SBA Entrepreneurial Development Programs Act of 2007

Mr. Speaker, I rise in reluctant opposition to the SBA Entrepreneurial Development Programs Act of 2007. I am a strong supporter of Small Business Development Centers (SBDCs). These centers continue to do a lot of good work to promote job creation and small business development throughout our nation. There are three SBDCs that serve constituents in the 16th District of Illinois and they do phenomenal work in oftentimes a difficult local economic climate with limited resources. But I fear that the various SBDC bills we debate this week may kill the program with kindness.

The bills all taken together proposes to create nine new grant initiatives within the SBDC program. According to the non-partisan Congressional Budget Office (CBO), the bills would add $122 million in additional spending in Fiscal Year 2008 alone and $365 million over the next five fiscal years. When you consider that the Democrat-controlled House Appropriations Financial Services Subcommittee recently provided a generous increase of $11 million for the regular SBDC program to reach $100 million for Fiscal Year 2008, these bills taken together proposes to more than double the size of the SBDC program. In an era of tight budgets, I don't think any program deserves a 122 percent increase.

I am sympathetic to many of these initiatives. I am particularly supportive of making sure that Small Business Administration (SBA) employees do not interfere in hiring decisions of local SBDCs. I also support provisions in Section 207 to require more information, primarily through Internet Web-based technologies, about regulatory compliance to small business owners.

But there are still significant outstanding budgetary issues. Throughout my tenure as the former Chairman of the House Small Business Committee, I tried numerous times to see the National Regulatory Assistance and the Native American Entrepreneurial Assistance SBDC initiatives, among others, become law. Last year, we reached a common- sense consensus that in order to get these new initiatives into law, the high $135 million authorization level for the overall SBDC program should be proportionally reduced. However, that consensus is not in these bills that we are debating this week. I find it odd that the ``pay-go'' fiscal conservative rhetoric of the Democrats is not met by reality. There are no spending offsets in these bills.

Some of these initiatives also are duplicative of existing Federal programs. For example, the Manufacturing Extension Partnership (MEP) program administered by the Department of Commerce through local centers across the nation offers the very same services that are outlined in Section 203 of H.R. 2359. The National Veterans Business Development Corporation (or Vets Corp) offers the same services as those being proposed in H.R. 2366.

I also have concern that some of the provisions in H.R. 2359 go beyond the mission of SBDCs, which historically has been primarily targeted at helping new or struggling small businesses. For example, Section 206 requires that SBDC grant recipients ``shall also attempt to negotiate lower health insurance premiums for small business concerns that seek the assistance of the recipient.'' In my view, it is not the role of SBDCs to get involved in the pricing health insurance premiums. Section 204 of H.R. 2359 establishes a new program to help transition so-called ``mature'' small businesses even though there is no definition of what the authors of this legislation mean by ``transition'' or ``mature'' small business. Again, I don't think it is the role of SBDCs to be involved in initiatives that could result in the closure of small businesses.

I also fear that creating these nine new initiatives all at once will give false hope to SBDCs seeking to receive these grants. These initiatives will not start until a specific amount separate from the regular SBDC appropriation is allocated from the Appropriations Committee. In principle, this is a good policy to help insure that the money to run the regular SBDC program is not raided to fund these new initiatives. However, noting that the Democrat-controlled House Appropriations Financial Services Subcommittee just provided a long- overdue increase for the regular SBDC program, I seriously doubt that any of these specific SBDC initiatives will be funded at a significant level in the near future, further diminishing the expectations behind this legislation.

Finally, these nine new initiatives create many hoops for local SBDCs to jump through in order to qualify for these grants. These bills will create a paperwork and accounting nightmare for SBDCs to keep track of various grants, particularly if they apply and receive multiple awards under different initiatives, for the programs they administer. In retrospect, it is probably best that Congress provides an overall increase in the appropriation for the regular SBDC program and then require that all SBDCs provide some services (even if it is to network with another specialized SBDC or another Federal partner such as a local MEP center or the Vets Corp) in the nine issue areas outlined in H.R. 2359, H.R. 2366, and H.R. 2284 as opposed to the micro-management approach as contained in these bills.

Mr. Speaker, last year, I predicted that if Democrats took over control of Congress, spending on the Small Business Administration (SBA) would dramatically increase. Never in my wildest dreams did I think they would be so brazen. Elections do matter. Thus far this year, the CBO estimates that the Democrat-controlled House Small Business Committee has authorized $5.4 billion in new spending over the next 5 years--$1.379 billion in fiscal year 2008 alone. With these bills on the suspension calendar this week, proposed spending on the SBA will grow once again. All totaled, the CBO estimates that spending on the SBA will increase by nearly $5.8 billion over 4 years and $1.525 billion in fiscal year 2008 alone. To put this massive spending increase in perspective, the House Appropriations Financial Services Subcommittee recommends providing $582 million in total spending on the SBA in fiscal year 2008. I urge my colleagues to stand up for fiscal responsibility and to prevent mission-creep within the SBDC network by voting against these bills.

Mr. Speaker, I would like to thank the distinguished chairwoman from New York for yielding.

Mr. Speaker, I rise today to urge my colleagues to support a piece of legislation to enhance two critical Small Business Administration entrepreneurial development programs, the Small Business Development Centers and the Service Corps for Retired Executives.

Serving as the Representative in a district that has been historically driven economically by vibrant local small businesses, I greatly appreciate and support the entrepreneurial development assistance that the SBA provides.

We know that entrepreneurial development programs work. Businesses who receive SBA entrepreneurial assistance are twice as likely to succeed. And for every Federal dollar spent on entrepreneurial development, $7 are generated in increased tax revenue.

But in the past 3 years, due to changes in our ever-changing globalizing economy, my district has lost 607 small businesses and one out of five manufacturing establishments. This is a trend that I am committed to reversing through fostering entrepreneurial development and creating the right set of conditions to help businesses flourish, stay and be attracted to my district, and I believe that supporting effective small business entrepreneurial development programs is a key part of that strategy.

In 1980, Congress established the SBDC program to foster economic development by providing management, technical and research assistance to current and prospective small businesses. As you know, SBDCs provide services which include assisting small businesses with financial, marketing, production, organizational, engineering and technical problems and feasibility studies.

SBDCs serve Americans with a desire to start their own venture but who lack the technical expertise associated with starting and running a successful business, and in the past decades, SBDCs have provided assistance to millions of entrepreneurs across America.

The SBDC program also represents the effective and efficient use of allocated Federal moneys through public/private collaboration. To that end, SBDCs are funded by matching moneys provided by State legislatures, foundations, State and local chambers of commerce, public and private universities, vocational and technical schools and community colleges. In fact, sponsors' contributions have been increasingly exceeding the minimum 50 percent matching share, signifying greater participation among such groups and institutions.

This is why I feel especially fortunate to have several Small Business Development Sub-Centers located at local universities, such as Widener University and the University of Pennsylvania, which provide critical business resources and technical assistance to small businesses in and around my district.

I would like to stress that the core SBDC program has been extremely effective, but there are certain operational improvements that can be implemented to increase the flexibility of SBDCs.

To that end, changes proposed in this legislation will ensure the quality of grant recipients to host SBDCs; help SBDCs maintain their autonomy from undue SBA interference; protect the confidentiality of SBDC clients; ensure that taxpayer dollars are being spent as efficiently as possible by not using SBDC funds except for the sole purpose of business development; and allowing exemptions to the current cap on non-matching portability grants in the event of federally designated natural or human caused disasters.

In addition to these operational changes, it is important to strengthen the SBDC core program, which successfully navigates entrepreneurs in managing their business, by establishing specific grant programs that will allow SBDCs to tailor their services.

For instance, the Capital Access Initiative would establish grants to assist entrepreneurs in processing loan applications and obtaining private equity. An Innovation and Competitiveness Initiative would establish grants to allow SBDCs to become technology centers, to help market technologies and advanced projects to manufacturers. A disaster recovery program would establish grants to allow SBDCs to assist and coordinate the Federal response for small business disaster victims.

The older entrepreneurial assistance program will target older Americans

interested in transitioning to become business owners, while the Small Business Sustainability Initiative will promote the development and implementation of energy-efficient and clean energy improvements and technology. And an Affordable Health Care Initiative will help small business owners provide affordable health care insurance options to their employees, as the chairwoman mentioned.

As I also spoke about, a second program which this legislation will address is SCORE, which provides entrepreneurs with free counseling assistance by former executives. SCORE provides a valuable service to small businesses, and I believe it will be even stronger with a provision to actively recruit volunteer mentors who will then provide a greater reflection of the social and economic diversity of those who will utilize SBA services, such as women and underrepresented minorities.

I urge all my colleagues to support this important bill, which will greatly enhance the business development resources available to America's small business owners and aspiring entrepreneurs.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2359) to reauthorize programs to assist small business concerns, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative to revise and extend their remarks and include extraneous material on the bill under consideration.

Mr. Speaker, I yield myself as much time as I may consume.

Mr. Speaker, small businesses play a critical role in our economy. As the leading job creators and generators of nearly half of private sector gross domestic product, their impact is felt throughout the country.

Today, entrepreneurs are confronted with intense competition from foreign and corporate counterparts. They must continually update their products and processes, as well as adapt to change quickly.

Traditionally, the SBA's entrepreneurial development programs were created to provide direction and assistance to small business owners, helping them remain competitive and armed with the tools to maintain successful ventures. While providing critical assistance, these programs were created many years ago to address general business development issues faced by typical small businesses of the time.

There is no question the needs of entrepreneurs change as the environment does. The challenges facing entrepreneurs today are different from those even 5 years ago. SBA's entrepreneurial development programs must evolve to provide small businesses with the ability to deal with the economic conditions of today.

The Small Business Entrepreneurial Development Programs Act of 2007 introduced by Congressman Sestak not only modernizes this program to adjust the current concerns of small businesses but also enhances them. Today, the leading issues for small firms are the rising health and energy costs and complying with regulations. This legislation will help small business owners identify and secure affordable health care. With less than half of small business owners providing health care, the need for legislation that helps alleviate this is clear.

Considering the current price of gasoline, there's no question why the number one concern for entrepreneurs is the cost of energy. Gasoline is more than $3 a gallon. This price represents a 28 percent increase over a period of just 2 months ago and a 52 percent increase since the end of January. Due to small businesses' limited resources, as production costs are driven up, they become less competitive with their counterparts.

While the costs of energy and health care have risen, so has the regulatory burden for small businesses. In 2006, just seven major rules added over $3.7 billion to the overall regulatory costs. That does not even account for the thousands of other regulations that were added last year. Small firms today require affordable access to information and counseling to address these new rules.

H.R. 2359, with its increased capacities, ensures that the SBDCs located in communities across the Nation have the ability to assist entrepreneurs in facing these challenges. For this reason, the SBA Entrepreneurial Development Act of 2007 has the support of the National Federation of Independent

Businesses. They are not only supporting but will key vote this legislation. By tailoring SBA's economic development programs to the economic demands and changing composition of small businesses, they will better promote business development this our communities.

H.R. 2359 will make sure small firms remain a driving force in our economy. I urge support of this legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I recognize Mr. Sestak, the sponsor of the legislation, for as much time as he may consume.

Mr. Speaker, I yield myself the balance of my time.

Today's entrepreneurs are facing countless challenges. SBA's entrepreneurial development programs must be modernized to provide small businesses with the ability to deal with the economic conditions of today.

Mr. Sestak's legislation, the SBA Entreprenurial Development Programs Act of 2007, makes much-needed updates to the agency's programs so that they are better able to assist entrepreneurs and enable small firms to remain a driving force in our economy.

H.R. 2359 has the support of the NFIB, who, in addition to supporting it, has made it one of their key votes for the 110th Congress.

Again I want to thank Mr. Sestak and also Mr. Chabot, the ranking minority member, for working in a bipartisan manner to move this legislation and other bills that will be moved today. I want to thank the staff that worked on this bill. From the majority staff, Michael Day, Adam Minehardt, Nicole Witenstein; from Representative Sestak's staff, Clarence Tong; and from the minority staff, Barry Pineles.

I strongly urge my colleagues to vote for H.R. 2359.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself such time as I may consume.

Today, Mr. Speaker, I rise in support of the request to suspend the rules and pass H.R. 2359, the SBA Entrepreneurial Development Programs Act of 2007.

I would like to thank Chairwoman Velazquez for working in a cooperative and bipartisan manner to bring this bill to the floor. This bill makes modest yet necessary changes in the core entrepreneurial technical assistance programs of the SBA, the Small Business Development Center Program.

Small business development centers, on a relatively modest appropriation, provide free training sessions which last at least 1 hour and free individual one-on-one counseling. The centers met a total of 700,000 individual business owners and prospective owners in fiscal year 2007.

Changes are necessary to clarify the statutory mandate and ensure that small business development centers are appropriately responding to the new challenges facing America's entrepreneurs. These alterations are reflected in title I of the bill.

Even though the program is more than 25 years old, there is no definition of the term ``small business development center,'' which substantially adds to the confusion interpreting the statutory language. I would like to thank the chairwoman for including the definition in the term.

Another key change demonstrates the need to update the mission of the small business development centers as technology and business practices change. Broadband access is no longer a luxury for many, if not most, small businesses; yet the only reliable data on broadband access in America comes from providers that make the reports to the Federal Communications Commission.

Congressman Fortenberry, the ranking member of the Committee's Subcommittee on Rural and Urban Entrepreneurship, had the idea that rather than relying on these providers, a more accurate picture might come from actually asking individuals whether they had access to broadband services. Mr. Fortenberry thought it would make sense to have the center survey their clients when they come in the door on the availability of broadband service. The survey might prove a valuable addition to supplement the existing data from broadband providers. And without appropriate information on broadband access and penetration, it is impossible to develop policies that ensure small businesses will have affordable access to broadband.

Title II also includes a mechanism to increase the capacity of small business development centers to offer regulatory compliance assistance to small businesses disproportionately affected by erroneous regulatory burdens. It is an idea supported by the House in the previous four Congresses and by the National Federation of Independent Business. I would like to thank the chairwoman and Mr. Sestak for including this critical assistance to small business owners.

Ultimately, H.R. 2359 is designed to help small businesses get the advice and assistance they need to continue their ever-increasing importance in maintaining America's prime place in the global economy.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I would like to yield such time as he may consume to my good friend Mr. Latham.

Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. Speaker, I thank the gentleman from Tennessee for yielding me time, and I congratulate the committee and the chairman for bringing this piece of legislation forward.

Mr. Speaker, I rise today in support of H.R. 2359, the Small Business Administration Entrepreneurial Development Programs Act.

I am especially pleased that the Small Business Committee included legislation that I introduced earlier this Congress, H.R. 731, the National Small Business Regulatory Assistance Act, into this broad legislative package. This National Small Business Regulatory Assistance Act utilizes one of SBA's most effective programs, the Small Business Development Center program. Generally the SBDCs support small businesses with financial, management, and marketing activities. My legislation, included in section 207 of H.R. 2359, creates a pilot program through the SBDCs that will provide free confidential counseling on regulatory compliance and help small businesses gain access to regulatory information and resources.

The research done by the Small Business Administration demonstrates that small businesses with less than 20 employees pay more than $7,600 per employee to comply with Federal regulations each year, while large firms pay 45 percent less per employee. Adjusted for inflation, the annual cost of Federal regulations faced by America's small businesses in 2004 was over $875 billion.

The fact of the matter is many small business owners have neither the time nor the expertise to sort through hundreds of pages of regulations in the Federal Register. Small business owners often learn of their failure to comply with Federal regulations or even that new Federal regulations have been imposed only after a penalty has been assessed. The current system denies small businesses access to regulatory compliance assistance and further weakens the opportunity for America's small businesses to compete with larger firms both domestically and internationally.

The Small Business Regulatory Assistance Act represents a win-win for America's small businesses. Not only will the SBDCs help small business owners understand what they must do to comply with Federal regulations but also how they may do so in a most cost-effective manner.

Again, I would like to thank the committee for including this legislation in the bill, and I urge my colleagues to support the overall bill.