[House Hearing, 107 Congress] [From the U.S. Government Publishing Office] TO INVESTIGATE THE LEGISLATION THAT WOULD INCREASE THE EXTENT AND SCOPE OF THE SERVICES PROVIDED BY SMALL BUSINESS DEVELOPMENT CENTERS ======================================================================= HEARING before the SUBCOMMITTEE ON WORKFORCE, EMPOWERMENT, AND GOVERNMENT PROGRAMS of the COMMITTEE ON SMALL BUSINESS HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS FIRST SESSION __________ WASHINGTON, DC, JULY 19, 2001 __________ Serial No. 107-20 __________ Printed for the use of the Committee on Small Business U.S. GOVERNMENT PRINTING OFFICE 75-226 WASHINGTON : 2001 ---------------------------------------------------------------------------- For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 COMMITTEE ON SMALL BUSINESS DONALD MANZULLO, Illinois, Chairman LARRY COMBEST, Texas NYDIA M. VELAZQUEZ, New York JOEL HEFLEY, Colorado JUANITA MILLENDER-McDONALD, ROSCOE G. BARTLETT, Maryland California FRANK A. LoBIONDO, New Jersey DANNY K. DAVIS, Illinois SUE W. KELLY, New York WILLIAM PASCRELL, New Jersey STEVEN J. CHABOT, Ohio DONNA M. CHRISTIAN-CHRISTENSEN, PATRICK J. TOOMEY, Pennsylvania Virgin Islands JIM DeMINT, South Carolina ROBERT A. BRADY, Pennsylvania JOHN THUNE, South Dakota TOM UDALL, New Mexico MIKE PENCE, Indiana STEPHANIE TUBBS JONES, Ohio MIKE FERGUSON, New Jersey CHARLES A. GONZALEZ, Texas DARRELL E. ISSA, California DAVID D. PHELPS, Illinois SAM GRAVES, Missouri GRACE F. NAPOLITANO, California EDWARD L. SCHROCK, Virginia BRIAN BAIRD, Washington FELIX J. GRUCCI, Jr., New York MARK UDALL, Colorado TODD W. AKIN, Missouri JAMES R. LANGEVIN, Rhode Island SHELLEY MOORE CAPITO, West Virginia MIKE ROSS, Arkansas BILL SHUSTER, Pennsylvania BRAD CARSON, Oklahoma ANIBAL ACEVEDO-VILA, Puerto Rico Phil Eskeland, Deputy Staff Director Michael Day, Minority Staff Director ------ Subcommittee on Workforce, Empowerment, and Government Programs JIM DeMINT, South Carolina, Chairman FRANK LoBIONDO, New Jersey JUANITA MILLENDER-McDONALD, MIKE FERGUSON, New Jersey California FELIX GRUCCI, New York DANNY DAVIS, Illinois DARRELL ISSA, California STEPHANIE TUBBS JONES, Ohio ED SCHROCK, Virginia CHARLES GONZALEZ, Texas SHELLY MOORE CAPITO, West Virginia MIKE ROSS, Arkansas DONNA CHRISTIAN-CHRISTENSEN, Virgin Islands Nelson Crowther, Professional Staff C O N T E N T S ---------- Page Hearing held on July 19, 2001.................................... 1 Witnesses Sweeney, Hon. John E., Member, U.S. House of Representatives..... 2 Udall, Hon. Tom, Member, U.S. House of Representatives........... 4 Brady, Hon. Robert A., Member, U.S. House of Representatives..... 5 Wilson, Donald T., Executive Director, Association of Small Business Development Centers................................... 9 Grumbles, Thomas G., Vice President, American Industrial Hygiene Association.................................................... 10 Cartier, Rudolph, Small Business Ombudsman, State of New Hampshire...................................................... 12 Conroy, Christian, Associate State Director, Pennsylvania Small Business Development Centers................................... 14 Lopez, Leonard, Sun Valley Express (Convenience Store)........... 16 Appendix Opening statements: DeMint, Hon. Jim............................................. 24 Prepared statements: Sweeney, Hon. John E......................................... 27 Udall, Hon. Tom.............................................. 30 Brady, Hon. Robert A......................................... 36 Wilson, Donald T............................................. 37 Grumbles, Thomas G........................................... 45 Cartier, Rudolph............................................. 57 Conroy, Christian............................................ 61 Lopez, Leonard............................................... 67 TO INVESTIGATE THE LEGISLATION THAT WOULD INCREASE THE EXTENT AND SCOPE OF THE SERVICES PROVIDED BY SMALL BUSINESS DEVELOPMENT CENTERS ---------- THURSDAY, JULY 19, 2001 Subcommittee on Workforce, Empowerment, and Government Programs, Committee on Small Business, Washington, DC. The Subcommittee met, pursuant to call, at 10:00 a.m. in room 311, Cannon House Office Building, Hon. Jim DeMint [chairman of the Subcommittee] presiding. Mr. DeMint. We are officially convened. I appreciate everyone being here. As you know, we will probably have a vote very quickly and we will adjourn, but it would probably be a good idea to go ahead and begin the hearing to see if we can get in some of the testimony before the first vote. I do want to welcome all of you and particularly you, Mr. Sweeney. I appreciate the ideas behind your bill and your being here to tell us a little bit about it, so I look forward to that. Today, the Subcommittee has three bills before us that would expand the extent and the scope of the services provided by the Small Business Development Centers that we usually refer to as the SBDCs. There are three legislative proposals under consideration that we will hear about. The first is H.R. 203, the National Small Business Regulatory Assistance Act of 2001, introduced by Congressman Sweeney of New York. This would direct the Administrator of the Small Business Administration to establish a pilot program to provide regulatory compliance assistance to small business concerns through participating SBDCs. Under H.R. 203, small businesses would be able to receive confidential counseling regarding compliance with federal regulations, provided that such counseling does not constitute the practice of law. In addition, SBDCs would provide to small businesses training and educational activities, technical assistance and referrals to experts and other providers of compliance assistance. The bill is aimed at helping small businesses cope with the maze of federal regulations, a good example of the federal government creating the problem and then coming in to solve it. The next legislative proposal, sponsored by Congressman Brady of Pennsylvania, who I assume will be here after the vote, would permit the SBA to make grants to SBDCs to enable them to provide technical assistance to secondary schools or to post secondary vocational and technical schools for the development and implementation of curricula designed to promote vocational and technical entrepreneurship. The third which has been dropped, H.R. 2538, is sponsored by Congressman Udall of New Mexico. It would authorize the SBA to make grants to SBDCs for the purpose of providing entrepreneurial assistance to Native Americans, Native Alaskans and Native Hawaiians in starting, operating and growing small businesses. The legislation is aimed at stimulating the economies of areas served and to promote job creation. The Subcommittee would appreciate everyone's views. We will be looking forward to hearing everyone. John, I think the best idea, if you do not mind, is we will go vote and come back, unless you would prefer to make your statement and then we will go vote. [Mr. DeMint's statement may be found in appendix.] Mr. Sweeney. Well, Mr. Chairman, my statement is very brief, so I think I could actually make the statement and get us over there. How much time do we have? Mr. DeMint. I would like the Ranking Member to have the opportunity to make a statement. Let us see if we can fit in these two statements before we vote. Ms. Millender-McDonald. Ms. Millender-McDonald. Thank you. Good morning, Mr. Chairman. Since I will be here for a little while after we return back, I will defer to our colleague, Congressman Sweeney, if you have a short one so that we can get to the Floor to vote and then return back. At that time, I will make my statement if it is okay with you. Mr. DeMint. Thank you. Thank you very much. Congressman Sweeney. Mr. Sweeney. I thank the Chairman and the Ranking Member, and I will shock you both by giving a very brief statement. Mr. DeMint. I will be shocked. Mr. Sweeney. I also want to compliment you on your choice of hearing rooms. This is a great historic place, and I think it showed some real contemplation. I am going to submit for the record an extended statement. STATEMENT OF CONGRESSMAN JOHN E. SWEENEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK Mr. Sweeney. For nearly 25 years, Congress has recognized that small businesses face substantial regulatory burdens. I, like you, have a substantial number of constituents in jobs created out of my district by small businesses, some 90 percent in New York's 22nd Congressional District, and I think that mirrors the vast majority of Members of Congress. In the spirit of helping these entrepreneurs, I have introduced H.R. 203, the National Small Business Regulatory Assistance Act. This legislation would assist small businesses in successfully finding their way through the maze of regulations that have proliferated in recent years. Last year, after a great deal of effort during the 106th Congress, and I was proud to be a Member of this Committee, we breathed new life into what began as an outstanding initiative, but had little prospect for implementation. This improved legislation has a proven record of support as witnessed on September 26 of last year when the House passed the National Small Business Regulatory Assistance Act by voice vote. H.R. 203 would amend the Small Business Act to establish a pilot program in 20 states. The Administrator, in consultation with the National Association of Small Business Development Centers, SBDCs, would select two states from each of the ten federal regions for participation in the program. This is a compromise that has been worked out over the last year. Within the pilot program, SBDCs would develop partnerships with federal agencies and be a point of contact for small businesses to turn to free of charge for confidential advice concerning regulatory compliance. This type of cooperation, Mr. Chairman and Ranking Member, is not new. Some SBDCs have already been thinking outside the box and providing that kind of service. They have fostered relationships with different federal agencies and independent compliance groups to build upon each other's resources. H.R. 203 is not meant to replace current regulatory compliance programs, but supplement them when relevant participating SBDCs may refer businesses to existing regulatory compliance programs. This bill is intended to take these successes and apply them nationwide to ensure safety in the workplace, to ensure compliance with all sorts of different regulatory requirements of the federal government. There are a number of examples, including examples within my own district, and I simply would say that as a former regulator--I was New York's Labor Commissioner before coming to Congress--I recognize both the importance that the government plays, the important role the government plays in providing regulatory oversight for the safety and health of both people who work at businesses or people who are using those businesses, and I also understand the need to try to link and better link those in the business community to those regulatory underpinnings so that we achieve the fundamental goal. It simply is not a matter of having more regulation and more rules, Mr. Chairman. It is really a matter of finding the easy and the right way or, I should say, the correct way, not the easy way, for businesses to be able to comply. With that, I will thank you again, submit my statement for the record and answer any questions you might have. [Mr. Sweeney's statement may be found in appendix.] Mr. DeMint. Thank you, Congressman. We do need to leave, but if there is a quick question from the Ranking Member? Ms. Millender-McDonald. Just one question, Mr. Chairman. Thank you so much for your indulgence. Mr. Sweeney, thank you so much for your presentation. We will submit your statement for the record. I just wanted to ask the funding source, given that there is no authorization levels in this proposal. Mr. Sweeney. And there is not a need to. This is without cost because the SBDCs have already indicated the capacity to be able to provide this service, and indeed they have in some areas. This is an attempt on our part to nationalize what we think is a program within the SBDCs that has worked. Mr. DeMint. Thank you. We are adjourned until 10:30. [Recess.] Mr. DeMint. Let us continue with the testimony. I assume some of our colleagues will join us later, but since we have a bipartisan mix here in the room, Tom, we will continue. We want to hear from two additional Congressmen on two additional pieces of legislation. Tom, since you are to my immediate left we will hear from Congressman Tom Udall from New Mexico, and then we will go to Congressman Robert Brady. Is that okay, that order? Mr. Brady. Sure. STATEMENT OF CONGRESSMAN TOM UDALL, A REPRESENTATIVE FROM THE STATE OF NEW MEXICO Mr. Udall. Thank you. Thank you very much, Chairman DeMint. It is a pleasure to be here with you today. Good morning, and I thank you for this opportunity to speak to the Committee about my proposal, which would establish a three year pilot project providing grants to SBDCs for assisting Native American, Native Alaskan and Native Hawaiian populations with their small business development needs. Today we have demonstrated how important small business enterprise is to the health of our economy, but there are still places in this country where economic prosperity has often failed to reach. These areas deserve our attention and assistance. Consider this. Nowhere in America has poverty persisted longer than on or near Native American reservations, which suffer an average unemployment rate of 45 percent. However, the number of businesses owned by Indian tribe members and Native Alaskans grew by 84 percent from 1992 to 1997, and their gross receipts grew by 179 percent in that period. This is compared to all businesses, which grew by seven percent, and their total gross receipts grew by 40 percent in that period. I would like to continue this growth and expansion of small enterprise with the Native American Small Business Development Act, H.R. 2538. My bill ensures that Native Americans, Native Alaskans and Native Hawaiians seeking to create, develop and expand small businesses have full access to the counseling and technical assistance available through the SBA's SBDC program. The business development tools offered by the SBDCs can assist Native Americans with the information and opportunity to build sustainable businesses in their communities. The Native American Small Business Development Act would permit state Small Business Development Centers to apply for federal grants to establish one or more Native American Small Business Development Centers. In an effort to ensure the quality and success of the program, the proposal requires grant applicants to provide SBA with their goals and objectives, including their experience in assisting entrepreneurs with the difficulties in operating a small business. In addition, the applicant must show their ability to provide training and services to a representative number of Native Americans, Native Alaskans and Native Hawaiians. Most importantly, applicants must seek the advice of the local native population on the specific needs and location of these services they will provide. It is clear we can do more to aid Native American entrepreneurs. No doubt, not enough has been done to assist Native Americans in building their businesses, which in turn helps benefit their community. I hope to change that with my proposal. In closing, I would like to mention that we will be receiving testimony from Mr. Leonard Lopez of Bloomfield, New Mexico. Mr. Lopez is opening a convenience store called Sun Valley Express on the Navajo Reservation in Shiprock, New Mexico. I know that he will provide the Committee with firsthand information on the strengths of the SBDC and how this proposal will further assist the development of small businesses for Native Americans, Alaskans and Hawaiians. I would also like to acknowledge the presence of Mr. Roy Miller, who is New Mexico's SBDC state director. He is here in the crowd. I thank the Chair for the opportunity to discuss these issues today. Thank you very much, Mr. Chairman. [Mr. Udall's statement may be found in appendix.] Mr. DeMint. Thank you, Congressman Udall. Can you stay with us a few minutes? I will hold my questions until we hear from Congressman Robert Brady. Thank you for being here. STATEMENT OF CONGRESSMAN ROBERT A. BRADY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. Brady. Thank you, Mr. Chairman. I appreciate this opportunity and look forward to discussing my proposal with you and with this Committee. I would like to introduce Christian Conroy, who is the assistant director at our Philadelphia SBDC in Wharton. I asked him to join me. I believe he is on the panel, but I asked him to join me up here in case you do have questions that I know he can answer that I cannot. It is the American value of hard work and valuable skill that makes our standard of living possible. From machinists and carpenters to auto mechanics and computer technicians, skilled work has made our life better for laborers and consumers. In a more competitive and global economy, it is a bedrock truth that to succeed you must be skilled, but there is another step to be taken toward a better life, and it, too, is a part of the American character. That is entrepreneurship, talented individuals starting their own businesses. Small business forms the backbone of our economy. The businesses create half of all jobs and do it more than 60 percent faster than larger firms. Small businesses employ our mechanics, technicians, builders, machinists and draftsmen. My bill would for the first time create a training program to help these skilled workers become entrepreneurs themselves. It is important to realize that many of these very skilled laborers do not have business experience or training that would help them succeed. We want them to succeed, so we should help them all we can. How do we propose to do this? I propose the Vocational and Technical Entrepreneurship Development Act to provide the resources necessary to help skilled workers learn new skills; how to build their own business and make it thrive. My bill would establish a program for vocational and technical entrepreneurship development. Through SBA we would provide grants to Small Business Development Centers to provide assistance to high schools, universities or vo-techs to develop and implement curriculum promoting entrepreneurship. With over 20 years of experience helping hundreds of thousands of people turn their dreams into profitable businesses, the Small Business Development Centers have developed excellent education programs to train people on what is required to operate a successful business. I thank you very much for the opportunity to speak to this Committee. [Mr. Brady's statement may be found in appendix.] Mr. DeMint. Thank you both. I just have a couple of brief questions, and then we can hear from some of the witnesses that you have been a part of inviting. Congressman Udall, as we look at providing I guess focused services or special services to particular groups, there are I guess many individuals who are disadvantaged for socio-economic reasons not necessarily related to their ethnic connections or whatever. Is there a reason we should focus these grants on Native Americans instead of including them in I guess a grant package that would go for disadvantaged areas, particularly areas that might have socio-economic problems? I just wanted to hear why the focus on just particular groups rather than a focus on the nature of the problem as a whole? Mr. Udall. Thank you very much, Chairman DeMint, for that question. The issue of unemployment in Native American communities is really a chronic and a longstanding one, and I do not think there is any place else in the country that has the dismal unemployment record of Native Americans. You heard me mention in my testimony an average of 40 percent. Many of the reservations in my state the unemployment is closer to 75 and 80 percent, and it has been like that for over 100 years. What we are trying to do with this bill in setting up a pilot is see that if we move some of these centers nearer to the reservation we cannot stimulate the kind of activity that could bring down those unemployment rates. Up until now, SBDC centers, which I think are required under current law to serve everyone in a state. In my state, which is a very large, rural state with hundreds of miles to travel, it may well be that an entrepreneur that needs assistance cannot travel 300 miles in order to get to that center, and so I think if we have this pilot that tries to locate these centers closer to where the problem is and to where the high unemployment is we may see more assistance. That would be my answer. I have also been joined up here, and I neglected to mention it, by Don Wilson, who is the president of the Association of Small Business Development Centers. He may assist me in some of these questions, too. Thank you for that question. Mr. DeMint. Thank you very much. Mr. Wilson. Mr. Chairman, if I could interrupt---- Mr. DeMint. Sure. Please. Mr. Wilson [continuing]. And just add to that? I know, for example, I believe the county in South Dakota, Congressman Thune's district and state, the Pine Ridge Reservation, I think that county has the highest level of poverty of any county in the nation. These patterns on Native American reservations are fairly consistent. SBDCs have done outreach in a number of these reservations and so forth, but when they go they may be out there once a month or, you know, once every two weeks, this sort of thing, because of the limited resources we have. I believe if we could concentrate it on the reservation and have a full-time operation that we could begin to break this terrible cycle of poverty that Congressman Udall has so eloquently referred to. Mr. DeMint. Let me see if I have a question for Congressman Brady here. Congressman Brady, I know that particularly in the post secondary vocational schools, community colleges, that sometimes they do have funds available to contract for various types of educational services. Do you envision that with the additional funds for the SBDCs we will provide free services to these colleges or look at doing it on some kind of partnership basis where there is some funding on a contract basis? To put the question in the context. Are there things like this happening now where the SBDCs are actually working with community colleges, vocational colleges? Is there payment for this? Is it being done free now, or are we proposing something that is actually different? Mr. Brady. I do not know other than where I am from. In the City of Philadelphia, that does not happen. Our vo-techs are gone. Mr. DeMint. Right. Mr. Brady. I really do not know about the rest of the parts of the country, but in the City ofPhiladelphia there is hardly any more vo-techs out there. It would be a partnership. The school would have to apply. They would apply, and there would be a clearinghouse, one clearinghouse throughout the country, that would supply maybe up to 33 schools or universities that would get these grants. It would be a partnership, but I do not know about the rest. Maybe Christian can help. I know in the city we do not have many more vo-techs that use your services. I do not know again through the rest of the country. Do you know? Mr. Conroy. Sure. Actually, part of the reason for the development of this proposal is in, for instance, Lancaster, Pennsylvania, we have worked with the Stevens College of Technology, which is a vocational school, and we have an outreach office that is located there. The reason we are able to have an outreach office there is that the college provides funding to the local Small Business Development Center that serves that area, which is operated out of the university. What we envision would happen with this is that yes, it would be a competitive process where vocational schools would apply to offer this type of training to their students. Mr. DeMint. Would the grant go to the school or to the SBDC? Mr. Conroy. It would go initially to the SBDC, and then we would put it out for competitive bids to various vocational- technical schools throughout the state. What that would allow then is the flexibility for different schools to tailor their programming to best reflect the strengths of the programs that they have. For instance, if one school is particularly strong in doing computer IT type of training, we could tailor the program so that it focuses on those areas that are relevant to that particular industry. Mr. DeMint. If there are no additional comments, we will dismiss this panel and move to Panel II. I want to thank both of my colleagues for being here. Let us just take a couple minutes and rotate the witnesses. Mr. Udall. Thank you very much. Thank you, Mr. Chairman. Mr. Sweeney. Thank you, Mr. Chairman. [Pause.] Mr. DeMint. Let us convene our second panel. I want to thank all of you gentlemen for taking the time to share your thoughts with us today. We have with us today Thomas Grumbles, who is vice- president of the American Industrial Hygiene Association. We have Don Wilson, president and CEO of the Association of Small Business Development Centers. We have Mr. Rudy Cartier, small business ombudsman for the State of New Hampshire; and Christian Conroy, the associate state director for Pennsylvania Small Business Development Centers; and Leonard Lopez, Sun Valley Express, Navajo Reservation, Shiprock, New Mexico. Congressman Udall would like to say a few words about our guest, Mr. Lopez, before we get started. Mr. Udall. Thank you, Chairman DeMint. Let me just say about Mr. Lopez, who is one of my constituents, and give you a little bit of an introduction and background. He is presently the president of L&A Enterprise, Inc., in Bloomfield, New Mexico. He is an enrolled and registered member of the Navajo Nation. Mr. Lopez was born in Geezi, New Mexico, and attended high school in Bloomfield, and he attended San Juan College in Farmington, New Mexico. He received his B.S. in Business Education from Brigham Young University. Leonard has worked extensively in the field of natural gas production in gas control analysis and training. He was the lead plant operator and was responsible for managing his crew. He has also worked in the field of education, teaching accounting and computer applications at the high school level. He is married and has five children. It is an honor to introduce and have a member of my constituency of the 3rd Congressional District here. Thank you very much, and I look forward to hearing from all of the panel members here today. Welcome to all of you. Mr. DeMint. Thank you, Congressman Udall. Gentlemen, will you try to keep your comments within about five minutes. We will let you all have a chance to speak, and then we will ask a few questions if that is okay. We will run the clock, so you will have some idea of how long you are taking. When you see it turning yellow, you will know the red light is right after that. We will begin with Donald Wilson. Donald? STATEMENT OF DONALD T. WILSON, PRESIDENT AND CEO, ASSOCIATION OF SMALL BUSINESS DEVELOPMENT CENTERS Mr. Wilson. Mr. Chairman, thank you very much. I am Don Wilson, president of the Association of Small Business Development Centers. The Association represents 58 small Business Development Center programs in all 50 states, the District of Columbia, American Samoa, Virgin Islands and Guam. I want to thank you for letting us testify this morning on legislation that I think is extremely important to the nation's small business community, H.R. 203, Congressman Sweeney's legislation. I think, Congressman, you and your colleagues probably know that small business views federal regulations and state regulations to be somewhat of a burden. I think my written testimony documents that very well. For example, since April of 1996, federal agencies have adopted 21,653 major and minor rules. The Code of Federal Regulations as of 1998 filled 201 volumes with a total of 134,723 pages. The Code currently occupies 19 feet of shelf space. If you are a small businessman, you are looking at dealing with IRS regulations, social security regulations, medicare regulations, federal unemployment insurance regulations, Fair Labor Standards Act, workers compensation, the Equal Pay Act, the Americans With Disabilities Act, Family and Medical Leave Act, Title VII of the Civil Rights Act, Federal Mine and Safety, the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Act, Migrant and Seasonal Agricultural Worker Protection Act, Immigration Control Act, et cetera, et cetera, et cetera. I think, you know, if you are a small businessman, a mom and pop operation, and you are trying to be familiar with all of the rules and regulations that you must comply with it is a pretty daunting task. In 1996, the Congress asked the SBDC program to begin to provide compliance assistance. Unfortunately, the program did not get the resources that were needed to fully implement that. From 1996 to 1999, in fact, 44 of the programs in the country were level funded, and in 2000 and 2001 we basically received cost of living increases. I believe Congressman Sweeney's legislation, H.R. 203, the pilot program proposed for 20 SBDCs in the ten SBA regions, will provide the resources to bring on staff the necessary core competencies to begin to work in an expanded program of compliance assistance. A number of our states have developed very solid partnerships with the 507 SBAP program and SBO programs. Some of ours already refer, constituents and clients, to industrial hygienists and others to assist them. I envision in some degree that your SBDCs would be like a general practitioner dealing with the less complicated cases, and the more complicated cases they would be referring them to the partners. I believe with the 600,000 or 700,000 small businesses that come through our doors needing compliance assistance, you will probably actually see those numbers grow when they became fully aware of the assistance that was available. We have worked with the Department of Labor on a cross cut program, the IRS and others on pilots, but this would expand it. This would give additional dollars that are badly needed so that small business people who are disproportionately affected, Mr. Chairman, by regulations could cope with those regulations and run their business and focus on the requirements of marketing and finance and the core issues rather than being absorbed in spending inordinate amounts of time and dollars complying with federal regulation. We would like to commend this legislation to you. We would like to see it grow. We believe funding would be absolutely necessary to implement this to the extent that we believe the small business community needs it, and we look forward to working with you and the other Members of the Small Business Committee to try to make this legislation a reality. [Mr. Wilson's statement may be found in appendix.] Mr. DeMint. Thank you, Mr. Wilson. Mr. Grumbles. STATEMENT OF THOMAS G. GRUMBLES, CIH VICE PRESIDENT, AMERICAN INDUSTRIAL HYGIENE ASSOCIATION Mr. Grumbles. Chairman DeMint and Members of the Subcommittee, my name is Tom Grumbles, and I am vice-president of the American Industrial Hygiene Association. I am a certified industrial hygienist and have been in the occupational health and safety profession for more than 25 years. I appreciate the opportunity to provide testimony on H.R. 203 to improve small business compliance with the federal regulations. AIHA is particularly interested in regulations addressing occupational health and safety in the workplace. AIHA is the world's largest association of occupational and environmental health professionals, and our members serve on the front line of worker health and safety. One of AIHA's goals is to bring good science and the benefit of our experience to public policy issues. A.I.H.A. supports H.R. 203, specifically ways to comply with the numerous and complex regulations of OSHA. I have not quantified it to the extent that Don did, but they are large. Of the myriad of federal regulations small businesses must comply with, in our opinion none is more important than protecting the health and safety of workers. As the front line stewards of occupational health and safety, however, we are aware of government and business limitations. OSHA, like the rest of government, has to accomplish more with less. No one is sure of the time it might take for an OSHA inspector to visit all covered sites, but most agree it is unlikely more than once every 50 to 80 years. It is also difficult for business to receive OSHA consultation service because of the length of time required before OSHA can respond to those requests. A 1990s NIOSH study found over 90 percent of the work sites are comprised of 50 or fewer employees that may have no industrial hygiene or safety expertise on staff, are not regularlyinspected by OSHA and may have little information about health, safety or industrial hygiene. If Congress is interested in improving worker health and safety, small business concerns must be met by working with them to address this issue. A.I.H.A.'s effort in this interest is not new. In the mid 1990s, AIHA decided to proactively assist small businesses unlikely or unwilling to look at occupational health and safety in their workplace. In consultation with OSHA, AIHA developed a pro bono assistance program for small businesses utilizing AIHA members. Five pilot projects were conducted. While the training that was provided was good and well received, the real success was one-on-one follow up consultation. Many small businesses, however, were uncomfortable with OSHA's involvement. While OSHA's profile was very low, most were convinced that OSHA would place them on a list of upcoming inspections if they attended. A.I.H.A. believes the approach taken in H.R. 203 is correct. Any successful program targeting small business should target businesses with less than 50 employees, have as a goal one-on-one consultation, be administered through a third party such as the SBDC, involve occupational health and safety professionals when addressing health and safety regulations, and assure that only competent and qualified individuals are involved in providing the education, training and/or consultation services. This last point is of great interest to AIHA. AIHA would like to offer a suggestion relative to the experts. The bill does say that assistance to small business concerns should include referrals to experts. We are pleased this section was added from previous versions of the bill. This was a recommendation from AIHA made in earlier testimony. However, we would like to see this section expanded. We recommend the referral of experts section be amended by adding language stating, ``provided that such experts meet educational, technical and professional standards established by the Administrator.'' This would provide assurance that only competent and qualified individuals are involved in providing the training and education. Further to that point, AIHA also suggests the legislation or report language and language that clarifies the competency requirement stating that, ``In the case of small businesses needing assistance with the rules promulgated by OSHA, the committee believes an expert should be a certified industrial hygienist, a certified safety professional, an occupational health physician, an occupational health nurse or their equivalent in other professions.'' A copy of our recommendations is attached to our testimony. This language should relieve the Small Business Association, OSHA or the SBDCs from having to develop regulations to identify certified individuals to conduct the education, training or consultations. The occupational health and safety profession has nationally recognized certification programs to qualify individuals and assure competency. As an example, a certified industrial hygienist must have at a minimum a Bachelor's degree in one of the sciences, five years of experience and undergo a two-day examination for being certified. In closing, most workplaces will never see an OSHA compliance officer. The new OSHA is one that does not focus necessarily on enforcement, but builds partnerships with business. AIHA has long supported pro bono assistance or a third party workplace review program such as that proposed by Senator Michael Enzi in the 106th Congress. We appreciate you giving us this opportunity to testify and ask that our written testimony be put in the record. Thank you. [Mr. Grumbles's statement may be found in appendix.] Mr. DeMint. Thank you, Mr. Grumbles. Mr. Cartier. STATEMENT OF RUDOLPH CARTIER, JR., SMALL BUSINESS OMBUDSMAN, STATE OF NEW HAMPSHIRE Mr. Cartier. Thank you, Chairman DeMint. Good morning, Chairman DeMint and Members of the Subcommittee. I thank you for the invitation and the opportunity to present testimony to the Subcommittee on H.R. 203. As stated, my name is Rudy Cartier. I am the New Hampshire Department of Environmental Services Small Business Ombudsman. I appear before you today as the chair of the National Steering Committee of the Small Business Technical Assistance Programs and Small Business Ombudsmen created under Section 507 of the Clean Air Act amendments of 1990. Section 507 of the Clean Air Act directed each state to develop a state specific technical assistance and advocacy program to help small businesses understand, comply with and have representation in the development of regulations promulgated under the Clean Air Act with an impact on small business. In addition, most programs have an appointed Compliance Advisory Panel made up of small business owners or their representatives, a representative from the environmental regulatory agency and at least two members of the general public to oversee the effectiveness of the programs. Although initially created to address Clean Air Act issues, all the programs have evolved into repositories and/or referral agencies where small business owners and operators can go for a myriad of environmental assistance and direction to other business services. This is accomplished through a variety of options, including formal and, in some cases, informal state level expansion of the program responsibilities, development of networking systems and, most importantly, the development of strategic partnerships with other assistance providers. Indeed, the vast majority of states have developed effective outreach assistance efforts in conjunction with state pollution prevention programs, Small Business Development Centers, economic development agencies, trade associations and local government agencies, to name a few. In addition, the partners regularly conduct regional and national conferences, seminars and workshops to increase our effectiveness to provide accurate, timely and appropriate assistance. The programs were also instrumental in the formulation and development of what is called the 507 Enforcement Response Policy and the Small Business Compliance Incentives Policy with the Environmental Protection Agency, which for the first time granted ``safe haven'' status for small business owners who voluntarily identified and agreed to remedy violations of environmental regulations. These policies encourage sound environmental practices and minimize the threat of punitive fines or the need to remain confidential. I am very pleased to be able to report that the programs are active in all 50 states and U.S. territories and are very well received by small business. Collectively, we provide environmentally related assistance to over 1,000,000 businesses and owners yearly through direct contact and in partnership with others. I appear before the Committee today to offer our support of legislation such as H.R. 203, which has the potential for increasing the effectiveness of all our efforts to provide the highest level of service to our small business clients. We see this bill as an opportunity for Congress to provide incentives to continue the cooperation and coordination among all programs that deliver regulatory assistance to small businesses, especially our SBDC partners. It is essential that the expertise found in all small business assistance programs be woven together through partnerships utilizing the expertise presently in place in each of these programs to ensure we are appropriately meeting the true needs of businesses. Our programs, along with those of our numerous partners, are proof that well crafted and coordinated technical and compliance assistance programs are extremely valuable to small businesses. We applaud Congress for recognizing the successes that have been the hallmark of each of these programs. We encourage your efforts to build and expand on this experience in delivering small business assistance to cover these and other pressing small business issues. We would note, however, that although pilot programs can provide support for creative breakthroughs, we would encourage Congress to also recognize the critical nature of the continuing need for stable financial support for these programs. The Small Business Technical Assistance Programs across the country are committed to remaining on the path of continued cooperation and coordination of our environmental assistance services. We appreciate your work to support this effort and look forward to additional targeted assistance by federal agencies with a commitment to specific, accurate and timely assistance. We on the state level will continue our commitment to fostering strategic and appropriate partnerships within our individual states. We have found that the most appropriate method for delivering useful assistance must be developed to meet the unique needs of businesses in each of the individual states. We certainly are supportive of efforts to direct any potential federal funding to these partnership programs to increase the resources availability and capabilities of assistance providers in meeting these needs. Again, thank you for this opportunity to provide this testimony to you today. I would be pleased to make myself available to the Committee for any other assistance deemed appropriate. [Mr. Cartier's statement may be found in appendix.] Mr. DeMint. Thank you, Mr. Cartier. Mr. Conroy. STATEMENT OF CHRISTIAN CONROY, ASSOCIATE STATE DIRECTOR, PENNSYLVANIA SMALL BUSINESS DEVELOPMENT CENTERS Mr. Conroy. Good morning. Chairman DeMint and Members of the Committee, I am Christian Conroy, the Associate State Director of the Pennsylvania Small Business Development Centers. I would like to thank you, Mr. Chairman and Members of the Committee, for inviting me to testify at this hearing on the Vocational and Technical Entrepreneurship Development Program Act of 2001. As you are all very well aware, small business is the engine of the economy in Pennsylvania, as well as in the nation. There are currently over 22,000,000 small businesses in America. They account for 99 percent of all businesses and employ 53 percent of the private workforce and contribute over half of the nation's gross domestic product. For the past 20 years, the Pennsylvania Small Business Development Centers have been helping entrepreneurs start and grow successful businesses. During that period, we have seen a number of changes that have affected small firms, things such as the development of sophisticated management software tools such as spreadsheets and databases, the increasing globalization of trade, the advent of the internet just to name a few. One thing that has remained constant, unfortunately, is the lack of entrepreneurial educational experience that the majority ofpeople who come to the Small Business Development Center for help in starting their business have. What we continue to see on a daily basis is many people who have excellent technical skills and an entrepreneurial disposition, but no formal training that will prepare them to start and grow a business. Eighty percent of our pre-venture clients have not owned or operated a business before, and 80 percent of our clients do not have an educational background to prepare them to start and operate a business. If you consider the courses of study that are offered in our principal educational systems--high schools, community colleges and vocational and technical schools--the lack of preparation should not come as a surprise. With few exceptions, these institutions do not offer a comprehensive, coherent course of study to prepare students to become competent business owners. What we have in Pennsylvania, and I would argue in the nation as well, is an economy that is dependent upon the initiation and growth of small business for its vitality and a set of educational institutions doing little to prepare students to participate in that entrepreneurial economy. When Congressman Brady requested information on how to increase support for entrepreneurship, we were delighted to work with him on developing the Vocational and Technical Entrepreneurship Development Program Act of 2001, which will provide resources to the Small Business Development Centers to adapt and apply our curriculum on how to start a business in select vocational and technical schools throughout the country. You are likely asking yourself why are the Small Business Development Centers not already doing this? Simply it is because our resources are such that we cannot currently meet the demand for assistance in starting a business. Present survey research indicates that five in ten people in the 21 to 30 age bracket are considering starting a firm, and about 7.7 million Americans are actively engaged in starting a business. That number is substantially greater than the number of people who get married each year. Currently in Pennsylvania, the SBDCs are operating at capacity, and we can only assist a tiny fraction of this huge population so thus if the Small Business Development Centers are going to serve a greater proportion of these potential entrepreneurs we must transfer our knowledge of the entrepreneurial process to those educational systems that have the capacity to reach and to educate a much larger segment of the population than can currently be served by the SBDCs. With this bill, what will happen is the SBDCs will adapt their business management training programs to develop a cohesive curriculum on starting and operating a successful business that can be provided to students in vocational and technical schools. The training will focus on the essential business operational areas such as management, marketing and finance, and additionally the programs will be modified to provide information that is relevant to the particular industry sectors in which the students are learning skills. The SBDCs will not conduct the training of students, but rather will train teachers on how to deliver training on starting and operating successful businesses. Thus, far more students will benefit from this training than if the SBDCs use their limited resources to conduct the training. As we see it, there are three benefits to this bill. The first and most obvious benefit is the training of potential entrepreneurs so when they do decide to start firms they will be prepared to succeed. The second benefit accrues to employers of individuals who have gone through this training. Whether or not a person starts a business, the knowledge of such key aspects of operating a business as customer relations, controlling costs and how money is made creates a more effective employee. Third, once we demonstrate the value of this type of training in the context of one set of educational institutions, it will, we believe, be easier to transfer these processes to other educational systems such as high schools, community colleges and universities. In the long term, we believe entrepreneurship education should be an option available through high schools, community colleges and four year colleges and institutions. This bill represents an excellent vehicle to combine the resources of two well established proven programs, vocational and technical schools and the Small Business Development Centers, to begin to make entrepreneurship education available to more students. Our economy and our communities depend upon it. I urge the Committee's approval of this bill. Thank you. [Mr. Conroy's statement may be found in appendix.] Mr. DeMint. Thank you, Mr. Conroy. Mr. Lopez. STATEMENT OF LEONARD LOPEZ, SUN VALLEY EXPRESS (CONVENIENCE STORE), NAVAJO RESERVATION, SHIPROCK, NEW MEXICO Mr. Lopez. Good morning, Mr. Chairman and Members of the Committee. My name is Leonard Lopez, and I live in Bloomfield, New Mexico. My wife and I are members of the Navajo Tribe, and we both grew up on the Navajo Reservation in New Mexico. I appreciate the opportunity to appear before the Subcommittee today on behalf of Congressman Tom Udall's bill to provide Small Business Development Centers with resources to assist National American populations. My wife and I began working on the idea of opening our own business, a convenience store/filling station, on the Navajo Reservation in Shiprock, New Mexico, in April, 1995. Four years later, after much red tape with the tribal and BIA regulations and the required signatures, we were finally granted our business site lease. For five years we aggressively wrote our business plan, gathered our financial projections, completed the environmental and archeological studies, the traffic study surveys, and the list goes on. We knew we were in for a long haul of getting a business started on the reservation. We were told that it would be discouraging and difficult to work with the tribal officials. Our friends were right. When it came time for us to approach the lending institution for a loan on our business, we received minimal support. We thought we were well prepared to submit our application for a business loan, but later found that there was just as much information needed and time required to secure a loan as getting a business site lease with the tribe. We are proud of ourselves that we were able to be convincing enough to be approved for approximately $700,000 from Bank of America and an SBA 504 loan of $330,000 that we are close to finalizing the agreement. I believe that had we been guided and coached from the beginning by a knowledgeable small business counselor like Orestes Hubbard at our SBDC, we would have avoided many unnecessary delays. Not only would this have been to our advantage, I believe we would have had our doors open for business by now. There are a few small business assistance providers we received assistance from, which are Southern Utah College Small Business Department in Blanding, Utah, and the Regional Business Development Office, RBDO, of the Navajo Nation in Shiprock, New Mexico. Basically we were left to ourselves to figure out what we needed to do. My wife and I did all the work in seeking our resources that helped us complete our project. I am not saying that someone should have done all my work while I sat around. No. I only needed directions. We finally received the directions we needed when we approached Mr. Orestes Hubbard, manager of the Small Business Development Center, SBDC, at San Juan College in Farmington, New Mexico. I first met Mr. Hubbard when I attended a Meet Your Lender seminar held at the college by the SBDC a year ago last spring. I was hesitant at first to solicit his help because I figured he might direct me to speak with the RBDO people in Shiprock, as has been the case with the previous directors. After explaining to him my goals and my desire of opening a business on the reservation, Mr. Hubbard made arrangements to meet with me personally to discuss my project. He evaluated my business plan and suggested a few changes and recommendations. According to his list of requirements, we had met all the requirements. He then recommended a number of lending institutions that we should contact for a loan. At this time, three lending establishments had already turned us down. The SBDC has been following up on the progress of our project. It was either Orestes personally or one of his staff who contacted us for updates. He has invited us to small business seminars and conferences held at the college. He keeps abreast of our progress and is very helpful in giving suggestions. I believe a Small Business Development Center on the reservation would be an advantage and benefit to those Native Americans who desire to start their own business. With an SBDC nearby, anyone can plan to work on starting a business. They will learn the techniques of starting a business, as well as how to manage a business. The center could also provide information on available resources. The personnel could be there for consultation. They could provide guidelines for writing a business plan, the implementation and the components of a business, namely financing, marketing, operations, management and technology. The Native American SBDC could also work closely with the San Juan College Small Business Development Center where they have, in addition, a department specializing in business incubation that helps companies grow and succeed. For these reasons, Mr. Chairman, I support Congressman Udall's effort to strengthen the outreach of the SBDC program to more Native Americans. I urge your Committee to support Congressman Udall in his efforts. [Mr. Lopez's statement may be found in appendix.] Mr. DeMint. Thank you, Mr. Lopez, and all our witnesses. It has been very informative and persuasive. I would like to offer my colleagues the opportunity to ask any of you questions. We will begin with Congressman Udall. Would you like to ask any of the panelists questions? Mr. Udall. Yes. Thank you, Chairman DeMint. My first question is for Don Wilson. Earlier Congressman Sweeney testified that his proposal would not require additional funding. Can the existing funding for the SBDC program accommodate Mr. Sweeney's proposal? Mr. Wilson. Congressman Udall, I do not know how that would be possible under the appropriation recently approved by the House Appropriations Committee. Although it is levelfunding for the network, due to the census and the way our formula is tied to the census 24 states will lose up to 20 percent of their funding. To anticipate that we could now launch the Sweeney bill or the Udall bill with those kinds of cuts in our program funding is just simply not realistic. As I believe my testimony mentions with regard to the Sweeney bill, from fiscal year 1996 through fiscal year 1999 roughly 44 percent of the state programs did not see a dollar's worth of increase in funding. Then in 2000 and 2001 they basically received roughly cost of living increases, so you see since 1996 over the last half decade these programs have been struggling. In fact, considering cost of operating the program, paying cost of living increases to counselors and so forth, the program has been going backwards. To launch initiatives like this, which I think are incredibly worthwhile, would just not be possible without some new authorization, some new resources. Mr. Udall. Thank you, Mr. Wilson. We obviously feel the SBDC program is an important one and should be funded at a level that is really going to provide the assistance out there. My next question is for Mr. Lopez. You mention in your testimony that it took you four years, and you say after much red tape with the tribe and the BIA regulations. Was it actually four years to get through the tribal process and the BIA regulatory process? Mr. Lopez. In the beginning there was the submission of our--Mr. Chairman, I am sorry. I am not used to this. Mr. Chairman, at the beginning of our idea of starting our business we submitted an application to the tribe which generated the process to get the lease. From the time that we started to the time that we had the paper signed it took three years and nine months to complete. Mr. Udall. That is pretty surprising to me. Mr. Lopez. And this was with exerted effort, too, being at their doorstep as frequently as we could. Mr. Udall. Trying to push it along? Mr. Lopez. Yes. Mr. Udall. Have you had contact with other business people that have had similar experiences? Mr. Lopez. Yes, sir. Some of them have said it took them about almost ten years just to get the lease on the reservation. Mr. Udall. One of the issues we talked about earlier in my testimony and others that have testified here is why you would locate an SBDC either near or right on a reservation. Can you tell me why you think it might be more helpful to have an SBDC on the reservation, for example, at Windowrock or Shiprock or someplace like that and why it might generate more business activity and more people would be employed? Mr. Lopez. See, I have also worked with the RBDO, which is the Regional Business Development Office, with the tribe, which is located in Shiprock, and through the agencies. There are several agencies on the reservation. We worked with the Shiprock agency. Often times it was difficult to get information from them. As far as expertise in setting up a business, they lacked so I had to seek assistance from elsewhere. I feel if we were to set up an SBDC right there in Shiprock, let us say, I believe that if we were to staff it with professional business oriented people and those who would be familiar with the laws of the Navajo Nation in conjunction with their expertise, I believe that it would lessen the time frame in which to start a business. Mr. Udall. And do you also believe that it would be more accessible and more business friendly to budding entrepreneurs that would want to seek assistance? Mr. Lopez. I believe it will be, and I also believe that the SBDC has to become very much aware of what the laws are of the Navajo Nations as far as business and economic development. Mr. Udall. So the second part of your answer is that there are a number of requirements that the Navajo Nation has, that the Bureau of Indian Affairs have, that are an essential part of starting a business and so the SBDC personnel would have to specialize in those in addition in those kinds of regulatory hurdles in order to assist the entrepreneur to get their business started, up and running and going? Mr. Lopez. Yes, sir. Mr. Udall. Okay. Thank you very much, Mr. Chairman. Mr. DeMint. Thank you, Mr. Udall. Mrs. Christian-Christensen. Mrs. Christian-Christensen. Thank you, Mr. Chairman. I do not have any questions. I just want to thank the panelists for taking the time to come and give us their testimony. The SBDC program is very important to my community, as it is to communities across the country, and I think any way that we can enhance its services helps our communities to grow even more. I am just glad that you were able to come with some of your opinions and your experience and bring it to bear on our discussions this morning. Thank you. Mr. DeMint. Thank you very much. Ms. Tubbs-Jones. Mrs. Jones. Mr. Chairman, thank you. Mr. Chairman, to my colleagues and to the people who are testifying this morning, welcome to Capitol Hill, and thank you for your testimony. I want to tell you, Mr. Lopez, I made it to Shiprock, New Mexico. I managed to get there with my colleague, Mr. Udall, and President Clinton when we were doing the digital divide tour. I regretted only that I did not have enough time to really get around and get to meet and greet the people of Shiprock, New Mexico. I also wanted to do a little bit of shopping. I wanted to leave my $2 in the economy of Shiprock, but I did not have time to do that either. I am glad to have you here and want to say that this is my second term as a Member of the Small Business Committee, and I am very happy to serve here and I am very supportive of SBDCs. We have a great network of SBDCs in the State of Ohio. I hail from Cleveland, Ohio, and the Growth Association is actually in my area. I have been working very hard. I support increased dollars for SBDCs. I also have had the pleasure very recently of, and I do not travel all the time, but every once in a while I get a chance. I went to visit the Small Business Development Center and the Women's Business Center in the State of Hawaii. Actually, I was on the island of Honolulu, and I forgot what city. I am really just learning that there is an island called Hawaii in the State of Hawaii. That was new for me. My geography kind of got lost somewhere in the process. One of the issues that was faced in Hawaii was the fact that there are so many different islands all around that it is very difficult for them to be able to provide services to the small businesses around the islands. What they were really excited about was recently having the opportunity to get computers wherein they were able to have the person being interviewed, the new small business person, on the computer talking to the counselor/advisor on another island and be able to see them face to face and provide advice. I would hope that each of you would think through over and above your testimony recommendations that you could give to us that would improve the operation and opportunity for small business in this country. We are all alarmed by the fact that the Small Business Administration budget was cut so significantly and did have a little success yesterday on the Floor of the House through the leadership of our Ranking Member, Nydia Velazquez, and Sue Kelly to increase some of the dollars for small business. I would encourage you to have all your members write to the President to encourage him to increase funding for small business and just keep doing all the work that you do, but as well to let us know what is not working. We may not always have the opportunity to have a hearing where you come and testify, but our offices are available to each and every one of you to provide information and service. After that long good morning and so forth and so on, I would give any of you who want to comment over and above your testimony some of my time to so do. If you do not, fine also. Mrs. Christian-Christensen. Would you yield so that I can-- -- Mrs. Jones. Absolutely. I will yield. Mrs. Christian-Christensen [continuing]. Bring in a question? Thank you. I do have a question, and it is an important question to Mr. Wilson in follow up to the question that Mr. Udall asked about the funding. Can you tell us how much money you would need to implement Mr. Sweeney's bill? Mr. Wilson. I would envision roughly $5 million, Mr. Chairman, would enable us to launch the initial 20. That is roughly a quarter of a million dollars per program, which I think would be a good start. If we are going to launch it, what we would envision is perhaps an authorization that would provide $5 million the first year, $10 million the second and perhaps another $10 million the third because it will take roughly $5 million to do 20, and we have 58 programs. You can do the math. I think it would take roughly $15 million when the project is completed to be able to provide these type of services nationwide. Obviously, you know, if you have 40 states that are not participating they are going to be very anxious. It is a competitive process, and the Sweeney bill is designed and the language is such that it will reward those grant applicants who already have or can demonstrate partnerships with folks like the 507 program from SBA, the SBO programs that Mr. Cartier represents, working with the industrial hygienists and others. I think that will get the biggest bang for the buck is those who can demonstrate the partnerships, but I think there is a commitment to the partnerships throughout the network, and I believe it would be ideal if after three years we could have all 58 programs active in the program in the pilot. That would require roughly $15 million by the third year. Mr. Conroy. Is there any way to proceed without additional funding? Mr. Wilson. I truly do not know how that would be done. Simply the resources are not there. For example, Representative Tubbs-Jones, in Ohio I believe with level funding, $88 million level funding, I believe Ohio will lose about $150,000 if my memory is correct. I cannot cite all of our states, but I believe $150,000 or $157,000, if I recall. Holly Schick, who is an outstanding director, state director in Ohio, is facing those kinds of cuts in her program. You are facing closing centers. We are in crisis. Mrs. Christian-Christensen. Thank you. Mr. Wilson. The key thing, if I may interrupt one more time, is with the slowdown in the economy the Department of Labor recently released a report that said when unemployment goes up self-employment goes up. We are seeing that around the country. When major industries or major plants have layoffs, those people who are now unemployedand often do not find jobs in their fields, they may be creative. They may be talented. They turn to the idea of trying to start their own business using perhaps pension funds, savings or whatever to start their own business. They come into the SBDCs. It is just a pattern that is repeated over and over. When there are periods of slow economic growth, the demand for our services increase. Right now we are seeing that demand increase when we are seeing the resources decline in 24 states. I think that is very unfortunate. Mrs. Christian-Christensen. Thank you. I yield back. Mrs. Jones. Just finally I meant to mention this, and I forgot. I am very much supportive of the vocational and technical entrepreneurship development portion. In the City of Cleveland, we have a school system that really needs some stirring up, and I think part of the need comes from the lack of recognition that all young people are not going to college. What do we do to teach them a trade or a skill that they can be useful citizens in our community and maybe pass it on through their entrepreneurship, going on and being able to be successful? I just want to also add that in of how supportive I am of that. Mr. Chairman, if I have any time I yield back the balance. Thank you very much. Mr. DeMint. Thank you very much. I think as the witnesses can tell, you have a lot of support for all three of the ideas today. Our hope is to get adequate funding. I would like to just ask a couple of brief questions. One of the primary goals of this Committee is to reduce the regulatory burden on small businesses, make it easier for them to start so that we will not have to have experts to help them navigate the regulatory process. Mr. Wilson, I mentioned to you before we got started an idea, if we are adequately funded and if we can expand your services to include support of small businesses in dealing with compliance issues. One of the best helps to us as a committee would be if there was some formal reporting system back to us about the regulations that cause the most trouble and for the SBDCs to give us specific recommendations on what changes they would recommend to us so that we can be an advocate for changes in federal policy. Is that possible, and would you have any brief recommendations on how we could do that? Mr. Wilson. Historically the program has tried not to get involved in policy issues, but I think there would be no problem with the network reporting back to the Committee on what it finds the most troublesome and burdensome to the small business clients that we see on a regular basis. We would be glad to work with you and your staff to try to develop something like that, Mr. Chairman. Mr. DeMint. Yes. A similar question, Mr. Conroy. As we begin to fund cooperative arrangements with secondary/ post secondary schools to train for entrepreneurship, can you envision any way where we can actually measure the impact of such an effort, or is that just wishful thinking? Mr. Conroy. Oh, no. Actually, impact and measuring the impact and outcome of the program is something that we take very seriously. It is something that we do on an annual basis for the basic program, and as part of this proposal actually the legislation does call for an evaluative component. I would envision that that would entail a number of different things. We would have an evaluation of the course once it is completed so that we can make adjustments and adapt it to go forward to make improvements to it, and then I would look to see that we would do follow up studies with the students who went through the program to find out really what kind of value was it and how did it affect and impact their efforts to start a business. Then what we would do also is compare that to a base group of folks who did not go through the training to make a determination as to really what is the value of that kind of training. Mr. DeMint. I think the key to long-term successful funding of all of our programs is to be able to document success and to what degree. You can be helpful with that long-term. I think it would help us in considering additional funding for a program. If there are not any additional questions, I would like to again thank the witnesses and my colleagues for being here. This hearing is adjourned. 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