[House Report 112-729]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-729
_______________________________________________________________________
Union Calendar No. 532
REPORT ON THE ACTIVITY
of the
COMMITTEE ON SMALL BUSINESS
112TH CONGRESS
December 27, 2012.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on Small Business,
Washington, DC, December 27, 2012.
Hon. Karen L. Haas,
Clerk, House of Representatives,
Washington, DC.
Dear Ms. Haas: Pursuant to clause 1(d)(3) of Rule XI of the
Rules of the House of Representatives, I present herewith the
report of the activities of the Committee for the 112th
Congress, including the Committee's review of legislation
within its jurisdiction and the oversight activities taken in
accordance with the oversight plan adopted on January 26, 2011.
Sincerely,
Sam Graves,
Chairman.
Enclosure.
C O N T E N T S
----------
Page
Committee Jurisdiction........................................... 1
Rules of the Committee........................................... 2
Membership and Organization...................................... 15
Legislative Activities........................................... 19
Oversight Summary................................................ 29
Part A--Full Committee Hearings................................ 29
Part B--Subcommittee Hearings.................................. 55
Part C--Waste, Fraud, Abuse, and Mismanagement................. 91
Oversight Plan................................................... 95
Part A--Committee Oversight Plan............................... 95
Part B--Implementation of Oversight Plan....................... 103
Regulatory Review................................................ 119
Union Calendar No. 532
112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-729
======================================================================
REPORT ON THE ACTIVITY OF THE COMMITTEE ON SMALL BUSINESS FOR THE 112TH
CONGRESS
_______
December 27, 2012.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Graves of Missouri, from the Committee on Small Business,
submitted the following
R E P O R T
Clause 1(d)(3) of rule XI of the Rules of the House of
Representatives for the 112th Congress requires that each
standing Committee, no earlier than December 15 or adjournment
of the Congress sine die (whichever occurs first), submit to
the House a report on the activities of that Committee,
including separate sections summarizing the legislative and
oversight activities of that Committee.
JURISDICTION AND SPECIAL OVERSIGHT FUNCTION
Clause 1(q) of rule X of the Rules of the House of
Representatives of the 112th Congress sets forth the
jurisdiction of the Committee on Small Business as follows--
(1) Assistance to and protection of small business,
including financial aid, regulatory flexibility, and paperwork
reduction.
(2) Participation of small-business enterprises in Federal
procurement and Government contracts.
Clause 3(l) of rule X of the Rules of the House of
Representatives for the 112th Congress sets forth the Special
Oversight Function of the Committee on Small Business as
follows--
The Committee on Small Business shall study and investigate
on a continuing basis the problems of all types of small
business.
RULES OF THE COMMITTEE ON SMALL BUSINESS FOR THE 112TH CONGRESS
1. GENERAL PROVISIONS
The Rules of the House of Representatives, in total (but
especially with the operations of Committees Rule X, cl. 1(q),
cl. 2, cl. 3(l), and Rule XI) are the rules of the Committee on
Small Business to the extent applicable and are incorporated by
reference. Each Subcommittee of the Committee on Small Business
(``the Committee'') is a part of the Committee and is subject
to the authority and direction of the Committee, and to the
rules of the House and the rules adopted herein to the extent
applicable.
2. REFERRAL OF BILLS BY THE CHAIR
The Chair will retain consideration of all legislation
referred to the Committee by the Speaker. No action will be
required of a Subcommittee before legislation is considered for
report by the Committee. Subcommittee chairs, pursuant to the
rules set out herein, may hold hearings on any bill referred to
the Committee.
3. DATE OF MEETING
The regular meeting date of the Committee shall be the
second Wednesday of every month when the House is in session.
The Chair may dispense with the meeting of the Committee, if in
the sole discretion of the Chair, there is no need for such
meeting. Additional meetings may be called as deemed necessary
by the Chair or at the request of the majority Members of the
Committee pursuant to Rule XI, cl. 2(c) of the rules of the
House.
At least 3 days notice of such an additional meeting shall
be given unless the Chair, with the concurrence of the Ranking
Minority Member, determines that there is good cause to call
the meeting on less notice or upon a vote by a majority of the
Committee (a quorum being present). To the extent possible, the
three days shall be counted from the 72 hours before the time
of the meeting. Announcements of the meeting shall be published
promptly in the Daily Digest and made publicly available in
electronic form.
The determination of the business to be considered at each
meeting shall be made by the Chair subject to limitations set
forth in House Rule XI, cl. 2(c).
The Chair shall provide to each Member of the Committee, to
the extent practicable, at least 48 hours in advance of a
meeting, a copy of the bill, resolution, report or other item
to be considered at the meeting, but no later than 24 hours
before the meeting. Such material also shall be made available
to the public at least 24 hours in advance in electronic form.
The rules for notice and meetings as set forth in Rule 3 of
these Rules shall not apply to special and emergency meetings.
Clause 2(c)(2) of Rule XI and clause 2(g)(3)(A) of Rule XI of
the Rules of the House, as applicable, shall apply to such
meetings.
A record vote of the Committee shall be provided on any
question before the Committee upon the request of any Member of
the Committee. A record of the vote of each Member of the
Committee on a matter before the Committee shall be available
in electronic form within 48 hours of such record vote, and,
with respect to any roll call vote on any motion to amend or
report, shall be included in the report of the Committee
showing the total number of votes cast for and against and the
names of those Members voting for and against.
The Chair of the Committee shall, not later than 24 hours
after consideration of a bill, resolution, report or other item
cause the text of the reported item and any amendment adopted
thereto to be made publicly available in electronic form.
4. ANNOUNCEMENT OF HEARINGS
Public announcement of the date, place, and subject matter
of any hearing to be conducted by the Committee shall be made
no later than 7 calendar days before the commencement of the
hearing. To the extent possible, the seven days shall be
counted from 168 hours before the time of the Committee's
hearing.
The Chair, with the concurrence of the Ranking Minority
Member, or upon a vote by the majority of the Committee (a
quorum being present), may authorize a hearing to commence on
less than 7 calendar days notice.
A. Witness Lists
Unless the Chair determines it is impracticable to do so,
the Committee shall make a tentative witness list available at
the time it makes the public announcement of the hearing. If a
tentative witness list is not made available at the time of the
announcement of the hearing, such witness list shall be made
available as soon as practicable after such announcement is
made. A final witness list shall be issued by the Committee no
later than 48 hours prior to the commencement of the hearing.
B. Material for the Hearing
The Chair shall provide to all Members of the Committee, as
soon as practicable after the announcement of the hearing, a
memorandum explaining the subject matter of the hearing and any
official reports from departments and agencies on the subject
matter of the hearing. Such material shall be made available to
all Members of the Committee no later than 48 hours before the
commencement of the hearing unless the Chair, after
consultation with the Ranking Minority Member, determines that
certain reports from departments or agencies should not be made
available prior to the commencement of the hearing. Material
provided by the Chair to all Members, whether provided prior to
or at the hearing, shall be placed on the Committee website no
later than 48 hours after the commencement of the hearing
unless such material contains sensitive or classified
information in which case such material shall be handled
pursuant to Rule 15 of the Committee's Rules.
5. MEETINGS AND HEARINGS OPEN TO THE PUBLIC
A. Meetings
Each meeting of the Committee or its Subcommittees for the
transaction of business, including the markup of legislation,
shall be open to the public, including to radio, television,
and still photography coverage, except as provided by House
Rule XI, cl. 4. If the majority of Members of the Committee or
Subcommittee present at the meeting, determine by a recorded
vote in open session that all or part of the remainder of the
meeting on that day shall be closed to the public because the
disclosure of matters to be considered would endanger national
security, would compromise sensitive law enforcement
information, or would tend to defame, degrade, or incriminate
any person or otherwise would violate any law or rule of the
House; provided however, that no person other than Members of
the Committee, and such congressional staff and such executive
branch representatives they may authorize, shall be present in
any meeting which has been closed to the public.
The Chair and Ranking Minority Member are ex officio
Members of all Subcommittees for the purpose of any meeting or
hearing conducted by a Subcommittee.
B. Hearings
Each hearing conducted by the Committee or its
Subcommittees shall be open to the public, including radio,
television and still photography coverage. If the majority of
Members of the Committee or Subcommittee present at the
hearing, determine by a recorded vote in open session that all
or part of the remainder of the hearing on that day shall be
closed to the public because the disclosure of matters to be
considered would endanger national security, would compromise
sensitive law enforcement information, or would tend to defame,
degrade, or incriminate any person or otherwise would violate
any law or rule of the House; provided however, that the
Committee or Subcommittee may by the same procedure also vote
to close one subsequent day of hearings. Notwithstanding the
requirements of the preceding sentence, a majority of those
present (if the requisite number of Members are present under
Committee rules for the purpose of taking testimony) may vote:
(i) to close the hearing for the sole purpose of discussing
whether the testimony or evidence to be received would endanger
the national security, would compromise sensitive law
enforcement information, or violate Rule XI, cl. 2(k)(5) of the
House or (ii) to close the hearing, as provided clause 2(k)(5)
of Rule XI of the House.
The Chair and Ranking Minority Member are ex officio
Members of all Subcommittees any hearing conducted by a
Subcommittee. Members of the Committee who wish to participate
in a hearing of the Subcommittee to which they are not Members
shall make such request to the Chair and the Ranking Minority
Member of the Subcommittee at the commencement of the hearing.
The Chair, after consultation with the Ranking Minority Member
of the Subcommittee, shall grant such request.
No Member of the House may be excluded from non-
participatory attendance at any hearing of the Committee or any
Subcommittee, unless the House of Representatives shall by
majority vote authorize the Committee or Subcommittees, for
purposes of a particular subject of investigation, to close its
hearing to Members by the same procedures designated to close
hearings to the public.
Members of Congress who are not Members of the Committee
but would like to participate in a hearing shall notify the
Chair and the Ranking Minority Member and submit a formal
request no later than 24 hours before the commencement of the
meeting or hearing.
To the maximum extent practicable, the Committee shall
provide audio and video coverage of each hearing or meeting for
the transaction of business in a manner that allows the public
to easily listen and view the proceedings and shall maintain
the recordings of such coverage in a manner easily accessible
to the public.
5. WITNESSES
A. Statement of Witnesses
Each witness who is to appear before the Committee or
Subcommittee shall file an electronic copy of the testimony
with the Committee and the Ranking Minority Member no later
than 48 hours before the commencement of the hearing. In
addition, the witness shall provide 75 copies of the testimony
by the commencement of the hearing. The Chair may waive the
requirement of the witness providing 75 copies in which case
the Committee or Subcommittee shall provide the 75 copies.
Each non-governmental witness shall provide to the
Committee and the Ranking Minority Member, no later than 48
hours before the commencement of the hearing, a curriculum
vitae or other statement describing their education,
employment, professional affiliation or other background
information pertinent to their testimony.
As required by Rule XI, cl. 2(g) of the Rules of the House,
each non-governmental witness before the commencement of the
hearing shall file with the Chair a disclosure form detailing
any contracts or grants that the witness has with the federal
government.
The failure to provide the materials set forth by the
deadlines set forth in these rules may be grounds for excluding
both the oral and written testimony of the witness unless
waived by the Chair of the Committee or Subcommittee.
The Committee will provide public access to printed
materials, including the testimony of witnesses in electronic
form on the Committee's website no later than 24 hours after
the hearing is adjourned. Supplemental material provided after
the hearing adjourns, shall be placed on the Committee website
no later than 24 hours after receipt of such material.
B. Number of Witnesses and Witnesses Selected by the Minority
For any hearing conducted by the Committee or Subcommittee
there shall be no more than four non-governmental witnesses of
which the Ranking Minority Member of the Committee or
Subcommittee (as appropriate) is entitled to select one witness
for the hearing. Witnesses selected by the Ranking Minority
Member of the Committee or Subcommittee shall be invited to
testify by the Chair of the Committee or Subcommittee (as
appropriate). Rule 6(A) shall apply with equal force to
witnesses selected by the Ranking Minority Member of the
Committee or Subcommittee.
The limitations set forth in the preceding paragraph shall
not apply if the Committee holds a hearing to honor the work of
the small business community in conjunction with the annual
celebration of Small Business Week. Witness limitations for
such a hearing shall be determined by the Chair in consultation
with the Ranking Minority Member.
C. Interrogation of Witnesses
Except when the Committee adopts a motion pursuant to
subdivisions (B) and (C) of clause 2(i)(2) of Rule XI of the
Rules of the House, Committee Members may question witnesses
only when they have been recognized by the Chair for that
purpose.
The Chair and Ranking Minority Member of the Committee or
Subcommittee shall face no limitation on the length of the time
that they may question a witness. After recognition by the
Chair, other Members shall have the opportunity, as set forth
in Rule XI, cl. 2 (j) of the Rules of the House, to question
each witness on the panel for a period not to exceed five
minutes.
For any hearing, the Chair of the Committee or Subcommittee
may offer a motion to extend the questioning of a witness or
witnesses by Members other than the Chair or Ranking Minority
Member identified in the motion for more than five minutes as
set forth in Rule XI, cl. 2(j)(B).
The Chair of the Committee or Subcommittee shall commence
questioning followed by the Ranking Minority Member.
Thereafter, questioning shall alternate between the majority
and minority Members by the time in which the Member arrived at
the hearing after the gavel has been struck to commence the
hearing, with the first arriving having priority over Members
of his or her party. If Members arrive simultaneously or are
there prior to the gavel being struck to commence the hearing,
order of questioning shall be based on seniority.
In recognizing Members to question witnesses, the Chair may
take into consideration the ratio of majority and minority
Members present in such a manner as to not disadvantage the
Members of either party.
6. SUBPOENAS
A subpoena may be authorized and issued by the Committee in
the conduct of any investigation or series of investigations or
activities to require the attendance and testimony of such
witness and the production of such books, records,
correspondence, memoranda, papers and document, as deemed
necessary. Such subpoena shall be authorized by a majority of
the full Committee. The requirement that the authorization of a
subpoena require a majority vote may be waived by the Ranking
Member of the Committee. The Chair may issue a subpoena, in
consultation with the Ranking Minority Member, when the House
is out for session for more than three legislative days.
7. QUORUM
A quorum, for purposes of reporting a measure or
recommendation, shall be a majority of the Committee Members.
For purposes of taking testimony or receiving evidence, a
quorum shall be one Member from the Majority and one Member
from the Minority. The Chair of the Committee or Subcommittee
shall exercise reasonable comity by waiting for the Ranking
Minority Member even if a quorum is present before striking the
gavel to commence the hearing. For hearings held by the
Committee or a Subcommittee in a location other than the
Committee's hearing Room in Washington, DC, a quorum shall be
deemed to present if the Chair of the Committee or Subcommittee
is present.
8. AMENDMENTS DURING MARK-UP
Any amendment offered to any pending legislation before the
Committee must be made available in written form by any Member
of the Committee. If such amendment is not available in written
form when requested, the Chair shall allow an appropriate
period for the provision thereof. Such period shall not
prejudice the offering of such amendment.
For amendments to be accepted during mark-up, there is no
requirement that the amendments be filed prior to commencement
of the mark-up or prepared with the assistance of the Office of
Legislative Counsel. Even though it is not necessary, Members
seeking to amend legislation during mark-up should draft
amendments with the assistance of the Office of Legislative
Counsel and consult with the Chair or Ranking Member's staff
(as appropriate) in the preparation of such amendments.
9. POSTPONEMENT OF PROCEEDINGS
The Chair in consultation with the Ranking Minority Member
may postpone further proceedings when a record vote is ordered
on the question of approving any measure or matter or adopting
an amendment. The Chair may resume postponed proceedings, but
no later than 24 hours after such postponement, unless the
House is not in session or there are conflicts with Member
schedules that make it unlikely a quorum will be present to
conduct business on the postponed proceeding. In such cases,
the Chair will consult with Members to set a time as early as
possible to resume proceedings but in no event later than the
next meeting date as set forth in Rule 3 of these Rules. When
proceedings resume on a postponed question, notwithstanding any
intervening order for the previous question, an underlying
proposition shall remain subject to further debate or amendment
to the same extent as when the question was postponed.
NUMBER AND JURISDICTION OF SUBCOMMITTEES
There will be five Subcommittees as follows:
The Subcommittee on Agriculture, Energy and Trade
This Subcommittee (which will consist of seven (7)
Republican Members and five (5) Democratic Members) will
address policies that enhance rural economic growth, increasing
America's energy independence and ensuring that America's small
businesses can compete effectively in a global marketplace.
Oversight of agricultural policies.
Oversight of environmental issues and regulations
(including agencies such as the Environmental Protection Agency
and the Army Corps of Engineers).
Oversight of energy issues, including expansion of
domestic resources whether they are renewable or non-renewable.
Oversight of international trade policy with
particular emphasis on agencies that provide direct assistance
to small businesses, such as: the Small Business
Administration's (SBA) Office of International Trade, the
Department of Commerce's United States Export Assistance
Centers, the Department of Agriculture's Foreign Agricultural
Service, and the Export-Import Bank.
Oversight of infringement of intellectual property
rights by foreign competition.
The Subcommittee on Healthcare and Technology
This Subcommittee (which will consist of eight (8)
Republican Members and five (5) Democratic Members) will
address how healthcare policies may inhibit or promote economic
growth and job creation by small businesses. In addition, the
Subcommittee will examine small business job growth through the
creation and adoption of advanced technologies.
Oversight of the implementation of the Patient
Protection and Affordable Care Act.
Oversight of availability and affordability of
healthcare coverage for small businesses.
Oversight of general technology issues, including
intellectual property policy in the United States.
Oversight of United States telecommunications
policies including, but not limited to, the National Broadband
Plan and allocation of electromagnetic spectrum.
The Small Business Innovation Research Program.
Small Business Technology Transfer Program.
The Subcommittee on Economic Growth, Tax and Capital Access
This Subcommittee (which will consist of seven (7)
Republican Members and five (5) Democratic Members) will
evaluate the operation of the financial markets in the United
States and their ability to provide needed capital to small
businesses. In addition, the Subcommittee will review federal
programs, especially those overseen by the SBA, aimed at
assisting entrepreneurs in obtaining needed capital. Since the
tax policy plays an integral role in access to capital, this
Committee also will examine the impact of federal tax policies
on small businesses.
Oversight of capital access and financial markets.
Implementation of the Dodd-Frank Wall Street
Reform and Consumer Protection Act.
SBA financial assistance programs, including
guaranteed loans, microloans, certified development company
loans, and small business investment companies.
Oversight of the Department of Agriculture
Business and Industry Guaranteed Loan program.
Oversight of general tax policy affecting small
businesses.
The management of the SBA disaster loan program.
The Subcommittee on Investigations, Oversight and Regulations
This Subcommittee (which will consist of seven (7)
Republican Members and five (5) Democratic Members) will probe
the efficient operation of government programs that affect
small businesses, including the SBA, and develop proposals to
make them operate in a more cost-effective manner. This
Subcommittee also will review the regulatory burdens imposed on
small businesses and how those burdens may be alleviated.
Oversight of general issues affecting small
businesses and federal agencies.
Oversight of the management of the SBA.
Oversight of the SBA Inspector General.
Implementation of the Regulatory Flexibility Act.
Oversight of the Office of Information and
Regulatory Affairs at the Office of Management and Budget.
Use of the Congressional Review Act.
Transparency of the federal rulemaking process as
required by the Administrative Procedure and Data Quality Acts.
Implementation of the Paperwork Reduction Act.
The Subcommittee on Contracting and Workforce
This Subcommittee (which will consist of seven (7)
Republican Members and five (5) Democratic Members) will assess
the federal procurement system, including those programs
designed specifically to enhance participation by small
businesses in providing goods and services to the federal
government. The Subcommittee will examine various programs
designed to provide technical assistance to small businesses,
whether specifically aimed at federal contractors or small
businesses in general. Finally, the Subcommittee will review
the broad scope of workforce issues that affect the ability of
small businesses to obtain and maintain qualified employees.
Oversight of government-wide procurement practices
and programs affecting small businesses.
Oversight of federal procurement policies that
inhibit or expand participation by small businesses in the
federal contracting marketplace.
All contracting programs established by the Small
Business Act, including HUBZone, 8(a), Women-, and Service
Disabled Veteran-Owned Small Business Programs.
Technical assistance provided to federal
contractors and perspective contractors through SBA personnel,
Offices of Small and Disadvantaged Business Utilization, and
Procurement Technical Assistance Centers.
The SBA Surety Bond guarantee program.
Oversight of all federal policies that affect the
workforce including, but not limited to, the roles of the
Department of Labor and the National Labor Relations Board.
SBA entrepreneurial development and technical
assistance programs unrelated to participation in the federal
government contracting.
10. POWERS AND DUTIES OF SUBCOMMITTEES
Each Subcommittee is authorized to meet, hold hearings,
receive evidence, and report to the Committee on any matters
referred to it. Prior to the scheduling of any meeting or
hearing of a Subcommittee, the Chair of the Subcommittee shall
obtain the approval of the Chair of the Committee.
No hearing or meeting of a Subcommittee shall take place at
the same time as the meeting or hearing of the full Committee
or another Subcommittee, provided however, that the
Subcommittee Chairs may hold field hearings that conflict with
those held by other Subcommittees of the Committee.
13. COMMITTEE STAFF
A. Majority Staff
The employees of the Committee, except those assigned to
the Minority as provided below, shall be appointed and
assigned, and may be removed by, the Chair of the Committee.
The Chair shall fix their remuneration and they shall be under
the general supervision and direction of the Chair.
B. Minority Staff
The employees of the Committee assigned to the Minority
shall be appointed and assigned, and their remuneration
determined, as the Ranking Minority Member of the Committee
shall determine.
C. Subcommittee Staff
There shall be no separate staff assigned to Subcommittees.
The Chair and Ranking Member shall endeavor to ensure that
sufficient Committee staff is made available in order that each
Subcommittee may carry out the responsibilities set forth in
Rule 11, supra.
14. RECORDS
The Committee shall keep a complete record of all actions,
which shall include a record of the votes on any question on
which a recorded vote is demanded. The result of any vote by
the Committee, or if applicable by a Subcommittee, including a
voice vote, shall be posted on the Committee's website within
24 hours after the vote has been taken. Such record shall
include a description of the amendment, motion, order, or other
proposition, the name of the Member voting for and against such
amendment, motion, order, or other proposition, and the names
of Members present but not voting. For any amendment, motion,
order, or other proposition decided by voice vote, the record
shall include a description and whether the voice vote was in
favor or against.
The Committee shall keep a complete record of all Committee
and Subcommittee activity which, in the case of a meeting or
hearing transcript shall include a substantially verbatim
account of the remarks actually made during the proceedings
subject only to technical, grammatical, and typographical
corrections authorized by the person making the remarks.
The records of the Committee at the National Archives and
Records Administration shall be made available in accordance
with Rule VII of the Rules of the House. The Chair of the
Committee shall notify the Ranking Member of the Committee of
any decision, pursuant to Rule VII, cl. 3(b)(3) or cl. 4 (b),
to withhold a record otherwise available, and the matter shall
be presented to the Committee for a determination of the
written request of any Member of the Committee.
The Committee Rules shall be made publicly available in
electronic form and published in the Congressional Record not
later than 30 days after the Chair of the Committee is elected
in each odd-numbered year.
15. ACCESS TO CLASSIFIED OR SENSITIVE INFORMATION
Access to classified or sensitive information supplied to
the Committee or Subcommittees and attendance at closed
sessions of the Committee or a Subcommittee shall be limited to
Members and necessary Committee staff and stenographic
reporters who have appropriate security clearance when the
Chair determines that such access or attendance is essential to
the functioning of the Committee or one of its Subcommittees.
The procedures to be followed in granting access to those
hearings, records, data, charts, and files of the Committee
which involve classified information or information deemed to
be sensitive shall be as follows:
(A) Only Members of the House of Representatives and
specifically designated Committee staff of the Committee on
Small Business may have access to such information.
(B) Members who desire to read materials that are in
possession of the Committee shall notify the Clerk of the
Committee in writing.
(C) The Clerk of the Committee will maintain an accurate
access log, which identifies the circumstances surrounding
access to the information, without revealing the material
examined.
(D) If the material desired to be reviewed is material
which the Committee or Subcommittee deems to be sensitive
enough to require special handling, before receiving access to
such information, individuals will be required to sign an
access information sheet acknowledging such access and that the
individual has read and understands the procedures under which
access is being granted.
(E) Material provided for review under this rule shall not
be removed from a specified Room within the Committee offices.
(F) Individuals reviewing materials under this rule shall
make certain that the materials are returned to the proper
custodian.
(G) No reproductions or recordings may be made of any
portion of such materials.
(H) The contents of such information shall not be divulged
to any person in any way, form, shape, or manner and shall not
be discussed with any person who has not received the
information in the manner authorized by the rules of the
Committee.
(I) When not being examined in the manner described herein,
such information will be kept in secure safes or locked file
cabinets within the Committee offices.
(J) These procedures only address access to information the
Committee or Subcommittee deems to be sensitive enough to
require special treatment.
(K) If a Member of the House of Representatives believes
that certain sensitive information should not be restricted as
to dissemination or use, the Member may petition the Committee
or Subcommittee to so rule. With respect to information and
materials provided to the Committee by the Executive Branch or
an independent agency as that term is defined in 44 U.S.C.
Sec. 3502, the classification of information and materials as
determined by the Executive Branch or independent agency shall
prevail unless affirmatively changed by the Committee or
Subcommittee involved, after consultation with the Executive
Branch or independent agency.
(L) Other materials in the possession of the Committee are
to be handled in the accordance with normal practices and
traditions of the Committee.
16. OTHER PROCEDURES
The Chair of the Committee may establish such other
procedures and take such actions as may be necessary to carry
out the foregoing rules or to facilitate the effective
operation of the Committee.
17. AMENDMENTS TO COMMITTEE RULES
The rules of the Committee may be modified, amended or
repealed by a majority vote of the Members, at a meeting
specifically called for such purpose, but only if written
notice of the proposed change or changes has been provided to
each Member of the Committee at least 72 hours prior to the
time of the meeting of the Committee to consider such change or
changes.
18. BUDGET AND TRAVEL
From the amount provided to the Committee in the primary
expense resolution adopted by the House of Representatives in
the 112th Congress, the Chair, after consultation with the
Ranking Minority Member, shall designate one-third of the
budget under the direction of the Ranking Minority Member for
the purposes of minority staff, travel expenses of minority
staff and Members, and minority office expenses.
The Chair may authorize travel in connection with
activities or subject matters under the legislative or
oversight jurisdiction of the Committee as set forth in Rule X
of the Rules of the House.
The Ranking Minority Member may authorize travel for any
Minority Member or staff of the minority in connection with
activities or subject matters under the Committee's
jurisdiction as set forth in Rule X of the Rules of the House.
Before such travel, there shall be submitted to the Chair of
the Committee in writing the following at least seven (7)
calendar days prior specifying: (a) the purpose of the travel;
(b) the dates during which the travel is to occur; (c) the
names of the states or countries to be visited and the length
of time spent in each; and (d) the names of Members and staff
of the Committee participating in such travel. Prior approval
shall not be required of Minority Staff traveling to
participate in a deposition, authorized by the Chair in rule 16
of these Rules of an individual located outside of Washington,
DC metropolitan area.
19. COMMITTEE WEBSITE
The Chair shall maintain an official Committee website for
the purpose of furthering the Committee's legislative and
oversight responsibilities, including communicating information
about Committee's activities to Committee Members and other
Members of the House. The Ranking Minority Member may maintain
a similar website for the same purpose, including communicating
information about the activities of the Minority to Committee
Members and other Members of the House.
20. VICE CHAIR
Pursuant to the Rules of the House, the Chair shall
designate a Member of the Majority to serve as Vice Chair of
the Committee. The Vice Chair shall preside at any meeting or
hearing during the temporary absence of the Chair. The Chair
also reserves the right to designate a Member of the Committee
Majority to serve as the Chair at a hearing or meeting.
MEMBERSHIP AND ORGANIZATION
OF THE
COMMITTEE ON SMALL BUSINESS
ONE HUNDRED AND TWELFTH CONGRESS
Revised
FULL COMMITTEE
REP. NYDIA M. VELAZQUEZ (NY-12), REP. SAM GRAVES (MO-6),
Ranking Member Chairman
Rep. KURT SCHRADER (OR-5) Rep. ROSCOE G. BARTLETT (MD-6)
Rep. MARK S. CRITZ (PA-12) Rep. STEVE CHABOT (OH-1)
Rep. YVETTE D. CLARKE (NY-11) Rep. STEVE KING (IA-5)
Rep. JUDY CHU (CA-32) Rep. MIKE COFFMAN (CO-6)
Rep. DAVID N. CICILLINE (RI-1) Rep. MICK MULVANEY (SC-5)
Rep. CEDRIC RICHMOND (LA-2) Rep. SCOTT R. TIPTON (CO-3)
Rep. JANICE HAHN (CA-36) Rep. JEFFREY M. LANDRY (LA-3)
Rep. GARY C. PETERS (MI-9) Rep. JAIME HERRERA BUETLER (WA-3)
Rep. WILLIAM L. OWENS (NY-23) Rep. ALLEN B. WEST (FL-22)
Rep. WILLIAM R. KEATING (MA-10) Rep. RENEE ELLMERS (NC-2)
Rep. JOE WALSH (IL-8)
Rep. LOU BARLETTA (PA-11)
Rep. RICHARD HANNA (NY-24)
Rep. BOBBY SCHILLING (IL-17)
SUBCOMMITTEE ON AGRICULTURE, ENERGY AND TRADE
REP. MARK S. CRITZ (PA-12), REP. SCOTT R. TIPTON (CO-3),
Ranking Member Chairman
Rep. DAVID CICILLINE (RI-1) Rep. ROSCOE G. BARTLETT (MD-6)
Rep. WILLIAM R. KEATING (MA-10) Rep. STEVE KING (IA-5)
Rep. JUDY CHU (CA-32) Rep. JEFFREY M. LANDRY (LA-3)
VACANT Rep. RENEE L. ELLMERS (NC-2)
Rep. LOU BARLETTA (PA-11)
Rep. BOBBY SCHILLING (IL-17)
SUBCOMMITTEE ON HEALTHCARE AND TECHNOLOGY
REP. CEDRIC RICHMOND (LA-2), REP. RENEE L. ELLMERS (NC-2),
Ranking Member Chairman
Rep. GARY C. PETERS (MI-9) Rep. STEVE KING (IA-5)
VACANT Rep. MICK MULVANEY (SC-5)
VACANT Rep. SCOTT R. TIPTON (CO-3)
VACANT Rep. JAIME HERRERA BUETLER (WA-3)
Rep. JOE WALSH (IL-8)
Rep. RICHARD HANNA (NY-24)
Rep. BOBBY SCHILLING (IL-17)
SUBCOMMITTEE ON ECONOMIC GROWTH, TAX AND CAPITAL ACCESS
REP. KURT SCHRADER (OR-5), REP. JOE WALSH (IL-8),
Ranking Member Chairman
Rep. YVETTE D. CLARKE (NY-11) Rep. STEVE CHABOT (OH-1)
Rep. DAVID CICILLINE (RI-1) Rep. STEVE KING (IA-5)
Rep. JUDY CHU (CA-32) Rep. MIKE COFFMAN (CO-6)
Rep. GARY C. PETERS (MI-9) Rep. MICK MULVANEY (SC-5)
Rep. RICHARD HANNA (NY-24)
Rep. BOBBY SCHILLING (IL-17)
SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT AND REGULATIONS
Ranking Member, Vacant REP. MIKE COFFMAN (CO-6),
Rep. KURT SCHRADER (OR-5) Chairman
Rep. JANICE HAHN (CA-36) Rep. SCOTT TIPTON (CO-3)
VACANT Rep. JEFFREY M. LANDRY (LA-3)
VACANT Rep. JAIME HERRERA BEUTLER (WA-3)
Rep. ALLEN B. WEST (FL-22)
Rep. JOE WALSH (IL-8)
Rep. RICHARD HANNA (NY-24)
SUBCOMMITTEE ON CONTRACTING AND WORKFORCE
REP. JUDY CHU (CA-32), REP. MICK MULVANEY (SC-5),
Ranking Member Chairman
Rep. KURT SCHRADER (OR-5) Rep. STEVE KING (IA-5)
Rep. MARK S. CRITZ (PA-12) Rep. MIKE COFFMAN (CO-6)
Rep. YVETTE D. CLARKE (NY-11) Rep. JEFFREY M. LANDRY (LA-3)
Rep. CEDRIC RICHMOND (LA-2) Rep. ALLEN B. WEST (FL-22)
Rep. RENEE L. ELLMERS (NC-2)
Rep. LOU BARLETTA (PA-11)
LEGISLATIVE ACTIVITIES
Clause 1(d)(3) of rule XI of the Rules of the House of
Representatives for the 112th Congress requires that each
standing Committee, no earlier than December 15 or adjournment
of the Congress sine die (whichever occurs first), submit to
the House a report on the activities of that Committee,
including a separate section summarizing the legislative
activities of that Committee.
AN ACT TO PROVIDE FOR AN ADDITIONAL TEMPORARY EXTENSION OF PROGRAMS
UNDER THE SMALL BUSINESS ACT AND THE SMALL BUSINESS INVESTMENT ACT OF
1958 THROUGH MAY 31, 2011, AND FOR OTHER PURPOSES
(H.R. 366)
Summary
H.R. 366 extended the programs authorized under the Small
Business Act and the Small Business Investment Act of 1958
through May 31, 2011.
Legislative History
Chairman Sam Graves introduced H.R. 366 on January 20,
2011. The bill was referred to the Committee on Small Business.
On January 25, 2011, the House considered H.R. 336 under
suspension of the rules. At the conclusion of debate, the
measure passed by voice vote. On the same day, H.R. 366 was
received in the Senate. On January 26, 2011, the Senate passed
H.R. 366 by unanimous consent. On January 31, 2011, the
President signed the bill, and it became Public Law 112-1.
AN ACT TO PROVIDE FOR AN ADDITIONAL TEMPORARY EXTENSION OF PROGRAMS
UNDER THE SMALL BUSINESS ACT AND THE SMALL BUSINESS INVESTMENT ACT OF
1958 THROUGH MAY 31, 2012, AND FOR OTHER PURPOSES
(S. 990)
Summary
S. 990 extended the programs authorized under the Small
Business Act and the Small Business Investment Act of 1958
through May 31, 2012.
Legislative History
Senator Mary Landrieu introduced S. 990 on May 12, 2011,
and the bill was placed on Senate Legislative Calendar and read
the first time. On May 16, 2011, the legislation was read the
second time and placed on Senate Legislative Calendar under
General Orders, Calendar No. 51. On May 19, 2011, Senator
Durbin offered an amendment in the nature of a substitute for
Senator Landrieu. This amendment extended the Small Business
Innovation Research (SBIR) and Small Business Technology
Transfer (STTR) Programs through May 31, 2012. Additionally, it
extended all other programs under the Small Business Act and
the Small Business Investment Act of 1958 that necessitated an
extension until June 30, 2011. The Senate passed S. 990 via
unanimous consent on May 19, 2011.
On May 24, 2011, Chairman Graves moved to suspend the rules
and pass S. 990, as amended. Chairman Graves amended the
legislation to provide for an additional temporary extension of
the programs under the Small Business Act and the Small
Business Investment Act of 1958 through September 30, 2011. The
House passed S. 990, as amended, on May 24, 2011, via voice
vote.
On the same day, Senator Reid offered a perfecting
amendment to S. 990 in the Senate. The perfecting amendment
stripped all of the text of S. 990 and inserted certain
extensions relating to the Patriot Act. The Senate passed S.990
by a recorded vote of 72-23, on May 26, 2011. The House also
passed S. 990 on May 26, 2011 by a recorded vote of 250-153. On
May 26, 2011, the President signed the legislation and it
became Public Law 112-14.
AN ACT TO PROVIDE FOR AN ADDITIONAL TEMPORARY EXTENSION OF PROGRAMS
UNDER THE SMALL BUSINESS ACT AND THE SMALL BUSINESS INVESTMENT ACT OF
1958 THROUGH MAY 31, 2012, AND FOR OTHER PURPOSES
(S. 1082)
Summary
S. 1082 extends the Small Business Innovation Research
(SBIR) and Small Business Technology Transfer (STTR) Programs
through September 30, 2011. Additionally, it extends all other
programs under the Small Business Act and the Small Business
Investment Act of 1958 that necessitated an extension until
July 31, 2011.
Legislative History
Senator Landrieu introduced and the Senate passed S. 1082
via unanimous consent on May 26, 2011. The House passed the
legislation, under suspension of the rules, by a recorded vote
of 387-33, on May 31, 2011. On June 1, 2011, the President
signed the legislation, and it became Public Law 112-17.
THE CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011
(H.R. 1425)
Summary
H.R. 1425, the ``Creating Jobs Through Small Business
Innovation Act of 2011,'' modernizes and reauthorizes the Small
Business Innovation Research (SBIR) and the Small Business
Technology Transfer (STTR) programs through September 30, 2014.
The legislative goal of the bill is to strengthen these
programs, ensure efficient use of taxpayer dollars, utilize the
best science offered by small firms, use existing federal funds
to help small firms commercialize technology, and create jobs.
The bill, among other things, would encourage greater
commercialization success, a primary objective of the programs,
by instituting commercialization initiatives at federal
agencies that administer SBIR programs. The legislation also
increases Phase I and Phase II award sizes for both programs,
shortens the time frame between application and notice of
award, and reduces the time between award and dispersal of
funds. H.R. 1425 also allows for greater participation of small
companies regardless of their financial structure. It codifies
in statute the programmatic flexibility that federal agencies
need in order to administer SBIR awards in a manner that is
most consistent with the agency's specific mission. The bill
reduces the programs' risk of waste, fraud, and abuse by
requiring the Small Business Administration to develop
preventive measures and requiring the Inspector General of each
participating agency to establish fraud detection measures and
share best practices. The bill permits agencies to use three
percent of their SBIR and STTR budget for administrative,
oversight, and contract processing costs. Finally, the bill
continues the current 2.5 percent set aside of existing federal
extramural research dollars for the SBIR and STTR programs.
Legislative History
Representative Renee Ellmers introduced H.R. 1425 on April
7, 2011. Original cosponsors include Representative Sam Graves,
Chairman of the Committee on Small Business; Representative
Ralph Hall, Chairman of the House Committee on Science, Space
and Technology; Representative Eddie Bernice Johnson, Ranking
Member of the Committee on Science, Space and Technology;
Representative Ben Quayle, Chairman of the Subcommittee on
Technology and Innovation of the Committee on Science, Space
and Technology; Representative David Wu, Ranking Member of the
Subcommittee on Technology and Innovation of the Committee on
Space, Science and Technology; Representative Cedric Richmond,
Ranking Member of the Subcommittee on Healthcare and Technology
of the Committee on Small Business; and Representative Jason
Altmire.
The Subcommittee on Healthcare and Technology held a
hearing on H.R. 1425 on April 7, 2011, and heard various small
businesses' views on the legislation.
The Committee on Small Business met in open session on May
11, 2011 and ordered H.R. 1425, as amended, reported favorably
to the House by a voice vote. H.R. 1425, with changes agreed to
by the House and the Senate became Title LI of the National
Defense Authorization Act for Fiscal Year 2012, Public Law 112-
81.
THE REGULATORY FLEXIBILITY IMPROVEMENTS ACT OF 2011
(H.R. 527)
Summary
H.R. 527 amends the Regulatory Flexibility Act (RFA) of
1980, as amended by the Small Business Regulatory Enforcement
Fairness Act, a law that requires federal agencies to consider
the economic impact of the rules they propose on small
entities. This legislation would strengthen the RFA by:
expanding its requirements to agencies not currently covered;
requiring more detailed analyses of regulatory impact;
providing new authorities to the Chief Counsel for Advocacy;
enhancing the participation of small businesses in the
rulemaking process; strengthening the requirement for periodic
review of regulations; and improving the ability of small
businesses to challenge compliance with the RFA.
Legislative History
Representative Lamar Smith, Chairman of the Committee on
the Judiciary, introduced H.R. 527, on February 8, 2011.
Original cosponsors include Representative Sam Graves, Chairman
of the Committee on Small Business, and Representative Howard
Coble, Chairman of the Subcommittee on Courts, Commercial and
Administrative Law of the Committee on the Judiciary. The bill
was referred to the Committee on Judiciary and the Committee on
Small Business, for a period to be determined by the Speaker.
On March 30, 2011, the Committee on Small Business held a
hearing entitled ``Reducing Federal Agency Overreach:
Modernizing the Regulatory Flexibility Act'' to provide an
overview of the RFA to Committee members. Subsequently, the
Committee held a hearing on H.R. 527 and H.R. 585, to discuss
the merits of those bills on June 15, 2011.
The Committee on Small Business met in open session on July
13, 2011 and ordered H.R. 527, as amended, reported favorably
to the House by a voice vote. The House passed the bill by a
recorded vote of 263-159 on December 1, 2011.
THE SMALL BUSINESS SIZE STANDARD FLEXIBILITY ACT OF 2011
(H.R. 585)
Summary
H.R. 585 amends the Small Business Act to authorize the
Chief Counsel for Advocacy of the Small Business Administration
to determine size standards for purposes of statutes other than
the Small Business Act and Small Business Investment Act of
1958. This ensures that decisions made by the Chief Counsel
under the RFA are consistent with an agency's determination of
any exemptions or other special treatment of small business.
Legislative History
Representative Sam Graves, Chairman of the Committee on
Small Business introduced H.R. 585, on February 9, 2011.
Representative Lamar Smith, Chairman of the Committee on the
Judiciary is an original cosponsor. The bill was referred to
the Committee on Small Business.
On June 15, 2011, the Committee on Small Business held a
hearing on H.R. 585.
On July 13, 2011, the Committee on Small Business met in
open session on July 13, 2011 and ordered H.R. 585 favorably
reported to the House by a recorded vote of 13-8.
THE GOVERNMENT EFFICIENCY THROUGH SMALL BUSINESS CONTRACTING ACT OF
2012
(H.R. 3850)
Summary
H.R. 3850 amends the Small Business Act by: increasing the
goals for prime and subcontracts to be awarded to small
business concerns; improving the reports of agency compliance
with the goals; and imposing penalties on senior executives for
failing to meet those goals. The changes are designed to
promote the goal of the Small Business Act--to ensure that
small businesses are awarded a fair share of federal
procurement opportunities--is met.
Legislative History
The issues in H.R. 3850 were addressed in the following
hearings: a full Committee hearing entitled ``Beyond the Size
Standards: The Sustainability of Small Businesses Graduates''
on September 14, 2011; a Subcommittee on Contracting and
Workforce hearing entitled ``Examining the Barriers for Small
Business Contractors at the DoD'' on November 8, 2011; and a
Subcommittee on Contracting and Workforce hearing entitled
``Construction Contracting: Barriers to Small Business
Participation'' on February 9, 2012.
On March 7, 2012, the Committee on Small Business met in
open session and ordered H.R. 3850, as amended, be favorably
reported to the House by voice vote. H.R. 3850, with changes
agreed to by the House and Senate, was incorporated into Title
XVI of the National Defense Authorization Act for Fiscal Year
2013, H. Conf. Rep. No. 112-705.
THE SMALL BUSINESS ADVOCATE ACT OF 2012
(H.R. 3851)
Summary
Each federal agency is required to have an official that
reports to the head or deputy head of an agency to run an
Office of Small and Disadvantaged Business Utilization. H.R.
3851 would strengthen and clarify the responsibilities of the
officials designated to run these offices with the expectation
that they would improve the ability of small business concerns
to obtain federal government contracts.
Legislative History
The Subcommittee on Contracting and Workforce held two
hearings to address the issues surrounding the Offices of Small
and Disadvantaged Business Utilization. The first was held on
June 23, 2011 and entitled ``Insourcing Gone Awry: Outsourcing
Small Business Jobs'' and the second was entitled ``Helping
Small Businesses Compete: Challenges within Programs Designed
to Assist Small Contractors which took place on September 15,
2011.
On March 7, 2012, the Committee on Small Business met in
open session and ordered H.R. 3851, as amended, be favorably
reported to the House by a recorded vote of 11-7. H.R. 3851,
with changes agreed to by the House and Senate, was
incorporated into Title XVI of the National Defense
Authorization Act for Fiscal Year 2013, H. Conf. Rep. No. 112-
705.
THE SUBCONTRACTING TRANSPARENCY AND RELIABILITY ACT OF 2012
(H.R. 3893)
Summary
H.R. 3893 imposes additional limitations on the ability of
small businesses that obtain contracts through preferences
established in the Small Business Act to subcontract the
performance of that work to large businesses. The bill also
imposes additional penalties for this type of improper
subcontracting. To improve the subcontracting plans that large
business prime contractors must submit with their bids, H.R.
3893 amends the reporting of subcontracting actions taken by
the large prime contractors by requiring more accurate
information. Finally, the legislation imposes additional
restraints on the ability of the federal government to transfer
work performed under contract by small businesses and transfer
it to federal employees.
Legislative History
Three hearings were held to address subcontracting and
insourcing. One was conducted by the Subcommittee on
Contracting and Workforce at a hearing entitled ``Insourcing
Gone Awry: Outsourcing Small Business Jobs'' on June 23, 2011.
The second, also conducted by the Subcommittee on Contracting
and Workforce was entitled ``Subpar Subcontracting: Challenges
for Small Business Contractors'' held on October 6, 2011. The
third was held by the Subcommittee on Investigations, Oversight
and Regulation on October 27, 2011 and entitled
``Misrepresentation and Fraud: Bad Actors in the Small Business
Procurement Programs.''
On March 7, 2012, the Committee on Small Business met in
open session and ordered H.R. 3893, as amended, be favorably
reported to the House by a voice vote. H.R. 3893, with changes
agreed to by the House and Senate, was incorporated into Title
XVI of the National Defense Authorization Act for Fiscal Year
2013, H. Conf. Rep. No. 112-705.
THE SMALL BUSINESS OPPORTUNITY ACT OF 2012
(H.R. 3980)
Summary
The bill would improve the ability of procurement center
representatives (PCRs) (personnel of the Small Business
Administration assigned to major federal contracting
activities) to provide input into the acquisition strategy; the
premise being that such earlier input by PCRs will lead to
greater contracting opportunities for small businesses. The
bill also requires improved training on small business
contracting for federal procurement officials.
Legislative History
Two hearings of the Subcommittee on Contracting and
Workforce considered matters raised in H.R. 3980: ``Insourcing
Gone Awry: Outsourcing Small Business Jobs'' on June 23, 2011;
and ``Helping Small Businesses Compete: Challenges within
Programs Designed to Assist Small Contractors'' on September
15, 2011.
On March 7, 2012, the Committee on Small Business met in
open session and ordered H.R. 3980, as amended, be favorably
reported to the House by a voice vote. H.R. 3980, with changes
agreed to by the House and Senate, was incorporated into Title
XVI of the National Defense Authorization Act for Fiscal Year
2013, H. Conf. Rep. No. 112-705.
THE BUILDING BETTER BUSINESS PARTNERSHIPS ACT OF 2012
(H.R. 3985)
Summary
The bill would revamp the requirements for establishing
mentor-protege agreements under the Small Business Act. The
modifications will provide better guidance to large business
mentors and small business proteges on how to prepare such
agreements, the standards by which the Small Business
Administration will approve such agreements, and limitations on
the ability of other federal agencies to establish mentor-
protege programs absent approval by the Administrator of the
Small Business Administration.
Legislative History
At a hearing conducted by the Subcommittee on Contracting
and Workforce on September 15, 2011 entitled ``Helping Small
Businesses Compete: Challenges within Programs Designed to
Assist Small Contractors,'' issues related to the inadequacy of
current mentor-protege programs was addressed.
On March 22, 2012, the Committee on Small Business met in
open session and ordered H.R. 3985, as amended, be favorably
reported to the House by a voice vote. H.R. 3985, with changes
agreed to by the House and Senate, was incorporated into Title
XVI of the National Defense Authorization Act for Fiscal Year
2013, H. Conf. Rep. No. 112-705.
THE SMALL BUSINESS PROTECTION ACT OF 2012
(H.R. 3987)
Summary
H.R. 3987 imposes additional constraints on the ability of
the Administrator of the Small Business Administration to
create size standards for small business concerns.
Specifically, the legislation requires the Administrator to
justify the rationale for adopting a common size standard for a
group of industries, requires such size standard to be adopted
after notice and comment rulemaking, and prohibits the
Administrator from artificially limiting the number of size
standards needed to define a small business concern for each of
the industries enumerated in the North American Industrial
Classification System.
Legislative History
The procedures used by the Administrator to create size
standards was fully ventilated in a hearing conducted by the
Subcommittee on Economic Growth, Capital Access and Tax
entitled ``Professional Services: Proposed Changes to the Small
Business Size Standards'' on May 5, 2011.
On March 22, 2012, the Committee on Small Business met in
open session and ordered H.R. 3987, as amended, be favorably
reported to the House by a voice vote. H.R. 3987, without
change, was incorporated into Title XVI of the National Defense
Authorization Act for Fiscal Year 2013, H. Conf. Rep. No. 112-
705.
THE CONTRACTOR OPPORTUNITY PROTECTION ACT OF 2012
(H.R. 4081)
Summary
The bill collects all of the provisions concerning contract
bundling currently in the Small Business Act and transfers them
to a revised 44. In addition to making this significant
clarifying change, the bill strengthens the requirements that
agencies must demonstrate before they are entitled to bundle or
consolidate contracts that would have, absent such bundling or
consolidation, been able to be performed by small businesses.
Legislative History
Issues related to contract bundling were addressed at
multiple hearings held to address federal government
contracting at both the full and Subcommittee levels. One
hearing, conducted by the Subcommittee on Contracting and
Workforce entitled ``Construction Contracting: Barriers to
Small Business Participation'' on February 9, 2012, focused
specifically on contract bundling and consolidation in federal
procurement for construction services.
On March 22, 2012, the Committee on Small Business met in
open session and ordered H.R. 4081, as amended, be favorably
reported to the House by a voice vote. H.R. 4081, with changes
agreed to by the House and Senate, was incorporated into Title
XVI of the National Defense Authorization Act for Fiscal Year
2013, H. Conf. Rep. No. 112-705.
THE SMALL BUSINESS PROCUREMENT IMPROVEMENT ACT OF 2012
(H.R. 4118)
Summary
H.R. 4118 addresses a miscellany of important small
business procurement policy matters. First, the legislation
seeks to improve participation by small businesses in multiple
contracts by encouraging outreach and mandating that the
President establish government-wide goals for small business
participation in such contracting vehicles. Second, the bill
raises the small business reserve to $200,000 and makes it
applicable to multiple award contracts. Finally, the
legislation expands the Federal Acquisition Regulatory Council
to include the Administrator of the Small Business
Administration.
Legislative History
The issues raised in H.R. 4118 were examined in multiple
hearings held by the Committee and Subcommittees.
On March 7, 2012, the Committee on Small Business met in
open session and ordered H.R. 4118 be favorably reported to the
House by a voice vote.
THE EARLY STAGE SMALL BUSINESS CONTRACTING ACT OF 2012
(H.R. 4121)
Summary
The bill reestablishes in a slightly different format a
successful program to help very small businesses win federal
government contracts. The original program's authorization had
lapsed, and H.R. 4121 rectifies that situation.
Legislative History
Since H.R. 4121 is reauthorizing a program with a lapsed
authorization, the findings of previous Congresses with respect
to the matter raised in the legislation were determined still
to be valid. As a result, no hearings were held on H.R. 4121.
On March 7, 2012, the Committee on Small Business met in
open session and ordered H.R. 4121, as amended, be favorably
reported to the House by a voice vote.
THE WOMEN'S PROCUREMENT PROGRAM IMPROVEMENT ACT OF 2012
(H.R. 4203)
Summary
The bill makes technical changes to the Women's Procurement
Program enacted by Congress in 2000. The specific changes
relate to the size of contracts that could be awarded in the
program to maintain consistency with similar specialized
contracting programs in the Small Business Act.
Legislative History
Since changes made in the bill were of a technical nature,
no hearings were necessary to address the legislation.
On March 22, 2012, the Committee on Small Business met in
open session and ordered H.R. 4203 be favorably reported to the
House by a voice vote.
THE CONTRACTING OVERSIGHT FOR SMALL BUSINESS JOBS ACT OF 2012
(H.R. 4206)
Summary
H.R. 4206 increases the adverse consequences for
misrepresenting the status of small businesses by raising the
criminal penalties and raising the probability that such
concerns will be suspended or debarred. It creates a safe
harbor for good faith efforts to properly certify the status of
small business concerns. The bill makes necessary changes to
the Office of Hearings and Appeals at the Small Business
Administration. Finally, the bill requires increased reporting
by the Administrator of the Small Business Administration to
report on suspensions and debarments.
Legislative History
Two hearings covered the matters raised in H.R. 4206. One
was held by the Subcommittee on Contracting and Workforce
entitled ``Subpar Subcontracting: Challenges for Small
Businesses Contractors'' on October 6, 2011. The other was
conducted by the Subcommittee on Investigations, Oversight and
Regulation entitled ``Misrepresentation and Fraud: Bad Actors
in the Small Business Procurement Programs'' on October 27,
2011.
On March 22, 2012, the Committee on Small Business met in
open session and ordered H.R. 4206, as amended, be favorably
reported to the House by a voice vote. H.R. 4206, with changes
agreed to by the House and Senate, was incorporated into Title
XVI of the National Defense Authorization Act for Fiscal Year
2013, H. Conf. Rep. No. 112-705.
DISASTER LOAN FAIRNESS ACT OF 2012
(H.R. 6296)
Summary
H.R. 6296 reduces the interest rates for disaster loans
issued by the SBA pursuant to section 7(b) of the Small
Business Act. The legislation authorizes the Administrator of
the SBA to set an interest rate that is, depending on the
borrower's access to credit, one-half to three-quarters of the
market interest rate but not higher than four percent and these
new rates would be retroactive to January 1, 2011. To pay the
cost of the legislation, the bill eliminates public funds for
political nominating conventions.
Legislative History
The bill was referred to the Committee on Small Business
which waived consideration of the legislation. On September 19,
2012, the House passed the bill by voice vote.
SMALL BUSINESS INVESTMENT COMPANY MODERNIZATION ACT
(H.R. 6504)
Summary
The legislation increases the amount of leverage that
commonly-owned and managed small business investment companies
(SBICs) can obtain from the SBA. A number of successful SBICs
have been unable to expand due to these limitations. H.R. 6504
raises that limit from $225 million to $350 million.
Legislative History
The bill was referred to the Committee on Small Business
which waived consideration of the legislation. On December 18,
2012, the House, by recorded vote of 359 yeas and 36 nays,
passed H.R. 6504.
OVERSIGHT SUMMARY
Clause 1(d)(3) of rule XI of the Rules of the House of
Representatives requires that not later than December 15 or the
adjournment of the Congress sine die (whichever occurs first),
a Committee shall submit to the House a report on the
activities of that Committee, including a separate section
summarizing the oversight activities of that Committee. The
report shall also include a delineation of any hearings held
pursuant to clauses 2(n), (o), or (p) of rule XI, related to
waste, fraud, and abuse in government programs.
Part A of this section describes the hearings held in full
Committee. Part B of this section describes the hearings held
in the Subcommittees. Part C of this section describes the
hearings that relate to the requirements of clauses 2(n), (o),
or (p) of rule XI.
PART A
Full Committee Hearings
TAX PROVISIONS UNDER HEALTH CARE REFORM
On February 9, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on ``Buried in Paperwork--A 1099
Update.'' The hearing focused on the health care law's expanded
1099 reporting mandate, which will require businesses to file a
1099 form for virtually every business-to-business transaction
of $600 or more in property and services.
The witness for the first panel was The Hon. Daniel E.
Lungren (R-CA). The witnesses for the second panel were: Mr. R.
Jerol Kivett, President, Kivett's Inc., Clinton, NC, testifying
on behalf of the National Federation of Independent Business;
Mr. John ``Mark'' Eagleton, Managing Member, Eagleton Ventures,
LLC, Golden, CO, testifying on behalf of the National
Restaurant Association; Mr. Seth Shipley, Owner, Shipley's Fine
Jewelry, Hampstead, MD, testifying on behalf of the National
Retail Federation; and Mr. Mike Kegley, President, B.O.L.D.
Homes, Inc., Union, KY, testifying on behalf of the National
Association of Home Builders.
At the hearing, House Administration Committee Chairman Dan
Lungren testified about H.R. 4, his bipartisan legislation to
repeal Section 9006 of the health care law. Chairman Lungren
said the expanded reporting requirement ``conveys the worst
possible message to the small business community [and] reflects
a disconnect with the day to day reality faced by men and women
involved with companies in each and every one of our
districts.'' All of the small business owners testified that
the 1099 mandate will impose a substantial and costly paperwork
burden.
At the hearing's close, Chairman Graves said he would send
a letter to the Chairman and Ranking Member of the House
Committee on Ways and Means urging the Committee to consider
the burdens on small businesses as they move H.R. 4 and other
legislation to relieve job destroying tax and regulatory
burdens through the Committee.
THE STATE OF THE U.S. ECONOMY FOR SMALL BUSINESS
On February 16, 2011, the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on the state of the small
business economy. The hearing, entitled ``Putting Americans
Back to Work: The State of the Small Business Economy,''
focused on examining obstacles to small business job creation
and economic growth and identifying specific tax, regulatory
and health care policies that inhibit job creation and economic
growth.
The witnesses for the hearing were: Mr. William Phelan,
President and Co-Founder, PayNet, Inc., Skokie, IL; Mr. Terry
Frank, Owner, Nature's Marketplace, Oak Ridge, TN; Ms. Dixie
Kolditz, Owner, Open-Box Creations, Cathlament, WA; and Mr.
Bill Feinberg, President of Allied Kitchen and Bath, Ft.
Lauderdale, FL, testifying on behalf of the U.S. Chamber of
Commerce.
Mr. Phelan began the testimony stating that while there has
been a thaw in the extension of credit to small businesses,
there are several negative factors that are continuing to
inhibit access to credit. Ms. Frank stated that the federal tax
burden has become too difficult to navigate by herself and
suggested the best way to raise tax revenue is to make the
process easier to comply with and lower the burden so that
small business owners could reinvest that money back onto their
businesses. Ms. Kolditz focused her testimony on importing and
exporting regulations citing specific examples of new
regulations that are costing her significant amounts of money
and preventing her from expanding her business. Finally, while
Mr. Feinberg stated that offering health care was imperative to
recruiting and retaining the best employees, he expressed
concern that the new Patient Protection and Affordable Care Act
could impose significant regulatory and penalty burdens on his
business. These additional burdens make him doubt he will be
able to expand his business to as large as he feels it could
be.
THE SMALL BUSINESS ADMINISTRATION FY 2012 BUDGET
On March 2, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony from The Hon. Karen Mills,
Administrator, United States Small Business Administration,
Washington, DC, on the President's proposed budget for the
Small Business Administration (SBA) and the programs authorized
by the Small Business Act and Small Business Investment Act.
The hearing, logically enough, was entitled ``The Small
Business Administration FY 2012 Budget.''
The Administrator commenced her testimony by noting that
the agency focuses its mission on providing small businesses
with capital, contracts, and counseling. The Administrator
noted the number of small businesses assisted by the agency.
However, she recognized the current fiscal situation will
require a reduction in the budget. The Administrator
recommended a number of minor programs for elimination.
The Committee used her testimony in preparing its views and
estimates on the President's Budget for the SBA. Those views
and estimates were adopted by the Committee on March 15, 2011.
FEDERAL RESEARCH AND DEVELOPMENT GRANTS FOR SMALL BUSINESSES--THE SBIR
PROGRAM
On March 16, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on the Small Business Innovation
Research (SBIR) and Small Business Technology Transfer (STTR)
Programs. The hearing, entitled ``Spurring Innovation and Job
Creation: The SBIR Program,'' focused on the benefits of the
SBIR and STTR programs.
The witnesses for the hearing were: Mr. Tom Tullie, Chief
Executive Officer, President and Chairman of EcoATM, San Diego,
CA; David Audretsch, Ph.D., Indiana University, Bloomington,
IN; Mike Squillante, Ph.D., Vice President of Radiation
Monitoring Devices, Inc., Watertown, MA, testifying on behalf
of the Small Business Technology Council; and Ms. Amy Comstock
Rick, Chief Executive Officer, Parkinson's Action Network,
Washington, DC.
Mr. Tullie began the testimony stating that in EcoATM's
critical second year, they received an SBIR Phase I award that
directly funded the development of the beginning technology
they would later deploy in their handheld electronic automated
recycling devices. Dr. Audretsch commented on his role in the
National Research Council's An Assessment of the Small Business
Innovation Research Program study that is widely recognized as
one of the most comprehensive examinations of the SBIR program
since its inception. Dr. Squillante provided an extensive
overview of the SBIR program and offered suggestions as to how
to improve it. Finally, Ms. Comstock Rick noted the large role
the SBIR program plays in research for diseases such as
Parkinson's Disease--especially because of the relatively few
sufferers leads to less private funding due to a smaller
potential market.
FEDERAL REGULATORY OVERREACH AND COMPLIANCE WITH THE REGULATORY
FLEXIBILITY ACT
On March 30, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on the Regulatory Flexibility Act (RFA).
The hearing, titled ``Reducing Federal Agency Overreach:
Modernizing the Regulatory Flexibility'' focused on introducing
the concepts of the RFA to members of the Committee, showing
them how the Act helps reduce regulatory burdens on small
business, and explaining its weaknesses.
The witnesses for the hearing were: Bill Squires, Esq.,
Senior Vice President and General Counsel, Blackfoot
Telecommunications Group, Missoula, MT, testifying on behalf of
the National Telephone Cooperative Association; David Frulla,
Esq., Partner, KelleyDrye, Washington, DC; Mr. Craig Fabian,
Vice President of Regulatory Affairs and Assistant General
Counsel, Aeronautical Repair Station Association, Alexandria,
VA; and Mr. Rich Draper, Chief Executive Officer, The Ice Cream
Club, Inc., Boynton Beach, FL, testifying on behalf of the
International Dairy Foods Association.
Mr. Squires testified that the Federal Communications
Commission frequently fails to comply with the RFA by treating
small firms, such as Blackfoot, no differently than the largest
telecommunications providers in the United States. Mr. Frulla
noted that the RFA and the Office of Advocacy have proven
valuable in reducing regulatory burdens on small businesses but
needs to be overhauled. Mr. Fabian discussed litigation by the
Aeronautical Repair Station Association challenging agency
compliance with the RFA and the length of time it took the
agency to comply with the court order mandating such
compliance. Mr. Draper testified that small businesses, like
his own, had significant difficulty dealing with regulatory
creep and the cumulative effect of disparate agency
regulations.
Mr. Graves noted that the hearing would be part of the
Committee's record as it considers modifications that
strengthen the RFA.
FREE TRADE AGREEMENTS AND SMALL BUSINESS EXPORTS
On April 6, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on ``Help Wanted: How Passing Free Trade
Agreements Will Help Small Businesses Create New Jobs.'' The
hearing focused on the benefits and importance of passing the
pending free trade agreements to small businesses. Lowering
trade barriers will spur small business exports, which will
then lead to job creation and long-term economic growth.
The witnesses included: Mr. Bill Patterson, Founder and
Chief Engineer, TEI Rock Drills, Montrose, CO; Mr. Phillip
Wise, Owner and Operator, Wise Family Farm, Harris, MO,
testifying on behalf of the National Pork Producers Council;
Mr. Trevor Myers, CEO, Cloyes Gear & Products, Inc., Fort
Smith, AR, testifying on behalf of the Motor & Equipment
Manufacturers Association; and Mr. Jason Speer, Vice President,
Quality Float Works, Inc., Schaumburg, IL, testifying on behalf
of the U.S. Chamber of Commerce.
At the hearing, four small businesses testified on the
importance of passing the pending free trade agreements with
Panama, Colombia, and Korea and their ability to compete
globally, export more products and create more U.S. jobs. Jason
Speer from Quality Float Works stated, ``With the passage of
the three pending trade agreements, our company and more than
250,000 small and medium-sized companies like ours will have
the opportunity to gain market share and provide more jobs.''
All small business owners testified that failing to pass the
three pending free trade agreements would put their small
business at a competitive disadvantage with nations who have
trade agreements in place.
At the hearing's close, Chairman Graves said he would
continue to spotlight the importance of passing the free trade
agreements to small businesses, and he encouraged the
Administration and Congress to pass all three agreements by
July 1, 2011.
REFORMING AND SIMPLIFYING THE U.S. TAX CODE
On April 13, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on ``How Tax Complexity Hinders Small
Business Job Creation and Economic Growth.'' The hearing
focused on the complexity of the current tax code, the
difficulty entrepreneurs have complying with it, and the
resulting effect on hiring and expansion.
The witnesses were Nina E. Olson, the National Taxpayer
Advocate, Washington, DC; Mr. Steven J. Strobel, Executive Vice
President and Chief Financial Officer, BlueStar Energy
Solutions, Chicago, IL, testifying on behalf of the National
Small Business Association; Mr. Robert Kulp, Founder, Kulp's of
Stratford, Stratford, WI, testifying on behalf of the National
Roofing Contractors Association; and Mr. Monty W. Walker, CPA,
Principal, Walker Business Advisory Services, Wichita Falls,
TX.
The witnesses agreed that tax complexity has a direct
impact on small business viability and job growth. In her
testimony, Ms. Olson testified that ``it is essential that the
tax system does not present an unnecessary hurdle to the
success of these already fragile operations. In addition,
because a substantial portion of businesses are pass- through
entities, a real reduction in complexity will not occur unless
individual and corporate tax reform occurs at the same time.''
Mr. Walker testified that understanding tax matters is
confusing and tax compliance comes at a cost. This results in
lost resources that could have been used for business
operations and business development. Mr. Walker also said that
because of tax complexity, some business owners decide to stay
small and not expand. Mr. Strobel encouraged Congress to
simplify the tax code, broaden the base and lower all
individual and corporate tax rates. He said these reforms will
create a surge in economic growth.
At the hearing's close, Chairman Graves said he plans to
send a letter to the Chairman and Ranking Member of the House
Committee on Ways and Means urging them to enact common sense
tax reform that will enable our nation's small businesses to
create jobs and spur growth in our economy.
POLITICAL DISCLOSURE IN FEDERAL CONTRACTING
On May 12, 2011, the Committee on Small Business and
Committee on Oversight and Government Reform met in Room 2154
of the Rayburn House Office Building to receive testimony on
the April 13, 2011 draft Executive Order (EO) entitled,
``Disclosure of Political Spending by Government Contractors.''
The EO directs agencies to require contractors to disclose
political expenditures and contributions, including those to
third parties, made within two years of all proposal
submissions in an official contracting certifications, and to
certify their acknowledgement that full disclosure of this
information is a precondition to contract award.
The first panel witness was The Hon. Daniel Gordon,
Administrator, Office of Federal Procurement Policy,
Washington, DC. The second panel consisted of Alan Chvotkin,
Esq., Executive Vice President and General Counsel,
Professional Services Council, Arlington, VA; D. Mark Renaud,
Esq., Partner, Wiley Rein LLP, Washington, DC; Ms. ML Mackey,
CEO, Beacon Interactive Systems, Cambridge, MA, testifying on
behalf of the National Defense Industrial Association; The Hon.
Marion Blakey, CEO, Aerospace Industries Association,
Arlington, VA; The Hon. Bradley A. Smith, Esq., Josiah H.
Blackmore II/Shirley M. Nault Designated Professor of Law,
Capital University Law School, Columbus, OH, testifying on
behalf of the Center for Competitive Politics; and Ms. Lawrie
Hollingsworth, President, Asset Recovery Technologies, Inc.,
Annapolis, MD, testifying on behalf of the U.S. Women's Chamber
of Commerce.
Administrator Gordon declined to answer questions about the
proposed EO, but testified that the Administration remains
fully committed to a merit-based contracting process rooted in
the highest levels of integrity and transparency, and
simultaneously asserted that, ``[t]here is no place for
politics in federal acquisition.''
Mr. Chvotkin opposed the EO, stating that political
contributions do not currently impact federal contract awards,
that contributions would not help contracting officers make
awards, and that much of the information required by the EO is
currently publicly available. As an expert on pay to play laws,
Mr. Renaud explained that the ``President's proposal actually
create several new problems where none existed before'' by
injecting disclosure into the procurement process and creating
an expensive recordkeeping requirement for small firms. Ms.
Mackey stated that, as a small business owner, she had no
problem with disclosure per se, but that it should be separate
from contract consideration and should not be injected into the
workplace. Ms. Blakey agreed that ``Political contributions
should never be considered by any procurement officer when
making a decision to either award or deny a contract to any
entity.'' Mr. Smith, as a former Commissioner of the Federal
Elections Commission, summarized that the propose EO, ``imposes
junk disclosure requirements that serve no good purpose;
[c]hills protected political activity; [and] seems motivated by
simple partisan politics.'' Ms. Hollingsworth, while concerned
by the administrative burdens the EO would place on small
businesses, disagreed with the rest of the panel and testified
that disclosure would level the playing field for small
business.
GOVERNMENT WASTE AND DUPLICATION IN SBA PROGRAMS
On May 25, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
providing oversight on duplication in the U.S. Small Business
Administration's (SBA's) entrepreneurial development programs.
The hearing, entitled ``Promoting Entrepreneurship and Job
Creation by Decreasing Duplication at SBA,'' focused on four
programs at SBA dealing with entrepreneurial development. Those
programs are the Small Business Development Companies (SBDC),
the Service Corps for Retired Employees (SCORE), Women's
Business Centers (WBCs) and Veterans' Business Outreach Centers
(VBOCs).
The witnesses were Mr. William Shear, Director, Financial
Markets and Community Investment, United States Government
Accountability Office (GAO), Washington DC; Mr. Arnold Baker,
President and Founder, Baker Ready Mix and Building Materials,
New Orleans, LA, testifying on behalf of the National Black
Chamber of Commerce; Ms. Jody Keenan, Director, Virginia Small
Business Development Center Network, Fairfax, VA, testifying on
behalf of the Association of Small Business Development
Centers; and Ms. Denise Pickett, Executive Vice President,
American Express OPEN, New York, NY.
Mr. Shear discussed the GAO's efforts to uncover waste and
duplication in the federal government, including a recent GAO
report pointing to 80 economic development programs that exist
in four federal agencies costing taxpayers $6.2 billion in
fiscal year 2010. Mr. Shear testified that the four agencies
identified in their report appear to have taken some actions to
implement collaborative practices, but they have offered little
evidence that they have developed compatible policies or
procedures. Mr. Shear testified that when you have separate
infrastructures to deliver similar services it could lead to
inefficiencies and confusion for small businesses. Mr. Baker
testified that SBA has sustained too many cuts to its programs
over the last several years and that the agency cannot afford
further cuts. He argued that a better funded and better staffed
field infrastructure at SBA is critical for continued
improvement of this nation's economy. Ms. Keenan testified that
the SBDC network is on the front line of providing services to
entrepreneurs. She indicated that SBDC's serve all types of
businesses and would very easily be able to deliver services to
the small business community currently being served by other
entrepreneurial development programs funded by SBA. Ms. Pickett
testified about the programs that American Express offers to
small business owners and stated that the public sector needs
to work together with both the private sector and non-profits
to meet to meet the needs of business owners.
ACCESS TO CAPITAL FOR SMALL BUSINESS
On June 1, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on small business access to capital. The
hearing entitled ``Access to Capital: Can Small Businesses
Access the Credit Necessary to Grow and Create Jobs?'' provided
a forum for lenders and business owners to discuss the current
economic environment and how they are working together to
support private sector job growth.
The witnesses were: Mr. William Hall, Dairy Queen
Franchisee, Ft. Worth, TX, testifying on behalf of the National
Franchise Association; Ms. Lynn Ozer, Executive Vice President,
Susquehanna Bank, Pottstown, PA, testifying on behalf of the
National Association of Government Guaranteed Lenders; Mr.
Robert Kottler, Executive Vice President, Director of Retail
and Small Business Banking, Iberia Bank, Lafayette, LA,
testifying on behalf of the Consumer Bankers of America; and
Dennis Jacobe, Ph.D., Chief Economist, Gallup, Washington, DC.
Mr. Hall testified about his struggle to obtain capital in
recent years and the needs of small businesses to obtain
capital to maintain operations as well as grow. He cited a $2
billion shortfall in available loans, which if filled could
create more than 332,000 new jobs in the franchise industry.
Ms. Ozer testified that the economic circumstances of the last
several years, combined with increased federal banking
regulations, have created the ``perfect storm of circumstances
that together serve to stifle banks' abilities to make credit
available to small businesses.'' Loan underwriting standards
are significantly tighter today than they were just a few years
ago. Many banks are taking advantage of the SBA 7(a) program
since it takes less capital to support an SBA loan then it does
a conventional loan. Mr. Kottler testified that over the last
few years, his bank has seen weaker demand for small business
loans, but they are starting to see an increase. Factors
affecting credit demand are lower sales and collateral value,
mainly in the housing sector. To increase demand, lenders are
working closer with borrowers, and many banks have instituted
``second look'' programs for those borrowers who are initially
denied credit. Dr. Jacobe testified that the downfall in the
housing industry and the recent financial crisis have caused
huge disruptions in the financial services sector that have
resulted in the continued economic ``soft patch.'' Citing
research performed by the Gallup Organization, Dr. Jacobe
reported that business owner optimism is down from early 2011,
getting credit is slightly less difficult and small business
owners are hiring fewer employees than they need.
REDUCING REGULATORY BURDENS BY THE AMENDING THE REGULATORY FLEXIBILITY
AND SMALL BUSINESS ACTS
On June 15, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony to review H.R. 527, the Regulatory
Flexibility Improvements Act of 2011 and H.R. 585, the Small
Business Size Standard Flexibility Act of 2011. The hearing
titled ``Lifting the Weight of Regulations: Growing Jobs by
Reducing Regulatory Burdens'' asked experts on the regulatory
process for input on improvements to both bills.
The witnesses for the hearing were: Frank Swain, Esq.,
Partner, Baker & Daniels, Washington, DC; Jane C. Luxton, Esq.,
Partner, PepperHamilton, Washington, DC; Harry J. Katrichis,
Esq., Partner, The Advocacy Group, Washington, DC; and Adam
Finkel, Ph.D., Fellow and Executive Director, Penn Program on
Regulation, University of Pennsylvania Law School,
Philadelphia, PA.
Mr. Swain testified about the history of agency compliance
with the Regulatory Flexibility Act (RFA). He noted that, even
since the 1996 strengthening of the RFA, agencies continued to
avoid compliance. Mr. Swain concluded by noting support for the
changes made by H.R. 527 and H.R. 585. Ms. Luxton focused on
the failure of agencies to consider indirect effects when they
assess impacts on small businesses. She noted how significant
the change would be to have agencies consider such indirect
effects. Mr. Katrichis testified about the value of the RFA and
the history of how the Committee passed the RFA initially and
amended it in 1996. Dr. Finkel noted that the concepts behind
H.R. 527 and H.R. 585 were interesting but he thought them
unnecessary.
Mr. Graves noted that the hearing would lay the foundation
for the Committee's consideration of the legislation at a full
Committee markup.
SMALL BUSINESS ACCESS TO CAPITAL: TREASURY DEPARTMENT PROGRAMS
On June 22, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony from The Hon. Timothy Geithner,
Secretary of the Treasury, on the implementation of the Small
Business Lending Fund and the State Small Business Credit
Initiative--two programs established in the Small Business Jobs
Act of 2010.
The only witness at the hearing was Secretary Geithner. The
Secretary began his testimony with a brief recap of the events
that led to the financial crisis, the resulting difficulties in
the American economy, and the responses by President Bush and,
primarily, President Obama. Secretary Geithner then noted that
small businesses faced stiffer obstacles because they were
overrepresented in businesses affected by the downturn in the
residential and commercial real estate markets. That in turn
limited the ability of small businesses to obtain capital and
credit. Secretary Geithner then explained how the Small
Business Lending Fund and State Small Business Credit
Initiative would increase capital access for small businesses.
Chairman Graves noted that the Committee would continue to
monitor the impacts of the two programs on small businesses.
INCREASING INTERNATIONAL TRADE BY SMALL BUSIENSSES
On Wednesday, July 27, 2011, the House Committee on Small
Business held a hearing titled, ``Bureaucratic Obstacles for
Small Exporters: Is Our National Export Strategy Working?'' The
hearing examined the National Export Strategy and the effect
that bureaucratic obstacles are having on small exporters. With
over 20 federal agencies involved in the exporting process,
many small firms have voiced the difficulty of maneuvering
through the bureaucracy and regulations.
Witnesses on Panel I were: The Hon. Marie Johns, Deputy
Administrator, United States Small Business Administration,
Washington, DC; The Hon. Suresh Kumar, Assistant Secretary of
Commerce and Director General, United States Commercial
Service, Department of Commerce, Washington, DC; and Mr.
Christian Foster, Deputy Administrator, Foreign Agriculture
Service, United States Department of Agriculture, Washington,
DC. The witnesses on Panel II were: Mr. Mark Rice, Founder and
CEO, Maritime Applied Physics Corporation, Baltimore, MD; Mr.
Mitchell Goetze, President and COO, Goetze Candy Inc.,
Baltimore, MD, testifying on behalf of the National
Confectioners Association; and Mr. Maurice Kogon, Director,
California Institute for International Trade and Development,
El Camino Community College, Hawthorne, CA.
At the hearing, the government officials testified on the
status of the National Export Initiative (NEI) and the
Administration's strategy to improve agency coordination to
make the export process easier for small businesses. The
private sector witnesses offered direct examples of the
barriers that limit their ability to export, including higher
tariffs. Mr. Goetze stated ``We support the President's NEI to
double U.S. exports, and the most efficient way to do this is
through Congressional approval and the timely implementation of
the pending free trade agreements with Korea, Colombia and
Panama.''
In closing, Chairman Graves said he would continue to work
on reducing the bureaucratic obstacles faced by small business
exporters. He will also focus on improving the coordination and
efficiency within the federal trade agencies. He is planning to
send a letter to the United States Government Accountability
Office requesting an updated report on the efficiency and
duplication of the Trade Promotion Coordinating Committee.
PRIVATE WORKFORCE TRAINING INITIATIVES
On September 8, 2011, the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on ``Innovative Approaches to
Meeting the Workforce Needs of Small Businesses.'' The hearing
focused on how private, industry-led skills certification
programs are helping meet the workforce needs of small business
while improving career and educational prospects for students
and workers. The Committee heard testimony from representatives
of small businesses and skills certification programs.
The witnesses were: Ms. Jennifer McNelly, Senior Vice
President, The Manufacturing Institute, Washington, DC; Mr.
Roger Tadajewski, Executive Director, National Coalition of
Certification Centers, Kenosha, WI; Mr. Scott Watkins, CEO,
Modern Tech Squad, Bonifay, FL, testifying on behalf of the
Computing Technology Industry Association (CompTIA); and Robert
Scott Ralls, Ph.D., President, North Carolina Community College
System, Raleigh, NC, testifying on behalf of the American
Association of Community Colleges.
Ms. McNelly testified about the National Association of
Manufacturers' skills certification system, which teaches
skills that may be used in any manufacturing business with a
particular emphasis on knowledge needed to work at small
manufacturers. Mr. Tadejewski discussed the cooperation between
private businesses and the development of innovative training
programs at community and technical colleges. Mr. Watkins
testified that the CompTIA skills certification program
enhanced his own skills and provided his small business with
new opportunities that would have been unavailable without the
CompTIA certification. Dr. Ralls testified that industry-led
skills credentialing programs are important to local and state-
wide economic development efforts in North Carolina and serve
as a means to attract employers to the state.
All the witnesses expressed their desire that the
government do more to promote industry-led skills certification
programs through higher and secondary education programs as
well as the Workforce Investment Act.
SMALL BUSINESSES AND FEDERAL GOVERNMENT CONTRACTING
On September 14, 2011, the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building to hold a
hearing titled ``Beyond Size Standards: Sustainability of Small
Business Graduates'' to consider two legislative proposals for
creating a medium-sized business contracting program. The first
proposal was introduced by Representative Michael Rogers (R-AL)
as an amendment to the National Defense Authorization Act, H.R.
1540, and would have created a pilot set-aside contracting
program at the Department of Defense for firms with fewer than
2,500 employees. The Committee on Rules found the amendment to
be non-germane, so it was not made in order for consideration
when H.R. 1540 went to the floor. The second proposal was the
Small Business Growth Act, H.R. 1812, introduced by
Representative Gerald Connolly (D-VA) introduced to create a
pilot set-aside contracting program at the General Services
Administration for firms with fewer than 1,500 employees that
were participants in the agency's Mentor-Protege program.
The witnesses were: The Hon. Gerald Connolly (D-VA), United
States House of Representatives, Washington, DC; Ms. Tonya
Speed, Founder, Washington Premier Consulting, Washington, DC,
testifying on behalf of the Mid-Tier Advocacy; Christopher
Yukins, Esq., Professor of Law, George Washington University,
Washington DC; Mr. Michael D. Frisbey, President, Government
Suppliers & Associates, Knoxville, TN, testifying on behalf of
the National Small Business Association; and Ms. Margot
Dorfman, CEO, U.S. Women's Chamber of Commerce, Washington, DC.
The witnesses disagreed about the wisdom of a medium-size
business program, with Ms. Speed supporting the proposal as a
method to increase competition, create jobs and sustain the
industrial base. Professor Yukins testified that any proposal
needed to account for current trade agreements and urged
members to be mindful of the affiliation rules generally found
in small business contracting. Mr. Frisbey began his testimony
opposed to a mid-sized business pilot, but retracted his
objection if the pilot would not encroach on the 23 percent
small business prime contracting goal. Ms. Dorfman opposed any
pilot since the federal government is not currently meeting the
statutory small business prime contracting goals.
Chairman Graves stated that for any legislative proposal to
be considered favorably by the Committee, it must meet two
mandates. First, it must provide benefits to the taxpayers and
the government. Second, it must protect the ability of current
small businesses to compete for federal contracts.
REDUCING REGULATORY BURDENS THROUGH PRESIDENTIAL EXECUTIVE ORDERS
On September 21, 2011, the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on Executive Order 13,563. The
hearing titled, ``Eliminating Job-Sapping Federal Rules Through
Retrospective Reviews--Oversight of the President's Efforts,''
examined President Obama's order that executive branch agencies
establish a process for reviewing their federal regulations and
eliminating those that are unnecessary, duplicative or
burdensome.
The only witness for the hearing was The Hon. Cass
Sunstein, Administrator, Office of Information and Regulatory
Affairs, Office of Management and Budget, Washington, DC.
Administrator Sunstein commenced his testimony by noting that
he is responsible for overseeing agency compliance with the
retrospective review process. The Administrator then noted that
the there already were savings associated with the removal of
certain regulations related to telemedicine, paperwork burdens
imposed by the Department of Labor, and spill prevention rules
from the Environmental Protection Agency. The Administrator
finished by stating his interest in working with all members of
the Committee to ensure that agencies do not skip review of
regulations important to small businesses.
At the close of the hearing, the Chairman noted that he
would continue to monitor the compliance and alert the
Administrator if agencies were not complying with the
requirements to assess the impact of rules on small businesses,
especially those small businesses involved in the regulation of
the general aviation industry.
REGULATORY BURDENS OF LABOR LAWS AND REGULATIONS ON SMALL BUSINESSES
On October 5, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on labor law rules affecting small
businesses. The hearing titled ``Adding to Uncertainty: The
Impact of DOL/NLRB Decisions and Proposed Rules on Small
Businesses'' examined the following issues: eliminating secret
ballots for union decertification; narrowing the scope of the
bargaining unit; truncating time periods for union
representation elections; and requiring disclosure of attorney
communications to employers during unionization campaigns.
The witnesses on the only panel were: Elizabeth Milito,
Esq., Senior Executive Counsel, NFIB Small Business Legal
Center, Washington, DC; Mr. Michael Mittler, President, Miller
Brothers Machine and Tool, Wright City, MO, testifying on
behalf of the National Tooling and Machining Association and
the Precision Metalforming Association; Ms. Beverly McCauley,
President, Hunt Country Masonry Inc., Leesburg, VA, testifying
on behalf of the Mason Contractors Association of America; and
Mr. Allen William West, Jr., President, West Sheet Metal Co.,
Sterling, VA.
Ms. Milito testified that most small businesses are
unfamiliar with the complexities of labor law. As a result, the
rules proposed by the Department of Labor (DOL) and the
National Labor Relations Board (NLRB) will make it more
difficult for small businesses to understand their rights
during a unionizing campaign. Mr. Mittler reiterated the point
made by Ms. Millito concerning the complexity of labor law, and
stated that the new proposals are likely to lead to greater
antagonism between workers and management hindering
productivity. Ms. McCauley opined that the new rules are one-
sided in favor of union certifications even though workers may
not (if given sufficient time and information) support efforts
at unionization. Mr. West summed up his review of the recent
proposals from the DOL and NLRB as not imposing any
disadvantages on small businesses.
SPECTRUM ALLOCATION AND IMPACT ON AVIATION SMALL BUSINESSES
On Wednesday, October 12, 2011, the House Committee on
Small Business held a hearing titled, ``LightSquared: The
Impact to Small Business GPS Users.'' The hearing examined the
impact on small businesses that may result from LightSquared's
plan to provide broadband service using its spectrum that is
adjacent to the spectrum utilized by the Global Positioning
System (GPS). Thousands of small businesses rely on an accurate
GPS signal for their day-to-day operations, and potential
interference could severely handicap or impair their business.
Witnesses were: Mr. Dennis Boykin IV, Principal, DB4
Consulting, Leesburg, VA, testifying on behalf of the Leesburg
Executive Airport Commission; Mr. Rick Greene, Precision
Agronomy Manager, MFA, Inc., Columbia, MO, testifying on behalf
of the Agriculture Retailers Association; Mr. Tim Taylor,
President and CEO, Free Flight Systems, Irving, TX, testifying
on behalf of the Aircraft Electronics Association; and Mr.
Jeffrey Carlisle, Executive Vice President of Public Policy,
LightSquared, Reston, VA.
At the hearing, small businesses explained how the
LightSquared proposal would impact their companies, including
the costs of repairing and retrofitting their GPS devices. Mr.
Greene discussed the economic impact LightSquared would have on
the agriculture industry by noting that it could take billions
of dollars over a decade to adopt new GPS devices. In addition,
even if LightSquare's proposed filter works that would cost
nearly a billion dollars and divert scarce personnel from their
other activities.
In closing, Chairman Graves said he will continue to
closely follow the action of the FCC and the LightSquared
proposal. He plans to send a letter to the FCC reinforcing the
need for comprehensive tests of all types of devices to ensure
there is no interference and added costs for small business GPS
users.
OVERSIGHT OF THE SMALL BUSINESS ADMINISTRATION'S FINANCING PROGRAMS
On October 26, 2011, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of conducting an oversight hearing titled ``Oversight of the
Small Business Administration's Financing Programs.'' The
hearing focused on the Small Business Administration's (SBA)
Fiscal Year 2011 performance and whether the SBA programs met
its goal of filling a void in the private lending market.
The first panel witness was The Hon. Karen Mills,
Administrator, United States Small Business Administration,
Washington, DC. Witnesses on the second panel were: Ms. Lynetta
Tipton Steed, Executive Vice President, Business and Community
Banking Division, Regions Financial Corp., Birmingham, AL,
testifying on behalf of the Consumer Bankers Association; Ms.
Sally Robertson, President, Business Finance Group, Fairfax,
VA, testifying on behalf of the National Association of
Development Companies; Mr. Gary Grinnell, President and CEO,
Corning Federal Credit Union, Corning, NY, testifying on behalf
of the National Association of Federal Credit Unions; and Mr.
Rodger Davis, Managing Partner, Northcreek Mezzanine,
Cincinnati, OH, testifying on behalf of the Small Business
Investor Alliance.
Administrator Mills testified that SBA financing programs
supported over $30 billion in lending to 60,000 small
businesses in Fiscal Year 2011. The SBA also is taking steps to
streamline paperwork in its loan programs and encourage more
lenders to make SBA backed loans.
The second panel testified that while SBA has improved in
several areas, problems remain. Ms. Steed testified that small
businesses are facing a number of challenges that have
diminished overall demand for loans, including weak economic
conditions and high levels of unemployment resulting in lower
sales and a poor general economic outlook. Ms. Robertson
testified that the ``grease'' that gets the small business jobs
engine going is short-term capital to pay for inventory, raw
materials, and labor costs and long-term capital for funding
business plant and equipment. Mr. Davis testified that raising
leverage limits in the Small Business Investment Company (SBIC)
Program will help SBICs provide more patient capital to small
businesses. Mr. Grinnell testified that participating in SBA
financing programs require meeting stringent government
regulations.
OVERSIGHT OF THE SBA'S DISASTER ASSISTANCE PROGRAM
On November 30, 2011, the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building for the
purpose of conducting an oversight hearing titled ``Disaster
Assistance: Is SBA Meeting the Needs of Disaster Victims?'' The
hearing focused on the Small Business Administration (SBA)
implementation of the Small Business Disaster Response and Loan
Improvements Act of 2008 and how those programmatic changes
have affected the delivery of recovery loans. The Committee
also learned about SBA's response plans and their capacity to
respond to a disaster the size and scope of Hurricane Katrina.
The witnesses were: Mr. James Rivera, Associate
Administrator, Office of Disaster Assistance, United States
Small Business Administration, Washington, DC; and Mr. William
Shear, Director, Financial Markets and Community Investment,
U.S. Government Accountability Office (GAO), Washington, DC.
Mr. Rivera testified that the SBA is making progress
towards fulfilling all of the requirements of the Small
Business Disaster Response and Loan Improvements Act of 2008.
Since hurricanes Katrina, Rita and Wilma, Mr. Rivera claimed
that the SBA has greatly improved its capacity to process
disaster loan applications in a timely manner. Mr. Shear
testified that SBA continues to make progress towards
implementing the statutory changes to the disaster program and
other GAO recommendations on how to improve the disaster
program. However, GAO reported that SBA needed to take
additional steps to fully address several shortcomings,
including improvements in the application process, increasing
the celerity of loan disbursements, and improved coordination
with state and local officials.
THE PATH TO JOB CREATION: THE STATE OF AMERICAN SMALL BUSINESS
On February 1, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on obstacles to small business job
creation and economic growth. The hearing, titled ``The Path to
Job Creation: The State of American Small Business,'' focused
on informing Committee members of the most pressing obstacles
facing small businesses in an effort to narrow the Committee's
focus to the most pertinent impediments and to tackle the most
egregious obstructions to job creation and economic growth.
The witnesses for the hearing were: Dennis Jacobe, Ph.D.,
Chief Economist, Gallup, Washington, DC; Mr. Peter Ferrara,
Senior Fellow, Entitlement and Budget Policy, Heartland
Institute, Chicago, IL; Martin Neil Baily, Ph.D., Senior
Fellow, Economic Studies, The Brookings Institution,
Washington, DC; and Mr. Michael Fredrich, President, Manitowoc
Custom Molding, Manitowoc, WI, testifying on behalf of the
Small Business and Entrepreneurship Council.
Dr. Jacobe began the hearing with testimony outlining the
results of an October 24, 2011 Gallup poll that showed that
excessive government regulation, lack of available capital, and
low consumer confidence as the biggest hurdles small business
must overcome. He also stated that a one-year moratorium on all
new federal regulations would be an immediate stimulus to the
economy. Mr. Ferrara argued against further stimulus packages.
Dr. Baily explained that the housing crisis is the mitigating
factor in the current slow recovery of the economy following
the 2007-2009 recession. He went on to state that while recent
economic indicators have been somewhat positive, much more
progress needs to be made to get the economy back to what is
was before the recession. Mr. Fredrich stated that the ever-
changing and confusing actions of the Federal Reserve and what
appears to be the insouciance of Washington regarding the
federal debt creates a level of uncertainty in the private
sector which will only result in stagnation and decline.
PLACING FEDERAL TAX DOLLARS AT RISK: HOW THE SMALL BUSINESS
ADMINISTRATION MISMANAGES THE MODERNIZATION OF ITS INFORMATION
TECHNOLOGY
On February 8, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on the Small Business Administration's
(SBA) efforts to modernize its computer systems used to manage
its loan portfolio. The hearing, titled ``Placing Federal Tax
Dollars at Risk: How the Small Business Administration
Mismanages the Modernization of Its Information Technology''
focused on a Government Accountability Office review of the
SBA's prolonged modernization efforts.
The hearing consisted of one panel: The Honorable Marie
Johns, Deputy Administrator, United States Small Business
Administration, Washington, DC; and Mr. David Powner, Director,
Information Technology Management Issues, United States
Government Accountability Office, Washington, DC.
Deputy Administrator Johns noted that the modernization
process of the Loan Management Accounting System (LMAS)
commenced in 2005. The update efforts were reengineered in
2009. Ultimately, the SBA determined to limit the scope of the
LMAS project thereby reducing the cost of the modernization
effort. Nevertheless, Deputy Administrator Johns stated that
certain legacy issues, such as the use of the COBOL computer
language, will continue even after the updates are fully
implemented.
Mr. Powner noted that the reengineering stemmed from the
SBA's inability to properly manage the original scope of the
LMAS modernization. Even with the significant smaller scale
project, the SBA remains behind schedule on milestones
established for the modernization effort. Mr. Powner concluded
that the SBA did not have proper management practices needed to
ensure successful completion of the modernization effort.
A JOB CREATION ROADMAP: HOW AMERICA'S ENTREPRENEURS CAN LEAD OUR
ECONOMIC RECOVERY
On March 21, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on ``A Job Creation Roadmap: How
America's Entrepreneurs Can Lead Our Economic Recovery.''
The witnesses were Mr. Andrew Razeghi, Adjunct Assistant
Professor, Kellogg School of Management, Northwestern
University, Evanston, IL; Mr. Seth Goldman, President and CEO,
Honest Tea, Bethesda, MD, testifying on behalf of the American
Beverage Association; Mr. Heath Hall, President, Pork Barrel
BBQ, Washington, DC; and Mr. Clinton Tymes, State Director,
Delaware Small Business Technology Development Center, Newark,
DE, testifying on behalf of the Association of Small Business
Development Centers.
Professor Razeghi noted that entrepreneurial ecosystems are
instrumental in helping to support high potential investors. He
also said that innovation reduces barriers to entry for
entrepreneurs, but also reduces the need for employees, thereby
reducing job growth. Mr. Goldman mentioned that running a lean
small company had advantages, because the company made less
expensive mistakes as a result. He also said that a
differentiated product (the first organic tea beverage) was key
to the company's survival. The best thing the government did to
support the company, he noted, was to not get in the company's
way. Mr. Hall said every regulation, requirement or delay that
the government imposes is a burden that new small businesses
have to overcome. These burdens cost entrepreneurs time and
money, and often lead to many small firms prematurely calling
it quits, opting to create fewer jobs and slowing innovation,
he said. Mr. Tymes testified that Small Business Development
Centers (SBDCs) educate entrepreneurs to access capital,
improve sales, and manage the day-to-day complexities of a
business.
At the hearing's close, Chairman Graves said the Committee
would continue to follow the research on, and needs of
America's entrepreneurs--our best job creators.
LARGE AND SMALL BUSINESSES: HOW PARTNERSHIPS CAN PROMOTE JOB GROWTH
On March 28, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on large and small businesses partnering
to create added value, jobs and economic growth. The hearing,
titled ``Large and Small Businesses: How Partnerships Can
Promote Job Growth,'' focused on the strategic affiliations
created between large and small businesses and how these can
help us to create more jobs and grow the economy.
The witnesses for the hearing were: Matthew Slaughter,
Ph.D., Signal Companies Professor of Management, Tuck School of
Business, Dartmouth College, Hanover, NH; William C. McDowell,
Ph.D., Assistant Professor of Management, East Carolina
University, Greenville, NC; Mr. Robert E. Bruck, Corporate Vice
President & General Manager, Technology Manufacturing
Engineering, Intel Corporation, Santa Clara, CA; and Mr. Paul
Blackborow, Chief Executive Officer, Energetiq Technology,
Inc., Woburn, MA.
Dr. Slaughter began the testimony by stating that neither
small business nor large business operates in a vacuum. Rather,
each is deeply embedded in the overall U.S. economy--with
extensive connections to each other in product markets, capital
markets, and labor markets. He added that one important link
between small business and big business is time: small
businesses of today can grow to become the big businesses of
tomorrow. Many of America's largest and most successful
companies started small--indeed, as the quintessential person
pursuing a dream from a garage or dorm Room. Dr. McDowell
testified that traditionally, small businesses are at a
disadvantage to large businesses in the access to capital and
tax realms and that these issues must be addressed to have
small businesses drive the United States economy. Both Mr.
Bruck and Mr. Blackborow testified about the significant
benefits their respective companies have realized by their
partnership by stating that as a result of the technical and
investment relationship with a small company, two technologies
critical to the manufacture of Intel's present generation and
future generation semiconductor chips have been developed and
commercialized. They continued that Energetiq had benefitted
not only from the revenue generated by sales to Intel's
suppliers, but its relationship with Intel provides significant
credibility with its customers, suppliers and other investors
enabling it to enlarge its business.
THE TAX OUTLOOK FOR SMALL BUSINESSES: WHAT'S ON THE HORIZON?
On April 18, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on ``The Tax Outlook for Small
Businesses: What's on the Horizon?'' The witnesses were: Aparna
Mathur, Ph.D., Resident Scholar, American Enterprise Institute,
Washington, DC; Mr. Leonard Steinberg, Principal, Steinberg
Enterprises, LLC, West Windsor, NJ, testifying on behalf of the
Small Business and Entrepreneurship Council; Mr. Martin J,
Mitchell, Vice CEO, Mitchell & Best Homes, Rockville, MD,
testifying on behalf of the National Association of Home
Builders; and Ms. Margot Dorfman, CEO, U.S. Women's Chamber of
Commerce.
Dr. Mathur cited the study by Department of the Treasury's
Office of Tax Analysis, which said in 2007, about 4% of small
businesses faced the high marginal tax rates of 33% and 35%.
However, nearly 32% of small business income was subject to
this tax. For employer small businesses, 10% of small
businesses and 38% of small business income was subject to
these rates. The effect of high tax rates is reduced business
entrepreneurship.
Mr. Steinberg, whose tax practice is a small business,
serves small business clients. He testified that whatever money
is taken out of the economy from the small business community,
the consequences have multiple effects. Business owners cannot
afford to give their employees timely raises, fringe benefits
are cut or withdrawn, and business owners defer capital
expenditures affecting their suppliers and the supplier's
workers.
Ms. Dorfman discussed the frustration of small business
owners with tax complexity. She expressed support for
simplifying the tax code, particularly because so many small
businesses are structured as pass-through entities and pay
business taxes on their individual tax returns. She testified
that the difficulties of tax compliance are compounded by the
challenges of the recession.
Mr. Mitchell strongly urged Members to extend the 2001 and
2003 tax cuts. He said tax policy can have a dramatic effect on
an industry like home building that is dominated by small
businesses. Because so many builders are organized as pass-
through entities that pay business taxes on their individual
tax returns, individual income tax rates are business tax
rates.
All witnesses expressed support for ending the estate tax.
At the hearing's close, Chairman Graves said the Committee
would continue to stay active in the debate on taxes in the
months ahead.
RUNNING ON EMPTY: THE EFFECTS OF HIGH GASOLINE PRICES ON SMALL
BUSINESSES
On May 9, 2012, the Committee on Small Business met in Room
2360 of the Rayburn House Office Building for the purpose of
receiving testimony on ``Running on Empty: The Effects of High
Gasoline Prices on Small Businesses.'' The purpose of the
hearing was to examine the causes of high fuel prices and to
learn of the direct and indirect economic effects of high
gasoline prices on small businesses.
The witnesses were: Mr. Robert McNally, President, The
Rapidan Group, LLC, Bethesda, MD; Ms. Jamie Smith, Owner and
General Manager, Mr. Rooter Plumbing of Greater Baltimore,
Baltimore, MD; Ms. C. Cookie Driscoll, Owner, C. Cookie
Driscoll, Inc., Fairfield, PA, testifying on behalf of the
National Small Business Association; and Michael Greenberger,
Esq., Professor and Director, Center for Health and Homeland
Security, Francis King Carey School of Law, University of
Maryland, Baltimore, MD.
Mr. McNally testified that gasoline prices are largely
dependent on the price of crude oil, the price of which is
determined in international markets. He testified that recent
increases in the cost of crude oil are largely the result of a
lack of excess supply capacity relative to demand. Professor
Greenberger testified that his research indicates that recent
high crude oil prices, and the concomitant increase in gasoline
prices, are not the result of market supply and demand
fundamentals, but are a consequence of increased financial
speculation in oil futures markets.
Mr. Smith testified that small businesses such as his have
less opportunity to hedge or mitigate the effects of high
gasoline prices on their bottom line. He mentioned that his
business has recently imposed a fuel surcharge in order to
recoup a portion of the increase in his gasoline costs.
However, he believes the fuel surcharge may have helped with
one problem by creating another, as some customers strenuously
object to the surcharge.
Ms. Driscoll testified that the cost of all of the inputs
she utilizes on her horse farm are directly linked to the price
of fuel and that when oil prices go up, so does the cost of
these inputs. As a result of high gasoline prices, Ms. Driscoll
has stopped paying herself a salary and has been forced to
increase the price she charges customers for boarding horses on
her farm. Ms. Driscoll and Mr. Smith both testified that demand
for their services declines when fuel prices increase.
Professor Driscoll noted that the fundamental supply and
demand for oil should not result in price spikes and attributed
it to speculation. He went on to note that more concerted
efforts by the Commodity Futures Trading Commission to
implement provisions of Dodd-Frank and take other steps against
index trading used by speculators would reduce price spikes for
crude oil.
U.S. TRADE STRATEGY: WHAT'S NEXT FOR SMALL BUSINESS EXPORTERS?
On May 16, 2012, the Committee on Small Business held a
hearing titled, ``U.S. Trade Strategy: What's Next for Small
Business Exporters?'' The hearing examined the trade policy
initiatives of the Administration and their effect on small
business exporters. Specifically, the Committee heard from the
Office of the United States Trade Representative (USTR) on the
status of current trade negotiations and the overall strategy
to open new markets for United States goods and services. In
addition, the Committee received recommendations directly from
small businesses on how to best increase exports and create new
local jobs.
The only witness on the first panel was Ambassador Miriam
Sapiro, Deputy United States Trade Representative, Office of
the United States Trade Representative, Washington, DC. The
second panel consisted of the following witnesses: Mr. Mark
Luden, CEO of Guithammer Company, Westerville, OH, testifying
on behalf of the Consumer Electronics Association; Mr. Robert
Sinner, President and Partner, SB&B Foods Inc, Casselton, ND,
testifying on behalf of the American Soybean Association; Mr.
Thomas Crafton, President, Thermcraft Inc., Winston Salem, NC,
testifying on behalf of the National Association of
Manufacturers; and Joshua Meltzer, Esq., LL.M., S.J.D., Fellow,
Brookings Institute, Washington, DC.
At the hearing, Ambassador Sapiro first testified on the
Administration's efforts to help small businesses increase
their exports. She explained the implementation status of the
free trade agreements (FTAs) passed last year with Colombia,
Panama and Korea. She stated the Colombia FTA, which just went
into effect on May 15, 2012, will help the already 13,000 small
firms that currently export to Colombia increase their sales.
The Ambassador also updated the Committee on the current Trans-
Pacific Partnership (TPP) negotiations with nine nations in the
Asia-Pacific Region.
The second panel of private witnesses discussed key policy
issues affecting their ability to compete globally and provided
recommendations on future trade policy. Mr. Luden praised the
free trade agreements and their ability to open new markets. He
also advocated expanding the Information Technology Agreement
(ITA) within the World Trade Organization (WTO), as this would
lower the export tariff on his electronic products. Mr. Crafton
explained how vital exports are to his business, as they
account for approximately 35 percent of total sales. Mr. Sinner
explained some of the key barriers for soybean exporters,
including the complex international standards promulgated by
foreign nations. The final witness, Dr. Meltzer highlighted the
potential gain for small business exporters through the TPP
agreement, including a $14 billion trade surplus.
In closing, Chairman Graves said he will continue to work
on opening new markets, reducing barriers, and making the trade
process easier for small business exporters. He also stated the
Committee will continue to focus on improving the coordination
and efficiency of the federal trade agencies to ensure small
firms have the resources available to export.
SBA'S MANAGEMENT OF ITS CAPITAL ACCESS PROGRAMS
On June 6, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of conducting an oversight hearing on the Small Business
Administration's (SBA's) financial assistance programs. The
hearing addressed SBA's oversight of the capital access
programs with a special focus on the ad hoc procedures used to
manage those programs.
The only witness at the hearing was The Honorable Karen
Mills, Administrator, United States Small Business
Administration, Washington, DC.
Administrator Mills testified that federal financial
regulators have been sharing their best practices with SBA
including the importance of establishing a comprehensive risk
plan for the agency. The Administrator stated that the agency
expects to complete its first comprehensive risk plan for its
loan portfolios (which exceed $90 billion) before the beginning
of the next fiscal year. Administrator Mills also remarked that
lending partners have asked SBA for greater ``clarity,
consistency, and transparency'' in lender oversight and that
the agency would incorporate those concepts into upcoming
revisions to its regulations.
REGULATORY FLEXIBILITY ACT COMPLIANCE: IS EPA FAILING SMALL BUSINESSES?
On June 27, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on whether the Environmental Protection
Agency (EPA) is complying with the Regulatory Flexibility Act
(RFA). The RFA requires federal agencies to assess the economic
impact of their regulations on small businesses, small non-
profits, and small governmental jurisdictions (collectively
referred to in the RFA as ``small entities'') and if the impact
is significant, consider alternatives that are less burdensome.
In addition, the EPA is one of three federal agencies required
to conduct Small Business Advocacy Review (SBAR) panels for all
rules that are expected to have a significant economic impact
on a substantial number of small entities.
The witnesses for the hearing were: Keith W. Holman, Esq.,
Legal and Policy Counsel, Environment, Technology and
Regulatory Affairs Division, U.S. Chamber of Commerce,
Washington, DC; Mr. Frank Knapp, President and CEO, South
Carolina Small Business Chamber of Commerce, Columbia, SC,
testifying on behalf of the American Sustainable Business
Council; Mr. Jeff Brediger, Director of Utilities, Orrville
Utilities, Orrville, OH, testifying on behalf of the American
Public Power Association; and Mr. David Merrick, President,
Merrick Design and Build Inc., Kensington, MD, testifying on
behalf of the National Association of the Remodeling Industry.
Mr. Holman began the hearing by providing an overview of
the RFA and the EPA's obligations under the RFA. He discussed
concerns with EPA's administration of the SBAR panel process
including: EPA declining to hold a panel when one should be
convened; rulemaking timetables that do not allow enough time
to conduct a thorough panel process; and EPA ignoring
recommendations from a panel that would reduce the burden and
cost of new rules on small businesses. Mr. Knapp discussed the
importance of the RFA and opined that EPA needed more resources
to fully comply with the law. Mr. Brediger discussed his
experience serving as a small entity representative on the
panel for the Major and Area Source Boiler MACT rules. He also
shared the concerns that Orrville Utilities has with the Boiler
MACT rules, including EPA's rejection of a less burdensome
alternative for small entities. Mr. Merrick discussed the
impact of EPA's Residential Lead Renovation, Repair and
Painting (LRRP) rule on small remodelers, and the remodeling
industry's concerns with EPA's future rulemaking that would
extend the LRRP rules to cover work on the exteriors of public
and commercial buildings. Small entities are concerned that EPA
will proceed with the rulemaking without scientific evidence of
lead exposure risks to children and pregnant women from
commercial and public building renovation and remodeling
activities and without meeting their obligations under the RFA.
IS FMCSA'S CSA PROGRAM DRIVING SMALL BUSINESSES OFF THE ROAD?
On July 11, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony to examine the Federal Motor Carrier
Safety Administration's (FMCSA) Compliance, Safety,
Accountability (CSA) program and its effects on small
businesses. In an effort to better allocate limited agency
resources and prioritize unsafe commercial motor carriers for
enforcement, the FMCSA began to develop the CSA in 2004. The
CSA's laudable goal is to prevent future crashes by intervening
earlier with carriers that are identified as unsafe. Since the
initial implementation of the program in 2010, small
businesses, including truckers, brokers and shippers, have
identified a number of concerns with the accuracy and
reliability of the system FMCSA is using to publicly identify
motor carriers as unsafe.
There were two panels of witnesses. The witness on the
first panel was Mr. William A. ``Bill'' Bronrott, Deputy
Administrator, FMCSA, Department of Transportation, Washington,
DC. The witnesses on the second panel were: Mr. Daniel A.
Miranda, CEO, Hit Em Hard Transportation, Elverta, CA,
testifying on behalf of the Owner-Operator Independent Drivers
Association; Mr. Jeff Tucker, CEO, Tucker Company Worldwide,
Cherry Hill, NJ, testifying on behalf of the Transportation
Intermediaries Association; Mr. Anthony Gallo, Senior Analyst,
Wells Fargo Securities, LLC, Baltimore, MD; and Michael Belzer,
Ph.D., Associate Professor, Department of Economics, Wayne
State University, Detroit, MI.
Deputy Administrator Bronrott began the hearing by
describing the CSA program and the FMCSA's goals for increasing
commercial motor carrier safety. Mr. Miranda, the owner and
operator of a small trucking company, described his personal
experience with the CSA program. He discussed the impact that
negative Behavior Analysis and Safety Improvement Categories
(BASICs) scores for minor violations had on his business,
including a loss of business and an increase in insurance
rates. Mr. Tucker, the CEO of a small, family run freight
brokerage business, described the concerns that small brokers
have with FMCSA encouraging them to use CSA data, which they
believe is unreliable, to make business decisions. He also
expressed concern that the use of CSA data by plaintiff's
attorneys in vicarious liability and negligent hiring lawsuits.
He believes that FMCSA should be identifying high-risk carriers
and getting them off the road, instead of relying on shippers
and brokers to determine which carriers are safe to operate.
Mr. Gallo discussed the three research reports that Wells Fargo
released on the CSA program and the methodology the program
uses to identify unsafe carriers. He used regression analysis
on CSA data and was unable to find any meaningful statistical
relationship between BASICs scores and actual accident
occurrence. Professor Belzer discussed his research examining
the link between commercial motor carrier driver compensation,
work pressure, and driver safety.
DIGITAL DIVIDE: EXPANDING BROADBAND ACCESS TO SMALL BUSINESSES
On July 18, 2012 at 1:30 p.m., the Committee on Small
Business held a hearing titled, ``Digital Divide: Expanding
Broadband Access to Small Business.'' The hearing examined the
role of the federal government in expanding broadband access to
small businesses in the United States. Specifically, the
Committee heard from the Federal Communications Commission
(FCC), the National Telecommunications and Information
Administration (NTIA) of the Department of Commerce, and the
Rural Utilities Service (RUS) of the United States Department
of Agriculture on the status of current broadband programs and
the overall strategy to expand broadband capabilities to small
businesses.
There was one panel of government witnesses: The Hon.
Julius Genachowski, Chairman, FCC, Washington, DC; The Hon.
Lawrence E. Strickling, Assistant Secretary, NTIA, Department
of Commerce, Washington, DC; and The Hon. Jonathan Adelstein,
Administrator, RUS, United States Department of Agriculture,
Washington, DC.
At the hearing, FCC Chairman Genachowski first testified on
the Commission's role in developing policies that maximize the
benefits of broadband communications, help the wire line and
wireless economy grow, enhance U.S. competitiveness, create
jobs, and connect the nearly 18 million Americans without
broadband access. He stated the success of reforming the
Universal Service Fund as a large step in modernizing a system
to bridge the gap in broadband coverage. Next, RUS
Administrator Adelstein explained the role of his agency in
supplying loans and grants to communication carriers to deploy
broadband in rural communities. He provided an update on the
agencies current loan portfolio and the Broadband Initiatives
Program, which was created by the American Recovery and
Reinvestment Act (ARRA) to provide loans and grants for
broadband deployment. The final witness, Assistant Secretary
Strickling, explained his agency's role in developing policy
aimed at expanding broadband deployment and adoption. He also
provided an update on the Broadband Technology Opportunities
Program, also created by the ARRA, and stated they are making
significant progress in achieving their goals of the program.
In closing, Chairman Graves said he will continue to
closely follow the actions of the Federal government in
expanding broadband to small businesses. He will continue to
work with House colleagues to ensure that federal policies do
not obstruct the private sector investment in broadband
infrastructure, as this will have an adverse impact on small
businesses and their ability to grow.
TALES OF RESILIENCE: SMALL BUSINESS SURVIVAL IN THE RECESSION
On July 25, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building to receive
testimony examining how, despite the harrowing recession and
tough economy, some small business owners have grown by
innovating and strategically adapting their business models in
order to find success. The hearing focused on how certain small
firms overcame obstacles created or exacerbated by the economic
climate. Further, it analyzed methods utilized and cultivated
by a portion of small businesses to achieve prosperity, such
as: reducing costs, diversifying portfolios, capitalizing on
emerging industries, and fostering innovation.
The witnesses were: Mr. H. Todd Flemming, President & CEO,
Infrasafe, Orlando, FL, testifying on behalf of Small Business
& Entrepreneurship Council; Mr. Michael R. Minogue, Chairman,
President & CEO, Abiomed, Danvers, MA, testifying on behalf of
the Advanced Medical Technology Association; Ms. Elise
Mitchell, President & CEO, Mitchell Communications Group,
Fayetteville, AR, testifying on behalf of Women Impacting
Public Policy; and Mr. Michael DiMarino, President, Linda Tool,
Brooklyn, NY.
The witnesses provided testimony highlighting their best
practices for achieving prosperity and propelling economic
growth during an uncertain and tumultuous economic climate. Mr.
Flemming testified that by staying flexible and embracing
technology his company has been able to streamline cuts and
operate more efficiently, allowing him to expand despite
economic uncertainty. Mr. Minogue highlighted his firm's
success which is centered on innovation and creating new
products in an emerging industry, but noted that the looming
medical device tax will negatively affect job creation and
research in his firm and across the medical device industry as
a whole. Ms. Mitchell testified that her small business was
able to grow despite the stagnant economy by hiring top talent
and taking risks, although she opined that the government needs
to consider the negative effects of onerous regulations and tax
uncertainty on small firms. Mr. DiMarino indicated that in
order to combat a weak economy, his firm altered business hours
and diversified their customer base in order to ensure that no
layoffs occurred.
At the conclusion of the hearing, Chairman Graves stated
that the Committee would continue to examine the best practices
employed by resilient small business who have managed to find
success despite the tough economy.
KNOW BEFORE YOU REGULATE: THE IMPACT OF CFPB REGULATIONS ON SMALL
BUSINESS
On August 1, 2012, the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony to examine the Consumer Financial
Protection Bureau's (CFPB) proposed regulation to integrate the
mortgage disclosures that are provided to consumers in a real
estate transaction. The proposed rule will integrate the
disclosures required under the Truth in Lending Act (TILA) and
the Real Estate Settlement Procedures Act (RESPA) and will
affect community banks, credit unions, mortgage brokers,
mortgage companies, and settlement agents. The CFPB has
determined that the proposed rule (the TILA-RESPA rule) will
have a significant economic impact on a substantial number of
small businesses under the Regulatory Flexibility Act (RFA), 5
U.S.C. Sec. Sec. 601-12. Consequently, the agency convened a
Small Business Advocacy Review (SBAR) panel and prepared an
initial regulatory flexibility analysis. The proposed rule and
the final report of the SBAR panel was posted on CFPB's website
on July 9, 2012.
The only witness at the hearing was CFPB Director Richard
Cordray. Director Cordray described how CFPB is working to
comply with the RFA. He discussed how the agency first makes a
threshold assessment to determine if a regulation is expected
to have a significant economic impact on a substantial number
of small businesses. For rules that are expected to have a
significant economic impact on a substantial number of small
businesses, Director Cordray then described how the CFPB is
getting input from the potentially impacted small businesses
through the SBAR panel process. Chairman Graves' opening
remarks noted that while CFPB has followed the steps that the
RFA requires, there appear to be holes in the agency's
assessment of the economic impact of the TILA-RESPA rule on
small business and very little discussion of how alternatives
may reduce the economic burdens.
USER FEES IN THE AVIATION INDUSTRY: TURBULENCE AHEAD
On September 12, 2012, the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on the negative financial and
regulatory impact of additional user fees on the aviation
industry. The hearing, titled ``User Fees in the Aviation
Industry: Turbulence Ahead,'' focused on the President's
proposal to institute a $100 per-flight user fee on aviation
operators.
The witnesses for the hearing were: Ms. Marian Epps, Chief
Financial Officer, Epps Aviation, Atlanta, GA, testifying on
behalf of the National Air Transportation Association; Ms.
Martha King, Co-Owner and Co-Chairman, King Schools, Inc., San
Diego, CA, testifying on behalf of the National Business
Aviation Association; Kenneth J. Button, Ph.D., Professor of
Public Policy and Director, Center for Transportation, Policy,
Operations and Logistics, George Mason University, Arlington,
VA; and Mr. Brad Pierce, President, Restaurant Equipment World,
Orlando, FL, testifying on behalf of the Aircraft Owners and
Pilots Association.
Ms. Epps began the testimony by stating that the proposed
user fee would decimate small businesses and organizations
around the country that depend on general aviation. She
continued that in a time when general aviation businesses are
looking to spur economic and job growth, the imposition of a
user fee would also be detrimental to the many states with
little or no commercial airline service where general aviation
plays an integral economic role. Ms. King testified that she
found it difficult to imagine how, when a critical American
industry is struggling the way general aviation is, people in
Washington could be contemplating an onerous, regressive and
administratively burdensome new per-flight tax. Dr. Button,
while expressing reservations about the President's $100 per-
flight fee, stated that he believed it would be better to
eliminate the current fuel tax system for general aviation and
move to a fee structure to maintain the aviation
infrastructure. Mr. Pierce concluded the hearing by stating
that a $100 per-flight user fee would be catastrophic to
general aviation, would not create jobs, depress economic
prosperity for the hundreds of thousands of businesses that
rely on general aviation to move their goods and is nothing
more than an additional regulatory burden and harassment to our
nation's small businesses and communities that rely on general
aviation as a means of livelihood.
SEQUESTRATION: THE THREAT TO SMALL BUSINESSES, JOBS, AND THE INDUSTRIAL
BASE
On September 20, 2012, the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building to receive
testimony examining the probable effects of sequestration on
small business contractors and the industrial base.
Specifically, the Committee focused on how small businesses are
likely to be affected if cuts to the federal workforce, prime
contracts, and subcontracts are not properly targeted. The
hearing also examined how these losses would affect employment
and the long-term health of our industrial base.
The witness on the first panel was The Honorable Mike
McCord, Principal Deputy Undersecretary of Defense
(Comptroller), Department of Defense, Washington, DC. The
witnesses on the second panel were: Stephen S. Fuller, Ph.D.,
Dwight Schar Faculty Chair, University Professor and Director,
Center for Regional Analysis, School of Public Policy, George
Mason University, Arlington, VA; Ms. ML Mackey, Chief Executive
Officer, Beacon Interactive Systems, Cambridge, MA, testifying
on behalf of the National Small Business Association; Ms.
Laurie Moncrieff, President, Adaptive Manufacturing Solutions,
Burton, MI, testifying on behalf of the National Defense
Industrial Association; and Mr. Mark Gross, Founder and CEO,
Oak Grove Technologies, Raleigh, NC.
The witnesses provided testimony on the various effects
that budget cuts under sequestration, particularly within the
Department of Defense (DoD), would have on small business
contractors and the defense industrial base. Mr. McCord
testified that while DoD is committed to contracting with
America's small firms, sequestration would have a significant
impact on the DoD's ability to do so as funding for all
contracts would be diminished. Dr. Fuller explained the
economic effects sequestration would have on small businesses,
noting that his research found that nationwide 956,181 jobs
will be lost at these companies alone. Ms. Mackey highlighted
that her small firm has saved the government over $40 million,
but is concerned that with the arbitrary cuts under
sequestration more contracts will be bundled creating less
opportunities for companies like hers and actually resulting in
higher costs for the government. Ms. Moncrieff testified that
sequestration would cause ``further degradation of the small
business base could result in the loss of sectors that are
costly to rebuild, if not impossible.'' Mr. Gross noted that
the threat of sequestration is leading to further uncertainty
among small businesses, therefore making them less likely to
invest and hire.
At the conclusion of the hearing, the Chairman indicated
that while significant budget cuts are necessary, the Committee
was committed to ensuring these cuts were targeted and would
not adversely affect small businesses.
PART B
Subcommittee Hearings
SMALL BUSINESS PROGRAMS CREATING INNOVATION AND JOBS
On April 7, 2011, the Subcommittee on Healthcare and
Technology of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for the purpose of
receiving testimony on draft legislation reauthorizing the
Small Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) Programs. The hearing, titled ``The
Creating Jobs Through Small Business Innovation Act of 2011,''
focused on improving the SBIR and STTR programs via the
legislation.
The witnesses for the hearing were: Mr. Glenn Norem,
Executive Chairman Totus Lighting Solutions, Inc. Lakeway TX;
Terry Brewer, Ph.D., President, Brewer Science, Inc., Rolla,
MO; Albert Link, Ph.D., Professor, Department of Economics,
University of North Carolina at Greensboro, Greensboro, NC; and
Scott Koenig, Ph.D., Chairman of the Board, Applied Genetics
Technology Corporation (AGTC) and CEO of MacroGenics, Inc.
Rockville, MD, testifying on behalf of the Biotechnology
Industry Organization.
Dr. Norem began the testimony by stating that the current
Small Business Administration (SBA) rules regarding the
participation of majority owned venture-backed small businesses
has handicapped his business' access to capital. He stated that
because of the rule, his company has had to make the choice
between participation in the SBIR program or accepting venture
capital investment. Dr. Brewer stressed the importance of the
SBIR program on emerging as well as established companies and
suggested that the SBIR program be a catalyst for American
manufacturing. Dr. Link detailed the findings of the National
Research Council's An Assessment of the Small Business
Innovation Research Program of which he was a part. Dr. Koenig
focused his testimony on the SBA's venture capital rule,
contrasting two unique therapies two different companies have
developed; one that succeeded (the company MedImmune and the
treatment called Synagis) prior to the SBA's 2003 decision to
limit the participation of venture-backed companies in the SBIR
program and one that has been shelved (the company AGTC and the
treatment for Pompe's disease) because the company had too much
venture capital support under the current rules.
THE EFFECT OF HIGH GAS PRICES ON SMALL BUSINESS
On April 14, 2011, the Subcommittee on Agriculture, Energy
and Trade of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for the purpose of
receiving testimony on ``Drilling for a Solution: Finding Ways
to Curtail the Crushing Effect of High Gas Prices on Small
Business.'' The hearing focused on the negative impacts of
rising fuel costs on small business and policies that should be
implemented to decrease the United States' dependence on
foreign oil and ease the cost burden on small businesses.
The witnesses were: Mr. Jim Ehrlich, Executive Director,
Colorado Potato Administrative Committee, Monte Vista, CO; Mr.
Rick Richter, Owner, Richter Aviation, Maxwell, CA, testifying
on behalf of the Agricultural Aviation Association; Mr. Dick
Pingel, Owner, Finally Trucking, Inc., Plover, WI, testifying
on behalf of the Owner-Operator Independent Drivers
Association, Inc.; and Robert Weiner, Ph.D., Professor of
International Business, Public Policy, Public Administration
and International Affairs, George Washington University,
Washington, DC.
The witnesses spoke about the impacts of increasing fuel
costs within their industries and other small businesses, and
agreed that the United States government should encourage
increases in domestic energy development to reduce dependency
on foreign sources and decrease fuel costs. Dr. Weiner stated,
``[t]o foster investment and future production [of oil] it is
important to establish and implement clear, stable policy in
the areas that affect petroleum the most--taxes and
regulation.'' Mr. Ehrlich noted that ``for every $0.10 increase
in gas prices there is a net loss of $5 billion dollars to the
United States economy,'' and pointed to the fact that the
``total energy cost of an irrigated potato crop in the San Luis
valley can be as great as fifty percent of total production.''
Mr. Pingel testified that despite the fact that most owner-
operators earn less than $40,000 a year in income, ``each time
the price of a gallon of diesel fuel increases by a nickel, a
trucker's annual costs increase by $1,000.'' He also advocated
fuel-efficiency driver training in lieu of costly government
regulations. Finally, Mr. Richter encouraged Congress to
prevent the EPA from promulgating new regulations on avgas. If
these standards are put into place, it would effectively ground
over 50 percent of agricultural aircraft, as there are no
acceptable substitutes for piston-powered engines.
SMALL BUSINESS SIZE STANDARDS REGULATION
On May 5, 2011, the Subcommittee on Economic Growth, Tax
and Capital Access of the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building to receive
testimony on the U.S. Small Business Administration's (SBA)
proposed rule, ``Small Business Size Standards: Professional,
Scientific and Technical Services,'' 74 Fed. Reg. 14323 (March
16, 2011). The proposed rule addresses industries within North
American Industry Classification System (NAICS) Sector 54,
Professional, Scientific and Technical Services, and one
industry in NAICS Sector 81, Other Services. It would increase
the small business size standards for 35 industries and one
sub-industry, reduce the number of available size standards
from 41 receipt and employee based standards to 16 standards,
and bundle NAICS codes together to form common industry group
size standards.
The witnesses were: Walter J. Hainsfurther, FAIA,
President, Kurtz Associates Architects of Des Plaines, IL,
testifying on behalf of the American Institute of Architects
(AIA); John Woods, P.E., Partner, Wood Peacock Engineering
Consultants of Alexandria, VA, testifying on behalf of the
American Council of Engineering Companies (ACEC); Mr. Roger
Jordan, Vice President, Professional Services Council (PSC) of
Arlington, VA; and Odysseus Lanier, CPA, Partner, McConnell
Jones Lanier & Murphy LLP of Houston, TX, testifying on behalf
of the American Institute of Certified Public Accountants
(AICPA).
The witnesses agreed growth in the size standards is
necessary to reflect economic conditions, but each disagreed
with changes proposed by SBA. Mr. Hainsfurther testified that
raising the standard for architectural firms from $4.5 million
from $19 million, due to the use of common group size
standards, would result in over 97% of architectural firms
qualifying as small businesses, and stated that an employee
based standard would better represent his industry. Mr. Woods
testified that ACEC needed more time to respond to the SBA
proposal, since the proposed rule would result in ``more than
90% of the nation's engineering industry . . . [being]
classified as small business[es].'' Mr. Jordan protested the
use of common size standards when those standards
``eliminate[d] legitimate small businesses from being able to
qualify.'' Mr. Lanier testified that SBA was not using the best
industry data, and that the methodology did not address whether
a firm was dominant in its field.
At the hearing's close, Chairman Walsh said he plans to
submit the hearing record to SBA for inclusion in the
administrative record, and to request that SBA extend the
comment period on the rulemaking.
ENVIRONMENTAL PROTECTION AGENCY REGULATIONS
On May 12, 2011, the Subcommittee on Oversight,
Investigations and Regulations of the Committee on Small
Business met in Room 2360 of the Rayburn House Office Building
for the purpose of receiving testimony on ``Green Isn't Always
Gold: Are EPA Regulations Stifling Small Business?'' The
hearing focused on the negative impacts of the United States
Environmental Protection Agency (EPA) regulations on small
businesses.
The witnesses were: Mr. Glenn Johnston, Vice President of
Regulatory Affairs, Gevo, Inc., Englewood, CO; Mr. John Ward,
Chairman, Citizens for Recycling First, Broomfield, CO; and Mr.
Bradford Muller, Vice President of Marketing & Corporate
Communications, Charlotte Pipe and Foundry Company, Charlotte,
NC, testifying on behalf of the American Foundry Society.
The witnesses spoke about the impacts of various EPA
proposed and final rules and how they negatively impact their
industries, most specifically as they relate to the Clean Air
Act and the Resources Conservation and Recovery Act. Witnesses
also spoke about how EPA has neglected to take into account the
Regulatory Flexibility Act when promulgating regulations,
despite significant direct and indirect burdens experienced by
small businesses. In his remarks, Mr. Muller stated, ``on the
question of whether the EPA Regulations are harming small
businesses . . . . [t]he answer is unequivocally yes.''
Mr. Ward, a former member of the National Coal Council and
American Coal Council, testified that between 1999 and 2009,
138 million tons of greenhouse gas emissions were decreased
through the use of coal fly ash in concrete products, and that
designating these byproducts as hazardous waste would only
serve to increase waste and pollutant emissions.
Mr. Johnston indicated that biofuels with broad market
applications as a solvent and a gasoline blendstock cannot
compete with ethanol due to EPA policies. ``Gevo and the
Advanced Biofuels industry in general believe that the EPA
should review its regulatory regime and to the extent possible
should assure that biofuels other than ethanol have equal and
unfettered access to the market,'' he said.
GOVERNMENT CONTRACTORS' TAX COMPLIANCE
On May 26, 2011, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building to receive testimony on
the effects of implementing Section 511 of the Tax Increase
Prevention and Reconciliation Act of 2005, Pub.L. No. 109-222.
As revised and implemented, the provision requires that
payments by federal, state and local governmental entities for
goods and services made after December 31, 2013 be subject to
3% income tax withholding in order to address the tax gap.
The first panel witness was: The Hon. Wally Herger (R-CA),
United States House of Representatives, Washington, DC. The
second panel consisted of Mr. Brian George, Deputy Director,
Office of Cost, Pricing & Finance, U.S. Department of Defense
(DoD), accompanied by Dave McDermott, Director, Standards and
Compliance, Defense Finance and Accounting Service, DoD, and
The Hon. Curtis M. Loftis, Jr., Treasurer, State of South
Carolina. The third panel witnesses were: Mr. Mike Murphy,
President, Turner Murphy Construction of Rock Hill, SC,
testifying on behalf of the Associated General Contractors; Mr.
Ian Frost, Principal, EEE Consulting, Inc. of Mechanicsville,
VA, testifying on behalf of the American Council of Engineering
Companies; and Mr. James M. Gaffney, Vice President, Goshen
Mechanical Inc. of Malvern, PA, testifying on behalf of the
Quality Construction Alliance; and Kara M. Sacilotto, Esq.,
Partner, Wiley Rein LLP, Washington DC. Over thirty additional
groups submitted testimony for the record.
Congressman Herger expressed his support for repeal of
Section 511, and encouraged passage of H.R. 674, which would
eliminate the 3% withholding provision.
Messrs. George and McDermott provided information regarding
the 2008 DoD study which found that implementation of Section
511 would cost DoD $17 billion and deny the Department full
small business participation, competition, and innovation. Mr.
Loftis denounced the provision as an unfunded mandate that
would create unnecessary budget stress on state and local
governments while simultaneously harming small businesses.
Each of the small business witnesses testified that the 3%
withholding provisions exceed their profit margins and thereby
prevent them from expanding or creating jobs. Ms. Sacilotto, a
government contracts attorney, explained that the unintended
consequences costs of the Section 511 on the procurement system
outweighed any recaptured revenue.
Chairman Mulvaney concluded the hearing by promising to
work with the Committee on Ways and Means to repeal Section
511. A copy of the hearing transcript will be sent to the
Committee on Ways and Means once it is available.
HEALTH INFORMATION TECHNOLOGY IMPLEMENTATION AND REGULATION
On June 2, 2011, the Subcommittee on Healthcare and
Technology of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for the purpose of a
hearing entitled, ``Not What the Doctor Ordered: Health IT
Barriers for Small Medical Practices.'' The hearing focused on
the implementation of health IT by small physician practices,
barriers that small practices have encountered and possible
solutions to those barriers.
The witnesses were: Farzad Mostashari, M.D., National
Coordinator for Health Information Technology, Department of
Health and Human Services, Washington DC; Ms. Karen Trudel,
Acting Director, Office of E-Health Standards and Services,
Centers for Medicare and Medicaid Services (CMS), Baltimore,
MD; Sasha Kramer, M.D., Olympia, WA, testifying on behalf of
the American Dermatological Society; Denise Elliott, D.P.M.,
Marrero, LA, testifying on behalf of the American Podiatric
Medical Association; Mr. Andrew Slavitt, Chief Executive
Officer, OptimumInsight, Eden Prairie, MN; and David L. Baumer,
Ph.D., Professor of Law and Technology, North Carolina State
University, Raleigh, NC.
Dr. Mostashari testified that the Regional Extension
Centers offer training and technical assistance to small
practices that are working toward meaningful use of Electronic
Health Records (EHR). Ms. Trudel said CMS and the states have
made incentive payments to 1139 eligible professionals who have
successfully adopted EHRs.
The second panel's witnesses agreed that health information
technology can help to boost a medical practice's quality of
care, but that barriers can prevent smaller practices from
adopting it. Dr. Elliott noted that more than 65% of
podiatrists practice in one or two person groups, and requiring
them to implement electronic health records for Medicare is an
undue financial burden. Dr. Kramer purchased a system by a
company that was acquired by another company whose software is
not compatible. Now she is facing the purchase of a new system.
Mr. Slavitt said the purchase and design of technology have
taken a back burner to all of the compliance reporting
requirements needed to qualify for federal incentive payments.
Dr. Baumer testified that the efficiency gains are offset by
the possible increased risks to the privacy of medical records
and recommended legal safe harbors for small firms to protect
them from lawsuits.
DEPARTMENT OF TRANSPORTATION REGULATION OF TRUCKING
On June 14, 2011, the House Committee on Small Business'
Subcommittee on Oversight, Investigations and Regulations met
in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on ``Do Not Enter: How Proposed
Hours of Service Trucking Rules are a Dead End for Small
Businesses.'' The hearing focused on the Federal Motor Carrier
Safety Administration's proposed rule on Hours of Service for
property-carrying truckers.
The witnesses were: Mr. Paul James, President, Rex Oil
Company, Denver, CO, testifying on behalf of the Petroleum
Marketers Association of America; Mr. James Burg, Owner, James
Burg Trucking, Warren, MI, testifying on behalf of the American
Trucking Association; Mr. J.D. Morrissette, President,
Interstate Van Line Operations, Inc., Springfield, VA,
testifying on behalf of the American Moving and Storage
Association; and Mr. Rusty Rader, Co-Owner, J.J. Kennedy, Inc.,
Fombell, PA, testifying on behalf of the National Ready-Mixed
Concrete Association.
The witnesses discussed how this proposed regulation would
harm their industries by reducing allowed duty times for
property-carrying trucks, hindering the ability for owner-
operators and other small businesses to transport goods
nationwide. In his remarks, Mr. Burg stated, ``[t]hese changes,
if finalized, would have a profoundly negative impact on small
businesses, would restrict productivity, and would result in
greater congestion and increased emissions. These impacts are
significant since there are some 500,000 trucking companies in
the United States and 99 percent of these companies are small
businesses.'' Mr. Morrissette spoke to the complexities of the
proposed rule: ``[t]he proposed hours of service changes are
complicated, difficult to understand and difficult for the
customer to appreciate . . . the current rules should continue
to apply.'' Mr. Rader testified to the challenges that would be
created as a result of changed restart provisions: ``[b]y
mandating a driver's off duty time to include at least two
consecutive periods of midnight to 6 a.m. reduces the number of
hours available to meet construction and delivery schedules to
an unacceptable level. Not every work day takes place during
daylight hours, making this proposed change overly
restrictive.'' Mr. James said, ``[w]ith fewer hours to drive
each day, any companies would be forced to hire additional
drivers or delay deliveries to the following day . . . [t]he
daily reduction in driving hours would thus decrease overall
safety by putting less experienced drivers on the road.''
NEW FINANCIAL SERVICE REGULATION AND IMPACT ON SMALL BUSINESS
On June 16, 2011, the Subcommittee on Economic Growth, Tax
and Capital Access of the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of a hearing titled ``The Dodd-Frank Act: Impact on Small
Business Lending.'' The hearing examined the regulatory
structure of financial institutions including the new
requirements placed on them by the Dodd-Frank Act.
The witnesses were: Mr. Thomas Boyle, Vice Chairman, State
Bank of Countryside, LaGrange, IL, testifying on behalf of the
American Bankers Association; Mr. Mark Sekula, Executive Vice
President, Randolph-Brooks Federal Credit Union, San Antonio,
TX, testifying on behalf of the National Association of Federal
Credit Unions; Mr. William Daley, Legislation and Policy
Director, Main Street Alliance, Washington, DC; and Mr. Greg
Ohlendorf, President and CEO, First Community Bank and Trust,
Beecher, IL, testifying on behalf of the Independent Community
Bankers of America.
Witnesses spoke about the impact of the Dodd-Frank Wall
Street Reform and Consumer Protection Act and offered solutions
to minimize its burdens. Mr. Boyle stated that community banks
understand the financial needs of local community and is
concerned that the community banking model will collapse under
the massive weight of new rules and regulations. Mr. Sekula,
testified that``[w]ith a slew of new regulation emerging from
the Dodd-Frank Act, such relief from unnecessary or outdated
regulation is needed now more than ever by credit unions.'' Mr.
Daley testified that the members of his organization were
concerned more about the over health of the economy and the
impact on their community, then they were about over
regulations. Mr. Ohlendorf, testified that ``[t]he stakes were
raised sharply after the financial crisis, but I believe many
examiners have overreacted and now the pendulum has swung too
far in the direction of over-regulation.''
INSOURCING OF FEDERAL PROCUREMENTS AND ITS EFFECTS ON SMALL BUSINESSES
On June 23, 2011, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building to receive testimony on
the implementation of the Administration's insourcing policies,
and the effect of these policies on small businesses.
Specifically, five issues were discussed: the lack of
transparency in the insourcing process; inconsistencies in the
cost studies used to justify insourcing; the prohibition on
public-private competitions when insourcing; the lack of
standing for small businesses that wish to challenge agency
insourcing decision; and the role of the Small Business
Administration in insourcing.
The witnesses were Ms. Dawn L. Hamilton, President and
Chief Executive Officer, Security Assistance Corporation,
Arlington, VA; Mr. Bryant S. Banes, Managing Shareholder, Neel,
Hooper & Banes, P.C., Houston, TX; Ms. Bonnie C. Carroll,
President, Information International Associates, Oak Ridge, TN;
and Ms. Jacque Simon, Public Policy Director, American
Federation of Government Employees, Washington, DC.
Ms. Hamilton, who had a contract insourced by the United
States Coast Guard, provided testimony explaining the analysis
used to insource her company's contract was irrevocably flawed,
as it began with the assertion that ``that the cost of a
contractor is automatically higher than a government employee
and that the insourcing would have no adverse impacts to other
organizations.'' Ms. Carroll, who had contracts insourced by
the United States Air Force and the Department of Labor,
testified that ``decisions to insource are driven more by
arbitrary budget and manpower boogies than by the objectives of
enhancing the government's workforce capabilities or by true
cost savings.'' Mr. Banes provided testimony in his capacity as
a government contracts expert. Specifically, he addressed the
findings of the United States Court of Federal Claim in the
decision of Hallmark-Phoenix 3, LLC v. United States, 99 Fed.
Cl. 65 (2011) where the court determined that it lacked
jurisdiction to consider insourcing decisions under statutes
that give the Court of Federal Claims the authority to hear
disputes over the award of federal government contracts. Ms.
Simon focused on ``the importance of insourcing and reducing
the Federal government's expensive and risky overreliance on
service contractors.''
Chairman Mulvaney stated that the Committee would consider
legislative actions in response to the testimony received.
REGULATORY BURDENS ON LIVESTOCK PRODUCERS--NEW RULES FOR COMPLYING WITH
THE PACKERS AND STOCKYARDS ACT
On July 7, 2011, the Subcommittee on Agriculture, Energy
and Trade of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for the purpose of
receiving testimony on ``Regulation Gone Awry: How USDA's
Proposed GIPSA Rule Hurts America's Small Businesses.'' The
hearing focused on USDA's Proposed Grain Inspection, Packers
and Stockyard Administration (GIPSA) rule and the changes on
livestock marketing practices.
The witness for the first panel was The Hon. Edward Avalos,
Under Secretary for Marketing and Regulatory Programs, United
States Department of Agriculture, Washington, DC. The witnesses
on the second panel were: Mr. Robbie LeValley, Hotchkiss, CO,
testifying on behalf of the Colorado Cattlemen's Association
and the National Cattlemen's Beef Association; Mr. Gary
Malenke, CEO, Natural Food Holdings, Sioux City, IA, testifying
on behalf of the National Meat Association; Mr. Joel
Bradenberger, President, National Turkey Federation,
Washington, DC; and Mr. Bob Junk, Local Economy Manager, Fay
Penn Economic Development Council, Uniontown, PA.
At the hearing, Undersecretary Avalos explained that the
USDA was still reviewing the 60,000+ comments they received in
response to the rule. He assured the Cmmittee that the Agency
was taking all of the comments seriously and with a heavy
heart. The Undersecretary refused to answer any specific
questions about where USDA was in the rule making process but
did tell the Committee that they expected a final rule
``soon''. All of the small business owners on the second panel,
minus Mr. Junk, testified that the proposed GIPSA rule was bad
for their business and that some of the provisions in the rule
would set back the livestock industry 30 years. Mr. Junk
testified that the rule was necessary and it stemmed from
language in the 2008 Farm Bill.
At the hearing's close, Chairman Tipton encouraged USDA to
take into consideration all of the testimony and questioning
that they heard during the Committee as they work through the
economic analysis. Mr. Tipton also urged the USDA to revise
their analysis on small businesses as part of a more detailed
economic analysis and then publish the new Regulatory
Flexibility Analysis for comment to ensure small businesses can
inform the Agency on its effect to their business. After the
hearing, Chairman Tipton sent a letter to Undersecretary Avalos
on July 21, 2011 with five follow up questions.
ADVERSE IMPACT OF HEALTHCARE LAW ON SMALL BUSINESSES THAT CURRENTLY
OFFER HEALTH INSURANCE
On July 28, 2011, the Subcommittee on Healthcare and
Technology of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for the purpose of holding
a hearing titled, ``Small Businesses and PPACA: If They Like
Their Coverage, Can They Keep It?'' The hearing focused on
whether small firms can keep their current health insurance
under the Patient Protection and Affordable Care Act.
The witnesses were: Mr. Steven Larsen, Deputy Administrator
and Director, Center for Consumer Information and Insurance
Oversight, Centers for Medicare and Medicaid Services,
Department of Health and Human Services, Washington, DC;
Douglas Holtz-Eakin, Ph.D., President, American Action Forum,
Washington, DC; Mr. William Dennis, Research Fellow, National
Federation of Independent Business, Washington, DC; Mr. Brian
Vaughn, President, Nearly Famous, Inc., Douglas, GA, testifying
on behalf of the U.S. Chamber of Commerce; and Timothy
Stoltzfus Jost, Esq., Robert Willett Family Professor of Law,
Washington and Lee University School of Law, Lexington, VA.
Mr. Larsen testified that the Patient Protection and
Affordable Care Act (PPACA) contains a number of provisions
that will help close the gap between small and large business'
ability to offer health insurance to their employees. Dr.
Holtz-Eakin said PPACA raises the overall cost of operating a
small business and undermines job growth. Mr. Dennis reported
that NFIB's recent survey found by overwhelming margins, small
employers with some knowledge of PPACA think it will not reduce
the rate of health insurance cost increases, will not reduce
the administrative burden, will increase taxes and will add to
the federal deficit. Mr. Vaughn testified that his plan has
been to expand and open a new store by reinvesting profits back
into his business, but he is instead worried that everything he
has worked for will be wiped out by the new law. Professor Jost
said that it is not possible to predict exactly how employers
will react to all of the cross-cutting incentives, and that the
effect of PPACA on employer-sponsored insurance is only one of
many considerations that must be weighted in evaluating health
care reform.
REGULATORY BURDENS OF THE NEW CONSUMER FINANCIAL PROTECTION BUREAU
On July 28, 2011, the Subcommittee on Investigations,
Oversight and Regulations of the Committee on Small Business
met in Room 2360 of the Rayburn House Office Building for the
purpose of a hearing titled ``Open for Business: The Impact of
the CFPB on Small Business.'' The hearing focused on the new
Consumer Financial Protection Bureau (CFPB) created by the Wall
Street Reform and Consumer Protection Act and its impact on
small business.
The only witness on Panel I was Mr. Dan Sokolov, Deputy
Associate Director for Research, Markets and Regulations,
Consumer Financial Protection Bureau, Washington, DC. The
witnesses on Panel II were: Mr. Jess Sharp, Executive Director,
Center for Capital Markets Competitiveness, U.S. Chamber of
Commerce, Washington, DC; Mr. Terry Jones, Chairman,
Legislative and Regulatory Affairs Committee, Colorado Mortgage
Lenders Association, Denver, CO; Mr. Daniel Fleming, President,
Fleming NationaLease, Springfield, VA, testifying on behalf of
the Truck Renting and Leasing Association; and Adam Levitin,
Esq., Professor of Law, Georgetown University Law Center,
Washington, DC.
Mr. Sokolov testified that the CFPB is working to minimize
the regulatory burden on small business by following procedural
safeguards in the rulemaking process including compliance with
the Small Business Regulatory Enforcement Fairness Act. The
CFPB is focused on consumer transactions and does not have
authority to regulate small business credit. Mr. Sharp
testified that large numbers of small businesses turn to
consumer financial products to fund their business because they
are very affordable and that any restriction on use of those
products could have a detrimental impact on small business. Mr.
Jones testified that CFPB is already working on several
regulations that focus on the mortgage lending industry and he
hopes the CFPB does not turn into a ``super regulator'' for the
mortgage industry. Mr. Fleming testified that the new small
business data collection requirements will force him spend
money on regulatory compliance, rather than on growing his
business. Professor Levitin testified that the CFPB is good for
consumers and will have only tangential impact small business
lending.
SMALL BUSINESS ACCESS TO CAPITAL
On August 25, 2011, the Subcommittee on Oversight,
Investigations and Regulations of the Committee on Small
Business met in Greenwood Village, Colorado for the purpose
conducting a hearing titled ``Small Business Committee Field
Hearing in Colorado: Local Perspectives on the State of Small
Business Lending.'' This hearing focused on the regulatory
burdens to small business lending and provided attendees the
opportunity to hear from the Small Business Administration
(SBA) about the government backed lending programs available to
help small businesses access capital.
The witnesses were: Mr. Steve Smits, Associate
Administrator, Office of Capital Access, United States Small
Business Administration, Washington, DC; Mr. Jay Davidson,
Chairman & CEO, First American State Bank, Greenwood, CO; Mr.
David Brown, President Southeast Denver Centennialbank,
Centennial, CO; and Mr. Jeff Wasden, Owner, PROFormance
Apparel, Littleton, CO.
Associate Administrator Smits testified that SBA lending
programs are providing access to capital to small businesses
and that could not otherwise obtain a loan without assistance.
Mr. Davidson testified that the economic recovery is slower
than it should be because regulators are requiring banks to
raise additional capital. Mr. Brown testified that all of the
new laws will lead to new regulation and this has been
happening at a much quicker pace than at any time in the past.
Further, each new regulation will be very expensive for banks
to understand and implement. Mr. Wasden testified that business
owners need to be focused on the day-to-day operations of their
business and not on government policies. He believes that ten
percent of businesses are thriving, twenty percent are seeing a
slight increase, thirty percent are holding even, and the
balance are struggling to stay in business.
INCREASING PROCUREMENT OPPORTUNITIES THROUGH IMPROVEMENTS TO SBA
PROCUREMENT ASSISTANCE PROGRAMS
On September 15, 2011, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for a hearing titled
``Helping Small Businesses Compete: Challenges within Programs
Designed to Assist Small Contractors.'' The hearing addressed
recent Government Accountability Office (GAO) reports on small
business contracting assistance programs. The reports were: (1)
GAO-11-548R, Mentor-Protege Programs Have Policies That Aim to
Benefit Participants but Do Not Require Postagreement Tracking;
(2) GAO-11-549R, Improvements Needed to Help Ensure Reliability
of SBA's Performance Data on Procurement Center
Representatives; and (3) GAO-11-418, Small Business
Contracting: Action Needed by Those Agencies Whose Advocates Do
Not Report to Agency Heads as Required.
The witnesses were: Mr. Joseph G. Jordan, Associate
Administrator of Government Contracting and Business
Development, United States Small Business Administration (SBA),
Washington, DC; Ms. Jiyoung Park, Associate Administrator,
Office of Small Business Utilization, United States General
Services Administration, Washington, DC; and Mr. William B.
Shear, Director, Financial Markets and Community Investment,
GAO, Washington, DC.
The witnesses provided testimony on challenges facing the
SBA's Procurement Center Representative (PCR) program, the
individual agency Offices of Small and Disadvantaged Business
Utilization (OSDBU), and the thirteen Mentor-Protege programs
currently available. Mr. Shear discussed GAO's finding that the
Departments of Agriculture, Commerce, Justice, Interior, State,
and the Treasury, and at the Social Security Administration
were not complying with Section 15(k)(3) of the Small Business
Act, which requires that the OSDBU Director ``report directly
to the head of such agency or to the deputy.'' Furthermore, he
explained that most Mentor-Protege programs do not adequately
measure outcomes, and provided insight into the challenges
facing the SBA's PCRs. Mr. Jordan testified that SBA recently
reviewed the PCR program and metrics, and is ``currently
reviewing the results of this analysis and working to develop
and implement an improved system, along with revised standard
operating procedures and tools.'' Ms. Park explained GSA's
Mentor-Protege, and that it had produced results by increasing
both prime and subcontract awards to participants as well as
creating ``132 new jobs as a direct result of participation in
the program.''
At the conclusion of the hearing, Chairman Mulvaney stated
the Subcommittee would continue to work towards holding those
government agencies accountable that refuse to comply with the
requirements of the Small Business Act, and towards improving
the small business contracting assistance programs.
REGULATORY BARRIERS TO ENERGY PRODUCTION
On September 19, 2011, the Subcommittee on Agriculture,
Energy and Trade met in the City Hall Auditorium, Grand
Junction, CO for a hearing titled ``Are Excessive Energy
Regulations and Policies Limiting Energy Independence, Killing
Jobs and Increasing Prices for Consumers?''. The hearing
examined burdensome federal regulations and policies on the
energy industry and their impact on small businesses, jobs, and
consumer prices. Specifically, the issues addressed at the
hearing included: the proposed regulation of coal combustion
residuals under the Resource Conservation and Recovery Act as a
hazardous waste; proposed rule to limit air certain toxics
emitted from coal-fired powerplants; potential rules proffered
by EPA to limit emission of greenhouse gases; and regulations
to address hydraulic fracking in the natural gas extraction
industry.
Witnesses on Panel I were: Mr. James Martin, Regional
Administrator, Environmental Protection Agency, Denver, CO; and
Ms. Helen Hankins, Colorado State Director, Bureau of Land
Management (BLM), United States Department of Interior,
Lakewood, CO. The second panel consisted of the following
witnesses: Mr. David White, Commissioner, Montrose County,
Montrose, CO; Mr. David Ludlam, Executive Director, West Slope
Oil & Gas Association, Grand Junction, CO; Ms. Jennifer Bredt,
Development Manger, Renewable Energy Systems Americas,
Broomfield, CO; Mr. James Kiger, Environmental Manager, Oxbow
Mining, LLC, Somerset, CO, testifying on behalf of the Colorado
Mining Association; Mr. Richard Welle, General Manager, White
River Electric Association, Inc., Meeker, CO.
Mr. Martin testified that EPA was still evaluating various
regulations but did not believe that any final rules would
impose significant costs on small businesses involved in energy
extraction or production. Ms. Hankins stated that BLM is, by
statute, committed to multiple use of federal lands and manage
such lands to permit responsible use of public lands for energy
and mineral development. Mr. White testified about the
regulatory barriers imposed by EPA and BLM to siting energy
production (both extractive and renewable) facilities in
Montrose County, Colorado. Mr. Ludlam stated that the
Department of Interior blocked a number of oil and gas drilling
operations in western Colorado while at the same fracking for
extraction of natural gas may be subject to stricter EPA
regulation. Ms. Bredt testified about the impediments imposed
by the Department of Interior to the development of wind energy
projects. Mr. Kiger stated that in thirty plus years of
``working in the Colorado coal mining industry . . . I have
never before seen such a concerted emphasis by numerous federal
agencies to create additional head winds for the coal industry.
. . .'' Mr. Welle testified that his customers (who also are
the owners since White River is a rural electric cooperative)
support the use of clean coal and renewable energy but cannot
afford rate increases that harm industry and punish consumers.
SUBCONTRACTING OPPORTUNITIES FOR SMALL BUSINESS
On October 6, 2011, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for a hearing titled
``Subpar Subcontracting: Challenges for Small Business
Contractors.'' Specifically, the problems discussed were:
problems with the limitation on subcontracting requirements;
noncompliance with subcontracting plans; and duplicative
government contracting systems which fail to support
enforcement or compliance.
The witnesses were: Mr. Joseph G. Jordan, Associate
Administrator of Government Contracting and Business
Development, United States Small Business Administration (SBA),
Washington, DC; Ms. Mary L. Kendall, Acting Inspector General,
United States Department of the Interior, Washington, DC; Ms.
Jenifer Bisceglie, President, Interos, McLean, VA, testifying
on behalf of Women Impacting Public Policy; and Ms. Jamie
Borromeo, President, The E & J Commission, LLC, Washington, DC.
Mr. Jordan testified that SBA is working to ensure
compliance with the limitation on subcontracting requirements,
and is developing and maintaining tools, systems, and resources
needed to monitor and track subcontracting achievements. Acting
Inspector General Kendall testified that confusion as to the
division of responsibilities between SBA and contracting agency
personnel contributes to enforcement and compliance issues.
The private sector witnesses agreed that small businesses
are harmed by failure to enforce the subcontracting rules. Ms.
Bisceglie testified that large prime contractors do not honor
their subcontracting plans and the government fails to
evaluate, monitor, and document compliance. Ms. Bisceglie
recommended that the Subcommittee consider revising the
limitation on subcontracting provisions to make them price-
based rather than cost-based, and to encourage small business
teaming. She further recommended increased enforcement and
transparency of subcontracting plans. Ms. Borromeo concurred,
and also recommended the following steps to prohibit fraudulent
contracting practices: (1) ensure government contracting
professionals are complying with rules and systems in place to
ensure prime contractors are performing well on existing
contracts and subcontracting the proper amount to small
businesses; and (2) ensure diligent and proper market research
performed by program offices.
Chairman Mulvaney asked the witnesses to work with the
Subcommittee on ideas to improve large business compliance with
subcontracting plans, and to improve the limitation on
subcontracting requirements.
TECHNICAL ASSISTANCE PROGRAMS FOR NEW ENTREPRENEURS
On October 17, 2011, the Subcommittee on Contracting and
the Workforce of the Committee on Small Business met for a
field hearing in Pasadena, CA titled ``Land of Opportunity:
Pursuing the Entrepreneurial American Dream.'' The hearing
examined the resources available to new legal immigrants
interested in becoming entrepreneurs.
Witnesses at the hearing were: Mr. Manuel Martinez,
President, Greater Los Angeles SCORE, Los Angeles, CA; Ms.
America Tang, President and CEO, Ace Fence Co., La Puente, CA;
Mr. Jesse Torres, President & CEO, Pan American Bank, Los
Angeles, CA; and Ms. Yusa Chang, COO, of Pacific Asian
Consortium in Employment (PACE), Los Angeles, CA.
Witnesses discussed the training and services new legal
immigrants need to become successful entrepreneurs. The hearing
also focused on the resources that are currently available to
help prospective business owners and whether additional
outreach methods should be considered. Mr. Martinez testified
about his experience as a volunteer counselor for SCORE and
stated that the business owner is the only one who can truly
make a business successful. Ms. Tang testified that Small
Business Administration (SBA) programs can help her business,
but the SBA needs to do a better job of letting people know of
new programs that assist small business. Mr. Torres testified
that his bank does not use SBA loan products because the rules
for participation are too stringent and it would require too
much of an investment to train his lending officers on how to
work within SBA strictures. Ms. Chang provided several
anecdotes about businesses that PACE has counseled and what
services they could have used to be successful.
REDUCING FRAUD IN FEDERAL PROCUREMENT PROGRAMS
On October 27, 2011, the Subcommittee on Investigations,
Oversight and Regulations of the Committee on Small Business
met in Room 2360 of the Rayburn House Office Building to hold a
hearing titled ``Misrepresentation and Fraud: Bad Actor in the
Small Business Procurement Programs.'' The hearing focused on
problems in the Small Business Prime Contract Program,
Historically Underutilized Business Zone (HUBZone) Small
Business program, Women-Owned Small Business program, Service-
Disabled Veteran-Owned Small Business Program, and Small
Disadvantaged Business program.
The witnesses were: The Hon. Peggy E. Gustafson, Inspector
General, United States Small Business Administration,
Washington, DC; and The Hon. Brian D. Miller, Inspector
General, General Services Administration, Washington, DC.
The witnesses provided examples of the types of fraud they
have encountered in the small business procurement programs,
including misrepresentations of size, program specific
misrepresentations, pass-through contracts, violations of the
non-manufacturer rule, incorrect assignment of size standards
to contracts, and recurring acts of bribery and kickbacks.
Inspectors General Miller and Gustafson stated that these
fraudulent activities harm legitimate small businesses by
denying them opportunities; the government, because statutory
procurement goals are skewed and program reputation suffers;
and the American people, as small businesses are not able to
create more jobs. Finally, the witnesses explained that the
current remedies available through the procurement process,
False Claims Act, Program Fraud Civil Remedies Act, and the
Small Business Jobs Act, still leave gaps in enforcement.
Specifically, Inspector General Miller indicated that since
small business fraud cases usually cost more to prosecute than
they collect in damages, the Department of Justice is reluctant
to use scarce resources to prosecute these cases, which results
in agency Inspectors General devoting investigative resources
elsewhere, which in turn results in mediocre enforcement by
agency contracting personnel, ultimately leaving legitimate
small businesses and taxpayers unprotected.
At the conclusion of the hearing, Chairman Coffman asked
the Inspectors General to work with the Subcommittee on ways to
deter and punish bad actors, examine the sufficiency of the
current remedies and whether there are sufficient monitoring
mechanisms in place, or how these should be strengthened to
detect fraud and misrepresentation in the small business
procurement programs.
TAX REFORM FOR SMALL BUSINESSES
On November 3, 2011, the Subcommittee on Economic Growth,
Tax and Capital Access of the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on ``Pro-Growth Tax Policy: Why
Small Businesses Need Individual Reform.'' The hearing focused
on the importance of tax policies to our Nation's small
businesses, our best job creators.
The witnesses were: Mr. Robert Carroll, Principal, Ernst &
Young, Washington, DC; Mr. Gary Marowske, President & CEO,
Flame Furnace, Heating, Cooling, Plumbing & Electrical, Warren,
MI, testifying on behalf of the Air Conditioning Contractors of
America; Mr. William R. Smith, President & CEO, Termax
Corporation, Lake Zurich, IL, testifying on behalf of the
Precision Metalforming Association; and Mr. Stephen Capp,
President & CEO, Laserage Technology Corporation, Waukegan, IL,
testifying on behalf of the National Federation of Independent
Business.
Mr. Carroll estimated that 95% of U.S. businesses are pass-
through entities--sole proprietorships, LLCs, partnerships or S
corporations. He opined that if Congress enacts only corporate
tax reform, and not individual tax reform, the income taxes
paid by owners of pass-through businesses could increase, on
average, by 8%, or $27 billion annually from 2010-2014. Mr.
Smith testified that ``[d]ue to our current U.S. tax code, we
are taxed on income we do not take out of the company, but
leave in the business to reinvest. This means we have fewer
resources to put toward hiring, training and buying new
machines. We need a comprehensive approach that addresses
corporate, pass-through businesses and individual tax rates,
deductions and credits.'' Mr. Marowske said ``I wholeheartedly
agree that tax reform must address individual rates because of
their impact on small businesses. Not everyone understands that
sole proprietors, partners and S corporation shareholders pay
taxes on business income through the individual income tax rate
schedules.'' Mr. Capp testified that ``[a]t the very least, the
tax rate paid by pass-through small businesses should be the
same rate that applies to C corps.''
At the hearing's close, Chairman Walsh said he plans to
send a letter to the Joint Select Committee on Deficit
Reduction asking that the Committee consider the concerns of
small business owners when they evaluate approaches to tax
reform.
SMALL BUSINESS CONTRACTING OPPORTUNITIES AT THE DEPARTMENT OF DEFENSE
On November 8, 2011, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Sumter,
South Carolina for the purpose of receiving testimony on small
business contracting issues at the Department of Defense. The
hearing, titled ``Examining the Barriers for Small Business
Contracting at the DOD,'' focused on examining the specific
process by which the Navy determined the contract for the 3rd
Army headquarters building construction on Shaw Air Force base.
Additionally, testimony was delivered on the difficulties small
businesses face when entering the federal contracting arena
along with their potential solutions.
The witnesses for the hearing were: Mr. Robert Griffin,
Assistant Commander for Acquisition, United States Navy
Facilities Engineering Command, Washington, DC; Ms. Jackie
Robinson-Burnette, Associate Director of Small Business
Programs, United States Army Corps of Engineers, Washington,
DC; Mr. John Caporal, Secretary, United States Air Force Small
Business Programs Office, Washington, DC; Mr. Bill Lynam,
Owner, Lynam Construction, Sumter, SC; Mr. William Aycock,
President, Aycock Construction, LLC., Sumter, SC; and Mr. Scott
H. Bellows, Program Manager, South Carolina Procurement
Technical Assistance Center, The Moore School of Business Small
Business Development Center, University of South Carolina,
Columbia, SC.
Mr. Griffin began the testimony by detailing the process by
which the Navy awarded the contract for construction of the 3rd
Army headquarters building. The contract was awarded under a
full and open process and no small business set aside programs
were used. Ms. Robinson-Burnette detailed the efforts taken by
the U.S. Army Corps of Engineers to include small businesses in
their contracting plans. Mr. Caporal provided testimony
outlining the efforts of the Air Force to include small
business in their contracting efforts and explained several
areas in which small businesses can compete for contracts at
Shaw Air Force base.
The second panel began with Mr. Lynam explaining that he
believes that 8(a) firms have a virtual monopoly on contracts
at Shaw. He also explained that while he appreciated the recent
Administration efforts to hasten payments to prime contractors,
he feels that it ought to be extended to subcontractors as well
as there is often a delay in payments from prime contractors to
subcontractors. Mr. Aycock testified that he found it
disheartening that prime contracts and some subcontracts go to
out of state companies, and that it seemed counterintuitive to
force local companies to partner with out of state companies to
get work literally right down the street. Finally, Mr. Bellows
explained the services and benefits available for small
businesses looking to get into the federal contracting arena at
the South Carolina Procurement Technical Assistance Center.
REGULATORY BURDENS ON THE AGRICULTURAL SECTOR
On November 17, 2011, the Subcommittee on Agriculture,
Energy and Trade of the Committee on Small Business met in Room
2360 of the Rayburn House Office Building for the purpose of
receiving testimony on ``Adrift in Regulatory Burdens and
Uncertainty: A Review of Proposed and Potential Regulations on
Family Farms.'' The hearing focused on National Pollutant
Discharge Elimination System (NPDES) requirements under the
Clean Water Act (CWA) for the application of pesticides and
other chemicals that must be registered under the Federal
Insecticide, Rodenticide and Fungicide Act (FIFRA). In
addition, the Subcommittee addressed new National Ambient Air
Quality Standards (NAAQS) for coarse particulate matter (PM)
that may or not incorporate dust.
The witnesses were: Mr. Philip Nelson, President, Illinois
State Farm Bureau, Bloomington, IL; Mr. Leonard Felix,
President, Olathe Spray Service, Inc., Olathe, CO, testifying
on behalf of the National Agriculture Aviation Association; Mr.
Ray Vester, Vester Farms, Stuttgart, AR, testifying on behalf
of the USA Rice Federation; and Mr. Carl Shaffer, President,
Pennsylvania State Farm Bureau, Mifflinville, PA.
At the hearing, the witnesses discussed onerous,
overreaching proposed and potential regulations that the
current Administration is considering which leave family
farmers and ranchers adrift in new regulatory burdens. Extra
regulation is potentially concerning at this time with nearly
one in ten Americans unemployed and our country still
struggling to crawl out of this economic downturn. All of the
witnesses testified that the EPA was overreaching with their
new regulations, and that it was clear the EPA does not
understand the improvements in agricultural practices over the
years.
At the hearing's close, Chairman Tipton vowed to continue
to focus on burdensome regulations that affect our farmers,
ranchers and small businesses.
CYBER SECURITY FOR SMALL BUSINESS
On Thursday December 1, 2011, the Subcommittee on
Healthcare and Technology of the Committee on Small Business
held a hearing entitled: ``Cyber Security: Protecting Your
Small Business.'' This hearing focused on the issues faced by
small businesses in combating cyber security threats, including
the role of the federal government and best practice solutions.
According to a recent study, small businesses are the victims
of nearly 40 percent of cyber attacks in the United States.
The only witness on panel I was The Hon. William M. ``Mac''
Thornberry (R-TX). Witnesses on panel II were: Mr. David Beam,
Senior Vice President, North Carolina Electric Membership
Corporation, Raleigh, NC, testifying on behalf of the National
Rural Electric Cooperative Association; Mr. Glenn Strebe, Chief
Executive Officer, Air Academy Federal Credit Union, Colorado
Springs, CO, testifying on behalf of the National Association
of Federal Credit Unions; Ms. Phyllis Schneck, Vice President
and Chief Technology Officer, McAfee, Inc., Reston, VA; and Mr.
Michael Kaiser, Executive Director, National Cyber Security
Alliance, Washington, DC.
At the hearing, Congressman Thornberry provided testimony
on House Republican Cybersecurity Task Force's policy
recommendations. He stressed the importance of establishing a
strong public-private partnership to voluntarily share
information and raise awareness. Next, a panel of private
sector witnesses provided chilling reports on the severity of
cyber attacks on small businesses. Michael Kaiser, Executive
Director of the National Cyber Security Alliance in Washington,
DC, provided some daunting statistics. He stated the average
annual cost of a cyber attack on a small business was $188,242,
and more than 60 percent of victims will shut down within six
months.
In closing, the Chairwoman said she will continue to
closely follow the action around cybersecurity legislation. She
plans on working with the Committees of jurisdiction to make
sure small businesses have the resources available to combat
cyber attacks, while not adding any duplicative regulatory
burdens.
IS UNCERTAINTY CONTRIBUTING TO THE JOBS CRISIS: THE VIEWS OF LOCAL
ILLINOIS SMALL BUSINESSES
On December 12, 2011, the Subcommittee on Economic Growth,
Tax and Capital Access of the Committee on Small Business met
for a field hearing at the Woodstock City Hall, Woodstock, IL
for the purpose of receiving testimony on ``Is Uncertainty
Contributing to the Jobs Crisis: The Views of Local Illinois
Small Business.'' The hearing focused on how uncertainty over
the direction of federal policies are effecting small business
investment and hiring decisions.
The witnesses were: Mr. Eric Treiber, President and CEO,
Chicago White Metal Casting, Inc., Bensenville, IL, testifying
on behalf of the North American Die Casting Association; Mr.
Perry Moy, Owner of Plum Garden Restaurant, McHenry, Il.,
testifying on behalf of the National Restaurant Association;
and Mr. Craig Larsen, Founder/President, AHC Advisors Inc., St.
Charles, Il.
At the hearing, the witnesses testified that uncertainty
over the direction of federal tax, spending and regulatory
policy affected their decisions to undertake new investments
and hire more workers. The most common sources of policy
uncertainty were large federal budget deficits, the looming
expiration of the 2001 and 2003 tax cuts, and federal
regulations.
Mr. Treiber described how concerns over government
regulations, particularly the EPA rules, have supplanted unfair
foreign trade as a predominate concern of small business
manufacturers. Mr. Moy testified that the federal government
policies that affect the economic welfare of businesses in
other industries ultimately affect the economic welfare of
businesses in the service industry. Mr. Larsen testified that
uncertainty over the outcome of the 2001 and 2003 tax cuts is a
significant source of small business uncertainty and results in
less hiring and investment by small businesses.
All the witnesses agreed that policy uncertainty is
resulting in less than potential economic growth and is
hindering business investment and job creation.
NEW MEDICAL LOSS RATIOS: INCREASING HEALTH CARE VALUE OR JUST
ELIMINATING JOBS?
On December 15, 2011, the Subcommittee on Investigations,
Oversight and Regulations of the Committee on Small Business
met in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on ``Medical Loss Ratios:
Increasing Health Care Value or Just Eliminating Jobs?'' The
hearing focused on the Patient Protection and Affordable Care
Act (PPACA) and its regulations, which require health insurers
to spend 80% of every premium dollar on health care claims or
activities to improve health care quality (the Medical Loss
Ratio) and cap administrative expenses at 20%. Under the law,
insurance agent commissions are an administrative expense.
The witnesses were: Mr. Mitchell West, Insurance Broker,
HealthChoiceOne, Greenwood Village, CO; Mr. Gary Livengood,
Principal, What a Stitch, LLC, Mt. Airy, MD; Ms. Grace-Marie
Turner, President, Galen Institute, Alexandria, VA; and Timothy
Stoltzfus Jost, Esq., Robert Willett Family Professor of Law,
Washington and Lee University School of Law, Lexington, VA.
Mr. West stated that since the new MLRs became effective,
all of the eight major insurance carriers in Colorado have
reduced their commissions by an average of 47% for new business
and 20% on existing business. He said his health insurance
clients will not get the same high level of service because he
must spend so much time selling and servicing other products to
maintain his income. Mr. Livengood testified that he relies
heavily on his agent for details about insurance products and
claims assistance, and the agent's role will become
increasingly important as more of the health care law's complex
provisions become effective. Ms. Turner cited data showing that
the MLR regulations have resulted in lower broker commissions,
employee layoffs, reduced client service and higher premiums.
Professor Jost said the National Association of Insurance
Commissioners found that consumers in states with state-enacted
MLRs continued to have access to brokers. He said he believes
the new MLRs will make health insurance more affordable.
At the hearing's close, Chairman Coffman pledged to
continue to closely monitor how the implementation of health
care reforms affects small businesses.
THE FUTURE OF THE FAMILY FARM: THE EFFECTS OF PROPOSED DOL REGULATIONS
ON SMALL BUSINESS PRODUCERS
On February 2, 2012, the Subcommittee on Agriculture,
Energy and Trade of the Committee on Small Business met in Room
2360 of the Rayburn House Office Building for the purpose of
receiving testimony on ``The Future of the Family Farm: The
Effects of Proposed DOL Regulations on Small Business
Producers.'' The purpose of the hearing was to examine a notice
of proposed rulemaking from the United States Department of
Labor (DOL) that would have made significant changes to
exemptions to Fair Labor Standards Act (FLSA) pertaining to
youth employment on family-owned agriculture operations and
those involving agriculture vocational education.
The witness were: Nancy Leppink, Esq., Deputy
Administrator, Wage and Hour Division, United States Department
of Labor, Washington, DC; Mr. Chris Chinn, Owner, Chinn Hog
Farm, Clarence, MO, testifying on behalf of the American Farm
Bureau Federation; Mr. Kent Schescke, Director of Strategic
Partnerships, National Future Farmers of America, Alexandria,
VA; Mr. Robert Tabb, Deputy Commissioner, West Virginia State
Department of Agriculture, Charleston, WV; and Mr. Richard
Ebert, Vice President, Pennsylvania Farm Bureau, Blairsville,
PA.
At the beginning of her testimony, Deputy Administrator
Leppink notified the Committee that DOL was going to withdraw
and repropose the portion of the rule addressing the parental
exemption. She then explained that the purpose of the proposed
rule was to update and clarify existing FLSA regulations
pertaining to the employment of youth in agriculture
occupations.
Ms. Chinn and Mr. Ebert testified that changes in the farm
economy have resulted in changes to farm ownership patterns as
families consolidate numerous individual farms and ranches into
a single operation to take advantage of economies of scale. Mr.
Schescke expressed concerns that the Department's attempts to
narrow the Fair Labor Standards Act exemptions applicable to
youth working with machinery could negatively affect their
ability to provide comprehensive education and training to
these youths. Mr. Tabb noted that current DOL FLSA regulations
have resulted in a substantial decrease in the number and
severity of on-farm accidents involving youth. All of the
witnesses on the second panel agreed that DOL's proposed rule
narrowing the parental exemption would negatively affect
family-owned agriculture operations and vocational education
programs.
At the hearing's close, Chairman Tipton urged the
Department of Labor to modify or rescind the parental exemption
portion of the proposed rule.
CONSTRUCTION CONTRACTING: BARRIERS TO SMALL BUSINESS PARTICIPATION
On Thursday, February 9, 2012, the Subcommittee on
Contracting and Workforce of the Committee on Small Business
met in Room 2360 of the Rayburn House Office Building, to
receive testimony on construction contracting and barriers
related to small businesses. The hearing focused on contracting
areas that can limit small businesses from competing on
construction projects, such as: (1) contract bundling; (2) the
sealed bid award process; (3) allowing prime contractors to
take credit for low tier subcontracting; (4) prompt payment of
prime contractors and subcontractor; (5) necessity of
retainage; (6) effectiveness of the Small Business
Administration (SBA) surety bond program; and (7) desirability
of a locality preference.
The witnesses on Panel I were: Mr. Mark McCallum, CEO,
National Association of Surety Bond Producers, Washington, DC;
Dirk D. Haire, Esq., Partner, Fox Rothschild, Washington DC, on
behalf of the Associated General Contractors of America; Ms.
Rosie Privitera Biondo, President, Mark One Electric Co.,
Kansas City, MO, on behalf of the Women Construction Owners and
Executives; and Mr. Miguel Galarza, President, Yerba Buena
Engineering and Construction, San Francisco, CA. The witnesses
on Panel II were: Mr. William Guerin, Assistant Commissioner,
Public Building Service, General Services Administration (GSA),
Washington, DC; James C. Dalton, P.E., Chief, Engineering and
Construction Division, Directorate of Civil Works, United
States Army Corps of Engineers (USACE), Washington, DC; and Ms.
Jeanne Hulit, Acting Associate Administrator for Capital
Access, Small Business Administration (SBA), Washington, DC.
The private sector witnesses provided examples of why the
contracting areas, highlighted in the hearing, prohibit small
businesses from competing on construction projects. The
witnesses supported expanding the statutory definition of
contract bundling to specifically include procurements for new
construction. Ms. Privitera Biondo and Mr. Galarza advocated
for a bid listing provision to combat bid shopping on sealed
bid awards, but Mr. Haire argued that industry should police
itself in this area. The panel generally supported allowing
prime contractors to count lower tier subcontracting work
towards their small business subcontracting goals; accelerating
prime contract payments on construction and architect and
engineering contract to 14 days; and notifying subcontractors
when the government pays prime contractors. Furthermore, the
panel agreed that retainage should not be an arbitrary
percentage automatically assessed the prime contractor and
passed onto the subcontractor, and should not exceed the value
of the remaining work. All agreed that improvements should be
made to the SBA Surety Bond Guarantee program. The witnesses
were not united behind the local geographic preference, and
stated that it may be more detrimental than beneficial to the
construction industry.
The GSA and USACE witnesses highlighted their success
including small businesses as prime contractors in their
construction programs. Each denied that they bundle contracts,
but both admitted that they consolidate contracts. SBA
discussed its surety bond program and improvements underway to
make the program more effective to small businesses, and
recommended legislatively raising the cap on the guarantees to
$5 million.
At the conclusion of the hearing, Chairman Mulvaney thanked
the witnesses for their testimonies, and asked them to work
with the Subcommittee on ideas and ways to eliminate and
minimize the impediments, mentioned in the hearing, that often
limit or preclude a small business from effectively competing
for construction contracts.
BROADBAND: A CATALYST FOR SMALL BUSINESS GROWTH
The Subcommittee on Healthcare and Technology of the
Committee on Small Business met for hearing on February 15,
2012 titled, ``Broadband: A Catalyst for Small Business
Growth.'' The purpose of the hearing was to examine the growth
and importance of broadband to small businesses, including the
role of the federal government in providing access to rural
America.
Witnesses included: Ms. Mitzie Branon, General Manager,
Yadkin Valley Telecom, Yadkin, NC, on behalf of the National
Telecommunications Cooperative Association, Organization for
the Promotion and Advancement of Small Telecommunication
Companies, and Western Telecommunications Alliance; Mr. Roger
Bundridge, General Manager, NorthwestCell, Maryville, MO, on
behalf of the Rural Cellular Association; Ms. Rebecca Sanders,
Indiana Telehealth Network Director, Indiana Rural Health
Association, Plainfield, IN, on behalf of the National Rural
Health Association; and Mr. Darrell West, Vice President and
Director of Governance Studies, The Brookings Institution,
Washington, DC.
At the hearing, Ms. Branon and Mr. Bundridge explained
their effort to expand both wireline and wireless broadband to
more small businesses, especially in rural areas. They provided
best practices and policy recommendations on certain federal
programs, including the Universal Service Reform initiative and
spectrum auctions. In addition, Mr. West and Ms. Sanders
explained how access to those broadband services is essential
for economic growth and success of small businesses. Ms.
Sanders said, ``In many parts of Indiana, patients have no
local access to specialists in critical fields, such as
radiology, cardiology, and neurology and must travel great
distances, often in very fragile health, to obtain those
services. When adequate broadband is available in rural areas,
patients are able to access specialists via telemedicine while
staying in their local communities. This results in time
savings to the patients through reduced travel, and higher
laboratory and radiology revenues to the local healthcare
providers who would have lost those revenues to the urban
healthcare provider.''
In closing, the Chairwoman said she will continue to
closely follow the actions of the Federal government in
expanding broadband to small businesses. She will also work
with House colleagues to ensure that federal policies do not
obstruct the private sector investment in broadband
infrastructure, as this will have an adverse impact on small
businesses and their ability grow.
EXAMINING THE ROLE OF GOVERNMENT ASSISTANCE FOR DISASTER VICTIMS: A
REVIEW OF H.R. 3042
On February 16, 2012, the Subcommittee on Economic Growth,
Tax and Capital Access of the Committee on Small Business met
in Room 2360 of the Rayburn House Office Building, for the
purpose of examining legislation that would amend the Small
Business Administration's (SBA) programs that provide long-term
disaster recovery assistance and short-term business
interruption assistance. The legislation, H.R. 3042, further
lowers the interest loans for SBA loans to small businesses
under section 7(b) of the Small Business Act.
The witnesses were: Mr. H. Doug Hoell, Director, North
Carolina Division of Emergency Management, Raleigh, NC,
testifying on behalf of the National Emergency Management
Association; Mr. Gene Tighe, Owner, GT Fabrication, Pittston,
PA; Howard Kunreuther, Ph.D., James G. Dinan Professor of
Decision Sciences and Public Policy, The Wharton School,
University of Pennsylvania, Philadelphia, PA; and David B.
Muhlhausen, Ph.D., Research Fellow in Empirical Policy
Analysis, The Heritage Foundation, Washington D.C.
Mr. Hoell testified that state emergency management
officials work closely with the Federal Emergency Management
Agency (FEMA) and the SBA to provide information to disaster
victims about the recovery assistance available from the
government. Mr. Tighe testified that after Tropical Storm Lee,
he experienced multiple delays and misinformation while
applying for an SBA disaster loan which would not be of
significant help given the interest rate on such loans.
Professor Kunreuther testified that natural disasters are
becoming more costly because the government is providing
incentives for rebuilding in disaster prone areas without
providing any incentives to mitigate damage from such
disasters. Mr. Muhlhausen testified that the federal government
disaster response supplants the historical state role in such
matters and such relief discourages individuals from obtaining
private insurance to protect themselves.
POWERING DOWN: ARE GOVERNMENT REGULATIONS IMPEDING SMALL ENERGY
PRODUCERS AND HARMING ENERGY SECURITY?
On March 8, 2012, the Subcommittee on Investigations,
Oversight and Regulations of the Committee on Small Business
met in Room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony on ``Powering Down: Are
Government Regulations Impeding Small Energy producers and
Harming Energy Security?'' The purpose of the hearing was to
examine federal policies that were impeding small energy
producer access to federal lands containing oil and gas
deposits.
The witnesses were: Mr. Tim Barber, Environmental/Federal
Regulator Supervisor, Yates Petroleum, Gillette, WY; Mr. David
Ewing, President, Ewing Exploration Company, Sugarland, TX; Ms.
Kimberly Rodell, Regulatory Project Manager, Banko Petroleum
Management, Inc., Englewood, CO; and Mark Squillace, Esq.,
Professor of Law and Director, Natural Resources Law Center,
University of Colorado School of Law, Boulder, CO.
Mr. Barber and Mr. Ewing testified that recent United
States Department of Interior Bureau of Land Management (BLM)
policies have greatly impeded the ability of small oil and gas
production firms to obtain leases and permits to drill for oil
and gas deposits on federal lands. They both claimed that BLM's
decisions to delay putting new lands up for lease until the
agency completes Master Resource Plans are arbitrary and not
based on sound science or land management principles. The
overall effect of these policies, Mr. Ewing testified, will be
to drive small producers out of energy production on federal
lands.
Ms. Rodell testified about difficulties small producers are
having obtaining permits to drill. Banko Petroleum Management,
Inc. provides consulting services to small producers filing
applications for permits to drill to BLM. She noted that the
time it takes for BLM to approve an application for a permit to
drill has increased significantly over the past few years. She
also questioned BLM's increased use of stipulations on leases
and drilling permits, such as a stipulation that prevents
companies from disturbing Sage Grouse habitat.
Professor Squillace testified that, in his opinion, oil and
gas producers have ample access to lease opportunities on
federal lands. He also stated that the federal land use
planning and leasing processes are critical to sound decision-
making and should not be compromised for any perceived short
term benefits to small oil and gas producers.
THE HEALTH CARE REFORM LAW: ITS PRESENT AND FUTURE IMPACT ON SMALL
BUSINESSES AND JOB CREATION
On March 16, 2012, the Subcommittee on Investigations,
Oversight, and Regulations of the Committee on Small Business
met at Greenwood Village, Colorado for the purpose of
conducting a hearing titled ``The Health Care Reform Law: Its
Present and Future Impact on Small Businesses and Job
Creation.'' The hearing examined the implementation of the
Patient Protection and Affordable Care Act (PPACA) and its
impact on small businesses. In particular, the Subcommittee
considered the employer mandate and how that provision will
affect small business job creation. The Subcommittee also
discussed the confusion and uncertainty the PPACA is causing
small businesses as the law is implemented.
The witnesses for the hearing were: Keith Small, DMD, Cody
Dental Group, Denver, CO; Mr. Matt Tynan, Secretary and
Treasurer, Tynan's VW, Nissan, Kia, Aurora, CO, testifying on
behalf of the National Automobile Dealers Association; Mr. John
W. Leevers, President, Leevers Supermarkets, Inc., Franktown,
CO, testifying on behalf of the National Grocers Association;
and Mr. Mark Rogers, President and Chief Operating Officer,
Roaring Fork Restaurants, Castle Rock, CO, testifying on behalf
of the International Franchise Association.
Dr. Small began the testimony by stating that the long
standing cafeteria plan structure in existence since 1986 has
been very beneficial to his employees. He went on to say that,
unfortunately, due to the PPACA's abrupt change in the flexible
spending account medical over the counter allowance in January
of 2011 coupled with the 68.75% reduction in the maximum
benefit on January 1, 2013 will be a major burden on the
budgets of his employees. Mr. Tynan testified that instead of
doing what is in the best interests of his employees and his
business by offering health insurance coverage, the PPACA
removes incentives to provide such coverage and makes it a
simple math equation where businesses will look to their bottom
lines and nothing else. Mr. Leevers expanded on the point made
by Mr. Tynan by saying that he currently covers 80% of the
health benefit costs for his full time employees with about
$480,000. He stated that should the employer mandate come into
effect unchanged in 2014, his health insurance costs would
skyrocket to around $2 million. He finalized that point by
saying that the penalties contained in the PPACA would only be
around $440,000. Mr. Rogers stating that should the employer
mandate be put into full effect, he envisions that he would
have to raise prices three or four percent in each of his
restaurants to cover the additional costs and believes that
other industries would face similar, or perhaps higher,
increases.
IMPACT OF UNITED STATES TRADE POLICIES ON SMALL BUSINESSES AND
MANUFACTURING
On April 2, 2012, the Subcommittee on Agriculture, Energy
and Trade of the Committee on Small Business held a hearing
titled, ``Impact of United States Trade Policies on Small
Businesses and Manufacturing'' at the Pittsburgh Technology
Council in Pittsburgh, PA. The hearing provided an opportunity
to examine the impact of international trade policies on small
manufacturers.
The witnesses on Panel I were: Mr. Thomas Cummings,
Northeast Regional Director, Export-Import Bank of the United
States, New York, NY; Mr. Joseph Hanley, Mid-Atlantic Director,
United States Department of Commerce Export Assistance Centers,
Philadelphia, PA; and Mr. Peter O'Neill, Executive Director,
Center for Trade Development, Pennsylvania Department of
Community and Economic Development, Harrisburg, PA. The
witnesses on Panel II were: Mr. Walt Robertson, President,
Johnstown Wire Technologies, Johnstown, PA, testifying on
behalf of the American Wire Producers Association; Mr. Justin
McElhattan, President and CEO, Industrial Scientific
Corporation, Oakdale, PA; and Mr. David Groll, CEO, Circadiance
LLC, Export, PA.
At the hearing, the first panel of government witnesses
explained the importance of and opportunities to increase
exports from small businesses in the United States. Mr. Hanley
stated the trade offices located in Pennsylvania helped counsel
over 1,000 businesses in FY2011 and 2012, resulting in over
$500 million in exports. Mr. O'Neil explained his role in
promoting Pennsylvania exports and recommended stronger
coordination between state and federal trade offices. Mr.
Cummings stated the Export-Import Bank of the United States set
a new record by financing over $6 billion to small business
exporters.
The second panel of private witnesses discussed key policy
issues affecting their ability to compete globally. Mr. Groll
said the possible enactment of the 2.3 excise tax on
manufactured medical devices mandated by the Patient Protection
and Affordable Care Act will force a 23 percent cut in his
firm's research and development program thereby impinging on
Circadiance's ability to stay competitive in the global market.
Mr. McElhattan voiced his concerns around the export control
process and encouraged policymakers to streamline the process.
Finally, Mr. Robertson expressed his concerns over unfair trade
practices with foreign competitors, especially in China. He
stated actions must be taken to combat these practices and
level the playing field.
In closing, Chairman Tipton said he will continue to work
on reducing barriers to better assist small business exporters,
while making the overall trade process simpler and stronger. He
will also work to ensure our foreign competitors are playing by
the same rules as domestic manufacturers.
EQUITY FINANCE: CATALYST FOR JOB CREATION
On Thursday, April 19, 2012, the Subcommittee on Economic
Growth, Tax and Capital Access met in Room 2360 of the Rayburn
House Office Building, for the purpose of examining the current
state of equity financing for small businesses. In particular,
the hearing focused on barriers to new ideas for the provision
of equity capital to startup ventures.
Witnesses for the hearing were: Mary Dent, Esq., General
Counsel, Silicon Valley Bank, Palo Alto, CA; Mr. Jason Best,
Co-founder, Startup Exemption, San Francisco, CA; Mr. Tony
Shipley, Founder & Chairman, Queen City Angels, Cincinnati, OH,
testifying on behalf of the Angel Capital Association; and Ms.
Angela Jackson, Managing Director, Portland Seed Fund,
Portland, OR.
Ms. Dent testified that the level of competition and the
availability of credit varies depending on the maturity of the
company in commerce, and younger companies (generally with
lower cash flows) require greater access to equity capital. Mr.
Best, discussed crowdfunding and how that would work given the
recent enactment of the Jumpstart Our Business Startups Act
(JOBS Act). Mr. Shipley testified that angel investors are
passionate about helping start small businesses but may need
certain tailored tax incentives to make angel investing a
widespread option for early-stage small businesses and that
angel investors enjoy being part of the entrepreneurial
ecosystem. Ms. Jackson testified that even with the passage of
the JOBS Act, other potential federal barriers exist to full
participation by angel investors in providing equity capital to
small businesses.
HOW THE REPORT ON CARCINOGENS USES SCIENCE TO MEET ITS STATUTORY
OBLIGATIONS, AND ITS IMPACT ON SMALL BUSINESS JOBS
On April 25, 2012, the Subcommittee on Healthcare and
Technology of the Committee on Small Business and the
Subcommittee on Investigations and Oversight of the Committee
on Science, Space and Technology met in Room 2318 of the
Rayburn House Office Building for the purpose of receiving
testimony on the Report on Carcinogens (RoC) and its impact on
small business. The hearing, titled ``How the Report on
Carcinogens Uses Science to Meet its Statutory Obligations, and
its Impact on Small Business Jobs,'' focused on examining the
process used by the National Toxicology Program (NTP) to
determine which substances should be listed in the
congressionally mandated RoC and the impact of a substance
listing on small business.
The witnesses for the first panel were: Linda S. Birnbaum,
Ph.D., Director, National Institute of Environmental Health
Sciences and National Toxicology Program, United States
Department of Health and Human Services, Research Triangle
Park, NC; Charles A. Maresca, Esq., Director of Interagency
Affairs, Office of the Chief Counsel for Advocacy, United
States Small Business Administration, Washington, DC. The
second panel witnesses were: James S. Bus, Ph.D., Director of
External Technology, Toxicology and Environmental Research and
Consulting, The Dow Chemical Company, Midland, MI; L. Faye
Grimsley, Ph.D., Associate Professor, School of Public Health
and Tropical Medicine, Tulane University, New Orleans, LA; Ms.
Bonnie Webster, Vice President, Monroe Industries, Inc., Avon,
NY; Ms. Ally LaTourelle, Vice President of Government Affairs,
BioAmber, Inc., Plymouth, MN; Mr. John E. Barker, Corporate
Manager, Environmental Affairs, Safety and Loss Prevention,
Strongwell Corp., Bristol, VA; Richard B. Belzer, Ph.D.,
President, Regulatory Checkbook, Mount Vernon, VA.
Dr. Birnbaum began the hearing by providing an overview of
the process used to prepare the 12th RoC and the changes to the
process for the 13th RoC. Mr. Maresca voiced the Office of
Advocacy's concerns with the peer review and public comment
process and discussed the potential regulatory and economic
impact of a substance listing on small business. Dr. Bus said
that the RoC process was largely ad hoc and lacked explicit
criteria to ensure that NTP's reviews of scientific information
are transparent and consistent. Ms. Grimsley noted the
importance of the NTP to public health. Ms. Webster and Mr.
Baker discussed the impact and uncertainty the listing of
styrene in the 12th RoC was causing for their businesses. Ms.
LaTourelle stated that regulations lead to innovation and that
consumers are the ultimate regulators. Dr. Belzer stated that
the RoC does not contain all the information mandated by
Congress and recommended legislative changes to make the RoC a
useful scientific compendium about human carcinogens.
SMALL BUSINESS INNOVATORS: ON THE CUTTING EDGE OF ENERGY SOLUTIONS
On April 26, 2012, the Subcommittee on Agriculture, Energy,
and Trade of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building for the purpose of
receiving testimony from witnesses regarding role of small
business innovation in the energy industry. The hearing, titled
``Small Business Innovators: On the Cutting Edge of Energy
Solutions,'' focused on innovative ways small businesses
contribute to energy production. Specifically, the Subcommittee
focused on advanced biofuels, such as cellulosic ethanol, and
new innovative technologies small companies have developed to
produce energy from previously unused materials.
The witnesses for the hearing were: Mr. Ralph Tommaso, CEO
& Head of Business Development, Greenworks Holdings, Bethlehem,
PA; Mr. Jerry Taylor, President & CEO, MFA Oil Company,
Columbia, MO; Mr. Michael McAdams, President, Advanced Biofuels
Association, Washington, DC; and Mr. Matthew Hughes, Director
of Business Development--ETC (Environmental Tank & Container),
JWF Industries, Johnstown, PA.
Mr. Tommaso testified that biofuels represent a potentially
cost effective way for the manufacturing industry to reduce
harmful emissions, thus saving manufacturing jobs while
simultaneously creating and preserving jobs in the biofuels
industry. He added that small businesses need stable policies
as the main challenge in his industry is regulatory uncertainty
and the fluctuating and, more often than not, tightening
policies under the Renewable Fuel Standard 2. While discussing
MFA Biomass, LLC., Mr. Taylor stated that his MFA farmer-owners
recognize the potential to offer America's rural communities
permanent manufacturing jobs, a new cash crop for farmers, a
local source for green heating, renewable liquid fuel sources,
biobased chemicals, green building materials, water treatments
systems, soil reclamation systems, and consumer packaging. Mr.
McAdams testified that the advanced biofuels industry is
extremely innovative and has evolved rapidly over the last five
years and that the country is already starting to see advanced
biofuels delivering on its promise of creating new jobs and
helping to strengthen our nation's economic and energy
security. Mr. Hughes testified that his company works in
conjunction with their customers to develop new technologies to
mitigate some of the fears and risks associated with fracking.
PLANNING FOR THE DEATH TAX: CAN SMALL BUSINESSES SURVIVE?
On May 31, 2012, the Subcommittee on Economic Growth, Tax
and Capital Access of the Committee on Small Business met in
Room 2360 of the Rayburn House Office Building for the purpose
of receiving testimony on ``Planning for the Death Tax: Can
Small Businesses Survive?'' The purpose of the hearing was to
examine the ability of familial heirs to maintain the business
in light of estate taxes.
The witnesses were Neil D. Katz, Esq., Managing Partner,
Katz, Bernstein & Katz, LLC, Syosset, NY; Ms. Karen Madonia,
Chief Financial Officer, Illco, Inc., Aurora, IL, testifying on
behalf of the Heating, Air-Conditioning & Refrigeration
Distributors; Mr. Michael G. Flesher, Owner, Taylor Rental
Center, Vestal, NY, testifying on behalf of the American Rental
Association; and Thala Taperman Rolnick, CPA, Owner, Thala T.
Rolnick, CPA, PLLC, Phoenix, AZ.
Mr. Katz, who not only advises small business owners about
tax matters, but is also managing partner of a small family
business (law practice with his father), cited small businesses
that are struggling in today's economy to meet their
obligations and provide for their families. He said that adding
the burden of an estate tax to be due, or one currently due as
the result of the death of a former business owner, can make
the operation of a small business a nearly impossible task.
Ms. Madonia testified that she finds it fundamentally wrong
to place a tax on death. If someone is able to accumulate
wealth through hard work and pays taxes on income as it is
earned, she believes the government cannot justify taking a
significant portion of what is left simply because that person
has saved and re-invested rather than consumed. Her small
heating and air conditioning business carries capital intensive
inventory valued at $10,000,000 and accounts receivable of
$5,000,000, because they supply equipment to hospitals,
schools, nursing homes and grocery stores.
Mr. Flesher said that under current law, his heirs would be
able to continue to operate the business, keeping sixteen full-
time employees working. The business would continue to invest
in equipment and provide services to the community where it is
located. If the estate tax reverts to the levels of 2000, it
could mean sixteen people would no longer have a job, the
businesses that have served his company may no longer have a
customer, and the economic security of his heirs could be
uncertain.
Ms. Rolnick recommended that Congress pass a permanent
estate tax exclusion. Such exclusion should include a
reasonable valuation discount for operating small businesses
where the death of the owner truly reduces the value of the
business.
At the hearing's close, Chairman Walsh said the Committee
would continue to raise awareness of the impact of the estate
tax on small businesses. He asked that numerous statements from
trade associations representing small firms be admitted to the
hearing's record.
SCHEDULING SUCCESS? ISSUES AND OPPORTUNITIES FOR SMALL BUSINESSES ON
THE SCHEDULES
On June 7, 2012, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building to receive testimony on
various contracting issues related to the General Services
Administration's (GSA's) Multiple Award Schedules (MAS or
Schedules) program. The hearing specifically addressed four
areas: (1) voluntary set-asides on Schedules; (2) strategic
sourcing and the Schedules; (3) GSA's proposed Demand Based
Efficiency Models; and (4) Brooks Act contracting on the
Schedules. The hearing also examined a United States Government
Accountability Office (GAO) study on strategic sourcing.
The witnesses on the first panel were: Mr. Thomas Jacobs,
Principal, Krueck Sexton Architects of Chicago, IL, testifying
on behalf of the American Institute of Architects; Mr. Larry
Allen, President, Allen Federal Business Partners, McLean, VA;
Mr. Charles Forman, Executive Vice President, Independent
Stationers, Indianapolis, IN; and Mr. Mike Tucker, Owner,
George W. Allen & Co., Beltsville, MD, testifying on behalf of
the National Office Products Alliance. The witnesses on the
second panel were: Mr. Steven J. Kempf, Commissioner, Federal
Acquisition Service, GSA, Washington, DC; and Mr. William
Woods, Director, Acquisition and Sourcing Management, GAO,
Washington, DC.
Mr. Jacobs expressed concerns that GSA Schedules are
improperly including architects and engineers in violation of
the Brooks Act, negatively affecting small architecture firms.
Mr. Allen testified on recent changes to GSA's Demand Based
Efficiency Model which could have negative consequences for
small business owners. Mr. Forman discussed small business
successes under GSA's federal strategic sourcing initiative
(FSSI) particularly with the Office Supply II (OS II) awards.
Mr. Tucker, in contradistinction, opined that FSSI and OS II
awards limit small business contracting with the federal
government.
Mr. Kempf testified on the effects of GSA's recent changes
on small businesses including: voluntary-set asides, FSSI, and
the MAS demand efficiency model. Mr. Woods testified on GAO's
December 2011 report (GAO-12-178) on GSA's strategic sourcing
entitled, ``Office Supplies Pricing Study Had Limitations, but
New Initiative Shows Potential for Savings,'' noting that small
businesses appear to benefiting from the FSSI.
At the conclusion of the hearing, Chairman Mulvaney stated
the Subcommittee would continue to work towards ensuring
equitable contracting opportunities with the GSA's Schedules
program, and that GSA's proposed changes to the program did not
unfairly harm small businesses currently holding a schedule or
impede small businesses in receiving a schedule contract.
CAUGHT UP IN RED TAPE: THE IMPACT OF FEDERAL REGULATIONS ON SMALL
BUSINESSES AND CONTRACTORS
On June 14, 2012, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Rock Hill,
South Carolina for the purpose of receiving testimony from
witnesses regarding on regulatory impediments for small
businesses and contractors. Specifically, the Subcommittee
examined regulatory obstacles to small business job creation,
economic growth, and participation in the federal contracting
arena.
The witnesses for the hearing were: Col. Charles O'Cain,
USAF, Ret., Owner, Owl Business Consulting, LLC, Rock Hill, SC;
Mr. Doug Meyer-Cuno, President, Carolina Ingredients, Rock
Hill, SC; and Mr. Monty Felix, CEO, Alaglas Pools, Saint
Matthews, SC, testifying on behalf of the American Composite
Manufacturers Association.
Col. O'Cain began the hearing by stating that while all of
the information that small businesses need to successfully
contract with the federal government is available online, there
is no central location where small business owners can go to
get that information. Col. O'Cain suggested that a central
website designed with a checklist of processes and documents
needed would better serve small businesses seeking to do
business with the federal government.
Mr. Meyer-Cuno focused his testimony on the regulations
implementing the Patient Protection and Affordable Care Act,
stating that with the complexity and sheer number of
regulations coming out of this law, he is unable to predict his
future costs when hiring new employees. He also testified that
that if the law is fully implemented, his healthcare costs will
rise by 100 to 150 percent.
Mr. Felix ended the testimony by focusing his presentation
on the lack of valid and transparent reviews of the scientific,
economic, and other relevant facts. He cited the Department of
Health and Human Services Report on Carcinogens as a prime
example federal regulators disregarding scientific evidence
contrary to the intended benefit of regulations.
SMALL BUSINESS LENDING: PERSPECTIVES FROM THE PRIVATE SECTOR
On June 21, 2012, the Subcommittee of Investigations,
Oversight and Regulations of the Committee on Small Business
met in Room 2360 of the Rayburn House Office Building for the
purpose of conducting a hearing on small business lending. The
hearing was a follow-up to the Committee on Small Business June
6 hearing during which the Administrator of the Small Business
Administration (SBA), the Hon. Karen Mills, testified.
Witnesses for the hearing were: Mr. David Rader, Executive
Vice President, SBA Lending, Business Executive, Wells Fargo
Bank, N.A., Minneapolis, MN; Mr. Timothy Dixon, Senior Vice
President & Head of Business-Owner Banking, Citizens Republic
Bancorporation, Warrensville Heights, OH, testifying on behalf
of the Consumer Bankers Association (CBA); Mr. Brett Martinez,
President and CEO, Redwood Federal Credit Union, Santa Rosa,
CA, testifying on behalf of the Credit Union National
Association; and Mr. Robert Marquette, President and CEO,
Members 1st Federal Credit Union, Mechanicsburg, PA, testifying
on behalf of the National Association of Federal Credit Unions.
Mr. Rader asserted that the SBA should focus its attention
on extant programs rather than creating new pilot programs. Mr.
Dixon suggested that the SBA provide results of audits to
lenders in a more timely fashion. Mr. Martinez stated that the
SBA should streamline its paperwork requirements since SBA
loans require more information than a credit union's normal
commercial loans. Mr. Marquette testified about critical issues
facing credit unions in their delivery of capital access to
small businesses, particularly focusing on the need for greater
SBA outreach and removal of the commercial loan lending cap.
Both credit union witnesses suggested that the commercial
lending cap on credit unions be raised. Finally, all the
witnesses were consentient in noting that the standard
operating procedure development process need to be overhauled.
HIGH FUEL PRICES: THE IMPACT ON ILLINOIS SMALL BUSINESSES AND JOB
CREATION
On June 25, 2012 at 10:00 a.m., the Subcommittee on
Economic Growth, Tax and Capital Access met for a field hearing
at the Hoffman Estates Village Hall, located at 1900 Hassel
Road, Hoffman Estates, IL, for the purposes of receiving
testimony on ``High Fuel Prices: The Impact on Illinois Small
Businesses and Job Creators.'' The purpose of the hearing was
to examine the direct and indirect economic effects of high
fuel prices on small businesses in Illinois.
The witnesses were: Mr. Larry Smith, General Manager,
Lurvey Landscape Supply Co., Des Plaines, IL; Mr. Phil Kerr,
President, Home Medical Express, Inc., Elmhurst, IL; Mr. James
Zuber, Owner, Jc3 Trucking, Inc., Newton, IL; and Mr. Richard
Sade, Vice President, S&S Hinge Company, Bloomingdale, IL.
Mr. Smith testified that high and volatile fuel prices
created problems in managing his businesses cash flow and
reduces consumer demand for his services, especially on the
retail side. Mr. Kerr states that providing home healthcare
services often requires his employees to drive great distances
to service customers. He stated that many of these customers
are Medicare beneficiaries and that government payments under
Medicare do not fully account for increases in costs his
business experiences when gas prices rise. Mr. Sade testified
that his business uses a great deal of oil-based lubricants in
the manufacture of his products and that high gas prices caused
by rising oil prices also increase the cost of the lubricants
he purchases. Mr. Zuber operates his own trucking company and
stated that for competitive reasons, he has a very limited
ability to increase his rates to compensate for rising gas
prices. All of the witnesses testified that their businesses
operate on narrow margins and that fuel prices reduce the
profitability of their businesses.
UNLOCKING OPPORTUNITIES: RECIDIVISM VERSUS FAIR COMPETITION IN FEDERAL
CONTRACTING
On June 28, 2012, the Subcommittee on Contracting and
Workforce of the Committee on Small Business met in Room 2360
of the Rayburn House Office Building to receive testimony on
the contracting preferences provided to Federal Prison
Industries (FPI or UNICOR). The hearing specifically examined
whether contracting preferences provided to FPI unfairly
disadvantaged small businesses competing for federal contracts.
The hearing also explored potential legislative solutions,
including H.R. 3634, the Federal Prison Industries Competition
in Contracting Act of 2011, introduced by Congressman Bill
Huizenga (R-MI).
The witness on the first panel was Mr. Philip J. Sibal,
Senior Deputy Assistant Director, Federal Prison Industries,
Education and Vocational Training Division, Federal Bureau of
Prisons, Washington, DC. The witness on the second panel was
the Hon. Bill Huizenga (R-MI), United States House of
Representatives, Washington, DC. The witnesses on the third
panel were: Mr. Michael Mansh, President, Pennsylvania Apparel
LLC, Fort Washington, PA, testifying on behalf of the American
Apparel and Footwear Association; Mr. John M. Palatiello,
President of the Business Coalition for Fair Competition,
Reston, VA; and Ms. Rebecca Boenigk, CEO, Neutral Posture,
Bryan, TX, testifying on behalf of Women Impacting Public
Policy.
The witnesses provided testimony on the various benefits
and drawbacks to UNICOR's contracting preference as it relates
to small businesses and on current legislative proposals to
mitigate UNICOR's effects on the private sector. Mr. Sibal
testified that FPI benefits taxpayers due to decreased rates of
recidivism and the fact that FPI does not receive appropriated
funds. Rep. Huizenga expressed the challenges faced by the
private sector when competing with UNICOR and noted that his
bill, H.R. 3634, would alleviate these burdens without unfairly
prejudicing FPI. Mr. Mansh testified that FPI's effects on the
textile industry were substantial and opined that thousands of
jobs could be created if his firm received these contracts over
FPI. Mr. Palatiello expressed concerns that FPI has exceeded
its statutory authority and shared his support for H.R. 3634 to
reform FPI. Ms. Boenigk discussed the challenges of competing
with UNICOR's contracting preference as a small business
furniture manufacturer, and indicated that released inmates
will be unable to find jobs if UNICOR continues driving small
firms out of business.
At the conclusion of the hearing, Chairman Mulvaney stated
the Subcommittee would continue to examine legislative
solutions to combat the effects of UNICOR's contracting
preference on small firms.
SINKING THE MARINE INDUSTRY: HOW REGULATIONS ARE AFFECTING TODAY'S
MARITIME BUSINESSES
On July 12, 2012, the Subcommittee on Investigations,
Oversight and Regulations of the Committee on Small Business
met in room 2360 of the Rayburn House Office Building for the
purpose of receiving testimony from witnesses regarding federal
policy and regulatory impediments for small businesses in the
marine industry. The hearing titled, ``Sinking the Marine
Industry: How Regulations are Affecting Today's Maritime
Businesses'' was a wide-ranging examination of regulatory
actions by the Department of Labor, the planning and permitting
processes for the United States Army Corps of Engineers
maintenance of navigable waterways, and intra-state taxation of
small businesses. Specifically, the hearing examined these
issues in the context of job creation and economic growth
within the small businesses segment of the maritime industry.
The witnesses for the hearing were: Captain Steve Engemann,
President, Herman Sand and Gravel, Herman, MO; Ms. Kristina
Hebert, Chief Operating Officer, Ward's Marine Electric, Inc.,
Fort Lauderdale, FL, testifying on behalf of the United States
Superyacht Association; Mr. Mark Ducharme, Vice President and
Chief Financial Officer, Monterey Boats, Williston, FL,
testifying on behalf of the National Marine Manufacturers
Association; and Rashid Sumaila, Ph.D., University of British
Columbia Fisheries Centre, Vancouver, BC.
Ms. Hebert began the hearing by testifying that the
Department of Labor has mandated a definition of recreational
vessels that imposes unnecessary and cumbersome additional
guidelines to determine how the exemption for recreational
marine workers would apply. While testifying about intra-state
taxation, Mr. Ducharme said that while he understands that
states face the great temptation of raising tax revenues from
those who do not vote in its elections or utilize state
resources, he only engages in interstate commerce by providing
products or services without any physical presence in the
state, and efforts to expand traditional definitions of ``tax
nexus'' have become completely absurd. When discussing the
United States Army Corps of Engineers permitting and planning
process on navigable waterways, Captain Engemann stated
regulations and federal policies have constricted his business
and if left unchecked, will ultimately be the demise of his
business and many others that serve the Missouri River and
beyond. Dr. Sumaila stated that as the debate continues,
environmental concerns must be balanced with those of industry.
HEALTH CARE REALIGNMENT AND REGULATIONS: THE DEMISE OF SMALL AND SOLO
PRACTICES?
On July 19, 2012 at 10:00 a.m., the Subcommittee on
Investigations, Oversight and Regulations of the Committee on
Small Business met in Room 2360 of the Rayburn House Office
Building for the purpose of receiving testimony on ``Health
Care Realignment and Regulations: The Demise of Small and Solo
Practices?'' The purpose of the hearing was to examine a trend
of small and solo practice physicians joining larger practices
and hospitals.
The witnesses were: Mr. Mark Smith, President, Merritt
Hawkins, Irving, TX; Louis F. McIntyre, M.D., Westchester
Orthopedic Associates, White Plains, NY, testifying on behalf
of the American Association of Orthopaedic Surgeons; Joseph
Yasso, Jr., D.O., Heritage Physicians Group, Independence, MO,
testifying on behalf of the American Osteopathic Association;
and Jerry Kennett, M.D., F.A.C.C., Senior Partner, Missouri
Cardiovascular Associates, Columbia, MO, testifying on behalf
of the American College of Cardiology. All of the witnesses
expressed concern about the rising costs of operating a small
practice, and the increasing number of statutory and regulatory
requirements, which disproportionately affect small practices.
Mr. Smith referenced a recent Merritt Hawkins study, which
found that in 2011, only 1% of the firms' physician searches
were for solo practitioners, the lowest level in its 28-year
history and down from 22% in 2004. He said the economies of
health care have been changing, due to declining
reimbursements, the increasing sophistication needed to run a
business, increasing regulations and the desire of recently
graduated residents for a better work/life balance.
Dr. McIntyre testified that he sold his small practice in
2011 due to a drop in reimbursements from private payers and
Medicare, rising practice costs, the stimulus' mandate of
electronic health records, and the health care law's movement
toward risk sharing reimbursement methodologies. Dr. Yasso
joined a small practice owned by a large company in 2010. He
noted that physician practices face numerous statutory and
regulatory mandates, such as electronic health records, e-
prescribing, and physician quality reporting measures, all of
which disproportionately affect small practices. Dr. Kennett
said the first year expense of adopting electronic health
records can be as much as $46,000 per physician, and annual
maintenance costs of $17,000 per physician, which is difficult
for a small practice to absorb.
All of the witnesses expressed concern about increasing
number of regulations pursuant to the health care law and other
statutes, and all said they believe medical malpractice reform
would help to lower the costs of small practice physicians.
At the hearing's close, Chairman Coffman asked unanimous
consent that several recent news articles about the declining
number of small practices be admitted to the hearing record,
and pledged to closely follow the issues affecting small and
solo practices.
MARKET CLOSED: FOREIGN TRADE BARRIERS FACING SMALL AGRICULTURE
EXPORTERS
On July, 26, 2012, the Subcommittee on Agriculture, Energy
and Trade of the Committee on Small Business met for a hearing
entitled, ``Market Closed: Foreign Trade Barriers Facing Small
Agriculture Exporters.'' The hearing focused on foreign nations
using sanitary and phytosanitary (SPS) measures as non-tariff
barriers to trade.
Testifying were: Mr. Jim Boyer, Owner, Boyer Farms,
Ringsted, IA, testifying on behalf of the National Pork
Producers Council; Mr. Roger Mix, Owner, Mix Farms, Center, CO,
testifying on behalf of the Colorado Potato Administrative
Committee and the National Potato Council; Mr. Carl T. Shaffer,
President, Pennsylvania Farm Bureau, Mifflinville, PA; and Mr.
Jason Hafemesiter, Vice President, Allen F. Johnson and
Associates, Washington, DC.
Mr. Boyer testified that nations often impose SPS measures
on American agricultural product exports that lack of
scientific basis and appear to be attempts by those nations to
shield their own producers from competition. Mr. Mix testified
that potato growers in Colorado have experienced trouble
accessing the Mexican market despite a market access agreement
between the United States and Mexico. According to Mr. Mix,
Mexican customs officials often cite sanitary concerns as a
reason for denying access to American-grown potatoes. Mr.
Shaffer discussed the consequences to corn and soybean growers
in Pennsylvania of European SPS measures banning the
importation of genetically engineered crops. He also discussed
the agriculture industries' need for investment in new
transportation infrastructure in order to maintain the domestic
agriculture industries trade competitiveness with foreign
producers. Mr. Hafemiester testified that the use of SPS
measures as non-tariff barriers will proliferate and threaten
market access for American products unless the United States
strengthens its response capacity and unless future trade
agreements strengthen the rules governing the application of
SPS measures. All of the agriculture industry witnesses agreed
with this assessment and urged the United States to support the
inclusion of a ``WTO plus'' chapter in future trade agreements.
At the conclusion of the hearing, Chairman Tipton thanked
the witnesses for their testimony and expressed the desire of
the Committee to work with agriculture producers to ensure that
their products receive fair treatment in international markets.
MEDICARE'S DURABLE MEDICAL EQUIPMENT COMPETITIVE BIDDING PROGRAM: HOW
ARE SMALL SUPPLIERS FARING?
On September 11, 2012 at 10:00 a.m., the Subcommittee on
Healthcare and Technology of the Committee on Small Business
met in Room 2360 of the Rayburn House Office Building for a
hearing titled ``Medicare's Durable Medical Equipment
Competitive Bidding Program: How are Small Suppliers Faring?''
The purpose of the hearing was to examine the durable medical
equipment prosthetics, orthotics and supplies (DMEPOS)
program's impact on small suppliers.
The witness on the first panel was Mr. Laurence Wilson,
Director, Chronic Care Policy Group, Centers for Medicare and
Medicaid Services (CMS), Baltimore, MD. The witnesses on the
second panel were: Peter Cramton, Ph.D., Professor of
Economics, University of Maryland, College Park, MD; Ms. Tammy
Zelenko, President and CEO, Advacare Home Services,
Bridgeville, PA, testifying on behalf of the American
Association for Home Care; and Mr. Randy Mires, Owner, Gem
Drugs, Reserve, LA, testifying on behalf of the National
Community Pharmacists Association.
Mr. Wilson testified that CMS has worked to ensure that
small suppliers remain an important part of the DMEPOS program.
He said that in the nine areas where DMEPOS competitive bidding
has been implemented, the program resulted in savings of $202
million compared to costs prior to bidding. Mr. Wilson also
testified that small businesses were not required to bid on all
products, thereby resulting in them winning 51 percent of the
bids.
Professor Cramton testified that the current competitive
bidding system is unsustainable in the long run. A better
system that would result in a Nash equilibrium and efficient
allocation of resources would be a market pricing program in
which the last bid accepted sets the price.
Ms. Zelenko said she supports competition, but agreed with
Professor Cramton that the current competitive bidding program
has flaws, reduces the number of competitors, allows bidders to
``game'' the system, and forces providers to reduce services to
meet drastically lower reimbursement rates. A bidding system
should focus on smaller areas to allow more small businesses to
win bids, she said.
Mr. Mire said CMS expects to fully implement the national
mail order competitive bidding program for diabetic testing
supplies within the next year. This would prevent community
pharmacies from offering diabetic testing supplies and inhibit
the ability of pharmacists to monitor the health of diabetics.
As a result, Mr. Mire asked Congress to exempt community
pharmacies from competitive bidding for diabetic testing
supplies.
At the hearing's conclusion, Chairwoman Ellmers said the
efficient operation of the DMEPOS program is vitally important
because numerous patients rely on medical equipment and many of
the suppliers are small businesses that are important to our
economic recovery.
ADDING TO UNCERTAINTY: SMALL BUSINESSES PERSPECTIVES ON THE TAX CLIFF
On September 13, 2012 at 10:00 a.m., the Subcommittee on
Economic Growth, Tax and Capital Access met in Room 2360 of the
Rayburn House Office Building for the purpose of receiving
testimony on ``Adding to Uncertainty: Small Businesses
Perspectives on the Tax Cliff.'' The purpose of the hearing was
to learn small businesses views and concerns over the potential
expiration of the 2001 and 2003 tax cuts as well as the Obama
Administration's proposal to extend all of the tax cuts for
taxpayers with incomes below $200,000 a year filing as an
individual, or $250,000 a year filing jointly.
The witnesses were: Ms. Theresa Kern, President, MA Steel
Erectors, Inc., Palos Heights, IL, testifying on behalf of the
Women Construction Owners and Executives, USA; Mr. Doug Harmon,
CEO, Twin Cities Die Casting Company, Minneapolis, MN,
testifying on behalf of the North American Die Casting
Association; Mr. Scott Hodge, President, The Tax Foundation,
Washington, DC; and Jeffrey Porter, CPA, Porter and Associates,
CPAs, Huntington, WV.
Ms. Kern testified that her business is organized as a
Subchapter S Corporation and that higher marginal tax rates
would not only reduce her businesses profitability, but would
also present challenges in managing her businesses' cash flow
and its ability to bid on future projects. Mr. Harmon testified
that his company also is structured as a Subchapter S
Corporation and that higher marginal income tax rates reduce
incentives for entrepreneurs to undertake new risk and invest
in expanding their businesses. He also testified that his
business must compete globally and that higher marginal tax
rates would reduce the competitiveness of his company. Mr.
Hodge concurred with others that higher marginal income tax
rates reduce incentives to undertake new risks and investment
which reduces economic growth and new job creation. Mr. Porter,
a certified public accountant, testified that the temporary
nature of so many provisions in the tax code complicates and
increases the cost of tax compliance for many small business
owners.
At the end of the hearing, Chairman Walsh thanked the
witnesses for their testimony and invited them to submit
additional materials into the official hearing record.
PART C
Waste, Fraud, Abuse and Mismanagement
Of the hearings delineated above, the following were
devoted specifically to an examination of programs within the
Committee's jurisdiction with a focus on potential
mismanagement, waste, fraud and/or abuse.
HEARING ON THE FY 2012 BUDGET FOR THE SMALL BUSINESS ADMINISTRATION
During the March 2, 2011 full Committee hearing on the
President's FY 2012 budget request for the Small Business
Administration (SBA), at which Administrator Karen Mills
testified, the programs under her authority were discussed in
detail. The members of the Committee expressed their concerns
about several pilot programs that are not authorized, as well
as the management of the agency related to the distribution of
personnel and its reflection of agency priorities. Further, the
Committee pointed to issues cited by the agency's Inspector
General, namely the SBA's expedited loan processing initiatives
and reliance on outside financial institutions, as well as
contracts awarded to firms that do not meet program eligibility
criteria. These concerns are laid out in greater detail in the
Committee's FY 2012 budget views and estimates letter that was
adopted by the Committee on March 15, 2011.
HEARING ON ENTREPRENEURIAL DEVELOPMENT PROGRAMS
The Committee hearing on May 25, 2011 examined duplication
in the SBA's entrepreneurial development programs. The hearing
focused on a report by the Government Accountability Office
citing 80 economic development programs throughout the
Department of Commerce, the Department of Housing and Urban
Development, the Department of Agriculture and SBA. The
Committee specifically focused on four programs at the SBA
dealing with entrepreneurial development. Those programs are
the Small Business Development Companies (SBDC), the Service
Corps for Retired Employees (SCORE), Women's Business Centers
(WBCs) and Veterans' Business Outreach Centers (VBOCs). In a
March 15, 2011 letter to the Senate Committee on Small Business
and Entrepreneurship, the SBA's Inspector General pointed to
overlap in these SBA programs, reporting that 104 of the 109
WBCs listed on SBA's website are located within 25 miles of
either an SBDC or SCORE chapter. Additionally, of the 16
Veterans Business Opportunity Centers, seven are located at the
same college or university as an SBDC. Of the remaining
veterans' centers, six have an SBDC within 10 miles, two are
less than 20 miles from an SBDC and the remaining center is 33
miles away. The Inspector General also noted that the
Department of Commerce Minority Business Development agency has
41 outreach centers providing similar services as SBDCs. All of
these 41 centers have a SBDC or SCORE chapter within 25 miles.
The Committee is examining these programs for consolidation or
elimination, in line with the recommendations made in its FY
2012 budget views and estimates letter.
The Subcommittee on Agriculture, Energy and Trade held a
filed hearing on April 2, 2012 in Pittsburgh, PA to address the
impact of United States trade policies on small businesses and
small manufacturers. One of the key recommendations in the
hearing was to increase coordination between federal and state
offices that provide small businesses with export assistance.
The findings of this hearing comport with the Committee's
efforts to reduce duplication in SBA's entrepreneurial
assistance programs aimed at providing assistance to small
businesses seeking to export their goods.
HEARINGS ON THE SMALL BUSINESS INNOVATION RESEARCH PROGRAM
The Committee held two hearings on the Small Business
Innovation Research (SBIR) and Small Business Technology
Transfer (STTR) Programs. The full Committee held a general
hearing to provide an overview of the programs on March 16,
2011. The Subcommittee on Healthcare and Technology held a
hearing on April 7, 2011 to examine a draft legislative
proposal to reauthorize and modernize the programs. Included in
the draft proposal were provisions designed to eliminate waste
and fraud in the programs. For example, the legislation
establishes an interagency Committee to recommend greater
efficiencies in the programs; requires the Comptroller General
of the United States to conduct an audit of the SBIR and STTR
programs; seeks to amend the SBIR and STTR Policy Directives to
include measures to prevent fraud, waste, and abuse, including
GAO studies on various measures of effectiveness; and requires
the Offices of Inspector General for participating agencies to
submit annual reports on fraud elimination in the programs.
Ultimately, these provisions were included in legislation (H.R.
1425) that the Committee marked up and reported favorably on
May 11, 2011. These anti-fraud provisions then were
incorporated into the National Defense Authorization Act for
Fiscal Year 2012, Pub. L. No. 112-81, 125 Stat. 1298, 1823-62
(2011).
HEARINGS ON SBA FINANCIAL ASSISTANCE PROGRAMS
The Committee held two hearings to consider the adequacy of
programs designed to provide financial assistance to small
businesses. On October 26, 2011, the Committee reviewed the
capital access programs operated by the SBA in conjunction with
private lenders. One of the major issues raised at the hearing
related to the adequacy of the SBA's oversight of the lenders
to ensure that federal taxpayers were not put at risk. In
addition, the hearing also inquired into whether the SBA
obtains sufficient returns when it is forced to foreclose on
loans. The hearing on November 30, 2011 assessed the SBA's
compliance with changes made to the disaster loan program in
2008 and whether the agency was capable of responding to major
disasters. GAO noted that SBA was improving its disaster
preparedness but still had more to do to ensure adequate
handling of disasters.
On February 8, 2012, the Committee held a hearing to
discuss a GAO investigation, initiated by Chairman Graves,
concerning problems associated with the modernization of
information technology resources used by the SBA to manage its
loan portfolio. The investigation found numerous deficiencies
in the project and the Committee continues to monitor the
modernization project to ensure that it complies with sound
information resource management practices.
On June 6 and June 21, 2012, the Committee held two
hearings to examine the lack of procedural regularity in how
the SBA operates it capital access programs. The June 6 hearing
was with Administrator Mills and the June 21 hearing had
testimony from SBA's private lending partners. The Committee
will continue to review SBA operations to ensure that
procedures used in the capital access programs are not based on
ad hoc procedures allowing the agency to treat similarly-
situated entities differently.
HEARINGS ON FEDERAL PROCUREMENT
The Subcommittee on Contracting and the Workforce conducted
four hearings on federal procurement matters that addressed
problems in efforts by the federal government to increase
opportunities for small businesses to participate in federal
procurements. Increased utilization of small businesses will
increase competition, enhance innovation, and reduce reliance
on certain sole source contracts thereby improving the value of
goods and services purchased by the federal government.
On June 23, 2011, the Subcommittee examined the impact of
insourcing (converting work done by contractors to work done by
federal employees) on small business federal government
contractors. The hearing revealed that small businesses (who
can do work in a more cost effective manner) were having their
contracts brought in-house to be performed by federal employees
even when those activities were not inherently governmental.
On September 15, 2011, the Subcommittee investigated
whether certain SBA programs were working sufficiently to
ensure maximum participation by small businesses in the federal
procurement arena. The hearing revealed that SBA programs
needed further enhancement and revision to ensure maximum
utilization from small businesses and the benefits that small
businesses would provide to the federal government.
A hearing on October 6, 2011 examined whether large
contractors were complying with federal statutes and
regulations to utilize small business subcontractors when
providing goods and services to the federal government. The
hearing found that large contractors did not comply with such
requirements and that the computer data systems used by the
federal government were inadequate to ensure compliance with
the subcontracting requirements.
The Subcommittee examined mechanisms to reduce fraud in
special contracting programs overseen by the SBA in a hearing
on October 27, 2011. The hearing identified a number of
problems associated with these programs, including
misrepresentation of status for participation in the programs,
improper subcontracting (including violations of the so-called
``non-manufacturing rule''), incorrect assignment of size
standards by contracting officers, and recurring acts of
bribery and kickbacks (which are currently under criminal
investigation).
On February 9, 2012, the Subcommittee on Contracting and
Workforce held a hearing to investigate barriers that small
businesses face in obtaining construction contracts. Although
not focused solely on fraud, waste, and abuse, greater
involvement by small businesses in construction contracts will
lead to increased competition thereby providing the government
with better service at lower overall cost.
The Subcommittee on Contracting and Workforce held a
hearing on June 7, 2012 to examine recent changes in operation
of GSA's multiple award schedules (MAS). While some of the
initiatives appear to be successful in providing increased
value to the government, other actions taken by GSA, such as
eliminating small sellers from the MAS, may hurt their ability
to offer goods and services to states and municipalities that
require their suppliers to have a MAS contract. The
Subcommittee continues to monitor the impact that the policy
changes will have on small government contractors.
The Subcommittee on Contracting and Workforce held a
hearing on June 28, 2012 examined the preference provided to
Federal Prison Industries also known as UNICOR. Witnesses
testified that UNICOR exceeded its contracting authority
thereby unfairly competing with small businesses that wish to
provide goods to the federal government.
OVERSIGHT PLAN FOR THE 112TH CONGRESS
Clause 2(d) of rule X of the Rules of the House of
Representatives for the 112th Congress requires that each
standing Committee, in the first session of a Congress, adopt
an oversight plan for the two-year period of the Congress and
submit the plan to the Committee on Oversight and Government
Reform and the Committee on House Administration.
Clause 1(d)(3) of rule XI of the Rules of the House of
Representatives requires each Committee to submit to the House,
no earlier than December 15 or adjournment of the Congress sine
die (whichever occurs first) a report on the activities of that
Committee. Moreover, that report shall include a summary of the
oversight plan submitted under clause 2(d) of rule X and
summary of the actions taken with respect to such plan; and a
summary of any additional oversight activities undertaken by
the Committee.
Part A of this section contains the Oversight Plan of the
Committee on Small Business for the One Hundred Twelfth
Congress, which the Committee considered and adopted on January
26, 2011.
Part B of this section contains a summary of the actions
taken to implement that plan.
PART A
Oversight Plan of the Committee on Small Business for the One Hundred
Twelfth Congress
---------- **
***
January 26, 2011, Approved by the Committee on Small Business
---------- **
***
Mr. Graves, from the Committee on Small Business, submitted to the
Committee on Oversight and Government Reform and the Committee on House
Administration the following
REPORT
Rule X, cl. 2(d)(1) of the Rules of the House requires each
standing Committee to adopt an oversight plan for the two-year
period of the Congress and to submit the plan to the Committees
on Government Reform and House Administration not later than
February 15 of the first session of the Congress. Under Rule X,
the Committee has oversight authority to investigate and
examine any matter affecting small business. This Report
reflects that broad oversight jurisdiction.
Pursuant to Rule X, cl. 2(d)(1)(F), this oversight plan
also includes from proposals to cut or eliminate programs that
are inefficient, duplicative, outdated, or more appropriately
administered by State or local governments.
Oversight of Federal Capital Access Programs
The Committee will conduct the hearings and investigations
into Small Business Administration (SBA) and other federal
agencies that provide capital to America's entrepreneurs that
may include any or all of the following as well as matters
brought to the attention of the Committee subsequent to the
filing of this Report:
Effectiveness of the capital access programs to
generate jobs in the fastest growing small businesses.
Whether lenders are meeting their goals to lend to
small businesses and create jobs.
Risk to the taxpayers of the capital access
programs and if those risks are not reasonable, then
elimination of those programs.
Adequacy of SBA oversight of its lending partners
to ensure that federal taxpayers are properly protected.
Capabilities of the SBA information technology to
manage the loan portfolio.
Appropriateness of ad hoc guidance documents in
regulating lenders and borrowers.
The exercise of discretion by SBA to create pilot
programs and the risk they pose to the taxpayer and whether
such authority should be curtailed or eliminated.
Whether SBA disaster loan program and its
oversight ensures that small businesses are able to revive to
rebuild communities without unduly placing the federal taxpayer
at risk.
Efficacy and duplication of federal capital access
programs offered by the Department of Agriculture to small
businesses in rural areas.
Utilization by small businesses of export capital
programs at the Export-Import Bank and the Overseas Private
Investment Corporation.
Effectiveness of the Small Business Lending Fund
and State Small Business Credit Initiative created by Pub. L.
No. 111-240, the Small Business Jobs Act of 2010.
Impact of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Pub. L. No. 111-203 on small business
access to capital.
In performing oversight, the Committee will focus on
particularly risky aspects of financial assistance programs
including, but not limited to, commercial real estate
refinancing, premier certified lenders, participating security
small business investment companies, small business lending
companies, express lenders, loan programs utilizing simplified
lending applications, and disaster loans offered by private
lenders through interest rate subsidies.
Oversight of SBA and Other Federal Entrepreneurial Development Programs
The Committee will conduct the hearings and investigations
into the SBA programs that provide training and advice to small
businesses that may include any or all of the following as well
as matters brought to the attention of the Committee subsequent
to the filing of this Report:
Examining effectiveness of SBA entrepreneurial
development programs in creating jobs.
Determining whether certain programs should be
eliminated as a result of their ineffectiveness or duplication
of programs provided by other agencies.
Suggesting methods for enhancing coordination
among federal agencies in providing assistance to
entrepreneurs.
Enhancing the efficacy and utilization of the
Manufacturing Extension Partnership at the Department of
Commerce.
Recommending improvements in assistance to small
businesses that participate in the production of value-added
agricultural products.
Increasing effectiveness of technical assistance
provided to small businesses involved in the production of
renewable and non-renewable energy sources.
Oversight of Federal Government Contracting Matters
The Committee will conduct hearings and investigations into
the federal procurement system that may include any or all of
the following as well as matters brought to the attention of
the Committee subsequent to the filing of this Report:
Whether fraud or other problems exist in the
federal government contracting programs overseen by the SBA
including the 8(a), HUBZone, service-disabled veteran, women-
owned contracting program, and Small Business Innovation
Research program.
Effectiveness of SBA contracting programs to
increase participation by small businesses in federal
procurement.
Effectiveness of federal agency protections
against contract bundling and consolidation.
The accuracy and utility of SBA size standards and
federal procurement databases.
Operation and effectiveness of federal agency
assistance provided to small businesses interested in federal
procurement, including that provided by the SBA, Offices of
Small and Disadvantaged Business Utilization and Procurement
Technical Assistance Centers.
Development of federal acquisition policies and
whether small businesses have sufficiently effective voice in
development of such policies.
Cost-effectiveness of outsourcing government work
to private enterprise rather than expanding the government to
do provide the good or service internally (i.e., government
insourcing).
In performing oversight, the Committee will focus its
efforts on uncovering abuse and misuse of the small business
designation to obtain federal government contracts.
Oversight of SBA Management
The Committee will conduct the hearings and investigations
into the management of the SBA that may include any or all of
the following, as well as matters brought to the attention of
the Committee subsequent to the filing of this Report:
The appropriate mission of the SBA.
Whether agency employees in the field are
empowered to assist small businesses.
Duplication of offices and missions at SBA
headquarters.
Effectiveness of personnel management to ensure
that employees are rewarded for assisting small businesses.
Capabilities of SBA employees to provide proper
assistance to small business owners.
In carrying out this oversight, the Committee will focus
particularly on streamlining and reorganizing of the agency's
operations to provide maximum assistance to small business
owners. Offices that primarily provide assistance or advice to
headquarters staff that do not promote the interests of small
businesses or protect the federal government as a guarantor of
loans will be recommended for cuts or elimination. For some
potential offices in which the Committee will examine, refer to
the section title ``Reductions in Programs and Spending.''
Oversight of Federal Regulatory and Paperwork Burdens
The Committee will conduct hearings and investigations into
unnecessary, burdensome, and duplicative federal rules,
reporting and recordkeeping requirements affecting small
businesses that that may include any or all of the following,
as well as matters brought to the attention of the Committee
subsequent to the filing of this Report:
Centers for Medicare and Medicaid Services.
Consumer Financial Protection Bureau.
Consumer Safety Products Commission.
Department of Agriculture.
Department of Energy, particularly the Office of
Energy Efficiency and Renewable Energy.
Department of Interior, particularly the Bureau of
Land Management and Minerals Management Service.
Department of Labor, particularly the Occupation
Safety and Health Administration.
Department of Homeland Security, particularly the
Transportation Security Administration.
Department of Transportation, particularly the
Federal Aviation Administration and Federal Motor Carrier
Safety Administration.
Environmental Protection Agency.
Federal Communications Commission.
Federal Financial Institutions Examination Council
and its constituent agencies.
Food and Drug Administration.
Office of Federal Procurement Policy.
Securities and Exchange Commission.
The Committee will identify specific rules and regulations
already issued or at the proposed rule stage to assess the
impact on small businesses. The Committee will pay close
attention to the effect that regulations have on the
implementation of advanced technologies including, but not
limited to, the deployment of broadband communications (either
by wireline or wireless services) throughout the United States.
Oversight of the regulatory process also will, to the extent
relevant, examine the work of the Office of Information and
Regulatory Affairs at the Office of Management and Budget.
Special attention will be paid to the work performed by the
Chief Counsel for Advocacy at the United States Small Business
Administration to ensure that Office is fulfilling its mission
to advocate vigorously on behalf of America's small business
owners in regulatory matters at federal agencies. Finally, this
oversight will entail an examination of compliance by federal
agencies with amendments to Executive Order 12,866 and
memoranda on regulatory flexibility and regulatory compliance
issued by the President on January 18, 2011.
Oversight of Federal Tax Policy
The Committee will conduct hearings and investigations into
the federal tax code, its impact on small business, and
Internal Revenue Service's (IRS) collection of taxes that may
include any or all of the following, as well as matters brought
to the attention of the Committee subsequent to the filing of
this Report:
Identification of tax code provisions that hinder
the ability of small businesses to create jobs and
recommendations for modifying those provisions to boost small
business job growth.
Examination of the structure of the tax code in
order to simplify compliance for small businesses.
Assessment of the recordkeeping and reporting
requirements associated with tax compliance and suggestions for
reducing such burdens on small businesses.
Evaluation of the estate tax provisions to
determine whether they inhibit the ability of successive
generations to maintain successful job creating enterprises.
Efficiencies at that the IRS that improve the
interaction between the government and small business owners.
Inefficiencies at the IRS that force small
businesses to divert capital from job growth to tax compliance.
Oversight of Health Care Policy
The Committee will conduct hearings and investigations into
federal health care policy (such as Medicare and Medicaid) and
the implementation of the Patient Protection and Affordable
Care Act that may include any or all of the following, as well
as matters brought to the attention of the Committee subsequent
to the filing of this Report:
The cost of Patient Protection and Affordable Care
Act to small businesses, including the self-employed.
The impact of the Patient Protection and
Affordable Care Act, Medicare and Medicaid on the ability of
physicians, pharmacists, and allied health care providers to
offer the best care possible to patients.
Alternatives to the Patient Protection and
Affordable Care Act that reduce health insurance costs to small
businesses without inhibiting their ability to create jobs.
The impact of state tort and insurance laws on the
cost of medical care.
Examination of increases in efficiencies that will
improve the provision of health care while reducing costs to
small businesses that offer their workers health insurance.
Oversight of Energy Policy
The Committee will conduct hearings and investigations into
energy policy to reduce the cost of energy and increase energy
independence that may include any or all of the following, as
well as matters brought to the attention of the Committee
subsequent to the filing of this Report:
Innovations developed by small businesses that
increase energy independence.
Federal regulatory policies that increase
dependence on foreign sources of energy.
Policies needed to incentivize production of
energy in the United States.
Examination of commercialization of research in
renewable energy.
Federal regulations or policies that increase
energy costs for small businesses.
The primary thrust of the Committee's efforts will focus on
efforts to use the innovation of America's entrepreneurs to
fuel the drive for greater energy independence.
Oversight of Trade and Intellectual Property Policy
The Committee will conduct hearings and investigations into
international trade and intellectual property policies of
America and its trading partners that may include any or all of
the following, as well as matters brought to the attention of
the Committee subsequent to the filing of this Report:
Impact of free trade agreements to increase
exports by American small businesses.
Whether the federal government is doing enough to
protect the intellectual property rights of small businesses by
foreign competitors.
The impact of federal intellectual property
policies, particularly patents and copyrights, to protect the
innovations of American entrepreneurs.
Efforts to increase exports by small businesses.
The focus of oversight will emphasize the best mechanisms
to promote and protect advanced technology innovations of small
businesses.
Reductions in Programs and Spending
In addition to the programs and policies already cited, the
Committee will examine and any all including, but not limited
to, programs and offices listed below in order to find areas in
which to reduce the federal deficit:
Small Business Lending Fund operated by Department
of Treasury.
State Small Business Credit Initiative operated by
Department of Treasury.
Patriot Express Loan Program overseen by the SBA.
Express Loan Program overseen by SBA.
Emerging Leaders Initiative started by SBA.
Drug-Free Workplace Program.
SBA Office of Policy.
SBA Regional Administrators.
Office of Advocacy Regional Advocates.
SBA Deputy District Directors.
SBA Office of International Trade.
SBA Office of Native American Affairs.
In particular, the Committee will assess whether
reorganization and reassignment of employees to more critical
functions at the SBA, such as positions as procurement center
representatives, will provide a more effective agency at
assisting small businesses generate growth.
PART B
Implementation of the Oversight Plan of the Committee on Small Business
for the One Hundred Twelfth Congress
A. Oversight of Federal Capital Access Programs
In its review of the Small Business Administration's (SBA)
fiscal year (FY) 2012 budget request, the Committee analyzed
the agency programs devoted to providing access to capital to
small businesses. During a March 2, 2011 hearing on the SBA
budget, at which the SBA Administrator testified, and as part
of the Committee's views and estimates on the FY 2012 budget
adopted on March 15, 2011, the Committee outlined its concerns
with and proposals for improving the SBA programs devoted to
small business financing, including the 7(a) Loan Program, the
Certified Development Company Loan Program, the Microloan
Program, the Small Business Lending Intermediary Pilot Program,
the Small Business Investment Company Program, the Surety Bond
Program and the Disaster Loan Program.
On June 1, 2011, the Committee on Small Business met for a
hearing titled, ``Access to Capital: Can Small Businesses
Access the Credit Necessary To Grow and Create Jobs?'' The
hearing provided a forum for lenders and business owners to
discuss the current economic environment and how they are
working together to support private sector job growth.
Witnesses from the lending side discussed the demand for
capital and current initiatives to encourage small business
lending. Small business owners testified about the current
economic environment and the capital that is required to expand
and hire new workers. The value of the SBA lending programs,
particularly the 7(a) guarantee program, was discussed in
detail. The Committee, in a hearing with Secretary Geithner on
June 22, 2011, examined programs operated by the Department of
Treasury to increase capital access to small businesses. On
October 26, 2011, the Committee examined in greater detail the
SBA capital access programs (which use loan guarantees rather
than direct loans to small businesses) and whether they were
operating in a manner designed to enhance access to capital by
small businesses while protecting the federal taxpayer from
defaults on such loans. Finally, the Committee continued its
oversight of the SBA Disaster Loan Program in a hearing on
November 30, 2011 to ensure that it is prepared to assist small
businesses in recovering from disasters.
On June 2, 2011, the Committee secured a commitment from
the Government Accountability Office (GAO) to review the SBA's
Loan Management Accounting system. GAO has concluded its
investigation and is awaiting the response from the SBA before
finalizing its report to Congress.
This system is designed to manage the SBA guaranteed loan
portfolio, but is severely outdated. The Committee's views and
estimates letter on the FY 2012 budget request, adopted by the
Committee on March 15, 2011, outlines concerns with the Loan
Management Accounting System used by the SBA and resources
devoted to it. As already noted, elsewhere in this report, the
Committee held a hearing to discuss the results of GAO's
investigation on the inadequacies of the modernization process.
In June 2012, the Committee held two hearings on the ad hoc
procedures used by the SBA in operating its capital access
programs. The Committee prepared a series of follow-up
questions to Administrator Mills in an effort to further
identify weaknesses in the SBA's regulation of its guaranteed
lenders, including the ability of the SBA to revoke the status
of its lending partners.
B. Oversight of SBA and Other Federal Entrepreneurial Development
Programs
On March 15, 2011 the Committee adopted its views and
estimates on the FY 2012 budget that outlined several
duplicative entrepreneurial development programs at the SBA.
This letter will be used as a template for legislation to
consolidate and/or eliminate said programs.
On May 25, 2011, the Committee on Small Business held a
full Committee hearing titled, ``Promoting Entrepreneurship and
Job Creation by Decreasing Duplication at SBA.'' This hearing
examined duplicative programs at the U.S. Small Business
Administration (SBA), specifically focusing on the
entrepreneurial development Programs. The panel discussed the
overlap that occurs within SBA's entrepreneurial development
programs and how private efforts meet the needs of businesses
seeking professional educational opportunities.
On July 28, 2011, Chairman Graves sent a letter to the
Administrator of the SBA, the Hon. Karen Mills, requesting that
the Administrator reconsider the disbursement of funds to
grantees operating Small Business Development Centers (SBDC).
The letter contended that the competitive grant program
undermined the basic financing structure of the SBDC program.
The following day, the Committee sent a request to the SBA
for contracts issued by the agency on a sole source basis to a
company that provided certain types of entrepreneurial
education. The Committee continues to investigate this sole
source contract and whether it duplicates efforts already
provided by other entrepreneurial development programs at the
SBA.
At a hearing on October 17, 2011, the Subcommittee on
Contracting and the Workforce examined whether changes were
needed to the SBA's entrepreneurial outreach programs to
maximize assistance to new entrepreneurs. The panel determined
that improvements could be made with efforts to refocus some of
the assistance provided by the SBA's entrepreneurial
development partners.
The Subcommittee on Agriculture, Energy and Trade held a
field hearing in Pittsburgh, PA on April 2, 2012 to discuss
trade policies and its impact on small manufacturers. Although
the main thrust of the hearing was not oversight of SBA's
entrepreneurial development programs, the issue of duplication
and coordination among SBA international trade offices and
those other federal and state agencies. Witnesses asseverated
that there needs to be greater coordination among federal and
state offices to promote the growth of small business
exporters.
C. Oversight of Federal Government Contracting Matters
On March 16, 2011, the Committee on Small Business met for
a hearing titled, ``Spurring Innovation and Job Creation: The
SBIR Program.'' This hearing marked the beginning of the
Committee's work to reauthorize the Small Business Innovation
Research (SBIR) and Small Business Technology Transfer (STTR)
programs. Last fully reauthorized in 2000, the SBIR program
sets aside federal research and development dollars to be
provided in the form of grants to small businesses that offer
innovations and needed products to the federal government. As
such, the program offers an effective way to jump start
entrepreneurs, grow the economy, and create jobs.
On April 7, 2011, the Subcommittee on Healthcare and
Technology met for a hearing titled, ``The Creating Jobs
Through Small Business Innovation Act of 2011.'' The hearing
was the second in a series of Committee events associated with
the reauthorization SBIR and STTR programs. This hearing
examined a draft of legislation reauthorizing the SBIR and STTR
programs. Witnesses discussed the benefits of specific
provisions in the draft legislation designed to improve and
modernize the SBIR and STTR programs.
On April 15, 2011, the Committee sent a letter to the SBA
requesting access to the Electronic Subcontracting Reporting
Systems to better carry out its oversight responsibilities.
On May 5, 2011, the Subcommittee on Economic Growth,
Capital Access and Tax met for a hearing titled, ``Professional
Services: Proposed Changes to the Small Business Size
Standard.'' The Subcommittee hearing examined the impact of
size standard regulations proposed by the SBA to redefine who
is a small business in the professional, scientific, and
technical services industries. The transcript of the hearing
and written testimony was provided to the SBA via a letter
dated May 6, 2011, to be included in the administrative record.
On May 12, 2011, the House Committee on Small Business and
the House Committee on Oversight and Government Reform met for
a joint hearing entitled, ``Politicizing Procurement: Will
President Obama's Proposal Curb Free Speech and Hurt Small
Business?'' This hearing examined the proposed Executive Order
(``EO'') mandating the disclosure of political donations by
government contractors as a prerequisite to receiving a
government contract, and evaluated its impact and consequences
upon the federal acquisition system. Specifically, the
Committees expressed concerns that this proposed EO would
inject politics into the procurement process, violate political
free speech rights, and usurp the legislative power of
Congress. This hearing followed a letter to President Obama,
dated April 21, 2011, detailing Chairman Graves' concerns with
the impact of the EO on small contractors.
On May 26, 2011, the Small Business Subcommittee on
Contracting and Workforce met for a hearing titled, ``Defer No
More: The Need to Repeal the 3% Withholding Provision.'' The
hearing examined the effect of Section 511 of the Tax
Prevention and Reconciliation Act of 2005, which will require
federal, state and local governments to withhold 3 percent from
all payments for goods and services purchased from small
businesses. The Subcommittee heard witness testimony that
Section 511 will: cost more to implement than it would generate
in revenue; restrict the already tight cash flow of small
companies; and destroy jobs.
Efforts to examine federal government contracting continued
with four hearings by the Subcommittee on Contracting and the
Workforce in late June, September and October of 2011. Those
hearings were then followed with two more Subcommittee hearings
in February and June of 2012. Those hearings have been
described in greater detail in the sections on Subcommittee
hearings and a description of the Committee's activities to
combat waste, fraud and abuse. For the sake of brevity, their
description will not be reiterated here.
On June 9, 2011, the Committee on Small Business and the
Committee on Oversight and Government Reform sent a letter to
the Department of Health and Human Services to seek information
about a contract awarded by the Biomedical Advanced Research
and Development Authority (BARDA). The Committees expressed
concern about the procurement process used to select the
recipient, which started as a small business set-aside, but was
then cancelled, and BARDA made a sole source award. The
Committee continues to investigate this contract in conjunction
with the Committee on Oversight and Government Reform.
On June 29, 2011, as a follow-up to a hearing on insourcing
policies, Subcommittee Chairman Mulvaney sent a letter to the
Administrator of the Office of Federal Procurement Policy
(OFPP), the Hon. Daniel I. Gordon (a copy of which was also
sent to the Director of the Office of Management and Budget,
the Hon. Jacob Lew). In the letter, Chairman Mulvaney disputed
the findings of OFPP that insourcing would result in savings to
the federal government. The Subcommittee Chairman then went on
to request that insourcing stop until agencies developed
transparent and sound cost estimation methodologies.
On November 1, 2011, the Committee issued subpoenas to
Deputy Attorney General James Cole, Deputy Secretary of State
William Burns, Deputy Treasury Secretary Neal Wolin, and Deputy
Secretary of Agriculture, Kathleen Merrigan to testify at a
hearing on their agencies' lack of compliance with the
requirements for ensuring that the Small and Disadvantaged
Business Utilization Offices (SADBUs) reported to the head or
deputy head of the agency. The hearing was intended to be the
culmination of an investigation by GAO and the Committee on the
failure of certain agencies to comply with federal statutes
mandating that SADBUs report to either the head or deputy head
of each federal agency. After the issuance of the subpoenas,
the agencies negotiated changes to their internal reporting
structures to the satisfaction of Chairman Graves and
Subcommittee Chairman Mulvaney. In addition to these agencies,
the Departments of Interior and Health and Human Services also
agreed to modify the reporting structures for their Offices of
Small and Disadvantaged Business Utilization.
The Committee continues to monitor federal procurement
matters as it relates to small businesses through informal
contacts with the small business community and regular
briefings with agency procurement personnel. For example,
Chairman Graves, in conjunction with Chairman Issa, sent
another letter to Secretary Sibelius on December 12, 2011
concerning the award of a sole source contract awarded by BARDA
already mentioned earlier in this section on government
contract oversight. On April 17, 2012, the Committee requested
information from the Inspector General of GSA concerning travel
and conference planning abuses at that agency.
On June 28, 2012, the Subcommittee on Contracting and
Workforce held a hearing to examine the preference provided to
Federal Prison Industries or UNICOR. Small businesses and
members of Congress contended that UNICOR oversteps is
statutory authority and significantly impedes the ability of
small businesses to provide goods and services to the federal
government.
On September 11, 2012, the Subcommittee on Healthcare and
Technology held a hearing about the Centers for Medicare and
Medicaid Services' (CMS) operation of competitive bidding
programs for the purchase of durable medical equipment by
Medicare-eligible beneficiaries. Specifically, the hearing
examined the competitive bidding model utilized by CMS and
whether there are better models to obtain durable medical
equipment that allow greater participation by small businesses.
This was followed by a letter from Chairman Graves and
Subcommittee Chairwoman Ellmers to CMS with substantive
questions for the record.
The Committee held a hearing on September 20, 2012
examining the impact that sequestration of federal budgetary
dollars will have on small business federal government
contractors. The Committee heard from small businesses that the
federal government was not fully prepared to deal with the
impacts of sequestration on small businesses that contract with
the federal government.
The Committee held a number of meetings with federal
agencies and small businesses to during the latter half of the
second session of the 112th Congress to address concerns about
the federal contracting process in general. In addition,
Committee staff met with small businesses that had raised
concerns about specific individual contracting actions and
staff followed up with the federal agencies in an effort to
determine whether improper procedures were used in the award of
those contracts.
The Committee sent a letter requesting all of the memoranda
of understanding (MOU) that the SBA entered into with other
agencies to delegate the SBA's authority under Sec. 8(a) of the
Small Business Act. The Committee staff continues to review
whether the actions of the SBA comport with the legislative
parameters of 8(a) and whether the federal agencies are in
compliance with the MOUs.
The Committee submitted a letter to the SBA contesting the
agency's decision not to consider whether a contract awarded by
the Department of Energy was a bundled contract. Further
efforts by the Committee resolved its concerns about the
contract.
On October 25, 2012, the Committee submitted comments to
the General Services Administration (GSA) in response to
potential modification to the operation of multiple award
schedule contracts. The Committee followed up with a letter to
Acting Administrator Tangherlini about its concerns.
Chairman Graves sent a letter to the Secretaries of the
Navy and Air Force on November 13, 2012 raising the issue of
the failure of the Departments' contractors to pay their
subcontractors in a prompt manner. The Department of the Navy
responded by alerting contracting officials to ensure that
subcontractors are paid promptly according to federal statutes.
D. Oversight of SBA Management
The Committee continues to oversee the management of the
SBA through hearings, meetings with agency personnel, and
industry representatives.
On March 2, 2011, the Committee held a hearing on the SBA's
proposed budget for FY2012. This hearing reviewed the
administration's funding requests as well as agency management
of key policy initiatives for the fiscal year. The Committee
heard testimony from SBA Administrator Karen Mills. The
information garnered at this hearing was utilized in the
Committee's development of views and estimates on the FY 2012
budget, subsequently adopted by the Committee and submitted to
the House Budget Committee on March 17. 2011. The Committee's
views and estimates letter recommends that 14 programs be
zeroed out and three programs receive less money than the SBA
requested for FY12. The total dollar figure is difficult to
quantify, but is approximately $100 million in cuts or 10
percent less than the SBA's FY12 budget request.
In two hearings, one on October 26, 2011 and one on
November 30, 2011, the Committee held hearings to assess the
management of SBA's capital access and disaster loan programs.
Those hearings were described in greater detail elsewhere in
this document and a reiteration of their descriptions would be
pleonastic.
The examination of the Loan Management Accounting System by
the GAO at the behest of the Committee, perforce, delves into
SBA management of complex information technology. In addition,
it examines whether the SBA has the tools needed to manage an
$80 billion loan portfolio. A detailed description of the
Committee's oversight hearing can be found elsewhere in this
document and will not be repastinated here.
Chairman Graves sent a letter to Administrator Mills on
April 11, 2012 concerning the SBA's award of a grant in the
State Trade Export Promotion (STEP) program created by the
Small Business Jobs Act of 2010. Chairman Graves noted that a
grant was made to an ineligible territory--the Northern
Marianas Islands--and requested that the funds be returned to
the United States Treasury rather than retained by the SBA. In
addition, the Chairman requested information on protocols that
will be followed to ensure that similar situations do not occur
in the agency's oversight of the STEP program.
The Committee sent comments letters to the SBA on July 12,
2012 and October 4, 2012. The letters supported the SBA's
regulations implementing changes with the Small Business
Innovation Research (SBIR) program because the regulations will
reduce abuse of that program by a limited number of companies
and increase access to the program by venture capitalists. Both
were major goals that Chairman Graves sought in the enactment
of reforms to the SBIR program.
E. Oversight of Federal Regulatory and Paperwork Burdens
On February 16, 2011, the Committee on Small Business met
for a hearing titled, ``Putting Americans Back to Work: The
State of the Small Business Economy.'' The Committee examined
obstacles to small business job creation and economic growth
and attempted to identify specific tax, regulatory and health
care policies that are inhibiting job creation and economic
growth. The hearing set the stage for future Committee
deliberations related to the obstacles impeding entrepreneurs'
and small firms' ability to strengthen our economy and put
Americans back to work.
On March 21, 2011, the Committee sent a letter to the
Department of Labor (DOL) regarding a rule on wage methodology
for temporary non-agricultural employment H2B program (76 Fed.
Reg. 3,452). The letter questioned the methodology used to
determine the prevailing wage under the rule and the impact on
small businesses.
On March 30, 2011 the Committee on Small Business met for a
hearing entitled, ``Reducing Federal Agency Overreach:
Modernizing the Regulatory Flexibility Act.'' The purpose of
the hearing was to examine the Regulatory Flexibility Act (RFA)
as amended by the Small Business Regulatory Enforcement
Fairness Act (SBREFA). This hearing laid the foundation for
Committee consideration of RFA reform and efforts to improve
agency compliance with the Act.
On April 12, 2011, the Committee sent a letter to the
Commissioner of the Food and Drug Administration (FDA)
regarding potential regulatory action related to the extra-
label use of cephalosporin antimicrobial drugs in food-
producing animals. Concerns were raised by agriculture
producers, veterinarians, and consumers over the adverse impact
the ban would have on food safety and animal health. A rule was
proposed and revoked in 2008. The letter was sent in response
to information suggesting the FDA is considering reissuing the
rule.
On April 14, 2011, the Committee sent a letter to the Chief
Counsel for Advocacy at the SBA to encourage analysis of the
Securities and Exchange Commission's proposed rule related to
use of conflict minerals (75 Fed. Reg. 80,948). The letter
focused on compliance with the Regulatory Flexibility Act and
the rule's impact on small entities.
On May 12, 2011 The House Committee on Small Business
Subcommittee on Oversight, Investigations and Regulations met
for a hearing entitled, ``Green Isn't Always Gold: Are EPA
Regulations Harming Small Businesses?'' The hearing examined
Environmental Protection Agency regulations that negatively
affect small businesses, most specifically those related to the
Clean Air Act and the Resources Conservation and Recovery Act.
The Subcommittee heard testimony from small business owners
about how EPA has neglected to take into account the Regulatory
Flexibility Act when promulgating regulations despite
significant direct and indirect burdens experienced by small
businesses.
On June 13, 2011, the Committee sent a letter to the
Department of Agriculture (USDA) Grain Inspection, Packer and
Stockyards Administration (GIPSA) regarding a proposed rule to
amend the Packer and Stockyards Act of 1921 (75 Fed. Reg.
35,338). The letter calls into question USDA's compliance with
the Regulatory Flexibility Act in determining the impact of the
regulation on small businesses involved in the beef, pork, and
poultry industries' supply chain.
On June 13, 2011, the Small Business Subcommittee on
Investigations, Oversight and Regulations met for a hearing
entitled, ``Do Not Enter: How Proposed Hours of Service
Trucking Rules are a Dead End for Small Businesses.'' The
hearing reviewed the Federal Motor Carrier Safety
Administration's proposed rule on trucking Hours of Service and
explored how this regulation would harm small businesses by
reducing allowed duty times for motor carriers and thereby
hindering the ability for owner-operators and other small
businesses to deliver goods nationwide.
On June 16, 2011, the Small Business Subcommittee on
Economic Growth, Tax and Capital Access convened a hearing
titled ``The Dodd-Frank Act Impact on Small Business Lending.''
The hearing examined the impact of Dodd-Frank regulations on
the ability of banks to make loans to small businesses. This
was followed by an examination of the potential adverse
consequences on small business access to capital that may
result from regulations issued by the Consumer Financial
Protection Bureau. The hearing, titled ``Open for Business: The
Impact of the CFPB on Small Business,'' was convened by the
Subcommittee on Investigations, Oversight and Regulations.
On June 23, 2011, the Committee sent the Commissioner of
the Internal Revenue a letter concerning the requirement to
report payment card and third party network transactions. The
letter noted these requirements would be particularly
burdensome on small businesses. As a result, the Committee
requested that the Commissioner impose the minimal amount of
reporting necessary to comply with the law and to the extent
possible, reduce the complexity associated with this
information collection.
On July 7, 2011, the Subcommittee on Agriculture, Energy
and Trade held a hearing titled ``Regulation Gone Awry: How
USDA's Proposed GIPSA Rule Hurts America's Small Businesses.''
The hearing was a follow-up to the June 13, 2011 letter from
Chairman Graves and Subcommittee Chairman Tipton concerning the
Department's failure to examine the impact of proposed rules to
implement the 2008 Farm Bill changes to the Packers and
Stockyards Act. At the hearing, small livestock producers and
meat processors testified about the increased uncertainty that
would result from the adoption of the Department's proposed
rule.
Chairman Graves sent a letter to EPA Administrator Lisa
Jackson on July 11, 2011 concerning the procedures used by the
agency to convene a panel of small businesses, as set forth in
Sec. 609 of the Regulatory Flexibility Act, 5 U.S.C. Sec. 609,
in the development of a proposed rule to establish new source
performance standards for utilities in order to control
greenhouse gases. The Chairman noted that the small business
representatives were not provided sufficient information to
provide EPA with appropriate input on the impacts on small
businesses.
On September 21, 2011, the Committee on Small Business held
a hearing titled ``Eliminating Job-Sapping Federal Rules
through Retrospective Reviews--Oversight of the President's
Effort'' to examine the results of Executive Order 13,563. That
order required ongoing retrospective review of all federal
regulations and the Committee was raised questions to the
Administrator of the Office of Information and Regulatory
Affairs, the Hon. Cass Sunstein, concerning whether the
Executive Order would be any different than other presidential
efforts to reduce regulatory burdens through retrospective
reviews. As a follow-up to the Committee's September 21, 2011
hearing, the Chairman, on November 4, 2011 sent Administrator
Sunstein a letter raising multiple concerns about the cost
impact of federal rules on general aviation.
On October 5, 2011, the Committee convened to examine the
impact of various decisions by the Department of Labor and
National Labor Relations Board on small businesses. In
particular, the hearing reviewed decisions that would place
small businesses in a significantly disadvantageous position
during union organizing campaigns.
The Committee extended its examination of regulatory issues
affecting general aviation when it convened a hearing titled
``LightSquared: The Impact of Small Business GPS Users'' on
October 12, 2011. The hearing focused on a proposal before the
Federal Communications Commission to allocate spectrum for use
of a terrestrial broadband service adjacent to spectrum used
for GPS services. Witnessed testified about the potential
interference with GPS devices, the potential serious
consequences to aviation, and the costs that would result in
needing to buy equipment that can filter out interference from
an adjacent terrestrial broadband service.
On November 17, 2011, the Subcommittee on Agriculture,
Energy and Trade held a hearing titled ``Adrift in Regulatory
Burdens and Uncertainty: A Review of Proposed and Potential
Regulations of Family Farms.'' The primary focus of the hearing
was the impact of requiring pesticide applicators to obtain a
discharge permit under the Clean Water Act. In addition, the
hearing considered the economic consequences of regulating dust
on farms pursuant to the Clean Air Act.
On November 17, 2011, Chairman Graves co-signed a letter to
the Chair of the Securities and Exchange Commission, the Hon.
Mary Schapiro. In the letter, the signatories raised concerns
about the Commission's efforts to issue a final rule on
conflict minerals as required by Sec. 1502 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act. Specifically,
the Commission's failure to assess adequately impacts on small
business as mandated under the Regulatory Flexibility Act.
The Subcommittee on Economic Growth, Tax and Capital Access
held a field hearing in Woodstock, IL on December 12, 2011 to
hear small businesses their concerns about regulatory overreach
and uncertainty. The witnesses were consentient in their belief
that increased government regulation and what direction it
takes is deterring them from making new investments or hiring
more workers.
On February 2, 2012, the Subcommittee on Agriculture,
Energy and Trade held a hearing to examine regulatory changes
proposed by the United States Department of Labor concerning
family-farm exemptions under the Fair Labor Standards Act
(FLSA). The hearing resulted in the Department withdrawing part
of the proposed rule and examining anew the family-farm
exemptions under FLSA.
Regulatory barriers and impediments to greater broadband
deployment were examined in a Subcommittee on Healthcare and
Technology hearing on February 15, 2012. The witnesses noted
that reformation of the Universal Service regime and
modification of spectrum management policies were needed to
increase broadband deployment in rural areas.
The Subcommittee on Economic Growth, Tax and Capital Access
held a hearing on April 19, 2012 to examine the impact of
regulatory changes wrought by the Dodd-Frank Wall Street Reform
and Consumer Protection Act on the ability of small businesses
to obtain equity capital. Witnesses testified that regulations,
notwithstanding the JOBS Act, emanating from Dodd-Frank
continue to impose barriers to small business access to equity
capital.
A joint hearing was held by the Subcommittee on Healthcare
and Technology of the Committee on Small Business and the
Subcommittee on Investigations and Oversight of the Committee
on Science, Space and Technology to consider the impact on
small business of the 12th Report on Carcinogens. Private
sector witnesses, as well as a witness from the Office of the
Chief Counsel for Advocacy of the United States Small Business
Administration, contended that the Report did not go through a
sufficient peer review process or obtain public input. Small
businesses with chemicals newly listed in the Report raised
concerns about economic impact of being listed as a potential
carcinogen as well as legal liability associated with such
listing.
The Subcommittee on Contracting and the Workforce examined
the impact of federal regulations on small businesses during a
June 14, 2012 field hearing in Rock Hill, SC. The businesses
noted that the government fails to provide sufficient
information to enable them to comply with federal regulations,
do not utilize sound science in developing regulatory
standards, and future regulatory uncertainty interferes with
the ability of businesses to undertake proper short- and long-
term planning.
On June 27, 2012, the Committee held a hearing on EPA's
compliance with the Regulatory Flexibility Act. Testimony
revealed that EPA failed to provide small businesses with
sufficient information to make their participation in
rulemaking effective under 609 of the Regulatory Flexibility
Act. A similar problem was raised in a full Committee hearing
on August 1, 2012 concerning the Consumer Financial Protection
Bureau's (CFRB) issuance of proposed rules revising disclosures
to purchasers of residential real estate. This hearing resulted
in a comment letter from Chairman Graves on November 5, 2012
criticizing the assessment of economic impact on small
businesses in the residential real estate market.
On July 11, 2012, the Committee examined the burdens
imposed on the trucking industry as a result of changes in the
Federal Motor Carrier Safety Administration's (FMCSA)
enforcement program that were made without input from small
businesses. As a consequence of the hearing, the Committee sent
a letter to the FMCSA identifying problems with the new
compliance program that could have been avoided had the agency
properly assessed the economic consequences on small truckers.
Two additional hearings, one by the Subcommittee on
Investigations, Oversight and Regulations on July 12, 2012 and
one by the full Committee on September 12, 2012 hearing
examined regulatory burdens on the transportation sector. The
July 12 hearing assessed the burdensome regulations facing the
marine industry while the September 12 hearing assessed the
consequences of increased user fees on small businesses in the
general aviation industry.
On August 8 and November 1, 2012, Chairman Graves (along
with other Members of Congress) sent letters to the Securities
and Exchange Commission. The August 8 letter raised issues
concerning the impact on small businesses on conflict minerals.
The November 1 letter, in an effort to reduce regulatory
burdens on the ability of small businesses to raise capital,
requested that the Commission lift the ban on solicitation and
advertising in private offerings.
Chairman Graves, in conjunction with Chairman Smith of the
Judiciary Committee, sent a letter on October 31, 2012 to the
Chief Counsel for Advocacy of the United States Small Business
Administration. The two Chairmen criticized federal agencies
for not publishing their Regulatory Flexibility Act agendas as
required by Sec. 602 of that Act.
F. Oversight of Federal Tax Policy
On February 9, 2011, the Committee on Small Business met
for a hearing titled, ``Buried in Paperwork--A 1099 Update.''
The hearing focused on the health care reform law's expanded
1099 reporting mandate, which would have required businesses to
file a 1099 form for virtually every business-to-business
transaction of $600 or more in property and services. In a
letter dated February 10, 2011, the Committee shared the
information garnered at the hearing with the Chairman and
Ranking Member of the Committee on Ways and Means.
On April 13, 2011, the Committee on Small Business met for
a hearing entitled, ``How Tax Complexity Hinders Small
Businesses: The Impact on Job Creation and Economic Growth.''
As Congress considers the issues related to fundamental tax
reform, the concerns of America's small businesses about tax
reform should be part of that debate. This hearing examined the
complexity of the current tax code, the difficulty that
entrepreneurs have in complying with it and the resulting
effect on hiring and economic expansion. In a letter to the
Chairman and Ranking Member of the Committee on Ways and Means
dated April 13, 2011, the Committee shared the views of the
witnesses who testified as relevant to the ongoing debate on
tax reform.
On November 3, 2011, the Subcommittee on Economic Growth,
Tax and Capital Access held a hearing titled ``Pro-Growth Tax
Policy: Why Small Businesses Need Individual Reform.'' The
hearing focused on the importance of tax policies to our
nation's small businesses. The primary issues addressed at the
hearing included complexity of the tax code and the taxation of
pass-through entities, such as sole proprietorships and S
corporations.
The full Committee and the Subcommittee on Economic Growth,
Tax and Capital Access held hearings in April and May of 2012
respectively to examine the impact of federal tax policy on
small businesses. At the full Committee hearing a wide variety
of issues, including high effective tax rates and complexity,
were ventilated. During the Subcommittee hearing, witnesses
asserted that the estate tax for small business owners should
be permanently repealed.
In addition to these hearings, the Committee continues to
investigate the impact of Internal Revenue Code Sec. 6050W
(dealing with among other things the tracking and reporting of
debit and credit card purchases) on small businesses. On
February 8, 2012, Chairman Graves sent a letter to IRS
Commissioner Shulman requesting more information about the
Service's implementation of Sec. 6050W.
On September 13, 2012, the Subcommittee on Economic Growth,
Tax and Capital Access held a hearing to address the tax
implications of the colloquially denominated ``fiscal cliff.''
Small businesses testifying at the hearing expressed concern
that an increase in rates for pass-through entities, such as
partnerships and S Corporations, would hurt their ability to
create jobs.
Chairman Graves and Senator Snowe (R-ME), the Ranking
Member of the Senate Small Business and Entrepreneurship
Committee sent a letter to Secretary Geithner on September 6,
2012. The letter asserted that the Department of Treasury
Office of Tax Analysis's revised methodology for estimating the
number of small businesses that would be adversely affected by
the expiration of the tax cuts enacted in 2001 and 2003 was
flawed. As a result, the authors contended that the analysis
underestimated the total number of small businesses that would
face an increase in taxes if the cuts were to expire.
The Chairman, in conjunction with Senate appropriators,
requested that GAO examine the cost of implementing the
Affordable Care Act. GAO found that the IRS implementation of
47 provisions cost $881 million. GAO made numerous
recommendations to the IRS to reduce the cost of
implementation.
G. Oversight of Health Care Policy
On March 22, 2011, the Committee sent a letter to the
Department of Health and Human Services requesting information
related to the treatment of small businesses in the Patient
Protection and Affordable Care Act (PPACA) (P.L. 111-148)
waiver process. The Committee is concerned that the process for
receiving waivers may be unfair to small firms. The Committee
also asked the GAO to examine the waiver process. On June 14,
2011, the GAO issued a report regarding HHS waivers of
restrictions on annual limits on health benefits.
On June 2, 2011, the Small Business Subcommittee on
Healthcare and Technology met for a hearing entitled, ``Not
What the Doctor Ordered: Health IT Barriers for Small Medical
Practices.'' The hearing examined the adoption of health
information technology by small medical practices. The
Subcommittee considered witness testimony regarding the
barriers that small providers have encountered and possible
solutions for addressing those barriers. As follow-ups to this
hearing, Subcommittee Chairwoman Ellmers sent letters to the
Department of Health and Human Services (dated July 5, 2011 and
August 11, 2011) raising issues about the cost of implementing
health information technology and regulatory modifications that
could assist small health care providers in overcoming these
cost barriers.
The Subcommittee on Healthcare and Technology held a
hearing on July 28, 2011 titled ``Small Businesses and PPACA:
If They like Their Coverage can They Keep It?'' Small
businesses testified that PPACA will not help them maintain
health insurance coverage or reduce their costs of doing
business.
On August 30, 2011, Subcommittee Chairwoman Ellmers sent a
letter to Secretary Sebelius on a proposed rule concerning the
establishment of health insurance exchanges under the Patient
Protection and Affordable Care Act. Subcommittee Chairwoman
Ellmers contended that the proposed rule might force small
health insurers out of the market. More significantly,
Subcommittee Chairwoman Ellmers alleged that the requirements
for eligibility as a small business under the insurance
exchanges would impose significant additional recordkeeping and
reporting requirements thereby increasing rather than
decreasing costs for small businesses.
On October 14, 2011, Chairman Graves sent a letter to GAO
concerning the Internal Revenue Service's implementation of
provisions in the Patient Protection and Affordable Care Act.
Mr. Graves, in addition to being added as co-requestor on a
study already underway by GAO, he asked GAO to prepare a study
on the impact on small business of the Service's implementation
of the Patient Protection and Affordable Care Act.
The Subcommittee on Investigations, Oversight and
Regulations held a hearing on December 15, 2011 to examine the
impact of medical loss ratios (the requirement in the
Affordable Care Act that insurers spend at least 80 percent of
their premiums on coverage) on agents that sell health
insurance. Agents noted that the medical loss ratio provisions
will reduce services to small businesses a view seconded by
small businesses at the hearing.
Subcommittee Chairman Coffman convened a field hearing on
March 16, 2012 in Greenwood Village, CO to assess the impact of
the Affordable Care Act on small businesses that provide their
employees with health insurance. The witnesses all concurred
that the Act would reduce their ability to provide employees
with health care coverage.
Subcommittee Chairwoman Ellmers sent a letter to the Acting
Administrator of the Centers for Medicare and Medicaid Services
on May 1, 2012 concerning a proposed rule to implement the
Electronic Health Record Incentive Program. The letter
expressed significant concern about the Stage 2 goals in the
proposed rule and its potential impact on small physician
practices, particularly those with fewer than ten doctors. That
was followed with another letter to Secretary Sebelius on June
12, 2012 requesting that the Secretary provide Subcommittee
Chairwoman Ellmers with a report outlining plans on how to
ensure patient safety during the adoption of health information
technology.
On July 19, 2012, the Subcommittee on Investigations,
Oversight and Regulations convened a hearing to examine the
impact on small providers of health care associated with the
regulations implementing the Affordable Care Act. Testimony
from experts and physicians revealed that regulatory burdens
are forcing smaller physician practices to consolidate into
ever larger practices.
Subcommittee Chairwoman Ellmers sent multiple letters to
multiple federal agencies concerning the regulatory impact on
health care providers. A June 26, 2012 letter requested that
the Food and Drug Administration modify rules to enhance
innovation in mobile medical applications. A letter on November
14, 2012 to Secretary Sebelius requesting a response to a
letter of June 12, 2012 concerning actions that the Secretary
should have taken pursuant to an Institute of Medicine report.
Chairman Graves sent a letter to Secretary Sebelius on
December 13, 2012. The letter responded to the proposed rule on
the definition of essential health benefits under the
Affordable Care Act. The Chairman requested that the Secretary
consider the impact of the definition on the ability of small
businesses to purchase health insurance.
The Committee had a role in a number of finished or ongoing
GAO studies concerning implementation of the Affordable Care
Act. As already noted in the section on tax policy oversight,
GAO found IRS's implementation of the provisions to be
excessive and recommended changes to reduce costs. GAO, on May
14, 2012, in response to a request by Chairman Graves, found
that less than 5 percent of the supposedly eligible small
businesses claimed even a partial tax credit under the
Affordable Care.
H. Oversight of Energy Policy
On April 14, 2011, the Small Business Subcommittee on
Agriculture, Energy and Trade met for a hearing titled,
``Drilling for a Solution: Finding Ways to Curtail the Crushing
Effect of High Gas Prices on Small Business.'' The purpose of
this hearing was to bring to light the negative impacts of
rising fuel costs on small business and to understand the
effects of short- and long-term solutions such as increasing
domestic oil production and further developing renewable energy
sources.
On September 19, 2011, the Subcommittee on Agriculture,
Energy and Trade held a field hearing in Grand Junction, CO,
titled ``Are Excessive Energy Regulations and Policies Limiting
Energy Independence, Killing Jobs and Increasing Prices for
Consumers?'' The hearing examined burdensome federal
regulations and policies on the development of energy resources
located in the United States and, in particular, Colorado.
Chairman Graves convened a hearing on May 9, 2012 to
examine the impact of gasoline prices on small businesses.
Witnesses testified that small businesses had little control
over the volatility in fuel prices, could not (unlike their
larger counterparts) effectively hedge against such rapid price
increases, and suffered diminution in net profits due to the
increased costs of fuel.
Two Subcommittee hearings were held in the first half of
2012 that examined federal energy policy. The first, held on
March 8, 2012 by the Subcommittee on Investigations, Oversight
and Regulations addressed the barriers to increasing extraction
on fossil fuels on federally-managed land, primarily that under
the Bureau of Land Management. Witnesses suggested reduction in
regulatory barriers to permit greater drilling on federal
lands, especially for those lands already identified to be
eligible for drilling. The second hearing, before the
Subcommittee on Agriculture, Energy and Trade convened on April
26 assayed the current state of small business innovation in
developing alternative energy sources.
The Subcommittee on Economic Growth, Tax and Capital Access
held a field hearing in the suburbs of Chicago, IL on June 25,
2012 to consider the impact of rising fuel prices on small
businesses. The witnesses noted that rising fuel prices force
them to absorb the costs or pass them on to consumers who
themselves may have difficulty covering such price increases.
On November 1, 2012, the Committee submitted a letter to
the Director of the Bureau of Land Management on proposed rules
to regulate hydraulic fracking on federal lands. The letter
raised issues concerning the disparate impact that the proposed
regulations would have on small oil and gas drillers that use
federal lands.
I. Oversight of Trade and Intellectual Property Policy
On April 6, 2011, the Committee on Small Business met for a
hearing entitled, ``Help Wanted: How Passing Free Trade
Agreements Will Help Small Businesses Create New Jobs.'' The
hearing focused on the benefits and importance of passing the
pending free trade agreements to small businesses. Lowering
trade barriers will spur small business exports, which will
then lead to job creation and long-term economic growth.
On July 27, 2011, the Committee on Small Business held a
hearing titled ``Bureaucratic Obstacles for Small Exporters: Is
our National Export Strategy Working?'' The hearing examined
the efforts encapsulated in President Obama's National Export
Strategy to reduce the regulatory barriers facing small
businesses to expand their involvement in exports of goods and
services.
Ambassador Sapiro, the Deputy United States Trade
Representative, testified at a full Committee hearing on May
16, 2012 about trade policy initiative designed to increase
exports. In addition to Ambassador Sapiro, small businesses
testified at the hearing. Like Ambassador Sapiro, the small
businesses supported increased export trade and recommended
reducing the complexity of rules covering exports from the
United States. The witnesses expressed the same sentiments that
the Subcommittee on Agriculture, Energy and Trade heard at its
Pittsburgh, PA field hearing on April 2, 2012.
On July 18, 2012, the Committee convened a hearing to
examine the federal broadband plan developed by Chairman
Genachowski of the Federal Communications Commission. In
addition, the Administrator of the Rural Utilities Service at
the Department of Agriculture and the Assistant Secretary of
the National Telecommunications Information Administration at
the Department of Commerce testified. The purpose of the
hearing was to examine whether the broadband plan was effective
in expanding the availability of broadband to small business.
The Committee staff met with the Federal Trade Commission
to examine the appropriate role of that agency in combating
stolen information technology. Specifically, the Committee
staff was concerned that stolen technology might have an
adverse impact on the competitive status of small manufacturers
in the United States.
J. Reductions in Programs and Spending
On March 15, 2011 the Committee reported its views and
estimates on the FY 2012 budget that outlined several programs
at the SBA that should be considered for reduced spending or
eliminated altogether. The letter suggested a reallocation of
resources, both financial and personnel, to better meet the
agency's mission. This letter will be used as a template for
legislation to consolidate and eliminate unnecessary or
duplicative programs. Overall, the Committee recommended the
elimination of 14 programs, totaling approximately $100
million. The Committee continues to examine programs and
options for consolidating and eliminating unnecessary small
business programs.
On March 7, 2012, the Committee reported its views and
estimates on the FY 2013 budget that identified programs at the
SBA that should be considered for reduced spending or
eliminated altogether. In addition, the letter recommended a
reallocation of resources to enable the agency to better meet
its mission of serving small businesses. The Committee
continues to examine agency programs and procedures in order to
draft legislation that will increase SBA effectiveness without
undermining services provided to America's entrepreneurs.
REGULATORY REVIEW
Legislative and Oversight Activity Related to Regulations, Orders,
Administrative Actions and Procedures by Federal Agencies Within the
Jurisdiction of the Committee on Small Business\1\
---------------------------------------------------------------------------
\1\Under House rule X, the Committee on Small Business has
jurisdiction over the protection of small business including
``regulatory flexibility,'' as well as jurisdiction over the
participation of small businesses in government contracts.
------------------------------------------------------------------------
Oversight and legislative
Regulation, order, administrative action activity
------------------------------------------------------------------------
1099 Reporting Requirement in the Patient The Committee held a hearing
Protection and Affordable Care Act regarding the burden on
(PPACA) (P.L. 111-148). small businesses of the
expanded 1099 reporting
requirement in PPACA. The
Committee shared the
information gained in the
hearing with the Committee
on Ways and Means in a
letter dated February 10,
2011. Ultimately, the
provision was repealed
(P.L. 112-15)
SBA 504 Loan Refinancing Program (76 Fed. On March 2, 2011, the
Reg. 9,213). Committee held a hearing on
the SBA budget request for
FY 2012, and on March 15,
2011, the Committee
reported its views and
estimates on the FY 2012
SBA budget, including a
recommendation that the 504
Loan Refinancing Program be
considered for elimination
and that no funds be
allocated for the SBA to
oversee this program.
Department of Labor (DOL) rule on wage The Committee sent a letter
methodology for temporary non- dated March 21, 2011 to DOL
agricultural employment H2B program (76 questioning the methodology
Fed. Reg. 3,452). used to determine the
prevailing wage under the
rule and the impact on
small businesses.
Department of Health and Human Services On March 22, 2011, the
(HHS) waivers provided under the Patient Committee sent a letter to
Protection and Affordable Care Act HHS requesting information
(PPACA). (P.L. 111-148). related to the treatment of
small businesses in the
PPACA waiver process.
Securities and Exchange Commission's (SEC) On April 14, 2011, the
rule related to conflict minerals (75 Committee sent a letter to
Fed. Reg. 80,948). the Chief Counsel for
Advocacy to encourage
analysis of the SEC's
proposed rule, compliance
with the Regulatory
Flexibility Act, and the
impact on small entities.
Proposed Executive Order on disclosure of The Committee submitted a
political contributions by Federal letter to President Obama
contractors. on April 21, 2011, to
express concerns about the
impact of the proposed
Executive Order on small
contractors. On May 12,
2011, the Committee held a
joint hearing with the
Committee on Oversight and
Government Reform to review
the proposal.
SBA Proposed Size Standards for North The Subcommittee on Economic
American Industry Classification System Growth, Tax, and Capital
(NAICS) Sector 54 Industries related to Access held a hearing on
professional services (76 Fed. Reg. May 5, 2011 to review the
14,323). size standard proposal. On
May 6, 2011, via a letter
to the SBA, the
Subcommittee submitted the
transcript of and written
statements from the hearing
for the administrative
record.
Environmental Protection Agency (EPA) The Subcommittee on
regulations related to the Clean Air Act Investigations, Oversight,
(42 U.S.C., Chapter 85) and the Resource and Regulations held a
Conservation and Recovery Act of 1976 hearing on various EPA
(P.L. 95-609). regulations and their
impact on small businesses
on May 12, 2011.
Department of Agriculture (USDA) Grain The Committee sent a letter
Inspection, Packer and Stockyards dated June 13, 2011, to the
Administration (GIPSA) proposed rule to USDA regarding compliance
amend the Packer and Stockyards Act of with the Regulatory
1921 (75 Fed. Reg. 35,338). Flexibility Act in
determining the impact of
the regulation on small
businesses involved in the
beef, pork, and poultry
industries' supply chain.
Tax credit for small businesses The Committee requested a
established by the Patient Protection and GAO analysis of the small
Affordable Care Act (PPACA) (P.L. 111- business tax credit
148). established by PPACA.
Department of Transportation Federal Motor The Subcommittee on
Carrier Safety Administration's Hours of Investigations, Oversight
Service regulations (75 Fed. Reg. 82,170). and Regulation held a
hearing on the impact of
trucking Hours of Service
regulations on small
businesses on June 14,
2011.
Presidential Guidance on Government The Subcommittee on
Contracting (74 Fed. Reg. 9755). Contracting and Workforce
held a hearing to examine
the President's guidance on
insourcing of work
currently done by federal
contractors on June 23,
2011.
Reporting to IRS on credit card Chairman Graves sent a
transactions (28 U.S.C. Sec. 6050W). letter to IRS Commissioner
Shulman concerning the
implementation of reporting
requirements for payment
card and third party
network transactions on
June 23, 2011. The
Committee continues to work
with the IRS on this issue.
Medicare Program; Proposed Changes to the Subcommittee Chair Ellmers
Electronic Prescribing Incentive Program sent a letter to the
(76 Fed. Reg. 31,547). Administrator of the
Centers for Medicare and
Medicaid Services
addressing the impact of
changes in the electronic
prescribing program on
small businesses on July 5,
2011.
Implementation of Regulations Required The Subcommittee on
Under Title XI of the Food, Conservation Agriculture, Energy and
and Energy Act of 2008; Conduct in Trade held a hearing on
Violation of the Act (75 Fed. Reg. July 7, 2011 which
35,338). addressed proposed
regulations that modify
requirements to comply with
the Packers and Stockyards
Act.
Draft Rule on Green House Gas New Source Chairman Graves sent EPA
Performance Standards for Electric Administrator Jackson a
Utility Steam Generating Units. letter on July 11, 2011,
about the inadequacy of the
Small Business Regulatory
Enforcement Fairness Act
panel on green house gas
emissions for new steam
generating facilities
constructed by electric
utilities.
Patient Protection and Affordable Care In a letter dated August 30,
Act: Establishment of Exchanges and 2011, Subcommittee Chair
Qualified Health Plans (76 Fed. Reg. Ellmers provided written
41,866). comments to the Department
of Health and Human
Services on the impact of
proposed insurance
exchanges on small
businesses and the agency's
lack of compliance with the
Regulatory Flexibility Act.
Mentor-Protege Programs related to The Subcommittee on
government contracting (13 C.F.R. Contracting and Workforce
124.520). held a hearing on September
15, 2011 to address a
number of government
contracting issues
including SBA improvements
needed to maximize benefits
of its Mentor-Protege
Program for small
government contractors.
Executive Order 13,563 regarding The Committee held a hearing
regulatory review (76 Fed. Reg. 3821). on September 21, 2011 with
OIRA Administrator Sunstein
to examine President
Obama's executive order
mandating retrospective
review of federal
regulations.
Representation--Case Procedures, Proposed The Committee held a hearing
Rule (76 Fed. Reg. 36,812); Labor- on October 5, 2011 to
Management Reporting and Disclosure Act-- address the impact of
Interpretation of the ``Advice'' proposed changes to union
Exemption, Proposed Rule (76 Fed. Reg. representation elections
36,178). and the impact those
changes would have on small
businesses.
In the Matter of LightSquared Subsidiary The Committee held a hearing
LLC; Request for Modification of its on October 12, 2011 to
Authority for an Ancillary Terrestrial consider the impact of
Component, Order and Authorization, DA 11- LightSquared's construction
133, 26 FCC Rcd 566 (2011). of a terrestrial wireless
broadband service and its
impact on general
aviation's use of GPS.
14 C.F.R. Part 91; 14 C.F.R. 39.13; Lead Chairman Graves sent a
Emissions from Piston Engine Aircraft letter on November 4, 2011
using Leaded Aviation Fuel, Advanced to OIRA Administrator
Notice of Proposed Rulemaking (75 Fed. Sunstein concerning
Reg. 22,440). regulations affecting small
businesses involved in
general aviation.
Final National Pollutant Discharge The Subcommittee on
Elimination System Pesticide General Agriculture, Energy and
Permit for Point Source Discharges from Trade held a hearing on
the Application of Pesticides (76 Fed. November 17, 2011 to
Reg. 68,750). consider the impact of EPA
regulatory actions on small
agribusinesses.
Conflict Minerals, Proposed Rule (75 Fed. Chairman Graves, in
Reg. 80,948). conjunction with other
members of the House and
Senate, wrote to the SEC on
November 17, 2011 reminding
the agency of the need to
comply with the Regulatory
Flexibility Act in
finalizing a rule on
conflict minerals.
Regulations required by the Chairman Graves and
reauthorization of the Small Business Chairwoman Landrieu of the
Innovation Research (SBIR) program in the Senate Committee on Small
National Defense Authorization Act of Business and
2012 (P.L. 112-81). Entrepreneurship wrote a
letter to SBA Administrator
Mills to encourage
compliance with the
deadline in the 2012 NDAA
related to the issuance of
regulations to implement
new provisions of the SBIR
program.
DOL proposed rule regarding agricultural The Subcommittee on
youth labor regulations (76 Fed. Reg. Agriculture, Energy and
54,836). Trade held a hearing on
February 2, 2012 to
determine the impact of the
proposed rule on family
farms. Ultimately, DOL
withdrew part of the
proposed rule and is
reviewing the family-farm
exemptions under FLSA.
Reporting to IRS on credit card Chairman Graves sent a
transactions (28 U.S.C. Sec. 6050W). letter to IRS Commissioner
Shulman on February 8, 2012
to determine the progress
of implementation of
requirements that
businesses report credit
card transactions and the
Agency's consideration of
small business concerns.
Further, three staff
briefings by the IRS
occurred at the Committee's
request.
Department of Health and Human Services The Subcommittee on
12th Report on Carcinogens (RoC) (76 Fed. Healthcare and Technology
Reg. 36,923). held a joint hearing on
April 25, 2012, with the
Science, Space and
Technology Subcommittee on
Investigations and
Oversight, to determine the
impact of the 12th RoC on
small businesses.
Regulations to implement the electronic On May 1, 2012, Subcommittee
health record incentive program (77 Fed. Chair Ellmers wrote a
Reg. 13,698). letter to Acting CMS
Administrator Tavenner
regarding the effect of the
regulations on small
practices and their ability
to comply and the
associated cost burden.
EPA's proposed rules on hazardous air On June 27, 2012, the full
pollutants from boilers and process Committee held a hearing to
heaters (Boiler MACT rules) (76 Fed. Reg. examine the Environmental
15,456, 15,554, 15,608, 15,704, 80,598; Protection Agency's
80,532; 80,452) and on Lead: Renovation, compliance with the
Repair and Painting Program for Public Regulatory Flexibility Act,
and Commercial Buildings (75 Fed. Reg. specifically related to
24,848). these regulations.
Development of rules required by the Food On June 28, 2012,
and Drug Administration Safety and Subcommittee Chair Ellmers
Innovation Act (P.L. 112-144) related to wrote a letter to the
mobile medical applications. Director for the Center for
Devices and Radiological
Health at the Food and Drug
Administration to urge
consideration of small
businesses in the medical
application and technology
industry.
Department of Transportation's On July 11, 2012, The full
implementation of a new carrier safety Committee held a hearing on
measurement system (75 Fed. Reg. 18,256). the Federal Motor Carrier
Safety Administration's
(FMCSA) Compliance, Safety,
Accountability (CSA)
program to determine its
effectiveness and the
impact on small truckers.
Regulations implementing the Longshore and On July 12, 2012, the
Harbor Workers' Compensation Act: Subcommittee on
Recreational Vessels (75 Fed. Reg. Investigations, Oversight
50,719, 50,730). and Regulations held a
hearing on regulations that
are having an adverse
impact on the marine
industry.
Proposed small business size standard On July 12, 2012, Chairman
regulations related to the Small Business Graves submitted comments
Innovation and Research (SBIR) Program on the proposed rules to
and Small Business Technology Transfer suggest minor modifications
(STTR) Program (77 Fed. Reg. 28,520). and agree in many cases
with SBA's interpretation
of legislative intent.
Consumer Financial Protection Bureau's On August 1, 2012, the full
(CFPB) proposed rule regarding integrated Committee held a hearing
mortgage disclosures under the Real examining CFPB's compliance
Estate Settlement Procedures Act with the Regulatory
(Regulation X) and the Truth In Lending Flexibility Act,
Act (Regulation Z) (77 Fed. Reg. 51,116). specifically its proposed
rules related to mortgage
disclosure. On November 5,
2012, Chairman Graves wrote
a comment letter to the
CFPB on the proposed rule
related to the impact on
small businesses in the
real estate industry.
Department of Treasury's report titled On September 6, 2012,
Methodology to Identify Small Businesses Chairman Graves and Senator
and Their Owners (Technical Paper 4). Snowe, ranking member on
the Senate Committee on
Small Business and
Entrepreneurship, sent a
letter to Treasury
Secretary Geithner to
inquire about the authority
to suggest new definitions
for ``small business'' and
the use of such
definitions. A follow up
letter was sent on October
4, 2012, encouraging a
response.
Implementation of Medicare's Durable On September 11, 2012, the
Medical Equipment (DME) competitive Subcommittee on Healthcare
bidding program (72 Fed. Reg. 17,992). and Technology held a
hearing to examine the
implementation and
expansion of the
competitive bidding program
for durable medical
equipment by Medicare and
the impact on small
suppliers.
Memorandums of Understanding (MOU) entered On October 1, 2012, Chairman
into by SBA and other agencies with Graves wrote a letter to
regard to the 8(a) Business Development SBA Administrator Mills
(BD) program. requesting copies of MOUs
related to the 8(a) BD
program, specifically those
that govern the use of
Multiple Award Contracts
and Governmentwide
Acquisition Contracts to
determine whether the
program was operating
effectively for small firms
that wish to compete.
SBIR Policy Directive (77 Fed. Reg. On October 4, 2012, Chairman
46,805). Graves submitted a comment
letter suggesting minor
modifications to the rules
designed to increase
commercialization of
products by participating
companies.
Implementation of Section 4191 of the On October 15, 2012,
Patient Protection and Affordable Care Chairman Graves sent a
Act (P.L. 111-148) related to the medical letter to the IRS
device tax (77 Fed. Reg. 6028). Commissioner Shulman
expressing concerns about
applying a medical device
tax to mobile medical apps
and the impact on small
firms in that industry.
Proposed rule to modify the General On October 25, 2012,
Services Administration's (GSA) Multiple Chairman Graves submitted
Award Schedules (MAS) program (77 Fed. comments on the proposed
Reg. 43,084). rule raising concerns about
small businesses'
opportunity to compete for
awards and questioning the
purported cost savings. On
November 29, 2012, Chairman
Graves sent a letter to
Acting GSA Administrator
Tangherlini to alert him to
the comments submitted and
his concerns. On November
30, 2012, the Chairman
wrote another letter to Mr.
Tangherlini specifically
related to the guaranteed
minimum sales under the MAS
and GSA's compliance with
such requirements. These
actions were taken in part
based on information
gathered at a Subcommittee
on Contracting and
Workforce hearing on June
7, 2012.
Publication of regulatory flexibility On October 31, 2012,
agendas as required by the Regulatory Chairman Graves sent a
Flexibility Act (5 U.S.C. Sec. 602). letter to the Chief Counsel
for Advocacy at the SBA
encouraging him to ensure
the transmission of
regulatory agendas by
federal agencies in a
timely manner and
requesting an accounting of
agency compliance with this
requirement.
Proposed rule on standards related to On December 13, 2012,
essential health benefits (EHB) as Chairman Graves sent a
required by the Patient Protection and letter to HHS Secretary
Affordable Care Act (77 Fed. Reg. 70,644). Sebelius expressing
concerns about the cost of
compliance with the EHB
standards for small
businesses.
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