMALL BUSINESS DEVELOPMENT CENTERS
Mr. Wilson. Mr. Chairman, thank you very much. I am Don
Wilson, president of the Association of Small Business
Development Centers. The Association represents 58 small
Business Development Center programs in all 50 states, the
District of Columbia, American Samoa, Virgin Islands and Guam.
I want to thank you for letting us testify this morning on
legislation that I think is extremely important to the nation's
small business community, H.R. 203, Congressman Sweeney's
legislation.
I think, Congressman, you and your colleagues probably know
that small business views federal regulations and state
regulations to be somewhat of a burden. I think my written
testimony documents that very well. For example, since April of
1996, federal agencies have adopted 21,653 major and minor
rules. The Code of Federal Regulations as of 1998 filled 201
volumes with a total of 134,723 pages. The Code currently
occupies 19 feet of shelf space.
If you are a small businessman, you are looking at dealing
with IRS regulations, social security regulations, medicare
regulations, federal unemployment insurance regulations, Fair
Labor Standards Act, workers compensation, the Equal Pay Act,
the Americans With Disabilities Act, Family and Medical Leave
Act, Title VII of the Civil Rights Act, Federal Mine and
Safety, the Rehabilitation Act of 1973, the Worker Adjustment
and Retraining Act, Migrant and Seasonal Agricultural Worker
Protection Act, Immigration Control Act, et cetera, et cetera,
et cetera.
I think, you know, if you are a small businessman, a mom
and pop operation, and you are trying to be familiar with all
of the rules and regulations that you must comply with it is a
pretty daunting task.
In 1996, the Congress asked the SBDC program to begin to
provide compliance assistance. Unfortunately, the program did
not get the resources that were needed to fully implement that.
From 1996 to 1999, in fact, 44 of the programs in the country
were level funded, and in 2000 and 2001 we basically received
cost of living increases.
I believe Congressman Sweeney's legislation, H.R. 203, the
pilot program proposed for 20 SBDCs in the ten SBA regions,
will provide the resources to bring on staff the necessary core
competencies to begin to work in an expanded program of
compliance assistance. A number of our states have developed
very solid partnerships with the 507 SBAP program and SBO
programs. Some of ours already refer, constituents and clients,
to industrial hygienists and others to assist them.
I envision in some degree that your SBDCs would be like a
general practitioner dealing with the less complicated cases,
and the more complicated cases they would be referring them to
the partners. I believe with the 600,000 or 700,000 small
businesses that come through our doors needing compliance
assistance, you will probably actually see those numbers grow
when they became fully aware of the assistance that was
available.
We have worked with the Department of Labor on a cross cut
program, the IRS and others on pilots, but this would expand
it. This would give additional dollars that are badly needed so
that small business people who are disproportionately affected,
Mr. Chairman, by regulations could cope with those regulations
and run their business and focus on the requirements of
marketing and finance and the core issues rather than being
absorbed in spending inordinate amounts of time and dollars
complying with federal regulation.
We would like to commend this legislation to you. We would
like to see it grow. We believe funding would be absolutely
necessary to implement this to the extent that we believe the
small business community needs it, and we look forward to
working with you and the other Members of the Small Business
Committee to try to make this legislation a reality.
[Mr. Wilson's statement may be found in appendix.]
Mr. DeMint. Thank you, Mr. Wilson.
Mr. Grumbles.
STATEMENT OF THOMAS G. GRUMBLES, CIH VICE PRESIDENT, AMERICAN
INDUSTRIAL HYGIENE ASSOCIATION
Mr. Grumbles. Chairman DeMint and Members of the
Subcommittee, my name is Tom Grumbles, and I am vice-president
of the American Industrial Hygiene Association. I am a
certified industrial hygienist and have been in the
occupational health and safety profession for more than 25
years.
I appreciate the opportunity to provide testimony on H.R.
203 to improve small business compliance with the federal
regulations. AIHA is particularly interested in regulations
addressing occupational health and safety in the workplace.
AIHA is the world's largest association of occupational and
environmental health professionals, and our members serve on
the front line of worker health and safety. One of AIHA's goals
is to bring good science and the benefit of our experience to
public policy issues.
A.I.H.A. supports H.R. 203, specifically ways to comply
with the numerous and complex regulations of OSHA. I have not
quantified it to the extent that Don did, but they are large.
Of the myriad of federal regulations small businesses must
comply with, in our opinion none is more important than
protecting the health and safety of workers.
As the front line stewards of occupational health and
safety, however, we are aware of government and business
limitations. OSHA, like the rest of government, has to
accomplish more with less. No one is sure of the time it might
take for an OSHA inspector to visit all covered sites, but most
agree it is unlikely more than once every 50 to 80 years. It is
also difficult for business to receive OSHA consultation
service because of the length of time required before OSHA can
respond to those requests.
A 1990s NIOSH study found over 90 percent of the work sites
are comprised of 50 or fewer employees that may have no
industrial hygiene or safety expertise on staff, are not
regularlyinspected by OSHA and may have little information
about health, safety or industrial hygiene. If Congress is interested
in improving worker health and safety, small business concerns must be
met by working with them to address this issue.
A.I.H.A.'s effort in this interest is not new. In the mid
1990s, AIHA decided to proactively assist small businesses
unlikely or unwilling to look at occupational health and safety
in their workplace. In consultation with OSHA, AIHA developed a
pro bono assistance program for small businesses utilizing AIHA
members. Five pilot projects were conducted.
While the training that was provided was good and well
received, the real success was one-on-one follow up
consultation. Many small businesses, however, were
uncomfortable with OSHA's involvement. While OSHA's profile was
very low, most were convinced that OSHA would place them on a
list of upcoming inspections if they attended.
A.I.H.A. believes the approach taken in H.R. 203 is
correct. Any successful program targeting small business should
target businesses with less than 50 employees, have as a goal
one-on-one consultation, be administered through a third party
such as the SBDC, involve occupational health and safety
professionals when addressing health and safety regulations,
and assure that only competent and qualified individuals are
involved in providing the education, training and/or
consultation services.
This last point is of great interest to AIHA. AIHA would
like to offer a suggestion relative to the experts. The bill
does say that assistance to small business concerns should
include referrals to experts. We are pleased this section was
added from previous versions of the bill. This was a
recommendation from AIHA made in earlier testimony.
However, we would like to see this section expanded. We
recommend the referral of experts section be amended by adding
language stating, ``provided that such experts meet
educational, technical and professional standards established
by the Administrator.'' This would provide assurance that only
competent and qualified individuals are involved in providing
the training and education.
Further to that point, AIHA also suggests the legislation
or report language and language that clarifies the competency
requirement stating that, ``In the case of small businesses
needing assistance with the rules promulgated by OSHA, the
committee believes an expert should be a certified industrial
hygienist, a certified safety professional, an occupational
health physician, an occupational health nurse or their
equivalent in other professions.'' A copy of our
recommendations is attached to our testimony.
This language should relieve the Small Business
Association, OSHA or the SBDCs from having to develop
regulations to identify certified individuals to conduct the
education, training or consultations.
The occupational health and safety profession has
nationally recognized certification programs to qualify
individuals and assure competency. As an example, a certified
industrial hygienist must have at a minimum a Bachelor's degree
in one of the sciences, five years of experience and undergo a
two-day examination for being certified.
In closing, most workplaces will never see an OSHA
compliance officer. The new OSHA is one that does not focus
necessarily on enforcement, but builds partnerships with
business. AIHA has long supported pro bono assistance or a
third party workplace review program such as that proposed by
Senator Michael Enzi in the 106th Congress.
We appreciate you giving us this opportunity to testify and
ask that our written testimony be put in the record. Thank you.
[Mr. Grumbles's statement may be found in appendix.]
Mr. DeMint. Thank you, Mr. Grumbles.
Mr. Cartier.
STATEMENT OF RUDOLPH CARTIER, JR., SMALL BUSINESS OMBUDSMAN,
STATE OF NEW HAMPSHIRE
Mr. Cartier. Thank you, Chairman DeMint. Good morning,
Chairman DeMint and Members of the Subcommittee. I thank you
for the invitation and the opportunity to present testimony to
the Subcommittee on H.R. 203.
As stated, my name is Rudy Cartier. I am the New Hampshire
Department of Environmental Services Small Business Ombudsman.
I appear before you today as the chair of the National Steering
Committee of the Small Business Technical Assistance Programs
and Small Business Ombudsmen created under Section 507 of the
Clean Air Act amendments of 1990.
Section 507 of the Clean Air Act directed each state to
develop a state specific technical assistance and advocacy
program to help small businesses understand, comply with and
have representation in the development of regulations
promulgated under the Clean Air Act with an impact on small
business.
In addition, most programs have an appointed Compliance
Advisory Panel made up of small business owners or their
representatives, a representative from the environmental
regulatory agency and at least two members of the general
public to oversee the effectiveness of the programs.
Although initially created to address Clean Air Act issues,
all the programs have evolved into repositories and/or referral
agencies where small business owners and operators can go for a
myriad of environmental assistance and direction to other
business services. This is accomplished through a variety of
options, including formal and, in some cases, informal state
level expansion of the program responsibilities, development of
networking systems and, most importantly, the development of
strategic partnerships with other assistance providers.
Indeed, the vast majority of states have developed
effective outreach assistance efforts in conjunction with state
pollution prevention programs, Small Business Development
Centers, economic development agencies, trade associations and
local government agencies, to name a few. In addition, the
partners regularly conduct regional and national conferences,
seminars and workshops to increase our effectiveness to provide
accurate, timely and appropriate assistance.
The programs were also instrumental in the formulation and
development of what is called the 507 Enforcement Response
Policy and the Small Business Compliance Incentives Policy with
the Environmental Protection Agency, which for the first time
granted ``safe haven'' status for small business owners who
voluntarily identified and agreed to remedy violations of
environmental regulations. These policies encourage sound
environmental practices and minimize the threat of punitive
fines or the need to remain confidential.
I am very pleased to be able to report that the programs
are active in all 50 states and U.S. territories and are very
well received by small business. Collectively, we provide
environmentally related assistance to over 1,000,000 businesses
and owners yearly through direct contact and in partnership
with others.
I appear before the Committee today to offer our support of
legislation such as H.R. 203, which has the potential for
increasing the effectiveness of all our efforts to provide the
highest level of service to our small business clients. We see
this bill as an opportunity for Congress to provide incentives
to continue the cooperation and coordination among all programs
that deliver regulatory assistance to small businesses,
especially our SBDC partners.
It is essential that the expertise found in all small
business assistance programs be woven together through
partnerships utilizing the expertise presently in place in each
of these programs to ensure we are appropriately meeting the
true needs of businesses. Our programs, along with those of our
numerous partners, are proof that well crafted and coordinated
technical and compliance assistance programs are extremely
valuable to small businesses.
We applaud Congress for recognizing the successes that have
been the hallmark of each of these programs. We encourage your
efforts to build and expand on this experience in delivering
small business assistance to cover these and other pressing
small business issues. We would note, however, that although
pilot programs can provide support for creative breakthroughs,
we would encourage Congress to also recognize the critical
nature of the continuing need for stable financial support for
these programs.
The Small Business Technical Assistance Programs across the
country are committed to remaining on the path of continued
cooperation and coordination of our environmental assistance
services. We appreciate your work to support this effort and
look forward to additional targeted assistance by federal
agencies with a commitment to specific, accurate and timely
assistance.
We on the state level will continue our commitment to
fostering strategic and appropriate partnerships within our
individual states. We have found that the most appropriate
method for delivering useful assistance must be developed to
meet the unique needs of businesses in each of the individual
states. We certainly are supportive of efforts to direct any
potential federal funding to these partnership programs to
increase the resources availability and capabilities of
assistance providers in meeting these needs.
Again, thank you for this opportunity to provide this
testimony to you today. I would be pleased to make myself
available to the Committee for any other assistance deemed
appropriate.
[Mr. Cartier's statement may be found in appendix.]
Mr. DeMint. Thank you, Mr. Cartier.
Mr. Conroy.
STATEMENT OF CHRISTIAN CONROY, ASSOCIATE STATE DIRECTOR,
PENNSYLVANIA SMALL BUSINESS DEVELOPMENT CENTERS
Mr. Conroy. Good morning. Chairman DeMint and Members of
the Committee, I am Christian Conroy, the Associate State
Director of the Pennsylvania Small Business Development
Centers. I would like to thank you, Mr. Chairman and Members of
the Committee, for inviting me to testify at this hearing on
the Vocational and Technical Entrepreneurship Development
Program Act of 2001.
As you are all very well aware, small business is the
engine of the economy in Pennsylvania, as well as in the
nation. There are currently over 22,000,000 small businesses in
America. They account for 99 percent of all businesses and
employ 53 percent of the private workforce and contribute over
half of the nation's gross domestic product.
For the past 20 years, the Pennsylvania Small Business
Development Centers have been helping entrepreneurs start and
grow successful businesses. During that period, we have seen a
number of changes that have affected small firms, things such
as the development of sophisticated management software tools
such as spreadsheets and databases, the increasing
globalization of trade, the advent of the internet just to name
a few. One thing that has remained constant, unfortunately, is
the lack of entrepreneurial educational experience that the
majority ofpeople who come to the Small Business Development
Center for help in starting their business have.
What we continue to see on a daily basis is many people who
have excellent technical skills and an entrepreneurial
disposition, but no formal training that will prepare them to
start and grow a business. Eighty percent of our pre-venture
clients have not owned or operated a business before, and 80
percent of our clients do not have an educational background to
prepare them to start and operate a business.
If you consider the courses of study that are offered in
our principal educational systems--high schools, community
colleges and vocational and technical schools--the lack of
preparation should not come as a surprise. With few exceptions,
these institutions do not offer a comprehensive, coherent
course of study to prepare students to become competent
business owners.
What we have in Pennsylvania, and I would argue in the
nation as well, is an economy that is dependent upon the
initiation and growth of small business for its vitality and a
set of educational institutions doing little to prepare
students to participate in that entrepreneurial economy.
When Congressman Brady requested information on how to
increase support for entrepreneurship, we were delighted to
work with him on developing the Vocational and Technical
Entrepreneurship Development Program Act of 2001, which will
provide resources to the Small Business Development Centers to
adapt and apply our curriculum on how to start a business in
select vocational and technical schools throughout the country.
You are likely asking yourself why are the Small Business
Development Centers not already doing this? Simply it is
because our resources are such that we cannot currently meet
the demand for assistance in starting a business.
Present survey research indicates that five in ten people
in the 21 to 30 age bracket are considering starting a firm,
and about 7.7 million Americans are actively engaged in
starting a business. That number is substantially greater than
the number of people who get married each year.
Currently in Pennsylvania, the SBDCs are operating at
capacity, and we can only assist a tiny fraction of this huge
population so thus if the Small Business Development Centers
are going to serve a greater proportion of these potential
entrepreneurs we must transfer our knowledge of the
entrepreneurial process to those educational systems that have
the capacity to reach and to educate a much larger segment of
the population than can currently be served by the SBDCs.
With this bill, what will happen is the SBDCs will adapt
their business management training programs to develop a
cohesive curriculum on starting and operating a successful
business that can be provided to students in vocational and
technical schools. The training will focus on the essential
business operational areas such as management, marketing and
finance, and additionally the programs will be modified to
provide information that is relevant to the particular industry
sectors in which the students are learning skills.
The SBDCs will not conduct the training of students, but
rather will train teachers on how to deliver training on
starting and operating successful businesses. Thus, far more
students will benefit from this training than if the SBDCs use
their limited resources to conduct the training.
As we see it, there are three benefits to this bill. The
first and most obvious benefit is the training of potential
entrepreneurs so when they do decide to start firms they will
be prepared to succeed.
The second benefit accrues to employers of individuals who
have gone through this training. Whether or not a person starts
a business, the knowledge of such key aspects of operating a
business as customer relations, controlling costs and how money
is made creates a more effective employee.
Third, once we demonstrate the value of this type of
training in the context of one set of educational institutions,
it will, we believe, be easier to transfer these processes to
other educational systems such as high schools, community
colleges and universities.
In the long term, we believe entrepreneurship education
should be an option available through high schools, community
colleges and four year colleges and institutions. This bill
represents an excellent vehicle to combine the resources of two
well established proven programs, vocational and technical
schools and the Small Business Development Centers, to begin to
make entrepreneurship education available to more students. Our
economy and our communities depend upon it.
I urge the Committee's approval of this bill. Thank you.
[Mr. Conroy's statement may be found in appendix.]
Mr. DeMint. Thank you, Mr. Conroy.
Mr. Lopez.
STATEMENT OF LEONARD LOPEZ, SUN VALLEY EXPRESS (CONVENIENCE
STORE), NAVAJO RESERVATION, SHIPROCK, NEW MEXICO
Mr. Lopez. Good morning, Mr. Chairman and Members of the
Committee. My name is Leonard Lopez, and I live in Bloomfield,
New Mexico. My wife and I are members of the Navajo Tribe, and
we both grew up on the Navajo Reservation in New Mexico.
I appreciate the opportunity to appear before the
Subcommittee today on behalf of Congressman Tom Udall's bill to
provide Small Business Development Centers with resources to
assist National American populations.
My wife and I began working on the idea of opening our own
business, a convenience store/filling station, on the Navajo
Reservation in Shiprock, New Mexico, in April, 1995. Four years
later, after much red tape with the tribal and BIA regulations
and the required signatures, we were finally granted our
business site lease.
For five years we aggressively wrote our business plan,
gathered our financial projections, completed the environmental
and archeological studies, the traffic study surveys, and the
list goes on. We knew we were in for a long haul of getting a
business started on the reservation. We were told that it would
be discouraging and difficult to work with the tribal
officials. Our friends were right.
When it came time for us to approach the lending
institution for a loan on our business, we received minimal
support. We thought we were well prepared to submit our
application for a business loan, but later found that there was
just as much information needed and time required to secure a
loan as getting a business site lease with the tribe.
We are proud of ourselves that we were able to be
convincing enough to be approved for approximately $700,000
from Bank of America and an SBA 504 loan of $330,000 that we
are close to finalizing the agreement. I believe that had we
been guided and coached from the beginning by a knowledgeable
small business counselor like Orestes Hubbard at our SBDC, we
would have avoided many unnecessary delays. Not only would this
have been to our advantage, I believe we would have had our
doors open for business by now.
There are a few small business assistance providers we
received assistance from, which are Southern Utah College Small
Business Department in Blanding, Utah, and the Regional
Business Development Office, RBDO, of the Navajo Nation in
Shiprock, New Mexico. Basically we were left to ourselves to
figure out what we needed to do.
My wife and I did all the work in seeking our resources
that helped us complete our project. I am not saying that
someone should have done all my work while I sat around. No. I
only needed directions.
We finally received the directions we needed when we
approached Mr. Orestes Hubbard, manager of the Small Business
Development Center, SBDC, at San Juan College in Farmington,
New Mexico. I first met Mr. Hubbard when I attended a Meet Your
Lender seminar held at the college by the SBDC a year ago last
spring.
I was hesitant at first to solicit his help because I
figured he might direct me to speak with the RBDO people in
Shiprock, as has been the case with the previous directors.
After explaining to him my goals and my desire of opening a
business on the reservation, Mr. Hubbard made arrangements to
meet with me personally to discuss my project. He evaluated my
business plan and suggested a few changes and recommendations.
According to his list of requirements, we had met all the
requirements. He then recommended a number of lending
institutions that we should contact for a loan. At this time,
three lending establishments had already turned us down.
The SBDC has been following up on the progress of our
project. It was either Orestes personally or one of his staff
who contacted us for updates. He has invited us to small
business seminars and conferences held at the college. He keeps
abreast of our progress and is very helpful in giving
suggestions.
I believe a Small Business Development Center on the
reservation would be an advantage and benefit to those Native
Americans who desire to start their own business. With an SBDC
nearby, anyone can plan to work on starting a business. They
will learn the techniques of starting a business, as well as
how to manage a business.
The center could also provide information on available
resources. The personnel could be there for consultation. They
could provide guidelines for writing a business plan, the
implementation and the components of a business, namely
financing, marketing, operations, management and technology.
The Native American SBDC could also work closely with the
San Juan College Small Business Development Center where they
have, in addition, a department specializing in business
incubation that helps companies grow and succeed.
For these reasons, Mr. Chairman, I support Congressman
Udall's effort to strengthen the outreach of the SBDC program
to more Native Americans. I urge your Committee to support
Congressman Udall in his efforts.
[Mr. Lopez's statement may be found in appendix.]
Mr. DeMint. Thank you, Mr. Lopez, and all our witnesses. It
has been very informative and persuasive.
I would like to offer my colleagues the opportunity to ask
any of you questions. We will begin with Congressman Udall.
Would you like to ask any of the panelists questions?
Mr. Udall. Yes. Thank you, Chairman DeMint.
My first question is for Don Wilson. Earlier Congressman
Sweeney testified that his proposal would not require
additional funding. Can the existing funding for the SBDC
program accommodate Mr. Sweeney's proposal?
Mr. Wilson. Congressman Udall, I do not know how that would
be possible under the appropriation recently approved by the
House Appropriations Committee. Although it is levelfunding for
the network, due to the census and the way our formula is tied to the
census 24 states will lose up to 20 percent of their funding. To
anticipate that we could now launch the Sweeney bill or the Udall bill
with those kinds of cuts in our program funding is just simply not
realistic.
As I believe my testimony mentions with regard to the
Sweeney bill, from fiscal year 1996 through fiscal year 1999
roughly 44 percent of the state programs did not see a dollar's
worth of increase in funding. Then in 2000 and 2001 they
basically received roughly cost of living increases, so you see
since 1996 over the last half decade these programs have been
struggling. In fact, considering cost of operating the program,
paying cost of living increases to counselors and so forth, the
program has been going backwards.
To launch initiatives like this, which I think are
incredibly worthwhile, would just not be possible without some
new authorization, some new resources.
Mr. Udall. Thank you, Mr. Wilson. We obviously feel the
SBDC program is an important one and should be funded at a
level that is really going to provide the assistance out there.
My next question is for Mr. Lopez. You mention in your
testimony that it took you four years, and you say after much
red tape with the tribe and the BIA regulations. Was it
actually four years to get through the tribal process and the
BIA regulatory process?
Mr. Lopez. In the beginning there was the submission of
our--Mr. Chairman, I am sorry. I am not used to this.
Mr. Chairman, at the beginning of our idea of starting our
business we submitted an application to the tribe which
generated the process to get the lease. From the time that we
started to the time that we had the paper signed it took three
years and nine months to complete.
Mr. Udall. That is pretty surprising to me.
Mr. Lopez. And this was with exerted effort, too, being at
their doorstep as frequently as we could.
Mr. Udall. Trying to push it along?
Mr. Lopez. Yes.
Mr. Udall. Have you had contact with other business people
that have had similar experiences?
Mr. Lopez. Yes, sir. Some of them have said it took them
about almost ten years just to get the lease on the
reservation.
Mr. Udall. One of the issues we talked about earlier in my
testimony and others that have testified here is why you would
locate an SBDC either near or right on a reservation.
Can you tell me why you think it might be more helpful to
have an SBDC on the reservation, for example, at Windowrock or
Shiprock or someplace like that and why it might generate more
business activity and more people would be employed?
Mr. Lopez. See, I have also worked with the RBDO, which is
the Regional Business Development Office, with the tribe, which
is located in Shiprock, and through the agencies. There are
several agencies on the reservation. We worked with the
Shiprock agency. Often times it was difficult to get
information from them. As far as expertise in setting up a
business, they lacked so I had to seek assistance from
elsewhere.
I feel if we were to set up an SBDC right there in
Shiprock, let us say, I believe that if we were to staff it
with professional business oriented people and those who would
be familiar with the laws of the Navajo Nation in conjunction
with their expertise, I believe that it would lessen the time
frame in which to start a business.
Mr. Udall. And do you also believe that it would be more
accessible and more business friendly to budding entrepreneurs
that would want to seek assistance?
Mr. Lopez. I believe it will be, and I also believe that
the SBDC has to become very much aware of what the laws are of
the Navajo Nations as far as business and economic development.
Mr. Udall. So the second part of your answer is that there
are a number of requirements that the Navajo Nation has, that
the Bureau of Indian Affairs have, that are an essential part
of starting a business and so the SBDC personnel would have to
specialize in those in addition in those kinds of regulatory
hurdles in order to assist the entrepreneur to get their
business started, up and running and going?
Mr. Lopez. Yes, sir.
Mr. Udall. Okay. Thank you very much, Mr. Chairman.
Mr. DeMint. Thank you, Mr. Udall.
Mrs. Christian-Christensen.
Mrs. Christian-Christensen. Thank you, Mr. Chairman. I do
not have any questions. I just want to thank the panelists for
taking the time to come and give us their testimony. The SBDC
program is very important to my community, as it is to
communities across the country, and I think any way that we can
enhance its services helps our communities to grow even more.
I am just glad that you were able to come with some of your
opinions and your experience and bring it to bear on our
discussions this morning. Thank you.
Mr. DeMint. Thank you very much.
Ms. Tubbs-Jones.
Mrs. Jones. Mr. Chairman, thank you. Mr. Chairman, to my
colleagues and to the people who are testifying this morning,
welcome to Capitol Hill, and thank you for your testimony.
I want to tell you, Mr. Lopez, I made it to Shiprock, New
Mexico. I managed to get there with my colleague, Mr. Udall,
and President Clinton when we were doing the digital divide
tour. I regretted only that I did not have enough time to
really get around and get to meet and greet the people of
Shiprock, New Mexico. I also wanted to do a little bit of
shopping. I wanted to leave my $2 in the economy of Shiprock,
but I did not have time to do that either.
I am glad to have you here and want to say that this is my
second term as a Member of the Small Business Committee, and I
am very happy to serve here and I am very supportive of SBDCs.
We have a great network of SBDCs in the State of Ohio. I hail
from Cleveland, Ohio, and the Growth Association is actually in
my area. I have been working very hard. I support increased
dollars for SBDCs.
I also have had the pleasure very recently of, and I do not
travel all the time, but every once in a while I get a chance.
I went to visit the Small Business Development Center and the
Women's Business Center in the State of Hawaii. Actually, I was
on the island of Honolulu, and I forgot what city. I am really
just learning that there is an island called Hawaii in the
State of Hawaii. That was new for me. My geography kind of got
lost somewhere in the process.
One of the issues that was faced in Hawaii was the fact
that there are so many different islands all around that it is
very difficult for them to be able to provide services to the
small businesses around the islands. What they were really
excited about was recently having the opportunity to get
computers wherein they were able to have the person being
interviewed, the new small business person, on the computer
talking to the counselor/advisor on another island and be able
to see them face to face and provide advice.
I would hope that each of you would think through over and
above your testimony recommendations that you could give to us
that would improve the operation and opportunity for small
business in this country.
We are all alarmed by the fact that the Small Business
Administration budget was cut so significantly and did have a
little success yesterday on the Floor of the House through the
leadership of our Ranking Member, Nydia Velazquez, and Sue
Kelly to increase some of the dollars for small business.
I would encourage you to have all your members write to the
President to encourage him to increase funding for small
business and just keep doing all the work that you do, but as
well to let us know what is not working. We may not always have
the opportunity to have a hearing where you come and testify,
but our offices are available to each and every one of you to
provide information and service.
After that long good morning and so forth and so on, I
would give any of you who want to comment over and above your
testimony some of my time to so do. If you do not, fine also.
Mrs. Christian-Christensen. Would you yield so that I can--
--
Mrs. Jones. Absolutely. I will yield.
Mrs. Christian-Christensen [continuing]. Bring in a
question? Thank you.
I do have a question, and it is an important question to
Mr. Wilson in follow up to the question that Mr. Udall asked
about the funding. Can you tell us how much money you would
need to implement Mr. Sweeney's bill?
Mr. Wilson. I would envision roughly $5 million, Mr.
Chairman, would enable us to launch the initial 20. That is
roughly a quarter of a million dollars per program, which I
think would be a good start.
If we are going to launch it, what we would envision is
perhaps an authorization that would provide $5 million the
first year, $10 million the second and perhaps another $10
million the third because it will take roughly $5 million to do
20, and we have 58 programs. You can do the math. I think it
would take roughly $15 million when the project is completed to
be able to provide these type of services nationwide.
Obviously, you know, if you have 40 states that are not
participating they are going to be very anxious. It is a
competitive process, and the Sweeney bill is designed and the
language is such that it will reward those grant applicants who
already have or can demonstrate partnerships with folks like
the 507 program from SBA, the SBO programs that Mr. Cartier
represents, working with the industrial hygienists and others.
I think that will get the biggest bang for the buck is
those who can demonstrate the partnerships, but I think there
is a commitment to the partnerships throughout the network, and
I believe it would be ideal if after three years we could have
all 58 programs active in the program in the pilot. That would
require roughly $15 million by the third year.
Mr. Conroy. Is there any way to proceed without additional
funding?
Mr. Wilson. I truly do not know how that would be done.
Simply the resources are not there.
For example, Representative Tubbs-Jones, in Ohio I believe
with level funding, $88 million level funding, I believe Ohio
will lose about $150,000 if my memory is correct. I cannot cite
all of our states, but I believe $150,000 or $157,000, if I
recall.
Holly Schick, who is an outstanding director, state
director in Ohio, is facing those kinds of cuts in her program.
You are facing closing centers. We are in crisis.
Mrs. Christian-Christensen. Thank you.
Mr. Wilson. The key thing, if I may interrupt one more
time, is with the slowdown in the economy the Department of
Labor recently released a report that said when unemployment
goes up self-employment goes up. We are seeing that around the
country.
When major industries or major plants have layoffs, those
people who are now unemployedand often do not find jobs in
their fields, they may be creative. They may be talented. They turn to
the idea of trying to start their own business using perhaps pension
funds, savings or whatever to start their own business. They come into
the SBDCs.
It is just a pattern that is repeated over and over. When
there are periods of slow economic growth, the demand for our
services increase. Right now we are seeing that demand increase
when we are seeing the resources decline in 24 states. I think
that is very unfortunate.
Mrs. Christian-Christensen. Thank you.
I yield back.
Mrs. Jones. Just finally I meant to mention this, and I
forgot. I am very much supportive of the vocational and
technical entrepreneurship development portion.
In the City of Cleveland, we have a school system that
really needs some stirring up, and I think part of the need
comes from the lack of recognition that all young people are
not going to college. What do we do to teach them a trade or a
skill that they can be useful citizens in our community and
maybe pass it on through their entrepreneurship, going on and
being able to be successful? I just want to also add that in of
how supportive I am of that.
Mr. Chairman, if I have any time I yield back the balance.
Thank you very much.
Mr. DeMint. Thank you very much. I think as the witnesses
can tell, you have a lot of support for all three of the ideas
today. Our hope is to get adequate funding.
I would like to just ask a couple of brief questions. One
of the primary goals of this Committee is to reduce the
regulatory burden on small businesses, make it easier for them
to start so that we will not have to have experts to help them
navigate the regulatory process.
Mr. Wilson, I mentioned to you before we got started an
idea, if we are adequately funded and if we can expand your
services to include support of small businesses in dealing with
compliance issues.
One of the best helps to us as a committee would be if
there was some formal reporting system back to us about the
regulations that cause the most trouble and for the SBDCs to
give us specific recommendations on what changes they would
recommend to us so that we can be an advocate for changes in
federal policy.
Is that possible, and would you have any brief
recommendations on how we could do that?
Mr. Wilson. Historically the program has tried not to get
involved in policy issues, but I think there would be no
problem with the network reporting back to the Committee on
what it finds the most troublesome and burdensome to the small
business clients that we see on a regular basis.
We would be glad to work with you and your staff to try to
develop something like that, Mr. Chairman.
Mr. DeMint. Yes. A similar question, Mr. Conroy. As we
begin to fund cooperative arrangements with secondary/ post
secondary schools to train for entrepreneurship, can you
envision any way where we can actually measure the impact of
such an effort, or is that just wishful thinking?
Mr. Conroy. Oh, no. Actually, impact and measuring the
impact and outcome of the program is something that we take
very seriously. It is something that we do on an annual basis
for the basic program, and as part of this proposal actually
the legislation does call for an evaluative component.
I would envision that that would entail a number of
different things. We would have an evaluation of the course
once it is completed so that we can make adjustments and adapt
it to go forward to make improvements to it, and then I would
look to see that we would do follow up studies with the
students who went through the program to find out really what
kind of value was it and how did it affect and impact their
efforts to start a business.
Then what we would do also is compare that to a base group
of folks who did not go through the training to make a
determination as to really what is the value of that kind of
training.
Mr. DeMint. I think the key to long-term successful funding
of all of our programs is to be able to document success and to
what degree. You can be helpful with that long-term. I think it
would help us in considering additional funding for a program.
If there are not any additional questions, I would like to
again thank the witnesses and my colleagues for being here.
This hearing is adjourned.
[Whereupon, at 11:40 a.m. the Subcommittee was adjourned.]
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